Exhibit 10.28

 

EXECUTION VERSION

 

[g12102kg01i001.jpg]

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

made and entered into
as of October 11, 2012
by and among

 

NEENAH PAPER, INC.,
CERTAIN SUBSIDIARIES OF NEENAH PAPER, INC.,
as joint and several borrowers,

 

CERTAIN SUBSIDIARIES OF NEENAH PAPER, INC.,
as guarantors,

 

EACH OF THE FINANCIAL INSTITUTIONS WHICH IS
A SIGNATORY HERETO OR
WHICH MAY FROM TIME TO TIME
BECOME A PARTY HERETO,

 

JPMORGAN CHASE BANK, N.A.,
as Agent for such Financial Institutions

 

BANK OF AMERICA, N.A.,
as Syndication Agent

 

and

 

J.P. MORGAN SECURITIES LLC,
as Sole Lead Arranger and Sole Bookrunner

 

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

 

INDEX TO CREDIT AGREEMENT

 

 

 

Page No.

 

 

 

1.

Definitions

2

 

1.1

Certain Defined Terms

2

 

1.2

Accounting Terms and Determinations

42

 

1.3

UCC Changes

43

 

1.4

Joint and Several Obligations; Borrowers’ Agent

44

 

 

 

 

2.

Loans; Letters of Credit; Notes; Payments; Prepayments; Interest Rates

44

 

2.1

Commitments

44

 

2.2

Loans

44

 

2.3

Commitment Fees

47

 

2.4

Termination and Reductions of Revolving Commitments

47

 

2.5

Mandatory and Voluntary Prepayments

48

 

2.6

Notes; Payments; Accounts

50

 

2.7

Application of Payments and Prepayments

51

 

2.8

Interest Rates for Loans

53

 

2.9

Special Provisions Applicable to LIBOR Borrowings

54

 

2.10

Letters of Credit

58

 

2.11

Swingline Loans

63

 

2.12

Pro-Rata Treatment

65

 

2.13

Sharing of Payments, Etc.

66

 

2.14

Recapture

67

 

2.15

Increase of Revolving Commitments

67

 

2.16

Defaulting Lenders

68

 

 

 

 

3.

Collateral

69

 

3.1

Security Documents

69

 

3.2

Filing and Recording

69

 

3.3

Special Cash Collateral Account

70

 

 

 

 

4.

Conditions

70

 

4.1

All Revolving Loans

70

 

4.2

Term Loans

72

 

4.3

First Loan or Letter of Credit

72

 

4.4

Post-Closing Deliveries

75

 

 

 

 

5.

Representations and Warranties

76

 

5.1

Organization

76

 

5.2

Financial Statements

76

 

5.3

Enforceable Obligations; Authorization

76

 

5.4

Other Debt

77

 

5.5

Litigation

77

 

5.6

Taxes

77

 

i

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

 

 

5.7

No Material Misstatements; Full Disclosure

78

 

5.8

Subsidiaries and Offshore Entities

78

 

5.9

Representations by Others

78

 

5.10

Permits, Licenses, Etc.

78

 

5.11

ERISA

78

 

5.12

Title to Properties; Possession Under Leases

79

 

5.13

Assumed Names

79

 

5.14

Investment Company Act

80

 

5.15

Public Utility Holding Company Act

80

 

5.16

Agreements

80

 

5.17

Environmental Matters

80

 

5.18

No Change in Credit Criteria or Collection Policies

81

 

5.19

Solvency

81

 

5.20

Status of Receivables and Other Collateral

82

 

5.21

Transactions with Related Parties

83

 

5.22

Intellectual Property

83

 

5.23

Related Businesses

83

 

5.24

Material Leasehold Properties

84

 

5.25

Security Interests

84

 

5.26

Deposit Accounts

84

 

 

 

 

6.

Affirmative Covenants

85

 

6.1

Businesses and Properties

85

 

6.2

Taxes

85

 

6.3

Financial Statements and Information

86

 

6.4

Inspections; Field Examinations; Inventory Appraisals and Physical Counts

88

 

6.5

Further Assurances

89

 

6.6

Books and Records

89

 

6.7

Insurance

89

 

6.8

ERISA

91

 

6.9

Use of Proceeds

91

 

6.10

Borrowers; Guarantors; Joinder Agreements

92

 

6.11

Notice of Events

93

 

6.12

Environmental Matters

93

 

6.13

End of Fiscal Year

94

 

6.14

Pay Obligations and Perform Other Covenants

94

 

6.15

Collection of Receivables; Application of Receivables Proceeds

94

 

6.16

Receivables and Other Collateral Matters

95

 

6.17

Agreements

96

 

6.18

Hedging Strategy

96

 

6.19

Conforming Leasehold Interests; Matters Relating to Additional Real Property
Collateral

96

 

 

 

 

7.

Negative Covenants

99

 

7.1

Indebtedness

99

 

7.2

Liens

101

 

ii

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

 

 

7.3

Contingent Liabilities

104

 

7.4

Mergers, Consolidations and Dispositions and Acquisitions of Assets

104

 

7.5

Nature of Business

109

 

7.6

Transactions with Related Parties

109

 

7.7

Investments, Loans

109

 

7.8

ERISA Compliance

110

 

7.9

Trade Credit Extensions

111

 

7.10

Change in Accounting Method

111

 

7.11

Redemption, Dividends, Stock Issuance, Distributions and Payments

111

 

7.12

Fixed Charge Coverage Ratio

112

 

7.13

Sale of Receivables

112

 

7.14

Sale and Lease-Back Transactions

112

 

7.15

Change of Name or Place of Business

112

 

7.16

Restrictive Agreements

113

 

7.17

Tax Classification

113

 

7.18

Deposit Accounts

113

 

7.19

Organizational Documents; Tax Sharing Agreements

113

 

7.20

Limitation on Indebtedness of Offshore Entities

113

 

 

 

 

8.

Events of Default and Remedies

114

 

8.1

Events of Default

114

 

8.2

Remedies Cumulative

118

 

 

 

 

9.

The Agent

118

 

9.1

Appointment, Powers and Immunities

118

 

9.2

Reliance

119

 

9.3

Defaults

119

 

9.4

Rights as a Lender

120

 

9.5

Indemnification

120

 

9.6

Non-Reliance on Agent and Other Lenders

120

 

9.7

Failure to Act

121

 

9.8

Resignation or Removal of Agent

121

 

9.9

Syndication Agent; Sole Lead Arranger; Sole Bookrunner

121

 

 

 

 

10.

Miscellaneous

122

 

10.1

No Waiver

122

 

10.2

Notices

122

 

10.3

Governing Law

122

 

10.4

Survival; Parties Bound

122

 

10.5

Counterparts

123

 

10.6

Limitation of Interest

123

 

10.7

Survival

123

 

10.8

Captions

124

 

10.9

Expenses, Etc.

124

 

10.10

Indemnification

124

 

10.11

Amendments, Waivers, Etc.

125

 

10.12

Successors and Assigns

126

 

iii

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

 

 

10.13

Entire Agreement

130

 

10.14

Severability

130

 

10.15

Disclosures

130

 

10.16

Capital Adequacy

131

 

10.17

Taxes

132

 

10.18

Waiver of Claim

137

 

10.19

Right of Setoff

137

 

10.20

Waiver of Right to Jury Trial

137

 

10.21

Additional Provisions Regarding Collection of Receivables and other Collateral

138

 

10.22

Bank Product Obligations

140

 

10.23

Construction

142

 

10.24

Joint and Several Obligations

142

 

10.25

USA Patriot Act

142

 

10.26

Judgment

142

 

10.27

Jurisdiction; Service of Process

143

 

10.28

Confidentiality

143

 

10.29

No Fiduciary Duty/Conflicts

144

 

10.30

Release of Neenah Canada

145

 

LIST OF EXHIBITS AND SCHEDULES

 

Exhibit A

-

Form of Revolving Credit Note

Exhibit B

-

Form of Swingline Note

Exhibit C

-

Form of Term Note

Exhibit D

-

Form of Compliance Certificate

Exhibit E

-

Form of Request for Extension of Credit

Exhibit F

-

Form of Rate of Section Notice

Exhibit G

-

Form of Borrowing Base Compliance Certificate

Exhibit H

-

Form of Receivables Report

Exhibit I

-

Form of Inventory Designation Report

Exhibit J

-

Form of Solvency Certificate

Exhibit K

-

Form of Guaranty

Exhibit L

-

Form of Perfection Certificate

 

iv

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

 

Exhibit M

-

Form of US Patent Security Agreement

Exhibit N

-

Form of US Trademark Security Agreement

Exhibit O

-

Form of US Copyright Security Agreement

Exhibit P

-

Form of Assignment And Acceptance

Exhibit Q

-

Form of Commitment Increase Agreement

Exhibit R

-

Form of New Lender Agreement

Exhibit S-1

-

Form of U.S. Tax Certificate for [Non-U.S. Lenders] [Participants] that are not
Partnerships

Exhibit S-2

-

Form of U.S. Tax Certificate for [Non-U.S. Lenders] [Participants] that are
Partnerships

 

Schedule 1.1A

-

Commitments

Schedule 1.1B

-

Material Leasehold Properties

Schedule 1.1C

-

Equipment Component

Schedule 1.1D

-

Quarterly Equipment Component Amortization Amount

Schedule 1.1E

-

Quarterly Real Estate Component Amortization Amount

Schedule 1.1F

-

Real Estate Component

Schedule 1.4

-

Responsible Officers of Neenah

Schedule 2.10(a)

-

Existing Letters of Credit

Schedule 4.3(r)-1

-

List of Closing Date Mortgaged Properties

Schedule 4.4

-

Post-Closing Deliveries

Schedule 5.3

-

Governmental Authorization

Schedule 5.5

-

Material Litigation

Schedule 5.10

-

Permits, Licenses, Etc.

Schedule 5.16

-

Indebtedness

Schedule 5.17

-

Environmental Matters

Schedule 7.2

-

Liens

Schedule 7.6

-

Permitted Affiliate Transactions

 

v

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

 

 

LIST OF DEFINED TERMS

 

 

Page No.

 

 

$

43

10 percent shareholder

138

Act

142

Additional Mortgage

97

Additional Mortgage Policies

98

Additional Mortgaged Property

97

Additional Mortgages

97

Additional Senior Indenture

2

Additional Senior Note Documents

2

Additional Senior Notes

3

Adjusted LIBOR Rate

3

Affiliate

3

Agent

1

Agreement

1

Alternate Base Rate

3

Alternate Base Rate Borrowing

3

Applicable Commitment Fee Percentage

4

Act

142

Applicable Lending Office

4

Applicable Margin

4

Applications

5

Approved Fund

5

Assignment and Acceptance

128

Availability

5

bank

138

Bank Product Amount

6

Bank Products

6

Borrower

1

Borrowers

1

Borrowers’ Agent

7

Borrowing Base

7

Borrowing Base Compliance Certificate

7

Borrowing Base Deficiency

7

Business Day

8

Business Entity

8

Canadian Collateral Agent

1

Capital Expenditures

8

Capital Lease Obligations

8

Cash Dividends

8

Cash Officer

8

Change in Law

9

Change of Control

9

Closing Date

9

 

vi

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

 

Closing Date Mortgage

75

Closing Date Mortgaged Property

75

Closing Date Mortgages

75

Code

9

Collateral

9

Collection Account

9

Commitment

9

Commitment Fee

48

Commitment Increase Agreement

10

Commitment Percentage

10

Compliance Certificate

10

Concentration Limit

10

Consequential Loss

10

Consolidated

11

Contingent Obligation

11

Contribution Agreement

11

Controlled Account

11

controlled foreign corporation

138

Copyrights

24

Credit Parties

11

Current Sum

11

Default

16

Default Rate

11

Defaulting Lender

12

Disbursement/Pass-Through Account

114

Discontinued Operations

12

Disposition

12

Dollar

12

dollars

43

Domestic Lending Office

12

Domestic Subsidiary

13

Dominion Event

95

Dominion Termination Event

95

EBITDA

13

Eligible Assignee

13

Eligible Equipment

13

Eligible Inventory

14

Eligible Real Estate

14

Eligible Receivables

15

Environmental Claim

15

Environmental Law

15

Environmental Liabilities

15

Environmental Permit

16

Equipment

16

Equipment Component

16

ERISA

16

 

vii

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

 

ERISA Affiliate

16

Event of Default

16

Excess Interest Amount

68

Excluded Foreign Subsidiary

93

Excluded Taxes

133

Existing Credit Agreement

1

Existing Indebtedness

1

Existing Lenders

1

Existing Letters of Credit

17

Extended Facility Letter of Credit

63

FATCA

17

Federal Funds Effective Rate

17

Financial Officer

17

FinCo

17

FinCo Note

17

Fixed Charge Coverage Ratio

17

Flood Hazard Property

18

Funded Term Loan Amount

18

GAAP

18

Governmental Authority

18

Grantor

18

guarantor

11

Guarantors

18

Guaranty

18

Hazardous Substance

19

Hedging Obligation Amount

19

Hedging Obligations

19

Hedging Obligations Aggregate Amount

19

Highest Lawful Rate

19

Indebtedness

20

Indemnifiable Tax

133

Indenture Cap

20

Ineligible Inventory

20

Ineligible Receivables

22

Intellectual Property

24

Intellectual Property Security Agreements

85

Inter-Company Loans

25

interest

123

Interest Expense

25

Interest Option

54

Interest Options

54

Interest Payment Dates

25

Interest Period

25

Inventory

26

Investment

26

IRS

26

 

viii

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

 

Issuing Bank

26

Joinder Agreement

26

JPMorgan

1

Judgment Currency

143

LC Collateral Account

63

Leasehold Property

26

Legal Requirement

26

Lender

1

Lender or Lenders

27

Lender Party

27

Lenders

1

Letter of Credit Advances

27

Letter of Credit Exposure Amount

27

Letters of Credit

27

LIBOR Borrowing

27

LIBOR Lending Office

27

LIBOR Rate

27

Lien

28

Loan Documents

28

Loans

28

Material Adverse Effect

28

Material Lease

28

Material Leasehold Property

28

Maturity Date

28

Mill Properties

29

Monthly Unaudited Financial Statements

29

Mortgage

29

Mortgaged Property

29

Mortgages

29

Neenah Canada

1

Neenah Germany

29

Net Income

29

Net Recovery Value Percentage

30

New Lender

69

New Lender Agreement

31

Non-Reporting Lender Party

7

Notes

31

Notice of Default

120

NP International

31

NP International HoldCo

31

NP International Lease

31

NP International Services Agreement

31

Obligation Currency

142

Obligations

31

Obligees

140

Offshore Entities

32

 

ix

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

 

Organizational Documents

32

Original Closing Date

1

Original Credit Agreement

1

Other Connection Taxes

133

Other Tax

133

Parent

1

Participant Register

128

Parties

32

Patents

24

PBGC

32

Perfection Certificate

32

Permitted Affiliate Transactions

33

Permitted Investment Securities

33

Permitted Offshore Acquisitions

34

Permitted Overadvances

48

Person

34

Plan

34

Pledged Cash

34

Post-Closing Mortgage Policy

34

PPSA (Nova Scotia)

34

primary obligations

11

primary obligor

11

Prime Rate

34

Principal Office

35

Prohibited Transaction

35

Proper Form

35

Property

35

PUHCA

80

purpose credit

92

Quarterly Equipment Component Amortization Amount

35

Quarterly Real Estate Component Amortization Amount

35

Quarterly Unaudited Financial Statements

35

Rate Selection Date

35

Rate Selection Notice

54

Reaffirmation Agreement

35

Real Estate Component

36

Real Property Asset

36

Receivables

36

Recipient

36

Refinancing Indebtedness

36

Reg U

92

Register

129

Regulation D

37

Regulatory Change

37

Related Obligations

140

Reportable Event

37

 

x

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

 

Request for Extension of Credit

37

Required Lenders

37

Requirements of Environmental Law

38

Reserves

38

Responsible Officer

38

Revolving Commitment

38

Revolving Commitment Increase Notice

68

Revolving Credit Alternate Base Rate Borrowing

39

Revolving Credit LIBOR Borrowing

39

Revolving Credit Notes

39

Revolving Exposure

39

Revolving Loans

39

Scheduled Principal Payments

39

Security Agreements

39

Security Documents

40

Senior Note Documents

40

Senior Note Indenture

40

Senior Notes

40

Settlement

65

Settlement Date

65

Significant Offshore Entity

40

Special Cash Collateral Account

40

Specified Representations

41

Standby Letters of Credit

41

Statutory Reserves

41

Stock

41

Stock Repurchases

39

Subordinated Indebtedness

41

Subsidiary

41

Swingline Exposure

41

Swingline Lender

41

Swingline Loan

64

Swingline Loans

41

Swingline Note

42

Synthetic Lease

42

Tax

133

Term Lenders

42

Term Loan Alternate Base Rate Borrowing

42

Term Loan Commitment

42

Term Loans

42

Term Notes

42

Termination Date

42

Title Company

42

Total Commitment

43

Total Revolving Commitment

43

Trade Letters of Credit

43

 

xi

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

 

Trademarks

24

Tri-Party Agreements

43

True-Up Loans

2

UCC

43

Unused Commitment

43

 

xii

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

 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT (together with all amendments,
modifications and supplements hereto and restatements hereof, this “Agreement”)
is made and entered into effective as of October 11, 2012, by and among Neenah
Paper, Inc., a Delaware corporation (“Parent”), each subsidiary of Parent listed
as a “Borrower” on the signature pages hereto (together with Parent, each a
“Borrower” and collectively, the “Borrowers”), each subsidiary of Parent listed
as a “Guarantor” on the signature pages hereto (if any), each of the financial
institutions which is a signatory hereto or which may from time to time become a
party hereto (individually, a “Lender” and collectively, the “Lenders”), and
JPMorgan Chase Bank, N.A. (“JPMorgan”), as agent for the Lenders (in such
capacity, together with its successors in such capacity, the “Agent”).

 

W I T N E S S E T H:

 

WHEREAS, the Borrowers, Neenah Paper Company of Canada (“Neenah Canada”), the
Agent, and JPMorgan Chase Bank, N.A., Toronto Branch, as Canadian collateral
agent (in such capacity, together with its successors in such capacity, the
“Canadian Collateral Agent”), and each of the financial institutions a party
thereto as lenders, were parties to that certain Credit Agreement dated as of
November 30, 2004 (the “Original Closing Date”), pursuant to which the lenders
party thereto provided certain loans and extensions of credit to the Borrowers
(such Credit Agreement, as amended prior to November 5, 2009, the “Original
Credit Agreement”); and

 

WHEREAS, the Original Credit Agreement was amended and restated by the Amended
and Restated Credit Agreement dated as of November 5, 2009 by and among the
Borrowers, Neenah Canada, the Agent, the Canadian Collateral Agent and each of
the financial institutions a party thereto as lenders (“Existing Lenders”),
pursuant to which Existing Lenders provided certain loans and extensions of
credit to the Borrowers (such Amended and Restated Credit Agreement, as
heretofore amended, the “Existing Credit Agreement” and all Indebtedness arising
pursuant to the Existing Credit Agreement, the “Existing Indebtedness”); and

 

WHEREAS, subject to the conditions precedent set forth herein, the parties
hereto desire to amend and restate the Existing Credit Agreement in its entirety
in the form of this Agreement, and Borrowers desire to (a) obtain Loans to
refinance the Existing Indebtedness and for other purposes permitted herein and
(b) obtain the release of Neenah Canada as a Guarantor and the release of the
Liens previously granted by Neenah Canada in connection with the Existing Credit
Agreement; and

 

WHEREAS, after giving effect to the amendment and restatement of the Existing
Credit Agreement pursuant to the terms hereof, the Commitment Percentage of each
Lender hereunder will be as set forth on Schedule 1.1A hereto;

 

WHEREAS, upon the satisfaction of the conditions precedent set forth in Sections
4.1 and 4.3 hereof on the Closing Date, (a) each Revolving Lender who holds
Revolving Loans in an aggregate amount less than its Commitment Percentage
(after giving effect to this amendment and restatement) of all Revolving Loans
shall advance new Revolving Loans which shall be

 

1

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

 

disbursed to the Agent and used to repay Revolving Loans outstanding to each
Revolving Lender who holds Revolving Loans in an aggregate amount greater than
its Commitment Percentage of all Revolving Loans, (b) each Lender’s
participation in each Letter of Credit shall be automatically adjusted to equal
its Commitment Percentage (after giving effect to this amendment and
restatement), and (c) such other adjustments shall be made as the Agent shall
specify so that each Lender’s Revolving Exposure equal its Commitment Percentage
(after giving effect to this amendment and restatement).  The loans and/or
adjustments described in this paragraph are referred to herein as the “True-Up
Loans”.

 

NOW, THEREFORE, in consideration of the premises, the representations,
warranties, covenants and agreements contained herein, and other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, and subject to the satisfaction of each condition precedent
contained in Section 4.2 hereof, the Existing Credit Agreement shall be amended
and restated as of the Closing Date in the form of this Agreement.  It is the
intention of the Borrowers, Guarantors, the Agent, and Lenders, and such parties
hereby agree, that this Agreement supersedes and replaces the Existing Credit
Agreement in its entirety, and that (a) such amendment and restatement shall
operate to renew, amend and modify certain of the rights and obligations of the
parties under the Existing Credit Agreement as provided herein, but shall not
act as a novation thereof, and (b) the Liens securing the “Obligations” under
and as defined in the Existing Credit Agreement shall not be extinguished, but
shall be carried forward and shall secure such obligations and Indebtedness as
renewed, amended, restated and modified hereby.  The parties hereto further
agree as follows:

 

1.             Definitions

 

1.1          Certain Defined Terms.  Unless a particular word or phrase is
defined therein or the context otherwise requires, capitalized words and phrases
used in the other Loan Documents have the meanings provided below.  As used in
this Agreement, the following terms shall have the following meanings:

 

“Additional Mortgage” shall have the meaning specified for such term in
Section 6.19(b)(ii)(A).

 

“Additional Mortgage Policies” shall have the meaning specified for such term in
Section 6.19(b)(ii)(F).

 

“Additional Mortgaged Property” shall have the meaning specified for such term
in Section 6.19(b).

 

“Additional Senior Indenture” shall mean a trust indenture between the Parent
and a financial institution serving as trustee thereunder, having covenants (but
not necessarily economic terms) substantially consistent with those in the
Senior Note Indenture (and if relating to senior subordinated Additional Senior
Notes, having subordination provisions customary for similar financings and
satisfactory to the Agent and its counsel).

 

“Additional Senior Note Documents” shall mean any and all agreements,
instruments and other documents pursuant to which the Additional Senior Notes
have been or will be issued or otherwise setting forth the terms of the
Additional Senior Notes, the Additional Senior

 

2

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

 

Indenture and the obligations with respect thereto, including any guaranty
agreements, bank product agreements or hedging agreements related thereto, all
ancillary agreements as to which any agent, trustee or lender is a party or a
beneficiary and all other agreements, instruments, documents and certificates
executed in connection with any of the foregoing, in each case as such
agreement, instrument or other document may be amended, restated, supplemented,
refunded, replaced or otherwise modified from time to time in accordance with
the terms thereof.

 

“Additional Senior Notes” shall mean any senior unsecured or senior subordinated
unsecured Indebtedness issued by the Parent as permitted pursuant to
Section 7.1(m) pursuant to an Additional Senior Indenture.

 

“Adjusted LIBOR Rate” shall mean, with respect to any LIBOR Borrowing for any
Interest Period, an interest rate per annum (rounded upwards, if necessary, to
the next 1/16 of 1%) equal to the sum of (a) the product of (i) the LIBOR Rate
in effect for such Interest Period and (ii) Statutory Reserves and (b) the
Applicable Margin.

 

“Affiliate” of any Person shall mean any other Person which controls or is
controlled by or under common control with such Person.  For purposes of this
definition, “control” (including “controlled by” and “under common control
with”) means the possession, directly or indirectly, of the power to direct or
cause the direction of the management or policies of such Person through the
ownership of securities or by contract.  Without limiting the generality of the
foregoing, control of the right to vote of ten percent (10%) or more of all
voting securities of a Person or beneficial ownership of ten percent (10%) of
the outstanding equity interests in such Person shall be deemed to be control
for purposes of compliance with the provisions of Section 7.6 hereof.

 

“Agent” shall have the meaning specified in the preamble to this Agreement.

 

“Alternate Base Rate” shall mean, for any day, a rate per annum (rounded upwards
to the nearest 1/16 of 1%) equal to the sum of (a) the greatest of (i) the Prime
Rate (computed on the basis of the actual number of days elapsed over a 360-day
year) in effect on such day, (ii) the Federal Funds Effective Rate (computed on
the basis of the actual number of days elapsed over a 360-day year) in effect
for such day plus ½ of 1%, and (iii) the Adjusted LIBOR Rate (determined without
regard to clause (b) in the definition thereof) for a one month Interest Period
on such day (or if such day is not a Business Day, the immediately preceding
Business Day) plus 2.50%, and (b) the Applicable Margin.  For purposes of this
Agreement, any change in the Alternate Base Rate due to a change in the Prime
Rate, Federal Funds Effective Rate or the Adjusted LIBOR Rate shall be effective
on the effective date of such change in the Prime Rate, Federal Funds Effective
Rate or the Adjusted LIBOR Rate, respectively.  If for any reason the Agent
shall have determined (which determination shall be conclusive and binding,
absent manifest error) that it is unable to ascertain the Federal Funds
Effective Rate or the Adjusted LIBOR Rate for any reason, including the
inability or failure of the Agent to obtain sufficient quotations in accordance
with the terms hereof, the Alternate Base Rate shall be determined without
regard to clause (a)(i) and/or (a)(iii), as applicable, until the circumstances
giving rise to such inability no longer exist.

 

3

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

 

 

“Alternate Base Rate Borrowing” shall mean, as of any date, that portion of the
principal balance of the Loans bearing interest at the Alternate Base Rate as of
such date.

 

“Annual Audited Financial Statements” shall mean (a) the annual financial
statements of the Parent and its subsidiaries, including all notes thereto,
which statements shall include, on a Consolidated basis, a balance sheet as of
the end of such fiscal year and a statement of operations, a retained earnings
statement and a statement of cash flows for such fiscal year, all setting forth
in comparative form the corresponding figures from the previous fiscal year and
accompanied by a report and opinion of independent certified public accountants
with Deloitte & Touche LLP or an accounting firm of national standing reasonably
acceptable to the Agent, which report shall not contain any qualification (and
be without comment as to the accountants’ opinion whether such Person is a
“going concern” or can continue to be a “going concern”), except that such
report may contain qualification with respect to new accounting principles
mandated by the Financial Accounting Standards Board (or its successor
organization), and shall state that such financial statements, in the opinion of
such accountants, present fairly, in all material respects, the financial
position of such Person as of the date thereof and the results of its operations
and cash flows for the period covered thereby in conformity with GAAP and
(b) annual consolidating financial statements of the Credit Parties and their
subsidiaries containing a balance sheet as of the end of such fiscal year and a
statement of operations for such fiscal year prepared in reasonable detail. 
Such statements shall be accompanied by a certificate of such accountants that
in making the appropriate audit and/or investigation in connection with such
report and opinion, such accountants did not become aware of any Default or
Event of Default with respect to a breach of Section 7.12, or if in the opinion
of such accountant any such Default or Event of Default exists with respect to a
breach of Section 7.12, a description of the nature and status thereof.

 

“Applicable Commitment Fee Percentage” shall mean, with respect to any
Commitment Fee, a rate per annum of (a) 0.375% from and after the Closing Date
and continuing until the tenth (10) Business Day after the Borrowing Base
Compliance Certificate of the Credit Parties and their Subsidiaries for
September 30, 2012 has been delivered to and received by the Agent in accordance
with the terms of Section 6.3(i) hereof and (b) from and after the tenth
(10) Business Day after the Borrowing Base Compliance Certificate of the Credit
Parties and their Subsidiaries for September 30, 2012 has been delivered to and
received by the Agent in accordance with the terms of Section 6.3(i) hereof,
(i) 0.375% if the aggregate amount of the Lenders’ average Unused Commitments
for the calculation period is greater than sixty percent (60%) of the Total
Revolving Commitment, and (ii) 0.25% if the aggregate amount of the Lenders’
average Unused Commitments for the calculation period is less than or equal to
sixty percent (60%) of the Total Revolving Commitment.

 

“Applicable Lending Office” shall mean, with respect to each Lender, such
Lender’s Domestic Lending Office in the case of an Alternate Base Rate Borrowing
and such Lender’s LIBOR Lending Office in the case of a LIBOR Borrowing.

 

“Applicable Margin” shall mean, (a) with respect to any Term Loans bearing
interest at the Adjusted LIBOR Rate, 3.75% per annum and for any Term Loans
bearing interest at the Alternate Base Rate, 2.25% per annum, and (b) with
respect to any Revolving Loan, the applicable rate per annum determined in
accordance with the remainder of this definition.  As of

 

4

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

 

the end of each fiscal quarter of the Credit Parties, commencing with the
quarter ending March 31, 2013, the Applicable Margin for Revolving Loans shall
be adjusted upward or downward, as applicable, to the respective percentages
shown in the schedule below based on Availability, tested on an average daily
basis for the most recently completed fiscal quarter of the Credit Parties. For
purposes hereof, any such adjustment in the respective amounts of the Applicable
Margin, whether upward or downward, shall be effective ten (10) Business Days
after the Borrowing Base Compliance Certificate of the Credit Parties and their
Subsidiaries with respect to the final month of such fiscal quarter has been
delivered to and received by the Agent in accordance with the terms of
Section 6.3(i) hereof; provided, however, if any such Borrowing Base Compliance
Certificate is not delivered in a timely manner as required under the terms of
Section 6.3(i) hereof, the Applicable Margin for Revolving Loans from the date
such Borrowing Base Compliance Certificate was due until ten (10) Business Days
after Agent and Lenders receive the same will be the applicable rate per annum
set forth below in Category 1; provided further, that the Applicable Margin from
and after the Closing Date and continuing until the first upward or downward
adjustment of the Applicable Margin for Revolving Loans, as hereinabove
provided, shall be at the applicable rate per annum set forth below in Category
2.

 

Availability

 

Per Annum Percentage for
Revolving Credit LIBOR
Borrowings

 

Per Annum Percentage
for Revolving Credit
Alternate Base Rate
Borrowings

 

Category 1:

 

2.25

%

0.75

%

Less than $25,000,000

 

 

 

 

 

Category 2:

 

2.00

%

0.50

%

Greater than or equal to $25,000,000 but less than $55,000,000

 

 

 

 

 

Category 3:

 

1.75

%

0.25

%

Greater than or equal to $55,000,000

 

 

 

 

 

 

“Applications” shall mean all applications and agreements for Letters of Credit,
or similar instruments or agreements, in Proper Form, now or hereafter executed
by any Person in connection with any Letter of Credit now or hereafter issued or
to be issued under the terms hereof at the request of the Borrower’s Agent.

 

“Approved Fund” shall mean any Person (other than a natural person) that is
engaged in making, purchasing, holding or investing in bank loans and similar
extensions of credit in the ordinary course of its business and that is
administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an
entity or an Affiliate of an entity that administers or manages a Lender.

 

“Assignment and Acceptance” shall have the meaning specified in
Section 10.12(c) hereof.

 

“Availability” shall mean at any time (a) the lesser at such time of (i) the
Total Revolving Commitment (as such amount may have been reduced or increased in
accordance

 

5

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

 

with the provisions of this Agreement) and (ii) (A) the Borrowing Base as of
such time, less (B) all applicable Reserves, less (b) the sum of the following:

 

(i)            the aggregate amount of each Lender’s Current Sum at such time;

 

(ii)           the aggregate amount of due and payable interest outstanding
under the Loans at such time; and

 

(iii)          all other outstanding Obligations hereunder or any other Loan
Documents which are past due and payable at such time, including without
limitation, Commitment Fees, fees related to any Letters of Credit, and legal
fees and other amounts payable under Section 10.9 hereof.

 

“Bank Product Amount” shall mean, with respect to any Bank Product at any time,
the applicable Credit Party’s or Subsidiary’s net payment obligation with
respect to such Bank Product as of the end of the preceding calendar month (or
other period as provided herein), as determined utilizing the methodology agreed
to with respect to such Bank Product between the applicable Lender Party and
Credit Party and reported to the Agent pursuant to the terms hereof.  In the
event that no Bank Product Amount is reported as provided herein for any Bank
Product for any period, the Agent may use the most recently reported Bank
Product Amount for such Bank Product, as adjusted in the Agent’s reasonable
credit judgment.

 

“Bank Products” shall mean any of the following a Lender Party provides to, or
enters into with, a Credit Party or Subsidiary of a Credit Party:

 

(a)           any arrangement with respect to Hedging Obligations (other than
any arrangement with respect to Hedging Obligations secured by a Lien pursuant
to Section 7.2(m));

 

(b)           any deposit, lockbox or other cash management arrangement; or

 

(c)           any other commercial bank product, service or agreement pursuant
to which a Credit Party or Subsidiary of a Credit Party may be indebted or owe
obligations to a Lender or one of its Affiliates, including, without limitation,
credit cards for commercial customers (including, without limitation,
“commercial credit cards”, E-Payables and purchasing cards), stored value cards
and treasury management services (including, without limitation, controlled
disbursement, automated clearinghouse transactions, returned items, overdrafts
and interstate depository network services);

 

provided that for any of the foregoing to be included as a “Bank Product”
hereunder:  (a) except in the case of Bank Products provided by or owing to
JPMorgan Chase Bank, N.A. or any of its Affiliates, the applicable Lender Party
and Borrowers’ Agent must have provided the Agent written notice of:  (i) the
existence of such Bank Product and (ii) the methodology agreed upon by the
Lender Party and the applicable Credit Party or Subsidiary to determine, from
time to time, the Bank Product Amount and, with respect to Bank Products
constituting Hedging Obligations, the Hedging Obligation Amount, (b) the
applicable Credit Party must otherwise be permitted to enter into such
arrangement under this Agreement or must not be restricted from entering into
such arrangement under this Agreement (including in each case Section 7.1
hereof), and (c) the applicable Lender Party must remain a Lender Party;
provided further, that each

 

6

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

 

Lender Party other than JPMorgan Chase Bank, N.A. and its Affiliates shall
notify the Agent in writing, as soon as available and in any event within
fifteen (15) days after the end of each calendar month (or at more frequent
intervals, and with such reporting dates, as the Agent may require in its
discretion), of the Bank Product Amount and, with respect to Bank Products
constituting Hedging Obligations, the Hedging Obligation Amount, in respect of
its Bank Products as of the end of such calendar month (or other interval), and
any Lender Party that fails to make such notification by the last day of the
month in which due (or, with respect to any interval more frequent than monthly,
within 10 Business Days of the date when due) and any Affiliate thereof (each, a
“Non-Reporting Lender Party”) shall be subject to the provisions of
Section 2.7(d) with respect to Bank Products owed to Non-Reporting Lender
Parties.

 

“Borrower” or “Borrowers” shall have the respective meanings specified in the
preamble of this Agreement.

 

“Borrowers’ Agent” shall mean Neenah Paper, Inc., in its capacity as agent for
the Borrowers and the other Credit Parties, as more fully described in
Section 1.4(b).

 

“Borrowing Base” shall mean, as of any date, the amount of the then most recent
computation of the Borrowing Base, determined by calculating the amount equal to
the following:

 

(a)           85% of Eligible Receivables; plus

 

(b)           the lesser of (i) 75% of the value of Eligible Inventory (valued
at the lower of cost or fair market value), and (ii) 85% of the applicable Net
Recovery Value Percentage of Eligible Inventory; plus

 

(c)           the Equipment Component; plus

 

(d)           the Real Estate Component; plus

 

(e)           the Pledged Cash (if any) held in the Special Cash Collateral
Account.

 

The Borrowing Base at any time shall be determined by reference to the most
recent Borrowing Base Compliance Certificate delivered to the Agent pursuant to
Section 6.3(i) subject to immediate adjustment as a result of (i) reductions in
the Equipment Component, including those resulting from the Quarterly Equipment
Component Amortization Amount, (ii) reductions in the Real Estate Component,
including those resulting from the Quarterly Real Estate Component Amortization
Amount, and (iii) reductions in the amount of Pledged Cash held in the Special
Cash Collateral Account based on the amount specified as Pledged Cash in the
most recently delivered Borrowing Base Compliance Certificate.

 

“Borrowing Base Compliance Certificate” shall mean a certificate completed in
the form of attached hereto and signed by a Responsible Officer of the
Borrowers’ Agent.

 

“Borrowing Base Deficiency” occurs if at any time the total Revolving Exposure
exceeds the Borrowing Base then in effect.

 

7

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

 

“Business Day” shall mean a day when the principal office in New York City of
the Agent is open for business and the Lenders’ Applicable Lending Offices are
generally open for business; provided, however, that with respect to LIBOR
Borrowings, Business Day shall mean a Business Day on which transactions in
dollar deposits between lenders may be carried on in the London eurodollar
interbank market.

 

“Business Entity” shall mean corporations, partnerships, joint ventures, joint
stock associations, business trusts, limited liability companies, unlimited
liability companies, and other business entities.

 

“Canadian Collateral Agent” shall have the meaning specified for such term in
the recitals to this Agreement.

 

“Capital Expenditures” shall mean, with respect to any Person for any period,
all capital expenditures of such Person, on a Consolidated basis, for such
period (including without limitation, the aggregate amount of Capital Lease
Obligations incurred during such period which are required to be capitalized and
reported as a liability on the consolidated balance sheet of such Person),
determined in accordance with GAAP, consistently applied.

 

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

 

“Cash Dividends” shall mean, with respect to any Person for any period, all cash
dividend payments actually made on any Stock of such Person for such period.

 

“Cash Officer” shall mean, with respect to any Person, any individual holding
the title of “cash manager”, “cash officer”, “treasury manager” or any like
title of such Person, or any other employee of Parent designated as a “Cash
Officer” such by its Chief Financial Officer in written notice to Agent from
time to time.  As of the Closing Date, David Linderman and Bridgett German have
each been designated as a Cash Officer.

 

“Change in Law” means (a) the adoption of any law, rule, regulation, treaty or
other Legal Requirement (including any rules or regulations issued under or
implementing any existing law) after the date of this Agreement, (b) any change
in any law, rule, regulation, treaty or other Legal Requirement or in the
interpretation or application thereof by any Governmental Authority after the
date of this Agreement or (c) compliance by any Lender or the Issuing Bank, by
any lending office of such Lender or by such Lender’s or the Issuing Bank’s
holding company, if any) with any request, guideline or directive (whether or
not having the force of law) of any Governmental Authority made or issued after
the date of this Agreement; provided that notwithstanding anything herein to the
contrary, (i) the Dodd-Frank Wall Street Reform and Consumer Protection Act and
all requests, rules, guidelines or directives thereunder, issued in connection
therewith or in implementation thereof, and (ii) all requests, rules, guidelines
and directives promulgated by the Bank for International Settlements, the Basel
Committee on

 

8

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

 

Banking Supervision (or any successor or similar authority) or the United States
or foreign regulatory authorities, shall in each case be deemed to be a “Change
in Law”, regardless of the date enacted, adopted, issued or implemented.

 

“Change of Control” shall mean (a) the acquisition of ownership, directly or
indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date of this Agreement),
of Stock representing more than 30% of the aggregate ordinary voting power
represented by the issued and outstanding Stock of the Parent; (b) occupation of
a majority of the seats (other than vacant seats) on the board of directors of
the Parent by Persons who were neither (i) nominated by the board of directors
of the Parent nor (ii) appointed by directors so nominated; (c) the Parent shall
cease to have beneficial ownership (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of 100% of the aggregate voting power of the Stock
of each other Credit Party, free and clear of all Liens (other than any Liens
granted under the Loan Documents and Liens permitted under Section 7.2), except
to the extent resulting from a transaction specifically permitted under
Section 7.4; (d) (i) any Credit Party consolidates or amalgamates with or merges
into another entity or conveys, transfers or leases all or substantially all of
its property and assets to another Person except in a transaction specifically
permitted under Section 7.4, or (ii) any entity consolidates or amalgamates with
or merges into any Credit Party in a transaction pursuant to which the
outstanding voting Stock of such Credit Party is reclassified or changed into or
exchanged for cash, securities or other property, other than any such
transaction described in this clause (ii) in which either (A) in the case of any
such transaction involving the Parent, no Person or group (within the meaning of
Section 13(d)(3) of the Exchange Act) has, directly or indirectly, acquired
beneficial ownership of more than 30% of the aggregate outstanding ordinary
voting Stock of the Parent, or (B) in the case of any such transaction involving
a Credit Party other than the Parent, the Parent has beneficial ownership,
directly or indirectly, of 100% of the aggregate voting power of all Stock of
the resulting, surviving or transferee entity; (e) any “Change of Control” (or
any similar term) as set forth in the Senior Note Indenture or any Additional
Senior Indenture; or (f) the Parent shall cease to have the beneficial
ownership, directly or indirectly, of 100% of the Stock of FinCo, NP
International and NP International HoldCo, free and clear of all Liens (other
than Liens permitted under Section 7.2).

 

“Closing Date” shall mean the date on which the conditions specified in
Section 4.2 are satisfied (or waived in accordance with Section 10.11).

 

“Closing Date Mortgaged Property” shall have the meaning specified for such term
in Section 4.3(r).

 

“Closing Date Mortgages” shall have the meaning specified for such term in
Section 4.3(r).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended, as now or
hereafter in effect, together with all regulations, rulings and interpretations
thereof or thereunder by the Internal Revenue Service.

 

9

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

 

“Collateral” shall mean all collateral and security as described in the Security
Documents.

 

“Collection Account” shall mean a deposit account of a Credit Party or any of
its Subsidiaries into which payments on account of Receivables of the Credit
Parties are received, including through (a) associated lockbox addresses and
(b) accounts related to foreign exchange conversion and similar purposes
pursuant to arrangements acceptable to the Agent.

 

“Commitment” shall mean, as to any Lender, the obligation of such Lender subject
to the terms and conditions of this Agreement to make Term Loans in a principal
amount not exceeding such Lender’s Term Loan Commitment, and to make Revolving
Loans and incur liability for the Letter of Credit Exposure Amount and the
Swingline Loans in an aggregate principal amount at any one time outstanding up
to, but not exceeding, the amount set forth as such Lender’s Revolving
Commitment.  The initial amount of each Lender’s Commitment is set forth on
Schedule 1.1A attached hereto, as each may be adjusted from time to time
pursuant to other provisions of this Agreement, and Commitments shall mean all
such Commitments of the Lenders, as so adjusted.

 

“Commitment Fee”, with respect to any Revolving Lender, shall have the meaning
assigned to it in Section 2.3.

 

“Commitment Increase Agreement” shall mean a Commitment Increase Agreement
entered into by a Revolving Lender in accordance with Section 2.15(c) and
accepted by the Agent in the form of attached hereto, or any other form approved
by the Agent.

 

“Commitment Percentage” shall mean, with respect to any Lender, (a) with respect
to Revolving Loans, Letter of Credit Exposure Amount or Swingline Exposure,
(i) prior to the termination of the Total Revolving Commitment, the ratio,
expressed as a percentage, of such Lender’s Revolving Commitment to the Total
Revolving Commitment, and (ii) after the termination of the Total Revolving
Commitment, the ratio, expressed as a percentage, of the amount of such
Revolving Lender’s outstanding Revolving Loans and its portion of the Letter of
Credit Exposure Amount and the Swingline Exposure to the aggregate amount of all
outstanding Revolving Loans and the total Letter of Credit Exposure Amount and
the Swingline Exposure, and (b) with respect to the Term Loans, a percentage
equal to a fraction of the numerator of which is such Term Lender’s outstanding
principal amount of the Term Loans and the denominator of which is the aggregate
outstanding amount of the Term Loans of all Term Lenders; provided that when a
Defaulting Lender shall exist, any such Defaulting Lender’s Commitment shall be
disregarded in the calculation in both clauses (a) and (b) hereof, subject to
Section 10.11 hereof.

 

“Compliance Certificate” shall mean a certificate substantially in the form of
attached hereto.

 

“Concentration Limit” shall mean, with respect to any account debtor owing any
Receivables to any Credit Party, the maximum amount of Receivables from such
account debtor which may be included as Eligible Receivables, expressed as a
percentage of the total amount of

 

10

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

 

Receivables owing to the Credit Parties by all account debtors, which percentage
shall be (a) seventeen and one-half percent (17.5%), or (b) such other
percentage for the applicable account debtor as determined by the Agent from
time to time in the Agent’s reasonable credit judgment.

 

“Consequential Loss” shall mean, with respect to (a) the Borrowers’ payment of
principal of or interest on a LIBOR Borrowing on a day prior to the last day of
the applicable Interest Period, (b) the Borrowers’ failure to borrow or convert
a LIBOR Borrowing on the date specified by the Borrowers’ Agent for any reason,
or (c) any cessation of the Adjusted LIBOR Rate to apply to the Loans or any
part thereof pursuant to Section 2.9 hereof, in each case whether voluntary or
involuntary, any loss, expense, penalty, premium or liability incurred by any of
the Lenders or the Agent as a result thereof, including without limitation any
loss of anticipated profit or any interest paid by any of the Lenders to lenders
of funds borrowed by it to make or carry the Loans and any other costs and
expenses sustained or incurred in liquidating or employing deposits from third
parties acquired to effect or maintain the Loans.

 

“Consolidated” shall mean, for any Person, as applied to any financial or
accounting term, such term determined on a consolidated basis in accordance with
GAAP (except as otherwise required herein) for such Person and all Subsidiaries
thereof.

 

“Contingent Obligation” shall mean, as to any Person (the “guarantor”), any
obligation of such guarantor guaranteeing the payment or performance of any
Indebtedness, leases, dividends or other obligations (collectively “primary
obligations”) of any other Person (the “primary obligor”), whether directly or
indirectly, including without limitation any obligation of such guarantor (a) to
purchase any such primary obligation or other property constituting direct or
indirect security therefor, (b) assume or contingently agree to become or be
secondarily liable in respect of any such primary obligation, (c) to advance or
supply funds (i) for the purchase or payment of any such primary obligation or
(ii) to maintain working capital or equity capital for the primary obligor or
otherwise to maintain the net worth or solvency of the primary obligor, (d) to
purchase property, securities or services primarily for the purpose of assuring
the owner of any such primary obligation of the ability of the primary obligor
to make payment of such primary obligation, or (e) otherwise to assure or hold
harmless the owner of such primary obligation against loss in respect thereof;
provided, however, that the term “Contingent Obligation” shall not include
endorsements of checks or other negotiable instruments in the ordinary course of
business.

 

“Contribution Agreement” shall mean any Contribution Agreement executed by and
among the Credit Parties and their Subsidiaries, as the same may be amended,
modified, supplemented, restated and joined in pursuant to a Joinder Agreement,
from time to time.

 

“Controlled Account” shall mean a deposit account (including a Collection
Account) of any Credit Party that is subject to a Tri-Party Agreement.

 

“Copyrights” shall have the meaning specified for such term in the definition of
“Intellectual Property.”

 

“Credit Parties” shall mean the Borrowers and the Guarantors.

 

11

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

 

“Current Sum” shall mean on any day, as to a particular Revolving Lender, the
sum of (a) the outstanding principal balance of such Revolving Lender’s
Revolving Credit Note on such day plus (b) the product of (i) such Revolving
Lender’s Commitment Percentage times (ii) the sum of the Letter of Credit
Exposure Amount and the Swingline Exposure on such day.

 

“Default Rate” shall mean, on any day, as follows:  (a) with respect to
principal which is outstanding under any Note, the sum of the Interest Option
otherwise applicable thereto on such day plus two percent per annum (it being
understood by the Borrowers that if any such applicable Interest Option is based
on the Adjusted LIBOR Rate, the Default Rate with respect to the applicable
principal amount shall only be calculated with reference to the applicable
Adjusted LIBOR Rate until the Interest Period applicable thereto expires, and
upon the expiration of such applicable Interest Period, the Default Rate for
such applicable principal amount shall be computed on the basis of the Alternate
Base Rate for such day plus two percent per annum), and (b) with respect to
accrued interest, fees and other Obligations (other than past due principal
outstanding under any Note), the sum of the Alternate Base Rate for such day
plus two percent per annum.

 

“Defaulting Lender” means any Lender, as determined by the Agent, that has
(a) failed to fund any portion of its Loans or participations in Letters of
Credit or Swingline Loans within three Business Days of the date required to be
funded by it hereunder, (b) notified the Borrowers, the Agent, the Swingline
Lender or any Lender in writing that it does not intend to comply with any of
its funding obligations under this Agreement or generally has made a public
statement to the effect that it does not intend to comply with its funding
obligations under this Agreement or under other agreements in which it commits
to extend credit, (c) failed, within three Business Days after request by the
Agent, to confirm that it will comply with the terms of this Agreement relating
to its obligations to fund prospective Loans and participations in then
outstanding Letters of Credit and Swingline Loans, (d) otherwise failed to pay
over to the Agent or any other Lender any other amount required to be paid by it
hereunder within three Business Days of the date when due, unless the subject of
a good faith dispute, or (e) (i) become or is insolvent or has a parent company
that has become or is insolvent or (ii) become the subject of a bankruptcy or
insolvency proceeding, or has had a receiver, conservator, trustee or custodian
appointed for it, or has taken any action in furtherance of, or indicating its
consent to, approval of or acquiescence in any such proceeding or appointment or
has a parent company that has become the subject of a bankruptcy or insolvency
proceeding, or has had a receiver, conservator, trustee custodian,
administrator, or assignee appointed for it for the benefit of creditors or
similar Person charged with reorganization or liquidation of its business or
assets, including the Federal Deposit Insurance Corporation or any other state
or federal regulatory authority acting in such capacity, or has taken any action
in furtherance of, or indicating its consent to, approval of or acquiescence in
any such proceeding or appointment; provided that a Lender shall not become a
Defaulting Lender solely as a result of the acquisition or maintenance of an
ownership interest in such Lender or Person controlling such Lender or the
exercise of control over a Lender or Person controlling such Lender by a
Governmental Authority or an instrumentality thereof, so long as such ownership
interest does not result in or provide such Lender with immunity from the
jurisdiction of courts within the United States or from the enforcement of
judgments or writs of attachment on its assets or permit such Lender (or such
Governmental Authority) to reject repudiate, disavow or disaffirm any contracts
or agreements made with any Credit Party.

 

12

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

 

“Discontinued Operations” shall mean, as of any day, operations of any Credit
Party or any of their Subsidiaries which have been discontinued, and which, as
of such day, have been fully terminated, disposed of or liquidated.

 

“Disposition” shall mean the sale, transfer, lease or other disposition
(including pursuant to a merger resulting in the subject Property no longer
being owned by a Credit Party) of any Property.

 

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

 

“Domestic Lending Office” shall mean, with respect to any Lender, the office of
such Lender specified as its “Domestic Lending Office” opposite its name on the
signature pages hereof, or such other office of such Lender as such Lender may
from time to time specify in writing to the Borrowers’ Agent and the Agent.

 

“Domestic Subsidiary” shall mean any Subsidiary of any Borrower that is
organized and domiciled in the United States of America; provided that, for the
purposes of this Agreement and the other Loan Documents, neither NP
International HoldCo nor NP International shall be treated as a Domestic
Subsidiary even though organized under the laws of the State of Delaware.

 

“Dominion Event” shall have the meaning assigned to such term in
Section 6.15(a).

 

“Dominion Termination Event” shall have the meaning assigned to such term in
Section 6.15(a).

 

“EBITDA” shall mean, with respect to any Person for any period, the sum of
(a) Net Income, (b) Interest Expense, (c) depreciation and amortization expense
(excluding depreciation and amortization applicable to Discontinued Operations
as of such period), and (d) federal, state and local income or franchise taxes,
in each case of such Person for such period, computed and calculated, without
duplication, on a Consolidated basis and in accordance with GAAP, consistently
applied.

 

“Eligible Assignee” shall mean (a) a Lender, (b) an Affiliate of a Lender,
(c) an Approved Fund, or (d) any other commercial lender, finance company,
insurance company, financial institution or fund reasonably acceptable to the
Agent and the Borrowers’ Agent; provided, however, that if an Event of Default
has occurred which has not been waived or cured, such approval by the Borrowers’
Agent shall not be required.

 

“Eligible Equipment” shall mean Equipment of a Credit Party which meets all of
the following specifications; provided that such specifications may be revised
from time to time by the Agent to account for events, conditions, contingencies
and risks that the Agent becomes actually aware of after the Closing Date that,
in the Agent’s reasonable credit judgment, could adversely affect any Equipment
or the Agent’s interest therein:

 

(a)           one of the Credit Parties has good title to such Equipment;

 

(b)           such Credit Party has the right to subject such Equipment to a
Lien in favor of the Agent; such Equipment is subject to a first priority
perfected Lien in favor of the Agent for the

 

13

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

 

 

ratable benefit of the Lender Parties and is free and clear of all other Liens
of any nature whatsoever (except for Liens permitted under Section 7.2(e) other
than contested Liens);

 

(c)           the full purchase price for such Equipment has been paid by the
Credit Parties;

 

(d)           such Equipment is located on premises (i) owned by one of the
Credit Parties, which premises are subject to a first priority perfected Lien in
favor of the Agent, or (ii) leased by one of the Credit Parties with respect to
which the Agent has received an executed landlord’s waiver or subordination
agreement from the owner of such leased facility pursuant to which such owner
waives or subordinates any Lien it may claim against such Equipment pursuant to
a written waiver or subordination and access agreement acceptable to the Agent
acting reasonably in all respects;

 

(e)           such Equipment is in good working order and condition (ordinary
wear and tear excepted) and is used or held for use by the Credit Parties in the
ordinary course of business of the Credit Parties;

 

(f)            such Equipment is not subject to any agreement which restricts
the ability of the Credit Parties to use, sell, transport or dispose of such
Equipment or which restricts the Agent’s  ability to take possession of, sell or
otherwise dispose of such Equipment; and

 

(g)           such Equipment does not constitute “fixtures” under the applicable
laws of the jurisdiction in which such Equipment is located.

 

“Eligible Inventory” shall mean all raw materials, rolled and uncut or sheeted
paper, or finished goods Inventory of the Credit Parties which complies with all
of the following requirements:  (a) such Inventory is owned by and recorded on
the books and records of the applicable Credit Party in the ordinary course of
business; (b) such Inventory is valued in accordance with GAAP at the lower of
fair market value or cost; and (c) such Inventory does not otherwise constitute
Ineligible Inventory.  Standards of eligibility and Reserves for Eligible
Inventory may be fixed and revised from time to time by the Agent in its
reasonable credit judgment based on events, conditions or other circumstances
that the Agent becomes actually aware of after the Original Closing Date that,
in the Agent’s reasonable credit judgment, adversely affect or could reasonably
be expected to adversely affect Eligible Inventory.

 

“Eligible Real Estate” shall mean Real Property Assets which meet all of the
following specifications; provided that such specifications may be revised from
time to time by the Agent in its reasonable credit judgment to account for
events, contingencies and risks that the Agent becomes actually aware of after
the Closing Date that, in the Agent’s reasonable credit judgment, could
adversely affect the Real Property Asset or the Agent’s interest therein:

 

(a)           one of the Credit Parties is the record owner of and has good fee
title to such Real Property Asset;

 

(b)           such Credit Party has the right to subject such Real Property
Asset to a Lien in favor of the Agent for the ratable benefit of the Lender
Parties; such Real Property Asset is subject to a first priority perfected Lien
in favor of the Agent for the ratable benefit of the Lender Parties and is free
and clear of all other Liens of any nature whatsoever (except for Liens

 

14

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

 

permitted under Section 7.2(e) other than contested Liens, and Liens permitted
under Section 7.2(f), Section 7.2(j), Section 7.2(o), Section 7.2(p) and
Section 7.2(q));

 

(c)           such Real Property Asset is not subject to any agreement or
condition which could restrict or otherwise adversely effect the Agent’s ability
to sell or otherwise dispose of such Real Property Asset; and

 

(d)           such parcel of real property shall comply with all the
requirements for a Closing Date Mortgaged Property set forth in Section 4.3(r).

 

“Eligible Receivables” shall mean, as at any date of determination thereof, all
Receivables of the Credit Parties which comply with all of the following
requirements:  (a) all payments due on the Receivable have been billed and
invoiced in a timely fashion and in the normal course of business; (b) no
payment is outstanding on the Receivable for more than one hundred (100) days
after the date of invoice (except for Receivables fully insured or backed by a
letter of credit in all respects acceptable to the Agent in its reasonable
discretion) or more than sixty (60) days past due; and (c) the Receivables do
not otherwise constitute Ineligible Receivables.  Standards of eligibility and
Reserves for Eligible Receivables may be fixed and revised from time to time by
the Agent in its reasonable credit judgment based on events, conditions or other
circumstances that the Agent becomes actually aware of after the Original
Closing Date that, in the Agent’s reasonable credit judgment, adversely affect
or could reasonably be expected to adversely affect the Eligible Receivables. 
Additionally, in calculating Eligible Receivables, each of the following shall
be excluded (to the extent the same are otherwise included in Eligible
Receivables):  (i) unpaid sales, excise or similar taxes owed by any of the
Credit Parties (to the extent the same are included in Receivables); and
(ii) returns, discounts, claims, credits and allowances of any nature asserted
or taken by account debtors of any of the Credit Parties.

 

“Environmental Claim” shall mean any third party (including any Governmental
Authority) action, lawsuit, claim or proceeding (including claims or proceedings
at common law) which seeks to impose or alleges any liability for (a) pollution
or contamination by, or releases or threatened releases of, Hazardous Substances
into the air, surface water, ground water or land or the clean-up, abatement,
removal, remediation or monitoring of such pollution, contamination or Hazardous
Substances; (b) generation, recycling, reclamation, handling, treatment,
storage, disposal or transportation of Hazardous Substances; (c) exposure to
Hazardous Substances; (d) the safety or health of employees or other Persons in
connection with any of the activities specified in any other subclause of this
definition; or (e) the manufacture, processing, distribution in commerce,
presence or use of Hazardous Substances.  An “Environmental Claim” includes a
common law action, as well as a proceeding to issue, modify or terminate an
Environmental Permit to the extent that such a proceeding attempts to redress
violations of the applicable permit, license, or regulation as alleged by any
Governmental Authority.

 

“Environmental Law” shall mean all requirements imposed by any law (including
The Resource Conservation and Recovery Act, The Comprehensive Environmental
Response, Compensation, and Liability Act, the Clean Water Act, the Clean Air
Act, and any state analogues of any of the foregoing), rule, regulation, or
order of any Governmental Authority now or hereafter in effect that relate to
(a) pollution, protection or clean-up of the air, surface water,

 

15

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

 

ground water or land; (b) solid, liquid or gaseous waste or Hazardous Substance
generation, recycling, reclamation, release, threatened release, treatment,
storage, disposal or transportation; (c) exposure of Persons or property to
Hazardous Substances; (d) the manufacture, presence, processing, distribution in
commerce, use, discharge, releases, threatened releases, or emissions of
Hazardous Substances into the environment; (e) the storage of any Hazardous
Substances; or (f) occupational health and safety

 

“Environmental Liabilities” shall mean all liabilities arising from any
Environmental Claim, Environmental Permit or Requirements of Environmental Law,
at law or in equity, and whether based on negligence, strict liability or
otherwise, including:  remedial, removal, response, abatement, restoration
(including natural resources), investigative, or monitoring liabilities,
personal injury and damage to property, natural resources or injuries to
persons, and any other related costs, expenses, losses, damages, penalties,
fines, liabilities and obligations, and all costs and expenses necessary to
cause the issuance, reissuance or renewal of any Environmental Permit reasonably
necessary for the conduct of any material aspect of the business of any Credit
Party or any of their Subsidiaries, including attorney’s fees and court costs. 
Environmental Liability shall mean any one of them.

 

“Environmental Permit” shall mean any permit, license, approval or other
authorization under any applicable law, regulation and other requirement of any
Governmental Authority relating to pollution or protection of health or the
environment, including laws, regulations or other requirements relating to
emissions, discharges, releases or threatened releases of pollutants,
contaminants, Hazardous Substances or toxic materials or wastes into ambient
air, surface water, ground water or land, or otherwise relating to the
manufacture, processing, distribution, recycling, presence, use, treatment,
storage, disposal, transport, or handling of wastes, pollutants, contaminants or
Hazardous Substances.

 

“Equipment” shall mean (a) any machinery or equipment and (b) any other Property
classified as “equipment” under the UCC.

 

“Equipment Component” shall have the meaning specified for such term on Schedule
1.1C.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and all rules, regulations, rulings and
interpretations adopted by the Internal Revenue Service or the Department of
Labor thereunder.

 

“ERISA Affiliate” shall mean any trade or business (whether or not incorporated)
which together with any Credit Party or any Subsidiary of any Credit Party would
be treated as a single employer under the provisions of Title I or Title IV of
ERISA following the Closing Date.

 

“Event of Default” shall mean any of the events specified in Section 8.1 hereof,
provided there has been satisfied any requirement in connection with any such
event for the giving of notice or the lapse of time, or both, and “Default”
shall mean any of such events, whether or not any such requirement for the
giving of notice, or the lapse of any applicable grace or curative period (if
any), or both, has been satisfied.

 

16

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

 

“Excess Interest Amount” shall have the meaning attributed to such term in
Section 2.14 hereof.

 

“Excluded Foreign Subsidiary” shall have the meaning assigned to such term in
Section 6.10; provided, that, as of the Closing Date, FinCo, Neenah Germany, NP
International HoldCo, NP International, and Neenah Canada shall each be deemed
to be Excluded Foreign Subsidiaries.

 

“Excluded Taxes” shall have the meaning attributed to such term in
Section 10.17(a)(i) hereof.

 

“Existing Credit Agreement” shall have the meaning specified in the recitals of
this Agreement.

 

“Existing Indebtedness” shall have the meaning specified in the recitals of this
Agreement.

 

“Existing Lenders” shall have the meaning specified in the recitals of this
Agreement.

 

“Existing Letters of Credit” shall mean the letters of credit issued under the
Existing Credit Agreement and listed on Schedule 2.10(a) hereto that are
outstanding on the Closing Date.

 

“Extended Facility Letter of Credit” shall have the meaning attributed to such
term in Section 2.10(j) hereof.

 

“FATCA” means Sections 1471 through 1474 of the Code, as of the date of this
Agreement and any regulations or official interpretations thereof.

 

“Federal Funds Effective Rate” shall mean, for any day, a rate per annum equal
to the weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Agent from three Federal funds brokers of recognized standing selected by it.

 

“Financial Officer” shall mean, with respect to any Person, the chief financial
officer, principal accounting officer, treasurer or controller of such Person.

 

“FinCo” shall mean Neenah Paper International Finance Company B.V., a company
formed under the laws of the Netherlands, all of whose issued and outstanding
Stock is owned by the Parent or another Credit Party.

 

“FinCo Note” shall mean that certain promissory note, dated as of October 3,
2006, by FinCo to NP International HoldCo, that evidences certain of the
Inter-Company Loans.

 

“Fixed Charge Coverage Ratio” shall mean, with respect to any Person and without
duplication, the ratio of (a) EBITDA less (i) Capital Expenditures not funded by
Indebtedness permitted by Section 7.1(c) or Section 7.1(m); less (ii) loans,
advances and Investments made to

 

17

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

 

Persons that are not Credit Parties, less (iii) cash payments of federal, state,
provincial and local income or franchise taxes, plus (iv) Cash Dividends and
other distributions with respect to Stock held by a Credit Party to the extent
received in cash by a Credit Party from any Person that is not a Credit Party,
to (b) the sum of (i) cash Interest Expense, plus (ii) Scheduled Principal
Payments, plus (iii) Cash Dividends, plus (iv) Stock Repurchases (other than
Stock Repurchases made prior to January 1, 2013), plus (v) the Quarterly
Equipment Component Amortization Amount per three calendar month period in
respect of scheduled reductions, if any, of the Equipment Component as set forth
in clause (a) of the definition of Equipment Component, plus (vi) the Quarterly
Real Estate Component Amortization Amount per three calendar month period in
respect of scheduled reductions, if any, of the Real Estate Component as set
forth in clause (a) of the definition of Real Estate Component.

 

All components of the Fixed Charge Coverage Ratio shall be determined for the
applicable Person on a Consolidated basis, without duplication and for the four
(4) most recent consecutive fiscal quarters of the applicable Person ending on
or prior to the date of determination; provided, that the results of operation
of the Offshore Entities and their subsidiaries, including, without limitation,
Neenah Germany and its subsidiaries, shall be excluded in the calculation of
Fixed Charge Coverage Ratio.

 

“Flood Hazard Property” shall mean a Mortgaged Property the improvements on
which are located in an area designated by the Federal Emergency Management
Agency as having special flood or mud slide hazards and requiring either the
Credit Party or Agent to purchase special flood insurance.

 

“Funded Term Loan Amount” shall mean the principal amount funded under the Term
Loans on the date of advance thereof.

 

“GAAP” shall mean, as to a particular Person, those principles and practices
(a) which are recognized as such by the Financial Accounting Standards Board or
successor organization, and (b) which are consistently applied (or with respect
to which any change in principles and practice mandated by the Financial
Accounting Standards Board or successor organization are disclosed in writing to
the Agent) for all periods after the date of this Agreement in a manner
consistent with the manner in which such principles and practices were applied
to the most recent audited financial statements of the relevant Person furnished
to the Agent and the Lenders prior to the Closing Date (or with respect to which
any change in principles and practice mandated by the Financial Accounting
Standards Board or successor organization are disclosed in writing to the
Agent).

 

“Governmental Authority” shall mean the United States of America, any state of
the United States, and any political subdivision of any of the foregoing, any
foreign governmental or supranational authority, and any agency,
instrumentality, department, commission, board, bureau, central bank, authority,
court or other tribunal, in each case whether executive, legislative, judicial,
regulatory or administrative, having jurisdiction over the Agent, any of the
Lenders, any Credit Party, any Subsidiary of any Credit Party, or their
respective Property.

 

“Grantor” shall mean any Grantor, Assignor, Pledgor or Debtor, as such terms are
defined in any of the Security Documents.

 

18

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

 

“Guarantors” shall mean each Subsidiary added as a guarantor pursuant to
Section 6.10.

 

“Guaranty” shall mean each and every guaranty of the Obligations from time to
time executed and delivered to the Agent by any Guarantor, as amended,
supplemented, modified, joined in pursuant to a Joinder Agreement and restated
from time to time, each substantially in the form of (with appropriate changes
based upon the local law of the applicable Guarantor’s jurisdiction of
creation).

 

“Hazardous Substance” shall mean any hazardous or toxic waste, substance or
product or material defined as or regulated as “hazardous” or “toxic” from time
to time by any Requirements of Environmental Law, including solid waste (as
defined under The Resource Conservation and Recovery Act or its regulations, as
amended from time to time), petroleum and any constituent thereof, and any
radioactive materials and waste; provided, however, the words “Hazardous
Substance” shall not mean or include any such Hazardous Substance used,
generated, manufactured, stored, disposed of or otherwise handled in normal
quantities in the ordinary course of business in compliance with all applicable
Environmental Laws, or such that may be naturally occurring in any ambient air,
surface water, ground water, land surface or subsurface strata.

 

“Hedging Obligations” shall mean, with respect to any Person, any and all
obligations of such Person, whether absolute or contingent and howsoever and
whensoever created, arising, evidenced or acquired (including all renewals,
extensions and modifications thereof and substitutions therefor), under (a) any
and all agreements, devices or arrangements designed to protect at least one of
the parties thereto from the fluctuations of interest rates, exchange rates or
forward rates applicable to such party’s assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency exchange
agreements, interest rate cap or collateral protection agreements, forward rate
currency or interest rate options, puts and warrants, commodity (including pulp)
futures, forwards, swaps and options, and (b) any and all cancellations, buy
backs, reversals, terminations or assignments of any of the foregoing.

 

“Hedging Obligation Amount” shall mean, with respect to any Hedging Obligation,
the “derivative risk equivalent” (or equivalent figure) for such Hedging
Obligation as of the end of the preceding calendar month (or other period as
provided herein), being a figure calculated to provide an exposure measure for
derivative obligations comparable with that of loans, in each case calculated
based upon a methodology reported to the Agent in accordance with the terms
hereof and acceptable to the Agent in its reasonable credit judgment.  In the
event that no Hedging Obligation Amount is reported as provided herein for any
Hedging Obligation for any period, the Agent may use the most recently reported
Hedging Obligation Amount for such Hedging Obligation, as adjusted in the
Agent’s reasonable credit judgment.

 

“Hedging Obligations Aggregate Amount” shall mean at any time, with respect to
Hedging Obligations constituting Bank Products hereunder, an amount equal to the
sum at such time of all Hedging Obligation Amounts associated with all such
Hedging Obligations.

 

19

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

 

“Highest Lawful Rate” shall mean, with respect to the Agent or any Lender, the
maximum nonusurious rate of interest permitted to be charged by, as applicable,
the Agent or such Lender under applicable laws (if any) of the United States or
any state from time to time in effect.

 

“Indebtedness” shall mean, as to any Person, without duplication:  (a) all
indebtedness of such Person for borrowed money; (b) any other indebtedness which
is evidenced by a bond, debenture or similar instrument or upon which interest
charges are traditionally paid; (c) all Capital Lease Obligations of such
Person; (d) all obligations of such Person for the deferred purchase price of
Property or services (except current trade accounts payable arising in the
ordinary course of business and current accrued expenses, not the result of
borrowing, arising in the ordinary course of business); (e) all reimbursement
obligations of such Person in respect of outstanding letters of credit,
acceptances and similar obligations created for the account of such Person;
(f) all indebtedness, liabilities, and obligations secured by any Lien on any
Property owned by such Person even though such Person has not assumed or has not
otherwise become liable for the payment of any such indebtedness, liabilities or
obligations secured by such Lien, but only to the extent of the value of the
Property subject to such Lien (or, if less, the amount of the underlying
indebtedness, liability or obligation); (g) net liabilities of such Person in
respect of Hedging Obligations (calculated on a basis satisfactory to the Agent
and in accordance with accepted practice); (h) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person; (i) all obligations of such Person to pay rent or other
amounts under any Synthetic Lease; (j) all Indebtedness of another entity to the
extent such Person is liable therefor (including any partnership in which such
Person is a general partner and including any unlimited liability corporation)
to the extent such Person is liable therefor as a result of such Person’s
ownership interest in or other relationship with such entity, except to the
extent the terms of such Indebtedness provide that such Person is not liable
therefor; and (k) all Contingent Obligations of such Person with respect to
Indebtedness of others; provided, that such term shall not mean or include
(i) any Indebtedness in respect of which monies sufficient to pay and discharge
the same in full (either on the expressed date of maturity thereof or on such
earlier date as such Indebtedness may be duly called for redemption and payment)
shall be deposited with a depository, agency or trustee acceptable to the Agent
in trust for the payment thereof, or (ii) any operating leases entered into in
the ordinary course of business (to the extent such operating leases do not
constitute Capital Lease Obligations or Synthetic Leases).

 

“Indemnifiable Tax” shall have the meaning attributed to such term in
Section 10.17(a)(i) hereof.

 

“Indenture Cap” shall mean the maximum aggregate principal amount of
Indebtedness permitted under Credit Facilities (as defined in the Senior Note
Indenture and any Additional Senior Indenture) pursuant to any limitation or
restriction set forth in the Senior Indenture, any other Senior Note Document or
any Additional Senior Note Documents, as the same may be amended, restated,
waived or otherwise modified from time to time; provided, that Parent may
characterize its Indebtedness under the covenants set forth under the Senior
Indenture, any other Senior Note Document or any Additional Senior Note
Documents which limit Indebtedness in any manner permitted thereunder, as
applicable, which may maximize the amount of the Indenture Cap.

 

20

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

 

“Ineligible Inventory” shall mean, as at any date of determination thereof, any
Inventory of any Credit Party which does not comply with all of the following
requirements:

 

(a)           such Inventory is Collateral hereunder and is subject to a first
priority perfected Lien in favor of the Agent for the ratable benefit of the
Lender Parties and is free and clear of all other Liens of any nature whatsoever
(except for Liens permitted under Section 7.2(e) other than contested Liens);

 

(b)           such Inventory meets all applicable laws and standards imposed by
any Governmental Authority having regulatory authority over it;

 

(c)           such Inventory is in good condition, is not returned, shopworn,
defective, damaged, obsolete, or broke inventory, and is currently usable or
saleable in the normal course of business of the applicable Credit Party;

 

(d)           such Inventory is not “slow moving”;

 

(e)           such Inventory is not work-in-process Inventory (other than rolled
and uncut or sheeted paper), is not scrap or remnants Inventory, is not stores
and is not packaging or shipping supplies or materials;

 

(f)            such Inventory must not be in transit and must be housed or
stored in the United States at either (i) a real Property location either owned
or leased by a Credit Party; so long as such leased facility is covered by a
landlord’s waiver or subordination agreement received by the Agent from the
owner of such leased facility pursuant to which such owner waives or
subordinates any Lien it may claim against such Inventory, whether contractual
or statutory, to the Lien in favor of the Agent against such Inventory pursuant
to a written waiver or subordination and access agreement acceptable to the
Agent in all respects, or (ii) a public warehouse facility utilized by a Credit
Party, so long as such warehouse facility is covered by a warehousemen’s waiver
or subordination and access agreement received by the Agent from the operator of
such warehouse facility pursuant to which such operator waives or subordinates
any Lien it may claim against such Inventory, whether contractual or statutory,
to the Lien in favor of the Agent against such Inventory and acknowledges that
it holds and controls such Inventory for the benefit of the Agent for purposes
of perfecting the Agent’s Lien therein pursuant to a written waiver or
subordination agreement reasonably acceptable to the Agent in all respects;

 

(g)           such Inventory is not in the possession of or control of any
bailee (other than a warehouseman as described above) or any agent or processor
for or customer of any Credit Party or any of their Subsidiaries, unless such
bailee, agent or processor has executed and delivered to the Agent an
access/subordination agreement in form and substance reasonably acceptable to
the Agent subordinating any Lien it may claim in such Inventory and
acknowledging that it holds and controls such Inventory for the benefit of the
Agent for purposes of perfecting the Agent’s Lien therein;

 

(h)           such Inventory must be adequately insured to the reasonable
satisfaction of the Agent pursuant to insurance coverage required by this
Agreement and the Security Documents;

 

(i)            such Inventory must not be on consignment;

 

21

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

 

(j)            such Inventory is not letterhead, watermarked, or styled in a
manner for a particular purchaser, unless covered by a purchase order under
which the purchaser has unconditionally agreed to take delivery;

 

(k)           such Inventory does not constitute seedlings;

 

(l)            such Inventory has neither been sold nor is subject to a Lien,
claim or right of any person other than the Credit Parties or the Agent (except
for Liens permitted under Section 7.2(e) other than contested Liens); and

 

(m)          the Agent has not deemed such Inventory ineligible because the
Agent in its reasonable credit judgment considers such Inventory to be
unmarketable or the value thereof to be impaired or its ability to realize such
value to be insecure.

 

Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, no Inventory purchased or otherwise acquired through any
acquisition or other investment permitted hereunder after the Closing Date shall
be included within the Borrowing Base for purposes hereof unless and until the
Agent shall have conducted a field examination (which shall be conducted within
a reasonable time (in the Agent’s judgment) after Borrower’s request at the
Borrowers’ cost and expense) of the applicable books, records and operations for
the assets or Subsidiary so acquired in order to reasonably satisfy the Agent
that the Inventory so acquired generally satisfies the above-described standards
of eligibility.

 

“Ineligible Receivables” shall mean, as at any date of determination thereof,
any Receivables of any Credit Party which do not comply with all of the
following requirements:

 

(a)           the Receivable has been created by the applicable Credit Party in
the ordinary course of business from a completed, outright and lawful sale of
goods, pursuant to which ownership has passed to the applicable account debtor
on an absolute sales basis, or from the rendering of services by or on behalf of
the applicable Credit Party and is deemed “earned” under the applicable service
contract or other agreement or arrangement between the applicable Credit Party
and the applicable account debtor;

 

(b)           the Receivable is Collateral hereunder and is subject to a first
priority perfected Lien in favor of the Agent for the ratable benefit of the
Lender Parties and is free and clear of all other Liens of any nature whatsoever
(except for Liens permitted under Section 7.2(e) other than contested Liens);

 

(c)           the payments due on 50% or more of all billed Receivables owing to
the applicable Credit Party by the applicable account debtor are less than
100 days past the date of invoice (except for Receivables fully insured or
backed by a letter of credit in all respects acceptable to the Agent in its
reasonable discretion) and less than 60 days from the due date thereof;

 

(d)           the Receivable constitutes an “account” within the meaning of the
UCC;

 

22

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

 

(e)           the Receivable does not arise out of a bill and hold,
ship-in-place, guaranteed sale, sale-and-return, consignment, progress billing,
promotional (including samples), C.O.D. or cash in advance arrangement;

 

(f)            the Receivable is not subject to any setoff, contra, offset,
deduction, dispute, charge back, credit, counterclaim or other defense arising
out of the transactions represented by the Receivable or independently thereof;
provided, however, that in each case regarding an undisputed liquidated sum,
such Receivable is an Ineligible Receivable only to the extent of such
undisputed liquidated sum, and in each case regarding a disputed sum or claim,
such Receivable is an Ineligible Receivable only to the extent of the sum or
amount claimed by the party adverse to the applicable Credit Parties);

 

(g)           the applicable account debtor has finally accepted the goods or
services from the sale out of which the Receivable arose and has not
(i) objected to such account debtor’s liability thereon, (ii) rejected any of
such services or goods or (iii) returned or repossessed any of such goods,
except for goods returned in the ordinary course of business for which, in the
case of goods returned, goods of equal or greater value have been shipped in
return;

 

(h)           the applicable account debtor is not any Governmental Authority,
unless such account debtor is the United States of America or Canada (or any
agency, instrumentality, department or other political subdivision thereof) and
there has been compliance satisfactory to the Agent in all respects with the
U.S. Federal Assignment of Claims Act or, as applicable, the Canadian Financial
Administration Act or any applicable provincial legislation;

 

(i)            the applicable account debtor is not an Affiliate of any Credit
Party or any of their Subsidiaries;

 

(j)            the applicable account debtor must have its principal place of
business located within the United States or Canada, except for Receivables
fully insured or backed by a letter of credit in all respects acceptable to the
Agent in its reasonable discretion;

 

(k)           the Receivable is not evidenced by a promissory note or other
instrument or by chattel paper;

 

(l)            the Receivable complies with all material Legal Requirements
(including without limitation, all usury laws, fair credit reporting and billing
laws, fair debt collection practices and rules, and regulations relating to
truth in lending and other similar matters);

 

(m)          the Receivable is in full force and effect and constitutes a legal,
valid and binding obligation of the applicable account debtor enforceable in
accordance with the terms thereof;

 

(n)           the Receivable is denominated in and provides for payment by the
applicable account debtor in U.S. dollars or Canadian dollars, except for
Receivables fully insured or backed by a letter of credit denominated in U.S.
dollars or Canadian dollars and in all other respects acceptable to the Agent in
its reasonable discretion;

 

(o)           the Receivable has not been and is not required to be charged or
written off as uncollectible in accordance with GAAP;

 

23

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

 

(p)           the Receivable is not due from an account debtor located in a
jurisdiction (e.g., New Jersey, Minnesota and West Virginia or any Canadian
province) which requires such Credit Party, as a precondition to commencing or
maintaining an action in the courts of that jurisdiction, either to (i) receive
a certificate of authority to do business and be in good standing in such
jurisdiction; or (ii) file a notice of business activities report or similar
report with such jurisdiction’s taxing authority, unless (x) such Credit Party
has taken one of the actions described in clauses (i) or (ii); or (y) the
failure to take one of the actions described in either clause (i) or (ii) may be
cured retroactively by such Credit Party at its election; and

 

(q)           the credit standing of the applicable account debtor in relation
to the amount of credit extended has not become unsatisfactory to the Agent in
its reasonable discretion, except for Receivables fully insured or backed by a
letter of credit in all respects acceptable to the Agent in its reasonable
discretion.

 

In addition to the forgoing, the total amount of Receivables owing to the Credit
Parties by an account debtor in excess of such account debtor’s Concentration
Limit of the total amount of Receivables owing to the Credit Parties by all
account debtors shall also constitute “Ineligible Receivables” for purposes
hereof, unless such Receivables exceeding such account debtor’s Concentration
Limit are fully backed or secured by a letter of credit acceptable to the Agent
in its reasonable discretion.  Notwithstanding anything to the contrary
contained in this Agreement or any other Loan Document, no Receivables purchased
or otherwise acquired through any acquisition or other investment permitted
hereunder after the Closing Date shall be deemed to constitute Eligible
Receivables for purposes hereof unless and until the Agent shall have conducted
a field examination (which shall be conducted within a reasonable time (in the
Agent’s judgment) after Borrower’s request at the Borrowers’ cost and expense)
of the applicable books, records and operations for the assets or Subsidiary so
acquired in order to satisfy the Agent that the Receivables so acquired
generally satisfy the above-described standards of eligibility.

 

“Intellectual Property” shall mean all U.S. and foreign (a) patents, patent
applications, patent disclosures, and all related continuations,
continuations-in-part, divisionals, reissues, re-examinations, substitutions,
and extensions thereof (“Patents”), (b) trademarks, service marks, trade names,
domain names, logos, slogans, trade dress, and other similar designations of
source or origin, together with the goodwill symbolized by any of the foregoing
(“Trademarks”), (c) copyrights and copyrightable subject matter (“Copyrights”),
(d) rights of publicity, (e) moral rights and rights of attribution and
integrity, (f) computer programs (whether in source code, object code, or other
form), databases, compilations and data, technology supporting the foregoing,
and all documentation, including user manuals and training materials, related to
any of the foregoing, (g) trade secrets and all confidential information,
know-how, inventions, proprietary processes, formulae, models, and
methodologies, (h) all rights in the foregoing and in other similar intangible
assets, (i) all applications and registrations for the foregoing, and (j) all
rights and remedies against infringement, misappropriation, or other violation
thereof.

 

“Intellectual Property Security Agreement” shall have the meaning attributed to
such term in Section 5.25 hereof.

 

24

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

 

“Inter-Company Loans” shall mean collectively, (a) the inter-company loans made
from time to time by the Parent to NP International Holdco to finance, by means
of loans described in clauses (b), (c) and (d), the 2006 acquisition of Neenah
Germany, the substantially contemporaneous payment of the purchase price for any
Permitted Offshore Acquisitions and the non-acquisition-related activities of NP
International HoldCo and any of its direct or indirect subsidiaries that are
Offshore Entities from time to time; provided that such inter-company loans are
permitted under Section 7.7; (b) advances from time to time under the
inter-company revolving line of credit from NP International HoldCo to FinCo,
evidenced by the FinCo Note, which line of credit shall be used to provide FinCo
with funds to finance, by means of loans described in clause (c), the activities
of NP International and any of its direct or indirect subsidiaries that are
Offshore Entities, to the extent permitted under this Agreement; (c) the
inter-company loans made from time to time by FinCo to NP International to
finance the 2006 acquisition of Neenah Germany, the substantially
contemporaneous payment of the purchase price for any Permitted Offshore
Acquisitions and the activities of NP International and any of its direct or
indirect subsidiaries that are Offshore Entities, to the extent permitted under
this Agreement; and (d) the inter-company loans made from time to time by NP
International HoldCo to NP International and/or any of NP International HoldCo’s
direct or indirect subsidiaries that are Offshore Entities, to finance the
substantially contemporaneous payment of the purchase price for any Permitted
Offshore Acquisitions by NP International or any of its direct or indirect
subsidiaries that are Offshore Entities, and the activities of NP International
and any of its subsidiaries that are Offshore Entities, to the extent permitted
under this Agreement.

 

“Interest Expense” shall mean, with respect to any Person for any period, the
interest expense of such Person, on a Consolidated basis, during such period
determined in accordance with GAAP, consistently applied, and shall in any event
include, without limitation, (a) the amortization or write-off of debt
discounts, (b) the amortization of all debt issuance costs, commissions and
other fees payable in connection with the incurrence of Indebtedness to the
extent included in interest expense, and (c) the portion of payments under
Capital Lease Obligation allocable to interest expense.

 

“Interest Option” shall have the meaning specified in Section 2.8(a) hereof.

 

“Interest Payment Dates” shall mean (a) for Alternate Base Rate Borrowings
(other than Swingline Loans), (i) the last Business Day of each calendar month
prior to the Termination Date, and (ii) the Termination Date; (b) for LIBOR
Borrowings, (i) last Business Day of each calendar month prior to the end of the
applicable Interest Period and (ii) at the end of the applicable Interest
Period; and (c) for Swingline Loans, (i) the last Business Day of each calendar
month prior to the earlier to occur of the Termination Date or the date such
Swingline Loans are required to be paid with proceeds of Revolving Loans in
accordance with Section 2.11(c), and (ii) the earlier to occur of the
Termination Date or the date such Swingline Loans are required to be paid with
proceeds of Revolving Loans in accordance with Section 2.11(c).

 

“Interest Period” shall mean the period commencing on the date of the applicable
LIBOR Borrowing and ending on the numerically corresponding day (or, if there is
no numerically corresponding day, on the last day) in the calendar month that is
one (1), two (2) or three (3) months thereafter, as the Borrower’s Agent may
elect in accordance herewith; provided,

 

25

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

 

however, that (a) if an Interest Period would end on a day that is not a
Business Day, such Interest Period shall be extended to the next succeeding
Business Day, unless such next succeeding Business Day would fall in the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day, (b) no Interest Period shall end later than the
Termination Date, and (c) interest shall accrue from and including the first day
of an Interest Period to, but excluding, the last day of such Interest Period.

 

“Inventory” shall mean all inventory, goods and merchandise now owned and
hereafter acquired by any Credit Party, wherever located, to be furnished under
any contract of service or held for sale or lease, all returned goods, raw
materials, other materials and supplies of any kind, nature or description which
are or will be used or consumed in the business of any Credit Party or any of
their Subsidiaries or used in connection with the packing, shipping,
advertising, selling or finishing of such goods, merchandise and such other
personal property, and all documents of title or other documents representing
any of them.

 

“Investment” shall mean the purchase or other acquisition of any securities or
Indebtedness of, or the making of any loan, advance, extension of credit or
capital contribution to (or the transfer of Property having the effect of any of
the foregoing), or the incurring of any Contingent Obligation in respect of the
Indebtedness of, any Person (in each case other than accounts receivable arising
in the ordinary course of business).

 

“IRS” shall mean the United States Internal Revenue Service.

 

“Issuing Bank” shall mean the Agent, in its capacity as the issuer of any Letter
of Credit pursuant to this Agreement.  The terms “Agent” and “Issuing Bank” may
be used interchangeably for such purpose.

 

“Joinder Agreement” shall mean any agreement, in Proper Form, executed by a
Subsidiary of a Credit Party from time to time in accordance with Section 6.10
hereof, pursuant to which such Subsidiary joins in the execution and delivery of
(a) this Agreement or a Guaranty, (b) the Contribution Agreement, or (c) any
other Loan Document.

 

“JPMorgan” shall mean JPMorgan Chase Bank, N.A., together with its successors
and assigns.

 

“LC Collateral Account” shall have the meaning specified for such term in
Section 2.10(k).

 

“Leasehold Property” shall mean any leasehold interest of any Credit Party as
lessee under any lease of a Real Property Asset.

 

“Legal Requirement” shall mean any law, statute, ordinance, decree, requirement,
order, judgment, rule, regulation (or interpretation of any of the foregoing)
of, and the terms of any license or permit issued by, any Governmental
Authority.

 

“Lender or Lenders” shall have the meaning specified in the preamble of this
Agreement.  Unless the context otherwise requires, the term “Lenders” shall
include the Swingline Lender.

 

26

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

 

“Lender Party” shall mean the Agent, any Lender, or any of their respective
Affiliates or branches.

 

“Letters of Credit” shall mean Standby Letters of Credit and Trade Letters of
Credit.  Letter of Credit shall mean any one of the Standby Letters of Credit or
Trade Letters of Credit and shall include the Existing Letters of Credit.

 

“Letter of Credit Advances” shall mean all sums which may from time to time be
paid by any and all of the Revolving Lenders pursuant to any and all of the
Letters of Credit, together with all other sums, fees, reimbursements or other
obligations which may be due to the Agent or any of the Revolving Lenders
pursuant to any of the Letters of Credit.

 

“Letter of Credit Exposure Amount” shall mean at any time the sum of (a) the
aggregate undrawn amount of all Letters of Credit outstanding at such time plus
(b) the aggregate amount of all Letter of Credit Advances for which the
Revolving Lenders have not been reimbursed and which remain unpaid at such
time.  The Letter of Credit Exposure Amount of any Revolving Lender at any time
shall be its Commitment Percentage of the aggregate Letter of Credit Exposure
Amount at such time.

 

“LIBOR Borrowing” shall mean, as of any date, that portion of the principal
balance of the Loans bearing interest at the Adjusted LIBOR Rate as of such date
and having the same Interest Period.

 

“LIBOR Lending Office” shall mean, with respect to any Lender, the office of
such Lender specified as its “LIBOR Lending Office” opposite or below its name
on the signature pages hereof, or (if no such office is specified, its Domestic
Lending Office), or such other office of such Lender as such Lender may from
time to time specify in writing to the Borrower’s Agent and the Agent.

 

“LIBOR Rate” shall mean, with respect to any LIBOR Borrowing for any Interest
Period, an interest rate per annum equal to the rate appearing on Reuters Screen
LIBOR01 Page (or, if no such page exists, on any successor or substitute
page providing rate quotations comparable to those currently provided on such
page of the Reuters Service, as determined by the Agent from time to time for
purposes of providing quotations of interest rates applicable to dollar deposits
in the London interbank market) at approximately 11:00 a.m., London time, two
Business Days before the commencement of such Interest Period as the composite
offered rate for dollar deposits approximately equal in principal amount to the
Agent’s portion of such LIBOR Borrowing and for a maturity equal to the
applicable Interest Period.  In the event that such rate is not available at
such time for any reason, then the “LIBOR Rate” with respect to such LIBOR
Borrowing for such Interest Period shall be the average interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) at which dollar deposits
approximately equal in principal amount to the Agent’s portion of such LIBOR
Borrowing and for a maturity equal to the applicable Interest Period are offered
to the Agent in the London interbank market at approximately 11:00 a.m., London
time, two Business Days before the commencement of such Interest Period.

 

27

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

 

“Lien” shall mean, with respect to any asset of any Person, (a) any mortgage,
pledge, debenture, charge, encumbrance, security interest, collateral assignment
or other lien or restriction of any kind on such asset, whether based on common
law, constitutional provision, statute or contract, (b) the interest of any
vendor or a lessor under any conditional sale agreement, title retention
agreement or capital lease relating to such asset, (c) in the case of
securities, any purchase option, call or similar right of a third party with
respect to such securities, or (d) any other right of or arrangement with any
creditor to have such creditor’s claim satisfied out of such assets, or the
proceeds therefrom, prior to the general creditors of such Person owning such
assets.

 

“Loan Documents” shall mean this Agreement, the Notes, the Applications, the
Security Documents, the Guaranties, the Contribution Agreement, the Joinder
Agreements, the Letters of Credit, all instruments, certificates and agreements
now or hereafter executed and delivered to the Agent and/or the Lenders in
connection with or pursuant to any of the foregoing (including without
limitation, any fee letter between the Agent, JPMorgan and/or any of its
Affiliates and any Borrower relating to the transactions contemplated by this
Agreement), and all amendments, modifications, renewals, extensions, increases
and rearrangements of, and substitutions for, any of the foregoing.

 

“Loans” shall mean the Term Loans, the Revolving Loans and the Swingline Loans. 
“Loan” shall mean any one of the Term Loans, Revolving Loans or the Swingline
Loans.

 

“Material Adverse Effect” shall mean a material adverse effect on (a) the
business, assets, prospects, operations, financial or other condition of the
Credit Parties and their Subsidiaries taken as a whole, (b) the ability of the
Credit Parties, taken as a whole, to perform their obligations under the Loan
Documents, (c) the validity or enforceability of this Agreement, any of the
Notes or any other Loan Documents or the rights or remedies of the Agent or the
Lenders hereunder or thereunder, or (d) the validity or enforceability of the
Agent’s Lien on any material portion of the Collateral or the priority of such
Lien.

 

“Material Lease” shall mean any lease agreement with respect to a Material
Leasehold Property.

 

“Material Leasehold Property” shall mean (a) the Leasehold Properties listed on
Schedule 1.1B and (b) a Leasehold Property of material value as Collateral or of
material importance to the operations of the Credit Parties.

 

“Maturity Date” shall mean November 30, 2017; provided, that, “Maturity Date”
shall mean August 15, 2014 in the event that, on or prior to such date, the
Senior Notes have not been redeemed, repurchased, defeased, refinanced or
extended (in each case to a date at least 90 days after November 30, 2017) or
repaid.

 

“Mill Properties” shall mean those Mortgaged Properties in respect of which
paper mill operations are conducted or where structures are located that are
integral to such operations.  Mill Property shall mean one of such Mill
Properties.

 

“Monthly Unaudited Financial Statements” shall mean the financial statements of
the Credit Parties and their subsidiaries, including all notes thereto, which
statements shall include

 

28

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

 

(a) a balance sheet as of the end of the respective calendar month, (b) a
statement of operations for such respective calendar month and for the fiscal
year to date, subject to normal year-end adjustments, all setting forth in
comparative form the corresponding figures for the corresponding period of the
preceding fiscal year and (c) a statement of cash flows for the fiscal year to
date, subject to normal year-end adjustments, setting forth in comparative form
the corresponding figures in the corresponding period of the preceding fiscal
year, all prepared in reasonable detail and in accordance with GAAP and
certified by a Responsible Officer of Borrower’s Agent as fairly and accurately
presenting in all material respects the financial condition and results of
operations of the Credit Parties and their subsidiaries, on a Consolidated
basis, at the dates and for the periods indicated therein subject to normal
year-end adjustments.  The Monthly Unaudited Financial Statements for the Credit
Parties and their subsidiaries shall be prepared on a Consolidated and
consolidating basis, the parties recognizing that such consolidating statements
will be prepared in accordance with GAAP only to the extent normal and
customary.

 

“Mortgage” shall mean (a) a security instrument (whether designated as a deed of
trust, an equitable mortgage, a debenture, a deed to secure debt, a mortgage, a
leasehold mortgage, a leasehold deed of trust, a leasehold deed to secure debt,
an assignment of leases and rents or by any similar title) executed and
delivered by any Credit Party in such form as may be approved by the Agent, in
each case with such changes thereto as may be recommended by the Agent’s local
counsel based on local laws or customary local practices, and (b) at the Agent’s
option, in the case of an Additional Mortgaged Property, an amendment to an
existing Mortgage, in form satisfactory to the Agent, adding such Additional
Mortgaged Property to the Real Property Assets encumbered by such existing
Mortgage, in either case as such security instrument or amendment may be
amended, supplemented or otherwise modified from time to time.  “Mortgages”
means all such instruments, including the Closing Date Mortgages and any
Additional Mortgages.

 

“Mortgaged Property” shall mean a Closing Date Mortgaged Property or an
Additional Mortgaged Property, as the case may be.

 

“Neenah Canada” shall have the meaning assigned to such term in the recitals of
this Agreement.

 

“Neenah Germany” shall mean Neenah Germany GmbH (formerly known as FiberMark
Beteiligungs GmbH) and Neenah Services GmbH & Co. KG. (formerly known as
FiberMark Services GmbH & Co. KG.), collectively.

 

“Net Income” shall mean, with respect to any Person for any period, net income
of such Person for the applicable calculation period determined in accordance
with GAAP; provided, that there shall not be included in such calculation of net
income (without duplication) (a) any extraordinary gains or losses (including in
connection with the sale or write-up of assets), (b) any nonrecurring gains or
losses, (c) any gains or losses from dispositions of property or assets, other
than dispositions of Inventory and Equipment in the ordinary course of business,
and the tax consequences thereof, (d) the net income or loss of any other Person
that is not a Subsidiary of such Person for whom net income is being calculated
(or is accounted for by such Person by the equity method of accounting), (e) the
net income (or loss) of any other Person acquired by, or

 

29

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

 

merged with, such Person for whom net income is being calculated or any of its
Subsidiaries for any period prior to the date of such acquisition, (f) the net
income of any Subsidiary of such Person for whom net income is being calculated
to the extent that the declaration or payment of dividends or similar
distributions by such Subsidiary of such net income is not at the time permitted
by operation of the terms of its charter, certificate of incorporation or
formation or other constituent document or any agreement or instrument or Legal
Requirement applicable to such Subsidiary, all as determined in accordance with
GAAP, (g) any non-cash non-recurring impairment charges with respect to a
writedown of the carrying amount of the Consolidated assets of the Credit
Parties acquired after the Closing Date (either through direct asset purchase or
as part of the acquisition of all or substantially all of the Stock of another
Person) based on the impairment of such assets, pursuant to the provisions of
Section 7.4(f) and any benefits (including tax benefits) resulting from such
writedown, and (h) any non-cash compensation expense realized for grants of
performance shares, stock options or other rights to officers, directors and
employees, provided that such shares, options or other rights can be redeemed at
the option of the holder only for capital stock of such Person.

 

“Net Recovery Value Percentage” shall mean the “net recovery value percentage”
under an orderly liquidation scenario for the Inventory, Equipment, or Real
Property Assets of any Credit Party, as specifically set forth and described in
the most recent appraisal of the Inventory, Equipment, or Real Property Assets
of the applicable Credit Party received by the Agent pursuant to the provisions
of Section 6.4 hereof (or with regard to work-in-process Inventory, gross
recovery value percentage as set forth in such an appraisal and as discounted by
the Agent in its reasonable credit judgment).

 

“New Lender” has the meaning assigned to such term in Section 2.15(d).

 

“New Lender Agreement” means a New Lender Agreement entered into by a New Lender
in accordance with Section 2.15(d) and accepted by the Agent in the form of
attached hereto, or any other form approved by the Agent.

 

“Non-Reporting Lender Party” shall have the meaning specified for such term in
the definition of “Bank Products”.

 

“Notes” shall mean the Revolving Credit Notes, the Term Notes and the Swingline
Note.  Note shall mean any one of such promissory notes.

 

“NP International” shall mean Neenah Paper International, LLC, a Delaware
limited liability company and a wholly owned subsidiary of NP International
HoldCo.

 

“NP International HoldCo” shall mean Neenah Paper International Holding Company,
LLC, a Delaware limited liability company and a wholly owned subsidiary of the
Parent.

 

“NP International Lease” shall mean any lease hereafter entered into by NP
International to occupy a portion of the real property constituting the Parent’s
corporate headquarters, whether by assignment and assumption, or by direct lease
with the landlord, which lease will be on terms substantially consistent with
the terms of the Parent’s lease for the portion of the space leased by NP
International.

 

30

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

 

“NP International Services Agreement” shall mean that certain Management and
Services Agreement referred to in Schedule 7.6, as the same may be amended,
extended, renewed, restated or replaced from time to time to the extent not
prohibited by this Agreement, pursuant to which, among other things, NP
International provides certain human resources services and sales and marketing
technical support to some or all of the Credit Parties.

 

“Obligations” shall mean, without duplication, all obligations, liabilities and
Indebtedness of the Credit Parties with respect to (a) the Security Documents
and all other Loan Documents, including without limitation, (i) the principal of
and interest on the Loans and (ii) the payment or performance of all other
obligations, liabilities and Indebtedness of the Credit Parties to the Agent and
the Lenders hereunder, under the Notes, under the Letters of Credit, under the
Applications or under any one or more of the other Loan Documents, including all
fees, costs, expenses and indemnity obligations hereunder and thereunder, and
(b) all obligations and liabilities of the Credit Parties and/or any of their
Subsidiaries now or hereafter owing to JPMorgan Chase Bank, N.A. or any other
Lender Party under any Bank Product.  The Obligations include interest
(including interest that accrues or that would accrue but for the filing of a
bankruptcy case by a Credit Party or any of its Subsidiaries, whether or not
such interest would be an allowable claim under any applicable bankruptcy or
other similar proceeding) and other obligations accruing or arising after
(a) commencement of any case under any bankruptcy or similar laws by or against
any Credit Party or any of their Subsidiaries (or that would accrue or arise but
for the commencement of any such case) or (b) the personal liability of the
Credit Parties or any of their Subsidiaries for the Obligations shall be
discharged or otherwise cease to exist by operation of law or for any other
reason.

 

“Obligee” and “Obligees” shall have the meanings assigned to such terms in
Section 10.22.

 

“Offshore Entities” shall mean FinCo, NP International HoldCo, NP International,
Neenah Germany, each Excluded Foreign Subsidiary and each of the forgoing
Persons’ direct or indirect foreign subsidiaries.

 

“Organizational Documents” shall mean, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a limited partnership, the limited partnership
agreement and certificate of limited partnership of such limited partnership;
with respect to a joint venture, the joint venture agreement establishing such
joint venture; with respect to a limited liability company, the articles of
organization or certificate of formation and regulations or limited liability
company agreement of such limited liability company;  with respect to an
unlimited liability company, the memorandum of association and articles of
association and the certificate of incorporation of such company; and with
respect to a trust, the instrument establishing such trust; in each case
including any and all modifications thereof as of the date of the Loan Document
referring to such Organizational Document and any and all future modifications
thereof.

 

“Original Closing Date” shall have the meaning specified in the recitals of this
Agreement.

 

31

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

 

“Original Credit Agreement” shall have the meaning specified in the recitals of
this Agreement.

 

“Other Connection Taxes” shall have the meaning attributed to such term in
Section 10.17(a)(iii).

 

“Other Tax” shall have the meaning attributed to such term in
Section 10.17(a)(iii) hereof.

 

“Parent” shall have the meaning specified in the preamble to this Agreement.

 

“Participant Register” has the meaning assigned to such term in
Section 10.12(b).

 

“Parties” shall mean all Persons other than the Agent and any Lender executing
any Loan Documents.

 

“Patents” shall have the meaning specified for such term in the definition of
“Intellectual Property.”

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation.

 

“Perfection Certificate” shall mean a certificate in the form of attached hereto
or any other form approved by the Agent, completed and supplemented with the
schedules and attachments contemplated thereby, and duly executed by each Credit
Party on the date hereof.

 

“Permitted Affiliate Transactions” shall mean any of the following: 
(a) transactions between Credit Parties; (b) transactions between Offshore
Entities, (c) customary directors’ fees, customary directors’ indemnifications
and similar arrangements for officers and directors of the Credit Parties and
the Offshore Entities entered into in the ordinary course of business, together
with any payments made under any such indemnification arrangements; provided,
that any of the foregoing owed to directors and officers of the Offshore
Entities are only payable and paid by the Offshore Entities; (d) customary and
reasonable loans, advances and reimbursements to officers, directors and
employees of the Credit Parties and Offshore Entities for travel, entertainment,
moving and other relocation expenses, in each case made in the ordinary course
of business provided, that any of the foregoing owed to officers, directors and
employees of the Offshore Entities are only payable and paid by the Offshore
Entities; (e) the incurrence of intercompany Indebtedness permitted pursuant to
Sections 7.1(f) and 7.1(o) hereof and Contingent Obligations permitted pursuant
to Section 7.1(g) hereof, (f) employment agreements and arrangements entered
into with directors, officers and employees of the Credit Parties or the
Offshore Entities in the ordinary course of business; provided, that any
obligations under any of the foregoing owed to directors, officers and employees
of the Offshore Entities are only obligations of the Offshore Entities and are
only paid by the Offshore Entities; and (g) other transactions, contracts or
agreements existing on the Closing Date and which are set forth on Schedule 7.6
attached hereto, together with any renewals and extensions of such existing
transactions, contracts or agreements, so long as such renewals and extensions
are upon terms and conditions substantially identical to the terms and
conditions set forth in such existing transactions, contracts and agreements (or
otherwise no less favorable to the Credit Parties, as applicable), and such
other

 

32

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

 

transactions, contracts or agreements with respect to the Offshore Entities
entered into after the Closing Date, which (i) either (A) contain terms and
conditions substantially similar to those transactions, contracts and agreements
listed on Schedule 7.6 attached hereto or (B) are transactions, contracts or
agreements customarily entered into by public companies for the provision of
administrative services to their related companies (including, without
limitation, legal, accounting, treasury, tax, human resources, billing and
collection, accounts payable, risk management, compliance and other similar
administrative services), and (ii) have been approved by the Agent in its
reasonable discretion.  Where any costs, expenses, fees or other payments to
directors, officers or employees described herein are required to be made by, or
to be obligations solely of, Offshore Entities, such amounts may be either paid
directly by the Offshore Entities, or paid by any Credit Party and reimbursed in
cash by Offshore Entities in the ordinary course of business which, in any
event, shall not be longer than 60 days after such payment is made.  In the
event such costs, expenses, fees or other payments relate both to the Credit
Parties and to one or more Offshore Entities, the Parent shall be entitled to
make a reasonable, good faith allocation of such amounts as between the affected
Credit Parties, on the one hand, and the affected Offshore Entities on the
other.

 

“Permitted Investment Securities” shall mean each of the following, to the
extent the same is pledged as additional Collateral hereunder and is subject to
a first priority perfected Lien in favor of the Agent for the ratable benefit of
the Lender Parties:  (a) readily marketable, direct obligations of the United
States of America or any agency or wholly-owned corporation thereof which are
backed by the full faith and credit of the United States, maturing within
one (1) year after the date of acquisition thereof, (b) certificates of deposit,
commercial paper (if rated no lower than A-1/P-1) or other short-term direct
obligations of (i) JPMorgan or (ii) any other domestic financial institution
having capital and surplus in excess of $5,000,000,000, maturing within six
months after the date of acquisition thereof, (c) money market mutual funds
having aggregate assets in excess of $5,000,000,000, and (d) other Investments
mutually agreed to in writing by the Borrowers’ Agent and the Agent.

 

“Permitted Offshore Acquisitions” shall mean any acquisition by NP International
HoldCo after the Closing Date, either directly or indirectly through one of more
of its subsidiaries that are Offshore Entities, of all or a substantial part of
the assets of any Person, or of the shares of Stock of, or similar interests in,
any Person, that is permitted under the provisions of Section 7.4(6)(B) of this
Agreement.

 

“Permitted Overadvance” shall have the meaning specified in
Section 2.2(h) hereof.

 

“Person” shall mean any individual, corporation, business trust, unincorporated
organization or association, partnership, joint venture, limited liability
company, unlimited liability company, Governmental Authority or any other form
of entity.

 

“Plan” shall mean any plan subject to Title IV of ERISA and maintained by any
Credit Party for employees of any Credit Party or of any member of a “controlled
group of corporations”, as such term is defined in the Code, of which the
Borrower, any of its Subsidiaries or any ERISA Affiliate it may acquire from
time to time is a part, or any such plan to which the Borrower, any of its
Subsidiaries or any ERISA Affiliate is required to contribute on behalf of its
employees.

 

33

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

 

“Pledged Cash” shall mean, on any date, the aggregate amount of cash on deposit
in the Special Cash Collateral Account on such date.

 

“Post-Closing Mortgage Policy” shall have the meaning specified for such term on
Schedule 4.4.

 

“PPSA (Nova Scotia)” shall mean the Personal Property Security Act (Nova
Scotia), as amended from time to time.

 

“Prime Rate” shall mean the rate of interest per annum publicly announced from
time to time by JPMorgan, or its successor financial institution, if any, at its
principal office in New York City as its prime rate in effect at such time. 
Without notice to any Credit Party or any other Person, the Prime Rate shall
change automatically from time to time as and in the amount by which said prime
rate shall fluctuate, with each such change to be effective as of the date of
each change in such prime rate.  THE PRIME RATE IS A REFERENCE RATE AND DOES NOT
NECESSARILY REPRESENT THE LOWEST OR BEST RATE ACTUALLY CHARGED BY JPMORGAN OR
SUCH SUCCESSOR FINANCIAL INSTITUTION TO ANY OF ITS CUSTOMERS.  JPMORGAN OR SUCH
SUCCESSOR FINANCIAL INSTITUTION MAY MAKE COMMERCIAL LOANS OR OTHER LOANS AT
RATES OF INTEREST AT, ABOVE AND BELOW THE PRIME RATE.

 

“Principal Office” shall mean the principal office in New York City of the
Agent, or such other place as the Agent may from time to time by notice to the
Borrowers’ Agent designate.

 

“Prohibited Transaction” shall mean any non-exempt transaction set forth in
Section 406 of ERISA or Section 4975 of the Code.

 

“Proper Form” shall mean in form and substance satisfactory to the Agent as of
the time of delivery and execution.

 

“Property” shall mean any interest in any kind of property or asset, whether
real, personal or mixed, tangible or intangible.

 

“Quarterly Equipment Component Amortization Amount” shall have the meaning
specified for such term on Schedule 1.1D.

 

“Quarterly Real Estate Component Amortization Amount” shall have the meaning
specified for such term on Schedule 1.1E.

 

“Quarterly Unaudited Financial Statements” shall mean the financial statements
of the Credit Parties and their subsidiaries, including all notes thereto, which
statements shall include (a) a balance sheet as of the end of the respective
fiscal quarter, as applicable, (b) a statement of operations for such respective
fiscal quarter, as applicable, and for the fiscal year to date, subject to
normal year-end adjustments, all setting forth in comparative form the
corresponding figures for the corresponding period of the preceding fiscal year
and (c) a statement of cash flows for the fiscal year to date, subject to normal
year-end adjustments, setting forth in comparative form the corresponding
figures in the corresponding period of the preceding fiscal year, all prepared
in

 

34

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

 

reasonable detail and in accordance with GAAP and certified by a Responsible
Officer of Borrower’s Agent as fairly and accurately presenting in all material
respects the financial condition and results of operations of the Credit Parties
and their subsidiaries, on a Consolidated basis, at the dates and for the
periods indicated therein, subject to normal year-end adjustments.  The
Quarterly Unaudited Financial Statements for the Credit Parties and their
subsidiaries shall be prepared on a Consolidated and consolidating basis, the
parties recognizing that such consolidating statements will be prepared in
accordance with GAAP only to the extent normal and customary.

 

“Rate Selection Date” shall mean that Business Day which is (a) in the case of
an Alternate Base Rate Borrowing, the date of such borrowing, or (b) in the case
of a LIBOR Borrowing, the date three (3) Business Days preceding the first day
of any proposed Interest Period for such LIBOR Borrowing.

 

“Rate Selection Notice” shall have the meaning specified in
Section 2.8(b)(i) hereof.

 

“Reaffirmation Agreements” means the Fourth Amendment to Security Agreement
(Personal Property) and Reaffirmation Agreement entered into by the Credit
Parties (other than Guarantor) and the Agent, the Reaffirmation of Pledge
Agreement entered into by the Credit Parties (other than Guarantor) and the
Agent, the Third Amendment to Patent Security Agreement and Reaffirmation
Agreement entered into by the Credit Parties (other than Guarantor) and the
Agent, the Third Amendment to Trademark Security Agreement and Reaffirmation
Agreement entered into by the Credit Parties (other than Guarantor) and the
Agent, the Reaffirmation of Copyright Security Agreement entered into by the
Credit Parties (other than Guarantor) and the Agent, and the Reaffirmation of
Trademark Security Agreement entered into by Neenah Paper FR, LLC and the Agent,
in each case dated as of the date hereof.

 

“Real Estate Component” shall have the meaning specified for such term on
Schedule 1.1F.

 

“Real Property Asset” shall mean, at any time of determination, any fee
ownership or leasehold interest of any Credit Party in or to any real Property.

 

“Receivables” shall mean and include all of the accounts, instruments,
documents, chattel paper and general intangibles of the Credit Parties, whether
secured or unsecured, whether now existing or hereafter created or arising, and
whether or not specifically assigned to the Agent for the ratable benefit of the
Lender Parties.

 

“Recipient” means, as applicable, (a) the Agent, (b) any Lender and (c) the
Issuing Bank.

 

“Refinancing Indebtedness” shall mean any Indebtedness of the Credit Parties or
any of their Subsidiaries issued in exchange for, or the net proceeds of which
are used to extend, refinance, renew, replace, defease or refund, other
Indebtedness of such Person, provided, that:

 

(a)           the principal amount of such Refinancing Indebtedness does not
exceed the sum of (i) the then outstanding principal amount of the Indebtedness
so extended, refinanced, renewed, replaced, defeased or refunded, (ii) the
amount of accrued but unpaid interest on the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded and (iii) the

 

35

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

 

reasonable and customary transactional costs and expenses incurred by the Credit
Parties in connection with incurring such Refinancing Indebtedness;

 

(b)           the interest rate or rates to accrue under such Refinancing
Indebtedness do not exceed the market interest rate or rates as of the time of
the issuance or incurrence of such Refinancing Indebtedness then accruing on the
Indebtedness so extended, refinanced, renewed, replaced, defeased or refunded;

 

(c)           such extension, refinancing, renewal, replacement defeasance or
refunding does not result in a shortening of the average weighted maturity of
the Indebtedness so extended, refinanced, renewed, replaced, defeased or
refunded (and, with respect to the Senior Notes, such extension, refinancing,
renewal, replacement defeasance or refunding does not result in any principal
amount owing with respect of such Refinancing Indebtedness becoming due earlier
than the date that is 90 days following the Maturity Date);

 

(d)           the subordination provisions (with respect to any Subordinated
Indebtedness) and collateral security provisions (or absence thereof) of such
Refinancing Indebtedness are in each case, as determined by the Agent in its
sole discretion, substantially the same as, or more favorable to the applicable
Credit Party and/or Subsidiary as those in the Indebtedness so extended,
refinanced, renewed, replaced, defeased or refunded;

 

(e)           the covenants, defaults, remedies and other terms of such
Refinancing Indebtedness are in each case, as determined by the Agent in its
sole discretion, substantially the same as, or not materially less favorable to
the applicable Credit Party and/or Subsidiary as those in the Indebtedness so
extended, refinanced, renewed, replaced, defeased or refunded; and

 

(f)            no Default or Event of Default has occurred and is continuing or
would result from the issuance or origination of such Refinancing Indebtedness.

 

“Regulation D” shall mean Regulation D of the Board of Governors of the Federal
Reserve System from time to time in effect and shall include any successor or
other regulation relating to reserve requirements applicable to member Lenders
of the Federal Reserve System.

 

“Regulatory Change” shall mean, with respect to any Lender, any change on or
after the date of this Agreement in any Legal Requirement (including
Regulation D) or the adoption or making on or after such date of any Legal
Requirement applying to Agent or a class of Lenders including such Person under
any Legal Requirement (whether or not having the force of law) by any
Governmental Authority charged with the interpretation or administration
thereof.

 

“Related Obligations” shall have the meaning assigned to such term in
Section 10.22.

 

“Reportable Event” shall mean a “reportable event” as defined in
Section 4043(c) of ERISA, excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation.

 

“Request for Extension of Credit” shall mean a written request for extension of
credit substantially in the form of attached hereto.

 

36

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

 

“Required Lenders” shall mean Lenders having greater than 50% of the aggregate
amount of the outstanding Term Loans, Revolving Loans, Letter of Credit Exposure
Amount, Swingline Exposure and, prior to the termination of the Total Revolving
Commitment, Unused Commitment; and provided, however, if only two (2) Lenders
are then parties to this Agreement, Required Lenders shall mean both of such
Lenders.  Notwithstanding anything in this Agreement to the contrary, no
Defaulting Lender shall be taken into account for any purpose in determining
whether the Required Lenders have authorized or taken any action contemplated in
this Agreement or any of the other Loan Documents, subject to Section 10.11
hereof.

 

“Required Revolving Lenders” shall mean Lenders having greater than 50% of the
aggregate amount of the outstanding Revolving Loans, Letter of Credit Exposure
Amount, Swingline Exposure and, prior to the termination of the Total Revolving
Commitment, Unused Commitment; provided, however, if only two (2) Revolving
Lenders are then parties to this Agreement, Required Revolving Lenders shall
mean both of such Revolving Lenders.  Notwithstanding anything in this Agreement
to the contrary, no Defaulting Lender shall be taken into account for any
purpose in determining whether the Required Revolving Lenders have authorized or
taken any action contemplated in this Agreement or any of the other Loan
Documents, subject to Section 10.11 hereof.

 

“Required Term Lenders” shall mean, at any time, Term Lenders having in the
aggregate more than 50% of the Term Loans at such time or, prior to the funding
of the Term Loans pursuant to Section 2.1, 50% of the Term Loan Commitment;
provided, however, if only two (2) Term Lenders are then parties to this
Agreement, Required Term Lenders shall mean both of such Term Lenders. 
Notwithstanding anything in this Agreement to the contrary, no Defaulting Lender
shall be taken into account for any purpose in determining whether the Required
Term Lenders have authorized or taken any action contemplated in this Agreement
or any of the other Loan Documents, subject to Section 10.11 hereof.

 

“Requirements of Environmental Law” shall mean all requirements imposed by any
Environmental Law.  Requirement of Environmental Law shall mean any one of them.

 

“Reserves” shall mean any and all reserves established by the Agent, in its
reasonable credit judgment and without duplication, with respect to the
Borrowing Base or in accordance with any express provision of this Agreement or
any other Loan Document (including, without limitation, such reserves as may be
necessary in any jurisdiction with respect to priming liens of any Governmental
Authority or any pension authority) for purposes of reducing the Borrowers’
ability to utilize any portion of the Borrowing Base.

 

“Responsible Officer” shall mean, with respect to any Person, the president,
chief financial officer, treasurer, controller, or general counsel of such
Person.

 

“Revolving Commitment” means, with respect to each Revolving Lender, the
commitment, if any, of such Revolving Lender to make Revolving Loans and to
acquire participations in Letters of Credit, Permitted Overadvances and
Swingline Loans hereunder, expressed as an amount representing the maximum
possible aggregate amount of such Revolving Lender’s Revolving Exposure
hereunder, as such commitment may be reduced or increased from time to time
pursuant to (a) Sections 2.4 and 2.15 and (b) assignments by or to such
Revolving

 

37

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

 

Lender pursuant to Section 10.12.  The initial amount of each Revolving Lender’s
Revolving Commitment is set forth on Schedule 1.1A hereto, or in the Assignment
and Acceptance or New Lender Agreement pursuant to which such Revolving Lender
shall have assumed its Revolving Commitment, as applicable.  The initial
aggregate amount of the Revolving Lenders’ Revolving Commitments as of the
Closing Date is $105,000,000.00.

 

“Revolving Commitment Increase Notice” shall have the meaning specified for such
term in Section 2.15(a).

 

“Revolving Credit Alternate Base Rate Borrowing” shall mean, as of any date,
that portion of the principal balance of the Revolving Loans bearing interest at
the Alternate Base Rate as of such date.

 

“Revolving Credit LIBOR Borrowing” shall mean, as of any date, that portion of
the principal balance of the Revolving Loans bearing interest at the Adjusted
LIBOR Rate as of such date.

 

“Revolving Credit Notes” shall mean the promissory notes, each substantially in
the form of attached hereto, of the Borrowers evidencing the Revolving Loans,
payable to the order of the respective Revolving Lenders in the amount of said
Revolving Lender’s Revolving Commitment, and all renewals, extensions,
modifications, rearrangements and replacements thereof and substitutions
therefor.  Revolving Credit Note shall mean any of such promissory notes.

 

“Revolving Exposure” means, with respect to any Revolving Lender at any time,
the sum of the outstanding principal amount of such Revolving Lender’s Revolving
Loans and its Letter of Credit Exposure Amount and an amount equal to its
Commitment Percentage of the aggregate principal amount of Swingline Loans at
such time, plus an amount equal to its Commitment Percentage of the aggregate
principal amount of Permitted Overadvances outstanding at such time.

 

“Revolving Lenders” shall mean, as of any date of determination, Lenders having
a Revolving Commitment.

 

“Revolving Loans” shall mean the Revolving Loans made pursuant to Section 2.1
hereof, including any Permitted Overadvances.  Revolving Loan shall mean one of
such Revolving Loans.

 

“Scheduled Principal Payments” shall mean, with respect to any Person for any
period, the aggregate amount of regularly scheduled payments of principal, if
any, in respect of funded Indebtedness (including the principal component of any
payments in respect of Capital Lease Obligations) paid or required to be paid by
such Person and its consolidated Subsidiaries during such period.

 

“Security Agreements” shall mean (a) the Security Agreement (Personal Property)
dated as of the Original Closing Date, between the Credit Parties (other than
the Guarantor) and the Agent, for the ratable benefit of the Lender Parties,
covering all Receivables, Inventory and all other tangible and intangible
personal Property of such Credit Parties more particularly described

 

38

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

 

therein, as the same may thereafter be or have been joined in by a Credit Party
pursuant to a Joinder Agreement, (b) the Pledge Agreement dated as of the
Original Closing Date, between the Credit Parties named therein and the Agent,
for the ratable benefit of the Lender Parties, covering all issued and
outstanding Stock in each of the Borrowers’ Domestic Subsidiaries, (c) any and
all other security agreements, pledge agreements, collateral assignments
(including without limitation assignments of insurance), assignments of contract
rights or agreements, assignments or pledges of stock or partnership interests,
or other similar documents now or hereafter executed in favor of the Agent for
the ratable benefit of the Lender Parties, as security for the payment or
performance of any and/or all of the Obligations, and (d) any amendment,
modification, restatement or supplement of all or any of the above-described
agreements and assignments, including, without limitation, the Reaffirmation
Agreements.

 

“Security Documents” shall mean the Security Agreements, all related financing
statements and any and all other agreements, Intellectual Property Security
Agreements, Mortgages, debentures, deeds of trust, chattel mortgages, Tri-Party
Agreements, guaranties, assignments of income, standby agreements, subordination
agreements, undertakings and other instruments and financing statements now or
hereafter executed and delivered as security for the payment and performance of
the Obligations, as any of them may from time to time be amended, modified,
restated or supplemented.

 

“Senior Note Documents” shall mean any and all agreements, instruments and other
documents pursuant to which the Senior Notes have been or will be issued or
otherwise setting forth the terms of the Senior Notes, the Senior Note Indenture
and the obligations with respect thereto, including any guaranty agreements,
bank product agreements or hedging agreements related thereto, all ancillary
agreements as to which any agent, trustee or lender is a party or a beneficiary
and all other agreements, instruments, documents and certificates executed in
connection with any of the foregoing, in each case as such agreement, instrument
or other document may be amended, restated, supplemented, refunded, replaced or
otherwise modified from time to time in accordance with the terms thereof.

 

“Senior Notes” shall mean the 7-3/8% senior notes of the Parent due 2014, issued
pursuant to the Senior Note Indenture.

 

“Senior Note Indenture” shall mean the Indenture, dated as November 30, 2004,
between Parent, the subsidiaries of the Parent party thereto, and The Bank of
New York Mellon Trust Company, N.A. (formerly known as The Bank of New York
Trust Company, N.A.), as Trustee.

 

“Settlement” shall have the meaning specified for such term in Section 2.11(f).

 

“Settlement Date” shall have the meaning specified for such term in
Section 2.11(f).

 

“Significant Offshore Entity” shall mean any Offshore Entity that, at the time
of determination, would constitute a “significant subsidiary” of the Parent
within the meaning of Rule 1-02 of Regulation S-X promulgated by the Securities
and Exchange Commission as in effect on the Closing Date; provided, however,
that any references to “10 percent” in the tests contained in sections w(1) and
w(2) thereof shall be replaced with references to “2.5 percent”.

 

39

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

 

“Special Cash Collateral Account” shall mean that certain deposit account
identified as such in Section II of the Perfection Certificate, established or
to be established with JPMorgan Chase Bank, N.A. or one of its Affiliates, into
which the Borrowers deposit certain proceeds received by them from the
Disposition of Property pursuant to Section 2.7(d); provided that such deposit
account is subject to an account control agreement and/or such other Security
Documents required by the Agent, each in form and substance satisfactory to the
Agent, pursuant to which the Agent has (i) been granted a first priority Lien on
and security interest in such account and all cash held from time to time
therein and (ii) sole control over the amounts held from time to time therein,
and which is otherwise maintained as provided in Section 3.3.

 

“Specified Representations” shall mean the representations and warranties with
respect to the Borrower set forth in Sections 5.1, 5.3, 5.4, 5.14, 5.19, and
5.25 of this Agreement.

 

“Standby Letters of Credit” shall mean all standby letters of credit issued by
the Agent for the account or liability of any Borrower pursuant to the terms set
forth in this Agreement and shall include all standby letters of credit which
are Existing Letters of Credit.

 

“Statutory Reserves” shall mean a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentage (including without
limitation, any marginal, special, emergency or supplemental reserves) expressed
as a decimal, established by the Board of Governors of the Federal Reserve
System of the United States and any other banking authority to which any Lender
is subject with respect to the Adjusted LIBOR Rate for Eurocurrency Liabilities
(as defined in Regulation D), including without limitation, those reserve
percentages imposed under Regulation D.

 

“Stock” shall mean as to a Business Entity, all capital stock, partnership
interests, membership interests or other indicia of equity rights issued by such
Business Entity from time to time.

 

“Stock Repurchases” shall mean, with respect to any period, all cash purchases
by Parent of its of common stock made during such period.

 

“Subordinated Indebtedness” shall mean, with respect to any Credit Party or any
of their Subsidiaries, Indebtedness subordinated in right of payment to such
Credit Party’s or such Subsidiary’s monetary Obligations on terms satisfactory
to and approved in writing by the Agent and the Required Lenders, in their
reasonable credit judgment, so long as all other terms thereof (including
without limitation, regularly scheduled payments and financial and negative
covenants) are satisfactory to and approved in writing by the Agent and the
Required Lenders, in their reasonable credit judgment.

 

“Subsidiary” shall mean, as to a particular parent Business Entity, any Business
Entity (excluding any Offshore Entity) of which more than fifty percent (50%) of
the Stock issued by such Business Entity is at the time directly or indirectly
owned by such parent Business Entity or by one or more of its Affiliates (other
than an Offshore Entity).

 

“Swingline Exposure” shall mean, at any time, the aggregate principal amount of
all Swing Loans outstanding at such time.

 

40

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

 

“Swingline Lender” shall mean JPMorgan or any other Lender that becomes the
Agent, in each case in its capacity as the Swingline Lender hereunder.

 

“Swingline Loans” shall mean the Swingline Loans made pursuant to
Section 2.11(a) hereof.  Swingline Loan shall mean any one of such Swingline
Loans.

 

“Swingline Note” shall mean the promissory note, substantially in the form of
attached hereto, of the Borrowers evidencing the Swingline Loans, payable to the
order of the Swingline Lenders in the original principal amount of $15,000,000,
and all renewals, extensions, modifications, rearrangements and replacements
thereof and substitutions therefor.

 

“Synthetic Lease” shall mean any lease of (or other arrangement conveying the
right to use) real or personal property, or a combination thereof, which lease
or other arrangement is required or is permitted to be classified and accounted
for as an operating lease under GAAP but which is intended by the parties
thereto for tax, bankruptcy, regulatory, commercial law, real estate law and all
other purposes as a financing arrangement.

 

“Tax” shall have the meaning attributed to such term in
Section 10.17(a)(v) hereof.

 

“Term Lenders” means, as of any date of determination, Lenders having a Term
Loan Commitment.

 

“Term Loan Alternate Base Rate Borrowing” shall mean, as of any date, that
portion of the principal balance of the Term Loans bearing interest at the
Alternate Base Rate as of such date.

 

“Term Loan LIBOR Borrowing” shall mean, as of any date, that portion of the
principal balance of the Term Loans bearing interest at the Adjusted LIBOR Rate
as of such date.

 

“Term Loan Commitment” means (a) as to any Term Lender, the aggregate commitment
of such Term Lender to make Term Loans as set forth in Schedule 1.1A hereto or
in the most recent Assignment and Assumption executed by such Term Lender and
(b) as to all Term Lenders, the aggregate commitment of all Term Lenders to make
Term Loans, which aggregate commitment shall be $30,000,000 on the date of this
Agreement.  After advancing the Term Loan, each reference to a Term Lender’s
Term Loan Commitment shall refer to that Term Lender’s Commitment Percentage of
the Term Loans.

 

“Term Loans” means the Term Loans extended by the Term Lenders to the Borrowers
pursuant to Section 2.1 hereof.

 

“Term Notes” shall mean the promissory notes, each substantially in the form of
attached hereto, of the Borrowers evidencing the Term Loans, payable to the
order of the respective Term Lenders in the amount of said Term Lender’s Term
Loan Commitment, and all renewals, extensions, modifications, rearrangements and
replacements thereof and substitutions therefor.  Term Loan Note shall mean any
of such promissory notes.

 

41

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

 

“Termination Date” shall mean the earliest of (a) the Maturity Date, and (b) any
date the Termination Date is accelerated or the Total Commitment is terminated
by the Agent pursuant to Section 8.1 hereof.

 

“Title Company” shall mean First American Title Insurance Company or one or more
other title insurance companies reasonably satisfactory to the Agent.

 

“Total Commitment” shall mean, on any day, the aggregate of all of the Lenders’
Commitments on such day.  As of the Closing Date, the Total Commitment is
$135,000,000.

 

“Total Revolving Commitment” shall mean, on any day, the aggregate of all of the
Revolving Lenders’ Revolving Commitments on such day.  As of the Closing Date,
the Total Revolving Commitment is $105,000,000.

 

“Trade Letters of Credit” shall mean all trade or documentary letters of credit
issued by the Agent for the account or liability of any Borrower pursuant to the
terms set forth in this Agreement and shall include all trade or documentary
letters of credit which are Existing Letters of Credit.

 

“Trademarks” shall have the meaning specified for such term in the definition of
“Intellectual Property.”

 

“Tri-Party Agreements” shall collectively mean tri-party agreements, in Proper
Form, to be executed and delivered by and among the Agent, the Credit Parties
required by the Agent and the applicable financial institutions described in
Section II of the Perfection Certificate, together with all modifications and/or
replacements thereof which are approved in writing by the Agent, for purposes of
(a) evidencing control by the Agent in one or more deposit accounts (including
Collection Accounts) maintained by the applicable Credit Parties with any such
specified financial institution, in the case of the Agent, for purposes of
perfection of the Agent’s Lien in such deposit accounts for the ratable benefit
of the Lender Parties, and (b) with respect to deposit accounts constituting
Collection Accounts, facilitating the collection of Receivables in accordance
with the terms of Section 6.15 hereof.

 

“True-Up Loans” shall have the meaning assigned to such term in the recitals of
this Agreement.

 

“UCC” shall mean the Uniform Commercial Code as in effect from time to time in
the State of New York.

 

“Unused Commitment” shall mean, as to a particular Revolving Lender, the daily
difference of such Revolving Lender’s Revolving Commitment on such day less the
Current Sum applicable to such Revolving Lender on such day.

 

1.2          Accounting Terms and Determinations.  Except where specifically
otherwise provided:

 

(a)           The symbol “$” and the word “dollars” shall mean lawful money of
the United States of America.

 

42

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

 

(b)           Any accounting term not otherwise defined shall have the meaning
ascribed to it under GAAP.  If any Credit Party is required after the Closing
Date to implement any change(s) in its accounting principles and practice as a
result of any changes in GAAP mandated by the Financial Accounting Standards
Board or successor organization, and if such change(s) result in any material
change in the method of calculation of the Fixed Charge Coverage Ratio, then for
all periods after the date of implementation of such change(s) until one or more
appropriate amendments of this Agreement addressing such change(s) in GAAP are
negotiated, executed and delivered by the parties hereto in a form acceptable to
all such parties, the Fixed Charge Coverage Ratio shall be calculated hereunder
utilizing GAAP as in effect prior to such change(s).

 

(c)           Unless otherwise expressly provided, any accounting concept and
all financial covenants shall be determined on a Consolidated basis, and
financial measurements shall be computed without duplication.

 

(d)           Wherever the term “including” or any of its correlatives appears
in the Loan Documents, it shall be read as if it were written “including (by way
of example and without limiting the generality of the subject or concept
referred to)”.

 

(e)           Wherever the word “herein” or “hereof” is used in any Loan
Document, it is a reference to that entire Loan Document and not just to the
subdivision of it in which the word is used.

 

(f)            References in any Loan Document to Section numbers are references
to the Sections of such Loan Document.

 

(g)           References in any Loan Document to Exhibits, Schedules, Annexes
and Appendices are to the Exhibits, Schedules, Annexes and Appendices to such
Loan Document, and they shall be deemed incorporated into such Loan Document by
reference.

 

(h)           Any term defined in the Loan Documents which refers to a
particular agreement, instrument or document shall also mean, refer to and
include all modifications, amendments, supplements, restatements, renewals,
extensions and substitutions of the same; provided, that nothing in this
subsection shall be construed to authorize any such modification, amendment,
supplement, restatement, renewal, extension or substitution except as may be
permitted by other provisions of the Loan Documents.

 

(i)            Unless otherwise expressly stated in any Loan Document, all times
of day used in the Loan Documents mean local time in New York, New York.

 

(j)            Defined terms may be used in the singular or plural, as the
context requires.

 

1.3          UCC Changes.  All terms used herein which are defined in the UCC
shall, unless otherwise defined herein, have the meanings ascribed to them in
the UCC both as in effect on the date of this Agreement and as hereafter
amended.

 

43

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

 

1.4          Joint and Several Obligations; Borrowers’ Agent.

 

(a)           All obligations of the Borrowers hereunder shall be joint and
several.  Any notice, request, waiver, consent or other action made, given or
taken by any Borrower shall bind all of the Borrowers.

 

(b)           Each of the Credit Parties hereby authorizes the Parent and each
of the Responsible Officers of the Parent listed on Schedule 1.4 hereto or
otherwise designated by the Parent from time to time as provided below, to act
as agent for all of the Credit Parties, and to execute and deliver on behalf of
any Credit Party such notices, requests, waivers, consents, certificates, and
other documents, and to take any and all actions, required or permitted to be
delivered or taken by the Credit Parties hereunder. The Credit Parties may
replace any of the Responsible Officers listed in Schedule 1.4 hereto or add any
additional Responsible Officers by the delivery of a written notice by the
Parent to the Agent specifying the names of each new Responsible Officer and the
offices held by each such Person.  Each Credit Party hereby agrees that any such
notices, requests, waivers, consents, certificates and other documents executed,
delivered or sent by the Parent or any Responsible Officer of the Parent and any
such actions taken by the Parent or any Responsible Officer of the Parent shall
bind each Credit Party.

 

2.             Loans; Letters of Credit; Notes; Payments; Prepayments; Interest
Rates.

 

2.1          Commitments.  Subject to the terms and conditions hereof, each
Lender, severally and not jointly, agrees to make Revolving Loans to the
Borrowers from time to time on and after the Closing Date until, but not
including, the Termination Date, in an aggregate principal amount at any one
time outstanding (including such Lender’s Commitment Percentage of the Letter of
Credit Exposure Amount and the Swingline Exposure at such time) up to, but not
exceeding, such Lender’s Revolving Commitment.  Subject to the terms and
conditions of Section 4.2 hereof, the Term Lenders, severally and not jointly,
agree to make a single Term Loan advance to the Borrowers on or after the
Closing Date but prior to November 30, 2012, in an amount equal to such Term
Lender’s Term Loan Commitment.  Such single Term Loan advance will be
transferred to the Borrowers on such requested date by making immediately
available funds available to the Agent’s designated account, not later than
10:00 a.m. Chicago time.  Any unused Term Loan Commitment not utilized on the
date of the Term Loan advance shall be automatically terminated. 
Notwithstanding the foregoing, the aggregate principal amount of the Revolving
Loans outstanding at any time shall not exceed the lesser of (a) the Indenture
Cap, and (b) (i) the lesser at such time of (A) the Total Revolving Commitment
and (B) (1) the Borrowing Base as of such time less (2) all applicable Reserves,
less (ii) the aggregate Letter of Credit Exposure Amount and Swingline Exposure
at such time less (iii) the aggregate amount of the items specified in
clauses (b)(ii) and (b)(iii) of the definition of “Availability.”  Subject to
the conditions herein, any such Revolving Loan prepaid prior to the Termination
Date may be reborrowed as an additional Revolving Loan by the Borrowers pursuant
to the terms of this Agreement.  Amounts prepaid or repaid in respect of Term
Loans may not be reborrowed.

 

2.2          Loans.

 

(a)           Subject to Sections 4.1 and 4.3 hereof, all Revolving Loans shall
be advanced and made ratably by the Revolving Lenders in accordance with the
Revolving

 

44

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

 

Lenders’ respective Revolving Commitments.  Subject to Section 4.2 hereof, the
Term Loans shall be made available in accordance with Section 2.1 by the Term
Lenders in accordance with the Term Lenders’ respective Term Loan Commitments. 
The Term Loans shall amortize as set forth in Section 2.6 hereof.

 

(b)           When requesting a Revolving Loan hereunder, the Borrowers shall
give the Agent notice of a request for a Loan in accordance with
Section 4.1(a) hereof; provided, however, no notice of a request for a Revolving
Loan in accordance with Section 4.1(a) hereof shall be required to be presented
by the Borrowers to the Agent if a check, wire transfer request or other item
issued by any Borrower shall be presented for payment against any controlled
disbursement account maintained with the Agent in connection with the account or
accounts established and maintained by the Agent for the purposes of deposits
and collections of Receivables in accordance with Section 6.15(a) hereof, and
the Agent shall then cause the Lenders (subject to the settlement delay
provisions of Section 2.2(f) hereof) to make a Revolving Loan for the purpose of
crediting said controlled disbursement account in an amount sufficient to permit
such check, wire transfer request or other item to be honored if (i) such
Revolving Loan is to be made prior to the Termination Date, (ii) the
Availability would be equal to or greater than zero after giving effect to such
Revolving Loan, and, if applicable, the resulting payment of any Obligations to
be contemporaneously paid with the proceeds of such requested Revolving Loan,
and (iii) no Default or Event of Default shall have occurred which is then
continuing.  Each such Revolving Loan advanced for the purpose of crediting any
such controlled disbursement account shall be deemed to be a Revolving Credit
Alternate Base Rate Borrowing until a Rate Selection Notice is otherwise
properly presented for such Revolving Credit Alternate Base Rate Borrowing
converting such borrowing to a Revolving Credit LIBOR Borrowing. 
Notwithstanding anything to the contrary contained in Section 2.11, if any
request for a Loan in accordance with Section 4.1(a) hereof requests Revolving
Loans in the form of Alternate Base Rate Borrowings, the Agent may make a
Swingline Loan available to the Borrowers in an aggregate amount not to exceed
the amount of such requested Revolving Loans, and the aggregate amount of the
corresponding requested Revolving Loans shall be reduced accordingly by the
principal amount of such Swingline Loan.  Except as otherwise provided in the
settlement delay provisions of Section 2.2(f) hereof, the Agent shall promptly
advise the Lenders of any notice of a request for a Loan (other than a Swingline
Loan) given pursuant to Section 4.1(a) or of any such Revolving Loan advanced
for purposes of crediting any such controlled disbursement account and of each
Lender’s portion of a requested borrowing (based on such Lender’s Commitment
Percentage).

 

(c)           Except as otherwise provided or specified in the settlement delay
provisions of Section 2.2(f) below, each Lender shall make its Revolving Loans
available on the proposed dates thereof by causing its Applicable Lending Office
to pay the amount required to the Agent at the Principal Office in immediately
available funds not later than 1:00 p.m., and the Agent shall as soon as
practicable, but in no event later than 5:00 p.m. on such date, credit the
amount so received to a general deposit account designated and maintained by the
applicable Borrower.  If a requested Revolving Loan shall not occur on the
Closing Date or any date specified by the Borrowers as set forth in the
applicable Request for Extension of Credit, as the case may be, because all of
the conditions for such Revolving Loan set forth herein or in any of the other
Loan Documents shall not have been met, the Agent shall return the amounts so
received from the Lenders in respect of such requested Revolving Loan to the
applicable Lenders as soon as practicable.

 

45

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

 

(d)           The obligations of the Lenders hereunder are several and not
joint; therefore, notwithstanding anything herein to the contrary:  (i) no
Revolving Lender shall be required to make Revolving Loans at any one time
outstanding in excess of such Lender’s Revolving Commitment and no Term Lender
shall be required to make Term Loans at any time after November 30, 2012 and in
an amount in excess of such Term Lender’s Term Loan Commitment; (ii) if a
Revolving Lender fails to make a Revolving Loan as and when required hereunder
and the Borrowers subsequently make a repayment on the Revolving Loans, such
repayment shall be shared among the non-defaulting Revolving Lenders in
accordance with the respective Commitment Percentages until each non-defaulting
Revolving Lender has received its Commitment Percentage of all of the
outstanding Revolving Loans, after which the balance of such repayment shall be
applied against such Defaulting Lender’s Commitment Percentage of the
outstanding Revolving Loans; and (iii) the failure of any Revolving Lender to
make any Revolving Loan or any payment in respect of its participation in
Swingline Loans and Letter of Credit Advances shall not in itself relieve any
other Revolving Lender of its obligation to lend hereunder (provided, that no
Lender shall be responsible for the failure of any other Lender to make a Loan
such other Lender is obligated to make hereunder).

 

(e)           The Revolving Loans made by the Lenders on any date and the Swing
Loans made by the Swingline Lender shall be in integral multiples of $25,000;
provided, however, that the LIBOR Borrowings made on any date shall be in
minimum aggregate principal amounts of $3,000,000, with any increases over such
minimal amount being in integral aggregate multiples of $1,000,000.

 

(f)            The arrangements between the Agent and the Lenders with respect
to making and advancing the Revolving Loans and making payments under Letters of
Credit shall be handled on the following basis:  no less than once a week, the
Agent will provide each Lender with a statement showing, for the period of time
since the date of the most recent of such statements previously provided, the
aggregate principal amount of new Revolving Loans made to the Borrowers, the
aggregate amount of new Letter of Credit Advances which have not been
reimbursed, the aggregate face amount of new Letters of Credit issued for the
account of the Borrowers, the aggregate principal amount of new Swingline Loans
made to the Borrowers, the amount of remittances and payments actually collected
and applied by the Agent to reduce the outstanding principal balance of the
Revolving Loans, to reduce the outstanding principal balance of the Swingline
Loans and to reimburse Letter of Credit Advances during such period and the
outstanding principal balances of the Revolving Loans and the Swingline Loans
and the aggregate Letter of Credit Exposure Amount outstanding at the end of
such period.  If a Revolving Lender’s pro-rata share (based on such Revolving
Lender’s Commitment Percentage) of the Revolving Loans and the unreimbursed
Letter of Credit Advances made during such period exceeds such Revolving
Lender’s pro-rata share of remittances and payments applied to reduce the
Revolving Loans and reimburse Letter of Credit Advances during such period, the
difference will be paid and made available in same day funds by such Revolving
Lender to the Agent, and if such Revolving Lender’s pro-rata share (based on
such Revolving Lender’s Commitment Percentage) of remittances and payments
applied to reduce the Revolving Loans and reimburse Letter of Credit Advances
during such period exceeds such Revolving Lender’s pro-rata share (based on such
Revolving Lender’s Commitment Percentage) of the Revolving Loans and the
unreimbursed Letter of Credit Advances made during such period, the difference
will be paid and made available in same day funds by the Agent to such Revolving
Lender.

 

46

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

 

(g)           The Agent shall render to the Borrowers’ Agent each month a
statement of the Borrowers’ account of all transactions of the type described in
Section 2.2(f) hereof, and all payments applied to the Term Loans, which shall
be deemed to be correct and accepted by and be binding upon the Borrowers unless
the Agent receives a written statement of the Borrowers’ exceptions to such
account statement within thirty (30) days after such statement was rendered to
the Borrowers’ Agent.

 

(h)           Notwithstanding anything to the contrary set forth in this
Section 2.2 or in any other provision of this Agreement, the Agent, on its own
initiative and in its sole discretion, but for the ratable benefit of the
Lenders, may extend Revolving Loans or issue Letters of Credit in excess of
Availability (collectively “Permitted Overadvances”) in an aggregate amount at
any one time not exceeding $5,000,000 upon and subject to the following terms: 
(i) no Permitted Overadvances shall be in excess of (A) the Total Revolving
Commitment, less (B) the aggregate Revolving Loans, Letter of Credit Exposure
Amount and Swingline Exposure at such time (excluding such Permitted
Overadvances) less (C) the aggregate amount of the items specified in
clauses (b)(ii) and (b)(iii) of the definition of “Availability”; (ii) no
Permitted Overadvances shall be outstanding for more than thirty (30)
consecutive days; and (iii) no more than two (2) Permitted Overadvances can be
extended by the Agent during any 180 consecutive day period.  The extension of
any Permitted Overadvance shall not operate as a waiver of any Default or Event
of Default.

 

2.3          Commitment Fees.  In consideration of each Revolving Lender’s
Revolving Commitment, the Borrowers agree to pay to the Agent for the account of
each Revolving Lender a commitment fee (each a “Commitment Fee”) (computed on
the basis of the actual number of days elapsed in a year composed of 360 days,
subject to the terms of Section 10.6 hereof) in an amount equal to the product
of (a) the Applicable Commitment Fee Percentage times (b) such Revolving
Lender’s average Unused Commitment for the applicable calculation period;
provided, however, that such Revolving Lender’s pro rata share of the Swingline
Exposure shall be disregarded for purposes of calculating such Revolving
Lender’s Unused Commitment for Commitment Fee purposes, except in respect of the
Swingline Lender, whose Unused Commitment for Commitment Fee purposes shall be
reduced by the Swingline Exposure.  The Commitment Fee shall be due and payable
in arrears (i) on the last Business Day of each month prior to the Termination
Date, and (ii) on the Termination Date, with each Commitment Fee to commence to
accrue as of the date of this Agreement and to be effective as to any reduction
in the Total Revolving Commitment pursuant to Section 2.4(a) below as of the
date of any such decrease, and each Commitment Fee shall cease to accrue (except
with respect to interest at the Default Rate on any unpaid portion thereof) on
the Termination Date.  All past due Commitment Fees shall bear interest at the
Default Rate and shall be payable upon demand by the Agent.

 

2.4          Termination and Reductions of Revolving Commitments.

 

(a)           Upon at least five (5) Business Days’ prior irrevocable written
notice to the Agent, the Borrowers may at any time in whole permanently
terminate, or from time to time in part permanently reduce (except as noted
below), the Total Revolving Commitment ratably among the Revolving Lenders in
accordance with the amounts of their Revolving Commitments; provided, however,
that the Total Revolving Commitment shall not be reduced at any time to an
amount less than the aggregate of each Revolving Lender’s Current Sum
outstanding at such

 

47

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

 

time; provided, further, that the Borrowers shall not at any time reduce the
Total Revolving Commitment pursuant to this Section 2.4(a) to an amount less
than $75,000,000, except pursuant to a permanent termination in whole thereof. 
Each partial reduction of the Total Revolving Commitment shall be in a minimum
of $5,000,000, or an integral multiple of $1,000,000 in excess thereof.

 

(b)           To effect the payment of any and all Commitment Fees and all other
Obligations outstanding and owing hereunder or under any other Loan Documents,
subject to the provisions of Sections 2.1 and 4.1 hereof, the Agent may, but
shall not be obligated to, cause the Revolving Lenders to make a Revolving Loan
or request that the Swingline Lender make a Swingline Loan if (i) such Revolving
Loan or Swingline Loan, as applicable, is to be made prior to the Termination
Date, (ii) the Availability would be equal to or greater than zero after giving
effect to such Revolving Loan or Swingline Loan, as applicable, and the
resulting payment of Commitment Fees to be contemporaneously paid with the
proceeds of such Loan, and (iii) no Default or Event of Default shall have
occurred which is then continuing.  The inability of the Agent to cause the
payment of any such Commitment Fees or other Obligations in accordance with the
preceding sentence shall not in any way whatsoever affect the Credit Parties’
obligation to otherwise pay such amounts in accordance with the applicable terms
hereof or of any other Loan Documents.

 

2.5          Mandatory and Voluntary Prepayments.

 

(a)           If the Current Sum applicable to a Revolving Lender at any time
exceeds such Revolving Lender’s Revolving Commitment, the Agent shall notify the
Borrowers’ Agent of such excess amount (such notice being permitted to be given
orally and need not be in writing) and the Borrowers shall immediately make a
prepayment on such Revolving Lender’s Revolving Credit Note or otherwise
reimburse such Revolving Lender for Letter of Credit Advances or cause one or
more Swingline Loans to be prepaid or one or more Letters of Credit to be
canceled and surrendered in an amount sufficient to reduce such Revolving
Lender’s Current Sum to an amount no greater than such Revolving Lender’s
Revolving Commitment.  Any prepayments required by this subparagraph (a) shall
be applied to outstanding Revolving Credit Alternate Base Rate Borrowings up to
the full amount thereof before such prepayments are applied to outstanding
Revolving Credit LIBOR Borrowings (together with any Consequential Loss
resulting from such prepayment).

 

(b)           The Borrowers shall make prepayments of the Revolving Loans and
the Swingline Loans from time to time so that the Availability equals or exceeds
zero at all times.  Specifically, if the Availability at any time is less than
zero (except for the existence of a Permitted Overadvance), the Agent shall
notify the Borrowers’ Agent of the deficiency (such notice being permitted to be
given orally and need not be in writing) and the Borrowers shall immediately
make a prepayment on the Revolving Credit Notes or otherwise reimburse the Agent
for Letter of Credit Advances or cause one or more Swingline Loans to be prepaid
or one or more Letters of Credit to be canceled and surrendered in an amount
sufficient to cause the Availability to be at least equal to zero (except for
the existence of a Permitted Overadvance).  Any prepayments required by this
subparagraph (b) shall be applied to outstanding Revolving Credit Alternate Base
Rate Borrowings up to the full amount thereof before such prepayments

 

48

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

 

are applied to outstanding Revolving Credit LIBOR Borrowings (together with any
Consequential Loss resulting from such prepayment).

 

(c)           In addition to the mandatory prepayments required by
Sections 2.5(a) and 2.5(b) above, the Borrowers shall have the right, at their
option, to prepay any of the Loans in whole at any time or in part from time to
time, without premium or penalty, except as otherwise provided in this
Section 2.5 or of Section 2.9(a), 2.9(b) or 2.9(c) hereof.  Each prepayment of
Swingline Loans, Revolving Credit Alternate Base Rate Borrowings or Term Loan
Alternate Base Rate Borrowings may be made in any amount, and such prepayments
shall be applied against the Revolving Credit Notes, the Swingline Note or the
Term Notes, as applicable.  Prepayments under this subparagraph (c) shall be
subject to the following additional conditions:

 

(i)            In giving notice of prepayment as hereinafter provided, the
Borrowers shall specify, for the purpose of paragraphs (ii) and
(iii) immediately following, the manner of application of such prepayment as
between Alternate Base Rate Borrowings and LIBOR Borrowings and as between
Swingline Loans, Revolving Loans and Term Loans; provided, that in no event
shall any LIBOR Borrowing be partially prepaid such that less than $3,000,000
remains outstanding.

 

(ii)           Prepayments applied to any LIBOR Borrowing may be made on any
Business Day, provided, that (A) the Borrowers shall have given the Agent at
least three (3) Business Days’ prior irrevocable written or telecopied notice of
such prepayment (other than automatic payments of Revolving Loans with proceeds
from Receivables in accordance with the terms of Section 6.15(b), for which no
prior notice of prepayment shall be required), specifying the principal amount
of the LIBOR Borrowing to be prepaid, the particular LIBOR Borrowing to which
such prepayment is to be applied and the prepayment date; and (B) if such
prepayment is made on any day other than the last day of the Interest Period
corresponding to the LIBOR Borrowing to be prepaid, the Borrowers shall pay upon
demand directly to the Agent for the account of the applicable Lenders the
Consequential Loss as a result of such prepayment.

 

(iii)          Prepayments applied to any Alternate Base Rate Borrowing may be
made on any Business Day, provided, that with respect thereto (other than
automatic payments of Revolving Loans with proceeds from Receivables in
accordance with the terms of Section 6.15(b), for which no prior notice of
prepayment shall be required), the Borrowers shall have given the Agent prior
irrevocable written notice or notice by telephone (which is to be promptly
confirmed in writing) of any such prepayment on the Business Day of such
prepayment, specifying the principal amount of the Alternate Base Rate Borrowing
to be prepaid.

 

(d)           If any notice of any prepayment has been given, the principal
amount specified in such notice, together with (in the case of any prepayment of
a LIBOR Borrowing) interest thereon to the date of prepayment and any resulting
Consequential Loss, shall be due and payable on such prepayment date.

 

49

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

 

2.6          Notes; Payments; Accounts.

 

(a)           Subject to the provisions of Section 10.12 hereof relating to
replacement and substitution of the Notes, (i) all Revolving Loans made by a
Revolving Lender to the Borrowers shall be evidenced by a single Revolving
Credit Note dated as of the Closing Date, delivered and payable to such
Revolving Lender in a principal amount equal to such Revolving Lender’s
Revolving Commitment as of the Closing Date, (ii) all Term Loans made by a Term
Lender to the Borrowers shall be evidenced by a single Term Note dated as of the
Closing Date, delivered and payable to such Term Lender in a principal amount
equal to such Term Lender’s Term Loan Commitment as of the Closing Date, and
(iii) all Swingline Loans made by the Swingline Lender to the Borrowers shall be
evidenced by a single Swingline Note dated as of the Closing Date, delivered and
payable to the Swingline Lender in a principal amount equal to $15,000,000.

 

(b)           The outstanding principal balance of each and every Revolving
Loan, as evidenced by the Revolving Credit Notes, shall mature and be fully due
and payable on the Termination Date.  The outstanding principal balance of each
and every Swingline Loan, as evidenced by the Swingline Note, shall mature and
be fully due and payable on the earlier to occur of the Termination Date or the
date such Swingline Loans are required to be paid with proceeds of Revolving
Loans in accordance with Section 2.11(c).  The Borrowers shall  make installment
payments of principal on the Term Loans commencing on March 31, 2013 and
continuing on the last Business Day of each June, September, December, and
March thereafter in the aggregate principal amount set forth below for such
period until the Term Loans have been paid in full:

 

Period ending on the last Business Day of

each March, June, September, and December

 

Amount

Period commencing on March 31, 2013 and ending on December 31, 2014

 

2.5% of the Funded Term Loan Amount

Period commencing on March 31, 2015 and ending on December 31, 2016

 

3.75% of the Funded Term Loan Amount

Period commencing on March 31, 2017 and ending on September 30, 2017

 

12.5% of the Funded Term Loan Amount

 

To the extent not previously paid, all unpaid Term Loans shall be paid in full
in cash by the Borrowers on the Termination Date.

 

(c)           Subject to Section 10.6 hereof, the Borrowers hereby agree to pay
accrued interest on the unpaid principal balance of the Loans on the Interest
Payment Dates, commencing with the first of such dates to occur after the date
of this Agreement.  After the Termination Date, accrued and unpaid interest on
the Term Loans, the Revolving Loans and the Swingline Loans shall be payable on
demand.

 

(d)           To effect payment of accrued interest owing on the Loans as of the
Interest Payment Dates, subject to the provisions of Sections 2.1 and 4.1
hereof, the Agent may, but shall not be obligated to, cause the Revolving
Lenders to make a Revolving Loan or request that the Swingline Lender make a
Swingline Loan to pay in full the amount of accrued interest

 

50

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

 

owing and payable on the Loans as of the respective Interest Payment Date, if
(i) such Revolving Loan or Swingline Loan, as applicable, is to be made prior to
the Termination Date, (ii) the Availability would be equal to or greater than
zero after giving effect to such Revolving Loan or Swingline Loan, as
applicable, and the resulting payment of accrued interest to be
contemporaneously paid with the proceeds of such Loan, and (iii) no Default or
Event of Default shall have occurred which is then continuing.  The inability of
the Agent to cause a payment of any accrued interest owing on the Loans on any
Interest Payment Date in accordance with the preceding sentence shall not in any
way whatsoever effect the Credit Parties’ obligation to otherwise pay such
amounts in accordance with the applicable terms hereof or any other Loan
Documents.

 

(e)           The Agent shall maintain accounts in which it shall record (i) the
amount of each Loan made hereunder, the type of each Loan made hereunder, and
the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrowers to each
Lender hereunder and (iii) the amount of any sum received by the Agent hereunder
for the account of the Lenders and each Lender’s share thereof.

 

(f)            The entries made in the accounts maintained pursuant to
paragraph (e) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of the
Agent to maintain such accounts or any error therein shall not in any manner
affect the obligation of the Borrowers to repay the Loans in accordance with the
terms of this Agreement.

 

2.7          Application of Payments and Prepayments.

 

(a)           Except as otherwise provided in Sections 2.5(a) and 2.5(b) hereof,
prepayments on the Revolving Credit Notes shall be applied to payment of the
aggregate unpaid principal amounts of the Revolving Credit Notes, with the
balance of any such prepayments, if any, being applied to accrued interest. 
Payments of accrued interest on each Revolving Credit Note in accordance with
Section 2.6(c) hereof shall be applied to the aggregate accrued interest then
outstanding under the Revolving Credit Notes, while payment by the Borrowers of
the aggregate principal amount outstanding under the Revolving Credit Notes on
the Termination Date shall be applied to principal.

 

(b)           Except as otherwise provided in Sections 2.5(a) and 2.5(b) hereof,
prepayments on the Term Notes shall be applied to payment of the aggregate
unpaid principal amounts of the Term Notes in inverse order of maturity, with
the balance of any such prepayments, if any, being applied to accrued interest. 
Payments of accrued interest on each Term Note in accordance with
Section 2.6(c) hereof shall be applied to the aggregate accrued interest then
outstanding under the Term Notes, while payment by the Borrowers of the
aggregate principal amount outstanding under the Term Notes on the Termination
Date shall be applied to principal.

 

(c)           Except as otherwise provided in Sections 2.5(a) and 2.5(b) hereof,
prepayments on the Swingline Note shall be applied to payment of the aggregate
unpaid principal amount of the Swingline Note, with the balance of any such
prepayments, if any, being applied to accrued interest.  Payments of accrued
interest on the Swingline Note in accordance

 

51

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

 

with Section 2.6(c) hereof shall be applied to the aggregate accrued interest
then outstanding under the Swingline Note, while payment by the Borrowers of the
aggregate principal amount outstanding under the Swingline Note on the
Termination Date shall be applied to principal.

 

(d)           All payments remitted to the Agent and all such payments not
relating to principal or interest of specific Loans, or not constituting payment
of specific fees or other specific Obligations, and all proceeds of Collateral
received by the Agent, shall be applied, ratably, subject to the provisions of
this Agreement, first, to pay any fees, indemnities or expense reimbursements
then due to the Agent from the Borrowers; second, to pay any fees or expense
reimbursements then due to the Lenders from the Borrowers; third, to pay
interest due in respect of all Swingline Loans; fourth, to pay interest due in
respect of all Revolving Loans; fifth, to pay interest due in respect of all
Term Loans; sixth, to pay or prepay principal of the Swingline Loans; seventh,
to pay or prepay principal of the Revolving Loans and unpaid reimbursement
obligations in respect of Letters of Credit, and thereafter to serve as cash
collateral to be held by the Agent to secure the Letter of Credit Exposure
Amount; eighth, to pay or prepay principal of the Term Loans; ninth, to the
payment of any other Obligation due to the Agent or any Lender (excluding any
amounts relating to Obligations under any Bank Product); tenth, to the payment
of any Obligations under any Bank Product (excluding any amounts relating to
Obligations under any Bank Product owed to any Non-Reporting Lender Party); and
eleventh, to the payment of any Obligations under any Bank Product owed to any
Non-Reporting Lender Party.  Notwithstanding anything to the contrary contained
in this Agreement, unless so directed by the Borrowers, or unless an Event of
Default has occurred and is continuing, neither the Agent nor any Lender shall
apply any payments which it receives to any LIBOR Borrowing, except (i) on the
expiration date of the Interest Period applicable to any such LIBOR Borrowing,
or (ii) in the event, and only to the extent, that there are no outstanding
Alternate Base Rate Borrowings and the Borrowers have consented to such
application.

 

(e)           Except for any settlement delay provided or specified in
Section 2.2(f) hereof, each payment or prepayment received by the Agent
hereunder or under any Note for the account of a Lender shall be paid promptly
to such Lender, in immediately available funds.  If the Agent fails to send to
any Lender the product of such Lender’s Commitment Percentage, times the
aggregate amount of any such payment or prepayment received by the Agent for the
account of all the Lenders by the close of business on the date such payment was
deemed received by the Agent in accordance with Section 2.7(f) below, the Agent
shall pay to such Lender interest on such Lender’s pro-rata portion of such
payment timely received by the Agent from such date of receipt by the Agent to
the date that such Lender receives its pro-rata portion of such payment, such
interest to accrue at the Federal Funds Effective Rate and to be payable upon
written request from such Lender.

 

(f)            Other than automatic payments of Obligations with proceeds from
Receivables in accordance with the terms of Section 6.15(b), all sums payable by
the Borrowers to the Agent hereunder or pursuant to the Notes or any of the
other Loan Documents for its own account or the account of the Lenders shall be
payable in United States dollars in immediately available funds not later than
1:00 p.m. on the date such payment or prepayment is due and shall be made
without set-off, counterclaim or deduction of any kind.  Any such payment or
prepayment received and accepted by the Agent after 1:00 p.m. shall be
considered for all purposes (including the payment of interest, to the extent
permitted by law) as having been made

 

52

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

 

on the next succeeding Business Day.  All such payments or prepayments shall be
made at the Principal Office.  If any payment or prepayment becomes due and
payable on a day which is not a Business Day, then the date for the payment
thereof shall be extended to the next succeeding Business Day and interest shall
be payable thereon at the then applicable rate per annum during such extension.

 

(g)           If any Lender shall fail to make any payment required to be made
by it hereunder, then the Agent may, in its sole discretion (notwithstanding any
contrary provision hereof), apply any amounts thereafter received by the Agent
for the account of such Lender to satisfy such Lender’s obligations hereunder
until all such unsatisfied obligations are fully paid.

 

2.8          Interest Rates for Loans.

 

(a)           Subject to Section 10.6 hereof, the Loans shall bear interest on
their respective outstanding principal balances at the Alternate Base Rate;
provided, that (i) all principal outstanding, whether then due and payable,
after the occurrence of an Event of Default which has not been cured to the
satisfaction of the Agent and the Required Lenders or waived in writing by the
Agent and the Required Lenders shall bear interest at the Default Rate, which
shall be due and payable upon demand, (ii) past due principal and interest shall
bear interest at the Default Rate, which shall be payable on demand, and
(iii) subject to the provisions hereof, the Borrowers shall have the option of
having all or any portion of the principal balances from time to time
outstanding under the Loans (other than Swingline Loans) bear interest until
their respective maturities at a rate per annum equal to the Adjusted LIBOR Rate
(together with the Alternate Base Rate, individually herein called an “Interest
Option” and collectively called “Interest Options”).  The records of the Agent,
with respect to Interest Options, Interest Periods and the amounts of Loans to
which they are applicable shall be binding and conclusive, absent manifest
error.  Interest on the Loans shall be calculated at the Alternate Base Rate,
except where it is expressly provided pursuant to this Agreement that the
Adjusted LIBOR Rate is to apply.

 

(b)           The Borrowers shall have the right to designate or convert their
Interest Options in accordance with the provisions hereof.  Provided no Default
or Event of Default has occurred and is continuing, and subject to the
provisions of the last sentence of Subsection 2.8(a) hereinabove and the
provisions of Section 2.9 hereof, the Borrowers may elect to have the Adjusted
LIBOR Rate apply or continue to apply to all or any portion of the principal
balances of the Loans.  Each change in Interest Options shall be a conversion of
the rate of interest applicable to the specified portion of the Loans, but such
conversion alone shall not change the outstanding principal balance of the
Loans.  The Interest Options shall be designated or converted in the manner
provided below:

 

(i)            The Borrowers’ Agent shall give the Agent notice by telephone,
promptly confirmed by written notice (the “Rate Selection Notice”) substantially
in the form of hereto.  Each such telephone and written notice shall specify the
amount and type of borrowings which are the subject of the designation; the
amount and type of borrowings into which such borrowings are to be converted or
for which an Interest Option is designated; the proposed date for the
designation or conversion (which, in the case of conversion of LIBOR Borrowings,
shall be the last day of the Interest Period applicable

 

53

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

 

thereto) and the Interest Period or Periods, if any, selected by the Borrowers. 
Such notice by telephone shall be irrevocable and shall be given to the Agent no
later than the applicable Rate Selection Date.  If (A) a new Revolving Loan is
to be a Revolving Credit LIBOR Borrowing, (B) an existing Revolving Credit LIBOR
Borrowing is maturing at the time that a new Revolving Loan is being requested
and the Borrowers are electing to have such existing portion of the outstanding
principal balance of the Revolving Loans going forward bear interest at the same
Interest Option and for the same Interest Period as the new Revolving Loan,
(C) a portion of a Revolving Credit Alternate Base Rate Borrowing is to be
converted so as to bear interest at the same Interest Option and for the same
Interest Period as the new Revolving Loan, (D) the Term Loan is to be a Term
Loan LIBOR Borrowing or (E) the aggregate outstanding principal amount of the
Term Loans constituting a Term Loan Alternate Base Rate Borrowing is to be
converted to a Term Loan LIBOR Borrowing then the Rate Selection Notice shall be
included in the Request for Extension of Credit applicable to the new Revolving
Loan or the Term Loan, which shall be given to the Agent no later than the
applicable Rate Selection Date.

 

(ii)                                  No more than eight (8) LIBOR Borrowings
and corresponding Interest Periods shall be outstanding at any one time.  Each
LIBOR Borrowing shall be in a minimum aggregate principal amount of at least
$3,000,000, with any increases over such minimum amount being in integral
aggregate multiples of $1,000,000.

 

(iii)                               Principal included in any borrowing shall
not be included in any other borrowing which exists at the same time.

 

(iv)                              Each designation or conversion shall occur on
a Business Day.

 

(v)                                 Except as provided in Section 2.9 hereof, no
LIBOR Borrowing shall be converted on any day other than the last day of the
applicable Interest Period.

 

(vi)                              The Agent shall promptly advise the Lenders of
any Rate Selection Notice given pursuant to this Section 2.8 and of each
Lender’s pro-rata portion of such designation or conversion hereunder.

 

(c)                                  All interest and fees (including the
Commitment Fee, but excluding any prepayment fee owing pursuant to Section 2.4
hereof) will be computed on the basis of a year of 360 days and actual days
elapsed (including the first day but excluding the last day) occurring in the
period for which payable.

 

2.9                               Special Provisions Applicable to LIBOR
Borrowings.

 

(a)                                 If, after the date of this Agreement, the
adoption of any applicable Legal Requirement or any change in any applicable
Legal Requirement or in the interpretation or administration thereof by any
Governmental Authority or compliance by the Agent or any Lender with any request
or directive (whether or not having the force of law) of any Governmental
Authority shall at any time make it unlawful or impracticable for any Lender to
permit the establishment of or to maintain any LIBOR Borrowing, the commitment
of the Lenders to establish or maintain the Adjusted LIBOR Rate affected by such
adoption or change shall forthwith be canceled and the Borrowers shall
forthwith, upon demand by the Agent to the

 

54

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

 

Borrowers’ Agent, (i) convert the Adjusted LIBOR Rate with respect to which such
demand was made to the Alternate Base Rate; (ii) pay all accrued and unpaid
interest to date on the amount so converted; and (iii) pay any amounts required
to compensate the Agent and the Lenders for any additional cost or expense which
the Agent or any Lender may incur as a result of such adoption of or change in
such Legal Requirement or in the interpretation or administration thereof and
any Consequential Loss which the Agent or any Lender may incur as a result of
such conversion to the Alternate Base Rate.  If, when the Agent so notifies the
Borrowers’ Agent, the Borrowers have given a Rate Selection Notice specifying
one or more borrowings of the type with respect to which such demand was made
but the selected Interest Period or Interest Periods has not yet begun, such
Rate Selection Notice shall be deemed to be of no force and effect, as if never
made, and the balance of the Loans specified in such Rate Selection Notice shall
bear interest at the Alternate Base Rate until a different available Interest
Option shall be designated in accordance herewith.

 

(b)                                 If, after the date of this Agreement, the
adoption of any applicable Legal Requirement or any change in any applicable
Legal Requirement or in the interpretation or administration thereof by any
Governmental Authority or compliance by the Agent or any Lender with any request
or directive (whether or not having the force of law) from any Governmental
Authority shall at any time as a result of any portion of the principal balance
of the Loans being maintained on the basis of the Adjusted LIBOR Rate:

 

(i)                                     subject any Lender to any tax (including
any United States interest equalization tax), levy, impost, duty, charge, fee,
or any deduction or withholding for any tax, levy, impost, duty, charge or fee
on or from the payment due under any LIBOR Borrowing or other amounts due
hereunder, other than (A) Indemnifiable Taxes and Other Taxes (as to which
Section 10.17 shall govern) or (B) income taxes and franchise taxes in lieu of
income taxes imposed on the applicable Lender by the jurisdiction (or any
political subdivision thereof) under which such Lender is organized or maintains
a lending office; or

 

(ii)                                  change the basis of taxation of payments
due from the Borrowers to the Agent or any Lender under any LIBOR Borrowing
(otherwise than by a change in the rate of taxation of the overall net income of
the Agent or such Lender); or

 

(iii)                               impose, modify, increase or deem applicable
any reserve requirement (excluding that portion of any reserve requirement
included in the calculation of the Statutory Reserves), special deposit
requirement or similar requirement (including state law requirements and
Regulation D) imposed, modified, increased or deemed applicable by any
Governmental Authority against assets held by the Agent or any Lender, or
against deposits or accounts in or for the account of the Agent or any Lender,
or against loans made by the Agent or any Lender, or against any other funds,
obligations or other Property owned or held by the Agent or any Lender; or

 

(iv)                              impose on the Agent or any Lender any other
materially restrictive or limiting condition regarding any LIBOR Borrowing;

 

55

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

 

and the result of any of the foregoing is to increase the cost to any Lender of
agreeing to make or of making, renewing or maintaining such borrowing on the
basis of the Adjusted LIBOR Rate, or reduce the amount of principal or interest
received by any Lender, then, upon demand by such Lender, the Borrowers shall
pay to such Lender, from time to time as specified by such Lender, additional
amounts which shall compensate such Lender for such increased cost or reduced
amount.  Such Lender will promptly notify the Borrowers’ Agent in writing of any
event, upon becoming actually aware of it, which will entitle any Lender to
additional amounts pursuant to this paragraph.  Such Lender’s determination of
the amount of any such increased cost, increased reserve requirement or reduced
amount shall be conclusive and binding, absent manifest error, provided that the
calculation thereof and reason therefore is certified and is set forth in
reasonable detail in such certification by such Lender.

 

The Borrowers shall have the right, if any Lender issues any notice referred to
in the preceding paragraph, upon three (3) Business Days’ notice to the Agent,
either (A) to repay in full (but not in part) any borrowing with respect to
which such notice was given, together with any accrued interest thereon, or
(B) to convert the Adjusted LIBOR Rate in effect with respect to such borrowing
from such Lender to the Alternate Base Rate; provided, that any such repayment
or conversion shall be accompanied by payment of (x) the amount required to
compensate the appropriate Lender or Lenders for the increased cost or reduced
amount referred to in the preceding paragraph; (y) all accrued and unpaid
interest to date on the amount so repaid or converted; and (z) any Consequential
Loss which may be incurred as a result of such repayment or conversion. 
Additionally, if any Lender issues any notice referred to in the preceding
paragraph, the Borrowers shall also have the corresponding rights in
Section 10.16(c).

 

(c)                                  If for any reason with respect to any
Interest Period the Agent shall have determined (which determination shall be
conclusive and binding upon the Borrowers) that:  (i) the Agent is unable
through its customary general practices to determine a rate at which the Agent
is offered deposits in United States dollars by prime banks in the London
interbank market, in the appropriate amount for the appropriate period, or by
reason of circumstances affecting the London interbank market generally, the
Agent is not being offered deposits for the applicable Interest Period and in an
amount equal to the amount of the Agent’s pro-rata portion of any LIBOR
Borrowing requested by the Borrowers, or (ii) the Adjusted LIBOR Rate will not
adequately and fairly reflect the cost to any Lender of making and maintaining
any LIBOR Borrowing hereunder for any proposed Interest Period, then the Agent
shall give the Borrowers’ Agent notice thereof explaining in reasonable detail
the circumstances giving rise to such notice, and thereupon, (A) any Rate
Selection Notice previously given by the Borrowers designating an Adjusted LIBOR
Rate which has not commenced as of the date of such notice from the Agent shall
be deemed for all purposes hereof to be of no force and effect, as if never
given, and (B) until the circumstances giving rise to such notice from the Agent
no longer exist, each Rate Selection Notice requesting an Adjusted LIBOR Rate
shall be deemed a request for an Alternate Base Rate Borrowing, and each
outstanding LIBOR Borrowing then in effect shall be converted, without any
notice to or from the Borrowers, upon the termination of the Interest Period
then in effect to an Alternate Base Rate Borrowing.

 

(d)                                 The Borrowers hereby agree (without
duplication of any other indemnity obligation hereunder) to indemnify the Agent
and each of the Lenders against and hold each of them harmless from any
Consequential Loss which it may incur or sustain as a consequence of

 

56

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

 

(i) any prepayment (mandatory or optional) of any LIBOR Borrowing, (ii) any
acceleration of the Loans or exercise of remedies upon an Event of Default that
results in the repayment or conversion of any LIBOR Borrowing, or any increase
in the cost of maintaining any LIBOR Borrowing, or (iii) any failure by the
Borrowers to convert or to borrow any LIBOR Borrowing on the date specified by
the Borrowers.  This indemnity shall survive termination of the Commitment and
this Agreement.  A certificate as to any additional amounts payable to the Agent
or any Lender pursuant to this paragraph, detailing the basis therefor and
submitted by the Agent or such Lender to the Borrowers’ Agent shall be
conclusive and binding upon the Borrowers, absent manifest error, provided the
calculation thereof is set forth in reasonable detail in such notice.

 

(e)                                  If the Borrowers request quotes of the
Adjusted LIBOR Rate for different Interest Periods being considered for election
by the Borrowers, the Agent will use reasonable efforts to provide such quotes
to the Borrowers promptly.  However, all such quotes provided shall be
representative only and shall not be binding on the Agent or any Lender, nor
shall they be determinative, directly or indirectly, of any Adjusted LIBOR Rate
or any component of any such rate, nor will the Borrowers’ failure to receive or
the Agent’s failure to provide any requested quote or quotes either (i) excuse
or extend the time for performance of any obligation of the Borrowers or for the
exercise of any right, option or election of the Borrowers or (ii) impose any
duty or liability on the Agent or any Lender.  If the Borrowers request a list
of the Business Days in any calendar month, the Agent will use reasonable
efforts to provide such list promptly.  However, any such list provided shall be
understood to identify only those days which the Agent believes in good faith at
the time such list is prepared will be the Business Days for such month.  The
Agent shall not have any liability for any failure to provide, delay in
providing, error or mistake in or omission from, any such quote or list.

 

(f)                                   With respect to any Lender having a LIBOR
Lending Office which differs from its Domestic Lending Office, all Loans
advanced by such Lender’s LIBOR Lending Office shall be deemed to have been made
by such Lender and the obligation of the Borrowers to repay such Loans shall
nevertheless be to such Lender and shall be deemed held by such Lender, to the
extent of such portions of the Loan, for the account of such Lender’s LIBOR
Lending Office.

 

(g)                                  Notwithstanding any provision of this
Agreement to the contrary, each Lender shall be entitled to fund and maintain
its funding of all or any part of the Loans hereunder in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement, all
determinations hereunder shall be made as if such Lender had actually funded and
maintained its portion of each LIBOR Borrowing during each Interest Period for
the Loans through the purchase of deposits having a maturity corresponding to
such Interest Period and bearing an interest rate equal to the LIBOR Rate for
such Interest Period.

 

(h)                                 The Borrowers’ obligation to pay increased
costs and Consequential Loss with regard to each LIBOR Borrowing as specified in
this Section 2.9 hereof shall, in accordance with Section 10.7, survive
termination of this Agreement.

 

57

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

 

2.10                        Letters of Credit.

 

(a)                                 Subject to the terms and conditions
contained herein, the Borrowers shall have the right to utilize a portion of the
Revolving Commitment from time to time prior to the Termination Date to obtain
from the Agent one or more Letters of Credit for the account of the Borrowers,
and, if applicable, NP International HoldCo and NP International, in such
amounts and in favor of such beneficiaries as the Borrowers from time to time
shall request; provided, that in no event shall the Agent have any obligation to
issue any Letter of Credit if (i) the face amount of such Letter of Credit, plus
the Letter of Credit Exposure Amount at such time would exceed $10,000,000,
(ii) the face amount of such Letter of Credit would exceed Availability,
(iii) such Letter of Credit would have an expiry date beyond the earlier to
occur of (A) five (5) Business Days prior to the scheduled Termination Date
(subject to Section 2.10(j)), (B) with respect to Standby Letters of Credit, one
full year after the issuance date of such Standby Letter of Credit, or (C) with
respect to Trade Letters of Credit, one hundred eighty (180) days after the
issuance date of such Trade Letter of Credit, (iv) such Letter of Credit is not
in a form and does not contain terms satisfactory to the Agent in its reasonable
credit judgment, (v) the Borrowers have not executed and delivered such
Applications and other instruments and agreements relating to such Letter of
Credit as the Agent shall have reasonably requested, (vi) an Default or Event of
Default has occurred and is continuing, or (vii) such Letter of Credit is not
being issued or has not been issued in connection with transactions occurring in
the ordinary course of business of the Credit Parties or any of their
Subsidiaries.  Each Letter of Credit may be issued for the account of or used by
the Borrowers or any of their Subsidiaries that are Credit Parties, but the
Credit Parties shall have full liability for each Letter of Credit.  The
Existing Letters of Credit, all of which are identified on Schedule 2.10(a),
shall be deemed to have been issued under this Agreement.  The above limitations
on the tenor of any Letter of Credit issued (or in the case of Existing Letters
of Credit deemed issued) hereunder shall not be deemed to be violated by the
inclusion in such Letter of Credit of an “evergreen clause” providing for the
automatic renewal of such Letter of Credit for successive periods not exceeding
one year in each instance, absent notice to the beneficiary and the account
party of the Issuing Bank’s election not to renew such Letter of Credit at least
thirty (30) days prior to the then effective expiry date of such Letter of
Credit.

 

(b)                                 If requesting the issuance of any Letter of
Credit, the Borrowers’ Agent on behalf of the Borrowers shall give at least
three (3) Business Days’ prior written notice to the Agent, at its Domestic
Lending Office, which written notice shall be the requisite Application for a
Letter of Credit on the Agent’s customary form.  In accordance with the
provisions of Section 2.2(f) hereof, the Agent shall periodically notify each
Lender that a Letter of Credit has been requested in the amount reflected in
such Application and inform such Lender of the amount of its pro-rata portion of
such proposed Letter of Credit (based upon such Lender’s Commitment Percentage).

 

(c)                                  Simultaneously with the Agent’s issuance
and delivery of any Letter of Credit, the Agent shall be deemed, without further
action, to have sold to each Revolving Lender, and each such Revolving Lender
shall be deemed, without further action by any party hereto, to have purchased
from the Agent, a participation interest (which participation shall be
nonrecourse to the Agent) equal to such other Revolving Lender’s Commitment
Percentage at such time in such Letter of Credit and all of the Letter of Credit
Exposure Amount related to

 

58

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

 

such Letter of Credit.  Each Revolving Lender acknowledges and agrees that its
obligation to acquire participations in each Letter of Credit, as well as its
obligation to make the payments specified in this Section 2.10 and the right of
the Agent to receive the same in the manner specified herein, are absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including without limitation, the occurrence and continuance of a Default or
Event of Default hereunder, and that each such payment shall be made without any
offset, abatement, withholding or reduction whatsoever.

 

(d)                                 The Borrowers promise to repay, to the order
of the Agent, the amount of all Letter of Credit Advances.  To effect repayment
of any such Letter of Credit Advance, the Agent shall automatically satisfy such
Letter of Credit Advance (subject to the terms and conditions of Sections 2.1
and 4.1 hereof) by causing the Revolving Lenders to make a Revolving Loan or the
Swingline Lender to make a Swingline Loan if (i) such Letter of Credit Advance
is (and such Revolving Loan or Swingline Loan, as applicable, is to be) made
prior to the Termination Date, (ii) the Availability would be equal to or
greater than zero after giving effect to such Revolving Loan or Swingline Loan,
as applicable, and the resulting repayment of such Letter of Credit Advance to
be contemporaneously paid with the proceeds of such Loan, and (iii) no Default
or Event of Default shall have occurred which is then continuing, and any such
Revolving Loan or Swingline Loan shall bear interest pursuant to
Section 2.8(a) at the Alternate Base Rate.  If any Letter of Credit Advance
cannot be so satisfied, such Letter of Credit Advance shall be considered for
all purposes as a demand obligation owing by the Borrowers to the Agent, and
each such Letter of Credit Advance shall bear interest from the date thereof at
the Default Rate, without notice of presentment, demand, protest or other
formalities of any kind (said past due interest on such Letter of Credit Advance
being payable on demand).  The unavailability of a Revolving Loan or Swingline
Loan to effect repayment of any such Letter of Credit Advance in accordance with
the second sentence of this Section 2.10(d) shall not in any way whatsoever
affect the Borrowers’ obligation to pay each Letter of Credit Advance on demand
and to pay interest at the Default Rate on the amount of such unreimbursed
Letter of Credit Advance.  Except for any settlement delay provided in
Section 2.2(f), the Agent will pay to each Revolving Lender such Revolving
Lender’s Commitment Percentage of all amounts received from the Borrowers by the
Agent, if any, for application, in whole or in part, against the Letter of
Credit Advances in respect to any Letter of Credit, but only to the extent such
Revolving Lender has made its full pro-rata payment of each drawing under the
Letter of Credit to which such Letter of Credit Advance relates.  All rights,
powers, benefits and privileges of this Agreement with respect to the Revolving
Loans, all security therefor (including the Collateral) and guaranties thereof
(including the Guaranties) and all restrictions, provisions for repayment or
acceleration and all other covenants, warranties, representations and agreements
of the Borrowers contained in this Agreement with respect to the Revolving Loans
shall apply to such Letter of Credit Advances.

 

(e)                                  In consideration of the issuance of each
Letter of Credit pursuant to the provisions of this Section 2.10, the Borrowers
agree to pay (subject to Section 10.6 hereof) to the Agent for the ratable
benefit of the Revolving Lenders a letter of credit fee (computed on the basis
of the actual number of days elapsed in a year composed of 360 days) in an
amount equal to the product of (i) the Applicable Margin in effect for Revolving
Credit LIBOR Borrowings for the applicable period times (ii) the undrawn amount
of the applicable Letter of Credit, with each letter of credit fee to commence
to accrue as of the date of issuance of such Letter of Credit and

 

59

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

 

to be effective as to any reductions in the undrawn amount of such Letter of
Credit as of the date of any such reduction (whether resulting from payments
thereunder by the Agent, by agreement of the beneficiary thereunder or
automatically by the terms of the Letter of Credit).  Such letter of credit fee
shall be due and payable, in arrears, on the last Business Day of each calendar
month and on the Termination Date.

 

(f)                                   The Borrowers hereby agree to pay to the
Agent for the Agent’s sole benefit a fronting fee equal to 0.25% on the face
amount of each Letter of Credit issued hereunder.  Fronting fees shall be
payable to the Agent at its Principal Office in immediately available funds on
the date of issuance of such Letter of Credit.  Notwithstanding anything to the
contrary contained herein, no fronting fees shall be due and payable with
respect to the Existing Letters of Credit. All past due fronting fees shall bear
interest at the Default Rate and shall be payable upon demand by the Agent.  The
Borrowers also hereby agree to pay to the Agent for the Agent’s sole benefit any
and all other issuance, administrative, amendment, negotiation, payment and
other normal and customary fees which are charged by the Agent in connection
with the issuance or negotiation of any of Letter of Credit and the presentation
or payment of any draw under any such Letter of Credit, with all of such amounts
being due and payable to the Agent upon demand.

 

(g)                                  The obligations of the Borrowers under this
Agreement in respect of the Letters of Credit and all Letter of Credit Advances
are absolute, unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement, under all circumstances whatsoever,
including the following circumstances:

 

(i)                                     any lack of validity or enforceability
of this Agreement, any Letter of Credit or any Loan Document;

 

(ii)                                  any amendment or waiver of default under
or any consent to departure from the terms of this Agreement or any Letter of
Credit without the express prior written consent of the Agent;

 

(iii)                               the existence of any claim, set-off, defense
or other right which any beneficiary or any transferee of any Letter of Credit
(or any entities for whom any such beneficiary or any such transferee may be
acting), or any Person (other than the Agent or the Lenders) may have, whether
in connection with this Agreement, the Letters of Credit, the transactions
contemplated hereby or any unrelated transaction;

 

(iv)                              any statement, draft, certificate, or any
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 whatsoever; provided, that the Agent
will examine each document presented under each Letter of Credit to ascertain
that such document appears on its face to comply with the terms thereof; and

 

(v)                                 any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing.

 

60

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

 

In the event that any restriction or limitation is imposed upon or determined or
held to be applicable to the Agent, any Revolving Lender or any Credit Party by,
under or pursuant to any Legal Requirement now or hereafter in effect or by
reason of any interpretation thereof by any Governmental Authority, which in the
respective sole judgment of the Agent or any Revolving Lender would prevent any
Revolving Lender from legally incurring liability under a Letter of Credit
issued or proposed to be issued hereunder, then the Agent shall give prompt
written notice thereof to the Borrowers’ Agent, whereupon the Agent shall have
no obligation to issue any additional Letters of Credit then or at any time
thereafter.  In addition, if as a result of any Regulatory Change which imposes,
modifies or deems applicable (x) any tax, reserve, special deposit or similar
requirement against any Letters of Credit issued or participated to by any
Revolving Lender; (y) any fee, expense or assessment against the Letters of
Credit issued by the Agent or any Lender for deposit insurance, or (z) any other
charge, expense or condition which increases the actual cost to the Agent or any
Revolving Lender of issuing or maintaining such Letters of Credit, or reduces
any amount receivable by the Agent or any Revolving Lender hereunder in respect
of any Letter of Credit or any participation therein (which increase in cost, or
reduction in amount receivable, shall be the result of the Agent’s or such
Revolving Lender’s reasonable allocation of the aggregate of such increases or
reductions resulting from such event), then the Borrowers (subject to
Section 10.6 hereof) shall pay to the Agent or such Revolving Lender, upon
demand and from time to time, amounts sufficient to compensate such Person for
each such increase from the effective date of such increase to the date of
demand therefor.  Each such demand shall be accompanied by a certificate setting
forth in reasonable detail the calculation of the amount then being demanded in
accordance with the preceding sentence and each such certificate shall be
conclusive absent manifest error.

 

(h)                                 THE BORROWERS HEREBY INDEMNIFY AND HOLD
HARMLESS EACH LENDER AND THE AGENT FROM AND AGAINST ANY AND ALL CLAIMS AND
DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES WHICH SUCH LENDER OR THE AGENT
MAY INCUR (OR WHICH MAY BE CLAIMED AGAINST SUCH LENDER OR THE AGENT BY ANY
PERSON WHATSOEVER) IN CONNECTION WITH THE EXECUTION AND DELIVERY OR TRANSFER OF
OR PAYMENT OR FAILURE TO PAY UNDER ANY LETTER OF CREDIT, INCLUDING ANY CLAIMS,
DAMAGES, LOSSES, LIABILITIES, COSTS OR EXPENSES WHICH THE AGENT OR SUCH LENDER,
AS THE CASE MAY BE, MAY INCUR (WHETHER INCURRED AS A RESULT OF, ITS OWN
NEGLIGENCE OR OTHERWISE) BY REASON OF OR IN CONNECTION WITH THE FAILURE OF ANY
OTHER LENDER (WHETHER AS A RESULT OF ITS OWN NEGLIGENCE OR OTHERWISE) TO FULFILL
OR COMPLY WITH ITS OBLIGATIONS TO THE AGENT OR SUCH LENDER, AS THE CASE MAY BE,
HEREUNDER (BUT NOTHING HEREIN CONTAINED SHALL AFFECT ANY RIGHTS THE BORROWERS
MAY HAVE AGAINST SUCH DEFAULTING LENDER); PROVIDED, THAT THE BORROWERS SHALL NOT
BE REQUIRED TO INDEMNIFY ANY LENDER OR THE AGENT FOR ANY CLAIMS, DAMAGES,
LOSSES, LIABILITIES, COSTS OR EXPENSES TO THE EXTENT, BUT ONLY TO THE EXTENT,
THAT THE SAME ARE DETERMINED BY A FINAL JUDICIAL DECISION TO HAVE BEEN CAUSED BY
(i) THE WILLFUL MISCONDUCT OR GROSS NEGLIGENCE OF THE PARTY SEEKING
INDEMNIFICATION OR (ii) SUCH LENDER’S OR THE AGENT’S (AS THE CASE MAY BE)
FAILURE TO PAY UNDER ANY LETTER OF CREDIT AFTER THE PRESENTATION TO IT OF A
REQUEST REQUIRED TO BE PAID UNDER APPLICABLE LAW.  NOTHING

 

61

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

 

IN THIS SECTION 2.10(h) IS INTENDED TO LIMIT THE OBLIGATIONS OF THE BORROWERS
UNDER ANY OTHER PROVISION OF THIS AGREEMENT.

 

(i)                                     Subject to the settlement delay
procedures of Section 2.2(f), the Agent shall give telephonic or facsimile
notice to the Revolving Lenders of the receipt and amount of any draft presented
under any Letter of Credit and the date on which payment thereon will be made,
and each of the Revolving Lenders shall, by 1:00 p.m. on the date such payment
is to be made under such Letter of Credit, pay in immediately available funds,
an amount equal to the product of (i) such Revolving Lender’s Commitment
Percentage times (ii) the amount of such payment to be made by the Agent to the
beneficiary under such Letter of Credit.  Any Revolving Lender failing to timely
deliver its requisite portion of any such payment shall deliver the same to the
Agent as soon as possible thereafter, together with interest on such amount for
each day from the due date for such payment to the date of payment by such
Revolving Lender to the Agent of such amount at a rate of interest per annum
equal to the Federal Funds Effective Rate for such period.  Each Revolving
Lender hereby absolutely and unconditionally assumes, as primary obligor and not
as a surety, and agrees to pay and discharge, and to indemnify and hold the
Agent harmless from liability and respect of, such Revolving Lender’s pro-rata
share (based on such Revolving Lender’s Commitment Percentage) of any amounts
owing by such Revolving Lender to the Agent in accordance with the immediately
preceding sentence.  Nothing herein shall be deemed to require any Revolving
Lender to pay to the Agent any amount as reimbursement for any payment made by
the Agent to acquire (discount) for its own account prior to maturity thereof
any acceptance created under a Letter of Credit.

 

(j)                                    Notwithstanding the contrary provisions
of Section 2.10(a)(iii)(A), Letters of Credit may be issued with expiry dates
later than the fifth Business Day prior to the scheduled Termination Date upon
the terms and conditions set forth in this Section 2.10(j) (any such Letter of
Credit, an “Extended Facility Letter of Credit”).  No Extended Facility Letter
of Credit shall have an expiry date later than one (1) year after the scheduled
Termination Date.  From the date thirty (30) days prior to the scheduled
Termination Date and at all times thereafter when any Extended Facility Letters
of Credit are outstanding, the Borrower shall maintain cash collateral in a
special purpose collateral account in the name of the Borrower, but subject to
the sole dominion and control of the Agent, in an amount not less than 110% of
the aggregate Letter of Credit Exposure Amount relating to all Extended Facility
Letters of Credit then outstanding.

 

(k)                                 Cash Collateralization.  If any Event of
Default shall occur and be continuing, on the Business Day that the Borrowers’
Agent receives notice from the Agent or the Required Lenders (or, if the
maturity of the Loans has been accelerated, Revolving Lenders with Letter of
Credit Exposure Amount representing greater than 50% of the total Letter of
Credit Exposure Amount) demanding the deposit of cash collateral pursuant to
this paragraph, the Borrowers shall deposit in an account with the Agent, in the
name of the Agent and for the benefit of the Revolving Lenders (the “LC
Collateral Account”), an amount in cash equal to 110% of the Letter of Credit
Exposure Amount as of such date plus accrued and unpaid interest thereon;
provided that the obligation to deposit such cash collateral shall become
effective immediately, and such deposit shall become immediately due and
payable, without demand or other notice of any kind, upon the occurrence of any
Event of Default with respect to any Borrower described in clause (o) or (p) of
Section 8.1.  Such deposit shall be held by the Agent as collateral for the
payment and performance of the Obligations.  The Agent shall have

 

62

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

 

exclusive dominion and control, including the exclusive right of withdrawal,
over such account and the Borrowers hereby grant the Agent a security interest
in the LC Collateral Account.  Other than any interest earned on the investment
of such deposits, which investments shall be made at the option and sole
discretion of the Agent and at the Borrowers’ risk and expense, such deposits
shall not bear interest.  Interest or profits, if any, on such investments shall
accumulate in such account.  Moneys in such account shall be applied by the
Agent to reimburse a Revolving Lender for Letter of Credit Advances for which it
has not been reimbursed and, to the extent not so applied, shall be held for the
satisfaction of the reimbursement obligations of the Borrowers for the Letter of
Credit Exposure Amount at such time or, if the maturity of the Loans has been
accelerated (but subject to the consent of Revolving Lenders with Letter of
Credit Exposure Amount representing greater than 50% of the total Letter of
Credit Exposure Amount), be applied to satisfy other Obligations.  If the
Borrowers are required to provide an amount of cash collateral hereunder as a
result of the occurrence of an Event of Default, such amount (to the extent not
applied as aforesaid) shall be returned to the Borrowers within three Business
Days after all such Events of Default have been cured or waived.

 

2.11                        Swingline Loans.

 

(a)                                 Subject to the terms and conditions hereof,
the Swingline Lender may, in its sole discretion, make loans for the Swingline
Lender’s own account (each a “Swingline Loan”) to the extent the same would
otherwise have been available to the Borrowers under the Revolving Commitment in
an aggregate principal amount at any one time outstanding up to, but not
exceeding, $15,000,000; provided, however, that at no time shall the Swingline
Lender make any Swingline Loan to the extent that, after giving effect to such
Swingline Loan, the aggregate amount of each Lender’s Current Sum at such time
would exceed the Total Revolving Commitment; and provided further, however, that
the Swingline Lender shall not make any Swingline Loan if any Event of Default
exists of which the Swingline Lender has actual knowledge.  Each Swingline Loan
shall be a Revolving Credit Alternate Base Rate Borrowing and shall in any event
mature no later than the Termination Date.  Subject to the conditions herein and
within the limits set forth in the first sentence of this paragraph, any
Swingline Loan prepaid prior to the Termination Date may be reborrowed as an
additional Swingline Loan by the Borrowers pursuant to the terms of this
Agreement; provided that the Swingline Lender shall not be required to make a
Swingline Loan to refinance an outstanding Swingline Loan; and provided further
that such refinance restriction shall not apply with respect to any “Swingline
Loan” under the Existing Credit Agreement outstanding on the Closing Date.

 

(b)                                 To request a Swingline Loan, the Borrowers’
Agent shall notify the Agent of such request by telephone (confirmed by
telecopy), not later than 1:00 p.m., on the day of a proposed Swingline Loan. 
Each such notice shall be irrevocable and shall specify the requested date
(which shall be a Business Day) and amount of the requested Swingline Loan.  The
Agent will promptly advise the Swingline Lender of any such notice received from
the Borrowers’ Agent, and subject to the terms of this Agreement, the Swingline
Lender may make a Swingline Loan available to the Borrowers by means of a credit
to the general deposit account of the Borrowers specified in such request with
the Swingline Lender by 5:00 p.m. on the requested date of such Swingline Loan.

 

63

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

 

(c)                                  The Swingline Lender may demand at any time
that each Revolving Lender pay to the Agent, for the account of the Swingline
Lender, in the manner provided below, such Revolving Lender’s Commitment
Percentage of all or a portion of the outstanding Swingline Loans, which demand
shall be made through the Agent, shall be in writing and shall specify the
outstanding principal amount of Swingline Loans demanded to be paid.  The Agent
shall forward notice of each such demand to each Revolving Lender on the day
such demand is received by the Agent (except that any such notice or demand
received by the Agent after 2:00 p.m. on any Business Day or any such demand
received on a day that is not a Business Day shall not be required to be
forwarded to the Revolving Lenders by the Agent until the next succeeding
Business Day), together with a statement prepared by the Agent specifying the
amount of each Revolving Lender’s Commitment Percentage of the aggregate
principal amount of the Swingline Loans stated to be outstanding in such notice
or demanded to be paid pursuant to such demand, and, notwithstanding whether or
not the conditions precedent set forth in Sections 4.1 or 4.2 shall have been
satisfied (which conditions precedent the Revolving Lenders hereby irrevocably
waive), each Revolving Lender shall, before 11:00 a.m. on the Business Day next
succeeding the date of such Revolving Lender’s receipt of such notice, make
available to the Agent, in immediately available funds, for the account of the
Swingline Lender, the amount specified in such statement.  Upon such payment by
a Revolving Lender, such Revolving Lender shall, except as provided in
Section 2.11(d) below, be deemed to have made a Revolving Loan to the Borrowers
in the amount of such payment.  The Borrowers agree that all such Revolving
Loans so deemed made shall be deemed to have been requested by them and direct
that all proceeds thereof shall be used to repay the Swingline Loans to the
Swingline Lender, and the Agent shall use such funds received from the Revolving
Lenders to repay the Swingline Loans to the Swingline Lender.  To the extent
that any Revolving Lender fails to make such payment available to the Agent for
the account of the Swingline Lender, the Borrowers shall repay such Swingline
Loan on demand.

 

(d)                                 Upon the occurrence of any Event of Default
described in Sections 8.1(n) through 8.1(s) each Revolving Lender shall acquire,
without recourse or warranty, an undivided participation in each Swingline Loan
otherwise required to be repaid by such Revolving Lender pursuant to
Section 2.11(c) above, which participation shall be in a principal amount equal
to such Revolving Lender’s Commitment Percentage of such Swingline Loan, by
paying to the Swingline Lender on the date on which such Revolving Lender would
otherwise have been required to make a payment in respect of such Swingline Loan
pursuant to Section 2.11(c) above, in immediately available funds, an amount
equal to such Revolving Lender’s Commitment Percentage of such Swingline Loan. 
If all or part of such amount is not in fact made available by such Revolving
Lender to the Swingline Lender on such date, the Swingline Lender shall be
entitled to recover any such unpaid amount on demand from such Revolving Lender
together with interest accrued from such date at the Federal Funds Effective
Rate for the first Business Day after such payment was due and thereafter at the
rate of interest then applicable to Alternate Base Rate Borrowings.

 

(e)                                  From and after the date on which any
Revolving Lender (i) is deemed to have made a Revolving Loan pursuant to
Section 2.11(c) above with respect to any Swingline Loan or (ii) purchases an
undivided participation interest in a Swingline Loan pursuant to
Section 2.11(d) above, the Swingline Lender shall promptly distribute to such
Revolving Lender such Revolving Lender’s Commitment Percentage of all payments
of principal of and interest

 

64

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

 

received by the Swingline Lender on account of such Swingline Loan other than
those received from a Revolving Lender pursuant to Sections 2.11(c) or
2.11(d) above.

 

(f)                                   The Agent, on behalf of the Swingline
Lender, shall request settlement (a “Settlement”) with the Revolving Lenders on
at least a weekly basis or on any date that the Agent elects, by notifying the
Revolving Lenders of such requested Settlement by facsimile, telephone, or
e-mail no later than 12:00 noon on the date of such requested Settlement (the
“Settlement Date”).  Each Revolving Lender (other than the Swingline Lender, in
the case of the Swingline Loans) shall transfer the amount of such Revolving
Lender’s Commitment Percentage of the outstanding principal amount of the
applicable Swingline Loan with respect to which Settlement is requested to the
Agent, to such account of the Agent as the Agent may designate, not later than
2:00 p.m. on such Settlement Date.  Settlements may occur during the existence
of a Default and whether or not the applicable conditions precedent set forth in
Section 4.1 have then been satisfied.  Such amounts transferred to the Agent
shall be applied against the amounts of the Swingline Lender’s Swingline Loans
and, together with Swingline Lender’s Commitment Percentage of such Swingline
Loan, shall constitute Revolving Loans of such Revolving Lenders, respectively. 
If any such amount is not transferred to the Agent by any Revolving Lender on
such Settlement Date, the Swingline Lender shall be entitled to recover such
amount on demand from such Revolving Lender together with interest thereon as
specified in Section 2.12(b).

 

2.12                        Pro-Rata Treatment.

 

(a)                                 Except to the extent otherwise provided
herein (including without limitation, as specified in Sections 2.2(f),
2.10(b) and 2.12(c) hereof):  (i) each borrowing from the Revolving Lenders
under Section 2.1 hereof shall be made, each payment of Commitment Fees shall be
made and applied for the account of the Revolving Lenders, and each termination
or reduction of the Revolving Commitments of the Revolving Lenders under
Section 2.4 hereof shall be applied, pro-rata, according to each Revolving
Lender’s Commitment Percentage; (ii) each payment or prepayment by the Borrowers
of principal of or interest on Loans (other than Swingline Loans) shall be made
to the Agent for the account of the Lenders pro-rata in accordance with the
respective unpaid principal amounts of such Loans held by such Lenders, and
amounts payable with respect to Swingline Loans shall be paid only to the
Swingline Lender; (iii) the Revolving Lenders (other than the Agent in its
capacity as a Revolving Lender) shall purchase from the Agent participations in
the Letters of Credit to the extent of their respective Commitment Percentages
upon issuance by the Agent of each Letter of Credit as otherwise provided for
herein, and (iv) the Revolving Lenders (other than the Swingline Lender) shall
purchase from the Swingline Lender participations in the Swingline Loans to the
extent of their respective Commitment Percentages upon request by the Swingline
Lender as otherwise provided for herein.

 

(b)                                 Except for any settlement delay provided or
specified in Section 2.2(f), unless the Agent shall have been notified in
writing by any Revolving Lender prior to the date of a proposed Loan that such
Revolving Lender will not make the amount that would constitute such Revolving
Lender’s Commitment Percentage of such Revolving Loan on such date available to
the Agent at the Principal Office, the Agent may assume that such Revolving
Lender has made such amount available to the Agent on such date, and the Agent
may, in reliance upon

 

65

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

 

such assumption and subject to the terms and conditions of this Agreement, make
such amount available to the Borrowers by depositing the same, in immediately
available funds, in a general deposit account maintained by the Borrowers and
designated by the Borrower’s Agent in the applicable Request for Extension of
Credit.  Any Revolving Lender failing to timely deliver its requisite portion of
such Revolving Loan shall deliver the same to the Agent as soon as possible
thereafter, together with interest on such amount for each day from the due date
for such payment to the date of payment by such Revolving Lender to the Agent of
such amount at a rate of interest per annum equal to the Federal Funds Effective
Rate for such period.  In addition, the Borrowers hereby agree that upon demand
by the Agent, the Borrowers shall reimburse the Agent for any such amount which
any Revolving Lender has failed to timely deliver to the Agent, but which the
Agent may have previously made available to the Borrowers in accordance with the
other provisions of this Section 2.12(b).  If a requested Revolving Loan shall
not occur on any date specified by the Borrowers as set forth in the applicable
Request for Extension of Credit because all of the conditions for such Revolving
Loan set forth herein or in any of the other Loan Documents shall have not been
met, the Agent shall return the amounts so received from the Revolving Lenders
in respect of such requested Revolving Loan to the applicable Revolving Lenders
as soon as practicable.

 

(c)                                  Notwithstanding any provision to the
contrary contained in this Section 2.12 or in any other provision hereof, each
Revolving Lender shall only receive interest upon and a portion of the
Commitment Fee paid hereunder based upon the amount of funds actually advanced
by such Revolving Lender to Borrowers from time to time.

 

2.13                        Sharing of Payments, Etc.  The Credit Parties agree
that, in addition to (and without limitation of) any right of set-off, bankers’
lien or counterclaim a Lender may otherwise have, each Lender shall be entitled,
at its option, to offset balances held by it for the account of any of the
Credit Parties at any of its offices against any principal of or interest on any
of such Lender’s Loans to the Borrowers hereunder, such Revolving Lender’s
Commitment Percentage of the Letter of Credit Exposure Amounts or the Swingline
Exposure, or any other Obligation of the Credit Parties owing to any such Lender
under any of the Loan Documents regardless of whether such offset balances are
then due to the Credit Parties, in which case it shall promptly notify the
Borrowers’ Agent and the Agent thereof, provided, that such Lender’s failure to
give such notice shall not affect the validity thereof.  If a Lender shall
obtain payment (other than the Swingline Lender obtaining payment of all or any
portion of a Swingline Loan) of any principal of or interest on any Loan made by
it under this Agreement, any Letter of Credit Exposure Amount, any Swingline
Exposure or other obligation then due to such Lender under any Loan Document,
through the exercise of any right of set-off (including, without limitation, any
right of set-off or lien granted under Section 10.19 hereof), banker’s lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from the
other Lenders participations in the Loans made by, the Letter of Credit Exposure
Amount or the Swingline Exposure of, or the other obligations of the Credit
Parties hereunder or thereunder of, the other Lenders in such amounts, and make
such other adjustments from time to time as shall be equitable to the end that
all the Lenders shall share the benefit of such payment (net of any expenses
which may be incurred by such Lender in obtaining or preserving such benefit)
pro-rata in accordance with their respective Commitment Percentages.  To such
end all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.  The Credit Parties agree, to the fullest extent they may
effectively

 

66

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

 

do so under applicable law, that any Lender so purchasing a participation in the
Loans made by, Letter of Credit Exposure Amount or the Swingline Exposure of, or
other obligations hereunder of, the other Lenders may exercise all rights of
set-off, bankers’ lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of said Loans,
Letter of Credit Exposure Amount, Swingline Exposure or other obligations in the
amount of such participation.  Nothing contained herein shall require any Lender
to exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Credit Parties.

 

2.14                        Recapture.  If on any Interest Payment Date the
Agent does not receive for the account of one or more Lenders payment in full of
interest computed at the Alternate Base Rate and/or the Adjusted LIBOR Rate, as
applicable (computed without regard to any limitation by the Highest Lawful
Rate), because the Alternate Base Rate and/or the Adjusted LIBOR Rate, as
applicable (so computed), exceeds or has exceeded the Highest Lawful Rate
applicable to such Lenders, the Borrowers shall pay to the Agent for the account
of such Lenders, in addition to interest otherwise required, on each Interest
Payment Date thereafter, the Excess Interest Amount (calculated as of each such
subsequent Interest Payment Date); provided, that in no event shall the
Borrowers be required to pay, for any computation period, interest at a rate
exceeding the Highest Lawful Rate applicable to such Lenders during such
period.  As used herein, the term “Excess Interest Amount” shall mean, on any
day, the amount by which (a) the amount of all interest which would have accrued
prior to such day on the outstanding principal of the Notes of the applicable
Lender (had the Alternate Base Rate and/or the Adjusted LIBOR Rate, as
applicable, at all times been in effect without limitation by the Highest Lawful
Rate applicable to such Lender) exceeds (b) the aggregate amount of interest
actually paid to the Agent for the account of such Lender on its Notes on or
prior to such day.

 

2.15                        Increase of Revolving Commitments.

 

(a)                                 If no Default or Event of Default or
Material Adverse Effect shall have occurred and be continuing, the Borrowers may
at any time prior to the Termination Date request one or more increases of the
Revolving Commitments by notice to the Agent in writing of the amount of such
proposed increase (each such notice, a “Revolving Commitment Increase Notice”);
provided, however, that, (i) the Revolving Commitment of any Revolving Lender
may not be increased without such Revolving Lender’s consent, (ii) the aggregate
amount of the Revolving Commitments as so increased shall not exceed
$150,000,000, and (iii) the Revolving Commitments may not be increased without
the consent of the Agent (which consent shall not be unreasonably withheld or
delayed).

 

(b)                                 In connection with any proposed increase in
the Revolving Commitments, the Borrowers may, in their sole discretion, but with
the consent of the Agent as to any Person that is not at such time a Revolving
Lender (which consent shall not be unreasonably withheld or delayed), offer to
any existing Revolving Lender or to one or more additional banks or financial
institutions the opportunity to participate in all or a portion of such
unsubscribed portion of the Revolving Commitments, by notifying the Agent of
such request; provided, that the Revolving Commitment of any New Lender shall
not be less than $10,000,000 and shall be in an integral multiple of
$2,500,000.  Promptly and in any event within five (5) Business Days after
receipt of such notice from the Borrowers of their desire to offer such
unsubscribed commitments to certain

 

67

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

 

existing Revolving Lenders or to the additional banks or financial institutions
identified therein, the Agent shall notify such proposed lenders of the
opportunity to participate in all or a portion of such unsubscribed portion of
the increased Revolving Commitments.

 

(c)                                  Any existing Revolving Lender that accepts
the Borrowers’ offer to increase its Revolving Commitment shall execute a
Revolving Commitment Increase Agreement with the Borrowers, the Guarantors and
the Agent, whereupon such Lender shall be bound by, and entitled to the benefits
of, this Agreement with respect to the full amount of its Revolving Commitment
as so increased.

 

(d)                                 Any additional bank or financial institution
which is not an existing Revolving Lender and which accepts the Borrowers’ offer
to participate in the increased Revolving Commitments shall execute and deliver
to the Agent, the Borrowers and the Guarantors a New Lender Agreement setting
forth its Revolving Commitment (subject to the limitations on the amounts
thereof set forth herein), and upon the effectiveness of such New Lender
Agreement such bank or financial institution (a “New Lender”) shall become a
Revolving Lender for all purposes and to the same extent as if originally a
party hereto and shall be bound by and entitled to the benefits of this
Agreement, and the signature pages hereof shall be deemed to be amended to add
the name of such New Lender.

 

(e)                                  Upon any increase in the Revolving
Commitments pursuant to this Section 2.15, Schedule 1.1A shall be deemed amended
to reflect the Revolving Commitment of each Revolving Lender (including any New
Lender) as thereby increased.

 

2.16                        Defaulting Lenders.

 

Notwithstanding any provision of this Agreement to the contrary, if any Lender
becomes a Defaulting Lender, then the following provisions shall apply for so
long as such Lender is a Defaulting Lender:

 

(a)                                 if any Swingline Exposure or Letter of
Credit Exposure Amount exists at the time a Lender becomes a Defaulting Lender
then:

 

(i)                                     all or any part of the Swingline
Exposure and Letter of Credit Exposure Amount of such Defaulting Lender shall be
reallocated among the non-Defaulting Lenders in accordance with their respective
Commitment Percentages but only to the extent (x) the sum of all non-Defaulting
Lenders’ Revolving Exposures plus such Defaulting Lender’s Swingline Exposure
and Letter of Credit Exposure Amount does not exceed the total of all
non-Defaulting Lenders’ Commitments and (y) the conditions set forth in
Section 4.1 are satisfied at such time; and

 

(ii)                                  if the reallocation described in
clause (i) above cannot, or can only partially, be effected, the Borrowers shall
within one Business Day following notice by the Agent (x) first, prepay such
Swingline Exposure and (y) second, cash collateralize, for the benefit of the
Issuing Bank, the Borrowers’ obligations corresponding to such Defaulting
Lender’s Letter of Credit Exposure Amount (after giving effect to any partial
reallocation pursuant to clause (i) above) in accordance with the procedures set
forth in Section 2.10(k) for so long as such Letter of Credit Exposure Amount is
outstanding; and

 

68

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

 

(iii)                               if the Letter of Credit Exposure Amount of
the non-Defaulting Lenders is reallocated pursuant to clause (i) above, then the
fees payable to the Revolving Lenders pursuant to Section 2.3 and
Section 2.9(e) shall be adjusted in accordance with such non-Defaulting Lenders’
Commitment Percentages.

 

(b)                                 so long as any Revolving Lender is a
Defaulting Lender, the Swingline Lender shall not be required to fund any
Swingline Loan and the Agent shall not be required to issue, amend or increase
any Letter of Credit, unless it is satisfied that the related exposure will be
100% covered by the Revolving Commitments of the non-Defaulting Lenders and/or
cash collateral will be provided by the Borrowers in accordance with
Section 2.15(a), and participating interests in any such newly issued or
increased Letter of Credit or newly made Swingline Loan shall be allocated among
non-Defaulting Lenders in a manner consistent with Section 2.15(a)(i) (and
Defaulting Lenders shall not participate therein).

 

(c)                                  In the event that the Agent, the Borrower,
and the Swingline Lender each agrees that a Defaulting Lender has adequately
remedied all matters that caused such Lender to be a Defaulting Lender, then the
Swingline Exposure and Letter of Credit Exposure Amount of the Lenders shall be
readjusted to reflect the inclusion of such Revolving Lender’s Revolving
Commitment and on such date such Revolving Lender shall purchase at par such of
the Revolving Loans of the other Revolving Lenders (other than Swingline Loans)
as the Agent shall determine may be necessary in order for such Revolving Lender
to hold such Revolving Loans in accordance with its Commitment Percentage.

 

3.                                      Collateral.

 

3.1                               Security Documents.  The Loans and all other
Obligations shall be secured by the Collateral and the Agent and the Lenders are
entitled to the benefits thereof.  The applicable Credit Parties shall duly
execute and deliver the Security Documents, all consents of third parties
necessary to permit the effective granting of the Liens created thereby (subject
only to Liens permitted under Section 7.2 hereof), and other documents,
consistent with the terms of this Agreement and the other Loan Documents, as may
be reasonably required by the Agent to grant to the Agent, for the ratable
benefit of the Lender Parties, a valid, perfected and enforceable first priority
Lien on and security interest in the Collateral (subject only to the Liens
permitted under Section 7.2 hereof), including without limitation, any and all
original stock certificates, stock transfer powers, assignments and other
documents and instruments necessary or desirable under the laws of any
applicable jurisdiction with regard to the Stock covered by any Security
Agreement.

 

3.2                               Filing and Recording.  The Credit Parties
shall, at their sole cost and expense, cooperate with the Agent in causing all
financing statements, Intellectual Property Security Agreements and other
Security Documents pursuant to this Agreement to be duly recorded and/or filed
or otherwise perfected in all places necessary or desirable in the Agent’s
discretion to perfect the Liens of the Agent, and the Credit Parties shall take
such other actions as the Agent may reasonably request, in order to perfect and
protect the Liens of the Agent, for the ratable benefit of the Lender Parties,
in the Collateral.  The Credit Parties, to the extent permitted by law, hereby
authorize the Agent to file any financing statement in respect of any Lien
created pursuant to the Security Documents which may at any time be required to
perfect such Liens or

 

69

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

 

which, in the reasonable opinion of the Agent, may at any time be desirable,
although the same may have been executed only by the Agent or, at the option of
the Agent, to sign such financing statement on behalf of the applicable Credit
Parties (to the extent that execution by them is necessary or desirable in the
Agent’s discretion), and file the same, and the Credit Parties hereby
irrevocably designate the Agent their respective agents, representatives and
designees as its agent and attorney-in-fact for this purpose.  In the event that
any re-recording or refiling thereof (or the filing of any statements of
continuation or assignment of any financing statement) is required to protect
and preserve such Lien, the Credit Parties shall, at the Credit Parties’ cost
and expense, cause the same to be recorded and/or refiled at the time and in the
manner requested by the Agent.

 

3.3                               Special Cash Collateral Account.  All amounts
on deposit from time to time in the Special Cash Collateral Account shall
constitute part of the Collateral hereunder and shall not constitute payment of
the Obligations until applied thereto as hereinafter provided.  Any income
received with respect to amounts from time to time on deposit in the Special
Cash Collateral Account, including any interest, shall be deposited in the
Collection Account.  The Agent shall at all times have control and complete
dominion over the Special Cash Collateral Account and all amounts on deposit
therein; provided, however, that the Borrowers may, upon the written request of
Borrowers’ Agent delivered to the Agent, from time to time withdraw and use the
requested funds (a) to pay, prepay or repay Obligations in respect of the
Revolving Loans, and (b) and, subject to obtaining the Agent’s prior written
consent, for any other purpose not herein prohibited.  The Agent agrees that it
will not unreasonably withhold, delay or condition such consent so long as
(A) Availability, as determined by the Agent, is not less than $35,000,000 at
the time of and immediately after giving effect to such withdrawal and
application of funds, and (B) Borrowers have not made a request (that was
approved by the Agent) to withdraw Pledged Cash pursuant to clause (b) of this
Section within the immediately preceding thirty (30) days.  Any use of Pledged
Cash by the Borrowers other than as permitted in the foregoing provisions of
this Section shall require the consent of the Required Lenders only.

 

4.                                      Conditions.

 

4.1                               All Revolving Loans.  The obligation of each
Revolving Lender to make any Revolving Loans (for purpose of clarity, all
Swingline Loans shall be governed exclusively by the terms of Section 2.11) and
the obligation of the Agent to issue any Letter of Credit is subject to the
satisfaction of the following conditions:

 

(a)                                 the Agent shall have received the following,
all of which shall be duly executed and in Proper Form:  (i) in the case of a
Revolving Loan, other than a Revolving Loan for the purposes described in
Sections 2.2(b), 2.4(b), 2.6(d) and 2.10(d),

 

(A)                               with respect to each Alternate Base Rate
Borrowing, Agent shall have received by no later than 1:00 p.m. on the
applicable Rate Selection Date, telephonic notice from the Borrowers’ Agent of
the proposed date and amount of such Revolving Loan, and by no later than
2:00 p.m. on the applicable Rate Selection Date, a Request for Extension of
Credit, signed by a Responsible Officer or Cash Officer of the Borrowers’ Agent
(or any person designated in writing by a Responsible Officer or Cash Officer of
the Borrowers’ Agent), and

 

70

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

 

(B)                               with respect to each LIBOR Borrowing, Agent
shall have received by no later than 12:00 noon on the applicable Rate Selection
Date, telephonic notice from the Borrowers’ Agent of the proposed date and
amount of such Revolving Loan, and no later than 1:00 p.m. on the applicable
Rate Selection Date, a Request for Extension of Credit, signed by a Responsible
Officer or Cash Officer of the Borrowers’ Agent (or any person designated in
writing by a Responsible Officer or Cash Officer of the Borrowers’ Agent),

 

or (ii), in the case of issuance of a Letter of Credit (other than the Existing
Letters of Credit), (A) a completed Application (as may be required by the
Agent) signed by a Responsible Officer or Cash Officer of the Borrowers’ Agent
(or any person designated in writing by a Responsible Officer or Cash Officer of
the Borrowers’ Agent) by 12:00 noon three (3) Business Days prior to the
proposed date of issuance of such Letter of Credit; (B) payment of the first
letter of credit fee as and by the time required in Section 2.10 of this
Agreement; and (C) such other Applications, certificates and other documents as
the Agent may reasonably require;

 

along with, in each case, such financial information as the Agent may require to
substantiate compliance with all financial covenants contained herein by the
Borrowers (or, as applicable, to demonstrate that compliance with any such
financial covenant is not then required) if the Agent believes at such time that
any of the financial covenants contained herein are then applicable and that the
Borrowers are not then in compliance therewith;

 

(b)                                 all representations and warranties of the
Borrowers and any other Person set forth in this Agreement and in any other Loan
Document shall be true and correct in all material respects with the same effect
as though made on and as of such date, except for (i) those representations and
warranties which relate to a specified date, which shall be true and correct as
of such date and (ii) those changes in such representations and warranties
otherwise permitted by the terms of this Agreement;

 

(c)                                  there shall have occurred no Material
Adverse Effect, after giving effect to the requested Revolving Loan(s) or
Letter(s) of Credit;

 

(d)                                 no Default or Event of Default shall have
occurred and be continuing;

 

(e)                                  if requested by the Agent, it shall have
received a certificate executed by the Financial Officer or other Responsible
Officer of each Credit Party as to the compliance with subparagraphs (b) through
(d) above;

 

(f)                                   the making of such Revolving Loan or the
issuance of such Letter of Credit, shall not be prohibited by, or subject the
Agent or any Lender to, any penalty or onerous condition under any Legal
Requirement; and

 

(g)                                  the Borrowers shall have paid all legal
fees and expenses of the type described in Section 10.9 hereof for which
invoices have been presented through the date of such Loan or the issuance of
such Letter of Credit.

 

71

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

 

4.2                               Term Loans.  The obligation of each Term
Lender to make any Term Loans is subject to the satisfaction of the following
conditions prior and after giving effect to the advance of the Term Loans:

 

(a)                                 the Agent shall have received the following,
all of which shall be duly executed and in Proper Form:

 

(i)                                     with respect to each Alternate Base Rate
Borrowing, Agent shall have received by no later than 1:00 p.m. on the
applicable Rate Selection Date, telephonic notice from the Borrowers’ Agent of
the proposed date and amount of the Term Loan, and by no later than 2:00 p.m. on
the applicable Rate Selection Date, a Request for Extension of Credit, signed by
a Responsible Officer or Cash Officer of the Borrowers’ Agent (or any person
designated in writing by a Responsible Officer or Cash Officer of the Borrowers’
Agent), and

 

(ii)                                  with respect to each LIBOR Borrowing,
Agent shall have received by no later than 12:00 noon on the applicable Rate
Selection Date, telephonic notice from the Borrowers’ Agent of the proposed date
and amount of the Term Loan, and no later than 1:00 p.m. on the applicable Rate
Selection Date, a Request for Extension of Credit, signed by a Responsible
Officer or Cash Officer of the Borrowers’ Agent (or any person designated in
writing by a Responsible Officer or Cash Officer of the Borrowers’ Agent);

 

along with, in each case, such financial information as the Agent may require to
substantiate compliance with all financial covenants contained herein by the
Borrowers (or, as applicable, to demonstrate that compliance with any such
financial covenant is not then required) if the Agent believes at such time that
any of the financial covenants contained herein are then applicable and that the
Borrowers are not then in compliance therewith;

 

(b)                                 all Specified Representations shall be true
and correct in all material respects; and

 

(c)                                  no Default shall occur in the observance of
any covenant, condition or agreement to be observed or performed on the part of
any Credit Party or any of their Subsidiaries pursuant to the terms of
Section 6.9 (both prior to and after giving effect to the advance of the Term
Loans).

 

4.3                               First Loan or Letter of Credit.  In addition
to the matters described in Section 4.1 hereof, the obligation of any Lender to
make the Term Loan and the initial Revolving Loans (including, without
limitation, the True-Up Loans) or the obligation of the Agent to issue the first
Letter of Credit is subject to the receipt by the Agent of each of the
following, on or before October 11, 2012 (except as otherwise specifically
provided in any Loan Document, including Schedule 4.4), in Proper Form:

 

(a)                                 the Notes executed by the Borrowers;

 

(b)                                 the Reaffirmation Agreements executed by the
Credit Parties, as applicable;

 

72

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

 

(c)                                  a certificate of corporate resolutions and
incumbency executed by the Secretary or an Assistant Secretary of each Borrower
dated as of the date of this Agreement, authorizing (i) each Borrower’s entering
into the transactions contemplated hereby and (ii) the delivery by each Borrower
of the Loan Documents to be executed and delivered by such Borrower;

 

(d)                                 a certificate of corporate resolutions and
incumbency executed by the Secretary or an Assistant Secretary of the Guarantor,
dated as of the date of this Agreement, authorizing the Guarantor to (i) enter
into the transactions contemplated hereby and (ii) deliver the Loan Documents to
be executed and delivered by the Guarantor;

 

(e)                                  certified copies of the Organizational
Documents of each Credit Party;

 

(f)                                   certificates from the Secretary of State
or other appropriate public official as to the continued existence and good
standing of each Credit Party in its applicable jurisdiction of formation, dated
within thirty (30) days of the Closing Date, together, if requested by the
Agent, with confirmation by telephone or telecopy (where available) on the
Closing Date from such official(s) as to such matters;

 

(g)                                  certificates from the appropriate public
officials of those jurisdictions where the nature of each Borrower’s business
makes it necessary or desirable to be qualified to do business as a foreign
corporation, which jurisdictions are set forth in Section I of the Perfection
Certificate, as to the good standing and qualification as a foreign corporation
(as may be appropriate) of the Credit Parties, dated within sixty (60) days of
the Closing Date;

 

(h)                                 the financial statements described in
Section 5.2 hereof, together with any management letters, if any, received for
such financial statements;

 

(i)                                     the most recent schedule and aging of
Receivables of the Credit Parties (dated within thirty (30) days of the Closing
Date);

 

(j)                                    a copy of the Agent’s field examination
of the books and records of the Credit Parties and their Subsidiaries and the
results of such field examination;

 

(k)                                 favorable legal opinions (i) from Bryan Cave
LLP, outside counsel for the Credit Parties, (ii) Foley & Lardner LLP, special
Michigan and Wisconsin counsel to the Credit Parties, and (iii) internal counsel
to the Credit Parties, each dated the Closing Date, each addressed to the Agent
and the Lenders and acceptable in all respects to the Agent in its reasonable
credit judgment;

 

(l)                                     certificates of insurance satisfactory
to the Agent in all respects evidencing the existence of all insurance required
to be maintained by the Credit Parties pursuant to Section 6.7 of this Agreement
and all other terms of the Security Documents;

 

(m)                             the applicable Credit Parties, JPMorgan and the
applicable financial institutions listed in Section II of the Perfection
Certificate shall have entered into the Tri-Party Agreements;

 

73

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

 

(n)                                 access agreements and waivers or
subordinations of landlord and warehouseman’s liens (whether statutory or
contractual) held by any owner of each real property location leased and any
operator of each public warehouse location utilized by any Credit Party set
forth in Section IV(2) of the Perfection Certificate, in each case reasonably
satisfactory to the Agent;

 

(o)                                 evidence satisfactory to the Agent that no
Material Adverse Effect shall have occurred since December 31, 2011;

 

(p)                                 a certificate of a Responsible Officer of
the Credit Parties in the form of annexed hereto certifying on behalf of the
Credit Parties as to the solvency of the Credit Parties and their Subsidiaries
after giving effect to the funding of the Term Loans and any initial Revolving
Loans and related matters set forth in Section 5.19;

 

(q)                                 the Perfection Certificate, dated the
Closing Date, substantially in the form of hereto, duly executed by each Credit
Party;

 

(r)                                    (i) a fully executed (and, where
required, notarized) Mortgage or amendment to Mortgage (each a “Closing Date
Mortgage” and, collectively, the “Closing Date Mortgages”), in proper form for
recording in the applicable jurisdiction, encumbering each Real Property Asset
owned in fee as of the Closing Date and listed on Schedule 4.3(r)-1 (each such
Real Property Asset, a “Closing Date Mortgaged Property”); (ii) in the case of
each Material Leasehold Property existing as of the Closing Date copies of all
leases between any Credit Party and any landlord or tenant, and any
modifications, supplements or amendments thereto; (iii) (A) evidence reasonably
acceptable to the Agent as to whether any Closing Date Mortgaged Property that
is a Mill Property owned by the Credit Parties is a Flood Hazard Property, and
(B) if there are any such Flood Hazard Properties, evidence that the applicable
Credit Party has obtained flood hazard insurance as required by law with respect
to each Flood Hazard Property in reasonable amounts approved by the Agent, or
evidence reasonably acceptable to the Agent that such insurance is not
available; (iv) appraisals, together with reliance letters where applicable,
concerning each Closing Date Mortgaged Property owned by the Credit Parties from
one or more independent real estate appraisers reasonably satisfactory to the
Agent, which appraisals shall set forth the Net Recovery Value Percentage of
such Closing Date Mortgaged Property and be in form, scope and substance
reasonably satisfactory to the Agent and shall satisfy the requirements of any
applicable laws and regulation; and (v) evidence reasonably satisfactory to the
Agent that there are no material taxes, levies, duties, imposts, deductions,
charges (including water and sewer charges), withholdings, assessments or
impositions of any kind which have been due and payable for more than thirty
(30) days with respect to such Closing Date Mortgaged Property, except those for
which extensions have been obtained and except for those which have been
disclosed to the Agent and which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
in accordance with GAAP;

 

(s)                                   a copy of the Credit Parties’ hedging
policies, which hedging policies shall be reasonably satisfactory to the Agent;

 

74

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

 

(t)                                    Availability as of the Closing Date, as
determined by the Agent, shall not be less than $30,000,000 after giving effect
to the initial Revolving Loan made or to be made, and the Existing Letters of
Credit and after payment of fees and expenses for such transactions; and

 

(u)                                 all other Loan Documents and any other
instruments or documents consistent with the terms of this Agreement and
relating to the transactions contemplated hereby as the Agent may reasonably
request, executed by the applicable Credit Parties or any other Person required
by the Agent;

 

and subject to the further conditions that, at the time of the the initial
Revolving Loan, (i) the ownership, corporate structure, solvency and
capitalization of the Credit Parties and their Subsidiaries shall be
satisfactory to the Lenders in all respects; (ii) the Agent and the Lenders
shall have had the opportunity, if they elect, to examine the books of account
and other records and files of the Credit Parties and their Subsidiaries and to
make copies thereof, and to conduct a preclosing audit which shall include,
without limitation, verification of Eligible Receivables, Eligible Inventory,
Eligible Equipment and Eligible Real Estate, verification of satisfactory status
of customer and supplier accounts, payment of payroll taxes and accounts payable
and formulation of an opening Borrowing Base as of the Closing Date (with the
results of such examination and audits to have been satisfactory to the Agent
and the Lenders in all respects); (iii) all such actions as the Agent shall
reasonably require to perfect the Liens created pursuant to the Security
Documents shall have been taken, including without limitation, (A) the delivery
to the Agent of all Property with respect to which possession is necessary or
desirable for the purpose of perfecting such Liens, (B) with respect to
Collateral covered by the Security Agreements, the filing of appropriately
completed and duly executed Uniform Commercial Code or other applicable
financing statements, (C) with respect to all Collateral constituting Stock in
any Credit Party or any of their Subsidiaries, delivery to the Agent of original
stock certificates and stock transfer powers with regard to all of the
applicable Stock, and (D) with respect to all Collateral consisting of
Intellectual Property, the recording of appropriate documents in the U.S. Patent
and Trademark Office, the U.S. Library of Congress, the United States Copyright
Office, and any domain name registry, as applicable; (iv) the Agent shall also
have received evidence reasonably satisfactory to it that the Liens created by
the Security Documents constitute first priority Liens (except for any Liens
expressly provided for in Sections 7.2(a), 7.2(c), 7.2(d), 7.2(e) and
7.2(f) below), including without limitation, satisfactory Uniform Commercial
Code or other applicable search reports and satisfactory authorizations to file
releases of Liens or termination statements with respect to any existing prior
Liens to be released; (v) the terms, conditions and amount of all Indebtedness
of each Credit Party shall be acceptable to the Agent; (vi) the Borrowers shall
contemporaneously pay on the Closing Date all fees owed to the Agent and the
Lenders by the Borrowers under this Agreement or under any commitment letters or
fee letters entered into between the Borrowers or any of its Affiliates and
JPMorgan or any of its Affiliates, including without limitation, reasonable
legal fees and expenses described in Section 10.9 or otherwise for which
invoices have been presented; and (vii) all other legal matters incident to the
transactions herein contemplated shall be reasonably satisfactory to counsel for
the Agent and respective counsel for each of the Lenders.

 

4.4                               Post-Closing Deliveries.  Borrowers shall
deliver or cause to be delivered to the Agent each of the items set forth on
Schedule 4.4, in each case within thirty (30) days after the

 

75

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

 

Closing Date or prior to such later date as the Agent may determine and agree to
in writing in its sole discretion.  Borrowers’ failure to deliver each such item
on or before the date specified (as such date may be extended by the Agent in
writing in its sole discretion) shall constitute an immediate Event of Default.

 

5.                                      Representations and Warranties.

 

To induce the Agent and the Lenders to enter into this Agreement, the Credit
Parties represent and warrant to the Agent and the Lenders, as of the date of
this Agreement and as of the date any Loan is made hereunder or any Letter of
Credit is issued hereunder, as follows:

 

5.1                               Organization.  Each Credit Party and each of
their then existing Subsidiaries are duly organized, validly existing and in
good standing under the laws of the jurisdiction of its incorporation or
formation; has all corporate or other applicable Business Entity power and
authority to own its respective Property and assets and to conduct its
respective businesses as presently conducted; and is duly qualified to do
business and in good standing in each and every state or provincial jurisdiction
where its respective business requires such qualification, except for those
jurisdictions in which the failure to qualify and/or be in good standing does
not cause a Material Adverse Effect to occur.

 

5.2                               Financial Statements.

 

(a)                                 The Consolidated financial statements of the
Credit Parties and their Subsidiaries delivered to the Agent and the Lenders in
connection with this Agreement, including without limitation, the monthly
unaudited financial statements dated as of August 31, 2012, fairly present, in
accordance with GAAP, the Consolidated financial condition and the results of
operations of the Credit Parties and their Subsidiaries as of the dates and for
the periods indicated, subject to the qualifications with respect to the pro
forma financial statements of the Credit Parties and their Subsidiaries set
forth therein.  No Material Adverse Effect has occurred since December 31, 2011.

 

(b)                                 The Credit Parties have heretofore furnished
to the Agent, for each month from the projected Closing Date through
December 31, 2014, and thereafter for each calendar year through the term of
this Agreement, projected income statements, balance sheets and cash flows of
the Credit Parties and their Subsidiaries, on a Consolidated basis, together
with one or more schedules demonstrating prospective compliance with all
financial covenants contained in this Agreement, such projections disclosing all
material assumptions made by the Credit Parties in formulating such
projections.  The projections are based upon estimates and assumptions which the
Credit Parties believe are reasonable in light of the conditions which existed
as of the time the projections were made, have been prepared on the basis of the
material assumptions stated therein and reflect as of the date of this Agreement
and the Closing Date an estimate believed reasonable by the Credit Parties as to
the results of operations and other information projected therein.

 

5.3                               Enforceable Obligations; Authorization.  The
Loan Documents are legal, valid and binding obligations of the Credit Parties to
the extent they are party thereto, enforceable in accordance with their
respective terms, except as may be limited by bankruptcy, insolvency,

 

76

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

 

reorganization, moratorium or other similar laws affecting creditors rights
generally and by general equitable principles including remedies of specific
performance and injunction.  The execution, delivery and performance of the Loan
Documents have all been duly authorized by all necessary corporate, and if
necessary shareholder or member, action; are within the corporate or other
applicable Business Entity power and authority of the applicable Credit Parties;
do not and will not contravene or violate any material Legal Requirement or the
Organizational Documents of any Credit Party; do not and will not result in the
breach of, or constitute a default under, any material agreement or instrument
by which any Credit Party or any material portion of its Property is bound or
affected; and do not and will not result in the creation of any Lien upon any
Property of any Credit Party except as expressly contemplated herein or therein,
and do not and will not result in any default, noncompliance, suspension,
revocation, impairment, forfeiture or non-renewal of any permit, license,
authorization or approval applicable to the operations or any of the Property of
any Credit Party that could reasonably be expected to have a Material Adverse
Effect.  Except as otherwise set forth on Schedule 5.3, all necessary consents
and approvals of any Governmental Authority and all other requisite material
permits, registrations and consents have been obtained for the delivery and
performance of the Loan Documents.

 

5.4                               Other Debt.  Neither any Credit Party nor any
Offshore Entity is in default in the payment of any other Indebtedness or under
any agreement, mortgage, deed of trust, security agreement or lease to which it
is a party, the result of which has, or could reasonably be expected to have, a
Material Adverse Effect.

 

5.5                               Litigation.  Except as set forth on
Schedule 5.5 attached hereto, there is no litigation, administrative proceeding
or investigation pending or, to the knowledge of any Credit Party, threatened
against, nor any outstanding judgment, order or decree affecting, any Credit
Party or any Offshore Entity before or by any Governmental Authority or arbitral
body which individually or in the aggregate have, or could reasonably be
expected to have, a Material Adverse Effect.  No Credit Party is knowingly in
material default with respect to any material judgment, writ, rule, regulation,
order or decree of any Governmental Authority binding on it or its Property.  No
Offshore Entity is knowingly in material violation with respect to any material
judgment, writ, rule, regulation, order or decree of any Governmental Authority
binding on it or its Property, which violation individually or in the aggregate
with all other such violations have, or could reasonably be expected to have, a
Material Adverse Effect.

 

5.6                               Taxes.  Each Credit Party and each Offshore
Entity has filed all federal, provincial, state, local or foreign income,
franchise and other material tax returns required to have been filed and paid
all taxes shown thereon to be due, except those for which extensions have been
obtained and except for those which are being contested in good faith and by
appropriate proceedings if adequate reserves with respect thereto are maintained
in accordance with GAAP.  No federal income tax returns of any Credit Party or
Offshore Entity have been audited by the Internal Revenue Service, the Canada
Revenue Agency, the Netherlands national tax authority (Belastingdienst) or the
German national tax authority (Bundesfinanzhof), the determination under which
could reasonably be expected to have a Material Adverse Effect.  No Credit Party
or Offshore Entity, as of the Closing Date, requested or been granted any
extension of time to file any federal tax return.  No Credit Party or Offshore
Entity has, as of the Closing Date, requested or been granted any extension of
time to file any state, provincial, local or foreign tax return, other than
extensions with respect to tax liabilities where such Credit Party’s

 

77

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

 

or Offshore Entity’s failure to pay such tax liabilities would not have a
Material Adverse Effect.  Except for any tax sharing agreement entered into and
delivered to the Agent pursuant to the terms hereof, no Credit Party or Offshore
Entity is a party to, or has any material obligation under, any tax sharing
arrangement with any Person.  Each Guarantor is, and has been at all times since
its creation or organization, classified as a disregarded entity for United
States federal tax purposes.

 

5.7                               No Material Misstatements; Full Disclosure. 
No report, financial statement, exhibit, schedule or other written information
prepared and furnished by or on behalf of any Credit Party to the Agent or any
Lender in connection with this Agreement or any other Loan Documents contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading.  As of the Closing Date, each Credit Party has
disclosed to the Agent all agreements, instruments and corporate or other
restrictions to which it is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect.  There is no contingent liability or fact that could
reasonably be expected to have a Material Adverse Effect which has not been
specifically set forth in the Parent’s public filings with the Securities and
Exchange Commission filed on or prior to the Closing Date, or in a schedule
hereto.

 

5.8                               Subsidiaries and Offshore Entities.  As of the
Closing Date, no Credit Party has any Subsidiaries or any other majority, or
material minority ownership interests in any other Person other than as listed
in Section I and II of the Perfection Certificate.  Except as expressly
indicated in Section I and II of the Perfection Certificate, as of the Closing
Date, each of the Subsidiaries and Offshore Entities listed in Section I and II
of the Perfection Certificate is wholly-owned by the Credit Party or other
Person indicated on such schedule.  As of the Closing Date, respectively, in
Section I and II of the Perfection Certificate set forth (a) the jurisdiction of
incorporation or organization of each Subsidiary of any Credit Party and each
Offshore Entity, and (b) the percentage of each Credit Party’s, any of its
Subsidiaries’ or such other Person’s (as indicated thereon) ownership of the
Stock of each Subsidiary of any Credit Party and each Offshore Entity.

 

5.9                               Representations by Others.  All
representations and warranties made by or on behalf of any Credit Party or any
of its Subsidiaries in any Loan Document shall constitute representations and
warranties of each Credit Party hereunder.

 

5.10                        Permits, Licenses, Etc.  Each Credit Party owns,
possesses or has the benefit of all other material permits, licenses (including
Intellectual Property licenses) and Intellectual Property rights which are
required (a) to conduct its respective business or (b) for the operation and use
of each Real Property Asset owned in fee and each Material Leasehold Property.

 

5.11                        ERISA.  No Reportable Event has occurred with
respect to any Plan which could reasonably be expected to result in any material
liability.  Each Plan complies in all material respects with all applicable
provisions of ERISA and the Code, and each Credit Party or each ERISA Affiliate
have filed all reports required by ERISA and the Code to be filed with respect
to each Plan.  The Credit Parties do not have any knowledge of any event which
could reasonably be expected to result in a liability of any Credit Party or any
ERISA Affiliate to the PBGC other

 

78

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

 

than for applicable premiums.  No failure to meet the minimum funding standard
(as described in Section 302 of ERISA and Section 412 of the Code), whether or
not waived, exists with respect to any Plan.  No event has occurred and no
condition exists that could reasonably be expected to constitute grounds for a
Plan to be terminated under circumstances which would cause the Lien provided
under Section 4068 of ERISA to attach to any Property of any Credit Party or any
ERISA Affiliate.  No event has occurred and no condition exists that could
reasonably be expected to cause the Lien provided under Section 303 of ERISA or
Section 430 of the Code to attach to any Property of any Credit Party or any
ERISA Affiliate.  No Credit Party has incurred or reasonably expects to incur
any liability as a result of a complete or partial withdrawal from a
multiemployer plan that could reasonably be expected to have a Material Adverse
Effect. There is no matter pending that could reasonably be expected to have a
Material Adverse Effect with respect to any of the Plans before the Internal
Revenue Service, the Department of Labor, or the PBGC.  No Credit Party has
incurred or reasonably expects to incur any contingent liability with respect to
any post-retirement welfare benefits (other than in accordance with
Section 4980B of the Code) under any “employee welfare plan” (within the meaning
of Section 3(1) of ERISA) that could reasonably be expected to have a Material
Adverse Effect.

 

5.12                        Title to Properties; Possession Under Leases.

 

(a)                                 The Credit Parties have good and insurable
title to or a valid leasehold interest in, all of their respective material
Property shown on the balance sheet referred to in Section 5.2(b) for the Credit
Parties and their Subsidiaries or, if applicable, the most recent Consolidated
balance sheet for the Credit Parties and their Subsidiaries provided under the
terms of Section 6.3(a), 6.3(b) or 6.3(c) and all material Property acquired
since the date of such respective balance sheets, except for such Property as is
no longer used or useful in the conduct of their respective businesses or as
have been disposed of in the ordinary course of business or otherwise in
accordance with this Agreement, and except for minor defects in title that do
not interfere with the ability of any Credit Party or any of their Subsidiaries
to conduct their respective businesses as now conducted.  All such assets and
Property are free and clear of all Liens other than those permitted by
Section 7.2 hereof.

 

(b)                                 The Credit Parties (and to the knowledge of
the Credit Parties, each of the Credit Parties’ predecessors in interest under
said leases) have complied in all material respects with all obligations under
all Material Leases to which any of them is a party and under which any of them
is in occupancy, except where non-compliance does not affect such Credit Party’s
use or occupancy thereof, as applicable, and all Material Leases are in full
force and effect, and each of the Credit Parties, as applicable, enjoy peaceful
and undisturbed possession under all such Material Leases.  Section V of the
Perfection Certificate sets forth each lease in existence as of the date of this
Agreement and the Closing Date of real Property of any Credit Party, and upon
the request of the Agent, the Credit Parties will provide the Agent with
complete and correct copies of all of such leases of real Property then in
effect.  As of the date of this Agreement and the Closing Date, there are no
Material Leasehold Properties other than those in clause (a) of the definition
thereof.

 

5.13                        Assumed Names.  As of the date of this Agreement and
the Closing Date, no Credit Party is currently conducting its business under any
assumed name or names, except as set forth in Section VI of the Perfection
Certificate.

 

79

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

 

5.14                        Investment Company Act.  No Credit Party, nor any of
its Subsidiaries, is an investment company within the meaning of the Investment
Company Act of 1940, as amended, or, directly or indirectly, controlled by or
acting on behalf of any Person which is an investment company, within the
meaning of said Act.

 

5.15                        Public Utility Holding Company Act.  No Credit
Party, nor any of its Subsidiaries, is a “public utility company,” or an
“affiliate” or a “subsidiary company” of a “public utility company,” or a
“holding company,” as such terms are defined in the Public Utility Holding
Company Act of 2005, as amended (“PUHCA”).  No Credit Party, nor any of its
Subsidiaries, is an “affiliate” or a “subsidiary company” of an unregistered,
non-exempt “holding company” as such terms are defined in PUHCA.

 

5.16                        Agreements.  Schedule 5.16 attached hereto is a
complete and correct list, as of the date of this Agreement and the Closing
Date, of (a) other than the Loan Documents, all credit agreements or indentures
for borrowed money and capitalized leases to which any Credit Party is a party
and all Property of the Credit Parties subject to any Lien securing such
Indebtedness or capitalized lease obligation, (b) each letter of credit and
guaranty to which any Credit Party is a party, (c) all other material
instruments in effect as of the date of this Agreement providing for,
evidencing, securing or otherwise relating to any Indebtedness for borrowed
money of any Credit Party (other than the Indebtedness hereunder), and (d) all
obligations of any Credit Party to issuers of appeal bonds issued for account of
any Credit Party, in each case other than the Loan Documents.  The Borrowers
shall, upon, request by the Agent, deliver to the Agent and the Lenders a
complete and correct copy of all such credit agreements, indentures, capitalized
leases, letters of credit, guarantees and other instruments described in
Schedule 5.16 or arising after the date of this Agreement, including any
modifications or supplements thereto, as in effect on the date of this
Agreement.

 

5.17                        Environmental Matters.

 

(a)                                 No material aspect of the business of any
Credit Party or any of their Subsidiaries requires any Environmental Permit
which has not been obtained and which is not now in full force and effect.

 

(b)                                 Except as described in Schedule 5.17(b),
each Credit Party and each of their Subsidiaries is in material compliance with
all limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Requirement of Environmental Law or Environmental Permit reasonably necessary to
the conduct of any material aspect of the business of any Credit Party or any of
their Subsidiaries.

 

(c)                                  Each Credit Party and each of their
Subsidiaries (i) has obtained and maintained in effect all Environmental
Permits, (ii) along with their respective Properties (whether leased or owned)
has been and is in material compliance with all applicable Requirements of
Environmental Law and Environmental Permits except as described in
Schedule 5.17(c)(ii), (iii) along with their respective Properties (whether
leased or owned) is not subject to any material (A) Environmental Claims or
(B) Environmental Liabilities, in either case direct or contingent arising from
or based upon any act, omission, event, condition or

 

80

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

 

circumstance occurring or existing on or prior to the date of this Agreement,
except as set forth in any of the environmental assessments or studies described
on Schedule 5.17(c)(iii), or as disclosed on Schedule 5.17(c)(iii), and
(iv) except as described in Schedule 5.17(c)(iv), has not received individually
or collectively any written notice from any Governmental Authority of any
material violation or alleged material violation of any Requirements of
Environmental Law or Environmental Permit or any written notice of any material
Environmental Claim in connection with their respective Properties.

 

(d)                                 Except as described in Schedule 5.17(d), no
Credit Party nor any of their Subsidiaries has actual knowledge of any material
violation of any applicable Requirements of Environmental Law and Environmental
Permits by, or of any material Environmental Claims or Environmental Liabilities
arising against, any of the prior owners or operators and predecessors in
interest with respect to any of the Credit Parties’ or any of their
Subsidiaries’ respective Property.

 

(e)                                  Except as described in Schedule 5.17(e), no
Credit Party nor any of their Subsidiaries has any actual knowledge of the
presence or release of any Hazardous Substance at any of their respective
Properties in quantities or under circumstances that under applicable
Requirements of Environmental Law could require remedial action having a
Material Adverse Effect.

 

(f)                                   Except as described in Schedule 5.17(f),
no Credit Party nor any of their Subsidiaries has any actual knowledge of any
facts or circumstances, including proposed or anticipated changes in applicable
Requirements of Environmental Law that would materially increase the cost of
maintaining compliance or otherwise result in a Material Adverse Effect.

 

(g)                                  The matters disclosed in Schedule 5.17
(other than those described in Schedule 5.17(f)) could not reasonably be
expected to result in a Material Adverse Effect.

 

5.18                        No Change in Credit Criteria or Collection
Policies.  There has been no material adverse change in credit criteria or
collection policies concerning Receivables of any Credit Party since November 5,
2009, which has had or which is likely to have a Material Adverse Effect.

 

5.19                        Solvency.

 

(a)                                 The value of the assets of each Credit Party
(including contribution rights from other Credit Parties), based on a fair
valuation thereof, is not less than the amount that will be required to be paid
on or in respect of the probable liability on the existing debts and other
liabilities (including contingent liabilities) of such Credit Party, as they are
expected to become absolute and mature.  The value of the assets of each of the
Subsidiaries of the Credit Parties (including contribution rights from other
Credit Parties), based on a fair valuation thereof, is not less than the amount
that will be required to be paid on or in respect of the probable liability on
the existing debts and other liabilities (including contingent liabilities) of
each such Subsidiary, as they are expected to become absolute and mature.

 

(b)                                 The assets of each Credit Party do not
constitute unreasonably small capital for such Credit Party to carry out its
business as now conducted and as proposed to be

 

81

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

 

conducted including the capital needs of such Credit Party, taking into account
(i) the nature of the business conducted by such Credit Party, (ii) the
particular capital requirements of the business conducted by such Credit Party,
(iii) the anticipated nature of the business to be conducted by such Credit
Party in the future, and (iv) the projected capital requirements and capital
availability of such current and anticipated business.  The assets of each of
the Subsidiaries of each Credit Party do not constitute unreasonably small
capital for such Subsidiary to carry out its business as now conducted and as
proposed to be conducted, including the capital needs of each such Subsidiary,
taking into account (A) the nature of the business conducted by such Subsidiary,
(B) the particular capital requirements of the business conducted by such
Subsidiary, (C) the anticipated nature of the business to be conducted by such
Subsidiary in the future, and (D) the projected capital requirements and capital
availability of such current and anticipated business.

 

(c)                                  No Credit Party, nor any of their
Subsidiaries, intends to incur debts beyond its ability to pay such debts as
they mature (taking into account the timing and amounts of cash to be received
by each such Credit Party and Subsidiary and the timing and amounts to be
payable on or in respect of debt of each such Credit Party and Subsidiary, as
applicable).  The cash flow of each such Credit Party and Subsidiary, after
taking into account all anticipated uses of the cash of each such Credit Party
and Subsidiary, should at all times be sufficient to pay all such amounts on or
in respect of debt of each such Credit Party and Subsidiary when such amounts
are anticipated to be required to be paid.

 

(d)                                 The Credit Parties do not believe that final
judgments against any of them or any of their Subsidiaries in actions for money
damages presently pending, if any, will be rendered at a time when, or in an
amount such that, the applicable Credit Party or Subsidiary will be unable to
satisfy any such judgments promptly in accordance with their terms (taking into
account the maximum reasonable amount of such judgments in any such actions and
the earliest reasonable time at which such judgments might be rendered).  The
cash flow of each such Credit Party and Subsidiary, as applicable, after taking
into account all other anticipated uses of the cash of each such Credit Party
and Subsidiary, as applicable (including the payments on or in respect of debt
referred to in subparagraph (c) of this Section 5.19), should at all times be
sufficient to pay all such judgments promptly in accordance with their terms
(taking into account the maximum reasonable amount of such judgments in any such
actions and the earliest reasonable time at which such judgments might be
rendered).

 

5.20                        Status of Receivables and Other Collateral.  Each
Credit Party represents and warrants that (a) each Credit Party is and shall be
the sole owner, free and clear of all Liens except in favor of the Agent or
otherwise permitted under Section 7.2 hereunder, of and fully authorized to
sell, transfer, pledge and/or grant a security interest in all of the Collateral
(other than Excluded Collateral, as defined in the applicable Security
Documents) owned by such Credit Party, and (b) each Receivable reported by the
Credit Parties as an Eligible Receivable meets the requirements of the
definition of Eligible Receivable, each item of Inventory reported by the Credit
Parties as Eligible Inventory meets the requirements of the definition of
Eligible Inventory, each item of Eligible Equipment reported by the Credit
Parties as Eligible Equipment meets the requirements of the definition of
Eligible Equipment, each Real Property Asset reported by the Credit Parties as
Eligible Real Estate meets the requirements of the definition of Eligible Real
Estate.

 

82

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

 

5.21                        Transactions with Related Parties.  Any and all
transactions, contracts, licenses, or other agreements existing on the date of
this Agreement and the Closing Date which have been entered into by and among
any Credit Party and any Affiliate, officer, or director of any Credit Party
(other than Permitted Affiliate Transactions), have been entered into and made
upon terms and conditions not less favorable to the applicable Credit Parties
than those terms which could have been obtained from wholly independent and
unrelated sources.

 

5.22                        Intellectual Property.  Section III of the
Perfection Certificate sets forth a true, accurate and complete listing, as of
the date of this Agreement, of all Patents, Trademarks and Copyrights that are
the subject of registrations or applications in any state, federal, or foreign
Intellectual Property registry or any domain name registry and all Intellectual
Property licenses thereof, of the Credit Parties as of the date of this
Agreement and the Closing Date, showing as of the date of this Agreement and the
Closing Date the owner, the jurisdiction of registry, the registration or
application number, and the date of registry thereof.  The Credit Parties are
the sole and exclusive owners of (and the current record owners of) all the
registrations and applications listed in Section III of the Perfection
Certificate.  Except as set forth in Section III of the Perfection Certificate,
the conduct of the respective businesses (including the products and services)
of the Credit Parties as currently conducted does not, in any material respect,
infringe, misappropriate, or otherwise violate any person’s Intellectual
Property rights, and there has been no such claim asserted or threatened in the
past three (3) years against any of the Credit Parties.  To the knowledge of the
Credit Parties, no Person is infringing, misappropriating, or otherwise
violating any Intellectual Property owned, used, or held for use by the Credit
Parties in the conduct of their respective businesses, and no such claims have
been asserted or threatened against any Person by the Credit Parties in the past
three (3) years.  Except as created or permitted under the Loan Documents, no
Lien exists with respect to the interest of any Credit Party in any such
Intellectual Property or licenses to Intellectual Property, and no Credit Party
has transferred or subordinated any interest it may have in such Intellectual
Property or licenses to Intellectual Property.  The Credit Parties shall, from
time to time as necessary to keep such schedule updated in all material respects
(but no more often than quarterly, except in the event that the Credit Parties
acquire material Intellectual Property through the acquisition of, or merger or
consolidation with, any Person, or acquisition of material assets of any
Person), deliver to the Agent an updated Section III of the Perfection
Certificate, together with a certificate of an authorized officer of the
Borrowers’ Agent certifying that the information set forth on such schedule is
true, correct and complete as of such date.  The execution and delivery of this
Agreement and the other Loan Documents, and the consummation of the transactions
contemplated hereby and thereby, will not result in the loss or impairment of or
payment of any additional amounts with respect to, nor require the consent of
any other person in respect of, the Credit Parties’ rights to own, use, or hold
for use any of the Intellectual Property as owned, used, or held for use in the
conduct of the business as currently conducted.

 

5.23                        Related Businesses.  As of the date of this
Agreement and the Closing Date, the Credit Parties are engaged in the businesses
of producing and selling paper products.  These operations require financing on
a basis such that the credit supplied can be made available from time to time to
Borrowers, as required for the continued successful operation of Borrowers and
the other Credit Parties taken as a whole.  Borrowers have requested the Lenders
to make credit available hereunder for the purposes set forth in Section 6.9 and
generally for the purposes of financing the operations of Borrowers and the
other Credit Parties.  Each Borrower and each

 

83

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

 

other Credit Party expects to derive benefit (and the board of directors of each
Borrower and other Credit Party has determined that such Borrower or other
Credit Party may reasonably be expected to derive benefit), directly or
indirectly, from a portion of the credit extended by Lenders hereunder, both in
its separate capacity and as a member of the group of companies, since the
successful operation and condition of each Borrower and each other Credit Party
is dependent on the continued successful performance of the functions of the
group as a whole.  Each Credit Party acknowledges that, but for the agreement of
each of the other Credit Parties to execute and deliver this Agreement, the
Agent and the Lenders would not have made available the credit facilities
established hereby on the terms set forth herein.

 

5.24                        Material Leasehold Properties.  No Credit Party is
in default in any material respect under any lease with respect to any Material
Leasehold Property, and to the knowledge of any Credit Party, no other party
thereto is in default under any such lease.

 

5.25                        Security Interests.  Each of the Security Documents
creates in favor of the Agent, for the benefit of the Agent and the Lenders, a
legal, valid and enforceable security interest in the Collateral secured
thereby.  Upon the filing of the Uniform Commercial Code financing statements
and the other personal property security financing statements and, to the extent
governed by United States federal law, as applicable, upon the recording of a
patent security agreement in the form of hereto, a trademark security agreement
in the form of hereto and a copyright security agreement in the form of hereto
(the “Intellectual Property Security Agreements”), in the United States Patent
and Trademark Office and the United States Copyright Office, as applicable, such
security interests in and Liens on the Collateral granted thereby that may be
perfected by such aforementioned filings or recordings shall be perfected, first
priority security interests (subject, as to priority, only to Liens permitted
under Section 7.2 that, as a matter of law (including, without limitation, the
priority rules of the Uniform Commercial Code and the applicable personal
property security legislation), would be prior to the Liens of the Collateral
Agent, and no further recordings or filings are or will be required in
connection with the creation, perfection or enforcement of such security
interests and Liens, other than (a) the filing of continuation statements or
financing change statements in accordance with applicable law, (b) the recording
of the Intellectual Property Security Agreements in the United States Patent and
Trademark Office and the United States Copyright Office, as applicable, with
respect to after-acquired U.S. Patent, Trademark and Copyright applications and
registrations and (c) the recordation of appropriate evidence of the security
interest in the appropriate foreign registry with respect to all foreign
Intellectual Property.

 

5.26                        Deposit Accounts.  Each deposit account of the
Credit Parties (including each Collection Account) is listed in Section II of
the Perfection Certificate, and each Collection Account is specified as such on
such Schedule; provided that Section II of the Perfection Certificate may be
updated by the Credit Parties from time to time when the Credit Parties add or
remove deposit accounts in accordance with this Agreement.  Each deposit account
of the Credit Parties (including each Collection Account), including each
deposit account listed on Section II of the Perfection Certificate or
established pursuant to Section 7.18, is a Controlled Account (except with
respect to the accounts referred to in Section 7.18(c) to the extent provided
therein).

 

84

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

 

6.                                      Affirmative Covenants.

 

Each Credit Party covenants and agrees with the Agent and the Lenders that prior
to the termination of this Agreement, each Credit Party will perform and observe
each and all of the following covenants:

 

6.1                               Businesses and Properties.  At all times: 
(a) do or cause to be done all things reasonably necessary to obtain, preserve,
renew and keep in full force and effect the rights, licenses, permits,
franchises, and Intellectual Property material to the conduct of its businesses;
(b) maintain and operate such businesses in the same general manner in which
they are presently conducted and operated, with such changes as such Credit
Party deems prudent or as otherwise permitted by this Agreement; (c) comply in
all material respects with all material Legal Requirements applicable to such
businesses and the operation thereof, whether now in effect or hereafter enacted
(including without limitation, all material Legal Requirements relating to
public and employee health and safety and all Environmental Laws); and
(d) maintain, preserve and protect all Property material to the conduct of such
businesses and keep such Property in good repair, working order and condition,
and from time to time make, or cause to be made, all needful and proper repairs,
renewals, additions, improvements and replacements thereto reasonably necessary
in order that the business carried on in connection therewith may be properly
conducted at all times.  Notwithstanding the foregoing provisions of this
Section 6.1, the Credit Parties shall not be required to comply with the
requirements of clauses (a), (b) or (d) of this Section 6.1 with respect to any
Properties (whether or not Mortgaged Properties) (i) at which operations shall
have been permanently discontinued and (ii) to the extent the Board of Directors
of the Parent shall have determined that the preservation and maintenance of
such Properties and the rights, licenses and permits related to such Properties,
as applicable, are no longer desirable in the conduct of the business of the
Credit Parties and their Subsidiaries, taken as a whole, and that the loss
thereof is not adverse in any material respect to the Lenders, or that the
preservation or maintenance thereof is not necessary in connection with any
transaction permitted under the Loan Documents. With respect to any Properties
at which operations are permanently discontinued, the Credit Parties will take
customary and prudent steps to secure such Properties from unauthorized Persons
and to make or cause to be made repairs and replacements necessary to prevent
the development of hazardous safety conditions at such Properties.

 

6.2                               Taxes.  Pay and discharge promptly when due
all material taxes, assessments and governmental charges or levies imposed upon
it or upon its income or profits or in respect of its Property before the same
shall become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise, which, if unpaid, might give rise to Liens
upon such Property or any part thereof (except as otherwise permitted by
Section 7.2 hereof), unless being diligently contested in good faith by
appropriate proceedings and as to which adequate reserves in an amount not less
than the aggregate amount secured by such Liens have been established in
accordance with GAAP; provided, however, that such contested amounts giving rise
to such Liens shall be immediately paid upon commencement of any procedure or
proceeding to foreclose any of such Liens unless the same shall be validly
stayed by a court of competent jurisdiction or a surety bond, which is
satisfactory in all respects to the Agent, is delivered to the Agent for the
ratable benefit of the Lender Parties in an amount no less than such contested
amounts.

 

85

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

 

6.3                               Financial Statements and Information.  Furnish
to the Agent (and Agent will thereafter furnish a copy to Lenders of) each of
the following, which may be furnished via electronic means acceptable to the
Agent and, in the case of the materials described in clause (h)(ii) of this
Section, by first class U.S. mail:

 

(a)                                 as soon as available and in any event within
ninety (90) days after the end of each fiscal year of the Credit Parties, Annual
Audited Financial Statements of the Credit Parties and their Subsidiaries;

 

(b)                                 as soon as available and in any event within
forty-five (45) days after the end of each fiscal quarter (that is not also the
end of a fiscal year) of the Credit Parties, Quarterly Unaudited Financial
Statements of the Credit Parties and their Subsidiaries;

 

(c)                                  as soon as available and in any event
within thirty (30) days after the end of the month, Monthly Unaudited Financial
Statements of the Credit Parties and their Subsidiaries;

 

(d)                                 concurrently with the financial statements
provided for in Subsections 6.3(a), 6.3(b) and 6.3(c) hereof, (i) a Compliance
Certificate, signed by a Responsible Officer of the Borrowers’ Agent setting
forth, among other things, in the case of a Compliance Certificate delivered in
connection with Subsections 6.3(a) and 6.3(b), reasonably detailed calculations
of the Fixed Charge Coverage Ratio calculated as of the end of such fiscal year
or fiscal quarter, as applicable; provided, that if the Fixed Charge Coverage
Ratio is not being tested as of such fiscal quarter or fiscal year end date
pursuant to Section 7.12, such calculation of the Fixed Charge Coverage Ratio
shall still be delivered, but may be delivered in a separate certificate, which
certificate shall be delivered as soon as available and in any event within
fifteen (15) days after the delivery of the Compliance Certificate delivered
pursuant to this Subsection 6.3(d) for the end of such fiscal year or fiscal
quarter end, and provided, further, that, (A) in no event shall the delivery of
a Fixed Charge Coverage Ratio calculation be deemed to imply that Section 7.12
is then being tested, such testing to be determined strictly in accordance with
the express terms of Section 7.12, and (B) failure to provide a calculation of
the Fixed Charge Coverage Ratio at times and for periods when the Fixed Charge
Coverage Ratio is not being tested pursuant to Section 7.12 shall not, in and of
itself, constitute a Default or an Event of Default, and (ii) a written
certificate in Proper Form, identifying each Subsidiary which is otherwise
required by the provisions of Section 6.10 hereof to become a Guarantor at the
request of the Agent, but which has not yet done so as of the date of such
certificate, and providing an explanation of the reasons why each such
Subsidiary is not a Guarantor, signed by a Responsible Officer of the Borrowers’
Agent;

 

(e)                                  as soon as available and in any event
within five (5) Business Days after the date of issuance thereof (if any such
management letter is ever issued), any management letter prepared by the
independent public accountants who reported on the financial statements provided
for in Subsection 6.3(a) above, with respect to the internal audit and financial
controls of the Credit Parties and their Subsidiaries;

 

(f)                                   from any date when Availability is less
than $25,000,000 (and until such time thereafter when Availability has exceeded
$35,000,000 for sixty (60) consecutive days) or

 

86

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

 

upon the occurrence and during the continuation of a Default or Event of
Default, within two (2) Business Days after the end of each week, a Receivables
report in the form of setting forth the sales, collections and total customer
debits and credits for the Credit Parties, on a Consolidated basis, for such
week, certified by a Responsible Officer of the Borrowers’ Agent; provided,
however, from any date when Availability is less than $25,000,000 (and until
such time when Availability has exceeded $35,000,000 for sixty (60) consecutive
days) or upon the occurrence and during the continuation of a Default or Event
of Default, Agent may, in its discretion, require such reports on a basis more
frequently than weekly;

 

(g)                                  from any date when Availability is less
than $25,000,000 (and until such time thereafter when Availability has exceeded
$35,000,000 for sixty (60) consecutive days) or upon the occurrence and during
the continuation of a Default or Event of Default, within two (2) Business Days
after the end of each week, an Inventory designation report in the form of,
certified by a Responsible Officer of the Borrowers’ Agent; provided, however,
from any date when Availability is less than $25,000,000 (and until such time
when Availability has exceeded $35,000,000 for sixty (60) consecutive days) or
upon the occurrence and during the continuation of a Default or Event of
Default, Agent may, in its discretion, require such reports on a basis more
frequently than weekly;

 

(h)                                 as soon as available, and in any event
postmarked (in the case of (ii) below) within fifteen (15) days after the end of
each calendar month, (i) Receivable agings and reconciliations, accounts payable
agings and reconciliations, lockbox statements and all other schedules,
computations and other information, all in reasonable detail, as may be
reasonably required or requested by the Agent with regard to the Credit Parties
and their Subsidiaries, all certified by a Responsible Officer of the Borrowers’
Agent, and (ii) copies of all monthly accounts statements for each deposit
account covered by a Tri-Party Agreement;

 

(i)                                     as soon as available and in any event
within fifteen (15) Business Days after the end of each calendar month, (A) a
certificate setting forth the calculation of the Indenture Cap as of the end of
such calendar month (in form and substance reasonably acceptable to the Agent),
and (B) a Borrowing Base Compliance Certificate;

 

(j)                                    as soon as available and in any event by
January 31st of each calendar year, management-prepared Consolidated and
consolidating financial projections of the Credit Parties and their Subsidiaries
for such year and the immediately following two (2) fiscal years (setting forth
such projections on both an annual basis and on a monthly basis for the upcoming
fiscal year and on an annual basis only for the two (2) fiscal years
thereafter), such projections to be prepared and submitted in such format and
detail as reasonably requested by the Agent; and

 

(k)                                 such other information relating to the
financial condition, operations and business affairs of the Credit Parties or
any of their Subsidiaries as from time to time may be reasonably requested by
the Agent.

 

Notwithstanding the delineation of specified time periods above in this
Section 6.3 for the applicable information, the Agent reserves the right to
require the applicable information be

 

87

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

 

furnished to the Agent and the Lenders on a more frequent basis, as determined
by the Agent in its discretion.  All collateral reports of each Credit Party,
including each Guarantor, shall be prepared in a manner compatible with the
Borrowers’ reporting procedures.

 

6.4                               Inspections; Field Examinations; Inventory
Appraisals and Physical Counts.

 

(a)                                 Upon reasonable notice (which may be
telephonic notice), at all reasonable times during (so long as no Default or
Event of Default has occurred and is continuing) regular business hours and as
often as the Agent may reasonably request, permit any authorized representative
designated by the Agent, including, without limitation any consultant engaged by
the Agent, together with any authorized representatives of any Lender desiring
to accompany the Agent, to visit and inspect the Properties and records of the
Credit Parties and their Subsidiaries and to make copies of, and extracts from,
such records and permit any authorized representative designated by the Agent
(together with any accompanying representatives of any Lender) to discuss the
affairs, finances and condition of the Credit Parties and their Subsidiaries
with the appropriate Financial Officer and such other officers as the Credit
Parties shall deem appropriate and the Credit Parties’ independent public
accountants, as applicable.

 

(b)                                 The Agent and any consultant of the Agent
shall each have the right to examine (and any authorized representatives of any
Lender shall have the right to accompany the Agent during any such examination),
as often as the Agent may request, the existence and condition of the
Receivables, books and records of the Credit Parties and to review their
compliance with the terms and conditions of this Agreement and the other Loan
Documents, subject to governmental confidentiality requirements.  The Agent
shall also have the right to verify with any and all customers of the Credit
Parties the existence and condition of the Receivables, as often as the Agent
may require, without prior notice to or consent of any Credit Party.  Without in
any way limiting the foregoing, the Agent shall have the right to (i) conduct
field examinations of the Credit Parties’ operations at the Borrowers’ expense
as often as the Agent may request and (ii) to order and obtain an appraisal of
the Inventory, Equipment and Real Property Assets of the Credit Parties by an
appraisal firm satisfactory to the Agent as often as the Agent may request
(subject to the proviso at the end of this clause (b)).  Without in any way
limiting the foregoing, the Credit Parties agree to cooperate and to cause their
Subsidiaries to cooperate in all respects with the Agent and its representatives
and consultants in connection with any and all inspections, examinations and
other actions taken by the Agent or any of its representatives or consultants
pursuant to this Section 6.4.  The Credit Parties hereby agree to promptly pay,
upon demand by the Agent (or the applicable Lender, if appropriate), any and all
reasonable fees and expenses incurred by the Agent or, during the continuance of
any Default or Event of Default, any Lender, in connection with any inspection,
examination or review permitted by the terms of this Section 6.4 (including
without limitation the fees of third party appraisers, accountants, attorneys
and consultants); provided, however, that so long as no Default or Event of
Default is continuing, the Borrowers shall only be obligated to pay for (x) one
(1) field examination per each twelve (12)-month period following the Closing
Date, (y) one (1) appraisal of Inventory during each twelve (12)-month period
after the Closing Date, and (z) at Agent’s discretion, up to one (1) appraisal
of Equipment and Real Property Assets during each twelve (12)-month period after
the Closing Date (other than the initial field examinations and appraisals for
any Receivables, Inventory, Equipment and/or Real Property Assets acquired

 

88

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

 

through an acquisition or other Investment permitted under the terms of this
Agreement, it being agreed that the Borrowers shall be obligated to pay for each
such initial field examination and/or appraisal, as applicable, conducted with
respect to each such acquisition or Investment).  For avoidance of doubt, the
Property inspection rights granted to the Agent and the Lenders in this
Section 6.4, do not include the Property of the Offshore Entities.

 

(c)                                  At the Agent’s request, not more frequently
than once during any consecutive twelve month period if no Default or Event of
Default then exists at the time of such request by the Agent, and as frequently
as requested by the Agent after the occurrence of any Default or Event of
Default which has not been cured or waived in writing by the Agent and the
Required Lenders, the Credit Parties shall conduct, at their own expense, a
physical count of their Inventory and promptly supply the Agent with a copy of
such counts accompanied by a report of the value (based on the lower of cost or
market value) of such Inventory.  Additionally, the Credit Parties shall
promptly provide the Agent with copies of any other physical counts of the
Credit Parties’ Inventory which are conducted by the Credit Parties after the
Closing Date.

 

6.5                               Further Assurances.  Upon request by the
Agent, promptly execute and deliver any and all other and further agreements and
instruments and take such further action as may be reasonably requested by the
Agent to (a) cure any defect in the execution and delivery of any Loan Document
or more fully to describe particular aspects of the Credit Parties’ or any of
their Subsidiaries’ agreements set forth in the Loan Documents or so intended to
be, (b) to carry out the provisions and purposes of this Agreement and the other
Loan Documents, and (c) grant, preserve, protect and perfect the first priority
Liens created or intended to be created by the Security Documents in the
Collateral.  Upon written request of the Agent, promptly cause a first priority
perfected security interest or pledge to be granted to the Agent, for the
ratable benefit of the Lender Parties, in 662/3% (or such greater percentage
that, due to a change in applicable law after the date hereof, (i) could not
reasonably be expected to cause the undistributed earnings of such foreign
Subsidiary as determined for U.S. federal income tax purposes to be treated as a
deemed dividend to such foreign Subsidiary’s U.S. parent and (ii) could not
reasonably be expected to cause any material adverse tax consequences) of the
Stock of Neenah Canada, together with such related certificates, legal opinions
and documents as the Agent may reasonably require, each in Proper Form.  Upon
written request by the Agent, promptly furnish the Agent with a then current
listing of all assumed names that any Credit Party is then utilizing in
conducting their respective businesses.  Promptly furnish the Agent with notice
of any transfer of Intellectual Property to another Credit Party and promptly
execute and deliver any and all other and further agreements and instruments as
may be reasonably requested by the Agent in connection therewith.

 

6.6                               Books and Records.  Maintain financial records
and books in accordance with accepted financial practice and GAAP.

 

6.7                               Insurance.

 

(a)                                 Maintain the insurance required by this
Section 6.7 at all times by financially sound and reputable insurers (or, to the
extent consistent with prudent business practice, a program of self-insurance
approved by the Agent, such approval not to be unreasonably withheld).

 

89

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

 

(b)                                 Maintain insurance, to such extent, on such
of its Properties and against such liabilities, casualties, risks and
contingencies, including fire and other risks insured against by extended
coverage, employee liability and business interruption, at least as is customary
with companies similarly situated and in the same or similar businesses, and
subject to deductibles that are no greater than are customary with such
companies, provided, however, that such insurance shall insure the Property of
the Credit Parties and each of their Subsidiaries against all risk of physical
damage, including without limitation, loss by fire, explosion, theft, fraud and
such other casualties as may be reasonably satisfactory to the Agent, but in no
event at any time in an amount less than the replacement value of the
Collateral; provided, further, that from and after the permanent cessation of
operations at any of their facilities (whether or not they are Mortgaged
Properties) in accordance with Section 6.1, the Credit Parties will not be
required to maintain property insurance with respect to the fixed assets
comprising such facility unless such facilities are located on Eligible Real
Property used in the computation of the Borrowing Base or such insurance is
required by law, as determined by the Agent (the Credit Parties agreeing to
provide not less than five (5) Business Days’ advance notice to Agent prior to
the effective date of any cancellation or non-renewal of such insurance).

 

(c)                                  Maintain in full force and effect worker’s
compensation coverage and public liability insurance against claims for personal
injury or death or property damage occurring upon, in, about or in connection
with its operations and with the use of any Properties owned, occupied or
controlled by any Credit Party or any of their Subsidiaries, in such amounts as
the Agent shall reasonably deem necessary.

 

(d)                                 Maintain such other insurance as may be
required by applicable law and furnish to the Agent, upon written request, full
information as to the insurance carried.

 

(e)                                  All insurance covering Property subject to
a Lien in favor of the Agent for the benefit of the Lenders granted pursuant to
the Security Documents shall provide that, in the case of each separate loss,
the full amount of insurance proceeds shall be payable to the Agent, and all
liability insurance maintained by the Credit Parties shall name the Agent as
additional insured.  All such property and liability insurance shall further
provide for at least thirty (30) days’ (ten (10) days’ with respect to
cancellation for non-payment of premium or at the request of the insured) prior
written notice to the Agent of the cancellation or substantial modification
thereof.  If any Credit Party fails to maintain such insurance, the Agent may
arrange for such insurance, but at the Borrowers’ expense and without any
responsibility on the Agent’s part for obtaining the insurance, the solvency of
the insurance companies, the adequacy of the coverage, or the collection of
claims.  Upon the occurrence and during the continuance of an Event of Default,
the Agent shall have the sole right, in the name of the Lenders, any Credit
Party and its Subsidiaries, to file claims under any insurance policies, to
receive, receipt and give acquittance for any payments that may be payable
thereunder, and to execute any and all endorsements, receipts, releases,
assignments, reassignments or other documents that may be necessary to effect
the collection, compromise or settlement of any claims under any such insurance
policies.  The Credit Parties shall deliver certificates evidencing renewal of
the insurance required hereunder and evidence that the premiums have been paid
before termination of any insurance policies required hereunder.  Upon request,
Debtors shall deliver certificates evidencing the insurance required hereunder
and copies of the underlying policies as they are available.

 

90

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

 

6.8                               ERISA.  At all times:  (a) make contributions
to each Plan in a timely manner and in an amount sufficient to comply with the
minimum funding standards requirements of ERISA; (b) immediately upon acquiring
knowledge of (i) any Reportable Event in connection with any Plan or (ii) any
Prohibited Transaction in connection with any Plan, that could reasonably be
expected to result in the imposition of material damages or a material excise
tax on any Credit Party or any Subsidiary thereof, furnish the Agent a statement
executed by a Responsible Officer of such Credit Party or Subsidiary setting
forth the details thereof and the action which such Credit Party or Subsidiary
proposes to take with respect thereto within thirty (30) days and, when known,
any action taken by the Internal Revenue Service or Department of Labor with
respect thereto; (c) notify the Agent promptly within thirty (30) days upon
receipt by any Credit Party or any Subsidiary thereof of any notice of the
institution of any proceedings or other actions which could reasonably be
expected to result in the termination of any Plan by the PBGC and furnish the
Agent with copies of such notice; (d) pay when due, or within any applicable
grace period allowed by the PBGC, all required premium payments to the PBGC;
(e) furnish the Agent with copies of the annual report for each Plan filed with
the Internal Revenue Service not later than ten (10) days after the Agent
requests such report; (f) furnish the Agent with copies of any request for
waiver of the funding standards or extension of the amortization periods
required by Sections 302 and 304 of ERISA or Sections 412 and 431 of the Code
promptly within thirty (30) days after the request is submitted to the Secretary
of the Treasury, the Department of Labor or the Internal Revenue Service, as the
case may be; and (g) pay when due all installment contributions required under
Section 303 of ERISA or Section 430 of the Code or within ten (10) days of a
failure to make any such required contributions when due furnish the Agent with
written notice of such failure.

 

6.9                               Use of Proceeds.

 

(a)                                 Subject to the terms and conditions
contained herein, use the proceeds of the Revolving Loans (i) to finance ongoing
working capital needs of the Credit Parties not otherwise prohibited herein;
(ii) for the issuance of Letters of Credit for the account of the Credit Parties
in accordance with and subject to the terms of this Agreement; (iii) to finance
acquisitions permitted under Section 7.4; (iv) for general corporate purposes of
the Credit Parties in the ordinary course of business and (v) to the extent not
included in clauses (i) through (v) of this Section 6.9 to finance any
transactions permitted under Section 7.4 or Section 7.11 and any Investments not
prohibited by this Agreement, whether or not in the ordinary course of business;
and

 

(b)                                 subject to the terms and conditions
contained herein, use the proceeds of the Term Loans to redeem, defease or
retire Senior Notes;

 

provided, that no proceeds of any Loan shall be used (x) for any purpose which
would constitute a violation of Regulation U (“Reg U”) of the Board of Governors
of the Federal Reserve System or Regulations T or X of the Board of Governors of
the Federal Reserve System or any successor regulation of any thereof or of any
other rule, statute or regulation governing margin stock from time to time and
(y) for any other purpose which would cause such Loan to be a “purpose
credit”within the meaning of Reg U.  Following this transaction, no more than
twenty-five percent (25%) (or such lesser percentage as may be established from
time to time under Reg U or

 

91

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

 

any successor statute) of the assets of Borrowers and their Subsidiaries,
subject to any restriction on sale or pledge, will consist of, or be represented
by margin stock.

 

6.10                        Borrowers; Guarantors; Joinder Agreements.  Promptly
inform the Agent of the creation or acquisition of any Subsidiary of any Credit
Party after the Closing Date and, within thirty (30) days after the written
request of the Agent (or the Required Lenders in the case of clause (b) below)
delivered in accordance with Section 10.2 below, cause:

 

(a)                                 each such Subsidiary (i) that is a Domestic
Subsidiary to become a Borrower by execution and delivery to the Agent, for the
ratable benefit of the Lender Parties, of a Joinder Agreement, and (ii) that is
not a Domestic Subsidiary (other than an Excluded Foreign Subsidiary) to become
a Guarantor by execution and delivery to the Agent, for the ratable benefit of
the Lender Parties, of a Guaranty and/or a Joinder Agreement, as applicable;

 

(b)                                 a first priority perfected security interest
to be granted to the Agent, for the ratable benefit of the Lender Parties, in
all of the Stock of such Subsidiary owned by the Credit Parties or any of their
other Subsidiaries if such newly acquired or created Subsidiary is a Domestic
Subsidiary or is treated, for U.S. federal tax purposes, as an entity that is
disregarded as an entity separate from its owner within the meaning of Treas.
Reg. § 301.7701-1. The Credit Parties and their Subsidiaries shall not be
required to pledge any issued and outstanding Stock of any such newly acquired
or created foreign subsidiary that is not disregarded as an entity separate from
its owner within the meaning of Treas. Reg. § 301.7701-1 (an “Excluded Foreign
Subsidiary”) or is otherwise an Offshore Entity; provided, that no Credit Party
shall be deemed at any time to be an Excluded Foreign Subsidiary;

 

(c)                                  each such Subsidiary (other than an
Excluded Foreign Subsidiary) to grant to the Agent, for the ratable benefit of
the Lender Parties, a security interest (subject only to (i) Liens permitted
under Section 7.2(e) as to Receivables, Inventory and Permitted Investment
Securities, and (ii) Liens permitted under Section 7.2 as to all other
Collateral existing as of the date of acquisition by any Credit Party or any
other Subsidiary thereof of such newly acquired Subsidiary, if applicable) in
all accounts, inventory, equipment, furniture, fixtures, chattel paper,
documents, instruments, general intangibles and other tangible and intangible
personal Property and all real Property owned at any time by such Subsidiary and
all products and proceeds thereof (subject to similar exceptions as set forth in
the Security Documents); and

 

(d)                                 cause such Subsidiary to deliver to the
Agent such other Joinder Agreements, guaranties, contribution and set-off
agreements, security agreements, pledge agreements, Tri-Party Agreements and
other Loan Documents and such related certificates, Uniform Commercial Code,
other customary lien search reports, legal opinions and other documents
(including Organizational Documents) as the Agent may reasonably require, each
in form and substance reasonably satisfactory to the Agent, and to submit to a
collateral audit conducted by an independent audit firm designated by Agent and
satisfactory to the Agent in its reasonable discretion;

 

provided, however, that (i) any such Subsidiary that is an Excluded Foreign
Subsidiary shall not be required to become a Guarantor or grant any Liens
hereunder and (ii) Neenah Menasha Water and Power Company shall not be required
to become a Borrower or grant any Liens hereunder;

 

92

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

 

provided, further, that until such Subsidiary becomes a Guarantor or a Borrower
pursuant to the terms of this Agreement it shall not become a Credit Party.  To
the extent reasonably feasible, all of the foregoing requirements shall be
affected by the execution and delivery of a Joinder Agreement.

 

6.11                        Notice of Events.  Notify the Agent within two
(2) Business Days after any Responsible Officer of any Credit Party or any of
their Subsidiaries acquires knowledge of the occurrence of, or if any Credit
Party or any of their Subsidiaries causes or intends to cause, as the case may
be, any of the following:  (a) the institution of any lawsuit, administrative
proceeding or investigation affecting any Credit Party or any of their
Subsidiaries, including without limitation any examination or audit by the IRS,
the adverse determination under which could reasonably be expected to be
material; (b) any development or change in the business or affairs of any Credit
Party or any of their Subsidiaries which has had or which is likely to have, in
the reasonable judgment of any Responsible Officer of the applicable Credit
Parties, a Material Adverse Effect; (c) any Event of Default or Default,
together with a reasonably detailed statement by a Responsible Officer on behalf
of the Borrowers’ Agent of the steps being taken to cure the effect of such
Event of Default or Default; (d) the occurrence of a default or event of default
by any Credit Party or any of their Subsidiaries under any agreement or series
of related agreements to which it is a party, which default or event of default
could reasonably be expected to have a Material Adverse Effect; (e) any written
notice of any material violation by, or investigation of any Credit Party or any
of their Subsidiaries in connection with any actual or alleged material
violation of any Legal Requirement imposed by the Environmental Protection
Agency, the Occupational Safety Hazard Administration or any other Governmental
Authority which has or is likely to have, in the reasonable judgment of any
Responsible Officer of the applicable Credit Parties, a Material Adverse Effect;
and (f) any significant change in the accuracy of any material representations
and warranties of the Credit Parties or any of their Subsidiaries in this
Agreement or any other Loan Document (including without limitation, the
representations and warranties in Section 5.20(b)).

 

6.12                        Environmental Matters.  Without limiting the
generality of Section 6.1(c) hereof, (a) comply in all material respects with
all material limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules and timetables contained in any applicable
Requirement of Environmental Law, or Environmental Permit; (b) obtain and
maintain in effect all Environmental Permits necessary to the conduct of its
business, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect; and (c) keep its Property free of any
Environmental Claims or Environmental Liabilities that could reasonably be
expected to have a Material Adverse Effect.  In the event that any Credit Party
or any of their Subsidiaries receives any such written demand or claim from any
Person with respect to any such Environmental Liabilities, the Credit Parties
agree to promptly take action and thereafter diligently pursue the same to
completion in a manner necessary to cause the applicable Environmental
Liabilities to be remediated as soon as reasonably possible in accordance with
all applicable Requirements of Environmental Law.  EACH OF THE CREDIT PARTIES
HEREBY INDEMNIFIES AND AGREES TO HOLD THE AGENT AND THE LENDERS HARMLESS FROM
AND AGAINST ANY AND ALL LIABILITY, LOSS, DAMAGE, SUIT, ACTION OR PROCEEDING
ARISING OUT OF THEIR RESPECTIVE BUSINESSES OR THE BUSINESSES OF ANY OF THE OTHER
CREDIT PARTIES OR ANY SUBSIDIARIES OF ANY OF THEM, PERTAINING TO

 

93

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

 

ANY ENVIRONMENTAL LIABILITIES, INCLUDING WITHOUT LIMITATION, CLAIMS OF ANY
GOVERNMENTAL AUTHORITY OR ANY OTHER PERSON ARISING UNDER ANY REQUIREMENT OF
ENVIRONMENTAL LAW OR UNDER TORT, CONTRACT OR COMMON LAW; PROVIDED, THAT THE
FOREGOING INDEMNITY SHALL NOT APPLY TO THE EXTENT, BUT ONLY TO THE EXTENT, THE
APPLICABLE LIABILITY, LOSS, DAMAGE, SUIT, ACTION OR PROCEEDING IS DETERMINED BY
A FINAL JUDICIAL DECISION TO HAVE BEEN CAUSED BY THE WILLFUL MISCONDUCT OR GROSS
NEGLIGENCE OF THE PARTY SEEKING INDEMNIFICATION.

 

6.13                        End of Fiscal Year.  Cause each of its fiscal years
and the fiscal years of each of its Subsidiaries to end on December 31st of the
applicable year.

 

6.14                        Pay Obligations and Perform Other Covenants.  Make
full and timely payment of the Obligations, whether now existing or hereafter
arising, as and when due and payable, duly comply, and cause each of its
Subsidiaries to duly comply, with all of the terms and covenants contained in
this Agreement and in each of the other Loan Documents at all times and places
and in the manner set forth therein, and except for the filing of continuation
and renewal statements and the making of other filings by the Agent as secured
party or assignee, at all times take all actions necessary to maintain the Liens
and security interests provided for under or pursuant to this Agreement and the
Security Documents as valid perfected first priority Liens on the Collateral
intended to be covered thereby (subject only to other Liens expressly permitted
by Section 7.2 hereof) and supply all information to the Agent necessary for
such maintenance.

 

6.15                        Collection of Receivables; Application of
Receivables Proceeds.

 

(a)                                 At all times after (i) Availability is less
than $25,000,000, or (ii) the occurrence of a Default or an Event of Default
(any such time, until the occurrence of a Dominion Termination Event, a
“Dominion Event”), and until such time when Availability has exceeded
$35,000,000 for sixty (60) consecutive days and no Default or Event of Default
is continuing (a “Dominion Termination Event”), the Borrowers shall cause all
payments received by any Borrowers or any of their Subsidiaries (other than any
Guarantor, except as provided below) on account of Receivables of the Borrowers
(whether in the form of cash, checks, notes, drafts, bills of exchange, money
orders or otherwise) to be promptly deposited in the form received (but with any
endorsements of the applicable Borrower or Subsidiary necessary for deposit or
collection, and if received in funds other than U.S. dollars, with such
arrangements for conversion to U.S. dollars as may be acceptable to the Agent)
into one or more Collection Accounts of the Borrowers designated by the Agent. 
Funds received in a Collection Account of a Borrower shall be subject to daily
wire transfer to an account designated by the Agent pursuant to arrangements
with the applicable depository that are acceptable to the Agent, and in
connection therewith, the Agent and JPMorgan are irrevocably authorized to cause
all collected funds on all Receivables received by the Agent or JPMorgan from
whatever means, whether pursuant to any Tri-Party Agreement or otherwise, to be
applied by the Agent to reduce the outstanding balance of the Revolving Loans. 
Upon the occurrence of a Dominion Event, and from time to time thereafter until
a Dominion Termination Event as the Agent may require, funds held in any other
deposit account of any Borrower shall be remitted to the Agent, except as the
Agent may permit to fund outstanding drafts or transfers or otherwise in its
discretion; and until

 

94

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

 

the occurrence of a Dominion Termination Event, funds contained in any account
of any Borrower shall be subject to withdrawal by the Agent only, as hereinafter
provided, except as otherwise expressly authorized by the Agent.  Upon the
occurrence of a Dominion Event, the Borrowers shall, at any time and from time
to time upon request of the Agent, liquidate any Permitted Investment Securities
held by them and remit the proceeds to the Agent.  Prior to the occurrence of a
Default or Event of Default, all remittances and payments that are deposited
with the Agent in accordance with this Section 6.15(a) will be applied by the
Agent on the same day received (or on the next Business Day in the case of
remittances and payments received after 11:00 a.m.) to reduce the outstanding
balance of the Revolving Loans, subject to final collection in cash of the item
deposited.  After the occurrence of a Default or Event of Default, all
remittances and payments that are deposited with the Agent in accordance with
this Section 6.15(a) will be applied by the Agent in accordance with
Section 2.7.  Upon the occurrence of a Dominion Event, and until the occurrence
of a Dominion Termination Event, each Guarantor shall be subject to cash
management arrangements (including with respect to payments received on account
of Receivables, short term investments and intercompany transfers of funds)
pursuant to which funds in each such Guarantor’s accounts may be applied to
reduce the outstanding balance of the Revolving Loans acceptable to the Agent,
whether or not demand has been made under the relevant Guaranty.  Upon the
occurrence of a Dominion Event, if any Credit Party, or any other Person acting
for or in concert with the Credit Parties, receives any monies, checks, notes,
drafts or other payments relating to or as proceeds of Receivables or other
Collateral except as contemplated by this Section 6.15(a), the Credit Parties
shall, or shall cause such Person to, receive and hold such items in trust for,
and as the sole and exclusive property of, the Agent (for the benefit of the
Lender Parties) and, immediately upon receipt thereof, remit the same (or cause
the same to be remitted) in hand to or as directed by the Agent.

 

(b)                                 Until the occurrence of a Dominion Event,
the Credit Parties shall be required, and hereby agree, to promptly deposit
Receivable payments when received into any Controlled Account maintained by the
Credit Parties pursuant to the terms hereof and designated to the Agent as a
Collection Account.  The Agent shall not deliver any “sole control” activation
notices under any Tri-Party Agreement until the occurrence of a Dominion Event. 
Upon the occurrence of a Dominion Event, all amounts in each Controlled Account
shall be subject to the provisions of Section 6.15(a), and none of such
Controlled Accounts shall be utilized for disbursement purposes, except as
otherwise consented to by the Agent.

 

6.16                        Receivables and Other Collateral Matters.  The
Credit Parties shall maintain books and records pertaining to the respective
Collateral owned by each of them in detail, form and scope as the Agent shall
reasonably require, and concurrently with the delivery by any Credit Party to
the Agent of any accounts receivable aging or any sales report summary
hereunder, the Credit Parties will disclose to the Agent which Receivables, if
any, arise out of contracts with the United States or any department, agency or
instrumentality thereof, and will, upon request from the Agent, use commercially
reasonable efforts to execute or cause to be executed any instruments and take
any steps required by the Agent in order that all monies due or to become due
under any such contract shall be assigned to the Agent and notice thereof given
under the Federal Assignment of Claims Act.  The Credit Parties will, promptly
after any Responsible Officer of any of them learns thereof, report to the Agent
any material loss or destruction of, or substantial damage to, any portion or
component of the Collateral with fair market value in excess of $500,000, and
any other matters materially affecting the value, enforceability or

 

95

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

 

collectability of any of the Collateral with fair market value in excess of
$500,000.  If any amount payable under or in connection with any Receivable is
evidenced by a promissory note or other instrument, as such terms are defined in
the Uniform Commercial Code), such promissory note or instrument shall be
promptly pledged, endorsed, assigned and delivered to the Agent as additional
Collateral.  The Credit Parties shall not redate, nor allow any of their
Subsidiaries to redate, any invoice or sale, or without written notice to the
Agent, make or allow to be made sales on extended dating beyond that customary
in the industry. Finally, neither any Credit Party, nor any of their
Subsidiaries, shall be entitled to pledge the Agent’s or any Lender’s credit on
any purchases or for any purpose whatsoever.

 

6.17                        Agreements.  The Credit Parties shall deliver or
cause to be delivered to the Agent copies of all tax sharing agreements and all
material employment agreements, management fee agreements, loan agreements,
notes and other documentation evidencing any Indebtedness of the Borrower or any
Subsidiary not delivered or provided prior to the Closing Date.

 

6.18                        Hedging Strategy.  The Credit Parties will enter
into and maintain Hedging Obligations permitted hereunder in accordance with and
as determined by the hedging policies referred to in Section 4.3(s), with such
changes thereto as may be reasonably acceptable from time to time to the Agent.

 

6.19                        Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral.

 

(a)                                 If any Credit Party acquires any Material
Leasehold Property after the Closing Date, the Credit Party shall use
commercially reasonable efforts to cause the landlord with respect to such
Material Leasehold Property to execute and deliver to the Agent waivers or
subordinations of any and all landlord rights (whether statutory or contractual)
held by such landlord with respect to any Collateral located on such Material
Leasehold Property.

 

(b)                                 From and after the Closing Date, in the
event that (i) any Credit Party acquires any Material Leasehold Property or any
fee interest in any Real Property Asset, or (ii) at the time any Person becomes
a Subsidiary (other than a Subsidiary that is not required to become a Borrower
or Guarantor), such Person owns or holds any fee interest in any Real Property
Asset, excluding any such Real Property Asset the encumbering of which requires
the consent of any then-existing senior lienholder, where the Credit Parties are
unable to obtain such senior lienholder’s consent (any such non-excluded Real
Property Asset described in the foregoing clause (i) or (ii) being an
“Additional Mortgaged Property”), such Credit Party shall deliver to the Agent,
as soon as reasonably practicable after such Person acquires such Additional
Mortgaged Property, the following (subject to Section 6.19(c)):

 

(A)                               Additional Mortgages.  A fully executed (and
where required, notarized) Mortgage (or, in the discretion of the Agent, an
amendment to an existing Mortgage) (each an “Additional Mortgage” and,
collectively, the “Additional Mortgages”), in proper form for recording in the
applicable jurisdiction, encumbering the interest of such Credit Party in such
Additional Mortgaged Property, and the Agent shall have the right in its sole
discretion to record such Additional Mortgage;

 

96

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

 

(B)                               Surveys.  With respect to each Additional
Mortgaged Property located in the United States or constituting a Mill Property,
such surveys or surveyor certificates as the Agent may reasonably require;

 

(C)                               Deeds.  Copies of all deeds by which such
Credit Party received title with respect to each Additional Mortgaged Property
that is a fee interest in a Real Property Asset;

 

(D)                               Leases.  Copies of all leases between any
Credit Party and any landlord or tenant with respect to any Material Leasehold
Property, including any and all modifications, supplements, and amendments
thereto.

 

(E)                                Matters Relating to Flood Hazard Properties. 
(1) Evidence as to whether any Additional Mortgaged Property that is located in
the United States or is a Mill Property is a Flood Hazard Property and (2) if
any such Additional Mortgaged Property is a Flood Hazard Property, evidence that
the applicable Credit Party has obtained flood insurance as required by law with
respect to each such Flood Hazard Property in amounts reasonably approved by the
Agent, or evidence reasonably acceptable to the Agent that such insurance is not
available;

 

(F)                                 Title Insurance.  (1) If required by the
Agent, ALTA mortgagee title insurance policies or unconditional commitments
therefor (the “Additional Mortgage Policies”) issued by the Title Company with
respect to the Additional Mortgaged Property, in an amount not less than the
fair market value of the Additional Mortgaged Property, or such lesser amount as
may be reasonably satisfactory to the Agent, insuring fee simple title or
leasehold title, as applicable, to each such Additional Mortgaged Property
vested in such Credit Party and assuring the Agent that such Additional Mortgage
creates a valid and enforceable first priority Lien on such Additional Mortgaged
Property, subject only to any standard or other exceptions as may be reasonably
acceptable to the Agent and which appear as exceptions on Schedule B to the
applicable Additional Mortgage Policy, which Additional Mortgage Policy
(a) shall include endorsements (to the extent available) for customary matters
reasonably requested by the Agent, including, but not limited to, those
endorsements listed on Schedule 4.3(r) and (b) shall provide for affirmative
insurance and such reinsurance as may be reasonable and customary and as the
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Agent; and (2) evidence reasonably satisfactory
to the Agent that such Credit Party has (a) delivered to the Title Company all
certificates and affidavits required by the Title Company in connection with the
issuance of the Additional Mortgage Policy and (b) paid to the Title Company or
to the appropriate Governmental Authorities all expenses and premiums of the
Title Company in connection with the issuance of the Additional Mortgage Policy
and all recording and stamp taxes (including mortgage recording taxes, fees and
other charges and intangible taxes) payable in connection with recording the
Additional Mortgage in the appropriate real estate records;

 

97

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

 

(G)                               Copies of Documents Relating to Title
Exceptions.  Copies of all recorded documents listed as exceptions to title or
otherwise referred to in each Additional Mortgage Policy;

 

(H)                              Opinions of Counsel.  (1) A favorable opinion
of counsel (which counsel shall be reasonably satisfactory to the Agent), as to
the due authorization, execution and delivery by such Credit Party of such
Additional Mortgage and such other matters as the Agent may reasonably request,
and (2) an opinion of counsel (which counsel shall be reasonably satisfactory to
the Agent) in the state or province in which such Additional Mortgaged Property
is located with respect to the enforceability of the form of Additional
Mortgages to be recorded in such state or province and such other reasonable and
customary matters (including without limitation any matters governed by the laws
of such state regarding personal property security interests in respect of any
Collateral) as the Agent may reasonably request, in each case in form and
substance reasonably satisfactory to the Agent;

 

(I)                                   Environmental Audit.  If required by the
Agent, reports and other information in form, scope and substance reasonably
satisfactory to the Agent and prepared by environmental consultants reasonably
satisfactory to the Agent and accompanied by reliance letters where applicable,
concerning any Environmental Claims or Environmental Liabilities to which any
Credit Party may be subject with respect to such Additional Mortgaged Property;
and

 

(J)                                   Taxes.  Evidence reasonably satisfactory
to the Agent that there are no outstanding material taxes, levies, duties,
imposts, deductions, charges (including water and sewer charges), withholdings,
assessments or impositions of any kind which have been due and payable for more
than thirty (30) days with respect to such Additional Mortgaged Property, except
to the extent that any such matters are being contested in accordance with the
terms of Section 6.2.

 

(c)                                  In the case of the acquisition in any
transaction or series of related transactions by any Credit Party of one or more
Additional Mortgaged Properties having an acquisition price of $250,000 or less
in the aggregate, the applicable Credit Party shall not be required to deliver
the items set forth in Section 6.19(b)(ii)(I) with respect to such Additional
Mortgaged Properties, and the remaining items required to be delivered for such
Additional Mortgaged Properties pursuant to  Section 6.19(b) shall be delivered
quarterly, thirty (30) days after the end of each fiscal quarter for all such
Additional Mortgaged Properties acquired during such fiscal quarter; provided,
however, that in the event that the Credit Parties acquire (i) any such
properties in any quarter having an acquisition price in excess of $2,000,000 in
the aggregate, or (ii) any such property that is or is expected to be material
to its operations, the applicable Credit Parties shall deliver such remaining
items to the Agent as soon as reasonably practicable thereafter.

 

98

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

 

7.                                      Negative Covenants.

 

The Credit Parties covenant and agree with the Agent and the Lenders that prior
to the termination of this Agreement, the Credit Parties will not do any of the
following:

 

7.1                               Indebtedness.  Create, incur, suffer or permit
to exist, or assume or guarantee, directly or indirectly, or become or remain
liable with respect to any Indebtedness, whether direct, indirect, absolute,
contingent, or otherwise, except the following:

 

(a)                                 Indebtedness to the Lenders and the Agent
pursuant hereto;

 

(b)                                 Indebtedness secured by Liens permitted by
Section 7.2 hereof;

 

(c)                                  Purchase money Indebtedness (including the
amount of any Capital Lease Obligations required to be capitalized and included
as a liability on the consolidated balance sheet of the Credit Parties and their
Subsidiaries incurred to finance Capital Expenditures) including under
conditional sales agreements and other title retention arrangements but
excluding purchase money Indebtedness incurred in respect of Inventory; provided
that the aggregate amount of such purchase money Indebtedness incurred during
any fiscal year of the Credit Parties shall not exceed $5,000,000;

 

(d)                                 Other liabilities existing on the date of
this Agreement and set forth on Schedule 5.16 attached hereto, with no renewals,
extensions, modifications or increases thereof being permitted, unless the same
constitutes Refinancing Indebtedness;

 

(e)                                  Current accounts payable and unsecured
current liabilities (including current accrued expenses), not the result of
borrowings, to vendors, suppliers, landlords, lessors and persons providing
services, for expenditures on ordinary trade terms for goods and services
normally required by the Credit Parties or any of their Subsidiaries in the
ordinary course of business;

 

(f)                                   Indebtedness of any Credit Party to any
other Credit Party, provided, that, no such Indebtedness may be cancelled,
compromised or otherwise discounted in any respect without the written consent
of the Required Lenders;

 

(g)                                  Contingent Obligations of a Credit Party
with respect to (i) Indebtedness of another Credit Party that is permitted
hereunder or (ii) Indebtedness of an Offshore Entity that is permitted under
 Section 7.20;

 

(h)                                 Current and deferred taxes and other
assessments and governmental charges (to the extent permitted by
 Section 7.2(e) hereof);

 

(i)                                     Customary and prudent Hedging
Obligations entered into in the ordinary course of business with the Agent, any
Lender or any of their respective Affiliates for the sole purpose of protecting
the Credit Parties and their Subsidiaries against fluctuations in interest
rates, currency exchange rates, commodity (including pulp) prices and similar
risks, so long as such Hedging Obligations are not speculative in nature and are
incurred in the normal course of

 

99

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

 

business and consistent with industry practices, and, with respect to Hedging
Obligations constituting Bank Products;

 

(j)                                    Refinancing Indebtedness, to the extent
the same relates to any Indebtedness permitted by Sections 7.1(c) and
7.1(d) hereof;

 

(k)                                 Indebtedness incurred in connection with the
financing of environmental remediation or Capital Expenditures made to acquire,
develop, construct, install, equip or replace existing Equipment, in each case
only to the extent (i) such Equipment is primarily intended to establish,
maintain or improve the compliance by such Credit Party with applicable
Environmental Law (including, as is necessary to maintain certain licenses or
permits held by the Credit Parties and required in the conduct of their
businesses), (ii) such Indebtedness does not exceed $30,000,000 in the aggregate
at any time outstanding, (iii) such Indebtedness (A) is loaned by or guaranteed
by a Governmental Authority or government-sponsored entity and is interest-free
or at a below-market interest rate, (B) is subject to customary intercreditor
arrangements acceptable to the Agent in its sole discretion, and (C) is secured
only by Liens permitted by Section 7.2(l);

 

(l)                                     unsecured letters of credit issued by
any third party for the account of any Credit Party, provided that at no time
shall the sum of the Letter of Credit Exposure Amount plus the outstanding face
amount of all letters of credit issued pursuant to this Section 7.1(l) plus the
drawn and unreimbursed amount of such letters of credit exceed $20,000,000;

 

(m)                             Senior unsecured Indebtedness, and/or senior
subordinated unsecured Indebtedness, evidenced by Additional Senior Notes,
provided, that (i) the sum of the outstanding principal amount of all Additional
Senior Notes and the Senior Notes shall not exceed $375,000,000, and (ii) upon
the issuance of any Additional Senior Notes, the Fixed Charge Coverage Ratio for
the Borrowers and their Subsidiaries (after giving effect to the incurrence of
the Indebtedness evidenced by the Additional Senior Notes and, to the extent
applicable, any application of the proceeds thereof to the retirement of
existing Indebtedness, provided, that such application occurs, or irrevocable
notice of the redemption, prepayment or purchase of which is given,
substantially contemporaneously with the issuance of such Additional Senior
Notes) shall be greater than 1.15 to 1.00 for the most recently completed four
quarter period, assuming that for purposes of calculating the Fixed Charge
Coverage Ratio for such period (calculated on a pro forma basis in a manner
reasonably acceptable to the Agent) such Indebtedness was incurred on the first
day of such applicable period;

 

(n)                                 Indebtedness owing in respect of operating
leases entered into in the ordinary course of business that on or prior to
March 31, 2011 were not required to be treated as Capital Lease Obligations
under GAAP, but as a result of any changes in GAAP mandated by the Financial
Accounting Standards Board or successor organization and implemented after
March 31, 2011, are required to be treated as Capital Lease Obligations under
GAAP; provided that the aggregate amount of such Indebtedness owing with respect
to such operating leases shall not exceed $15,000,000; and

 

(o)                                 other Indebtedness in an aggregate amount
not to exceed $10,000,000 at any one time outstanding;

 

100

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

 

provided, however, that notwithstanding the foregoing, in no event shall the
Credit Parties enter into any Hedging Obligation constituting Bank Products at
any time when the Hedging Obligations Aggregate Amount exceeds $20,000,000, or
which would cause the Hedging Obligations Aggregate Amount to exceed $20,000,000
immediately after the incurrence thereof.

 

The Credit Parties, the Agent and the Lenders agree that, notwithstanding
anything contained in Section 7.1(f) or in any other provision contained in this
Agreement which may appear to be to the contrary, any and all Indebtedness
permitted by Section 7.1(f) hereof (together with any and all Liens from time to
time securing the same as permitted by Section 7.2 hereof) is hereby made and at
all times hereafter shall be inferior and subordinate in all respects to the
Obligations from time to time owing to the Agent or any Lender pursuant hereto
and to any Lien against any Collateral from time to time now or hereafter
securing any of such Obligations pursuant to the terms hereof and the Security
Documents.  Additionally, the Credit Parties, the Agent and the Lenders agree
that, notwithstanding anything contained in any provision of this Agreement, any
and all contractual, statutory or constitutional Liens which may now or
hereafter held by any Credit Party against any Property of any other Credit
Party or any of their Subsidiaries as a result of any intercompany lease or
sublease by such Credit Party to such other Credit Party or Subsidiary of any
real Property owned or leased by the lessor or sublessor Credit Party are, and
at all times hereafter shall be, inferior and subordinate in all respects to any
Lien now or hereafter held by the Agent, for the ratable benefit of the Lender
Parties, against any Collateral as security for any of the Obligations pursuant
to the terms hereof and the Security Documents.  The Credit Parties agree to
execute and deliver on their own behalf, and to cause to be executed and
delivered by and on behalf of their Subsidiaries, any and all subordination
agreements, in form and content reasonably acceptable to the Agent, which the
Agent may hereafter require to further evidence the subordination of the
Indebtedness permitted by Section 7.1(f) above, the Liens permitted by
Section 7.2 and any such contractual, statutory or constitutional landlord’s
Liens held by any Credit Party.

 

7.2                               Liens.  Create or suffer to exist any Lien
upon any of its Property (including without limitation, real property assets and
personal property assets, including Stock in its Subsidiaries) now owned or
hereafter acquired, or acquire any Property upon any conditional sale or other
title retention device or arrangement or any purchase money security agreement;
provided, however, that the Credit Parties may create or suffer to exist:

 

(a)                                 Liens in effect on the date of this
Agreement and which are described on Schedule 7.2 attached hereto, provided,
that the Property covered thereby does not increase in scope and such Liens may
not be renewed and extended (other than continuation filings or similar filings
to maintain the effectiveness of any such Lien), unless such renewal and
extension is with respect to Refinancing Indebtedness permitted by
Section 7.1(j) above;

 

(b)                                 Liens against the Collateral in favor of the
Agent as security for the Obligations;

 

(c)                                  Liens incurred and pledges and deposits
made in the ordinary course of business in connection with workers’
compensation, unemployment insurance, old-age pensions

 

101

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

 

and other social security benefits (not including any lien described in
Section 430(k) of the Code);

 

(d)                                 Liens imposed by law, such as carriers’,
warehousemen’s, mechanics’, materialmen’s, processors’ and vendors’ liens and
other similar liens, incurred in good faith in the ordinary course of business
and securing obligations which are incurred in the ordinary course of business
and are not overdue for a period of more than thirty (30) days or which are
being contested in good faith by appropriate, diligently pursued proceedings as
to which the Credit Parties or any of their Subsidiaries, as the case may be,
shall, to the extent required by GAAP, consistently applied, have set aside on
its books adequate reserves;

 

(e)                                  Liens securing the payment of taxes,
assessments and governmental charges or levies, that are not delinquent, are
permitted by Section 6.2 hereof, or are being diligently contested in good faith
by appropriate proceedings and as to which adequate reserves have been
established in accordance with GAAP; provided, however, that a Reserve against
Availability will be established in an amount equal to the aggregate amount of
any and all such federal, state, provincial or local taxes which are being
diligently contested;

 

(f)                                   Zoning restrictions, easements, licenses,
reservations, provisions, covenants, conditions, waivers, restrictions on the
use of property or minor irregularities of title (and with respect to leasehold
interests, mortgages, obligations, liens and other encumbrances incurred,
created, assumed or permitted to exist and arising by, through or under a
landlord or owner of the leased property, with or without consent of the lessee)
which do not in the aggregate materially detract from the value of its property
or assets or materially impair the use thereof in the operation of its business;

 

(g)                                  Liens securing the performance of bids,
tenders, leases, contracts (other than for the repayment of borrowed money),
statutory obligations, surety, customs and appeal bonds and other obligations of
like nature, incurred as an incident to and in the ordinary course of business,
including without limitation security given in the ordinary course of business
to a public utility, a municipality, or a governmental or other public authority
where required by such utility, municipality or governmental or public authority
in connection with the operations of any Credit Party, in each case in an amount
not to exceed $5,000,000 and not secured by Inventory or Receivables;

 

(h)                                 Purchase money Liens securing the
Indebtedness permitted by Section 7.1(c) above, provided, as a result of the
creation of any such Lien, (i) no Default or Event of Default shall have
occurred, (ii) the principal amount of such Lien does not exceed 100% of the
purchase price of the asset acquired with such permitted Indebtedness plus
accrued interest on such Indebtedness plus protective advances made by the
holder of such permitted Indebtedness, and (iii) such Lien shall not apply to
any other Property other than the asset acquired with such purchase money
Indebtedness;

 

(i)                                     Liens in favor of any Credit Party
securing any Indebtedness permitted pursuant to Section 7.1(f) hereof;

 

102

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

 

(j)                                    Liens arising from judgments, orders, or
other awards not constituting an Event of Default;

 

(k)                                 Liens upon Property (i) acquired by the
Credit Parties after the Closing Date, (ii) purchased in whole or in substantial
part (in no event less than 75% of the aggregate purchase price) with proceeds
of Indebtedness permitted pursuant to Section 7.1(k) hereof, which Liens secure
only such Indebtedness, and (iii) which Property, in the reasonable discretion
of the Agent, can be readily removed from the facility on which it is located at
a commercially reasonable cost and without any damage (other than de minimus
damage) or impairment (other than de minimus impairment) of the use,
functionality or value of such facility;

 

(l)                                     all rights reserved to or vested in any
Governmental Authority by the terms of any lease, franchise, grant or permit
held by any Credit Party or by any statutory provision to terminate any such
lease, license, franchise, grant or permit or to require annual or periodic
payments as a condition of the continuation thereof, or to distrain against or
to obtain a Lien on any Property of any Credit Party in the event of failure to
make such annual or other periodic payments;

 

(m)                             Liens upon cash or Permitted Investment
Securities in an amount not to exceed $5,000,000 at any time to secure Hedging
Obligations;

 

(n)                                 rights of tenants, subtenants, licensees or
other parties in possession, if any, but only (i) as tenants or licensees or
otherwise to the extent of their possessory rights or interests and (ii) so long
as such rights do not, in the aggregate, materially detract from the value of
the Properties of the Credit Parties or materially impair the use thereof in the
operation of the business of the Credit Parties;

 

(o)                                 with respect to any lease of any Leasehold
Property entered into in accordance with the terms hereof, the rights of the
landlord to such leased property and the terms and conditions contained in the
corresponding lease, but only so long as such Credit Party is current with
respect to payment of all rent and other amounts due to such landlord under such
lease;

 

(p)                                 any encumbrance for which adequate title
insurance is provided against losses that may be suffered by the Agent and the
Lenders, which insurance is reasonably acceptable to the Agent; and

 

(q)                                 other Liens securing the payment of
obligations, other than Indebtedness or Hedging Obligations, in an amount not to
exceed $5,000,000 at any time outstanding; provided, that such Liens are not
upon Inventory, Receivables, Eligible Equipment, Eligible Real Estate, or
Deposit Accounts;

 

provided, however, notwithstanding anything contained above in this Section 7.2
to the contrary, (i) if any of the permitted Liens are of the type that are
being contested in good faith by appropriate proceedings as to the Credit
Parties, the Indebtedness giving rise to such contested Lien(s) must be
immediately paid upon commencement of any foreclosure process or proceeding with
respect to such Lien(s) unless the same shall be effectively stayed or a surety
bond or title insurance with respect thereto (which is reasonably satisfactory
in all respects to the Agent), is

 

103

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

 

posted; and (ii) in no event will the Credit Parties create or suffer to exist
any Lien upon any Stock of their existing or future Subsidiaries or upon any
Stock of NP International HoldCo, NP International, or FinCo (other than Liens
in favor of the Agent as security for the Obligations).

 

7.3                               Contingent Liabilities.  Create, incur, suffer
or permit to exist, directly or indirectly, any Contingent Obligations, other
than:

 

(a)                                 The Obligations of each Guarantor to the
Agent and the Lenders under the terms of any Guaranty;

 

(b)                                 Any Contingent Obligations of the Credit
Parties under any Hedging Obligations permitted by Section 7.1(i) above;

 

(c)                                  The guarantees by the Credit Parties of any
obligations of any other Credit Party that are not prohibited by this Agreement
or of any Indebtedness of any other Credit Party if such Indebtedness so
guaranteed is permitted under the terms of Section 7.1 above;

 

(d)                                 The guarantees by any Credit Party of
Indebtedness created, incurred or existing pursuant to the terms of Section 7.20
hereof, provided, that, at all times any such guaranty is in effect the maximum
amount of such guaranteed Indebtedness shall be deemed to be an Investment in an
Offshore Entity on the date such guaranty is entered into, and any such
Investment must be permitted under Section 7.7 hereof (whether through one or a
combination of the clauses thereof so long as such amounts aggregate to such
maximum amount); and

 

(e)                                  Any guarantee by the Parent of NP
International’s obligations under the NP International Lease, if such guarantee
is required by the landlord under the NP International Lease.

 

7.4                               Mergers, Consolidations and Dispositions and
Acquisitions of Assets.  In any single transaction or series of related
transactions, directly or indirectly:

 

(a)                                 Wind up its affairs, liquidate or dissolve;

 

(b)                                 Be a party to any merger or consolidation;

 

(c)                                  (i) Sell, convey, lease, transfer or
otherwise dispose of all or any portion of the Property (except for the sale of
Inventory in the ordinary course of business) of any Credit Party, or agree to
take any such action, or (ii) permit any Offshore Entity to sell, convey, lease,
transfer or otherwise dispose of all or any substantial portion of the Property
(except for the sale of Inventory in the ordinary course of business) of such
Offshore Entity, or permit any Offshore Entity to agree to take any such action;

 

(d)                                 Sell, assign, pledge, transfer or otherwise
dispose of, or in any way part with control of, any Stock of any of its
Subsidiaries or of any Offshore Entity or any Indebtedness or obligations of any
character of any of its Subsidiaries or of any Offshore Entity, or permit any
such Subsidiary or Offshore Entity to do so with respect to any Stock of any
other subsidiary or any Indebtedness or obligations of any character of any
Credit Party, any of their Subsidiaries or any Offshore Entity, or permit any of
their Subsidiaries or any of the Offshore

 

104

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

 

Entities to dissolve or liquidate, or to issue any additional Stock other than
to the Credit Parties or, solely with respect to Neenah Germany’s subsidiaries,
to Neenah Germany or one of its directly or indirectly wholly owned
subsidiaries;

 

(e)                                  Take any board of director or shareholder
action with a view toward dissolution, liquidation or termination; or

 

(f)                                   Purchase or otherwise acquire, directly or
indirectly, in a single transaction or a series of related transactions, all or
a substantial portion of the assets of any Person or any shares of Stock of, or
similar interest in, any Person;

 

provided, however that notwithstanding the foregoing, any of the following
described actions may be undertaken, so long as no Default or Event of Default
then exists or would exist immediately after giving effect to the applicable
event:

 

(1)                                 any Subsidiary of any Credit Party may merge
or consolidate with any Credit Party or any other Subsidiary of any Credit
Party, provided, that if (i) one or more of the entities so merging or
consolidating was a Borrower, and if the surviving entity is not yet a Borrower,
such surviving entity must be a wholly-owned Domestic Subsidiary and such
surviving entity shall simultaneously with such merger, execute and deliver to
the Agent a Joinder Agreement with respect to this Agreement, together with all
requested Security Documents, as required at such time by the Agent,
appropriately completed in Proper Form, and (ii) one or more of the entities so
merging or consolidating was a Guarantor (and so long as none of the entities
was a Borrower, in which event clause (i) shall apply), and if the surviving
entity is not yet a Guarantor, such surviving entity must be a wholly-owned
Canadian Subsidiary and such surviving entity shall simultaneously with such
merger, execute and deliver to the Agent a Guaranty or a Joinder Agreement,
together with all requested Security Documents, as required at such time by the
Agent, appropriately completed in Proper Form;

 

(2)                                 any of the Credit Parties’ Subsidiaries may
sell, lease, transfer or otherwise dispose of any of its assets to a Credit
Party or any other wholly-owned Subsidiary of the Borrower, provided, that if
(i) the entity selling, leasing, transferring or otherwise disposing of its
assets is a Borrower, and if the entity to whom the sale, lease, transfer or
other disposition was made is not a Borrower, such entity must be a wholly-owned
Domestic Subsidiary and such entity shall simultaneously with such lease,
transfer or disposition, execute and deliver to the Agent a Joinder Agreement,
together with all requested Security Documents, as required at such time by the
Agent, appropriately completed in Proper Form, and (ii) the entity selling,
leasing, transferring or otherwise disposing of its assets is a Guarantor, and
if the entity to whom the sale, lease, transfer or other disposition was made is
not a Borrower or a Guarantor, such entity must be a wholly-owned Canadian
Subsidiary and

 

105

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

 

such entity shall simultaneously with such lease, transfer or disposition,
execute and deliver to the Agent a Guaranty or a Joinder Agreement, together
with all requested Security Documents, as required at such time by the Agent,
appropriately completed in Proper Form;

 

(3)                                 any Subsidiary may be dissolved or
liquidated, so long as such dissolution or liquidation results in all assets of
such Subsidiary being owned by a Credit Party or a wholly-owned Subsidiary;
provided, that if (i) the entity dissolving or liquidating is a Borrower, and if
the entity to whom all assets of such dissolving or liquidating entity are
transferred is not yet a Borrower, such entity must be a wholly-owned Domestic
Subsidiary and such entity shall simultaneously with such transfer execute and
deliver to the Agent a Joinder Agreement, together with all requested Security
Documents, as required at such time by the Agent, appropriately completed in
Proper Form, and (ii) the entity dissolving or liquidating is a Guarantor, and
if the entity to whom all assets of such dissolving or liquidating entity are
transferred is not yet a Borrower or a Guarantor, such entity must be a
wholly-owned Canadian Subsidiary and such entity shall simultaneously with such
transfer execute and deliver to the Agent a Guaranty or a Joinder Agreement,
together with all requested Security Documents, as required at such time by the
Agent, appropriately completed in Proper Form;

 

(4)                                 (A) any of the Credit Parties may (i) sell
Inventory in the ordinary course of business, (ii) sell, exchange or otherwise
dispose of Permitted Investment Securities in the ordinary course of business;
(iii) terminate, surrender or sublease a lease of real Property in the ordinary
course of business; (iv) sell or otherwise dispose of equipment and fixtures
that are obsolete, worn out or no longer needed in the business of the Credit
Parties; (v) sell, exchange, lease, transfer or otherwise dispose of (in each
case for reasonably equivalent value) real Property having a fair market value
not to exceed the sum of (1) $2,000,000 for all such transactions in the
aggregate in any calendar year; plus (2) the excess (if any) of $2,000,000 over
the amount of dispositions pursuant to this clause (A) (v) consummated in the
immediately preceding calendar year; and (vi) sell or otherwise dispose of, for
fair and adequate consideration any other equipment and fixtures having a fair
market value not to exceed $1,000,000 in the aggregate during the period from
the Closing Date through the Termination Date; provided that, upon the
occurrence and during the continuation of a Dominion Event, all net proceeds of
any and all of the foregoing shall be paid to the Agent for application in
accordance with Section 2.7; (B) any of the Offshore Entities may (i) sell,
exchange or otherwise dispose of marketable investments in which their cash is
invested in the ordinary course of business; (ii) terminate, surrender or
sublease a lease of real Property in the ordinary course of business; (iii) sell
or otherwise dispose of equipment and fixtures that are obsolete, worn out or no
longer needed in the business of the Offshore

 

106

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

 

Entities; (iv) in the case of Neenah Germany and its subsidiaries, assign their
accounts receivable, or any portion thereof, to secure a line of credit in the
maximum principal amount of €15,000,000; (v) sell or otherwise dispose of, for
fair and adequate consideration, any other equipment and fixtures having a fair
market value not to exceed €5,000,000 in the aggregate during the period from
the Closing Date through the Termination Date; (vi) sell, contribute or
otherwise transfer Property to any other Offshore Entity, or to a Person that,
contemporaneously with such sale, contribution or transfer will become an
Offshore Entity; (vii) transfer and issue Stock to other Offshore Entities as
necessary to implement the corporate restructuring of the Credit Parties’
foreign operations, subject to changes to such restructuring from time to time
as may be approved by the Agent in writing prior to the implementation of such
restructuring; and (C) any Offshore Entity created or acquired after March 31,
2011 that is not directly or indirectly wholly owned by the Parent may issue
Stock from time to time to holders of minority interests in its Stock, provided
that after giving effect to such issuance, the Offshore Entity will remain
majority owned directly or indirectly by the Parent.

 

(5)                                 (i) to the extent any Collateral is sold or
otherwise permanently disposed of as permitted by this Section 7.4, such
Collateral shall be sold or otherwise disposed of free and clear of the Liens of
the Security Documents and the Agent shall take such actions, including
executing and filing appropriate releases, as are appropriate in connection
therewith, and no approval of any of Lenders shall be required therefor, and
(ii) to the extent any Collateral is leased as permitted by this Section 7.4,
the Parent or the applicable Credit Party may request that the Agent enter into
a subordination, non-disturbance and attornment agreement in form and substance
acceptable to the related lessee and to the Agent, as applicable (and no
approval of any of the Lenders shall be required therefor) and the Agent may
require the delivery of Security Documents, including without limitation, a
collateral assignment of lease, in form and substance reasonably acceptable to
it; and

 

(6) (A) the Credit Parties may purchase or otherwise acquire all or a
substantial portion of the assets of one or more Persons, or any shares of Stock
of, or similar interest in, any Person; provided, that, (i) such transaction or
series of transactions is not otherwise prohibited hereunder, (ii) the Credit
Parties comply with the requirements of this Agreement, including without
limitation Section 6.10 and Section 6.19, in connection with such transaction or
series of transactions, (iii) the aggregate purchase price (including merger
consideration, if applicable) paid by the Credit Parties in any transaction or
series of transactions under this Section 7.4(6)(A) and by the Offshore Entities
in any transaction or series of transactions under Section 7.4(6)(B) does not
exceed $100,000,000 in any twelve month period or $200,000,000 in the aggregate
for all transactions under this Section 7.4(6) consummated after

 

107

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

 

the Closing Date, (iv) the Availability immediately after giving effect to the
completion of any transaction or series of transactions under this
Section 7.4(6) shall not be less than $25,000,000 on a pro forma basis (and the
Borrowers shall provide the Agent with a pro forma calculation in form and
substance reasonably satisfactory to the Agent) including all consideration
given in connection with such transaction or series of transactions as having
been paid in cash at the time of the initial completion of any such transaction
or series of transactions, and (v) the Fixed Charge Coverage Ratio for the
Borrowers and their Subsidiaries (after giving effect to such transaction or
series of transactions, including, to the extent applicable, the retirement of
any Indebtedness occurring, or irrevocable notice of the redemption, prepayment
or purchase of which Indebtedness is given, substantially contemporaneously with
the consummation of such transaction or transactions) shall be greater than 1.15
to 1.00 for the most recently completed four quarter period assuming that for
purposes of calculating the Fixed Charge Coverage Ratio for such period
(calculated on a pro forma basis in a manner acceptable to the Agent) such
transaction or series of transactions occurred on the first day of such
applicable period; and (B) any of the Offshore Entities may purchase or
otherwise acquire all or a substantial portion of the assets of one or more
Persons, or any shares of Stock of, or similar interest in, any Person;
provided, that, (i) such transaction or series of transactions is not otherwise
prohibited hereunder, (ii) the Credit Parties and the Offshore Entities comply
with the requirements of this Agreement in connection with such transaction or
series of transactions, (iii) the aggregate purchase price (including merger
consideration, if applicable) paid by the Credit Parties in any transaction or
series of transactions under Section 7.4(6)(A) and by the Offshore Entities in
any transaction or series of transactions under this Section 7.4(6)(B) does not
exceed $100,000,000 in any twelve month period or $200,000,000 in the aggregate
for all transactions under this Section 7.4(6) consummated after the Closing
Date, (iv) the Availability immediately after giving effect to the completion of
any transaction or series of transactions under this Section 7.4(6) shall not be
less than $25,000,000 on a pro forma basis (and the Borrowers shall provide the
Agent with a pro forma calculation in form and substance reasonably satisfactory
to the Agent) including all consideration given in connection with such
transaction or series of transactions as having been paid in cash at the time of
the initial completion of any such transaction or series of transactions, and
(v) the Fixed Charge Coverage Ratio for the Borrowers and their Subsidiaries
(after giving effect to such transaction or series of transactions, including,
to the extent applicable, the retirement of any Indebtedness occurring, or
irrevocable notice of the redemption, prepayment or purchase of which
Indebtedness is given, substantially contemporaneously with the consummation of
such transaction or transactions) shall be greater than 1.15 to 1.00 for the
most recently completed four quarter period assuming that for purposes of
calculating

 

108

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

 

the Fixed Charge Coverage Ratio for such period (calculated on a pro forma basis
in a manner acceptable to the Agent) such transaction or series of transactions
occurred on the first day of such applicable period.

 

7.5                               Nature of Business.  Materially change the
nature of its business or enter into any business which is substantially
different from the business in which it is engaged as of the Closing Date,
except for entry into related businesses that do not in the aggregate
substantially change the overall composition of the Credit Parties’ or the
Offshore Entities respective businesses; provided that the Credit Parties shall
not be required to remain in the timber or pulp business.

 

7.6                               Transactions with Related Parties.  Except for
any Permitted Affiliate Transactions and other transactions specifically
permitted by Section 7.4 or 7.7, enter into any other transaction, contract,
license or agreement of any kind with any Affiliate, officer or director of any
Credit Party or any of their Subsidiaries, unless such transaction, contract or
agreement is made upon terms and conditions not less favorable to such Person
than those which could have been obtained from wholly independent and unrelated
third parties.

 

7.7                               Investments, Loans.  Make, directly or
indirectly, any Investment in or loan or advance to any Person, or make any
commitment to make such loan, advance or Investment, except:

 

(a)                                 Stock of any Domestic Subsidiary or any
Guarantor acquired or issued in accordance with the other provisions of this
Agreement, including without limitation, the provisions of Section 6.10 above,
or Stock of any other Subsidiary or Offshore Entity with the prior written
consent of the Agent;

 

(b)                                 Permitted Investment Securities;

 

(c)                                  loans otherwise permitted by the provisions
of Section 7.1(f) above;

 

(d)                                 loans to employees of any Credit Party made
in the ordinary course of business, so long as the aggregate amount of all such
loans outstanding at any time does not exceed $500,000;

 

(e)                                  loans or advances to, or Investments in,
any Credit Party;

 

(f)                                   loans or capital contributions to
(i) Neenah Menasha Water and Power Company in an aggregate amount not to exceed
$500,000 in any twelve (12)- month period, and (ii) Neenah Canada in an
aggregate amount not to exceed $2,500,000 in any twelve (12)-month period;

 

(g)                                  Inter-Company Loans;

 

(h)                                 Investments in NP International HoldCo made
prior to December 31, 2006 in order to finance the 2006 acquisition of Neenah
Germany;

 

109

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

 

(i)                                     other loans, advances or Investments in
FinCo, NP International and NP International HoldCo in an aggregate amount not
to exceed €250,000 at any time outstanding;

 

(j)                                    any expenses, including, without
limitation, insurance and workers compensation expenses, reasonably incurred by
the Parent in the ordinary course of business on a “blanket” or “umbrella” basis
for benefit of the Credit Parties, NP International HoldCo and NP International;

 

(k)                                 any Letter of Credit issued pursuant to
Section 2.10 of this Agreement, to the extent it may directly or indirectly
benefit NP International HoldCo and NP International, or either of them;

 

(l)                                     any guarantee by the Parent of NP
International’s obligations under the NP International Lease, if such guarantee
is required by the landlord under the NP International Lease;

 

(m)                             guarantees by one or more Credit Parties of
Indebtedness of an Offshore Entity that is permitted under Section 7.20 and for
which Reserves equal to the amount of such guaranteed Indebtedness have been
established and are being maintained with respect to Availability; and

 

(n)                                 Other loans, advances or Investments not
covered by clauses (a) through (i) above, in any aggregate amount not to exceed
$15,000,000 at any time outstanding.

 

7.8                               ERISA Compliance.

 

(a)                                 At any time engage in any Prohibited
Transaction with respect to a Plan which could reasonably be expected to result
in a material liability; or permit any Plan to be terminated in a manner which
could result in the imposition of a Lien on any Property of any Credit Party or
any of their Subsidiaries pursuant to ERISA.

 

(b)                                 Engage in any transaction in connection with
which any Credit Party or any Subsidiary thereof would or could reasonably be
expected to be subject to either a material civil penalty assessed pursuant to
the provisions of Section 502 of ERISA or a material tax imposed under the
provisions of Section 4975 of the Code.

 

(c)                                  Terminate any Plan in a “distress
termination” under Section 4041 of ERISA, or take any other action which could
reasonably be expected to result in a material liability of any Credit Party or
any Subsidiary thereof to the PBGC.

 

(d)                                 Fail to make payment when due of all amounts
which, under the provisions of any Plan, any Credit Party or any Subsidiary
thereof is required to pay as contributions thereto, or, with respect to any
Plan, fail to satisfy the minimum funding standard (as described in Section 302
of ERISA and Section 412 of the Code), whether or not waived, with respect
thereto.

 

(e)                                  Adopt an amendment to any Plan restricted
by Section 436 of the Code.

 

110

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

 

7.9                               Trade Credit Extensions.  Extend credit to
customers other than normal and prudent extensions of trade credit for goods and
services in the ordinary course of business.

 

7.10                        Change in Accounting Method.  Make or permit any
change in accounting method or financial reporting practices except as may be
required by GAAP, as in effect from time to time.

 

7.11                        Redemption, Dividends, Stock Issuance, Distributions
and Payments.  At any time:

 

(a)                                 Redeem (whether as a result of mandatory or
optional redemption obligations or rights), purchase, retire or otherwise
acquire, directly or indirectly, any shares of its Stock or any warrants or
other similar instruments issued by any Credit Party or any Subsidiary thereof,
except Stock Repurchases, so long as (A) no Default or Event of Default exists
on the trade date for the applicable Stock Repurchase, or would result from such
purchase, (B) the aggregate amount of such Stock Repurchases does not exceed
(i) $15,000,000 in the aggregate for the period commencing on November 16, 2011
and ending on December 31, 2012, and (ii) $10,000,000 in the aggregate for any
fiscal year of Parent commencing on or after January 1, 2013 (exclusive of
amounts paid prior to January 1, 2013), (C) such Stock Repurchase has been duly
authorized by Parent’s board of directors, and (D) the Borrowers shall have pro
forma Availability of at least $25,000,000 on the trade date of such Stock
Repurchase and, on an average basis, for the sixty (60)-day period before such
trade date, in each case after giving effect to such Stock Repurchase;

 

(b)                                 Declare or pay, directly or indirectly,  any
dividend, except (i) dividends paid to a Credit Party which is a direct parent
of the Credit Party paying a dividend, (ii) non-cash dividends paid to the
holders of any Stock of the Parent in the form of additional Stock of the
Parent, and (iii) Cash Dividends to the holders of any Stock of the Parent, so
long as (A) no Default or Event of Default exists on the date that the
applicable Cash Dividend is declared or paid, or would result from the payment
thereof, (B) the aggregate amount of such Cash Dividends paid during any twelve
(12)-month period does not exceed $12,000,000 in the aggregate, (C) such Cash
Dividend is legally declared and payable, (D) the Borrowers shall have pro forma
Availability of at least $25,000,000 on the date of such payment and, on an
average basis, for the sixty (60)-day period before the payment of such
dividends, in each case after giving effect to such payment, and (E) Borrower’s
Agent shall have (x) given the Agent at least five (5) Business Days prior
written notice specifying the amount and date of such proposed Cash Dividend
and, (y) if required by the Agent, submitted a certificate of a Responsible
Officer setting forth reasonably detailed calculations demonstrating compliance
with the required Availability test described above and certifying that the
other conditions set forth in this clause (b) have been satisfied;

 

(c)                                  Make any other distribution of any
Property, cash, securities or a combination thereof, with respect to (whether by
reduction of capital or otherwise) any shares of its Stock except as permitted
in Section 7.11(b) above;

 

111

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

 

(d)                                 Set apart any money for a sinking fund or
other analogous fund for any dividend or other distribution on its Stock or for
any redemption, purchase, retirement, or other acquisition of any of its Stock;
or

 

(e)                                  Redeem (whether as a result of mandatory or
optional redemption obligations or rights), purchase, defease or retire for
value, or make any principal payment on, any Subordinated Indebtedness, prior to
the Termination Date (other than any non-cash conversion to equity and any
principal payments on Indebtedness permitted under Section 7.1(f)).

 

7.12                        Fixed Charge Coverage Ratio.

 

Permit the Fixed Charge Coverage Ratio of the Borrowers and their Subsidiaries
to be less than 1.1 to 1.0 as of the last day of any fiscal quarter for the four
quarter period ending on such day, such ratio to be tested with respect to the
most recently ended fiscal quarter (a) so long as the Term Loan Commitment or
the Term Loans are outstanding; and (b) after the Term Loans shall have been
repaid or prepaid in full, on any date from time to time on which Availability
falls below $20,000,000, and on the last day of each fiscal quarter ending
thereafter, in each case until such time when Availability has exceeded
$35,000,000 for sixty (60) consecutive days and no Default or Event of Default
is continuing.

 

7.13                        Sale of  Receivables.  Sell, assign, discount,
transfer or otherwise dispose of any Receivables, promissory notes, drafts or
trade acceptances or other rights to receive payment held by it, with or without
recourse.

 

7.14                        Sale and Lease-Back Transactions.  (a) Enter into
any arrangement, directly or indirectly, with any Person whereby any Credit
Party shall sell or transfer any Property, real or personal, which is used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such Property or other Property which such Credit Party intends to
use for substantially the same purpose or purposes as the Property being sold or
transferred, except for the sale of Property, the aggregate value of which does
not exceed $5,000,000 during the term of this Agreement, so long as (i) no
Default or Event of Default then exists or would exist immediately after giving
effect to such sale, and (ii) upon the occurrence and during the continuation of
a Dominion Event, the net proceeds of such sale are used to prepay Revolving
Loans pursuant to Section 2.5, or (b) cause any Offshore Entity to enter into
any arrangement, directly or indirectly, with any Person whereby any Offshore
Entity shall sell or transfer any Property, real or personal, which is used or
useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such Property or other Property which such Offshore Entity intends
to use for substantially the same purpose or purposes as the Property being sold
or transferred, except for the sale of Property, the aggregate value of which
does not, during the term of this Agreement, when added to the aggregate amount
of all Indebtedness of the Offshore Entities (other than FinCo, NP International
and NP International HoldCo) at any time outstanding, exceed €50,000,000.

 

7.15                        Change of Name or Place of Business.  Permit any
Credit Party to change its address, name, identity, type of organization,
corporate structure (e.g. by merger, consolidation, change in corporate form or
otherwise), jurisdiction of organization, location of its chief

 

112

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

 

executive office or principal place of business or the place it keeps its
material books and records, unless the Borrowers’ Agent has (a) notified the
Agent of such change in writing at least ten (10) Business Days before the
effective date of such change, (b) taken such action, reasonably satisfactory to
the Agent, to have caused the Liens against all Collateral in favor of the Agent
for the ratable benefit of the Lender Parties to be at all times fully perfected
and in full force and effect and (c) delivered such certificates of Governmental
Authorities as the Agent may require substantiating such change.

 

7.16                        Restrictive Agreements.  Other than as provided in
this Agreement, the Senior Note Documents and the Additional Senior Note
Documents (but only to the extent the conditions and restrictions in the
Additional Senior Note Documents are no more restrictive than those restrictions
and conditions in the Senior Note Documents), directly or indirectly (a) agree
to restrict or condition (i) the payment of any dividends or other distributions
to any Credit Party; (ii) the payment of any Indebtedness owed to any Credit
Party; (iii) the making of any loans or advances to any Credit Party; or
(iv) the transfer of any of its properties or assets to any Credit Party, or
(b) cause any Offshore Entity to agree to restrict or condition the payment of
any dividends or other distributions to any Offshore Entity or to any Credit
Party to the extent such condition or restrictions would prohibit the
distribution of amounts necessary to pay the interest accruing on the
Inter-Company Loans.

 

7.17                        Tax Classification.  Elect, without the prior
consent of the Agent, a different classification for United States federal tax
purposes than the classification that such Credit Party, or such Subsidiary, as
the case may be, had when such Person became a party to this Agreement or any
other Loan Document.

 

7.18                        Deposit Accounts.  (a) Establish any additional
deposit accounts for any purpose (i) which are not listed in Section II of the
Perfection Certificate (as updated from time to time pursuant to the terms
hereof) and (ii) unless such additional deposit accounts are Controlled
Accounts; (b) allow any of Parent’s foreign exchange accounts identified in
Section II of the Perfection Certificate, each with Bank of America, N.A., to
remain open or to be reopened, or to hold any funds of any Credit Party, unless
such foreign exchange accounts are covered by a Tri-Party Agreement containing
arrangements satisfactory to the Agent with respect to such accounts, or
(c) allow the aggregate balance of one or more deposit accounts heretofore or
hereafter established in the ordinary course of business as part of the
administration of employee benefits or other corporate-related matters and not
subject to a Tri-Party Agreement to exceed $200,000 (other than deposit accounts
of any Credit Party held with a Lender which deposit accounts solely receive
funds from deposit accounts that are subject to Tri-Party Agreements).

 

7.19                        Organizational Documents; Tax Sharing Agreements. 
Modify any of their Organizational Documents in a manner that is adverse to the
Lenders; or enter into any tax sharing agreement that is, or modify any tax
sharing agreement in a manner that is, adverse to the Lenders.

 

7.20                        Limitation on Indebtedness of Offshore Entities.

 

(a)                                 Limitations on Indebtedness.  Permit
(i) FinCo, NP International and NP International HoldCo to create, incur, assume
or suffer to exist Indebtedness other than (A)

 

113

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

 

Indebtedness owing to the Parent or to a Person for whom the beneficial
ownership of 100% of the Stock in such Person is owned, directly or indirectly,
by the Parent free and clear of all Liens, and (B) any Indebtedness of NP
International owing in respect of operating leases entered into in the ordinary
course of business that prior to March 31, 2011 were not required to be treated
as Capital Lease Obligations under GAAP, but as a result of any changes in GAAP
mandated by the Financial Accounting Standards Board or successor organization
and implemented after  March 31, 2011, are required to be treated as Capital
Lease Obligations under GAAP, and (ii) the Offshore Entities (other than FinCo,
NP International and NP International HoldCo) to create, incur, assume or suffer
to exist Indebtedness in excess of €50,000,000 at any time outstanding.

 

(b)                                 Limitations on Assets. Permit FinCo, NP
International and NP International HoldCo to hold Property other than (i) Stock
in Persons for whom the beneficial ownership, directly or indirectly, of more
than fifty percent (50%) of the Stock of such Persons is owned by the Parent,
free and clear of all Liens, (ii) Inter-Company Loans for which such party is
the lender thereunder, (iii) cash received in the form of loan proceeds from an
Inter-Company Loan, provided that such cash is loaned, advanced or otherwise
invested in Permitted Offshore Acquisitions or the activities of NP
International and any Offshore Entity subsidiaries of NP International from time
to time substantially contemporaneously after receipt, (iv) cash received in the
form of dividends or repayment of Inter-Company Loans, provided that such cash
is either (A) applied to accrued and unpaid interest on such Inter-Company Loans
or (B) is distributed substantially contemporaneously after receipt in the form
of distributions to the holder(s) of such Person’s Stock or a repayment of
principal then outstanding under an Inter-Company Loan owing by such Person,
(v) in the case of NP International, payments received for services performed
under the NP International Services Agreement, (vi) in the case of NP
International HoldCo and NP International, cash received directly or indirectly
from the Parent that is used  to pay the wages, salaries and benefits of
employees of NP International in the ordinary course of business, (vii) cash
representing (A) profits earned by NP International for services performed under
the NP International Services Agreement prior to March 31, 2011 and (B) amounts
retained in the reasonable business judgment of the Parent to provide for the
payment of bonuses to employees of NP International in the ordinary course of
business, (viii) Investments by NP International HoldCo and NP International, or
either of them, that would qualify as Permitted Investment Securities, but for
the fact that they are not pledged to the Agent and the Lenders as Collateral,
and (ix) the property occupied by NP International under the NP International
Lease, if and to the extent that prior to March 31, 2011 the NP International
Lease was not required to be treated as a Capital Lease Obligation under GAAP,
but as a result of any changes in GAAP mandated by the Financial Accounting
Standards Board or successor organization and implemented after March 31, 2011
the NP International Lease is required to be treated as a Capital Lease
Obligation under GAAP.

 

8.                                      Events of Default and Remedies.

 

8.1                               Events of Default.  If any of the following
events shall occur and be continuing, then the Agent may (and, if directed by
the Required Lenders, shall), by written notice (or facsimile notice) to the
Borrowers’ Agent, take any or all of the following actions at the same or
different times:  (i) accelerate the Termination Date and declare the Loans, all
Letter of Credit Advances, the Commitment Fees and all other Obligations then
outstanding to be, and thereupon the Loans, said Letter of Credit Advances, the
Commitment Fees and all other Obligations shall

 

114

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

 

forthwith become, immediately due and payable, without further notice of any
kind, notice of intention to accelerate, presentment and demand or protest, or
other notice of any kind all of which are hereby expressly waived by each Credit
Party; (ii) terminate all or any portion of the Commitments and any obligation
to issue any additional Letters of Credit; (iii) demand that the Credit Parties
provide the Agent, for the ratable benefit of the Lender Parties, and the Credit
Parties jointly and severally agree upon such demand to, provide cash collateral
in an amount equal to 110% of the aggregate Letter of Credit Exposure Amount
then outstanding, pursuant to Section 2.10(k); and (iv) exercise any and all
other rights pursuant to the Loan Documents or available under applicable law:

 

(a)                                 The Credit Parties or any of their
Subsidiaries shall fail to pay or prepay (i) any Obligation (other than Related
Obligations) constituting principal, as and when due and payable, whether at the
due date thereof (by acceleration, lapse of time or otherwise) or at any date
fixed for prepayment thereof in accordance with the other provisions of the Loan
Documents, (ii) any Obligation (other than Related Obligations) constituting
interest or fees within two Business Days of the time such amount is due as and
when due and payable, or (iii) any other Obligations (other than Related
Obligations) within five (5) Business Days of the time such amount is due and
payable; or

 

(b)                                 (i) Any Credit Party (A) shall fail to pay
when due, or within any applicable period of grace, any other Indebtedness
(excluding Indebtedness outstanding hereunder) in excess of $5,000,000 in
principal amount unless such payment is being contested in good faith (by
appropriate proceedings) and adequate reserves have been provided therefor, or
(B) shall default (beyond any applicable grace and curative periods) in any
other manner with respect to any other Indebtedness (excluding Indebtedness
outstanding hereunder) in excess of $5,000,000 in principal amount if the effect
of any such default or event of default shall be to accelerate or to permit the
holder of any such other Indebtedness, at its option, to accelerate the maturity
of such Indebtedness prior to the stated maturity thereof; or (ii) any Offshore
Entity shall default (beyond any applicable grace and curative periods) in any
manner with respect to any Indebtedness under any working capital line of credit
in excess of €5,000,000 in principal amount, or any other Indebtedness in excess
of €15,000,000 in principal amount.

 

(c)                                  Any representation or warranty made or
deemed made by any Credit Party in connection with any Loan Document or in any
certificate, report, notice or financial statement furnished at any time in
connection with this Agreement shall prove to have been incorrect, false or
misleading in any material respect when made or deemed to have been made; or

 

(d)                                 Except as provided in Section 8.1(e) or
8.1(f) below, Default shall occur in the punctual and complete performance or
observance of any covenant, condition or agreement to be observed or performed
on the part of any Credit Party or any of their Subsidiaries pursuant to the
terms of any provision of this Agreement or any other Loan Document, and such
Default remains uncured fifteen (15) Business Days after the earlier to occur of
(i) the Agent giving written notice of such Default to the Borrowers’ Agent or
(ii) any Responsible Officer of any Credit Party or any of their Subsidiaries
acquired actual knowledge of the existence of such Default; or

 

115

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

 

(e)                                  Default shall occur in the punctual and
complete performance or observance of any covenant, condition or agreement to be
observed or performed on the part of any Credit Party or any of their
Subsidiaries pursuant to the terms of Section 6.3 or 6.11 hereof (other than
Sections 6.3(f) through Section 6.3(i) and such Default remains uncured for two
(2) Business Days; or

 

(f)                                   Default shall occur in the punctual and
complete performance or observance of any covenant, condition or agreement to be
observed or performed on the part of any Credit Party or any of their
Subsidiaries pursuant to the terms of Section 6.2, Sections 6.3(f) through
6.3(i), Section 6.9, Sections 7.1 through Section 7.20 hereof; or

 

(g)                                  Final judgment or judgments (or any decree
or decrees for the payment of any fine or any penalty) for the payment of an
uninsured money award in excess of $2,000,000 in the aggregate shall be rendered
against any Credit Party, or in excess of €5,000,000 against any Offshore
Entity, and in either case the same shall remain undischarged and unpaid for a
period of thirty (30) days during which execution shall not be effectively
stayed or bonded; or

 

(h)                                 Any Credit Party or any of their
Subsidiaries shall have concealed, removed, or permitted to be concealed or
removed, any part of its Property, with intent to hinder, delay or defraud its
creditors or any of them, or made or suffered a transfer of any of its Property
which is or could reasonably be expected to be fraudulent under any bankruptcy,
fraudulent conveyance or similar law; or

 

(i)                                     Any of the following shall occur where
such occurrence could reasonably be expected to result in any material
liability:  (i) a Reportable Event shall have occurred with respect to a Plan;
(ii) the filing by any Credit Party, any ERISA Affiliate, or an administrator of
any Plan of a notice of intent to terminate such Plan under the provisions of
Section 4041 of ERISA; (iii) the receipt of notice by any Credit Party, any
ERISA Affiliate or an administrator of a Plan that the PBGC has instituted
proceedings to terminate (or appoint a trustee to administer) such a Plan;
(iv) any other event or condition exists which might, in the opinion of the
Agent, constitute grounds under the provisions of Section 4042 of ERISA for the
termination of or the appointment of a trustee to administer any Plan by the
PBGC; (v) a Plan shall fail to maintain a minimum funding standard required by
Section 412 of the Code for any plan year or a waiver of standard is sought or
granted under the provisions of Section 412(c) of the Code; (vi) any Credit
Party or any ERISA Affiliate has incurred, or is likely to incur, a liability
under the provisions of Section 4062, 4063, 4064 or 4201 of ERISA; (vii) any
Credit Party or any ERISA Affiliate fails to pay the full amount of an
installment required under Section 430(j) of the Code; or (viii) any Prohibited
Transaction involving any Plan; or

 

(j)                                    This Agreement, any Note, any of the
Security Documents or any other Loan Document, or any material provision
thereof, shall for any reason cease to be, or shall be asserted by any Credit
Party not to be, a legal, valid and binding obligation of any Credit Party,
enforceable in accordance with its terms, or the Lien purported to be created by
any of the Security Documents shall for any reason cease to be, or be asserted
by any Credit Party not to be, a valid, first priority perfected Lien against
any material portion of the Collateral (except to the extent otherwise permitted
under this Agreement or any of the Security Documents); or

 

116

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

 

(k)                                 Any Credit Party or any of its Subsidiaries
which is a party to any Tri-Party Agreement fails to perform and observe, and/or
cause to be performed and observed, all material covenants, provisions and
conditions to be performed, discharged and observed by such Credit Party or
Subsidiary under the terms of any Tri-Party Agreement; or

 

(l)                                     Any financial institution (other than
JPMorgan) which is a party to any Tri-Party Agreement fails to perform and
observe, and/or cause to be performed and observed, all material covenants,
provisions and conditions to be performed, discharged and observed by such
financial institution under the terms of any Tri-Party Agreement and such
failure remains uncured (or such defaulting financial institution and applicable
Tri-Party Agreement is not replaced by the Credit Parties with a substitute
financial institution and replacement Tri-Party Agreement both reasonably
acceptable to the Agent) five (5) Business Days after the Agent gives written
notice of such failure to the Borrowers’ Agent; or

 

(m)                             A Change of Control shall occur.

 

In addition, if any of the following events shall occur, then (i) the Loans, the
Letter of Credit Advances, the Commitment Fees and all other Obligations then
outstanding and payable hereunder shall automatically, without demand,
presentment, protest, notice of intent to accelerate, notice of acceleration or
other notice to any Person of any kind, all of which are hereby expressly waived
by each Credit Party, become immediately due and payable and (ii) all
Commitments and further obligations to issue any additional Letters of Credit
shall be immediately and automatically terminated:

 

(n)                                 Any Credit Party or any of their
Subsidiaries or any Significant Offshore Entity shall commence a voluntary
proceeding seeking liquidation, reorganization, or other relief with respect to
itself or its debts under any bankruptcy, insolvency, or other similar law now
or hereafter in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian, or other similar official of it or a substantial part of
its property or shall consent to any such relief or to the appointment of or
taking possession by any such official in an involuntary case or other
proceeding commenced against it or shall make a general assignment for the
benefit of creditors or shall generally fail to pay its debts as they become due
or shall take any corporate action to authorize any of the foregoing; or

 

(o)                                 An involuntary proceeding shall be commenced
against any Credit Party or any of their Subsidiaries or any Significant
Offshore Entity seeking liquidation, reorganization, or other relief with
respect to it or its debts under any bankruptcy, insolvency, or other similar
law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian, or other similar official for it or a
substantial part of its property, and such involuntary proceeding shall remain
undismissed and unstayed for a period of 60 days; or

 

(p)                                 Any involuntary order shall be entered in
any proceeding against any Credit Party or any of their Subsidiaries or any
Significant Offshore Entity decreeing the dissolution, liquidation or split-up
thereof, and such order shall remain in effect for sixty (60) days; or

 

117

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

 

(q)                                 Any Credit Party or any of their
Subsidiaries or any Significant Offshore Entity shall admit in writing its
inability to pay its debts as they become due; or

 

(r)                                    Any Credit Party or any of their
Subsidiaries shall suffer any writ of attachment or execution or any similar
process to be issued or levied against it or any substantial part of its
Property which is not released, stayed, bonded or vacated within thirty (30)
days after its issue or levy; or

 

(s)                                   Any court shall order a meeting of the
creditors, or any class of creditors that includes any of the Lender Parties on
account of any of the Obligations, of any Credit Party or any of their
Subsidiaries, or any Credit Party or any of their Subsidiaries shall request or
apply for any such order, or take any corporate action to authorize any such
request or application.

 

8.2                               Remedies Cumulative.  No remedy, right or
power conferred upon the Agent or any Lender is intended to be exclusive of any
other remedy, right or power given hereunder or now or hereafter existing at
law, in equity, or otherwise, and all such remedies, rights and powers shall be
cumulative.

 

9.                                      The Agent.

 

9.1                               Appointment, Powers and Immunities.  Each
Lender hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the Letters of Credit and the other Loan Documents with such
powers as are specifically delegated to the Agent by the terms hereof and
thereof, together with such other powers as are reasonably incidental thereto. 
Each Lender hereby irrevocably appoints and authorizes the Agent to act as its
agent under the Letters of Credit which the Agent has issued with such powers as
are specifically delegated to the Agent by the terms hereof and thereof,
together with such other powers as are reasonably incidental thereto.  The Agent
may each perform any and all of their respective duties and exercise their
respective rights and powers by or through any one or more sub-agents appointed
by the Agent in its reasonable credit judgment.  The exculpatory, indemnity, and
expense reimbursement provisions of the Loan Documents shall apply to any such
sub-agent in such capacity.  The Agent (which such term as used in this
Section 9, shall, in each case, (a) include reference to its Affiliates and its
own and its Affiliates’ officers, directors, employees’ and agents (including
any sub-agents)) (i) shall not have duties or responsibilities except those
expressly set forth in this Agreement, the Letters of Credit and the other Loan
Documents, and shall not by reason of this Agreement or any other Loan Document
be a trustee for any Lender; (ii) shall not be responsible to any Lender for any
recitals, statements, representations or warranties contained in this Agreement,
the Letters of Credit or any other Loan Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement, the Letters of Credit or any other Loan Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the Letters of Credit or any other Loan Document or any other
certificate or document referred to or provided for herein or therein or any
property covered thereby or for any failure by any Party or any other Person
(other than the Agent) to perform any of its obligations hereunder or
thereunder; (iii) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under the Letters of Credit or any other
Loan Document except to the extent requested by the Required Lenders, provided
that the Agent shall not be required to take any action which exposes the Agent
to

 

118

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

 

personal liability or which is contrary to this Agreement or any other Loan
Documents or applicable law, and (iv) shall not be responsible for any action
taken or omitted to be taken by it hereunder or under the Letters of Credit or
any other Loan Document or any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, INCLUDING
PURSUANT TO ITS OWN NEGLIGENCE, except to the extent it is determined by a final
judicial decision that such act or omission constituted its own gross negligence
or willful misconduct.  The Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by them with reasonable care.  Without in any way
limiting any of the foregoing, each Lender acknowledges that the Agent shall not
have any greater responsibility in the operation of the Letters of Credit than
is specified in the Uniform Customs and Practice for Documentary Credits (2007
Revision, International Chamber of Commerce Publication No. 600 or any successor
publication).  In any foreclosure proceeding concerning any collateral for the
Notes, each holder of a Note if bidding for its own account or for its own
account and the accounts of other Lenders is prohibited from including in the
amount of its bid an amount to be applied as a credit against its Note or the
Notes of the other Lenders, instead such holder must bid in cash only.  However,
in any such foreclosure proceeding, the Agent may (but shall not be obligated
to) submit a bid for all Lenders (including itself) in the form of a credit
against the Notes of all of the Lenders, and the Agent or its designee may (but
shall not be obligated to), with the consent of the Required Lenders, accept
title to such collateral for and on behalf of all Lenders.  The Agent may
perform any and all its duties and exercise its rights and powers by or through
any one or more sub-agents appointed by the Agent in its reasonable credit
judgment.

 

9.2                               Reliance.  The Agent shall be entitled to rely
upon any certification, notice or other communication (including any thereof by
telephone, telex, telegram or cable) believed by it to be genuine and correct
and to have been signed or sent by or on behalf of the proper Person or Persons,
and upon advice and statements of legal counsel (which may be counsel for the
Credit Parties), independent accountants and other experts selected by the
Agent.  As to any matters not expressly provided for by this Agreement, the
Letters of Credit or any other Loan Document, the Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and
thereunder in accordance with instructions of the Required Lenders, and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders.

 

9.3                               Defaults.  The Agent shall not be deemed to
have knowledge of the occurrence of a Default or Event of Default unless it has
received notice from a Lender or the Borrowers’ Agent specifying such Default or
Event of Default and stating that such notice is a “Notice of Default.”  In the
event that the Agent receives such a notice of the occurrence of a Default or
Event of Default, the Agent shall give prompt notice thereof to the Lenders (and
shall give each Lender prompt notice of each such non-payment).  The Agent shall
(subject to Section 9.7 hereof) take such action with respect to such Default or
Event of Default as shall be directed by the Required Lenders and within its
rights under the Loan Documents and at law or in equity, provided that, unless
and until the Agent shall have received such directions, the Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
permitted or within its rights under any of the Loan Documents or under
applicable law with respect to such Default or Event of Default.

 

119

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

 

9.4                               Rights as a Lender.  With respect to its
Commitment, the Loans and any Letter of Credit Exposure Amount, the Agent in its
capacity as a Lender hereunder shall have the same rights and powers hereunder
as any other Lender and may exercise the same as though it were not acting as
the Agent, and the term “Lender” or “Lenders” shall, unless the context
otherwise indicates, include the Agent in its individual capacity.  The Agent
may (without having to account therefor to any Lender) accept deposits from,
lend money to and generally engage in any kind of banking, trust, letter of
credit, agency or other business with any Credit Party (and any of their
Affiliates) as if it were not acting as the Agent, and the Agent may accept fees
and other consideration from any Credit Party (in addition to the fees
heretofore agreed to between the applicable Credit Parties and the Agent) for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.

 

9.5                               Indemnification.  The Lenders agree to
indemnify the Agent (to the extent not reimbursed under Section 2.9(d),
Section 2.10(h), Section 6.12, Section 10.9 or Section 10.10 hereof, but without
limiting the obligations of the applicable Credit Parties under said
Section 2.9(d), Section 2.10(h), Section 6.12, Section 10.9 or Section 10.10),
ratably in accordance with their respective Commitments, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind and nature whatsoever (INCLUDING
THE CONSEQUENCES OF THE NEGLIGENCE OF SUCH INDEMNIFIED PERSON, but excluding any
act or omission to the extent the same is determined by a final judicial
decision to have been caused by or resulted from the gross negligence or willful
misconduct of such indemnified person) which may be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement, the Letters of Credit or any other Loan Document or any other
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby (including the costs and expenses which the
applicable Credit Parties are obligated to pay under Section 2.9(d),
Section 2.10(h), Section 6.12, Section 10.9 or Section 10.10 hereof but
excluding, unless a Default or Event of Default has occurred and is continuing,
normal administrative costs and expenses incident to the performance of its
agency duties hereunder) or the enforcement of any of the terms hereof or
thereof or of any such other documents, INCLUDING THE NEGLIGENCE OF SUCH
INDEMNIFIED PERSON, but excluding any act or omission to the extent the same is
determined by a final judicial decision to have been caused by or resulted from
the gross negligence or willful misconduct of such indemnified person.  The
obligations of the Lenders under this Section 9.5 shall survive the termination
of this Agreement and the repayment of the Indebtedness arising in connection
with this Agreement.

 

9.6                               Non-Reliance on Agent and Other Lenders.  Each
Lender agrees that it has received current financial information with respect to
the Credit Parties and the other Parties and that it has  independently and
without reliance on the Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis of
the Credit Parties and the other Parties and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents.  The Agent shall not be required to keep itself informed as to the
performance or observance by any Party of this Agreement, the Letters of Credit
or any of the other Loan

 

120

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

 

Documents or any other document referred to or provided for herein or therein or
to inspect the properties or books of the Credit Parties or any Party.  Except
for notices, reports and other documents and information expressly required to
be furnished to the Lenders by the Agent, under the Letters of Credit or the
other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the affairs,
financial condition or business of the Credit Parties or any other Party (or any
of their Affiliates) which may come into the possession of the Agent.

 

9.7                               Failure to Act.  Except for action expressly
required of the Agent hereunder, under the Letters of Credit and under the other
Loan Documents, the Agent shall in all cases be fully justified in failing or
refusing to act hereunder and thereunder unless it shall receive further
assurances to its satisfaction by the Lenders of their indemnification
obligations under Section 9.5 hereof against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action.

 

9.8                               Resignation or Removal of Agent.  Subject to
the appointment and acceptance of a successor Agent as provided below, the Agent
may resign at any time by giving notice thereof to the Lenders and the
Borrowers’ Agent, and the Agent may be removed at any time with or without cause
by the Required Lenders.  Upon any such resignation or removal, the Required
Lenders shall have the right to appoint a successor Agent reasonably acceptable
to the Borrowers.  If no successor Agent shall have been so appointed by the
Required Lenders and shall have accepted such appointment within 30 days after
the retiring Agent’s giving of notice of resignation or the Required Lenders’
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent reasonably acceptable to the Borrowers;
provided, however, that if an Event of Default has occurred which has not been
waived or cured to the satisfaction of the Agent and the Required Lenders, the
Borrowers’ approval of a successor Agent shall not be required.  Any successor
Agent shall be a Lender which has an office in the United States with a combined
capital and surplus of at least $2,000,000,000.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder.  Such successor Agent shall promptly
specify by notice to the Borrowers’ Agent and the Lenders its office for the
purpose of any notices and payments hereunder.  After any retiring Agent’s
resignation or removal hereunder as Agent, the provisions of this Section 9
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Agent.

 

9.9                               Syndication Agent; Sole Lead Arranger; Sole
Bookrunner.  Any syndication agent, sole lead arranger or sole bookrunner
appointed in connection with the Loan Documents or the transactions contemplated
thereby, in its capacity as such, shall have no rights, powers, duties or
responsibilities, and no rights, powers, duties or responsibilities shall be
read into this Agreement or any other Loan Document or otherwise exist on behalf
of or against any such syndication agent, sole lead arranger or sole bookrunner,
in its capacity as such (in each case without prejudice to the rights, powers,
duties or responsibilities of any such Person in its capacity as a Lender,
Agent, or otherwise as a Party to any Loan Document, other than in its capacity
as syndication agent, sole lead arranger or sole bookrunner).  If any such
syndication

 

121

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

 

agent, sole lead arranger or sole bookrunner resigns from such capacity, no
successor syndication agent, sole lead arranger or sole bookrunner, as
applicable, shall be appointed.

 

10.                               Miscellaneous.

 

10.1                        No Waiver.  No waiver of any Default or Event of
Default shall be deemed to be a waiver of any other Default or Event of
Default.  No failure to exercise and no delay on the part of the Agent or any
Lender in exercising any right or power under any Loan Document or at law or in
equity shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or the abandonment or discontinuance of
steps to enforce any such right or power, preclude any further or other exercise
thereof or the exercise of any other right or power.  No course of dealing
between the Credit Parties and the Agent or any Lender shall operate as a waiver
of any right or power of the Agent or any Lender.  No notice to or demand on any
Credit Party or any other Person shall entitle the Credit Parties or any other
Person to any other or further notice or demand in similar or other
circumstances.

 

10.2                        Notices.  Except as otherwise expressly permitted
hereunder or under any other Loan Document, all notices under the Loan Documents
shall be in writing and either (a) delivered to the intended recipient, (b) sent
via overnight courier, or (c) sent by facsimile (promptly confirmed by mail,
except for any notice pursuant to Section 4.1(a) hereof which need not be
confirmed by mail), in each case to the intended recipient at the “Address for
Notices” specified below its name on the signature pages hereof; or, as to any
Lender who is a signatory hereto, at such other address as shall be designated
by such Lender in a notice to the Borrowers’ Agent and the Agent given in
accordance with this Section 10.2 or to such other address as a party may
designate in a notice given in accordance with the provisions of this
Section 10.2.  The Borrowers’ Agent may change its address for purposes hereof
by providing written notice of such address change to the Lenders and the Agent
in accordance with the provisions of this Section 10.2, with any such change in
address only being effective ten (10) Business Days after such change of address
has been deemed given in accordance with the provisions hereof.  Notices shall
be deemed to have been given (whether actually received or not) when delivered
(or, if sent via overnight courier, on the next Business Day after the date
sent); provided, however, that the notices required or permitted by Sections
2.2(b) and 4.1(a) hereof shall be effective only when actually received by the
Agent.

 

10.3                        Governing Law.  UNLESS OTHERWISE SPECIFIED THEREIN,
EACH LOAN DOCUMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO
NATIONAL BANKS.

 

10.4                        Survival; Parties Bound.  All representations,
warranties, covenants and agreements made by or on behalf of the Credit Parties
in connection herewith shall survive the execution and delivery of the Loan
Documents and shall not be affected by any investigation made by any Person. 
The term of this Agreement shall be until the termination or lapse of all
Commitments, the final maturity of each Note, the payment of all amounts due
under the Loan Documents, and the return of all outstanding Letters of Credit
(or the cash collateralization of all outstanding Letters of Credit in an amount
equal to 110% of the aggregate Letter of Credit Exposure Amount then
outstanding).

 

122

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

 

10.5                        Counterparts.  This Agreement may be executed in
several identical counterparts, and by the parties hereto on separate
counterparts, and each counterpart, when so executed and delivered, shall
constitute an original instrument, and all such separate counterparts shall
constitute but one and the same instrument.

 

10.6                        Limitation of Interest.  The Credit Parties and the
Lenders intend to strictly comply with all applicable laws, including applicable
usury laws, if any.  Accordingly, the provisions of this Section 10.6 shall
govern and control over every other provision of this Agreement or any other
Loan Document which conflicts or is inconsistent with this Section, even if such
provision declares that it controls.  As used in this Section, the term
“interest” includes the aggregate of all charges, fees, benefits or other
compensation which constitute interest under applicable law, provided, that, to
the maximum extent permitted by applicable law, (a) any non-principal payment
shall be characterized as an expense or as compensation for something other than
the use, forbearance or detention of money and not as interest, and (b) all
interest at any time contracted for, reserved, charged or received shall be
amortized, prorated, allocated and spread, in equal or in unequal parts during
the full term of the Loans and the Commitments so that interest for the entire
term does not exceed the Highest Lawful Rate.  In no event shall the Borrowers
or any other Person be obligated to pay, or the Agent or any Lender have any
right or privilege to reserve, receive or retain, (y) any interest in excess of
the maximum amount of nonusurious interest permitted under the laws of the
United States or of any state, if any, which are applicable to the Agent or such
Lender, respectively, or (z) total interest in excess of the amount which the
Agent or such Lender could lawfully have contracted for, reserved, received,
retained or charged had the interest been calculated for the full term of the
Loans at the Highest Lawful Rate, if any, applicable to the Agent or such
Lender.  None of the terms and provisions contained in this Agreement or in any
other Loan Document which directly or indirectly relate to interest shall ever
be construed without reference to this Section 10.6, or be construed to create a
contract to pay any Lender for the use, forbearance or detention of money at an
interest rate in excess of the Highest Lawful Rate applicable to such Lender. 
If the term of any Loans or the Notes is shortened by reason of acceleration of
maturity as a result of any Default or Event of Default or by any other cause,
or by reason of any required or permitted prepayment, and if for that (or any
other) reason the Agent or any Lender at any time is owed or receives (and/or
has received) interest in excess of interest calculated at the Highest Lawful
Rate applicable to the Agent or such Lender, then and in any such event all of
any such excess interest owed to or received by the Agent or such Lender shall
be canceled automatically as of the date of such acceleration, prepayment or
other event which produces the excess, and, if such excess interest has been
paid to the Agent or such Lender, it shall be credited pro tanto against the
then-outstanding principal balance of the Borrowers’ obligations to the Agent or
such Lender, effective as of the date or dates when the event occurs which
causes it to be excess interest, until such excess is exhausted or all of such
principal has been fully paid and satisfied, whichever occurs first, and any
remaining balance of such excess shall be promptly refunded to its payor.

 

10.7                        Survival.  The obligations of the Borrower under
Sections 2.3, 2.9, 2.10(h), 10.9, 10.10 and 10.17 hereof shall survive the
repayment of the Loans and all other Obligations, the termination of the
Commitments and the cancellation or expiration of the Letters of Credit.

 

123

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

 

10.8                        Captions.  The headings and captions appearing in
the Loan Documents have been included solely for convenience and shall not be
considered in construing the Loan Documents.

 

10.9                        Expenses, Etc.  The Borrowers agree to pay or
reimburse on demand of the Agent the following:  (a) the reasonable fees and
expenses of Vinson & Elkins LLP, counsel to the Agent, or any other legal
counsel engaged by the Agent in connection with (i) the preparation, execution
and delivery of this Agreement (including the exhibits and schedules hereto) and
the Loan Documents and the making of the Loans and the issuance of Letters of
Credit hereunder and (ii) any modification, supplement or waiver of any of the
terms of this Agreement, the Letters of Credit or any other Loan Document;
(b) all out-of-pocket costs and expenses (including attorneys’ fees) of the
Lenders and the Agent, or any of them, in connection with any Default or Event
of Default or the enforcement of this Agreement, the Letters of Credit or any
other Loan Documents; (c) all transfer, stamp, documentary or other similar
taxes, assessments or charges levied by any governmental or revenue authority in
respect of this Agreement, any Letter of Credit or any other Loan Document or
any other document referred to herein or therein; (d) all out-of-pocket costs,
expenses, taxes, assessments and other charges incurred by the Agent in
connection with any filing, registration, recording or perfection of any
security interest contemplated by this Agreement, any other Loan Document or any
document referred to herein or therein, and the cost of title insurance; and
(e) reasonable expenses of due diligence incurred by the Agent prior to or as of
the Closing Date.

 

10.10                 Indemnification.  The Borrowers agree to indemnify the
Agent, the Lenders and each Affiliate thereof and their respective directors,
officers, employees, partners and agents from, and hold each of them harmless
against, any and all losses, liabilities (including Environmental Liabilities),
claims, costs (including Environmental Claims) or damages to which any of them
may become subject, insofar as such losses, liabilities, claims, costs or
damages arise out of or result from any (a) actual or proposed use by any Credit
Party of the proceeds of any extension of credit (whether a Loan or a Letter of
Credit) by any Lender hereunder, (b) breach by any Credit Party of this
Agreement or any other Loan Document, (c) violation by any Credit Party or any
of their Subsidiaries of any law, rule, regulation or order including any
Requirements of Environmental Law, (d) Liens or security interests granted on
any Property pursuant to or under the Loan Documents, to the extent resulting
from any Hazardous Substance located in, on or under any such Property,
(e) ownership by the Lenders or the Agent of any Property following foreclosure
under the Loan Documents, to the extent such losses, liabilities, claims, costs
or damages arise out of or result from any Hazardous Substance, located in, on
or under such Property prior to or at the time of such foreclosure, including
losses, liabilities, claims, costs or damages which are imposed upon Persons
under laws relating to or regulating Hazardous Substances, solely by virtue of
ownership, (f) any Lender or the Agent being deemed an operator of any such
Property by a court or other regulatory or administrative agency or tribunal or
other third party, to the extent such losses, liabilities, claims, costs or
damages arise out of or result from any Hazardous Substance, petroleum,
petroleum product or petroleum waste located in on or under such Property at or
prior to any foreclosure thereon under the Loan Document, or (g) investigation,
litigation or other proceeding (including any threatened investigation or
proceeding) relating to any of the foregoing, and the Borrowers agree to
reimburse the Agent and each Lender, and each Affiliate thereof

 

124

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

 

and their respective directors, officers, employees, partners, counsel and
agents, upon demand for any out-of-pocket expenses (including reasonable legal
fees) and costs incurred in connection with any such investigation or
proceeding, AND WHETHER ANY SUCH LOSS, LIABILITY, CLAIM OR DAMAGE RESULTS FROM
THE NEGLIGENCE OF ANY SUCH INDEMNIFIED PERSON; but excluding any such losses,
liabilities, claims, costs, damages or expenses incurred by a Person or any
Affiliate thereof or their respective directors, officers, employees, partners,
counsel or agents to the extent the same is determined by a final judicial
decision to have been caused by or resulted from the gross negligence or willful
misconduct of such Person, Affiliate, director, officer, employee, partner,
counsel or agent.  No party hereto, nor any other Person indemnified hereunder,
shall be liable for any damages arising from the use by others of information or
other materials obtained through electronic, telecommunications or other
information transmission systems or for any special, indirect, consequential or
punitive damages in connection with the Loan Documents or the transaction
contemplated thereby.

 

10.11                 Amendments, Waivers, Etc.  No amendment, modification or
waiver of any provision of this Agreement, the Notes or any other Loan Document,
nor any consent to any departure by the Credit Parties or any of their
Subsidiaries, nor by the Agent or any Lenders therefrom, shall in any event be
effective unless the same shall be agreed or consented to in writing by the
Required Lenders and the Borrowers, and each such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no such amendment, waiver or consent shall, unless
consented to in writing by each affected Lender (excluding a Defaulting Lender
except with respect to clauses (a) and clause (c) below), do any of the
following:  (a) increase the Total Commitment or any Commitment of any such
Lender or subject the Agent or any such Lender to any additional obligations;
(b) reduce the principal of, or interest on, any Loan, any Letter of Credit
Exposure Amount or any fee hereunder (provided, that any waiver of Default Rate
interest shall not be considered a reduction of interest); (c) waive or postpone
any scheduled date fixed for any payment of principal of, or interest on, any
Loan, any Letter of Credit Exposure Amount or any fee or other sum to be paid
hereunder; (d) change the percentage of any of the Commitments or of the
aggregate unpaid principal amount of any of the Loans, any Letter of Credit
Exposure Amount, or the number of Lenders which shall be required for the
Lenders or any of them to take any action under this Agreement; (e) increase any
of the applicable Borrowing Base advance rates or sublimits; (f) change any
provision contained in Sections 2.2(d), 2.2(e), 2.7, 2.11, 10.9(b) or 10.10
hereof or this Section 10.11 or Section 10.16 hereof; (g) release the Borrowers
from liability for any of the Obligations; (h) release any Guarantor from any
Guaranty; (i) other than as expressly permitted by this Agreement, release any
Collateral for any of the Obligations if the value of such Collateral (excluding
the value of all other Collateral released pursuant to Section 7.4(f)(3) or
10.21(f) hereof) exceeds $2,000,000 in the aggregate, as reasonably determined
by the Agent; (j) change any of the definitions of “Obligations” or “Required
Lenders” contained herein; or (k) change any of the definitions of “Eligible
Equipment,” “Eligible Inventory,” “Eligible Real Estate,” “Eligible
Receivables,” “Ineligible Receivables,” or “Ineligible Inventory” contained
herein, if the effect of any such change would be to materially increase the
Borrowing Base provided that any change to these definitions shall be deemed to
affect all Lenders, including Term Lenders; provided further that nothing in
this Section 10.11 shall affect, limit or restrict the Agent’s right to
establish, fix, reduce, increase or otherwise revise any standards of
eligibility for any items included within the Borrowing Base or any Reserves,
from time to time in accordance

 

125

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

 

with other provisions of this Agreement and subject to the limitations set forth
herein; and furthermore provided that no such amendment, waiver or consent
shall: (a) amend, modify or waive any condition precedent to a Revolving Loan
set forth in Section 4.1 and Section 4.3 (including in connection with any
waiver of an existing Default or Event of Default) without the written consent
of the Required Revolving Lenders; (b) amend, modify or waive any condition
precedent to a Term Loan set forth in Section 4.2 (including in connection with
any waiver of an existing Default or Event of Default) without the written
consent of the the Term Lenders; (c) impose any greater restriction on the
ability of any Revolving Lender to assign any of its rights or obligations
thereunder without the written consent of the Required Revolving Lenders; or
(d) impose any greater restriction on the ability of any Term Lender to assign
any of its rights or obligations thereunder without the written consent of the
Required Term Lenders.  Anything in this Section 10.11 to the contrary
notwithstanding, no amendment, waiver or consent shall be made with respect to
Section 9 without the written consent of the Agent, and no amendment, waiver or
consent shall amend, modify or otherwise affect the rights or duties of the
Swingline Lender hereunder without the prior written consent of the Swingline
Lender.  Notwithstanding any contrary provision hereof, if any Lender (a) fails
to consent to any of the above-described items requiring the unanimous consent
of the Lenders when such consent has been agreed to by the Agent and the
Required Lenders, (b) is a Defaulting Lender hereunder, or (c) requests
compensation under Section 2.9(d) and/or Section 10.16, the Agent or the
Borrowers shall be entitled to cause such non-consenting Lender to be replaced
hereunder by an Eligible Assignee in compliance with all relevant provisions of
Section 10.12 hereof without payment of any prepayment or termination fee. In
such event, such non-consenting Lender agrees to abide by the relevant
provisions of Section 10.12 hereof in connection with the replacement of such
non-consenting Lender by the Eligible Assignee secured by the Agent or the
Borrowers.  Notwithstanding the foregoing right of the Borrowers to replace a
Lender that requests compensation under Section 2.9(d) and/or Section 10.16, the
Borrowers shall continue to be obligated to pay such Lender all amounts owing
under Section 2.9(d) and/or Section 10.16 for the period such Lender remains a
Lender hereunder.  Notwithstanding the foregoing right of the Borrowers to
replace any such non-consenting Lender, neither the Agent nor any Lender shall
have any obligation to the Borrowers to find or locate any substitute lender or
lenders to replace any such non-consenting Lender.

 

10.12                 Successors and Assigns.

 

(a)                                 This Agreement shall be binding upon and
inure to the benefit of the Credit Parties, the Agent, and the Lenders and their
respective successors and permitted assigns, provided that the undertaking of
the Lenders hereunder to make Loans to the Borrowers and to issue Letters of
Credit for the account of the Borrowers shall not inure to the benefit of any
successor of the Borrowers, other than a successor expressly permitted by the
terms of this Agreement. The Borrowers may not assign or transfer any of their
rights or obligations hereunder without the prior written consent of all of the
Lenders (and any attempted assignment or transfer by the Borrowers without such
consent shall be null and void), and no Lender may assign or otherwise transfer
its rights or obligations hereunder except in accordance with this
Section 10.12.  Nothing in this Agreement, expressed or implied, shall be
construed to confer upon any Person (other than (i) the parties hereto, their
respective successors and assigns permitted hereby, (ii) any participant of a
Lender (to the extent provided in subparagraph (b)

 

126

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

 

below), and (iii) to the extent expressly set forth herein, the Affiliates of
the Agent and each of the Lenders) any legal or equitable right, remedy or claim
under or by reason of this Agreement.

 

(b)                                 Each Lender may sell participations to any
Person in all or part of any Loan, or all or part of its Notes, the Letter of
Credit Exposure Amount, the Swingline Exposure or Commitments, to another bank
or other entity, in which event, without limiting the foregoing, the provisions
of Sections 10.10 and Section 10.16 shall inure to the benefit of each purchaser
of a participation and the pro-rata treatment of payments, as described in
Section 2.12, shall be determined as if such Lender had not sold such
participation.  In the event any Lender shall sell any participation:  (i) the
Borrowers, the Agent, and the other Lenders shall continue to deal solely and
directly with such selling Lender in connection with such selling Lender’s
rights and obligations under the Loan Documents (including the Note(s) held by
such selling Lender), (ii) such Lender shall retain the sole right and
responsibility to enforce the obligations of the Borrowers relating to the
Loans, Letter of Credit Exposure Amount and Swingline Exposure, including the
right to approve any amendment, modification or waiver of any provision of this
Agreement other than (and then only if expressly permitted by the applicable
participation agreement) amendments, modifications or waivers with respect to
(1) any reduction of fees payable hereunder to the Lender, (2) any reduction of
the amount of principal or the rate of interest payable on, or the dates fixed
for the scheduled repayment of principal of, the Loans and other sums to be paid
to the Lenders hereunder, and (3) any postponement of any date for the payment
of any amount payable in respect of the Loans of such Lender, and (iii) the
Borrowers agree, to the fullest extent they may effectively do so under
applicable law, that any participant of a Lender may exercise all rights of
set-off, bankers’ lien, counterclaim or similar rights with respect to such
participation as fully as if such participant were a direct holder of Loans if
such Lender has previously given notice of such participation to the Borrowers.

 

The Borrowers agree that each participant shall be entitled to the benefits of
Section 10.17 (subject to the requirements and limitations therein, including
the requirements under Section 10.17(h) (it being understood that the
documentation required under Section 10.17(h) shall be delivered to the
participating Lender)) 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 that such participant (A) agrees to be subject to the provisions of
Section 10.16(c) as if it were an assignee under paragraph (c) of this Section;
and (B) shall not be entitled to receive any greater payment under
Section 10.17, with respect to any participation, than its participating Lender
would have been entitled to receive, except to the extent such entitlement to
receive a greater payment results from a change in law that occurs after the
participant acquired the applicable participation.  Each Lender that sells a
participation agrees, at the applicable Borrower’s request and expense, to use
reasonable efforts to cooperate with the Borrowers to effectuate the provisions
of Section 10.16(c) with respect to any participant.  Each Lender that sells a
participation shall, acting solely for this purpose as a non-fiduciary agent of
the Borrowers, maintain a register on which it enters the name and address of
each participant and the principal amounts (and stated interest) of each
participant’s interest in the Loans or other obligations under the Loan
Documents (the “Participant Register”); provided that no Lender shall have any
obligation to disclose all or any portion of the Participant Register (including
the identity of any participant or any information related to a participant’s
interest in any commitments, loans, letters of credit or its other obligations
under any Loan Document) to any Person except to the extent that such disclosure
is necessary to establish that such commitment, loan, letter of credit

 

127

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

 

or other obligation is in registered form under Section 5f.103-1(c) of the
United States Treasury Regulations.  The entries in the Participant Register
shall be conclusive absent manifest error, and such Lender shall treat each
Person whose name is recorded in the Participant Register as the owner of such
participant for all purposes of this Agreement notwithstanding any notice to the
contrary.  For the avoidance of doubt, the Agent (in its capacity as Agent)
shall have no responsibility for maintaining a Participant Register.

 

(c)                                  Each Lender may assign to one or more
Lenders or Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of its Commitment
at the time owing to it, the related Note or Notes held by it and its Letter of
Credit Exposure Amount); provided, however, that, (i) the Agent and the
Borrowers must give their respective prior written consent, which consent will
not be unreasonably withheld, conditioned or delayed (except that the Borrowers’
consent to any such assignment shall not be required if (A) such assignment is
to a Lender, an Affiliate of a Lender or an Approved Fund or (B) an Event of
Default has occurred which has not been waived or cured to the satisfaction of
the Agent and the Required Lenders), (ii) the aggregate amount of the applicable
Commitment, Loans, Letter of Credit Exposure Amount and Swingline Exposure
(without duplication) of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance (as defined below) with
respect to such assignment is delivered to the Agent) shall in no event be less
than $5,000,000 (except for certain exceptions approved by the Borrowers and the
Agent) and shall be in an amount that is an integral multiple of $1,000,000
(unless all of the assigning Lender’s applicable Commitment, Loans, Letter of
Credit Exposure Amount and Swingline Exposure is being assigned); (iii) the
aggregate amount of the applicable Commitment and/or Loans of the assigning
Lender immediately after each partial assignment must be at least $5,000,000
(except for certain exceptions approved by the Borrowers and the Agent) and
shall be in an amount which is an integral multiple of $1,000,000; provided,
however, that upon the occurrence and during the continuance of any Event of
Default, any Lender shall be entitled to assign to one or more Lenders or
Eligible Assignees all of such assigning Lender’s Commitment, Loans, Letter of
Credit Exposure Amount and Swingline Exposure in accordance with the other terms
of this Section 10.12; and (iv) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance and recording in its
records, and to the Borrowers’ Agent, for its acceptance on behalf of the
Borrowers if the Borrowers’ approval of such assignment is otherwise required
under the terms of this Section 10.12, an Assignment and Acceptance in
substantially the form of annexed hereto, or in such other form as may be
approved by the Agent (each an “Assignment and Acceptance”) with blanks
appropriately completed, together with any Note or Notes subject to such
assignment and a processing and recordation fee of $3,500 (for which the
Borrowers shall have no liability).  Upon such execution, delivery, acceptance
and recording, from and after the effective date specified in each Assignment
and Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, unless a shorter period of time may be agreed to by
the Agent in its sole and absolute discretion, (A) the assignee thereunder shall
be a party hereto and, to the extent provided in such Assignment and Acceptance,
have the rights and obligations of a Lender hereunder and (B) the Lender
thereunder shall, to the extent provided in such assignment, be released from
its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender’s rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto).

 

128

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

 

(d)                                 By executing and delivering an Assignment
and Acceptance, the Lender assignor thereunder and the assignee thereunder
confirm to and agree with each other and the other parties hereto as follows: 
(i) other than the representation and warranty that it is the legal and
beneficial owner of the interest being assigned thereby free and clear of any
adverse claim, such Lender assignor makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument or document furnished pursuant
thereto; (ii) such assignor Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the Credit
Parties or any of their Subsidiaries or the performance or observance by the
Credit Parties of any of their obligations under any of the Loan Documents;
(iii) such assignee confirms that it has received a copy of this Agreement and
the other Loan Documents, together with copies of the financial statements of
the Credit Parties previously delivered in accordance herewith and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (iv) such
assignee confirms that it will keep confidential all information with respect to
the Credit Parties furnished to it by the Credit Parties, such assignor Lender,
or the Agent (other than information generally available to the public or
otherwise available to the Agent on a non-confidential basis or otherwise
permitted pursuant to the terms of this Agreement); (v) such assignee will,
independently and without reliance upon the Agent, such assignor Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents; (vi) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental thereto; and
(vii) such assignee agrees that it will perform in accordance with their terms
all obligations that by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

(e)                                  The Agent, acting for this purpose as an
agent of the Borrowers, shall maintain at its office a copy of each Assignment
and Acceptance delivered to it and a register containing the names and addresses
of the Lenders and the Commitments of, and principal amount (and stated
interest) of the Loans owing to, and the Letter of Credit Exposure Amount and
Swingline Exposure of, each Lender from time to time (the “Register”).  The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Agent, and the Lenders shall treat each person the name
of which is recorded therein as a Lender hereunder for all purposes of the Loan
Documents.  Such records shall be available for inspection by the Borrowers or
any Lender at any reasonable time and from time to the upon reasonable prior
notice.

 

(f)                                   Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and the assignee thereunder together
with the Note(s) subject to such assignment, the written consent to such
assignment and the fee payable in respect thereto, the Agent shall, if such
Assignment and Acceptance has been completed with blanks appropriately filled,
(i) accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Borrowers
and the Lenders.  Contemporaneously with the receipt by the Borrowers of such
Assignment and Acceptance and

 

129

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

 

the surrendered Note(s), the Borrowers, at their own expense, shall execute and
deliver to the Agent in exchange for the surrendered Note(s), a new Note or
Notes payable to the order of such assignee in an amount equal to the applicable
Commitment, Loans, Letter of Credit Exposure Amount and Swingline Exposure
(without duplication) assumed by it pursuant to such Assignment and Acceptance
and, if the assigning Lender has retained Commitments, Loans, Letter of Credit
Exposure Amount and/or Swingline Exposure hereunder, a new Note or Notes to the
order of the assigning Lender in an amount equal to the applicable Commitment,
Loans, Letter of Credit Exposure Amount and/or Swingline Exposure retained by it
hereunder.  Such new Notes shall be in an aggregate principal amount equal to
the aggregate principal amount of such surrendered Note(s), shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of the surrendered Note(s).  Such surrendered Note shall
be marked canceled and returned to the Borrowers’ Agent.

 

(g)                                  Any Lender may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 10.12, disclose to the assignee or participant or proposed assignee
or participant, any information relating to the Credit Parties and/or any
Subsidiary of the Credit Parties furnished to such Lender by or on behalf of the
Credit Parties or such applicable Subsidiary, so long as such assignee or
participant or proposed assignee or participant confirms that it will keep
confidential all information with respect to the Credit Parties furnished to it
by the Credit Parties, such assignor Lender, or the Agent (other than
information generally available to the public or otherwise available to the
Agent on a non-confidential basis or otherwise permitted pursuant to the terms
of this Agreement).

 

(h)                                 Notwithstanding anything herein to the
contrary, any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including without limitation, any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.

 

10.13                 Entire Agreement.  This Agreement and the other Loan
Documents embody the entire agreement and understanding among the Credit
Parties, the Agent and the Lenders relating to the subject matter hereof and
supersede all prior proposals, agreements and understandings relating to the
subject matter hereof.  Any conflict between the provisions of this Agreement
and the provisions of any other Loan Documents shall be governed by the
provisions of this Agreement.  The Credit Parties certify that they are relying
on no representation, warranty, covenant or agreement except for those set forth
in this Agreement and the other Loan Documents of even date herewith.

 

10.14                 Severability.  If any provision of any Loan Documents
shall be invalid, illegal or unenforceable in any respect under any applicable
law, the validity, legality and enforceability of the remaining provisions shall
not be affected or impaired thereby.

 

10.15                 Disclosures.  Every reference in the Loan Documents to
disclosures of the Borrower or other Credit Parties to the Agent and the Lenders
in writing, to the extent that such references refer to disclosures at or prior
to the execution of this Agreement, shall be deemed

 

130

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

 

strictly to refer only to written disclosures delivered to the Agent and the
Lenders in an orderly manner prior to or concurrently with the execution hereof.

 

10.16                 Capital Adequacy.  Without duplication of the provisions
of Section 2.9:

 

(a)                                 If after the date of this Agreement, any
Lender shall have determined that the adoption or effectiveness (regardless of
whether previously announced) after the date of this Agreement of any applicable
Legal Requirement or treaty regarding capital adequacy or liquidity, or any
other Change in Law after the date of this Agreement, or any change in the
interpretation or administration thereof by any Governmental Authority or
comparable agency charged with the interpretation or administration thereof
after the date of this Agreement, or compliance by any Lender with any request
or directive regarding capital adequacy made or adopted after the date of this
Agreement (whether or not having the force of law) of any such Governmental
Authority, has or would have the effect of increasing the cost of, or reducing
the rate of return on the capital of such Lender (or any holding company of
which such Lender is a part) as a consequence of its obligations hereunder or
under any Letter of Credit or its Note to a level below that which such Lender
or holding company could have achieved but for such adoption, change or
compliance by an amount deemed by such Lender to be material, then from time to
time, upon demand by such Lender (with a copy to the Agent) in the form of a
certificate stating the cause of such demand and reasonably detailed
calculations therefor, the Borrowers (subject to Section 10.6 hereof) agree to
pay to such Lender such additional amount or amounts as will compensate such
Lender or holding company for such reduction.

 

(b)                                 The certificate of any Lender setting forth
such amount or amounts as shall be necessary to compensate such Lender or its
holding company as specified in Section 10.16(a) above (and setting forth the
calculation thereof in reasonable detail) shall be conclusive and binding,
absent manifest error.  The Borrowers shall pay such Lender the amount shown as
due on any such certificate within five (5) Business Days after such Lender
delivers such certificate.  In preparing such certificate, such Lender may
employ such assumptions and allocations of costs and expenses as it shall in
good faith deem reasonable and may use any reasonable averaging and attribution
method.

 

(c)                                  If any Lender requests compensation from
the Borrowers under this Section 10.16 or under Sections 2.9(b) or 10.17, then
at any time within 120 days after receipt by the Borrowers’ Agent of the
certificate from such Lender regarding the circumstances and calculation of the
applicable compensation so requested, the Borrowers shall have the right to seek
and obtain one or more substitute lenders approved by the Agent (which approval
shall not be unreasonably withheld so long as each such substitute lender is an
Eligible Assignee) to replace such Lender hereunder in compliance with all
relevant provisions of Section 10.12 hereof.  In such event, the Agent or the
Borrowers shall be entitled to cause such Lender so requesting compensation to
be replaced hereunder by an Eligible Assignee in compliance with all relevant
provisions of Section 10.12 hereof without payment of any prepayment or
termination fee, and, any such Lender so requesting compensation agrees to abide
by the relevant provisions of Section 10.12 hereof in connection with the
replacement of such non-consenting Lender by the Eligible Assignee secured by
the Agent or the Borrowers.  Contemporaneously with the replacement of such
Lender hereunder with one or more such substitute lenders, the Borrowers shall
cause such substitute lender(s) to pay in full, as the purchase price for such

 

131

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

 

assignment, the Obligations owed to such replaced Lender, including all accrued,
unpaid interest thereon and any Consequential Loss owing by the Borrowers to
such replaced Lender as a result of such payment.  Notwithstanding the foregoing
terms and provisions of this Section 10.16, (i) the Borrowers shall remain
obligated to make timely payment of the additional compensation set forth in the
certificate presented to the Borrowers by such replaced Lender under the terms
of Section 10.16(b) above for the periods prior to the applicable replacement
date, and (ii) neither the Agent nor any Lender shall have any obligation to the
Borrowers to find or locate any substitute lender or lenders to replace any
Lender requesting compensation from the Borrowers under this Section 10.16.

 

(d)                                 Failure or delay on the part of any Lender
Party to demand compensation pursuant to this Section 10.16 or under
Sections 2.9(b) or 10.17 shall not constitute a waiver of such Lender Party’s
right to demand such compensation; provided that the Borrower shall not be
required to compensate any Lender Party pursuant to any such section for any
increased costs or reductions incurred more than one hundred eighty (180) days
prior to the date that such Lender Party (or the Agent on behalf of such Lender
Party) notifies the Borrower of the circumstance giving rise to such increased
costs or reductions and of such Lender Party’s intention to claim compensation
therefor; provided further that, if the circumstance giving rise to such
increased costs or reductions arises with retroactive effect, then the one
hundred eighty (180)-day period referred to above shall be extended to include
the period of retroactive effect thereof.

 

10.17                 Taxes.

 

(a)                                 As used in this Section 10.17, the following
terms shall have the following meanings:

 

(i)                                     “Excluded Taxes” means any of the
following Taxes imposed on or with respect to a Recipient or required to be
withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or
measured by net income (however denominated), franchise Taxes, and branch
profits Taxes, in each case, (i) imposed as a result of such Recipient being
organized under the laws of, or having its principal office or, in the case of
any Lender, its applicable lending office located in, the jurisdiction imposing
such Tax (or any political subdivision thereof) or (ii) that are Other
Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes
imposed on amounts payable to or for the account of such Lender with respect to
an applicable interest in a Loan or Commitment pursuant to a law in effect on
the date on which (i) such Lender acquires such interest in the Loan or
Commitment (other than pursuant to an assignment request by the Borrower under
Section 10.16(c)) or (ii) such Lender changes its lending office, except in each
case to the extent that, pursuant to Section 10.17, amounts with respect to such
Taxes were payable either to such Lender’s assignor immediately before such
Lender became a party hereto or to such Lender immediately before it changed its
lending office, (c) Taxes attributable to such Recipient’s failure to comply
with Section 10.17(h); and (d) any U.S. federal withholding Taxes imposed under
FATCA.

 

(ii)                                  “Indemnifiable Tax” means (a) Taxes, other
than Excluded Taxes, imposed on or with respect to any payment made by or on
account of any

 

132

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

 

obligation of any Credit Party under any Loan Document and (b) to the extent not
otherwise described in (a), Other Taxes.

 

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

 

(iv)                              “Other Tax” means any present or future stamp,
court, documentary, intangible, recording, filing or similar excise or property
Taxes that arise from any payment made under, from the execution, delivery,
performance, enforcement or registration of, or from the receipt or perfection
of a security interest under, or otherwise with respect to, any Loan Document,
except any such Taxes that are Other Connection Taxes imposed with respect to an
assignment (other than an assignment under Section 10.16(c)).

 

(v)                                 “Tax” means any present or future tax, levy,
impost, duty, deduction, withholding, charge, assessment or fee of any nature
(including interest thereon and penalties and additions thereto) that is imposed
by any Governmental Authority.

 

(b)                                 If any Credit Party is required by any
applicable Legal Requirement to make any deduction or withholding for or on
account of any Tax from any payment to be made by it under this Agreement, under
the Notes, under any Letter of Credit or under any other Loan Documents, then
the Credit Party shall (A) promptly notify the applicable Lender, the holder of
Notes or other relevant Persons hereunder that is entitled to such payment of
such requirement to so deduct or withhold such Tax, (B) pay to the relevant
Governmental Authorities the full amount required to be so deducted or withheld,
(C) promptly forward to such Lender, holder or other relevant Person an official
receipt (or certified copies thereof), or other documentation reasonably
acceptable to such holder or other relevant Person, evidencing such payment to
such Governmental Authorities and (D) if such Tax is an Indemnifiable Tax, pay
to such Lender, holder or other relevant Person, in addition to whatever net
amount of such payment is paid to such holder or other relevant Person, such
additional amount as is necessary to ensure that the total amount actually
received by such holder or other relevant Person (free and clear of
Indemnifiable Tax imposed on or with respect to such additional amount) will
equal the full amount of the payment such holder or other relevant Person would
have received had no such deduction or withholding been required.

 

(c)                                  In addition, the relevant Credit Party or
Credit Parties shall pay to the relevant Governmental Authority in accordance
with applicable law, or at the option of the Agent timely reimburse it for the
payment of, any Other Taxes.

 

(d)                                 Each Lender or holder of a Note shall, upon
request by the Credit Parties, take requested measures to mitigate the amount of
Indemnifiable Tax required to be deducted or

 

133

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

 

withheld from any payment made by the Credit Parties under this Agreement, under
the Notes or under any other Loan Documents if such measures can, in the sole
and absolute opinion of such Lender or holder, be taken without such Person
suffering any economic, legal, regulatory or other disadvantage (provided,
however, that no such Person shall be required to designate a funding office
that is not located in the United States of America).

 

(e)                                  As soon as practicable after any payment of
Indemnifiable Taxes by the Borrowers to a Governmental Authority, the Borrowers’
Agent shall deliver to the Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.

 

(f)                                   The Borrowers shall jointly and severally
indemnify each Recipient for any Indemnifiable Taxes that are paid or payable by
such Recipient in connection with any Loan Document (including amounts paid or
payable under this Section 10.17(f)) and any reasonable expenses arising
therefrom or with respect thereto, whether or not such Indemnifiable Taxes were
correctly or legally imposed or asserted by the relevant Governmental
Authority.  The indemnity under this Section 10.17(f) shall be paid within ten
(10) days after the Recipient delivers to the Borrowers’ Agent a certificate
stating the amount of any Indemnified Taxes so paid or payable by such Recipient
and describing the basis for the indemnification claim.  Such certificate shall
be conclusive of the amount so paid or payable absent manifest error.  Such
Recipient shall deliver a copy of such certificate to the Agent.

 

(g)                                  Each Lender shall severally indemnify the
Agent for any Taxes (but, in the case of any Indemnifiable Taxes, only to the
extent that the Borrowers have not already indemnified the Agent for such
Indemnifiable Taxes and without limiting the obligation of the Borrowers to do
so) attributable to such Lender that are paid or payable by the Agent in
connection with any Loan Document and any reasonable expenses arising therefrom
or with respect thereto, whether or not such Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  The indemnity under
this Section 10.17(g) shall be paid within ten (10) days after the Agent
delivers to the applicable Lender a certificate stating the amount of Taxes so
paid or payable by the Agent.  Such certificate shall be conclusive of the
amount so paid or payable absent manifest error.

 

(h)                                 (i)  Any Lender that is entitled to an
exemption from or reduction of the deduction, withholding or payment of an
Indemnifiable Tax or Other Tax, with respect to payments under this Agreement,
under any Note, under any Letter of Credit or under any other Loan Document
shall deliver to the Credit Parties and the Agent, at the time or times
reasonably requested by the Credit Parties, such properly completed and executed
documentation reasonably requested by the Credit Parties of the Agent as will
permit such payments to be made without, or at a reduced rate of, withholding. 
In addition, any Lender, if requested by the Borrowers’ Agent or the Agent,
shall deliver such other documentation prescribed by law or reasonably requested
by the Borrowers’ Agent or the Agent as will enable the Borrowers’ Agent or the
Agent to determine whether or not such Lender is subject to any withholding
(including backup withholding) or information reporting requirements. 
Notwithstanding anything to the contrary in the preceding two sentences, the
completion, execution and submission of such documentation (other than such
documentation set forth in Section 10.17(h)(ii)(A) through (E) below) shall not

 

134

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

 

be required if in the Lender’s judgment such completion, execution or submission
would subject such Lender to any material unreimbursed cost or expense or would
materially prejudice the legal or commercial position of such Lender.  Upon the
reasonable request of the Borrowers’ Agent or the Agent, any Lender shall update
any form or certification previously delivered pursuant to this
Section 10.17(h).  If any form or certification previously delivered pursuant to
this Section expires or becomes obsolete or inaccurate in any respect with
respect to a Lender, such Lender shall promptly (and in any event within ten
(10) days after such expiration, obsolescence or inaccuracy) notify the
Borrowers’ Agent and the Agent in writing of such expiration, obsolescence or
inaccuracy and update the form or certification if it is legally eligible to do
so.

 

(ii)                                  Without limiting the generality of the
foregoing, in the event that the relevant Credit Party is resident for tax
purposes in the United States, any Lender shall deliver to the Credit Party and
the Agent (in such number of copies as shall be requested by the recipient) on
or prior to the date on which such Lender becomes a Lender under this Agreement
(and from time to time thereafter upon the request of the Credit Parties or the
Agent, but only if such Lender is legally entitled to do so), whichever of the
following is applicable:

 

(A)                               in the case of a Lender that is a U.S.
Person, IRS Form W-9 certifying that such Lender is exempt from U.S. Federal
backup withholding tax,

 

(B)                               in the case of a Non-U.S. Lender claiming the
benefits of an income tax treaty to which the United States is a party (1) with
respect to payments of interest under any Loan Document, IRS Form W-8BEN
establishing an exemption from, or reduction of, U.S. Federal withholding Tax
pursuant to the “interest” article of such tax treaty and (2) with respect to
any other applicable payments under this Agreement, IRS Form W-8BEN establishing
an exemption from, or reduction of, U.S. Federal withholding Tax pursuant to the
“business profits” or “other income” article of such tax treaty;

 

(C)                               in the case of a Non-U.S. Lender for whom
payments under this Agreement constitute income that is effectively connected
with such Lender’s conduct of a trade or business in the United States, IRS
Form W-8ECI;

 

(D)                               in the case of a Non-U.S. Lender claiming the
benefits of the exemption for portfolio interest under Section 881(c) of the
Code both (1) IRS Form W-8BEN and (2) a tax certificate substantially in the
form of Exhibit S-1 to the effect that such Lender is not (a) a “bank” within
the meaning of Section 881(c)(3)(A) of the Code, (b) a “10 percent shareholder”
of such Borrower within the meaning of Section 881(c)(3)(B) of the Code (c) a
“controlled foreign corporation” described in Section 881(c)(3)(C) of the Code
and (d) conducting a trade or business in the United States with which the
relevant interest payments are effectively connected;

 

(E)                                in the case of a Non-U.S. Lender that is not
the beneficial owner of payments made under this Agreement (including a
partnership or a

 

135

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

 

participating Lender) (1) an IRS Form W-8IMY on behalf of itself and (2) the
relevant forms prescribed in clauses (A), (B), (C), (D) and (F) of this
paragraph (i)(ii) that would be required of each such beneficial owner or
partner of such partnership if such beneficial owner or partner were a Lender;
provided, however, that if the Lender is a partnership and one or more of its
partners are claiming the exemption for portfolio interest under
Section 881(c) of the Code, such Lender may provide a tax certificate
substantially in the form of Exhibit F-2 on behalf of such partners; or

 

(F)                                 any other form prescribed by law as a basis
for claiming exemption from, or a reduction of, U.S. Federal withholding Tax
together with such supplementary documentation necessary to enable the
Borrowers’ Agent or the Agent to determine the amount of Tax (if any) required
by law to be withheld.

 

(iii)                               If a payment made to a Lender under any Loan
Document would be subject to U.S. Federal withholding Tax imposed by FATCA if
such Lender were to fail to comply with the applicable reporting requirements of
FATCA (including those contained in Section 1471(b) or 1472(b) of the Code, as
applicable), such Lender shall deliver to the Borrowers’ Agent and the Agent, at
the time or times prescribed by law and at such time or times reasonably
requested by the Borrowers’ Agent and the Agent, such documentation prescribed
by applicable law (including as prescribed by Section 1471(b)(3)(C)(i) of the
Code) and such additional documentation reasonably requested by the Borrowers’
Agent and the Agent as may be necessary for the Borrowers’ Agent and the Agent
to comply with its obligations under FATCA, to determine that such Lender has or
has not complied with such Lender’s obligations under FATCA and, as necessary,
to determine the amount to deduct and withhold from such payment.  Solely for
purposes of this Section 10.17(h)(iii), “FATCA” shall include any amendments
made to FATCA after the date of this Agreement.

 

(i)                                     Each Lender and each Note holder agrees
that if, in its sole discretion exercised in good faith, it has received a
refund of any Taxes (i) previously paid by it and as to which it has been
indemnified by or on behalf of the Borrowers or (ii) previously deducted by the
Credit Parties (including, without limitation, any Indemnifiable Taxes deducted
from any additional amounts paid under clause (b) above), the relevant Lender or
Note holder, as the case may be, shall reimburse the Credit Parties to the
extent of the amount of any refund (but only to the extent of any indemnity
payments made under this Section 10.17 with respect to the Taxes giving rise to
such refund); provided, however, that the Credit Parties, upon the request of
the Lender or Note holder, as the case may be, agree to repay to such Lender or
Note holder, as the case may be, the amount paid over to the Credit Parties
(together with penalties, interest or other charges), in the event such Lender
or Note holder is required to repay such amount to the relevant Governmental
Authority.  Notwithstanding anything to the contrary in this Section 10.17(i),
in no event will any indemnified party be required to pay any amount to any
indemnifying party pursuant to this Section 10.17(i) if such payment would place
such indemnified party in a less favorable position (on a net after-Tax basis)
than such indemnified party would have been in if the indemnification payments
or additional amounts giving rise to such refund had never been paid.  This
Section 10.17(i) shall not be construed to require any

 

136

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

 

indemnified party to make available its Tax returns (or any other information
related to its Taxes which it deems confidential) to the indemnifying party or
any other Person.

 

(j)                                    For purposes of Section 10.17(g) and (h),
the term “Lender” includes the Issuing Bank.

 

10.18                 Waiver of Claim.  Each Borrower hereby waives and releases
the Agent and all Lenders from any and all claims or causes of action which the
Borrowers or any of them may own, hold or claim in respect of any of the Agent
or any Lenders as of the date of this Agreement.

 

10.19                 Right of Setoff.  The Lender Parties each are hereby
authorized at any time and from time to time during the existence of an Event of
Default or a Dominion Event, without notice to any Credit Party (any such notice
being expressly waived by the Credit Parties by their execution of the
applicable Loan Documents), to setoff and apply any and all deposits (general or
special, time or demand, provisional or final, whether or not such setoff
results in any loss of interest or other penalty, and including without
limitation all certificates of deposit) at any time held, and any other funds or
property at any time held, and other Indebtedness at any time owing by the Agent
or such other Lender Party to or for the credit or the account of any such
Credit Party against any and all of the Obligations irrespective of whether or
not Agent or such other Lender Party shall have made any demand under this
Agreement, the Notes or any other Loan Document.  Each Credit Party (by their
execution of the applicable Loan Documents) also hereby grants to Agent and each
of the other Lender Parties a security interest in and hereby transfers,
assigns, sets over, and conveys to the Agent and to each of the other Lender
Parties, as security for payment of all Obligations, all such deposits, funds or
property of such Credit Party or Indebtedness of the Agent or any other Lender
Party to any such Credit Party.  Should the right of the Agent or any other
Lender Party to realize funds in any manner set forth hereinabove be challenged
and any application of such funds be reversed, whether by court order or
otherwise, the Lenders shall make restitution or refund to the applicable Credit
Parties pro rata in accordance with their respective Commitment Percentages. 
Each Lender agrees to promptly notify the Borrowers’ Agent and the Agent after
any such setoff and application by it or any of its Affiliates, provided that
the failure to give such notice will not affect the validity of such setoff and
application.  The rights of the Agent and the other Lender Parties under this
Section are in addition to other rights and remedies (including without
limitation other rights of setoff) which the Agent or the other Lender Parties
may have.  This Section is subject to the terms and provisions of Section 2.12
hereof.

 

10.20                 Waiver of Right to Jury Trial.  EXCEPT AS PROHIBITED BY
APPLICABLE LAW, EACH PARTY HERETO HEREBY WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL
BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES, ANY OF THE OTHER LOAN
DOCUMENTS OR ANY TRANSACTIONS EVIDENCED THEREBY.

 

137

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

 

10.21                 Additional Provisions Regarding Collection of Receivables
and other Collateral.

 

(a)                                 Each Credit Party (by its execution of the
applicable Loan Documents) hereby designates and constitutes the Agent or the
Agent’s designee as each Credit Party’s attorney-in-fact with power to endorse
each such Credit Party’s name upon any notes, acceptances, checks, drafts, money
orders or other evidence of payment of any Receivables or any other Collateral
that may come into its possession; to sign or endorse such Credit Party’s name
on any invoice, bill of lading or other title or ownership documents relating to
any Receivables or Inventory, drafts against any customers of any Credit Party,
assignments and verifications of Receivables and, upon the occurrence and during
the continuance of any Event of Default, notices to customers of any Credit
Party; to send verifications of Receivables; and to notify the U.S. Postal
Service authorities to change the address for delivery of mail addressed to any
Credit Party to such address as the Agent may designate at any time after the
occurrence of any Event of Default which is continuing.  All acts of said
attorney or designee are hereby ratified and approved by each Credit Party (by
its execution of the applicable Loan Documents), and said attorneys or designee
shall not be liable for any acts of omission or commission, for any error of
judgment or for any mistake of fact or law, provided that the Agent or its
designee shall not be relieved of liability to the extent it is determined by a
final judicial decision that its act, error or mistake constituted gross
negligence or willful misconduct.  The power of attorney granted under this
subparagraph is coupled with an interest and is irrevocable until all of the
Obligations are paid in full and this Agreement and the Commitments are
terminated.

 

(b)                                 The Agent, without notice to or consent of
any Credit Party, at any time after the occurrence and during the continuation
of an Event of Default:  (i) may sue upon or otherwise collect, extend the time
of payment of, or compromise or settle for cash, credit or otherwise upon any
terms, any of the Receivables or any instruments or insurance applicable thereto
and/or release any account debtor thereon; (ii) is authorized and empowered to
accept or direct shipments of Inventory and accept the return of the goods
represented by any of the Receivables; and (iii) shall have the right to
receive, endorse, assign and/or deliver in its name or the name of any Credit
Party any and all checks, drafts and other instruments for the payment of money
relating to the Receivables, and each Credit Party (by its execution of the
applicable Loan Documents) hereby waives notice of presentment, protest and
non-payment of any instrument so endorsed.

 

(c)                                  Nothing herein contained shall be construed
to constitute any Credit Party as agent of the Agent for any purpose whatsoever,
and the Agent shall not be responsible or liable for any shortage, discrepancy,
damage, loss or destruction of any part of the Collateral wherever the same may
be located and regardless of the cause thereof (except to the extent it is
determined by a final judicial decision that the Agent’s or a Lender’s act or
omission constituted gross negligence of willful conduct).  The Agent and the
Lenders shall not, under any circumstances or in any event whatsoever, have any
liability for any error or omission or delay of any kind occurring in the
settlement, collection or payment of any of the Receivables or any instrument
received in payment thereof or for any damage resulting therefrom (except to the
extent it is determined by a final judicial decision that the Agent’s or such
Lender’s error, omission or delay constituted gross negligence or willful
misconduct).  The Agent and the Lenders do not, by anything herein or in any
assignment or otherwise, assume any of any Credit Party’s obligations under any
contract or agreement assigned to the Agent or the Lender, and the Agent and the
Lenders shall not be responsible in any way for the performance by any Credit
Party of any of the terms and conditions thereof.

 

138

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

 

(d)                                 Upon the occurrence and during the
continuation of any Event of Default:  (i) if any of the Receivables includes a
charge for any tax payable to any governmental tax authority, the Agent is
hereby authorized (but in no event obligated) in its discretion to pay the
amount thereof to the proper taxing authority for the account of any Credit
Party and to charge any Credit Party’s account therefor; and (ii) the Borrowers
shall notify the Agent if any Receivables include any tax due to any such taxing
authority and, in the absence of such notice, the Agent shall have the right to
retain the full proceeds of such Receivables and shall not be liable for any
taxes that may be due from any Credit Party by reason of the sale and delivery
creating such Receivables.

 

(e)                                  Upon the occurrence and continuation of any
Event of Default, the Agent may at any time and from time to time employ and
maintain in the premises of any Credit Party a custodian selected by the Agent
who shall have full authority to do all acts necessary to protect the Agent’s
and the Lenders’ interests and to report to the Agent thereon.  Each Credit
Party (by its execution of the applicable Loan Documents) hereby agrees to
cooperate with any such custodian and to do so whatever the Agent may reasonably
request to preserve the Collateral.  All costs and expenses incurred by the
Agent by reason of the employment of the custodian shall be added to the
Obligations and may be charged to any Credit Party’s account.

 

(f)                                   The Lenders hereby irrevocably authorize
the Agent, at its option and in its discretion, to release any Lien granted to
or held by the Agent upon any Collateral (i) upon termination of the Total
Commitment and payment in full in cash and satisfaction (or cash
collateralization pursuant to the terms of the Loan Documents) of all Loans, any
Letter of Credit Exposure Amount, and all other Obligations which have matured
and which the Agent has been notified in writing are then due and payable; or
(ii) constituting property being sold or disposed of in the ordinary course of
any Credit Party’s business and in compliance with the terms of this Agreement
and the other Loan Documents (with respect to which the Agent may rely
conclusively on any certificate of any Credit Party, without further inquiry);
or (iii) constituting property in which the Credit Parties owned no interest at
the time the Lien was granted or at any time thereafter; or (iv) if approved,
authorized or ratified in writing by the Lenders.  Upon request by the Agent at
any time, the Lenders will confirm in writing the Agent’s authority to release
particular types or items of Collateral pursuant to this Section 10.21(f).

 

(g)                                  Without in any manner limiting the Agent’s
authority to act without any specific or further authorization or consent by the
Lenders (as set forth in Section 10.21(f)), each Lender agrees to confirm in
writing, upon request by the Agent, the authority to release Collateral
conferred upon the Agent under Section 10.21(f).  Upon receipt by the Agent of
confirmation from the Lenders of its authority to release any particular item or
types of Collateral, and upon prior written request by any Credit Party, the
Agent shall (and is hereby irrevocably authorized by the Lenders to) execute
such documents as may be necessary to evidence the release of the Liens granted
to the Agent for the benefit of the Lenders upon such Collateral; provided,
however, that (i) the Agent shall not be required to execute any such document
on terms which, in the Agent’s opinion, would expose the Agent to liability or
create any obligations or entail any consequence other than the release of such
Liens without recourse or warranty, and (ii) such release shall not in any
manner discharge, affect or impair the Obligations or any Lien upon all
interests in the Collateral retained by any Credit Party.

 

139

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

 

10.22                 Bank Product Obligations.

 

(a)                                 The term “Obligations,” as defined and used
in this Agreement, includes all Obligations under all Bank Products of any
Credit Party or any of their Subsidiaries (collectively, “Related Obligations”)
to the Agent, JPMorgan, , or any other Lender Party (each an “Obligee” and,
collectively, the “Obligees”).  Accordingly, the benefit of the Loan Documents
and of the provisions of this Agreement relating to the Collateral shall extend
to and be available in respect of the Related Obligations solely on the
condition and understanding, as among the Agent and all Obligees, that (i) the
Related Obligations shall be entitled to the benefit of the Loan Documents and
the Collateral to the extent expressly set forth in this Agreement and the other
Loan Documents and to such extent the Agent shall hold, and have the right and
power to act with respect to, any Guaranty and the Collateral on behalf of and
as agent for the Obligees, but the Agent is otherwise acting solely as agent for
the Lenders and shall have no fiduciary duty, duty of loyalty, duty of care,
duty of disclosure or other obligation whatsoever to any Obligee, (ii) all
matters, acts and omissions relating in any manner to any Guaranty, the
Collateral, or the omission, creation, perfection, priority, abandonment or
release of any Lien, shall be governed solely by the provisions of this
Agreement and the other Loan Documents and no separate Lien, right, power or
remedy shall arise or exist in favor of any Obligee under any separate
instrument or agreement or in respect of any Related Obligation, (iii) each
Obligee shall be bound by all actions taken or omitted, in accordance with the
provisions of this Agreement and the other Loan Documents, by the Agent and the
Required Lenders, each of whom shall be entitled to act at its sole discretion
and exclusively in its own interest given its own Commitments and its own
interest in the Loans, Letter of Credit Obligations and other Obligations to it
arising under this Agreement or the other Loan Documents, without any duty or
liability to any other Obligee or as to any Related Obligation and without
regard to whether any Related Obligation remains outstanding or is deprived of
the benefit of the Collateral or becomes unsecured or is otherwise affected or
put in jeopardy thereby, (iv) no Obligee (except the Agents and the Lenders, to
the extent set forth in this Agreement) shall have any right to be notified of,
or to direct, require or be heard with respect to, any action taken or omitted
in respect of the Collateral or under this Agreement or the Loan Documents and
(v) no Obligee shall exercise any right of setoff, banker’s lien or similar
right except to the extent such right is exercised in compliance with
Section 2.13.

 

(b)                                 The Borrowers hereby irrevocably and
unconditionally guarantee to each of the Obligees the full and prompt payment
and performance of any and all Related Obligations to each Obligee.  Such
guaranty shall be an absolute, continuing, irrevocable, and unconditional
guaranty of payment and performance, and not a guaranty of collection, and the
Borrowers shall remain liable on its obligations hereunder until the payment and
performance in full of the Related Obligations.  No set-off, counterclaim,
recoupment, reduction, or diminution of any obligation, or any defense of any
kind or nature which any Credit Party or any of their Subsidiaries may have
against any Obligee or any other party shall be available to, or shall be
asserted by, any Credit Party against any Obligee or any subsequent holder of
the Related Obligations or any part thereof or against payment of the Related
Obligations or any part thereof.

 

(c)                                  If any Credit Party becomes liable for any
obligations or indebtedness owing by any Subsidiary of any Credit Party to any
Obligee by endorsement or otherwise, other than under this Section 10.22, such
liability shall not be in any manner impaired or affected

 

140

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

 

hereby, and the rights of each Obligee shall be cumulative of any and all other
rights that any Obligee may ever have against the Borrower.

 

(d)                                 In the event of default by any Subsidiary of
any Credit Party in payment or performance of any of the Related Obligations, or
any part thereof, when any part of the Related Obligations becomes due, whether
by its terms, by acceleration, upon demand or otherwise, the Borrowers shall
promptly pay the amount due thereon to the applicable Obligee without notice or
demand in dollars and it shall not be necessary for any Obligee, in order to
enforce such payment by the Borrowers, first to institute suit or exhaust its
remedies against any Subsidiary of any Credit Party or any others liable on such
Related Obligations, or to enforce any rights against any collateral which shall
ever have been given to secure such Related Obligations.  Notwithstanding
anything to the contrary contained in this Section 10.22, the Credit Parties
hereby irrevocably subordinate to the prior and defeasible payment in full of
the Related Obligations, any and all rights the Borrowers may now or hereafter
have under any agreement or at law or in equity (including, without limitation,
any law subrogating the Borrowers to the rights of any of the Obligees) to
assert any claim against or seek contribution, indemnification or any other form
of reimbursement from any Subsidiary of any Credit Party or any other party
liable for payment of any or all of the Related Obligations for any payment made
by any Borrower under or in connection with this Section 10.22 or otherwise.

 

(e)                                  The Borrowers hereby agree that their
obligations under this Section 10.22 shall not be released, discharged,
diminished, impaired, reduced, or affected for any reason or by the occurrence
of any event, including, without limitation, one or more of the following
events, whether or not with notice to or the consent of any Borrower:  (i) the
taking or accepting of collateral as security for any or all of the Related
Obligations or the release, surrender, exchange, or subordination of any
collateral now or hereafter securing any or all of the Related Obligations;
(ii) any partial release of the liability of any Borrower hereunder or any other
Credit Party under the Loan Documents, or the full or partial release of any
other guarantor from liability for any or all of the Related Obligations;
(iii) any disability of any Credit Party or any of their Subsidiaries, or the
dissolution, insolvency, or bankruptcy of any Credit Party, any of their
Subsidiaries, any guarantor or any other party at any time liable for the
payment of any or all of the Related Obligations; (iv) any renewal, extension,
modification, waiver, amendment, or rearrangement of any or all of the Related
Obligations or any instrument, document, or agreement evidencing, securing, or
otherwise relating to any or all of the Related Obligations; (v) any adjustment,
indulgence, forbearance, waiver, or compromise that may be granted or given by
any Obligee to any Credit Party, any of their Subsidiaries, or any other party
ever liable for any or all of the Related Obligations; (vi) any neglect, delay,
omission, failure, or refusal of any Obligee to take or prosecute any action for
the collection of any of the Related Obligations or to foreclose or take or
prosecute any action in connection with any instrument, document, or agreement
evidencing, securing, or otherwise relating to any or all of the Related
Obligations; (vii) the unenforceability or invalidity of any or all of the
Related Obligations or of any instrument, document, or agreement evidencing,
securing, or otherwise relating to any or all of the Related Obligations;
(viii) any payment by any Credit Party, any Subsidiary of any Credit Party or
any other party to any Obligee is held to constitute a preference under
applicable bankruptcy or insolvency law or if for any other reason any Obligee
is required to refund any payment or pay the amount thereof to someone else;
(ix) the settlement or compromise of any of the Related Obligations; (x) the
non-perfection of any security interest or lien securing any or all of the
Related Obligations; (xi)

 

141

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

 

any impairment of any collateral securing any or all of the Related Obligations;
(xii) the failure of any Obligee to sell any collateral securing any or all of
the Related Obligations in a commercially reasonable manner or as otherwise
required by law; (xiii) any change in the corporate existence, structure, or
ownership of any Credit Party or any of their Subsidiaries; or (xiv) any other
circumstance which might otherwise constitute a defense available to, or
discharge of, any Credit Party or any of their Subsidiaries.

 

(f)                                   The Borrowers hereby waive promptness,
diligence, notice of any default under the Related Obligations, demand of
payment, notice of acceptance of this Agreement, presentment, notice of protest,
notice of dishonor, notice of the incurring by any Subsidiary of any Credit
Party of additional obligations or indebtedness, and all other notices and
demands with respect to the Related Obligations and this Agreement.

 

10.23                 Construction.  The Borrowers, each other Credit Party, the
Agent, and each Bank acknowledge that each of them has had the benefit of legal
counsel of its own choice and has been afforded an opportunity to review this
Agreement and the other Loan Documents with its legal counsel and that this
Agreement and the other Loan Documents shall be construed as if jointly drafted
by the parties hereto.

 

10.24                 Joint and Several Obligations.  Notwithstanding anything
to the contrary contained herein or in any other Loan Documents (but giving
effect to Section 1.4(a)), the Borrowers acknowledge that they and the
Guarantors are jointly and severally responsible for their respective
agreements, covenants, representations, warranties and obligations contained and
set forth in this Agreement or in any other Loan Document to which the
applicable Party is a party.

 

10.25                 USA Patriot Act.  Each Lender hereby notifies the Credit
Parties that pursuant to the requirements of the USA Patriot Act (Title III of
Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required
to obtain, verify and record information that identifies the Credit Parties,
which information includes the name and address of the Credit Parties and other
information that will allow such Lender to identify the Credit Parties in
accordance with the Act.

 

10.26                 Judgment.  The specification under the Loan Documents of
Dollars and payment in New York City is of the essence.  The Credit Parties’
obligations hereunder and under the other Loan Documents to make payments in
Dollars (the “Obligation Currency”) shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Lender Parties of the
full amount of the Obligation Currency expressed to be payable to the Lender
Parties under this Agreement or the other Loan Documents.  If, for the purpose
of obtaining or enforcing judgment in any court, it is necessary to convert into
or from any currency other than the Obligation Currency (such other currency
being hereinafter referred to as the “Judgment Currency”) an amount due in the
Obligation Currency, the rate of exchange used shall be that at which the Lender
Parties could, in accordance with normal banking procedures, purchase Dollars
with the Judgment Currency on the Business Day preceding that on which final
judgment is given.  The obligation of the Credit Parties in respect of any such
sum due from it to the Lender Parties hereunder shall, notwithstanding any
judgment in such Judgment Currency, be discharged only to the extent that,

 

142

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

 

on the Business Day immediately following the date on which the Lender Parties
receive any sum adjudged to be so due in the Judgment Currency, the Lender
Parties may, in accordance with normal banking procedures, purchase Dollars with
the Judgment Currency.  If the Dollars so purchased are less than the sum
originally due to the Lender Parties in Dollars, the Credit Parties agree, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Lender Parties against such loss, and if the Dollars so purchased exceed the sum
originally due to the Lender Parties in Dollars, the Lender Parties agree to
remit to the Credit Parties such excess.

 

10.27                 Jurisdiction; Service of Process.  Each Credit Party
hereby irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the Supreme Court of the State of New York
sitting in New York County and of the United States District Court of the
Southern District of New York, and any appellate court from any thereof, in any
action or proceeding arising out of or relating to any Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
hereby irrevocably and unconditionally agrees that all claims in respect of any
such action or proceeding may be heard and determined in such New York State or,
to the extent permitted by law, in such federal court.  Each of the parties
hereto agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.  Nothing in this Agreement or any other
Loan Document shall affect any right that any Lender Party may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against any Credit Party or its properties in the courts of any
jurisdiction.  Each Credit Party hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this Agreement or any other Loan
Document in any court referred to in this Section.  Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.  Each party to this Agreement irrevocably consents to service of
process in the manner provided for notices in Section 10.2.  Nothing in this
Agreement or any other Loan Document will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.

 

10.28                 Confidentiality.  Each of the Agent, the Issuing Bank and
the Lenders agrees to maintain the confidentiality of the Information (as
defined below), except that information may be disclosed (a) to its and its
Affiliates’ directors, officers, employees and agents, including accountants,
legal counsel and other advisors (it being understood that the Persons to whom
such disclosure is made will be informed of the confidential nature of such
information and instructed to keep such Information confidential), (b) to the
extent requested by any regulatory authority, (c) to the extent requested by any
rating agency or market data collector (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of such
information and instructed to keep it confidential), (d) to the extent required
by law or by any subpoena or similar legal process, (e) to any other party to
this Agreement, (f) in connection with the exercise of any remedies hereunder or
any suit, action or proceeding relating to this Agreement or any other Loan
Document or the enforcement of rights hereunder or thereunder, (g) subject to an
agreement containing provisions substantially the same as those of this Section,
to (i) any assignee of, or any prospective assignee of, any of its rights or
obligations under this Agreement or (ii) any actual or prospective counterparty
(or its advisors) to any swap or derivative transaction relating to the Credit
Parties and their obligations, (h) with the consent of

 

143

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

 

the Borrowers or (i) to the extent such Information (i) becomes publicly
available other than as a result of a breach of this Section or (ii) becomes
available to the Agent, the Issuing Bank or any Lender on a nonconfidential
basis from a source other than the Borrowers.  For the purposes of this Section,
“Information” means all information received from the Credit Parties relating to
any of the Credit Parties, the Offshore Entities, their respective subsidiaries
or their respective businesses, other than any such information that is
available to the Agent, the Issuing Bank or any Lender on a non-confidential
basis prior to disclosure by the Borrowers; provided that, in the case of
information received from the Borrowers after the date hereof, such information
is clearly identified at the time of delivery as confidential.  Any Person
required to maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so if
such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.

 

EACH LENDER ACKNOWLEDGES THAT INFORMATION AS DEFINED IN THIS SECTION 10.28
FURNISHED TO IT PURSUANT TO THIS AGREEMENT MAY INCLUDE MATERIAL NON-PUBLIC
INFORMATION CONCERNING THE CREDIT PARTIES AND  THEIR RELATED PARTIES AND
AFFILIATES, OR THEIR RESPECTIVE SECURITIES, AND CONFIRMS THAT IT HAS DEVELOPED
COMPLIANCE PROCEDURES REGARDING THE USE OF MATERIAL NON-PUBLIC INFORMATION AND
THAT IT WILL HANDLE SUCH MATERIAL NON-PUBLIC INFORMATION IN ACCORDANCE WITH
THOSE PROCEDURES AND APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES
LAWS.

 

ALL INFORMATION, INCLUDING REQUESTS FOR WAIVERS, CONSENTS AND AMENDMENTS,
FURNISHED BY THE CREDIT PARTIES, THE AGENT OR THEIR RESPECTIVE RELATED PARTIES
AND AFFILIATES, PURSUANT TO, OR IN THE COURSE OF ADMINISTERING, THIS AGREEMENT
WILL BE SYNDICATE-LEVEL INFORMATION, WHICH MAY CONTAIN MATERIAL NON-PUBLIC
INFORMATION ABOUT THE CREDIT PARTIES AND THEIR RELATED PARTIES AND AFFILIATES OR
THEIR RESPECTIVE SECURITIES.  ACCORDINGLY, EACH LENDER REPRESENTS TO THE CREDIT
PARTIES AND THE AGENT THAT IT HAS IDENTIFIED IN ITS ADMINISTRATIVE QUESTIONNAIRE
A CREDIT CONTACT WHO MAY RECEIVE INFORMATION THAT MAY CONTAIN MATERIAL
NON-PUBLIC INFORMATION IN ACCORDANCE WITH ITS COMPLIANCE PROCEDURES AND
APPLICABLE LAW, INCLUDING FEDERAL AND STATE SECURITIES LAWS.

 

10.29                 No Fiduciary Duty/Conflicts.  The Lender Parties may have
economic interests that conflict with those of Borrowers, their stockholders
and/or their Affiliates.  Borrowers agree that nothing in the Loan Documents or
otherwise will be deemed to create an advisory, fiduciary or agency relationship
or fiduciary or other implied duty between any Lender Party, on the one hand,
and Borrowers, their stockholders or their affiliates, on the other.  The Credit
Parties acknowledge and agree that (i) the transactions contemplated by the Loan
Documents (including the exercise of rights and remedies hereunder and
thereunder) are arm’s-length commercial transactions between the Lenders
Parties, on the one hand, and Borrowers, on the other, and (ii) in connection
therewith and with the process leading thereto, (x) no Lender Party has assumed
an advisory or fiduciary responsibility in favor of any Borrower, its
stockholders or its Affiliates

 

144

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

 

with respect to the transactions contemplated hereby (or the exercise of rights
or remedies with respect thereto) or the process leading thereto (irrespective
of whether any Lender Party has advised, is currently advising or will advise
any Borrower, its stockholders or its Affiliates on other matters) or any other
obligation to Borrowers except the obligations expressly set forth in the Loan
Documents and (y) each Lender Party is acting solely as principal and not as the
agent or fiduciary of any Borrower, its management, stockholders, creditors or
any other Person.  Each Borrower acknowledges and agrees that each Borrower has
consulted its own legal and financial advisors to the extent it deemed
appropriate and that it is responsible for making its own independent judgment
with respect to such transactions and the process leading thereto.  Borrower
agrees that it will not claim that any Lender Party has rendered advisory
services of any nature or respect, or owes a fiduciary or similar duty to such
Borrower, in connection with such transaction or the process leading thereto.

 

10.30                 Release of Neenah Canada.

 

(a)                                 The Borrowers and Neenah Canada hereby
request that the Lenders consent to the release of Neenah Canada as Guarantor
under the Security Documents and the other Loan Documents and waive any
violation of this Agreement that would otherwise exist or arise as a result of
such release in the absence of such consent.  In reliance on the representations
and warranties of the Borrowers contained herein, and subject to the terms, and
satisfaction of the conditions precedent, set forth in Section 4 hereof,
effective as of the Closing Date, the Lenders hereby consent to the release of
Neenah Canada as Guarantor and waive any violation of this Agreement that would
otherwise exist or arise upon such release in the absence of such consent. 
Effective as of the Closing Date, Neenah Canada shall be deemed to have been
released as Guarantor under the Loan Documents.  Furthermore, upon the Closing
Date, (i) the Agent shall file one or more PPSA releases required to release
Neenah Canada as Guarantor under the Security Documents.

 

(b)                                 On and following the Closing Date, the Agent
is hereby authorized and directed to execute and deliver such documents and
instruments as may be reasonably requested by the Parent to give effect to the
release of Neenah Canada as Guarantor, including without limitation lien
releases, re-assignments of Intellectual Property pledged by Neenah Canada (if
any) under the Intellectual Property Security Agreement, and releases under any
Tri-Party Agreements.

 

(c)                                  The releases set forth in this
Section 10.30 are limited solely to the release of Neenah Canada as Guarantor,
and nothing contained herein shall be deemed a consent to, or waiver of, any
other action or inaction of any other Credit Party.  Neither the Agent nor the
Lenders shall be obligated to grant any future waivers, consents or amendments
with respect to the Credit Agreement or any other Loan Document.

 

(Signature Pages Follow)

 

145

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

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first set forth above.

 

 

 

NEENAH PAPER, INC.,

 

as a Borrower

 

 

 

By:

/s/ Bonnie C. Lind

 

Name:

Bonnie C. Lind

 

Title:

Sr. Vice President, CFO and Treasurer

 

 

 

 

Address for Notices:

 

3460 Preston Ridge Road, Suite 600

 

Alpharetta, Georgia 30005

 

Attention: General Counsel

 

Facsimile: 678-518-3283

 

 

 

With a copy to:

 

Bryan Cave LLP

 

One Atlantic Center — Fourteenth Floor

 

1201 West Peachtree Street, NW

 

Atlanta, Georgia 30309-3488

 

Attention: Robert C. Lewinson

 

Facsimile: 404-420-0623

 

 

 

NEENAH PAPER MICHIGAN, INC.,

 

as a Borrower

 

 

 

By:

/s/ Bonnie C. Lind

 

Name:

Bonnie C. Lind

 

Title:

Sr. Vice President, CFO and Treasurer

 

 

 

 

 

 

 

NPCC HOLDING COMPANY, LLC,

 

as a Borrower

 

 

 

By:

Neenah Paper, Inc., as its sole member

 

 

 

 

By:

/s/ Bonnie C. Lind

 

 

Name:

Bonnie C. Lind

 

 

Title:

Sr. Vice President, CFO and Treasurer

 

Signature Page to Second Amended and Restated Credit Agreement

 

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

 

 

NEENAH PAPER FVC, INC., as a Borrower

 

 

 

By:

/s/ Bonnie C. Lind

 

Name:

Bonnie C. Lind

 

Title:

Sr. Vice President, CFO and Treasurer

 

 

 

 

 

 

 

NEENAH PAPER FR, LLC, as a Borrower

 

 

 

By:

/s/ Bonnie C. Lind

 

Name:

Bonnie C. Lind

 

Title:

Sr. Vice President, CFO and Treasurer

 

 

 

 

 

 

 

Acknowledged and Agreed by:

 

 

 

RELEASED PARTY:

 

 

 

NEENAH PAPER COMPANY OF CANADA

 

 

 

By:

/s/ Bonnie C. Lind

 

Name:

Bonnie C. Lind

 

Title:

Sr. Vice President, CFO and Treasurer

 

Signature Page to Second Amended and Restated Credit Agreement

 

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

 

 

JPMORGAN CHASE BANK, N.A.,

 

as a Lender, as Agent and as Swingline Lender

 

 

 

By:

/s/ Jeff A. Tompkins

 

Name:

Jeff A. Tompkins

 

Title:

Authorized Officer

 

 

 

 

Address for Notices:

 

2200 Ross Avenue, 9th Floor TX 2921

 

Dallas, Texas 75201

 

Attention: Jeff A. Tompkins

 

Facsimile: 214-965-2594

 

 

 

With a copy to:

 

Vinson & Elkins LLP

 

2001 Ross Avenue, Suite 3700

 

Dallas, Texas 75201

 

Attention: Erec R. Winandy

 

Facsimile: 214-999-7756

 

Signature Page to Second Amended and Restated Credit Agreement

 

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

 

 

BANK OF AMERICA, N.A.,

 

as a Lender

 

 

 

By:

/s/ Dennis S. Losin

 

Name:

Dennis S. Losin

 

Title:

Senior Vice President

 

 

 

 

Address for Notices:

 

 

300 Galleria Parkway, Suite 800

 

 

Atlanta, GA 30339

 

Attention:

Dennis S. Losin, CFA

 

Facsimile:

(312) 453-4735

 

Signature Page to Second Amended and Restated Credit Agreement

 

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

 

 

UBS AG, Stamford Branch,

 

as a Lender

 

 

 

By:

/s/ Irja R. Otsa

 

Name:

Irja R. Otsa

 

Title:

Associate Director

 

 

 

 

By:

/s/ David Urban

 

Name:

David Urban

 

Title:

Associate Director

 

 

 

 

Address for Notices:

 

 

UBS AG, Stamford Branch

 

 

677 Washington Blvd.

 

 

Stamford, CT 06901

 

Attention:

Jitesh Hotwani

 

Facsimile:

(203) 719-3888

 

Signature Page to Second Amended and Restated Credit Agreement

 

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

 

 

GOLDMAN SACHS LENDING PARTNERS LLC, as a Lender

 

 

 

By:

/s/ Mark Walton

 

Name:

Mark Walton

 

Title:

Authorized Signatory

 

 

 

 

Address for Notices:

 

 

200 West Street

 

 

New York, NY 10282-2198

 

Attention:

Michelle Latzoni

 

Facsimile:

(646) 769 7700

 

Signature Page to Second Amended and Restated Credit Agreement

 

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

 

 

BMO HARRIS BANK, N.A.,

 

as a Lender

 

 

 

By:

/s/ Kimberly Ptak

 

Name:

Kimberly Ptak

 

Title:

Vice President

 

 

 

 

Address for Notices:

 

 

111 W. Monroe, 20E

 

 

Chicago, IL 60603

 

Attention:

Kimberly Ptak

 

Facsimile:

312.765.1641

 

Signature Page to Second Amended and Restated Credit Agreement

 

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

 

EXHIBIT A

 

FORM OF REVOLVING CREDIT NOTE

 

$[-]

 

October        , 2012

 

 

Neenah Paper, Inc., a Delaware corporation (“Neenah Paper”) and the subsidiaries
of Neenah Paper signatory hereto (collectively with Neenah Paper, the
“Borrowers”), for value received, hereby jointly and severally promise to pay to
the order of [NAME OF LENDER] (the “Lender”) the principal sum of [AMOUNT]
($[-]) or, if less, the amount of Revolving Loans loaned by the Lender to the
Borrowers pursuant to the Credit Agreement referred to below, in lawful money of
the United States of America and in immediately available funds, on the
date(s) and in the manner provided in the Credit Agreement.  The Borrowers also
jointly and severally promise to pay interest on the unpaid principal balance
hereof, for the period such balance is outstanding, at the principal office of
the Lender, in like money, at the rates of interest as provided in the Credit
Agreement described below, on the date(s) and in the manner provided in the
Credit Agreement.

 

This Revolving Credit Note is issued pursuant to, and is entitled to the
benefits of, that certain Second Amended and Restated Credit Agreement, dated as
of October 11, 2012, by and among the Borrowers, the Guarantors from time to
time party thereto, the financial institutions from time to time party thereto
as “Lenders”, and JPMorgan Chase Bank, N.A., as Agent (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
and evidences the Revolving Loans made by the Lender to the Borrowers
thereunder.  All capitalized terms used but not defined herein shall have the
meanings specified in the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of principal
upon the occurrence and during the continuance of certain Events of Default and
for prepayments on the terms and conditions specified therein.

 

The Borrowers waive presentment, notice of dishonor, protest and any other
notice or formality with respect to the enforcement of this Revolving Credit
Note, except any notices required under the terms of the Credit Agreement.

 

In any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Borrower would otherwise be
held or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its joint and several
liability hereunder, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by any
Borrower or Lender or any other Person, be automatically limited and reduced to
the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.

 

(Signature Page Follows)

 

A-1

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

 

THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS OF THE
UNITED STATES OF AMERICA APPLICABLE TO NATIONAL BANKS.

 

[Signature Page Follows]

 

A-1

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

 

 

BORROWERS:

 

 

 

NEENAH PAPER, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER MICHIGAN, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NPCC HOLDING COMPANY, LLC

 

 

 

By:

Neenah Paper, Inc., as its sole member

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FVC, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FR, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Revolving Credit Note]

 

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

 

EXHIBIT B

 

FORM OF SWINGLINE NOTE

 

$15,000,000

October       , 2012

 

Neenah Paper, Inc., a Delaware corporation (“Neenah Paper”) and the subsidiaries
of Neenah Paper signatory hereto (collectively with Neenah Paper, the
“Borrowers”), for value received, hereby jointly and severally promise to pay to
the order of [NAME OF SWINGLINE LENDER] (the “Swingline Lender”) the principal
sum of Fifteen Million Dollars ($15,000,000) or, if less, the amount of
Swingline Loans loaned by the Swingline Lender to the Borrowers pursuant to the
Credit Agreement referred to below, in lawful money of the United States of
America and in immediately available funds, on the date(s) and in the manner
provided in the Credit Agreement.  The Borrowers also jointly and severally
promise to pay interest on the unpaid principal balance hereof, for the period
such balance is outstanding, at the principal office of the Swingline Lender, in
like money, at the rates of interest as provided in the Credit Agreement
described below, on the date(s) and in the manner provided in the Credit
Agreement.

 

This Swingline Note is issued pursuant to, and is entitled to the benefits of,
that certain Second Amended and Restated Credit Agreement, dated as of
October 11, 2012, by and among the Borrowers, the Guarantors from time to time
party thereto, the financial institutions from time to time party thereto as
“Lenders”, and JPMorgan Chase Bank, N.A., as Agent (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
and evidences the Swingline Loans made by the Swingline Lender to the Borrowers
thereunder.  All capitalized terms used but not defined herein shall have the
meanings specified in the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of principal
upon the occurrence and during the continuance of certain Events of Default and
for prepayments on the terms and conditions specified therein.

 

The Borrowers waive presentment, notice of dishonor, protest and any other
notice or formality with respect to the enforcement of this Swingline Note,
except any notices required under the terms of the Credit Agreement.

 

In any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Borrower would otherwise be
held or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its joint and several
liability hereunder, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by any
Borrower or Swingline Lender or any other Person, be automatically limited and
reduced to the highest amount that is valid and enforceable and not subordinated
to the claims of other creditors as determined in such action or proceeding.

 

(Signature Page Follows)

 

B-1

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

 

THIS SWINGLINE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED
STATES OF AMERICA APPLICABLE TO NATIONAL BANKS.

 

[Signature Page Follows]

 

B-2

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

 

 

BORROWERS:

 

 

 

NEENAH PAPER, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER MICHIGAN, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NPCC HOLDING COMPANY, LLC

 

 

 

By:

Neenah Paper, Inc., as its sole member

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FVC, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FR, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Swingline Note]

 

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

 

EXHIBIT C

 

FORM OF TERM NOTE

 

$[-]

October       , 2012

 

Neenah Paper, Inc., a Delaware corporation (“Neenah Paper”) and the subsidiaries
of Neenah Paper signatory hereto (collectively with Neenah Paper, the
“Borrowers”), for value received, hereby jointly and severally promise to pay to
the order of [NAME OF LENDER] (the “Lender”) the principal sum of [AMOUNT]
($[-]) or, if less, the amount of Term Loans loaned by the Lender to the
Borrowers pursuant to the Credit Agreement referred to below, in lawful money of
the United States of America and in immediately available funds, on the
date(s) and in the manner provided in the Credit Agreement.  The Borrowers also
jointly and severally promise to pay interest on the unpaid principal balance
hereof, for the period such balance is outstanding, at the principal office of
the Lender, in like money, at the rates of interest as provided in the Credit
Agreement described below, on the date(s) and in the manner provided in the
Credit Agreement.

 

This Term Note is issued pursuant to, and is entitled to the benefits of, that
certain Second Amended and Restated Credit Agreement, dated as of October 11,
2012, by and among the Borrowers, the Guarantors from time to time party
thereto, the financial institutions from time to time party thereto as
“Lenders”, and JPMorgan Chase Bank, N.A., as Agent (as amended, restated,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
and evidences the Term Loan made by the Lender to the Borrowers thereunder.  All
capitalized terms used but not defined herein shall have the meanings specified
in the Credit Agreement.

 

The Credit Agreement provides for the acceleration of the maturity of principal
upon the occurrence and during the continuance of certain Events of Default and
for prepayments on the terms and conditions specified therein.

 

The Borrowers waive presentment, notice of dishonor, protest and any other
notice or formality with respect to the enforcement of this Term Note, except
any notices required under the terms of the Credit Agreement.

 

In any action or proceeding involving any state corporate law, or any state or
federal bankruptcy, insolvency, reorganization or other law affecting the rights
of creditors generally, if the obligations of any Borrower would otherwise be
held or determined to be void, invalid or unenforceable, or subordinated to the
claims of any other creditors, on account of the amount of its joint and several
liability hereunder, then, notwithstanding any other provision hereof to the
contrary, the amount of such liability shall, without any further action by any
Borrower or Lender or any other Person, be automatically limited and reduced to
the highest amount that is valid and enforceable and not subordinated to the
claims of other creditors as determined in such action or proceeding.

 

(Signature Page Follows)

 

C-1

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

 

THIS TERM NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES OF
AMERICA APPLICABLE TO NATIONAL BANKS.

 

[Signature Page Follows]

 

C-2

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

 

 

BORROWERS:

 

 

 

NEENAH PAPER, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER MICHIGAN, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NPCC HOLDING COMPANY, LLC

 

 

 

By:

Neenah Paper, Inc., as its sole member

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FVC, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FR, LLC

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Term Note]

 

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

 

EXHIBIT D

 

FORM OF COMPLIANCE CERTIFICATE

 

[Letterhead of Company]

 

 

                 , 200        

 

JPMorgan Chase Bank, N.A., as Agent

2200 Ross Avenue, 9th Floor TX 2921

Dallas, Texas 75201

Attention: Jeff A. Tompkins

Telecopy No.: 214-965-2594

 

Ladies and Gentlemen:

 

I hereby certify to you as follows:

 

(a)                                 I am the duly elected [Title] of NEENAH
PAPER, INC., a Delaware corporation (the “Company”).  All capitalized terms used
but not defined herein shall have the meanings specified in the Second Amended
and Restated Credit Agreement dated as of October 11, 2012 (together with all
amendments, restatements, modifications or renewals, the “Credit Agreement”),
among the Company, certain subsidiaries of Company (together with Company, each
a “Borrower” and collectively, the “Borrowers”),  the Guarantors from time to
time party thereto, each of the financial institutions which may from time to
time become a party thereto (individually, a “Lender” and collectively, the
“Lenders”), and JPMorgan Chase Bank, N.A. (“JPMorgan”), as agent for the Lenders
(in such capacity, together with its successors in such capacity, the “Agent”).

 

(b)                                 I have reviewed the terms of the Credit
Agreement, and have made, or have caused to be made under my supervision, a
review in reasonable detail of the transactions and the condition of the Credit
Parties during the immediately preceding [applicable time period].

 

(c)                                  Except as disclosed on Annex A attached
hereto, the review described in paragraph (b) above did not disclose the
existence during or at the end of such period, and I have no knowledge of the
existence as of the date hereof, of any condition or event which constitutes a
Default or an Event of Default.  Provided in Annex B to this Certificate are the
financial statements and information required to be furnished to the Agent
pursuant to Section 6.3 of the Credit Agreement.

 

I further certify that, based on the review described in paragraph (b) above, no
Credit Party has at any time during or at the end of such period, except as
(i) specifically described in paragraph (p) below or (ii) permitted by the
Credit Agreement, done any of the following:

 

D-1

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

 

(d)                                 Changed its respective address, name,
identity, type of organization, corporate structure (e.g., by merger,
consolidation, change in corporate form or otherwise), jurisdiction of
organization, location of its chief executive office or principal place of
business or the place it keeps its material books and records, or established
any trade names;

 

(e)                                  Permitted any of its Subsidiaries to issue
any equity or securities or otherwise change its capital structure;

 

(f)                                   Permitted the Fixed Charge Coverage Ratio
of the Credit Parties and their Subsidiaries, on a Consolidated basis, to be
less than 1.1 to 1.0 as of the last day of any fiscal quarter for the four
quarter period ending on such day, such ratio to be tested with respect to the
most recently ended fiscal quarter (a) so long as the Term Loan Commitment or
the Term Loans are outstanding and (b) after the Term Loans shall have been
repaid or prepaid in full, on any date from time to time on which Availability
falls below $20,000,000, and on the last day of each fiscal quarter ending
thereafter, in each case until such time when Availability has exceeded
$35,000,000 for sixty (60) consecutive days and no Default or Event of Default
is continuing;

 

(g)                                  Become aware of, obtained knowledge of, or
received notification of, the institution of any lawsuit, administrative
proceeding or investigation affecting any Credit Party or any of their
Subsidiaries (other than the litigation described in Schedule 5.5 of the Credit
Agreement), including without limitation any examination or audit by the IRS
which individually or in the aggregate have, or could reasonably be expected to
have, a Material Adverse Effect;

 

(h)                                 Become aware of, obtained knowledge of, or
received notification of any breach or violation of any material covenant
contained in any instrument or agreement in respect of indebtedness for money
borrowed by the Borrower or any of the Subsidiaries that would permit or result
in the acceleration of any Indebtedness that would have a Material Adverse
Effect;

 

(i)                                     Become aware of, obtained knowledge of,
or received notification of any development or change in the business or affairs
of any Credit Party or any of their Subsidiaries which has had or which is
likely to have a Material Adverse Effect;

 

(j)                                    Become aware of, obtained knowledge of,
or received notification of the occurrence of a default or event of default by
any Credit Party or any of their Subsidiaries under any agreement or series of
related agreements to which it is a party, which default or event of default
could reasonably be expected to have a Material Adverse Effect;

 

(k)                                 Become aware of, obtained knowledge of, or
received notification of any material violation in connection with any actual or
alleged material violation of any Legal Requirement imposed by the Environmental
Protection Agency, the Occupational Safety Hazard Administration or any other
Governmental Authority, which has or is likely to have a Material Adverse
Effect;

 

(l)                                     Become aware of, obtained knowledge of,
or received notification of any significant change in the accuracy of any
material representations and warranties of any Loan Document;

 

D-2

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

 

(m)                         Incurred any material loss or destruction of, or
substantial damage to, any portion or component of the Collateral with fair
market value in excess of $500,000 and no other matters occurred that materially
affected the value, enforceability or collectibility of any of the Collateral
with fair market value in excess of $500,000, unless a notice of such loss,
destruction or damage has previously been provided to the Agent;

 

(n)                                 Acquired any Additional Mortgaged Property,
unless a notice of such acquisition has previously been provided to the Agent;

 

(o)                                 [List exceptions, if any, to paragraphs
(d) through (n) above.]

 

The foregoing certifications are made and delivered this          day of
                      , 20    .

 

 

 

Very truly yours,

 

 

 

NEENAH PAPER, INC.

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

D-3

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

 

Annex A

 

Disclosure of Known Defaults and Events of Default

 

[If none, insert “NONE”.]

 

D-4

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

 

Annex B

 

Financial Statements and Information

 

D-5

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

 

EXHIBIT E

 

FORM OF REQUEST FOR EXTENSION OF CREDIT

 

Neenah Paper, Inc.

3460 Preston Ridge Road, Suite 600

Alpharetta, GA 30005

 

[-], 20[—]

 

JPMorgan Chase Bank, N.A.

2200 Ross Avenue, 9th Floor TX 2921

Dallas, Texas 75201

Attention: Jeff A. Tompkins

 

Ladies and Gentlemen:

 

Reference is hereby made to that certain Second Amended and Restated Credit
Agreement, dated as of October 11, 2012, (as amended, restated, supplemented or
otherwise modified from time to time, the “Credit Agreement”), by and among
Neenah Paper, Inc. (“Parent”), each subsidiary of Parent listed as a “Borrower”
on the signature pages thereto (together with Parent, each a “Borrower” and
collectively, the “Borrowers”), each subsidiary of Parent party thereto as a
“Guarantor”, the lenders from time to time party thereto (each a “Lender” and
collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., as agent for the
Lenders (in such capacity, together with any successors and assigns, the
“Agent”).  All capitalized terms used but not defined herein have the same
meanings specified in the Credit Agreement.  The Borrowers’ Agent hereby gives
you notice pursuant to [Section 4.1(a)] [Section 4.2(a)] of the Credit Agreement
of the following request for a [Revolving] [Term] Loan (the “Proposed Loan”)
under the Credit Agreement:

 

(i)                                     The aggregate principal amount of the
Proposed Loan is $                        .(1)

 

(ii)                                  The Proposed Loan will be a [Alternate
Base Rate Borrowing] [LIBOR Borrowing, with an initial Interest Period of [one]
[two] [three] month[s]].

 

(iii)                               The borrowing date of the Proposed Loan is
                        .(2)

 

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

(1) In the case of a LIBOR Borrowing, the Proposed Loan must be in a minimum
amount of $3,000,000 and in integral multiples of $1,000,000.

(2) This date must be a Business Day.

 

E-1

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

 

(iv)                              The proceeds of the Proposed Loan should be
made available to the undersigned by wire transferring such proceeds in
accordance with the payment instructions attached hereto as Exhibit A.

 

The undersigned certifies that [(i) For Revolving Loans: the representations and
warranties contained in Article 5 of the Credit Agreement and in each other Loan
Document and certificate or other writing delivered to the Agents or any Lender
pursuant thereto on or prior to the date hereof are true and correct in all
material respects on and as of the date hereof as though made on and as of the
date hereof (except for any representation and warranty made as of a specific
date which was true and correct as of such specific date, and except for changes
in representations and warranties otherwise permitted by the terms of the Credit
Agreement), (ii) there shall have occurred no Material Adverse Effect after
giving effect to the Proposed Loan] [(i) For Term Loans: the Specified
Representations are true and correct in all material respects on and as of the
date hereof], [(ii)][(iii)] no Default or Event of Default has occurred and is
continuing or will result from the making of the Proposed Loan and [(iii)][(iv)]
all applicable conditions set forth in Article 4 of the Credit Agreement have
been satisfied as of the date hereof or shall have been waived in writing by the
requisite Lender Parties.

 

 

Very truly yours,

 

 

 

NEENAH PAPER, INC.,

 

as Borrowers’ Agent

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

E-2

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

 

EXHIBIT A

 

Payment Instructions

 

E-3

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

 

EXHIBIT F

 

FORM OF RATE SELECTION NOTICE

 

Reference is made to that certain Second Amended and Restated Credit Agreement,
dated as of October 11, 2012, by and among the undersigned (“Borrowers’ Agent”),
the other Persons defined therein as Credit Parties, JPMorgan Chase Bank, N.A.,
as agent for the Lenders, and the other Persons signatory thereto from time to
time as Lenders (including all annexes, exhibits and schedules thereto, and as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”).  All capitalized terms used but not defined herein shall
have the meaning specified in the Credit Agreement.

 

Borrowers’ Agent hereby gives irrevocable notice, pursuant to
Section 2.8(b)(i) of the Credit Agreement, of its request to:

 

(a)                                 on [    date    ] convert [                ]
dollars of the aggregate outstanding principal amount of the [Term
Loans][Revolving Loans] constituting a [              ] Borrowing, bearing
interest at the [                ] Rate, into a(n) [                ] Borrowing
[and, in the case of a LIBOR Borrowing, having an Interest Period of
[          ] month(s)];

 

[(b)                        on [    date    ] continue [                ]
dollars of the aggregate outstanding principal amount of the [Term
Loans][Revolving Loans] constituting a LIBOR Borrowing, bearing interest at the
Adjusted LIBOR Rate, as a LIBOR Borrowing having an Interest Period of
[          ] month(s)].

 

[Borrowers’ Agent hereby certifies that no Event of Default or Default has
occurred and is continuing on the date hereof.](1)

 

 

 

NEENAH PAPER, INC.,

 

as Borrowers’ Agent

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

(1) This bracketed sentence is to be used only if a LIBOR Borrowing is being
continued as such or if an Alternate Base Rate Borrowing is being converted into
a LIBOR Borrowing.

 

F-1

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

 

EXHIBIT G

 

FORM OF BORROWING BASE COMPLIANCE CERTIFICATE

 

G-1

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

 

EXHIBIT H

 

FORM OF RECEIVABLES REPORT

 

JPMORGAN CHASE BANK, N.A., AGENT

ASSET BASED OPERATIONS

2200 Ross Avenue, 9th Floor TX 2921

Dallas, Texas 75201

ATTN:  Jeff A. Tompkins

 

RE:                           Second Amended and Restated Credit Agreement,
dated as of October 11, 2012 (as amended, supplemented, waived or otherwise
modified from time to time, the “Credit Agreement”), among Neenah Paper, Inc.
(“Parent”), a Delaware corporation, each subsidiary of Parent party thereto as a
“Borrower” (together with Parent, each a “Borrower” and collectively, the
“Borrowers”), each subsidiary of Parent party thereto as a “Guarantor”, certain
financial institutions now or hereafter parties thereto (each a “Lender” and
collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
“Agent”).

 

Ladies and Gentlemen:

 

Reference is hereby made to the Credit Agreement for all purposes.  Any
capitalized terms used but not defined herein shall have the meanings specified
in the Credit Agreement.

 

The Person executing this Receivables Report, which is being delivered pursuant
to Section 6.3(f) of the Credit Agreement on behalf of the Credit Parties,
hereby certifies that (a) he/she is a Responsible Officer of the Borrowers’
Agent, and in that capacity such Person is authorized to execute this
Receivables Report on behalf of the Credit Parties, and (b) the following
information is accurate, complete and correct as of  [           ].

 

Credit Parties’ Receivables Information:

 

Total Receivables as of [                        ]

 

$

                       

 

Plus gross sales other than sales giving rise to bill and hold Receivables

 

$

                       

 

Less gross collections on Receivables

 

$

                       

 

Less credits to Receivables

 

$

                       

 

Plus/Minus adjustments to Receivables

 

$

                       

 

Less Receivables not constituting Eligible Receivables

 

$

                       

 

Eligible Receivables as of [                        ]

 

$

                       

 

 

H-1

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

 

Information.  Such figures are taken from the Credit Parties’ Receivables
records, kept in accordance with GAAP and used in the Credit Parties’ business. 
In determining Ineligible Receivables for purposes hereof, the standards set
forth in the Credit Agreement were utilized and correctly and consistently
applied.  This certificate and agreement is delivered to the Agent upon the
understanding that the Agent and the Lenders will rely upon it in making or
continuing Revolving Loans to the Borrowers under the Credit Agreement.

 

Representations and Warranties.  The Person executing this Receivables Report on
behalf of the Credit Parties hereby confirms that the agreements, warranties and
representations contained in the Loan Documents apply to all such Receivables. 
The Credit Parties ratify and confirm the continuing general and first priority
Lien against all Receivables of the Credit Parties and confirm any Security
Documents in favor of the Loan Parties.

 

 

 

[                                        ]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

H-2

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

 

EXHIBIT I

 

FORM OF INVENTORY DESIGNATION REPORT

 

JPMORGAN CHASE BANK, N.A., AGENT

ASSET BASED OPERATIONS

2200 Ross Avenue, 9th Floor TX 2921

Dallas, Texas 75201

ATTN:  Jeff A. Tompkins

 

RE:                           Second Amended and Restated Credit Agreement,
dated as of October 11, 2012 (as amended, supplemented, waived or otherwise
modified from time to time, the “Credit Agreement”), among Neenah Paper, Inc.
(“Parent”), a Delaware corporation, each subsidiary of Parent party thereto as a
“Borrower” (together with Parent, each a “Borrower” and collectively, the
“Borrowers”), each subsidiary of Parent party thereto as a “Guarantor”, certain
financial institutions now or hereafter parties thereto (each a “Lender” and
collectively, the “Lenders”), and JPMorgan Chase Bank, N.A., as agent for the
Lenders (in such capacity, together with its successors in such capacity, the
“Agent”).

 

Ladies and Gentlemen:

 

Reference is hereby made to the Credit Agreement for all purposes.  Any
capitalized terms used but not defined herein shall have the meanings specified
in the Credit Agreement.

 

The Person executing this Inventory Designation Report, which is being delivered
pursuant to Section 6.3(g) of the Credit Agreement on behalf of the Credit
Parties, hereby certifies that (a) he/she is a Responsible Officer of the
Borrowers’ Agent, and in that capacity such Person is authorized to execute this
Inventory Designation Report on behalf of the Credit Parties, and (b) the
following information is accurate, complete and correct as of [              ].

 

11.          Credit Parties’ Inventory:

 

Credit Parties’ total Inventory:

 

$

 

 

 

Inventory not constituting Eligible Inventory

 

$

 

 

 

Credit Parties’ Eligible Inventory (A minus B)

 

$

 

 

 

Net Recovery Value Percentage of the Credit Parties’

 

 

Eligible Inventory

 

$

 

 

 

.75 multiplied by C

 

$

 

I-1

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

 

.85 multiplied by D

 

$

 

 

 

Credit Parties’ Inventory (Lesser of E or F)

 

$

 

Information.  Such figures are taken from the Credit Parties’ inventory records,
kept in accordance with GAAP and used in the Credit Parties’ business or, if so
indicated, taken from a physical inventory.  Unless otherwise indicated, such
figures are at the lower of cost (determined on a [              ] basis) or
market value, with appropriate allowances for Ineligible Inventory.  Title to
all Inventory listed hereon is owned by and recorded on the books and records of
the applicable Credit Party in the ordinary course of business.  In determining
Ineligible Inventory for purposes hereof, the standards set forth in the Credit
Agreement were utilized and correctly and consistently applied.  This
certificate and agreement is delivered to the Agent upon the understanding that
the Agent and the Lenders will rely upon it in making or continuing Revolving
Loans to the Borrowers under the Credit Agreement.

 

Representations and Warranties.  The Person executing this Inventory Designation
Report on behalf of the Credit Parties hereby confirms that the agreements,
warranties and representations contained in the Loan Documents apply to all such
inventories.  The Credit Parties ratify and confirm the continuing general and
first priority Lien against all inventories of the Credit Parties and confirm
any Security Documents in favor of the Loan Parties.

 

Inventory Locations.  Except as described in Annex I hereto, all Inventory of
the Credit Parties is kept at the locations specified in the Perfection
Certificate as updated in any Perfection Certificate update previously delivered
to the Agent.

 

 

 

[                                       ]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

I-2

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

 

EXHIBIT J

 

FORM OF SOLVENCY CERTIFICATE

 

The undersigned [TITLE] of Neenah Paper, Inc., a Delaware corporation (“Neenah
Paper”), hereby certifies that [he/she] is duly authorized to execute this
Certificate on behalf of Neenah Paper and each of the Credit Parties under the
Second Amended and Restated Credit Agreement (as each such term is defined
below).

 

WITNESSETH

 

WHEREAS, Neenah Paper and its subsidiaries, Neenah Paper Michigan, Inc., NPCC
Holding Company, LLC, Neenah Paper FR, LLC and Neenah Paper FVC, Inc., as
co-borrower (each a “Borrower” and collectively with Neenah Paper, the
“Borrowers”), each subsidiary of Neenah Paper listed as a “Guarantor” on the
signature pages thereto (the “Guarantor”; and together with the Borrowers, the
“Credit Parties”), have entered into that certain Second Amended and Restated
Credit Agreement, dated as of the date hereof (the “Second Amended and Restated
Credit Agreement”; capitalized terms used but not otherwise defined herein
having the meanings specified in the Second Amended and Restated Credit
Agreement), by and among the Credit Parties, the Lenders from time to time party
thereto, and JPMorgan Chase Bank, N.A., as Agent, pursuant to which the Lenders
have established a $105,000,00 revolving credit facility and a $30,000,000 term
loan facility (collectively, the “Credit Facilities”) in favor of the Borrowers;

 

WHEREAS, to secure their respective obligations under and relating to the Credit
Facilities the Credit Parties have executed and delivered to the Agent the other
Loan Documents referenced in the Second Amended and Restated Credit Agreement
(the grant of security interests, transfers, incurrence of obligations and other
transactions relating to the execution, delivery and performance of the
obligations under the Loan Documents, and any other transactions and transfers
related thereto, being referred to herein collectively as the “Transactions”);

 

WHEREAS, the undersigned has carefully reviewed the Second Amended and Restated
Credit Agreement and the various other Loan Documents, and also the contents of
this Certificate, and in connection herewith has made such investigations and
inquiries as he or she has deemed necessary and prudent therefor, including
those described below, and further acknowledges that the Agent and the Lenders
are relying on this Certificate in connection with the establishment of the
Credit Facilities;

 

NOW, THEREFORE, ON THE BASIS OF THE FOREGOING, and the inquiries and
considerations set forth below, the undersigned hereby certifies to the best of
such person’s knowledge and belief, and in his or her representative capacity
that after giving effect to the funding of the initial Loans and the
consummation of the Transactions:

 

1.             I am, and at all pertinent times mentioned herein, have been the
duly qualified and acting [TITLE] of Neenah Paper and have responsibility for
the overall management of the

 

J-1

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

 

financial affairs of the Credit Parties and the preparation of the financial
statements of the Credit Parties.

 

2.             The financial information, projections and assumptions which
underlie and form the basis for the representations made in this Certificate
were reasonable under the circumstances in which they were made and were made in
good faith and continue to be reasonable as of the date hereof.

 

3.             The value of the assets of each Credit Party (including
contribution rights from other Credit Parties), based on a fair valuation
thereof, is not less than the amount that will be required to be paid on or in
respect of the probable liability on the existing debts and other liabilities
(including contingent liabilities) of such Credit Party, as they are expected to
become absolute and mature.

 

4.             The value of the assets of each of the Subsidiaries of the Credit
Parties (including contribution rights from other Credit Parties), based on a
fair valuation thereof, is not less than the amount that will be required to be
paid on or in respect of the probable liability on the existing debts and other
liabilities (including contingent liabilities) of each such Subsidiary, as they
are expected to become absolute and mature.

 

5.             The assets of each Credit Party do not constitute unreasonably
small capital for such Credit Party to carry out its business as now conducted
and as proposed to be conducted including the capital needs of such Credit
Party, taking into account (i) the nature of the business conducted by such
Credit Party, (ii) the particular capital requirements of the business conducted
by such Credit Party, (iii) the anticipated nature of the business to be
conducted by such Credit Party in the future, and (iv) the projected capital
requirements and capital availability of such current and anticipated business.

 

6.             The assets of each of the Subsidiaries of each Credit Party do
not constitute unreasonably small capital for such Subsidiary to carry out its
business as now conducted and as proposed to be conducted, including the capital
needs of each such Subsidiary, taking into account (i) the nature of the
business conducted by such Subsidiary, (ii) the particular capital requirements
of the business conducted by such Subsidiary, (iii) the anticipated nature of
the business to be conducted by such Subsidiary in the future, and (iv) the
projected capital requirements and capital availability of such current and
anticipated business.

 

7.             No Credit Party, nor any of their Subsidiaries, intends to incur
debts beyond its ability to pay such debts as they mature (taking into account
the timing and amounts of cash to be received by each such Credit Party and
Subsidiary and the timing and amounts to be payable on or in respect of debt of
each such Credit Party and Subsidiary, as applicable).  The cash flow of each
such Credit Party and Subsidiary, after taking into account all anticipated uses
of the cash of each such Credit Party and Subsidiary, should at all times be
sufficient to pay all such amounts on or in respect of debt of each such Credit
Party and Subsidiary when such amounts are anticipated to be required to be
paid.

 

8.             The Credit Parties do not believe that final judgments against
any of them or any of their Subsidiaries in actions for money damages presently
pending, if any, will be rendered at

 

J-2

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

 

a time when, or in an amount such that, the applicable Credit Party or
Subsidiary will be unable to satisfy any such judgments promptly in accordance
with their terms (taking into account the maximum reasonable amount of such
judgments in any such actions and the earliest reasonable time at which such
judgments might be rendered).  The cash flow of each such Credit Party and
Subsidiary, as applicable, after taking into account all other anticipated uses
of the cash of each such Credit Party and Subsidiary, as applicable (including
the payments on or in respect of debt referred to in paragraph 7 herein), should
at all times be sufficient to pay all such judgments promptly in accordance with
their terms (taking into account the maximum reasonable amount of such judgments
in any such actions and the earliest reasonable time at which such judgments
might be rendered).

 

(Signature Page Follows)

 

J-3

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

 

IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
                       , 200    , on behalf of Neenah Paper.

 

 

 

NEENAH PAPER, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Solvency Certificate]

 

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

 

EXHIBIT K

 

FORM OF GUARANTY

 

GUARANTY

 

GUARANTY, dated as of [                                        ], made by
[                                ], a [                                    ]
(the “Guarantor”), in favor of each of the Lender Parties, and JPMorgan Chase
Bank, N.A., in its capacity as agent for the Lenders (as hereinafter defined)
(in such capacity, together with its successors in such capacity, the “Agent”),
pursuant to the Second Amended and Restated Credit Agreement referred to below.

 

W I T N E S S E T H:

 

WHEREAS, Neenah Paper, Inc., a Delaware corporation (the “Parent”), each
subsidiary of the Parent listed as a “Borrower” on the signature pages thereto
(together with the Parent, each a “Borrower” and collectively, the “Borrowers”),
each subsidiary of the Parent listed as a “Guarantor” on the signature
pages thereto, each of the financial institutions from time to time party
thereto (each a “Lender” and collectively, the “Lenders”) and the Agents are
parties to a  Second Amended and Restated Credit Agreement, dated as of
October 11, 2012 (such agreement, as amended, restated, supplemented or
otherwise modified from time to time, including any replacement agreement
therefor, being hereinafter referred to as the “Second Amended and Restated
Credit Agreement”);

 

WHEREAS, the Parent directly or indirectly owns all of the issued and
outstanding shares of Stock (as defined in the Second Amended and Restated
Credit Agreement) of the Guarantor;

 

WHEREAS, pursuant to the Second Amended and Restated Credit Agreement, the
Guarantor is required to execute and deliver to the Agents a guaranty
guaranteeing all Obligations of the Credit Parties (as each such term is defined
in the Credit Agreement) under the Second Amended and Restated Credit Agreement;
and

 

WHEREAS, the Guarantor has determined that its execution, delivery and
performance of this Guaranty directly benefits, and are within the corporate
purposes and in the best interests of, the Guarantor;

 

NOW, THEREFORE, in consideration of the premises and the agreements herein and
in order to induce the Lenders and the Agents to make and maintain the Loans,
the Letters of Credit and the other financial accommodations pursuant to the
Second Amended and Restated Credit Agreement, the Guarantor hereby agrees with
the Agents and the Lender Parties as follows:

 

Definitions.  Reference is hereby made to the Second Amended and Restated Credit
Agreement for a statement of the terms thereof. All terms used in this Guaranty
which are defined in the Second Amended and Restated Credit Agreement and not
otherwise defined herein shall have the same meanings herein as set forth
therein.

 

K-1

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

 

Guaranty.  The Guarantor hereby (i) unconditionally and irrevocably guarantees,
the punctual payment, when due, whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise, of all Obligations of each of the
other Credit Parties (and any one or more of them) from time to time owing by
each of them under any Loan Document or pursuant to any Bank Product, whether
for principal, interest (including, without limitation, interest that accrues or
that would accrue but for the filing of a bankruptcy case or other similar
proceeding by a Credit Party or any of its Subsidiaries, whether or not such
interest would be an allowable claim under any applicable bankruptcy or other
similar proceeding (an “Insolvency Proceeding”), whether or not a claim for
post-filing interest is allowed in such proceeding) and any other obligations,
liabilities and Indebtedness of the Credit Parties under or pursuant to the
Second Amended and Restated Credit Agreement or any Loan Document or Bank
Product, including all fees, costs, expenses, commissions, indemnifications or
otherwise (such obligations being the “Guaranteed Obligations”), and (ii) agrees
to pay any and all reasonable out-of-pocket expenses (including reasonable
counsel fees on a full indemnity basis and expenses) incurred by the Lender
Parties in protecting or enforcing any rights under this Guaranty. Without
limiting the generality of the foregoing, the Guarantor’s liability shall extend
to all amounts that constitute part of the Guaranteed Obligations and would be
owed by the Credit Parties to the Lender Parties under any Loan Document or
pursuant to any Bank Product but for the fact that they are unenforceable or not
allowable due to the existence of an Insolvency Proceeding involving any Credit
Party.

 

Guaranty Absolute; Continuing Guaranty; Assignments.

 

The Guarantor hereby guarantees that the Guaranteed Obligations will be paid
strictly in accordance with the terms of the Loan Documents, regardless of any
law, regulation or order now or hereafter in effect in any jurisdiction
affecting any of such terms or the rights of the Lender Parties with respect
thereto. The Guarantor agrees that this Guaranty constitutes a guaranty of
payment when due and not of collection and waives any right to require that any
resort be made by any Lender Party to any other Credit Party or any Collateral.
The obligations of the Guarantor under this Guaranty are independent of the
Guaranteed Obligations, and a separate action or actions may be brought and
prosecuted against the Guarantor to enforce such obligations, irrespective of
whether any action is brought against any Credit Party or whether any other
Credit Party is joined in any such action or actions. The liability of the
Guarantor under this Guaranty shall be irrevocable, absolute and unconditional
irrespective of, and the Guarantor hereby irrevocably waives any defenses it may
now or hereafter have in any way relating to, any or all of the following:

 

any lack of validity or enforceability of the Guaranteed Obligations or any Loan
Document or any agreement or instrument relating thereto in whole or in part;

 

any other guarantee given by any Person in favour of any Lender or Lenders or
either or both of the Agents from time to time in connection with or relating to
the Guaranteed Obligations;

 

any change in the time, manner or place of payment of, or in any other term of,
all or any of the Guaranteed Obligations, or any other amendment or waiver of or
any consent to departure from any Loan Document, including, without limitation,
any increase in the

 

K-2

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

 

Guaranteed Obligations resulting from the extension of additional credit to any
Credit Party or otherwise;

 

any taking, exchange, release or non-perfection of any Collateral or any
security interest therein, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the Guaranteed
Obligations;

 

the existence of any claim, set-off, defense or other right that the Guarantor
may have at any time against any Person, including, without limitation, any
Lender Party;

 

any change, restructuring or termination of the corporate, limited liability
company, unlimited liability company or partnership structure or existence of
any Credit Party or control of any Credit Party;

 

any change in the name, objects, capital stock, constating documents or by-laws
of any Credit Party; or the dissolution, winding-up, liquidation or other
distribution of the assets of any Credit Party, whether voluntary or otherwise;

 

any Credit Party’s becoming insolvent or bankrupt or subject to any proceeding
under the provisions of the [Bankruptcy and Insolvency Act (Canada), the
Companies’ Creditors Arrangement Act (Canada), the arrangement provisions of
applicable corporate legislation,](1) any legislation similar to the foregoing
in any other jurisdiction, or any legislation enacted substantially in
replacement of any of the foregoing, or either Agent’s or any Lender’s voting in
favour of any proposal, arrangement or compromise in connection with any of the
foregoing;

 

the failure or neglect of either Agent or any Lender to demand payment of
Guaranteed Obligations by any Credit Party, any guarantor of Guaranteed
Obligations or any other Person;

 

the valuation by either Agent or any Lender of any security held in respect of
the Guaranteed Obligations, which shall not be considered as a purchase of such
security or as payment on account of the Guaranteed Obligations;

 

any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any Lender
Party that might otherwise constitute a legal or equitable defense available to,
or a discharge or partial discharge of, any Credit Party or any other guarantor
or surety.

 

The liability of the Guarantor hereunder shall be absolute and unconditional
irrespective of, and shall not be released, discharged, limited or otherwise
affected by anything done, suffered or permitted by either or both of the Agents
or any Lender or Lenders in connection with any Credit Party or any Guaranteed
Obligations. For greater certainty and without limiting the generality of the
foregoing, without releasing, discharging, limiting or otherwise affecting in
whole or in part the liability of the Guarantor hereunder, and without notice to
or the consent of the Guarantor, either or both of the Agents or any Lender or
Lenders may from time to time:

 

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

(1)Appropriate changes based upon the local law of the applicable Guarantor’s
jurisdiction of creation should be inserted in place of the bracketed language.

 

K-3

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

 

make advances and extend credit to any Borrower (including new loans and credit
facilities, whether in addition to or in replacement for other loans and credit
facilities previously established for any Borrower), convert revolving lines of
credit to non-revolving lines of credit or vice versa, increase or decrease the
amount of credit available to any Borrower and receive payments in respect of
the Guaranteed Obligations;

 

increase the interest rates, fees and charges applicable to all or any portion
of the Guaranteed Obligations from time to time;

 

amend, renew, waive, release or terminate the Second Amended and Restated Credit
Agreement or any of the other Loan Documents or any provisions thereof in whole
or in part from time to time (including, without limitation, any provisions
relating to interest rates, fees, margin requirements, conditions for the
extension of credit and the determination of the amount of credit available,
positive and negative covenants, payment provisions, the application of payments
received by or on behalf of the Debtor, and events of default);

 

extend, renew, settle, compromise, waive, release or terminate the Guaranteed
Obligations in whole or in part from time to time;

 

grant time, renewals, extensions, indulgences, releases and discharges to any
Credit Party;

 

take, refrain from taking or release guarantees from other Persons in respect of
Guaranteed Obligations;

 

accept compromises or arrangements from any Credit Party, any guarantor of
Guaranteed Obligations or any other Person;

 

refrain from demanding payment from or exercising any rights or remedies in
respect of any Credit Party or any guarantor of Guaranteed Obligations;

 

apply all monies received from any Credit Party, any guarantor of the Borrowers
or any other Person or from the proceeds of any security to pay such part of the
Guaranteed Obligations as the Agents and Lenders may see fit, or change any such
application in whole or in part from time to time, notwithstanding any direction
which may be given regarding application of such monies by any Credit Party, any
guarantor of the Borrower or any other Person; and

 

otherwise deal with any Credit Party, any guarantor of Guaranteed Obligations or
any other Person and any security held by the Agents or any Lender or Lenders in
respect of Guaranteed Obligations, as the Agents or such Lender or Lenders may
see fit in its or their absolute discretion.

 

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if and to the extent that, for any reason any payment of any of the
Guaranteed Obligations is rescinded or must otherwise be returned by any Lender
Party or any other Person whether as a result of the insolvency, bankruptcy or
reorganization of any Credit Party or otherwise, all as though such payment had
not been made.

 

K-4

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

 

Subject to Section 12 hereof, this Guaranty is a continuing guaranty and shall
remain in full force and effect until the date on which all of the Guaranteed
Obligations and all other amounts payable under this Guaranty shall have been
paid in full in cash and the Commitments have been terminated.

 

Waivers.  The Guarantor hereby waives (i) promptness, diligence, (ii) notice of
acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and any requirement that any Lender Party pursue,
resort to or exhaust any right or take any action against any Credit Party or
any other Person or any Collateral, (iii) any right to compel or direct any
Lender Party to seek payment or recovery of any amounts owed under this Guaranty
from any one particular fund or source or to pursue, resort to or exhaust any
right or take any action against any other Credit Party or any other Person or
any Collateral, (iv) any requirement that any Lender Party protect, secure,
perfect or insure any security interest or Lien or any property subject thereto
or pursue, resort to or exhaust any right or take any action against any Credit
Party or any other Person or any Collateral and (v) any other defense available
to the Guarantor. The Guarantor agrees that the Lender Parties shall have no
obligation to marshall any assets in favor of or for the benefit of the
Guarantor or against, or in payment of, any or all of the Obligations. The
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated herein and in the Second Amended and
Restated Credit Agreement and that the waivers set forth in Section 3 and
Section 4 are knowingly made in contemplation of such benefits. The Guarantor
hereby waives any right to revoke this Guaranty, and acknowledges that this
Guaranty is continuing in nature and applies to all Guaranteed Obligations,
whether existing now or in the future.

 

Subrogation.  The Guarantor will not exercise any rights that it may now or
hereafter acquire against any other Credit Party or any other guarantor that
arise from the existence, payment, performance or enforcement of the Guarantor’s
obligations under this Guaranty, including, without limitation, any right of
subrogation, reimbursement, exoneration, contribution or indemnification and any
right to participate in any claim or remedy of any Lender Party against any
other Credit Party or any other guarantor or any Collateral, whether or not such
claim, remedy or right arises in equity or under contract, statute or common
law, including, without limitation, the right to take or receive from any Credit
Party or any other guarantor, directly or indirectly, in cash or other property
or by set-off or in any other manner, payment or security solely on account of
such claim, remedy or right, unless and until the date on which all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash and the Commitments have been terminated. If any
amount shall be paid to the Guarantor in violation of the immediately preceding
sentence at any time prior to the later of the date on which all of the
Guaranteed Obligations and all other amounts payable under this Guaranty shall
have been paid in full in cash and the Commitments have been terminated, such
amount shall be held in trust for the benefit of the Lender Parties and shall
forthwith be paid to the Lender Parties, to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of this Guaranty and
the Second Amended and Restated Credit Agreement, or to be held as Collateral
for any Guaranteed Obligations or other amounts payable under this Guaranty
thereafter arising. If (i) the Guarantor shall make payment to any Lender Party
of all of the Guaranteed Obligations, (ii) all of the Guaranteed Obligations and
all other amounts payable under this Guaranty shall be paid in full in cash and
(iii) the Commitments have been terminated,

 

K-5

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

 

such Lender Party will, at the Guarantor’s request and expense, execute and
deliver to the Guarantor appropriate documents, without recourse and without
representation or warranty, necessary to evidence the transfer by subrogation to
the Guarantor of an interest in the Guaranteed Obligations resulting from the
payment by the Guarantor.

 

Representations, Warranties and Covenants.  The Guarantor hereby represents and
warrants to the Lender Parties as follows:

 

The Guarantor (i) has read and understands the terms and conditions of the
Second Amended and Restated Credit Agreement and the other Loan Documents, and
(ii) now has and will continue to have independent means of obtaining
information concerning the affairs, financial condition and business of the
Credit Parties, and has no need of, or right to obtain from any Lender Party,
any credit or other information concerning the affairs, financial condition or
business of the Credit Parties that may come under the control of any Lender
Party.

 

The Guarantor acknowledges and agrees that by its execution and delivery of this
Guaranty (i) it shall be bound, as a Guarantor, by all the provisions of the
Second Amended and Restated Credit Agreement and the other Loan Documents and
shall comply with and be subject to all of the terms, conditions, covenants,
agreements and obligations set forth therein and applicable to the Guarantors
(including, without limitation, each of the covenants that are set forth in
Section 1.4(b), Section 6 and Section 7 of the Second Amended and Restated
Credit Agreement) and (ii) from and after the date hereof, each reference to a
“Guarantor”, the “Guarantors”, a “Credit Party” or the “Credit Parties” in the
Second Amended and Restated Credit Agreement and each other Loan Document shall
include the Guarantor. The Guarantor further acknowledges and agrees that it has
received a copy of the Second Amended and Restated Credit Agreement and each
other Loan Document.

 

Right of Set-off.  Upon the occurrence and during the continuance of any Event
of Default, any Lender Party may, and is hereby authorized to, at any time and
from time to time, without notice to the Guarantor (any such notice being
expressly waived by the Guarantor) and to the fullest extent permitted by law,
set-off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other Indebtedness at any time owing
by such Lender Party to or for the credit or the account of the Guarantor
against any and all obligations of the Guarantor now or hereafter existing under
this Guaranty or any other Loan Document, irrespective of whether or not such
Lender Party shall have made any demand under this Guaranty or any other Loan
Document and although such obligations may be contingent or unmatured. Each
Lender Party agrees to notify the Guarantor promptly after any such set-off and
application made by such Lender Party, provided that the failure to give such
notice shall not affect the validity of such set-off and application. The rights
of the Lender Parties under this Section 7 are in addition to other rights and
remedies (including, without limitation, other rights of set-off) that the
Lender Parties may have under this Guaranty or any other Loan Document, in law
or otherwise.

 

Notices, Etc.  Except as otherwise expressly permitted hereunder, all notices
shall be in writing and either (i) delivered to the intended recipient,
(ii) mailed by registered or certified mail, return receipt requested, or
(iii) sent by facsimile or other form of electronic transmission (promptly
confirmed by mail), in each case to the intended recipient at the “Address for
Notices”

 

K-6

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

 

specified in the Second Amended and Restated Credit Agreement; or, as to any
Lender who is a signatory thereto, at such other address as shall be designated
by such Lender.

 

CONSENT TO JURISDICTION; SERVICE OF PROCESS AND VENUE.  ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS GUARANTY OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE [GUARANTOR’S JURISDICTION OF INCORPORATION], AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE GUARANTOR HEREBY IRREVOCABLY
ACCEPTS IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. THE GUARANTOR HEREBY IRREVOCABLY APPOINTS
CT CORPORATION SYSTEM, LOCATED AT 111 EIGHTH AVENUE, NEW YORK, NEW YORK 10011,
AS ITS AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING
AND FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF THE
AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, CARE OF THE
BORROWER’S AGENT AT ITS ADDRESS FOR NOTICES AS SET FORTH IN THE AMENDED AND
RESTATED CREDIT AGREEMENT AND TO CT CORPORATION SYSTEM, SUCH SERVICE TO BECOME
EFFECTIVE TEN (10) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE LENDER PARTIES TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE
GUARANTOR IN ANY OTHER JURISDICTION. THE GUARANTOR HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
IT MAY NOW OR HEREAFTER HAVE TO THE JURISDICTION OR LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
THE GUARANTOR HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY
COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO
ITSELF OR ITS PROPERTY, THE GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS GUARANTY AND THE OTHER LOAN DOCUMENTS.

 

Taxes.

 

Any and all payments by the Guarantor hereunder or under any other Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes. If the Guarantor is required by any applicable Legal Requirement
to make any deduction or withholding for or on account of any Tax from any
payment to be made by it under this Guaranty, then the Guarantor shall
(i) promptly notify the applicable Lender, the holder of Notes or other relevant
Persons that are entitled to such payment of such requirement to so deduct or
withhold such Tax, (ii) pay to the relevant Governmental Authorities the full
amount required to be so deducted or withheld, (iii) promptly forward to such
Lender, holder or other relevant Person an official receipt (or certified copies
thereof), or other documentation reasonably

 

K-7

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

 

acceptable to such holder or other relevant Person, evidencing such payment to
such * Governmental Authorities and (iv) if such Tax is an Indemnifiable Tax,
pay to such Lender, holder or other relevant Person, in addition to whatever net
amount of such payment is paid to such holder or other relevant Person, such
additional amount as is necessary to ensure that the total amount actually
received by such holder or other relevant Person (free and clear of
Indemnifiable Tax imposed on or with respect to such additional amount) will
equal the full amount of the payment such holder or other relevant Person would
have received had no such deduction or withholding been required.

 

In addition, the Guarantor shall pay to the relevant Governmental Authority in
accordance with applicable law, or at the option of the Agent timely reimburse
it for the payment of, any Other Taxes.

 

Each Lender or holder of a Note shall, upon request by the Guarantor, take
requested measures to mitigate the amount of Indemnifiable Tax required to be
deducted or withheld from any payment made by the Guarantor hereunder, if such
measures can, in the sole and absolute opinion of such Lender or holder, be
taken without such Person suffering any economic, legal, regulatory or other
disadvantage (provided, however, that no such Person shall be required to
designate a funding office that is not located in the United States of America).

 

As soon as practicable after any payment of Indemnifiable Taxes by the Gurantor
to a Governmental Authority, the Guarantor shall deliver to the Agent the
original or a certified copy of a receipt issued by such Governmental Authority
evidencing such payment, a copy of the return reporting such payment or other
evidence of such payment reasonably satisfactory to the Agent.

 

The Guarantors shall jointly and severally indemnify each Recipient for any
Indemnifiable Taxes that are paid or payable by such Recipient in connection
with any Loan Document (including amounts paid or payable under this
Section 10(e)) and any reasonable expenses arising therefrom or with respect
thereto, whether or not such Indemnifiable Taxes were correctly or legally
imposed or asserted by the relevant Governmental Authority.  The indemnity under
this Section 10(e) shall be paid within ten (10) days after the Recipient
delivers to the Guarantor a certificate stating the amount of any Indemnified
Taxes so paid or payable by such Recipient and describing the basis for the
indemnification claim.  Such certificate shall be conclusive of the amount so
paid or payable absent manifest error.  Such Recipient shall deliver a copy of
such certificate to the Agent.

 

Each Lender shall severally indemnify the Agent for any Taxes (but, in the case
of any Indemnifiable Taxes, only to the extent that the Guarantor has not
already indemnified the Agent for such Indemnifiable Taxes and without limiting
the obligation of the Guarantor to do so) attributable to such Lender that are
paid or payable by the Agent in connection with any Loan Document and any
reasonable expenses arising therefrom or with respect thereto, whether or not
such Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority.  The indemnity under this Section 10(f) of the Second
Amended and Restated Credit Agreement shall be paid within ten (10) days after
the Agent delivers to the applicable Lender a certificate stating the amount of
Taxes so paid or payable by the Agent.  Such certificate shall be conclusive of
the amount so paid or payable absent manifest error.

 

K-8

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

 

Any Lender that is entitled to an exemption from or reduction of the deduction,
withholding or payment of an Indemnifiable Tax or Other Tax, with respect to
payments hereunder shall deliver to the Guarantor and the Agent, at the time or
times reasonably requested by the Guarantor, such properly completed and
executed documentation reasonably requested by the Guarantor of the Agent as
will permit such payments to be made without, or at a reduced rate of,
withholding.  In addition, any Lender, if requested by the Guarantor or the
Agent, shall deliver such other documentation prescribed by law or reasonably
requested by the Guarantor or the Agent as will enable the Guarantor or the
Agent to determine whether or not such Lender is subject to any withholding
(including backup withholding) or information reporting requirements.  Upon the
reasonable request of the Guarantor or the Agent, any Lender shall update any
form or certification previously delivered pursuant to this Section 10(g).  If
any form or certification previously delivered pursuant to this Section expires
or becomes obsolete or inaccurate in any respect with respect to a Lender, such
Lender shall promptly (and in any event within ten (10) days after such
expiration, obsolescence or inaccuracy) notify the Guarantor and the Agent in
writing of such expiration, obsolescence or inaccuracy and update the form or
certification if it is legally eligible to do so.

 

Each Lender and each Note holder agrees that if, in its sole discretion
exercised in good faith, it has received a refund of any Taxes  previously paid
by it and as to which it has been indemnified by or on behalf of the Guarantor
or  previously deducted by the Guarantor (including, without limitation, any
Indemnifiable Taxes deducted from any additional amounts paid under
clause (b) above), the relevant Lender or Note holder, as the case may be, shall
reimburse the Guarantor to the extent of the amount of any refund (but only to
the extent of any indemnity payments made under this Section 10 with respect to
the Taxes giving rise to such refund); provided, however, that the Guarantor,
upon the request of the Lender or Note holder, as the case may be, agree to
repay to such Lender or Note holder, as the case may be, the amount paid over to
the Guarantor (together with penalties, interest or other charges), in the event
such Lender or Note holder is required to repay such amount to the relevant
Governmental Authority.  Notwithstanding anything to the contrary in this
Section 10(h), in no event will any indemnified party be required to pay any
amount to any indemnifying party pursuant to this Section 10(h) if such payment
would place such indemnified party in a less favorable position (on a net
after-Tax basis) than such indemnified party would have been in if the
indemnification payments or additional amounts giving rise to such refund had
never been paid.  This Section 10(h) shall not be construed to require any
indemnified party to make available its Tax returns (or any other information
related to its Taxes which it deems confidential) to the indemnifying party or
any other Person.

 

The obligations of the Guarantor under this Section 10 shall survive the
termination of this Guaranty and the payment of the Guaranteed Obligations and
all other amounts payable hereunder.

 

Miscellaneous.

 

The Guarantor will make each payment hereunder in lawful money of the United
States of America and in immediately available funds to the Agent, for the
benefit of the Lender Parties, at such address specified by the Agent from time
to time by notice to the Guarantor.

 

K-9

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

 

No amendment or waiver of any provision of this Guaranty and no consent to any
departure by the Guarantor therefrom shall in any event be effective unless the
same shall be in writing and signed by the Guarantor and the Agent, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given.

 

No failure on the part of any Lender Party to exercise, and no delay in
exercising, any right hereunder or under any other Loan Document shall operate
as a waiver thereof, nor shall any single or partial exercise of any right
hereunder or under any other Loan Document preclude any other or further
exercise thereof or the exercise of any other right. The rights and remedies of
the Lender Parties provided herein and in the other Loan Documents are
cumulative and are in addition to, and not exclusive of, any rights or remedies
provided by law. The rights of the Lender Parties under any Loan Document
against any party thereto are not conditional or contingent on any attempt by
the Lender Parties to exercise any of their rights under any other Loan Document
against such party or against any other Person.

 

Any provision of this Guaranty which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or thereof or affecting the validity or enforceability of such provision
in any other jurisdiction.

 

This Guaranty shall (i) be binding on the Guarantor and its successors and
assigns, and (ii) inure, together with all rights and remedies of the Lender
Parties and the Agents hereunder, to the benefit of the Lender Parties, the
Agents and their respective permitted successors, transferees and assigns.
Without limiting the generality of clause (ii) of the immediately preceding
sentence, to the extent permitted by Section 10.12 of the Second Amended and
Restated Credit Agreement, any Lender may assign or otherwise transfer its
rights and obligations under the Second Amended and Restated Credit Agreement or
any other Loan Document (including, without limitation, all or a portion of its
Commitment, its Loans, the Note or Notes held by it, and obligations owing to it
with respect to Letters of Credit) to any other Person, and such other Person
shall thereupon become vested with all of the benefits in respect thereof
granted to the Lenders herein or otherwise. The Guarantor agrees that each
participant shall be entitled to the benefits of this Section 11 with respect to
its participation in any portion of the Loans as if it was a Lender. None of the
rights or obligations of the Guarantor hereunder may be assigned or otherwise
transferred without the prior written consent of the Agent.

 

This Guaranty and the other Loan Documents reflect the entire understanding of
the parties with respect to the transactions contemplated hereby and thereby and
shall not be contradicted or qualified by any other agreement, oral or written,
before the date hereof.

 

Section headings herein are included for convenience of reference only and shall
not constitute a part of this Agreement for any other purpose.

 

THIS GUARANTY AND THE OTHER LOAN DOCUMENTS (UNLESS EXPRESSLY PROVIDED TO THE
CONTRARY IN ANOTHER LOAN DOCUMENT IN RESPECT OF SUCH OTHER LOAN DOCUMENT) SHALL
BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE [PROVINCE OF
NOVA SCOTIA AND THE FEDERAL LAWS OF CANADA APPLICABLE THEREIN].

 

K-10

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

 

In the event of a conflict between the provisions contained in this Agreement
and the provisions contained in the Second Amended and Restated Credit
Agreement, the provisions of the Second Amended and Restated Credit Agreement
shall control and govern.

 

Termination or Release.

 

Notwithstanding the foregoing, a Guarantor shall automatically be released from
its obligations hereunder upon the Guarantor ceasing to be a Subsidiary of the
Parent in accordance with the terms of the Second Amended and Restated Credit
Agreement.

 

In connection with any termination or release pursuant to paragraph (a) of this
Section, the Agent shall, upon the Guarantor’s written request and at the
Guarantor’s expense, without any representation, warranty or recourse
whatsoever, execute and deliver to the Guarantor such documents as the Guarantor
shall reasonably request to evidence such termination or release.

 

Judgment. The specification under the Loan Documents of Dollars and payment in
New York City is of the essence. The Guarantor’s obligations hereunder to make
payments in Dollars (the “Obligation Currency”) shall not be discharged or
satisfied by any tender or recovery pursuant to any judgment expressed in or
converted into any currency other than the Obligation Currency, except to the
extent that such tender or recovery results in the effective receipt by the
Lender Parties of the full amount of the Obligation Currency expressed to be
payable to the Lender Parties under this Guaranty. If, for the purpose of
obtaining or enforcing judgment in any court, it is necessary to convert into or
from any currency other than the Obligation Currency (such other currency being
hereinafter referred to as the “Judgment Currency”) an amount due in the
Obligation Currency, the rate(s) of exchange used shall be that at which the
Lender Parties could, in accordance with normal banking procedures, purchase
Dollars with the Judgment Currency on the Business Day preceding that on which
final judgment is given. The obligation of the Guarantor in respect of any such
sum due from it to the Lender Parties hereunder shall, notwithstanding any
judgment in such Judgment Currency, be discharged only to the extent that, on
the Business Day immediately following the date on which the Lender Parties
receive any sum adjudged to be so due in the Judgment Currency, the Lender
Parties may, in accordance with normal banking procedures, purchase Dollars with
the Judgment Currency. If the Dollars so purchased are less than the sum
originally due to the Lender Parties in Dollars, the Guarantor agrees, as a
separate obligation and notwithstanding any such judgment, to indemnify the
Lender Parties against such loss, and if the Dollars so purchased exceed the sum
originally due to the Lender Parties in Dollars, the Lender Parties agree to
remit to the Guarantor such excess.

 

K-11

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

 

IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed by an
officer thereunto duly authorized, as of the date first above written.

 

 

 

[                                                                              ]

 

By:

 

 

Name:

 

 

Title:

 

 

 

[Signature Page to Guaranty]

 

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

 

EXHIBIT L

 

FORM OF PERFECTION CERTIFICATE

 

October [  ], 2012

 

Reference is hereby made to that certain Second Amended and Restated Credit
Agreement, dated as of October 11, 2012 (as amended, modified, restated and
supplemented from time to time, the “Credit Agreement”), among Neenah
Paper, Inc., as a borrower, the other borrowers party thereto, the guarantors
party thereto, the lenders party thereto and JPMorgan Chase Bank, N.A., as
Agent. Terms used herein but not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

 

As used herein, the following terms shall have the following meanings:

 

“Neenah Entities” shall include Neenah Paper, Inc. and each Subsidiary thereof.

 

CURRENT INFORMATION

 

Legal Names, Organizations, Jurisdictions of Organization and Organizational
Identification Numbers.  The full and exact legal name (as it appears in each
respective certificate or articles of incorporation, limited liability
membership agreement or similar organizational documents, in each case as
amended to date), the type of organization, the jurisdiction of organization (or
formation, as applicable), the organizational identification number (not tax
i.d. number) of the Neenah Entities and Offshore Entities and those
jurisdictions where the nature of each Borrower’s business makes it necessary or
desireable to be qualified to do business as a foreign corporation are as
follows:

 

Name of Entity

 

Type of
Organization
(e.g.
corporation,
limited liability
company,
limited
partnership)

 

Jurisdiction of
Organization/
Formation

 

Organizational
Identification
Number

 

Jurisdictions of
Foreign
Qualification

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Chief Executive Offices and Mailing Addresses. Set forth below are the chief
executive office address and the preferred mailing address (if different than
chief executive office or residence) of each Neenah Entity:

 

Name of Entity

 

Address of
Chief Executive Office

 

Mailing Address
(if different than CEO)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

L-1

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

 

Changes in Names, Jurisdiction of Organization or Corporate Structure.  Except
as set forth below, no Neenah Entity has changed its name, jurisdiction of
organization or its corporate structure in any way (e.g. by merger,
consolidation, change in corporate form, change in jurisdiction of organization
or otherwise) within the past five (5) years:

 

Entity

 

Date of Change

 

Description of Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Prior Addresses.  Except as set forth below, no Neenah Entity has changed its
chief executive office within the past five (5) years:

 

Entity

 

Former chief executive office

 

 

 

 

 

 

 

 

 

 

Acquisitions of Equity Interests or Assets.

 

Except as set forth below, no Neenah Entity has acquired the equity interests of
another entity within the past five (5) years or any material amount (fair
market value of $1,000,000 or more) of assets of another entity outside of the
ordinary course of business within the past five (5) years.

 

Acquiring Entity

 

Date of Acquisition

 

Description of Acquisition

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INVESTMENT RELATED PROPERTY

 

Securities.  Set forth below is a list of all equity interests owned or to be
owned by the Neenah Entities together with the type of organization which issued
such equity interests (e.g., corporation, limited liability company, partnership
or trust):

 

Entity

 

Issuer

 

Type of
Organization
and
Jurisdiction
of
Organization
of Issuer

 

# of
Shares
Owned

 

Total
Shares
Outstanding

 

% of
Interest
Pledged

 

Certificate
No. (if
uncertificated,
please
indicate so)

 

Par Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Securities Accounts.  Set forth below is a list of all equity interests owned or
to be owned by the Neenah Entities together with the type of organization which
issued such equity interests (e.g., corporation, limited liability company,
partnership or trust):

 

Deposit Accounts.  Set forth below is a list of all bank accounts (checking,
savings, money market or the like) and Special Cash Collateral Accounts in which
any Neenah Entity customarily maintains or will maintain in excess of $10,000:

 

Entity

 

Type of Account

 

Name & Address of Financial
Institutions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

L-2

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

 

Instruments.  Set forth below is a list of all instruments owed or to be owed to
any Neenah Entity in the principal amount of greater than $10,000:

 

INTELLECTUAL PROPERTY

 

Set forth below is a list of all copyrights, patents and trademarks and other
intellectual property owned or used, or hereafter to be adopted, held or used,
by any Neenah Entity:

 

Copyrights.

 

Patents and other intellectual property.

 

Trademarks.

 

INVENTORY AND EQUIPMENT

 

Inventory and Equipment.  Set forth below in this Section 1 and in Section 2 are
all the locations where any Neenah Entity currently maintains (or will maintain)
any material amount (aggregate fair market value of $250,000 or more) of
inventory and equipment (whether or not in the possession of such entity):

 

Property

 

Entity

 

Address—
City/State/Zip
Code

 

County

 

Description of
Assets and Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Warehousemen and bailees.  Except as set forth below, no persons (including
warehousemen and bailees) other than a Neenah Entity have or will have
possession of any material amount (fair market value of $250,000 or more) of
assets of a Neenah Entity:

 

Entity

 

Address/City/
State/Zip Code

 

County

 

Description of Assets
and Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

REAL ESTATE RELATED UCC COLLATERAL

 

Fixtures. Set forth below are all the locations where any Neenah Entity owns or
leases (or will own or lease) any real property:

 

L-3

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

 

Timber to be Cut.  Set forth below are all locations where any Neenah Entity
owns or has rights (or will own or have rights) in goods that are timber to be
cut:

 

SPECIAL DEBTORS

 

Trade Names.

 

Current Names.  Set forth below is each trade name or assumed name currently
used or to be used by a Neenah Entity or by which a Neenah Entity is or will be
known or is or will be transacting any business:

 

Entity

 

Trade Name

 

 

 

 

 

 

 

 

 

 

Past Names.  Set forth below is each trade name or assumed name used by any
Neenah Entity during the past five (5) years or by which such entity has been
known or has transacted any business during the past five (5) years other than
the names identified in Section I.A. and VI.1. of this Perfection Certificate:

 

[Signature Page Follows.]

 

L-4

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

 

In connection with the Credit Agreement, the Borrowers and each other Credit
Party each hereby certify that the information set forth herein is true and
correct in all material respects as of the date first set forth above.

 

 

NEENAH PAPER, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

NEENAH PAPER MICHIGAN, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NPCC HOLDING COMPANY, LLC

 

 

 

By:

Neenah Paper, Inc., as its sole member

 

 

 

 

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

[SIGNATURES CONTINUE ON NEXT PAGE.]

 

 

[Signature Page to Perfection Certificate]

 

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

 

 

NEENAH PAPER FVC, INC.

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FR, LLC

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

[Signature Page to Perfection Certificate]

 

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

 

Schedule 1
to
Perfection Certificate

 

INTELLECTUAL PROPERTY

 

L-7

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

 

Schedule 2
to
Perfection Certificate

 

REAL PROPERTY LOCATIONS

 

L-8

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

 

EXHIBIT M

 

FORM OF PATENT SECURITY AGREEMENT

 

PATENT SECURITY AGREEMENT (“Agreement”), dated                [   ], 20    , is
made by [Neenah Paper, Inc.], a Delaware corporation, located at 3460 Preston
Ridge Road, Suite 600, Alpharetta, GA 30005 (“Assignor”), in favor of JPMorgan
Chase Bank, N.A., a New York banking corporation, located at 2200 Ross Avenue,
Ninth Floor Texas 2921, Dallas, Texas 75201, Attention: Jeff A. Tompkins, as
agent for certain lenders (in such capacity, together with any permitted
successors and assigns, “Assignee”).  Capitalized terms used in this Agreement
and not defined herein have the meanings set forth for such terms in the
Security Agreement (as hereinafter defined).

 

WHEREAS, Assignor is the patentee or applicant for the utility patents, design
patents and patent applications listed on the annexed Schedule 1, which patents
are issued or applied for in the United States Patent and Trademark Office (the
“Patents”);

 

WHEREAS, the Assignor has entered into a Security Agreement (Personal Property),
dated as of November 30, 2004, among Assignor and the other grantors signatory
thereto, and Assignee (as amended, restated, supplemented or otherwise modified
from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to the Security Agreement, as collateral security for all of
the Obligations, Assignor has pledged and assigned to Assignee, and granted to
Assignor, for the benefit of the Lender Parties (as such terms are defined in
the Security Agreement) a continuing security interest in the Patents and the
applications and registrations thereof, and all proceeds thereof (the
“Collateral”);

 

NOW, THEREFORE, in consideration of the premises and agreements made herein and
in the Security Agreement, as collateral security for all of the Obligations,
Assignor hereby pledges and assigns to the Assignee, and grants to the Assignee,
for the benefit of the Agents and the Lender Parties, a continuing security
interest in the Collateral.

 

Assignor does hereby further acknowledge and affirm that the rights and remedies
of the Assignee with respect to the Collateral are more fully set forth in the
Security Agreement, the terms and provisions of which are hereby incorporated by
reference herein as if fully set forth herein.

 

Upon full satisfaction of the Obligations, complete performance of all of the
obligations of the Credit Parties under the Loan Documents and final termination
of each Lender’s obligations — if any — to make any further advances under any
Note or to provide any other financial accommodations to any Credit Party, all
rights under this Agreement shall terminate and the Collateral shall become
wholly clear of the security interest evidenced hereby, and upon written request
by Assignor such security interest shall be released by Assignee in due form and

 

M-1

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

 

at Assignor’s cost; provided, however, that this Agreement shall be reinstated
if at any time any payment of any of the obligations under the Loan Documents is
rescinded or must otherwise be returned by the Assignee, the Lenders, or any of
their respective affiliates or branches on the insolvency, bankruptcy or
reorganization of any Credit Party or otherwise, all as though the payment had
not been made.

 

(Signature Pages Follow)

 

M-2

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

 

IN WITNESS WHEREOF, Assignor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized as of the date above first
written.

 

 

[NEENAH PAPER, INC.],

 

as Assignor

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[Signature Page to Patent Security Agreement]

 

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

 

STATE OF                  

 

ss.:

 

COUNTY OF              

 

On this          day of              , 20    , before me personally came
                                , to me known to be the person who executed the
foregoing instrument, and who, being duly sworn by me, did depose and say that
s/he is the                                  of
                                                                              ,
a                                         , and that s/he executed the foregoing
instrument in the name of
                                                                              ,
and that s/he had authority to sign the same, and s/he acknowledged to me that
he executed the same as the act and deed of said entity for the uses and
purposes therein mentioned.

 

 

 

 

 

 

Notary Public

 

[Notary Page to Patent Security Agreement]

 

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

 

SCHEDULE 1 TO PATENT SECURITY AGREEMENT

 

[Patents and Patent Applications]

 

M-5

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

 

EXHIBIT N

 

FORM OF TRADEMARK SECURITY AGREEMENT

 

TRADEMARK SECURITY AGREEMENT (“Agreement”), dated               , [   ] 20    ,
is made by [Neenah Paper, Inc.], a Delaware corporation, located at 3460 Preston
Ridge Road, Suite 600, Alpharetta, GA 30005 (“Assignor”), in favor of JPMorgan
Chase Bank, N.A., a New York banking corporation, located at 2200 Ross Avenue,
Ninth Floor Texas 2921, Dallas, Texas 75201, Attention: Jeff A. Tompkins, as
agent for certain lenders (in such capacity, together with any permitted
successors and assigns, “Assignee”). Capitalized terms used in this Agreement
and not defined herein have the meanings set forth for such terms in the
Security Agreement (as hereinafter defined).

 

WHEREAS, Assignor is the applicant or registrant for the trademarks and service
marks listed on the annexed Schedule 1 hereto, which trademarks and service
marks are registered or applied for in the United States Patent and Trademark
Office (the “Trademarks”);

 

WHEREAS, the Assignor has entered into a Security Agreement (Personal Property),
dated as of November 30, 2004,  among Assignor and the other grantors signatory
thereto, and Assignee (as amended, restated, supplemented or otherwise modified
from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to the Security Agreement, as collateral security for all of
the Obligations, Assignor has pledged and assigned to Assignee, and granted to
Assignor, for the benefit of the Lender Parties (as such terms are defined in
the Security Agreement) a continuing security interest in the Trademarks,
together with, among other things, the goodwill of the business symbolized by
and associated with the Trademarks and the applications and registrations
thereof, and all proceeds thereof (the “Collateral”);

 

NOW, THEREFORE, in consideration of the premises and agreements made herein and
in the Security Agreement, as collateral security for all of the Obligations,
Assignor hereby pledges and assigns to the Assignee, and grants to the Assignee,
for the benefit of the Agents and the Lender Parties, a continuing security
interest in the Collateral.

 

Assignor does hereby further acknowledge and affirm that the rights and remedies
of the Assignee with respect to the Collateral are more fully set forth in the
Security Agreement, the terms and provisions of which are hereby incorporated by
reference herein as if fully set forth herein.

 

Upon full satisfaction of the Obligations, complete performance of all of the
obligations of the Credit Parties under the Loan Documents and final termination
of each Lender’s obligations — if any — to make any further advances under any
Note or to provide any other financial accommodations to any Credit Party, all
rights under this Agreement shall terminate and the Collateral shall become
wholly clear of the security interest evidenced hereby, and upon

 

N-1

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

 

written request by Assignor such security interest shall be released by Assignee
in due form and at Assignor’s cost; provided, however, that this Agreement shall
be reinstated if at any time any payment of any of the obligations under the
Loan Documents is rescinded or must otherwise be returned by the Assignee, the
Lenders, or any of their respective affiliates or branches on the insolvency,
bankruptcy or reorganization of any Credit Party or otherwise, all as though the
payment had not been made.

 

(Signature Pages Follow)

 

N-2

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

 

IN WITNESS WHEREOF, Assignor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized as of the date above first
written.

 

 

[NEENAH PAPER, INC.],

 

as Assignor

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[Signature Page to Trademark Security Agreement]

 

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

 

STATE OF                    

 

ss.:

 

COUNTY OF                

 

On this          day of              , 20    , before me personally came
                                , to me known to be the person who executed the
foregoing instrument, and who, being duly sworn by me, did depose and say that
s/he is the                                  of
                                                                              ,
a                                         , and that s/he executed the foregoing
instrument in the name of
                                                                              ,
and that s/he had authority to sign the same, and s/he acknowledged to me that
he executed the same as the act and deed of said entity for the uses and
purposes therein mentioned.

 

 

 

 

 

 

Notary Public

 

[Notary Page to Trademark Security Agreement]

 

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

 

SCHEDULE 1 TO TRADEMARK SECURITY AGREEMENT

 

[Trademark Registrations and Trademark Applications]

 

N-5

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

 

EXHIBIT O

 

FORM OF COPYRIGHT SECURITY AGREEMENT

 

COPYRIGHT SECURITY AGREEMENT (“Agreement”), dated                         
[    ], 20    , is made by [Neenah Paper, Inc.], a Delaware corporation, located
at 3460 Preston Ridge Road, Suite 600, Alpharetta, GA 30005 (“Assignor”), in
favor of JPMorgan Chase Bank, N.A., a New York banking corporation, located at
2200 Ross Avenue, Ninth Floor TX 2921, Dallas, Texas 75201, Attention: Jeff A.
Tompkins, as agent for certain lenders (in such capacity, together with any
permitted successors and assigns, “Assignee”).  Capitalized terms used in this
Agreement and not defined herein have the meanings set forth for such terms in
the Security Agreement (as hereinafter defined).

 

WHEREAS, Assignor is the applicant or registrant for the copyrights listed on
the annexed Schedule 1, which copyrights are registered in the United States
Copyright Office (the “Copyrights”);

 

WHEREAS, the Assignor has entered into a Security Agreement (Personal Property),
dated as of November 30, 2004, among Assignor and the other grantors signatory
thereto, and Assignee (as amended, restated, supplemented or otherwise modified
from time to time, the “Security Agreement”);

 

WHEREAS, pursuant to the Security Agreement (Personal Property), as collateral
security for all of the Obligations, Assignor has pledged and assigned to
Assignee, and granted to Assignor, for the benefit of the Lender Parties (as
such terms are defined in the Security Agreement) a continuing security interest
in the Copyrights and the applications and registrations thereof, and all
proceeds thereof (the “Collateral”);

 

NOW, THEREFORE, in consideration of the premises and agreements made herein and
in the Security Agreement, as collateral security for all of the Obligations,
Assignor hereby pledges and assigns to the Assignee, and grants to the Assignee,
for the benefit of the Agents and the Lender Parties, a continuing security
interest in the Collateral.

 

Assignor does hereby further acknowledge and affirm that the rights and remedies
of the Assignee with respect to the Collateral are more fully set forth in the
Security Agreement, the terms and provisions of which are hereby incorporated by
reference herein as if fully set forth herein.

 

Upon full satisfaction of the Obligations, complete performance of all of the
obligations of the Credit Parties under the Loan Documents and final termination
of each Lender’s obligations — if any — to make any further advances under any
Note or to provide any other financial accommodations to any Credit Party, all
rights under this Agreement shall terminate and the Collateral shall become
wholly clear of the security interest evidenced hereby, and upon written request
by Assignor such security interest shall be released by Assignee in due form and

 

O-1

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

 

at Assignor’s cost; provided, however, that this Agreement shall be reinstated
if at any time any payment of any of the obligations under the Loan Documents is
rescinded or must otherwise be returned by the Assignee, the Lenders, or any of
their respective affiliates or branches on the insolvency, bankruptcy or
reorganization of any Credit Party or otherwise, all as though the payment had
not been made.

 

(Signature Pages Follow)

 

O-2

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

 

IN WITNESS WHEREOF, Assignor has caused this Agreement to be executed and
delivered by its officer thereunto duly authorized as of the date above first
written.

 

 

[NEENAH PAPER, INC.],

 

as Assignor

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

[Signature Page to Copyright Security Agreement]

 

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

 

STATE OF              

 

ss.:

 

COUNTY OF          

 

On this          day of              , 20    , before me personally came
                                , to me known to be the person who executed the
foregoing instrument, and who, being duly sworn by me, did depose and say that
s/he is the                                  of
                                                                              ,
a                                         , and that s/he executed the foregoing
instrument in the name of
                                                                              ,
and that s/he had authority to sign the same, and s/he acknowledged to me that
he executed the same as the act and deed of said entity for the uses and
purposes therein mentioned.

 

 

 

 

 

 

Notary Public

 

[Notary Page to Copyright Security Agreement]

 

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

 

SCHEDULE 1 TO COPYRIGHT SECURITY AGREEMENT

 

[Copyright Registrations and Copyright Applications]

 

O-5

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

 

EXHIBIT P

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the “Assignor”) and [Insert name of Assignee] (the
“Assignee”).  All capitalized terms used but not defined herein shall have the
meanings specified in the Second Amended and Restated Credit Agreement
identified below (as amended, the “Second Amended and Restated Credit
Agreement”), receipt of a copy of which is hereby acknowledged by the Assignee. 
The Standard Terms and Conditions set forth in Annex 1 attached hereto are
hereby agreed to and incorporated herein by reference and made a part of this
Assignment and Acceptance as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Second Amended and Restated Credit Agreement, as of the
Effective Date inserted by the Agent as contemplated below (i) all of the
Assignor’s rights and obligations in its capacity as a Lender under the Second
Amended and Restated Credit Agreement and any other documents or instruments
delivered pursuant thereto to the extent related to the amount and percentage
interest identified below of all of such outstanding rights and obligations of
the Assignor under the respective facilities identified below (including any
letters of credit, guarantees, and swingline loans included in such facilities)
and (ii) to the extent permitted to be assigned under applicable law, all
claims, suits, causes of action and any other right of the Assignor (in its
capacity as a Lender) against any Person, whether known or unknown, arising
under or in connection with the Second Amended and Restated Credit Agreement,
any other documents or instruments delivered pursuant thereto or the loan
transactions governed thereby or in any way based on or related to any of the
foregoing, including contract claims, tort claims, malpractice claims, statutory
claims and all other claims at law or in equity related to the rights and
obligations sold and assigned pursuant to clause (i) above (the rights and
obligations sold and assigned pursuant to clauses (i) and (ii) above being
referred to herein collectively as the “Assigned Interest”).  Such sale and
assignment is without recourse to the Assignor and, except as expressly provided
in this Assignment and Acceptance, without representation or warranty by the
Assignor.

 

1.

 

Assignor:

 

 

 

 

 

 

 

 

 

2.

 

Assignee:

 

 

 

 

 

 

 

[and is an Affiliate/Approved Fund of [identify Lender](1)]

 

 

 

 

 

3.

 

Borrower(s):

 

Neenah Paper, Inc. and certain subsidiaries of Neenah Paper, Inc. signatories to
the Second Amended and Restated Credit Agreement as a “Borrower”

 

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

(1)  Select as applicable.

 

P-1

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

 

4.

 

Agent:

 

JPMorgan Chase Bank, N.A., as agent for the Lenders under the Second Amended and
Restated Credit Agreement

 

 

 

 

 

5.

 

Credit Agreement:

 

That certain Second Amended and Restated Credit Agreement, dated as of
October 11, 2012, among the Borrowers, the Guarantors from time to time party
thereto, the Lenders from time to time party thereto, and JPMorgan Chase Bank,
N.A., as Agent

 

 

 

 

 

6.

 

Assigned Interest:

 

 

 

Aggregate Amount of 
Revolving 
Commitment/Revolving 
Loans for all Lenders

 

Amount of Revolving 
Commitment/Revolving 
Loans Assigned

 

Percentage Assigned of 
Revolving 
Commitment/Revolving 
Loans(2)

 

$

 

 

$

 

 

 

 

 

Aggregate Amount of Term
Commitment/Term Loans for
all Lenders

 

Amount of Term 
Commitment/Term Loans 
Assigned

 

Percentage Assigned of Term 
Commitment/Term Loans(3)

 

$

 

 

$

 

 

 

 

 

Aggregate Amount of Total 
Commitment/Loans for all 
Lenders

 

Amount of Total 
Commitment/Loans Assigned

 

Percentage Assigned of Total 
Commitment/Loans(4)

 

$

 

 

$

 

 

 

 

 

Effective Date:                                    , 20       [TO BE INSERTED BY
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]

 

[Remainder of Page Intentionally Left Blank]

 

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

(2)  Set forth, to at least 9 decimals, as a percentage of the Revolving
Commitment/Revolving Loans of all Lenders thereunder.

(3)  Set forth, to at least 9 decimals, as a percentage of the Term
Commitment/Term Loans of all Lenders thereunder.

(4)  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
of all Lenders thereunder.

 

P-2

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

 

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

 

 

ASSIGNOR

 

 

 

[NAME OF ASSIGNOR]

 

 

 

 

 

By:

 

 

Title:

 

 

 

 

 

 

ASSIGNEE

 

 

 

[NAME OF ASSIGNEE]

 

 

 

 

 

By:

 

 

Title:

 

 

[Consented to and](5)  Accepted:

 

JPMorgan Chase Bank, N.A., as Agent

 

 

By:

 

 

Title:

 

 

 

 

[Consented to:](6)

 

[NAME OF RELEVANT PARTY]

 

 

By:

 

 

Title:

 

 

 

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

(5) To be added only if the consent of the Administrative Agent is required by
the terms of the Amended and Restated Credit Agreement.

(6) To be added only if the consent of the Borrowers’ Agent and/or other parties
is required by the terms of the Amended and Restated Credit Agreement.

 

[Signature Page to Assignment and Acceptance]

 

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

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

 

ASSIGNMENT AND ACCEPTANCE

 

1.  Representations and Warranties.

 

1.1.  Assignor.  The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Second Amended and Restated Credit Agreement or any other Loan Document,
(ii) the execution, legality, validity, enforceability, genuineness, sufficiency
or value of the Loan Documents or any other instrument or document furnished
pursuant thereto or any collateral thereunder, (iii) the financial condition of
any Credit Party or any Subsidiary or Affiliate thereof or any other Person
obligated in respect of any Loan Document or (iv) the performance or observance
by any Credit Party or any Subsidiary or Affiliate thereof or any other Person
of any of their respective obligations under any Loan Document.

 

1.2.  Assignee.  The Assignee (a) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms of the Second Amended and
Restated Credit Agreement, together with such powers as are reasonably
incidental thereto, (b) represents and warrants that (i) it has full power and
authority, and has taken all action necessary, to execute and deliver this
Assignment and Acceptance and to consummate the transactions contemplated hereby
and to become a Lender under the Second Amended and Restated Credit Agreement,
(ii) it satisfies the requirements, if any, specified in the Second Amended and
Restated Credit Agreement that are required to be satisfied by it in order to
acquire the Assigned Interest and become a Lender, (iii) from and after the
Effective Date, it shall be bound by the provisions of the Second Amended and
Restated Credit Agreement as a Lender thereunder and, to the extent of the
Assigned Interest, shall have the obligations of a Lender thereunder, (iv) it
has received a copy of the Second Amended and Restated Credit Agreement,
together with copies of the most recent financial statements delivered pursuant
to Section 6.3 thereof, as applicable, and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance and to purchase the Assigned Interest
on the basis of which it has made such analysis and decision independently and
without reliance on the Agent, the

 

P-4

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

 

Assignor or any other Lender, and (v) if it is a Non-U.S. Lender, attached to
the Assignment and Acceptance is any documentation required to be delivered by
it pursuant to the terms of the Second Amended and Restated Credit Agreement,
duly completed and executed by the Assignee; and (c) agrees that (i) it will,
independently and without reliance on the Agent, the Assignor or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under the Loan Documents, (ii) it will keep confidential all information
with respect to the Credit Parties furnished to it by the Credit Parties, the
Assignor, or the Agent (other than information generally available to the public
or otherwise available to the Agent on a non-confidential basis or otherwise
permitted pursuant to the terms of the Second Amended and Restated Credit
Agreement), and (iii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender.

 

2.  Payments.  From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued
to but excluding the Effective Date and to the Assignee for amounts which have
accrued from and after the Effective Date.

 

3.  General Provisions.  This Assignment and Acceptance shall be binding upon,
and inure to the benefit of, the parties hereto and their respective successors
and assigns.  This Assignment and Acceptance may be executed in any number of
counterparts, which together shall constitute one instrument.  Delivery of an
executed counterpart of a signature page of this Assignment and Acceptance by
telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Acceptance.  THIS ASSIGNMENT AND ACCEPTANCE SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
BUT GIVING EFFECT TO FEDERAL LAWS OF THE UNITED STATES OF AMERICA APPLICABLE TO
NATIONAL BANKS.

 

P-5

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

 

EXHIBIT Q

 

FORM OF COMMITMENT INCREASE AGREEMENT

 

THIS COMMITMENT INCREASE AGREEMENT is made and entered into as of
                    , 2012 (this “Agreement”) to be effective as of the
Effective Date (as defined herein), by and among NEENAH PAPER, INC., a Delaware
corporation (the “Parent”), each Subsidiary of the Parent listed as a “Borrower”
on the signature pages hereto (together with the Parent, each a “Borrower” and
collectively, the “Borrowers”), each Subsidiary of the Parent listed as a
“Guarantor” on the signature pages hereto (each a “Guarantor” and collectively,
the “Guarantors”), JPMORGAN CHASE BANK, N.A., as Agent, and
                               (“Increasing Lender”).

 

RECITALS:

 

WHEREAS, the Borrowers, the Guarantors, JPMorgan Chase Bank, N.A., individually
as a Lender and as the Agent, and the other financial institutions parties
thereto as Lenders entered into that certain Second Amended and Restated Credit
Agreement dated as of October 11, 2012 (as amended through the date hereof, the
“Second Amended and Restated Credit Agreement”).  Unless otherwise defined
herein, terms defined in the Second Amended and Restated Credit Agreement and
used herein shall have the meanings given to them in the Second Amended and
Restated Credit Agreement.

 

WHEREAS, the Borrowers have requested that Increasing Lender agree to increase
its Revolving Commitment pursuant to, and as contemplated by, Section 2.15 of
the Second Amended and Restated Credit Agreement.

 

AGREEMENTS:

 

Increase in Commitment.  Increasing Lender and the Borrowers agree that, subject
to the satisfaction of each condition precedent set forth in Section 5 hereof,
from and after the Effective Date inserted by the Agent as contemplated below,
(a) Increasing Lender’s Revolving Commitment shall be increased from
$                             to $                        , (b) Schedule 1.1A to
the Second Amended and Restated Credit Agreement shall be deemed to be amended
to reflect such Revolving Commitment, and (c) to the extent permitted under
applicable law, Increasing Lender shall be entitled to the benefits of, and
shall be deemed to have assumed, to the extent of its Commitment Percentage (as
increased pursuant to such increase in its Revolving Commitment, all claims,
suits, causes of action and any other right of a Lender against any Person,
whether known or unknown, arising under or in connection with the Second Amended
and Restated Credit Agreement, any other documents or instruments delivered
pursuant thereto or the loan transactions governed thereby or in any way based
on or related to any of the foregoing.

 

Disbursement.  Subject to the satisfaction of each condition precedent set forth
in Section 5 hereof, on the Effective Date, Increasing Lender shall fund
additional Revolving Loans in an amount equal to the difference between its
Commitment Percentage (as increased pursuant to the increase in its Revolving
Commitment pursuant hereto) of the principal amount outstanding of all
outstanding Revolving Loans and the principal amount of all outstanding

 

Q-1

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

 

Revolving Loans held by Increasing Lender prior to giving effect to such
funding.  Increasing Lender shall make such amount available to the Agent at its
payment office set forth in Section 2.7 of the Second Amended and Restated
Credit Agreement or at such other office as agreed to by the Agent, in
immediately available funds, and the Agent shall disburse such amounts to each
Lender in such amounts as are necessary to cause each Lender to hold its
Commitment Percentage of all outstanding Revolving Loans after giving effect
thereto.  All such amounts funded by Increasing Lender shall be Alternate Base
Rate Borrowings.  The Borrowers shall be required to pay to the existing Lenders
any amounts required by Section 2.9 of the Second Amended and Restated Credit
Agreement as a result of the pre-payment made pursuant to this Section 2 of any
existing LIBOR Borrowings prior to the last day of the Interest Period
applicable thereto.

 

Promissory Note.  On the Effective Date, to the extent requested by Increasing
Lender, the Borrowers shall issue to Increasing Lender a promissory note to
evidence the Loans made by Increasing Lender in accordance with Section 2.6 of
the Second Amended and Restated Credit Agreement (the “Increasing Lender Note”).

 

Certain Agreements of Increasing Lender.  Increasing Lender represents and
warrants that (a) it has full power and authority, and has taken all action
necessary, to execute and deliver this Agreement and to consummate the
transactions contemplated hereby and to become a Lender under the Second Amended
and Restated Credit Agreement, and (b) it has received a copy of the most recent
financial statements delivered pursuant to Section 6.3 thereof, as applicable,
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Agreement, on the basis
of which it has made such analysis and decision independently and without
reliance on the Agent or any other Lender.

 

Conditions Precedent.  The obligation of Increasing Lender to increase its
Revolving Commitment pursuant hereto and to provide extensions of credit to the
Borrowers thereunder is subject to the satisfaction of each of the following
conditions precedent on or before the Effective Date:

 

To the extent requested by Increasing Lender, the Borrowers shall have executed
and delivered to Increasing Lender an Increasing Lender Note;

 

The Borrowers shall have delivered to Increasing Lender and the Agent certified
copies of the resolutions of the Board of Directors, sole member or other
appropriate authority of each Borrower dated on or prior to the Effective Date
and approving this Agreement, and all other documents, if any, to which each
Borrower is required to enter pursuant to this Agreement and evidencing
corporate authorization with respect to such documents;

 

The Borrowers shall have delivered to Increasing Lender and the Agent a
certificate of the Secretary or an Assistant Secretary of each Borrower dated as
of the Effective Date and certifying (i) the name, title and true signature of
each officer of such Person authorized to execute this Agreement, (ii) the name,
title and true signature of each officer of such Person authorized to provide
the certifications required pursuant to this Agreement, and (iii) that attached
thereto is a true and complete copy of the certificate of incorporation,
formation or organization, as applicable, certified by the appropriate
Governmental Authority of the

 

Q-2

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

 

jurisdiction of incorporation, formation or organization of each Borrower and
the bylaws or other applicable organizational documents of each Borrower, each
as amended to date, recent good standing certificates and/or certificates of
existence for each Borrower and certificates of foreign qualification for each
Borrower in such jurisdictions as Increasing Lender or the Agent shall require;

 

The Borrowers shall have delivered to Increasing Lender and the Agent an opinion
of                                 , counsel to each Borrower dated as of the
Effective Date addressed to Increasing Lender and the Agent and covering such
matters as Increasing Lender or the Agent may reasonably request;

 

The Borrowers shall have delivered to Increasing Lender and the Agent a
certificate of a Financial Officer of each of the Borrowers dated as of the
Effective Date and certifying, before and after giving effect to the making of
the Revolving Loans being requested hereunder, that (i) each Borrower is
Solvent, (ii) no Default then or immediately thereafter would, exist, (iii) each
of the conditions required by this Section 5 have been satisfied or waived in
writing by Agent and Increasing Lender, and (iv) each representation and
warranty of the Borrowers contained herein and in the Second Amended and
Restated Credit Agreement is true and correct in all material respects, except
for (i) those representations and warranties which relate to a specified date,
which were true and correct in all material respects as of such date, and
(ii) those changes in representations and warranties otherwise permitted by the
terms of the Second Amended and Restated Credit Agreement;

 

The applicable Borrowers shall have paid or reimbursed (i) the Agent’s counsels’
fees and expenses incurred in connection with this Agreement through the
Effective Date, to the extent invoiced, (ii) the Agent’s other expenses incurred
through the Effective Date in connection with this Agreement, and (iii) any fees
or expenses then required to be paid to (A) JPMorgan Chase Bank, N.A. (or its
Affiliates) pursuant to the Fee Letter, and (B) Increasing Lender pursuant to
any fee letter between the Borrowers, the Agent and Increasing Lender;

 

All representations and warranties contained herein, in the Second Amended and
Restated Credit Agreement and the other Loan Documents shall be true and correct
in all material respects with the same effect as though such representations and
warranties had been made on and as of the Effective Date, except for (i) those
representations and warranties which relate to a specified date, which were true
and correct in all material respects as of such date, and (ii) those changes in
representations and warranties otherwise permitted by the terms of the Second
Amended and Restated Credit Agreement and the other Loan Documents; and

 

There shall not exist a Default or Event of Default.

 

Certain Representations and Warranties.  In order to induce the Agent and
Increasing Lender to enter into this Agreement, each Borrower hereby represents
and warrants to the Agent and Increasing Lender that each statement set forth in
this Section 6 is true and correct on the date hereof and will be true and
correct on the Effective Date.  Each such representation and warranty shall
survive the execution and delivery of this Agreement and shall not be qualified
or limited by any investigation undertaken by the Agent or Increasing Lender or
any actual or

 

Q-3

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

 

constructive knowledge the Agent or Increasing Lender may have or be charged
with indicating that any such representation or warranty is inaccurate or
incomplete in any respect.

 

Each Borrower is duly authorized and empowered to execute, deliver and perform
this Agreement; and all corporate, partnership or other action on any Borrower’s
part requisite for the due execution, delivery and performance of this Agreement
has been duly and effectively taken;

 

This Agreement constitutes the legal, valid and binding obligations of each
Borrower and is enforceable in accordance with its terms (except that
enforcement may be subject to any applicable bankruptcy, insolvency or similar
laws generally affecting the enforcement of creditors’ rights and subject to the
availability of equitable remedies);

 

The execution, delivery and performance of this Agreement do not and will not
violate or create a default under any provisions of the articles or certificate
of incorporation, formation or organization, as applicable, bylaws, partnership
agreement or other organizational documents of any Borrower, or any contract,
agreement, instrument or requirements of any Governmental Authority to which any
Borrower is subject which violation or default could have a Material Adverse
Effect, or result in the creation or imposition of any Lien upon any Properties
of any Borrower;

 

Each Borrower’s execution, delivery and performance of this Agreement do not
require notice to or filing or registration with, or the authorization, consent
or approval of or other action by any other Person, including, but not limited
to, any Governmental Authority, except those obtained or made; and

 

No Default or Event of Default has occurred which is continuing.

 

Notice.  All notices, requests and other communications to any party hereunder
shall be given in the manner set forth in Section 10.2 of the Second Amended and
Restated Credit Agreement.

 

Benefit of Agreement.  This Agreement and the other documents that may be
required pursuant hereto shall be binding upon and inure to the benefit of and
be enforceable by the respective permitted successors and assigns of the parties
hereto, provided that no Borrower may assign or transfer any of its interest
hereunder or thereunder without the prior written consent of the Agent and
Increasing Lender.

 

Amendment and Waiver.  Neither this Agreement nor any terms hereof or thereof,
may be amended, supplemented or modified except in accordance with the
provisions of Section 10.11 of the Second Amended and Restated Credit Agreement.

 

Loan Document.  This Agreement and the Increasing Lender Note (if delivered
pursuant hereto) are Loan Documents for all purposes of the Second Amended and
Restated Credit Agreement and the other Loan Documents.

 

Entire Agreement.  The Increasing Lender Note, this Agreement, the Second
Amended and Restated Credit Agreement and the other Loan Documents embody the
entire agreement and understanding between the Agent and Increasing Lender and
supersede all prior agreements and

 

Q-4

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

 

understandings between such parties relating to the subject matter hereof and
thereof and may not be contradicted by evidence of prior or contemporaneous
agreements of the parties.  There are no unwritten oral agreements between the
parties.

 

Counterparts.  This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original but all of which shall together
constitute one and the same instrument.

 

Further Assurances.  The Borrowers and Increasing Lender agree to execute,
acknowledge, deliver, file and record such further certificated, instruments and
documents, and to do all other acts and things as may be requested by the Agent
as necessary or advisable to carry out the intents and purposes of this
Agreement.

 

Governing Law.  This Agreement and the rights and obligations of the parties
hereunder and under the Increasing Lender Note shall be construed in accordance
with and be governed by the laws of the State of New York, but giving effect to
federal laws of the United States of America applicable to national banks.

 

Consent of Guarantors.  The Guarantors hereby consent to this Agreement.

 

Effective Date.  This Agreement shall be effective upon the date (the “Effective
Date”) specified by the Agent below its signature below.

 

[Signature Page Follows]

 

Q-5

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

 

 

 

NEENAH PAPER, INC.,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER MICHIGAN, INC.,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NPCC HOLDING COMPANY, LLC,

 

as a Borrower

 

 

 

By:

Neenah Paper, Inc., as its sole member

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FVC, INC.,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FR, LLC,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Commitment Increase Agreement]

 

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

 

 

[FUTURE BORROWERS]

 

 

 

By:

 

 

Name

 

 

Title:

 

 

[Signature Page to Commitment Increase Agreement]

 

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

 

 

[FUTURE GUARANTORS]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Commitment Increase Agreement]

 

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

 

 

[INCREASING LENDER]

 

 

 

By:

 

 

Name

 

 

Title:

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

as the Agent

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to Commitment Increase Agreement]

 

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

 

EXHIBIT R

 

FORM OF NEW LENDER AGREEMENT

 

THIS NEW LENDER AGREEMENT is made and entered into as of
                          ,            (this “Agreement”) to be effective as of
the Effective Date (as defined herein), by NEENAH PAPER, INC., a Delaware
corporation (the “Parent”), each Subsidiary of the Parent listed as a “Borrower”
on the signature pages hereto (together with the Parent, each a “Borrower” and
collectively, the “Borrowers”), each Subsidiary of the Parent listed as a
“Guarantor” on the signature pages hereto (each a “Guarantor” and collectively,
the “Guarantors”), JPMORGAN CHASE BANK, N.A., as Agent, and
                                                                   (“New
Lender”).

 

RECITALS:

 

WHEREAS, the Borrowers, the Guarantors, JPMorgan Chase Bank, N.A., individually
as a Lender and as the Agent, and the other financial institutions parties
thereto as Lenders entered into that certain Second Amended and Restated Credit
Agreement dated as of October 11, 2012 (as amended through the date hereof, the
“Second Amended and Restated Credit Agreement”).  Unless otherwise defined
herein, terms defined in the Second Amended and Restated Credit Agreement and
used herein shall have the meanings given to them in the Second Amended and
Restated Credit Agreement.

 

WHEREAS, the Borrowers have requested that New Lender become a party to the
Second Amended and Restated Credit Agreement as a Lender and provide a Revolving
Commitment thereunder pursuant to, and as contemplated by, Section 2.15 of the
Second Amended and Restated Credit Agreement.

 

AGREEMENTS:

 

1.                                      Joinder/Commitment.  New Lender and the
Borrowers agree that, subject to the satisfaction of each condition precedent
set forth in Section 5 hereof, from and after the Effective Date inserted by the
Agent as contemplated below New Lender (a) shall be a party to the Second
Amended and Restated Credit Agreement as a Lender and is subject to all rights
and obligations of a Lender under the Second Amended and Restated Credit
Agreement and any other documents or instruments delivered pursuant thereto to
the extent of its Commitment Percentage, (b) New Lender’s Revolving Commitment
is in the amount of $                        , (c) Schedule 1.1A to the Second
Amended and Restated Credit Agreement shall be deemed to be amended to reflect
such Revolving Commitment, and (d) to the extent permitted under applicable law,
New Lender shall be entitled to the benefits of, and shall be deemed to have
assumed, to the extent of its Commitment Percentage, all claims, suits, causes
of action and any other right of a Lender against any Person, whether known or
unknown, arising under or in connection with the Second Amended and Restated
Credit Agreement, any other documents or instruments delivered pursuant thereto
or the loan transactions governed thereby or in any way based on or related to
any of the foregoing.

 

2.                                      Disbursement.  Subject to the
satisfaction of each condition precedent set forth in Section 5 hereof, on the
Effective Date, New Lender shall fund its Commitment Percentage of the Revolving
Loans outstanding as of such date by making such amount available to the Agent

 

R-1

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

 

at its payment office set forth in Section 2.7 of the Second Amended and
Restated Credit Agreement or at such other office as agreed to by the Agent, in
immediately available funds, and the Agent shall disburse such amounts to each
Lender in such amounts as are necessary to cause each Lender to hold its
Commitment Percentage of all outstanding Revolving Loans after giving effect
thereto.  All such amounts funded by New Lender shall be Alternate Base Rate
Borrowings.  The Borrowers shall be required to pay to the existing Lenders any
amounts required by Section 2.9 of the Second Amended and Restated Credit
Agreement as a result of the pre-payment made pursuant to this Section 2 of any
existing LIBOR Borrowings prior to the last day of the Interest Period
applicable thereto.

 

3.                                      Promissory Note.  On the Effective Date,
to the extent requested by New Lender, the Borrowers shall issue to New Lender a
promissory note to evidence the Revolving Loans made by New Lender in accordance
with Section 2.6 of the Second Amended and Restated Credit Agreement (the “New
Lender Note”).

 

4.                                      Certain Agreements of New Lender.  New
Lender (a) represents and warrants that (i) it has full power and authority, and
has taken all action necessary, to execute and deliver this Agreement and to
consummate the transactions contemplated hereby and to become a Lender under the
Second Amended and Restated Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Second Amended and Restated Credit
Agreement that are required to be satisfied by it in order to become a Lender,
(iii) from and after the Effective Date, it shall be bound by the provisions of
the Second Amended and Restated Credit Agreement as a Lender thereunder and, to
the extent of its Commitment Percentage, shall have the obligations of a Lender
thereunder, (iv) it has received a copy of the Second Amended and Restated
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 6.3 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Agreement on the basis of which it has made such
analysis and decision independently and without reliance on any Agent or any
other Lender, and (v) if it is a Non-U.S. Lender, attached to the Agreement is
any documentation required to be delivered by it pursuant to the terms of the
Second Amended and Restated Credit Agreement, duly completed and executed by New
Lender; and (b) agrees that (i) it will, independently and without reliance on
any Agent or any other Lender, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Loan Documents, and (ii) it will perform
in accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

 

5.                                      Conditions Precedent.  The obligation of
New Lender to become a party to the Second Amended and Restated Credit Agreement
as a Lender thereunder, to issue its Revolving Commitment[s] pursuant thereto
and hereto and to provide extensions of credit to Borrowers thereunder is
subject to the satisfaction of each of the following conditions precedent on or
before the Effective Date:

 

To the extent requested by New Lender, the Borrowers shall have executed and
delivered to New Lender a New Lender Note;

 

R-2

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

 

The Borrowers shall have delivered to New Lender and the Agent certified copies
of the resolutions of the Board of Directors, the sole member or other
appropriate authority of each Borrower dated on or prior to the Effective Date
and approving this Agreement, and all other documents, if any, to which each
Borrower is required to enter pursuant to this Agreement and evidencing
corporate authorization with respect to such documents;

 

The Borrowers shall have delivered to New Lender and the Agent a certificate of
the Secretary or an Assistant Secretary of each Borrower dated as of the
Effective Date and certifying (i) the name, title and true signature of each
officer of such Person authorized to execute this Agreement, (ii) the name,
title and true signature of each officer of such Person authorized to provide
the certifications required pursuant to this Agreement, and (iii) that attached
thereto is a true and complete copy of the certificate of incorporation,
formation or organization, as applicable, certified by the appropriate
Governmental Authority of the jurisdiction of incorporation, formation or
organization of each Borrower and the bylaws or other applicable organizational
documents of each Borrower, each as amended to date, recent good standing
certificates and/or certificates of existence for each Borrower and certificates
of foreign qualification for each Borrower in such jurisdictions as New Lender
or the Agent shall require;

 

The Borrowers shall have delivered to New Lender and the Agent an opinion of
                                , counsel to each Borrower dated as of the
Effective Date addressed to New Lender and the Agent and covering such matters
as New Lender or the Agent may reasonably request;

 

The Borrowers shall have delivered to New Lender and the Agent a certificate of
a Financial Officer of each of the Borrowers dated as of the Effective Date and
certifying, before and after giving effect to the making of the Revolving Loans
being requested hereunder, that (i) each Borrower is Solvent, (ii) no Default
then or immediately thereafter would, exist, (iii) each of the conditions
required by this Section 5 have been satisfied or waived in writing by Agent and
New Lender, and (iv) each representation and warranty of the Borrowers contained
herein and in the Second Amended and Restated Credit Agreement is true and
correct in all material respects except for (i) those representations and
warranties which relate to a specified date, which were true and correct in all
material respects as of such date, and (ii) those changes in representations and
warranties otherwise permitted by the terms of the Second Amended and Restated
Credit Agreement;

 

The applicable Borrowers shall have paid or reimbursed (i) the Agent’s counsels’
fees and expenses incurred in connection with this Agreement through the
Effective Date, to the extent invoiced, (ii) the Agent’s other expenses incurred
through the Effective Date in connection with this Agreement, and (iii) any fees
or expenses then required to be paid to (A) JPMorgan Chase Bank, N.A. (or its
Affiliates) pursuant to the Fee Letter, and (B) New Lender pursuant to any fee
letter between the Borrowers, the Agent and New Lender;

 

All representations and warranties contained herein, in the Second Amended and
Restated Credit Agreement and the other Loan Documents shall be true and correct
in all material respects with the same effect as though such representations and
warranties had been made on and as of the Effective Date, except for (i) those
representations and warranties which relate to a specified date, which were true
and correct in all material respects as of such date, and

 

R-3

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

 

(ii) those changes in representations and warranties otherwise permitted by the
terms of the Second Amended and Restated Credit Agreement and the other Loan
Documents; and

 

There shall not exist a Default or Event of Default.

 

Certain Representations and Warranties.  In order to induce the Agent and New
Lender to enter into this Agreement, each Borrower hereby represents and
warrants to the Agent and New Lender that each statement set forth in this
Section 6 is true and correct on the date hereof and will be true and correct on
the Effective Date.  Each such representation and warranty shall survive the
execution and delivery of this Agreement and shall not be qualified or limited
by any investigation undertaken by the Agent or New Lender or any actual or
constructive knowledge the Agent or New Lender may have or be charged with
indicating that any such representation or warranty is inaccurate or incomplete
in any respect.

 

Each Borrower is duly authorized and empowered to execute, deliver and perform
this Agreement; and all corporate, partnership or other action on any Borrower’s
part requisite for the due execution, delivery and performance of this Agreement
has been duly and effectively taken;

 

This Agreement constitutes the legal, valid and binding obligations of each
Borrower and is enforceable in accordance with its terms (except that
enforcement may be subject to any applicable bankruptcy, insolvency or similar
laws generally affecting the enforcement of creditors’ rights and subject to the
availability of equitable remedies);

 

The execution, delivery and performance of this Agreement do not and will not
violate or create a default under any provisions of the articles or certificate
of incorporation, formation or organization, as applicable, bylaws, partnership
agreement or other organizational documents of any Borrower, or any contract,
agreement, instrument or requirements of any Governmental Authority to which any
Borrower is subject which violation or default could have a Material Adverse
Effect, or result in the creation or imposition of any Lien upon any Properties
of any Borrower;

 

Each Borrower’s execution, delivery and performance of this Agreement do not
require notice to or filing or registration with, or the authorization, consent
or approval of or other action by any other Person, including, but not limited
to, any Governmental Authority, except those obtained or made; and

 

No Default or Event of Default has occurred which is continuing.

 

Notice.  All notices, requests and other communications to any party hereunder
shall be given in the manner set forth in Section 10.2 of the Second Amended and
Restated Credit Agreement.  The initial notice address for New Lender shall be
                                                       .

 

Benefit of Agreement.  This Agreement and the other documents that may be
required pursuant hereto shall be binding upon and inure to the benefit of and
be enforceable by the respective permitted successors and assigns of the parties
hereto, provided that no Borrower may assign or transfer any of its interest
hereunder or thereunder without the prior written consent of the Agent and New
Lender.

 

R-4

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

 

Amendment and Waiver.  Neither this Agreement nor any terms hereof or thereof,
may be amended, supplemented or modified except in accordance with the
provisions of Section 10.11 of the Second Amended and Restated Credit Agreement.

 

Loan Document.  This Agreement and the New Lender Note (if delivered pursuant
hereto) are Loan Documents for all purposes of the Second Amended and Restated
Credit Agreement and the other Loan Documents.

 

Entire Agreement.  The New Lender Note, this Agreement, the Second Amended and
Restated Credit Agreement and the other Loan Documents embody the entire
agreement and understanding between the Agent and New Lender and supersede all
prior agreements and understandings between such parties relating to the subject
matter hereof and thereof and may not be contradicted by evidence of prior or
contemporaneous agreements of the parties.  There are no unwritten oral
agreements between the parties.

 

Counterparts.  This Agreement may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original but all of which shall together
constitute one and the same instrument.

 

Further Assurances.  Borrowers and New Lender agree to execute, acknowledge,
deliver, file and record such further certificated, instruments and documents,
and to do all other acts and things as may be requested by the Agent as
necessary or advisable to carry out the intents and purposes of this Agreement.

 

Governing Law.  This Agreement and the rights and obligations of the parties
hereunder and under the New Lender Note shall be construed in accordance with
and be governed by the laws of the State of New York, but giving effect to
federal laws of the United States of America applicable to national banks.

 

Consent of Guarantors.  The Guarantors hereby consent to this Agreement.

 

Effective Date.  This Agreement shall be effective upon the date (the “Effective
Date”) specified by the Agent below its signature below.

 

[Signature Page Follows]

 

R-5

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
as of the Effective Date.

 

 

 

NEENAH PAPER, INC.,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER MICHIGAN, INC.,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NPCC HOLDING COMPANY, LLC,

 

as a Borrower

 

 

 

By:

Neenah Paper, Inc., as its sole member

 

 

 

 

By:

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FVC, INC.,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

 

 

NEENAH PAPER FR, LLC,

 

as a Borrower

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to New Lender Agreement]

 

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

 

 

[FUTURE BORROWERS]

 

 

 

By:

 

 

Name

 

 

Title:

 

 

[Signature Page to New Lender Agreement]

 

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

 

 

[FUTURE GUARANTORS]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

[Signature Page to New Lender Agreement]

 

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

 

 

[NEW LENDER]

 

 

 

By:

 

 

Name

 

 

Title:

 

 

 

 

 

 

JPMORGAN CHASE BANK, N.A.,

 

as the Agent

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

Effective Date:

 

                           , 20    .

 

[Signature Page to New Lender Agreement]

 

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

 

EXHIBIT S-1

 

FORM OF U.S. TAX CERTIFICATE FOR [NON-U.S. LENDERS] [PARTICIPANTS] THAT ARE NOT
PARTNERSHIPS

 

Reference is hereby made to the Second Amended and Restated Credit Agreement
dated as of October 11, 2012 (as amended, supplemented, restated or otherwise
modified from time to time, the “Credit Agreement”) among Neenah Paper, Inc.
(the “Parent”) and its Subsidiaries party thereto as borrowers (collectively,
the “Borrowers”), the Subsidiaries of Parent party thereto as guarantors (if
any) (together with the Borrowers, the “Credit Parties”) each Lender from time
to time party thereto and JPMorgan Chase Bank, N.A., as Agent, Swingline Lender
and Issuing Bank.

 

Pursuant to the provisions of Section 10.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record and beneficial owner
of the [Loan(s) (as well as any Note(s) evidencing such Loan(s))]
[participation] in respect of which it is providing this certificate, (ii) it is
not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is
not a ten percent shareholder of any Borrower within the meaning of
Section 871(h)(3)(B) of the Code, (iv) it is not a controlled foreign
corporation related to any Borrower as described in Section 881(c)(3)(C) of the
Code and (v) the interest payments in question are not effectively connected
with the undersigned’s conduct of a U.S. trade or business.

 

The undersigned has furnished [the Agent and the Borrowers’ Agent] [its
participating Lender] with a certificate of its non-U.S. person status on IRS
Form W-8BEN.  By executing this certificate, the undersigned agrees that (i) if
the information provided on this certificate changes, the undersigned shall
promptly so inform [the Borrowers’ Agent and the Agent] [such Lender] and
(ii) the undersigned shall have at all times furnished [the Borrowers’ Agent and
the Agent] [such Lender] with a properly completed and currently effective
certificate in either the calendar year in which each payment is to be made to
the undersigned, or in either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF LENDER OR PARTICIPANT]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

Date:                      , 20    

 

 

S-1

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

 

EXHIBIT S-2

 

FORM OF U.S. TAX CERTIFICATE FOR [NON-U.S. LENDERS] [PARTICIPANTS] THAT ARE NOT
PARTNERSHIPS

 

Reference is hereby made to the Second Amended and Restated Credit Agreement
dated as of October 11, 2012 (as amended, supplemented, restated or otherwise
modified from time to time, the “Credit Agreement”) among Neenah Paper, Inc.
(“Parent”) and its Subsidiaries party thereto as borrowers (collectively, the
“Borrowers”), the Subsidiaries of Parent party thereto as guarantors (if any)
(together with the Borrowers, the “Credit Parties”) each Lender from time to
time party thereto and JPMorgan Chase Bank, N.A., as Agent, Swingline Lender and
Issuing Bank.

 

Pursuant to the provisions of Section 10.17 of the Credit Agreement, the
undersigned hereby certifies that (i) it is the sole record owner of the
[Loan(s) (as well as any Note(s) evidencing such Loan(s))] [participation] in
respect of which it is providing this certificate, (ii) its partners/members are
the sole beneficial owners of such [Loan(s) (as well as any Note(s) evidencing
such Loan(s))] [participation], (iii) with respect to [the extension of credit
pursuant to this Credit Agreement] [participation], neither the undersigned nor
any of its partners/members is a bank extending credit pursuant to a loan
agreement entered into in the ordinary course of its trade or business within
the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its
partners/members is a ten percent shareholder of any Borrower within the meaning
of Section 871(h)(3)(B) of the Code, (v) none of its partners/members is a
controlled foreign corporation related to any Borrower as described in
Section 881(c)(3)(C) of the Code, and (vi) the interest payments in question are
not effectively connected with the undersigned’s or its partners/members’
conduct of a U.S. trade or business.

 

The undersigned has furnished [the Agent and the Borrowers’ Agent] [its
participating Lender] with IRS Form W-8IMY accompanied by an IRS Form W-8BEN
from each of its partners/members claiming the portfolio interest exemption.  By
executing this certificate, the undersigned agrees that (i) if the information
provided on this certificate changes, the undersigned shall promptly so inform
[the Borrowers’ Agent and the Agent] [such Lender] and (ii) the undersigned
shall have at all times furnished [the Borrowers’ Agent and the Agent] [such
Lender] with a properly completed and currently effective certificate in either
the calendar year in which each payment is to be made to the undersigned, or in
either of the two calendar years preceding such payments.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

 

[NAME OF LENDER OR PARTICIPANT]

 

 

 

By:

 

 

Name:

 

 

Title:

 

Date:                      , 20    

 

 

1.1A - 1

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

 

SCHEDULE 1.1A

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Commitments

 

Lender

 

Revolving Note
Commitment
Amount

 

Term Loan
Commitment
Amount

 

Total Commitment:
Revolver & Term
Loan

 

Swingline Note
Commitment
Amount

 

JPMorgan Chase Bank, N.A.

 

$

37,321,428.30

 

$

22,500,000.00

 

$

59,821,428.30

 

$

15,000,000

 

Bank of America, N.A.

 

$

33,928,571.70

 

$

7,500,000.00

 

$

41,428,571.70

 

N/A

 

UBS AG, Stamford Branch

 

$

16,964,285.85

 

N/A

 

$

16,964,285.85

 

N/A

 

Goldman Sachs Lending Partners LLC

 

$

6,785,714.15

 

N/A

 

$

6,785,714.15

 

N/A

 

BMO Harris Bank, N.A.

 

$

10,000,000.00

 

N/A

 

$

10,000,000.00

 

N/A

 

Total Commitments:

 

$

105,000,000

 

$

30,000,000

 

$

135,000,000

 

$

15,000,000

 

 

1.1A - 1

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

 

SCHEDULE 1.1B

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Material Leasehold Properties

 

1.                                      Industrial Lease Agreement between First
Industrial Realty Trust, Inc. and Neenah Paper, Inc. — Suite B of the Building
located at 655 Hembree Park Drive, Roswell, Georgia

 

2.                                      Lease between Germania Property
Investors XXXIV, L.P. and Neenah Paper, Inc. dated June 29, 2004, as amended by
that First Amendment to Lease, dated October 10, 2006, that Second Amendment to
Lease, dated April 10, 2007, that Third Amendment to Lease dated July 11, 2011,
and that Fourth Amendment to Lease dated September 13, 2011, 6th Floor Office
Space, 3460 Preston Ridge Road, Alpharetta, Georgia.

 

1.1B - 1

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

 

SCHEDULE 1.1C

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Equipment Component

 

“Equipment Component” shall mean $9,561,650; provided, that, the Equipment
Component shall reduce (a) by the Quarterly Equipment Component Amortization
Amount, commencing on December 31, 2012, and continuing on the last Business Day
of each March, June, September and December thereafter, and (b) (i) upon the
consummation of Dispositions of Eligible Equipment owned by the Borrowers on the
Closing Date, or (ii) at such time as any Equipment which was previously
Eligible Equipment ceases to be Eligible Equipment hereunder, by the applicable
percentage of the Net Recovery Value Percentage of the Property so disposed of
or the Equipment which has ceased to be Eligible Equipment hereunder, as
applicable.

 

1.1C - 1

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

 

SCHEDULE 1.1D

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Quarterly Equipment Component Amortization Amount

 

“Quarterly Equipment Component Amortization Amount” shall mean $478,083, as such
amount shall be adjusted by Agent (a) upon the consummation of Dispositions of
Eligible Equipment owned by the Borrowers on the Closing Date and (b) at such
time as any Equipment which was previously Eligible Equipment ceases to be
Eligible Equipment hereunder, by the applicable percentage of the Net Recovery
Value Percentage of the Property so disposed of or the Equipment which has
ceased to be Eligible Equipment hereunder, as applicable.

 

1.1D - 1

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

 

SCHEDULE 1.1E

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Quarterly Real Estate Component Amortization Amount

 

“Quarterly Real Estate Component Amortization Amount” shall mean $348,750, as
such amount shall be adjusted by Agent upon the consummation of Dispositions of
Closing Date Mortgaged Properties consisting of Eligible Real Estate owned by
the Borrowers on the Closing Date and at such time as any Real Property Asset
which was previously Eligible Real Estate ceases to be Eligible Real Estate
hereunder, in each case, by the applicable percentage of the Net Recovery Value
Percentage of the Property so disposed of or the Real Property Asset which has
ceased to be Eligible Real Estate hereunder, as applicable.

 

1.1E - 1

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

 

SCHEDULE 1.1F

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Real Estate Component

 

“Real Estate Component” shall mean $13,950,000; provided, that, the Real Estate
Component shall reduce (a) by the Quarterly Real Estate Component Amortization
Amount commencing on December 31, 2012, and continuing on the last Business Day
of each March, June, September and December thereafter, and (b) (i) upon the
consummation of Dispositions of Closing Date Mortgaged Properties consisting of
Eligible Real Estate owned by the Borrowers on the Closing Date, or (ii) at such
time as any Real Property Asset which was previously Eligible Real Estate ceases
to be Eligible Real Estate hereunder, by the applicable percentage of the Net
Recovery Value Percentage of the Property so disposed of or the Real Property
Asset which has ceased to be Eligible Real Estate hereunder, as applicable.

 

1.1F - 1

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

 

SCHEDULE 1.4

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Responsible Officers of the Parent

 

John P. O’Donnell

 

Bonnie C. Lind

 

Steven S. Heinrichs

 

Larry N. Brownlee

 

1.4 - 1

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

 

SCHEDULE 2.10(a)

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Existing Letters of Credit

 

1.              Standby letter of credit issued under the Original Credit
Agreement — Sentry Insurance A Mutual Company - $250,000 USD

 

2.              Standby letter of credit issued under the Original Credit
Agreement — Employers Insurance Company of Wausau - $31,000 USD

 

2.10(a) - 1

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

 

SCHEDULE 4.3(r)-1

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Closing Date Mortgaged Properties

 

Amendments to Mortgages

 

Real Property Asset

 

Address

 

 

 

Munising Mill

 

501 E. Munising Avenue Munising, MI 49862-7490

 

 

 

Neenah Mill

 

133/135 North Commercial Street Neenah, WI 54956

 

 

 

Neenah Distribution Center

 

1300 Kimberly Drive Neenah, WI 54956

 

 

 

Whiting Mill

 

3243 Whiting Avenue Stevens Point, WI 54481

 

 

 

Appleton Mill

 

430 East South Island Street Appleton, WI 54912-2215

 

4.3(r)-1 - 1

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

 

SCHEDULE 4.4

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Post-Closing Deliveries

 

(1)  Endorsements to existing loan title insurance policies or, if required by
the Agent, a new ALTA loan title insurance policy (or an endorsement in Proper
Form to any existing ALTA loan title insurance policy issued by the Title
Company in favor of the Agent) or unconditional commitment therefor (a
“Post-Closing Mortgage Policy”) issued by the Title Company with respect to each
Closing Date Mortgaged Property owned by any Credit Party, in an amount not less
than the appraised fair market value of such Closing Date Mortgaged Property,
insuring fee simple title to the Closing Date Mortgaged Property vested in such
Credit Party and assuring the Agent that the Closing Date Mortgage creates a
valid and enforceable first priority Lien on such Closing Date Mortgaged
Property, subject only to any standard or other exceptions as may be reasonably
acceptable to the Agent and which appear as exceptions on Schedule B to the
applicable Post-Closing Mortgage Policy, which Post-Closing Mortgage Policy
(i) shall include endorsements (to the extent available) for customary matters
reasonably requested by the Agent, including, but not limited to, those
endorsements listed on this Schedule 4.4 and (ii) shall provide for affirmative
insurance and such reinsurance as may be reasonable and customary and as the
Agent may reasonably request, all of the foregoing in form and substance
reasonably satisfactory to the Agent; and (b) evidence satisfactory to the Agent
that such Credit Party has (i) delivered to the Title Company all certificates
and affidavits required by the Title Company in connection with the issuance of
the Post-Closing Mortgage Policy and (ii) paid to the Title Company or to the
appropriate Governmental Authorities all expenses and premiums of the Title
Company in connection with the issuance of the Post-Closing Mortgage Policy and
all recording and stamp taxes (including mortgage recording taxes, fees and
other charges and intangible taxes) payable in connection with recording the
Closing Date Mortgage in the appropriate real estate records;

 

(2)  Copies of all recorded documents listed as exceptions to title or otherwise
referred to in the Post-Closing Mortgage Policy and any other such documents as
Agent shall reasonably request; and

 

(3)  together with such other certificates affidavits, mortgages, mortgage
amendments, surveys or surveyor or owners certificates, or such other documents
as the Agent may reasonably require or such other documents necessary to permit
the Title Company to issue endorsements or policies.

 

4.4 -1

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

 

SCHEDULE 5.3

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Governmental Authorization

 

None

 

5.3 - 1

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

 

SCHEDULE 5.5

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Material Litigation

 

None

 

5.5 - 1

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

 

SCHEDULE 5.10

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Permits, Licenses, Etc.

 

None

 

5.10 - 1

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

 

SCHEDULE 5.16

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Indebtedness

 

1.              Indebtedness under the Senior Note Documents in the initial
principal amount of $225,000,000.

 

2.              Standby Letters of Credit in effect as of the date of this
agreement and in accordance with the terms of the Credit Facility:

 

a.              Sentry Insurance A Mutual Company - $250,000 USD

b.              Employers Insurance Company of Wausau - $31,000 USD.

 

3.              Loan Agreement between Neenah Paper International Holding
Company, LLC and Neenah Paper International Finance Company BV ($500,000,000
intercompany line of credit note, with $119,742,483.66 principal amount
outstanding as of the October 11, 2012).

 

5.16 - 1

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

 

SCHEDULE 5.17

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Environmental Matters

 

5.17(c)(iii):  Environmental Claims and Liabilities:

 

1.              Environmental Claims:

 

Claims (United States):

 

a.              Request for Information from the U.S. Environmental Protection
Agency, dated October 27, 1994 (re the Manistique River Harbor Area, related to
Munising Mill).

 

b.              Munising RCRA matter, U.S. Forest Service Landfill in Munising,
MI.  Active Site, Groundwater Monitoring, Cap Maintenance.

 

c.               Clean Air Act Matter — MUNISING — Notice of Violation for
Opacity Monitoring; Reporting and Record keeping issues.

 

d.              Housatonic:   The Massachusetts DEP (MassDEP) is aware of the
presence of historic solid waste disposed of on property in Great Barrington, MA
owned by Neenah Paper FR, LLC (“Neenah FR”).  A release of oil and/or hazardous
materials (OHM) has occurred at this location, which is a disposal site as
defined by M.G.L. c. 21E, § 2 and the Massachusetts Contingency Plan, 310 CMR
40.0000. To evaluate the release, a Phase I Initial Site Investigation was
performed pursuant to 310 CMR 40.0480. As a result of this investigation, the
site has been classified as Tier II pursuant to 310 CMR 40.0500. On May 18,
2012, Neenah Paper filed a Tier II Classification Submittal with the MassDEP.
Work is underway to complete a Phase II Comprehensive Site Assessment (CSA) to
delineate the extent of OHM in soil in certain portions of the Site and to
characterize risks to human health and the environment. It is expected the
environmental matter will be closed with the MassDEP in Q1 2013. Neenah FR
currently has an escrow liability claim and environmental liability insurance
which it believes will cover costs associated with remediation.

 

2.              Environmental Claims/Environmental Liabilities: those matters
set forth in the following studies and assessments:

 

5.17 - 1

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

 

a.              InteGreyted International Phase I Environmental Site Assessment
and Environmental, Health and Safety Compliance Evaluation - Munising Mill,
April 2004;

 

b.              InteGreyted International Phase I Environmental Site Assessment
and Environmental, Health and Safety Compliance Evaluation - Whiting Mill,
April 2004;

 

c.               InteGreyted International Phase I Environmental Site Assessment
and Environmental, Health and Safety Compliance Evaluation - Neenah Mill,
April 2004;

 

d.              InteGreyted International Phase I Environmental Site Assessment
and Environmental, Health and Safety Compliance Evaluation - Neenah Distribution
and Finishing Center, April 2004;

 

e.               Phase I Environmental Site Assessment — Vicksburg, Michigan,
Delta Project No. HS06-018-1.0006, prepared for: Neenah Paper, Inc., 3460
Preston Ridge Road, Suite 600, Alpharetta, Georgia 30005, prepared by: Delta
Environmental Consultants, Inc., 3701 Briarpark Drive, Suite 300, Houston, Texas
77042, February 12, 2007;

 

f.                Phase I Environmental Site Assessment — Kalamazoo Valley Group
Landfill, 2042 South 40th Street, Galesburg, Michigan, Delta Project
No. HS06-018-1.0008, prepared for: Neenah Paper, Inc., 3460 Preston Ridge Road,
Suite 600, Alpharetta, Georgia 30005, prepared by: Delta Environmental
Consultants, Inc., 3701 Briarpark Drive, Suite 300, Houston, Texas 77042,
February 12, 2007; and

 

g.               Phase I Environmental Site Assessment — Appleton Mill, 430 East
South Island Street, Appleton, Wisconsin, Delta Project No. HS06-018-1.0002,
prepared for: Neenah Paper, Inc., 3460 Preston Ridge Road, Suite 600,
Alpharetta, Georgia 30005, prepared by: Delta Environmental Consultants, Inc.,
3701 Briarpark Drive, Suite 300, Houston, Texas 77042, February 12, 2007.

 

5.17(c)(iv): Notices of Violation:

 

1.                                      Vicksburg:  Ongoing ground water
monitoring at the Sludge Impoundment Area (SIA)  in Vicksburg, MI owned by
Neenah FR. Vicksburg property monitoring indicated exceedance of Generic GSI
criterion for TDS in the May 29, 2009, samples.  Previous reports have indicated
occasional exceedance of barium concentrations.  The MI Department of
Environmental Quality is aware that the closure of the site and installation of
a landfill cap has reduced impact on ground water and is expected to mitigate
any potential deleterious impact on ground water with time.  These exceedances
are not considered significant in nature.

 

2.

 

5.17 - 2

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

 

5.17(d): Predecessors In Interest:

 

1.                                      The matters otherwise described in this
Schedule 5.17 relate to the period prior to the Credit Parties’ ownership and
operation, and are therefore matters relating to a predecessor in interest.

 

5.17(1): Pending/Anticipated Changes in Law:

 

1.                   Munising Mill Boiler, MACT Standards Phase-In - the U.S.
Environmental Protection Agency recently promulgated national emission standards
limiting hazardous air pollutant emissions from industrial boilers, Existing
sources, such as the Munising Mill’s boiler, have three years from promulgation
to demonstrate compliance, The Munising Mill has yet to determine its boiler’s
compliance status with respect to these new regulations.  Compliance may require
installation of a scrubber.  Costs for such a scrubber have been included in the
company’s environmental capital budget in the event such scrubber is required.

 

5.17 - 3

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

 

SCHEDULE 7.2

 

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Liens

 

ENCUMBRANCES ON TITLE OF REAL PROPERTY

 

Closing Date Mortgaged Property

 

Munising Mill Property

 

Exceptions listed in Schedule B, Section 2 of First American Title Policy No.:
NCS-121617-CHI1, as endorsed.

 

Neenah Mill and Kimberly Drive Properties in Neenah, Wisconsin

 

Exceptions listed in Schedule B, Section 2 of First American Title Policy No.:
NCS-112000-CHI2, as endorsed.

 

Whiting Mill Property

 

Exceptions listed in Schedule B, Section 2 of First American Title Policy No.:
NCS-112287-MAD, as endorsed.

 

Appleton Mill Property

 

Exceptions listed in Schedule B, Section 2 of First American Title Policy No.:
NCS-411394-06-ATL.

 

7.2 - 1

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

 

UCC Financing Statements — Delaware Secretary of State

 

DEBTOR

 

SECURED PARTY AND
ADDRESS

 

ORIGINAL UCC
FILING
INFORMATION

 

AMENDMENT
FILING
INFORMATION

 

EXPIRY
DATE

 

COLLATERAL DESCRIPTION

Neenah Paper, Inc.

 

Additional debtors: Neenah Paper Michigan, Inc.

 

CIT Communications Finance Corporation

1 CIT Drive

Livingston, NJ 07039

 

DE SOS 53013290, filed 09/29/2005

 

—

 

09/29/2010

 

Equipment owned or thereafter acquired/leased pursuant to Lease No. X897032,
including but not limited to Avaya Inc. S8710 Media Servers and Call Management
System, and all attachments, etc. Equipment location, includes, but is not
limited to 1376 Kimberly Drive, Neenah, WI 54956.

 

 

 

 

 

 

 

 

 

 

 

Neenah Paper, Inc.

 

Astenjohnson, Inc.

4399 Corporate Road

P. O. Box 118001

Charleston, SC 29423-8001

 

DE SOS 61934694, filed 06/07/2006

 

—

 

06/07/2011

 

All of consignee’s right, title and interest in and to all goods and inventory
(including without limitation any/all paper machine clothing) consigned to
consignee from time to time; and all proceeds of the foregoing, including
without limitation chattel paper, accounts and insurance proceeds.

 

 

 

 

 

 

 

 

 

 

 

Neenah Paper, Inc.

 

CIT Communications Finance Corporation

1 CIT Drive

Livingston, NJ 07039

 

DE SOS 81514106, filed 05/01/2008

 

—

 

05/01/2013

 

Equipment leased or thereafter acquired pursuant to Lease No. 0004032, including
but not limited to, Avaya Inc. S8500 media server and DEFINITY sets, and all
attachments, etc. Support and services provided to debtor, which is financed by
secured party pursuant to Lease No. X897032, including but not limited to, all
rights of debtor under a Service Agreement between Avaya Inc. and debtor.
Equipment locations include 3460 Preston Ridge Road, Alpharetta, GA 30005; 1376
Kimberly Drive, Neenah, WI 54956; 3243 Whiting Road, Stevens Point, WI 54481;
501 E. Munising Ave., Munising, MI 49862

 

7.2 - 2

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

 

Neenah Paper Michigan, Inc.

 

Additional debtors: Neenah Paper, Inc.;

 

CIT Communications Finance Corporation

1 CIT Drive

Livingston, NJ 07039

 

DE SOS 53013290, filed 09/29/2005

 

—

 

09/29/2010

 

Equipment owned or thereafter acquired/leased pursuant to Lease No. X897032,
including but not limited to Avaya Inc. S8710 Media Servers and Call Management
System, and all attachments, etc. Equipment location, includes, but is not
limited to 1376 Kimberly Drive, Neenah, WI 54956.

 

UCC Financing Statements — Fulton County, Georgia

 

DEBTOR

 

SECURED PARTY AND
ADDRESS

 

ORIGINAL UCC
FILING
INFORMATION

 

AMENDMENT
FILING
INFORMATION

 

EXPIRY
DATE

 

COLLATERAL DESCRIPTION

Neenah Paper, Inc.

 

Toyota Motor Credit Corporation

P.O. Box 3457

Torrance, CA 90510-3457

 

Fulton County, GA 007-2008-5457, filed 03/14/08

 

—

 

03/14/2013

 

It is the intent of the parties that the transaction referenced herin [sic]
constitutes a true lease. The party designated as the secured party in item 3
above is the owner of the property described herein. This filing is made as a
precaution should the transaction be viewed as other than a true lease. TWO
(2) TOYOTA FORKLIFT MODEL #7FGCSU20 SERIAL # 69937 & 69936

 

 

 

 

 

 

 

 

 

 

 

Neenah Paper, Inc.

 

Toyota Motor Credit

Corporation

P.O. Box 3457

Torrance, CA 90510-3457

 

Fulton County, GA 007-2008-5462, filed 03/14/08

 

—

 

03/14/2013

 

It is the intent of the parties that the transaction referenced herin [sic]
constitutes a true lease. The party designated as the secured party in item 3
above is the owner of the property described herein. This filing is made as a
precaution should the transaction be viewed as other than a true lease. ONE
(1) TOYOTA FORKLIFT MODEL #7FGCU25 SERIAL # 96241

 

7.2 - 3

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

 

SCHEDULE 7.6

TO THE

SECOND AMENDED AND RESTATED CREDIT AGREEMENT

 

Permitted Affiliated Transactions

 

1.             License and Technical Assistance Agreement between Neenah
Paper, Inc. and Neenah Paper Michigan, Inc.

 

2.             Loan Agreement between Neenah Paper, Inc. and Neenah Paper
Michigan, Inc.

 

3.             Consignment Manufacturing Agreement between Neenah Paper FR, LLC
and Neenah Paper, Inc.

 

4.             Loan Agreement between Neenah Paper International Holding
Company, LLC and Neenah Paper International Finance Company BV

 

5.             Loan Agreement between Neenah Paper International Finance Company
BV and Neenah Paper International, LLC

 

6.             Management and Services Agreement between Neenah Paper
International, LLC, Neenah Paper, Inc., Neenah Paper FVC, Inc., Neenah Paper FR,
LLC  and Neenah Paper Michigan, Inc.

 

7.6

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