Exhibit 10.55

EXECUTION COPY

EIGHTH AMENDMENT AND WAIVER  

            This Eighth Amendment and Waiver (the "Agreement") to the Credit
Agreement referred to below is dated as of November 12, 2008 and effective in
accordance with Section 4 below, by and among BOWATER INCORPORATED, a
corporation organized under the laws of Delaware ("BI"), BOWATER ALABAMA LLC
(formerly known as Bowater Alabama Inc.), a limited liability company organized
under the laws of Alabama ("BA"), BOWATER NEWSPRINT SOUTH LLC, a limited
liability company organized under the laws of Delaware ("BNS"), BOWATER
NEWSPRINT SOUTH OPERATIONS LLC (formerly known as Bowater Newsprint South Inc.),
a limited liability company organized under the laws of Delaware and the
successor by merger to Bowater Mississippi LLC ("BNSO"), each in its capacity as
a Borrower under the Credit Agreement referred to below (BI, BA, BNS and BNSO
are collectively referred to herein as the "Borrower"), certain Subsidiaries and
Affiliates of the Borrower party hereto (the "Grantors"), ABITIBIBOWATER INC., a
corporation organized under the laws of Delaware (the "Parent"), the Lenders and
the Canadian Lenders party hereto (collectively, the "Consenting Lenders")
pursuant to an authorization (in the form attached hereto as Exhibit A, each a
"Lender Authorization") and WACHOVIA BANK, NATIONAL ASSOCIATION, as
administrative agent (the "Administrative Agent") for the Lenders party to the
Credit Agreement referred to below.

STATEMENT OF PURPOSE:

            The Borrower, the Lenders, certain other financial institutions and
the Administrative Agent are parties to the Credit Agreement dated as of May 31,
2006 (as amended by that certain First Amendment dated as of July 20, 2007, that
certain Second Amendment dated as of October 31, 2007, that certain Third
Amendment and Waiver dated as of February 25, 2008, that certain Fourth
Amendment dated as of March 31, 2008, that certain Fifth Amendment dated as of
April 30, 2008, that certain Sixth Amendment dated as of June 30, 2008, that
certain Seventh Amendment and Waiver dated as of August 7, 2008, as amended
hereby and as further amended, restated, supplemented or otherwise modified from
time to time, the "Credit Agreement").  

The Borrower has requested that the Administrative Agent, the Lenders and the
Canadian Lenders agree to amend the Credit Agreement as more specifically set
forth herein.  In addition, the Borrower (a) has (i) failed to deliver the
monthly borrowing base certificate as required pursuant to Section 7.1(g) of the
Credit Agreement for the months ended June 30, 2008, July 31, 2008, August 31,
2008 and September 30, 2008 (the "Delivery Requirements") and (ii) failed to
promptly notify the Administrative Agent of such failure, (b) has failed to
comply with the financial covenants set forth in Sections 9.1 and 9.2 of the
Credit Agreement with respect to the testing period ended September 30, 2008 and
(c) hereby requests that the Administrative Agent, the Lenders and the Canadian
Lenders agree to waive all Defaults and Events of Default related to the
foregoing.  Subject to the terms and conditions set forth herein, the
Administrative Agent and each of the Consenting Lenders have agreed to grant
such requests of the Borrower.

            NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:

                1.                   Capitalized Terms.  Except as otherwise
provided herein, all capitalized undefined terms used in this Agreement
(including, without limitation, in the introductory paragraph and the statement
of purpose hereto) shall have the meanings assigned thereto in the Credit
Agreement (as amended by this Agreement). 

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                2.                 Credit Agreement Amendments.  The Credit
Agreement (including Exhibits B and K thereto but excluding all other Exhibits
and Schedules thereto) is hereby amended as set forth on Exhibit B.  It is
hereby acknowledged by the parties hereto that the amended Credit Agreement as
set forth on Exhibit B reflects the permanent reduction by the Borrower of the
Commitment from $415,000,000 to $407,572,707 pursuant to Section 2.5(a) of the
Credit Agreement (the Consenting Lenders hereby waiving the minimum incremental
amount requirements of such Section).

                3.                  Waivers.  Pursuant to Section 13.2 of the
Credit Agreement and subject to the terms and conditions hereof, including,
without limitation, the conditions to effectiveness set forth in Section 4
hereof, the Administrative Agent, the Issuing Lender and the other Consenting
Lenders party hereto waive any and all Defaults and Events of Default occurring
pursuant to (a) Section 11.1(d), Section 11.1(e) and/or Section 11.1(g)(i) of
the Credit Agreement, in each case, solely as a result of the failure by the
Borrower and the Canadian Borrower to comply with the Delivery Requirements and
to provide notice of such failure to the Administrative Agent and (b) Section
11.1(d) and Section 11.1(g)(i) of the Credit Agreement, in each case, solely as
a result of the failure by the Borrower and its Subsidiaries to comply with the
financial covenants set forth in Sections 9.1 and 9.2 of the Credit Agreement
and Sections 9.1 and 9.2 of the Canadian Credit Agreement, in each case, solely
with respect to the testing period ended September 30, 2008.

                4.                      Conditions to Effectiveness.  Upon the
satisfaction of each of the following conditions, this Agreement shall be deemed
to be effective as of the date hereof:

              (a)                     the Administrative Agent shall have
received counterparts of this Agreement executed by the Administrative Agent (on
behalf of itself and each of the Consenting Lenders by virtue of each Consenting
Lender's execution of a Lender Authorization), the Borrower, the Parent and each
of the Grantors;

                (b)                     the Administrative Agent shall have
received executed Lender Authorizations from the requisite Consenting Lenders;

                (c)                   the Administrative Agent shall have been
reimbursed for all fees (including, without limitation, the fees set forth in
that certain letter agreement dated as of October 31, 2008 (as amended,
restated, supplemented or otherwise modified) between Wachovia Capital Markets,
LLC and the Borrower) and out-of-pocket charges and other expenses incurred in
connection with this Agreement, including, without limitation, the reasonable
fees and disbursements of counsel for the Administrative Agent;

                (d)                   the Administrative Agent shall have
received an effective corresponding amendment to the Canadian Credit Agreement,
in form and substance substantially consistent with this Agreement (with such
changes as are applicable only to the Canadian Credit Agreement), duly executed
by the Canadian Administrative Agent, the Canadian Borrower, the Parent, each
Canadian Guarantor and the requisite Consenting Lenders (whether directly or
through a lender authorization);

                (e)                  the Administrative Agent shall have
received evidence in form and substance satisfactory thereto that Consolidated
EBITDA for the fiscal quarter ended September 30, 2008 is not less than
$78,500,000;

                 (f)                    the Borrower shall have paid to the
Administrative Agent (or its applicable affiliates), for the account of each
Consenting Lender (including the Administrative Agent and the Canadian
Administrative Agent) that executes and delivers this Agreement or a Lender
Authorization to the Administrative Agent (or its counsel) on or prior to 5:00
p.m. (Eastern Time) on November 13, 2008, an amendment fee in an amount equal to
(a) 50 basis points times the principal amount of such Consenting

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Lender's Commitment plus (b) 50 basis points times the principal amount of such
Consenting Lender's "Commitment" (as defined in the Canadian Credit Agreement);

                (g)                    the Administrative Agent and the Lenders
shall have been repaid in full all commitment fees due thereto under the Credit
Agreement that have accrued on and prior to the date of this Agreement with
respect to that portion of the Commitment terminated as of the date hereof;

                (h)                    the Borrower shall have made a repayment
of principal sufficient to permanently reduce the aggregate outstanding
Revolving Credit Loans, Swingline Loans and L/C Obligations, as applicable, to
the Commitment as reduced as of the date of this Agreement and shall otherwise
have complied with the requirements of the Credit Agreement with respect to
reduction of the Commitment;

                (i)                     the Borrower shall have used its
commercially reasonable efforts to deliver endorsements with respect to the
Credit Insurance Policy in form and substance reasonably acceptable to the
Administrative Agent and the Canadian Administrative Agent reflecting their
respective interests as additional insured and loss payee, as their respective
interests may appear;

                (j)                     the Administrative Agent shall have
received a bring-down field exam dated as of September 30, 2008 with respect to
the Collateral in form and substance satisfactory to the Administrative Agent
(it being hereby agreed and acknowledged that receipt of the Borrowing Base
Certificate pursuant to clause (k) below shall be deemed to satisfy the
requirement set forth in this clause (j));

                (k)                    the Administrative Agent shall have
received a Borrowing Base Certificate, in form and substance satisfactory to the
Administrative Agent dated as of September 30, 2008, duly certified by a
Responsible Officer of the Original Borrower;

                (l)                     the Administrative Agent shall have
received documentation, in form and substance satisfactory to the Administrative
Agent and the Canadian Administrative Agent, evidencing, amongst other things,
an increase in the credit limit (on terms and conditions satisfactory to the
Administrative Agent and the Canadian Administrative Agent) with respect to the
Borrower and its Subsidiaries' existing foreign accounts receivable credit
insurance policy number GE 1 16357 with Export Development Canada (the "Closing
Date Credit Insurance Policy"); and

                (m)                   the Administrative Agent shall have
received such other instruments (including, without limitation, amended and
restated Revolving Credit Notes (if requested by the Lenders) reflecting the
reduction in the Commitment), documents and certificates as the Administrative
Agent shall reasonably request in connection with the execution of this
Agreement.

                  5.                    Post-Closing Agreements. 

                (a)                    As promptly as possible, but no later
than November 26, 2008, to the extent not delivered on the date of this
Agreement after the Borrower's use of commercially reasonable efforts, the
Administrative Agent shall have received endorsements with respect to the
Closing Date Credit Insurance Policy in form and substance reasonably acceptable
to the Administrative Agent and the Canadian Administrative Agent reflecting
their respective interests as additional insured and loss payee, as their
respective interests may appear.

                (b)                   As promptly as possible, but no later than
December 8, 2008, the Administrative Agent shall have received a duly executed
perfection certificate for the Credit Parties dated as of the date of its
delivery in form and substance satisfactory to the Administrative Agent.

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                (c)                     As soon as possible but in any event by
December 31, 2008, the Borrower hereby agrees that it shall provide the
following:

                                           (i)                 (A) duly executed
amendments to each of the New Borrower Mortgages, in each case, in form and
substance satisfactory to the Administrative Agent but including, without
limitation, an amendment to the legal descriptions set forth therein (to the
extent necessary) (collectively, the "New Borrower Mortgage Amendments") and
(B) down-dated title policies with respect to each of the Coosa Pines Mill Real
Property and Grenada Mill Real Property dated as of the date of the applicable
amendment referred to in clause (A) insuring the Lien of each of the New
Borrower Mortgages, as amended by each of the New Borrower Mortgage Amendments,
and otherwise in form and substance satisfactory to the Administrative Agent; 
and

                                             (ii)               an updated
Schedule 1.1(c) to the Credit Agreement dated as of the date on which the New
Borrower Mortgage Amendments are filed.

(d)                    As promptly as possible, but no later than December 12,
2008 (as such date may be extended by the Administrative Agent and the Canadian
Administrative Agent in their sole discretion), the Administrative Agent and the
Canadian Administrative Agent shall have received (i) a Credit Insurance Policy
covering the Borrower and its Subsidiaries or the Parent and each of its
subsidiaries (including the Borrower and its Subsidiaries) issued by Export
Development Canada or another insurer reasonably acceptable to the
Administrative Agent and the Canadian Administrative Agent, covering each
account debtor of the Borrower and its Subsidiaries whose chief executive office
is not located in the United States or Canada (except as otherwise approved by
the Administrative Agent and the Canadian Administrative Agent) and otherwise on
substantially the same terms and conditions as those set forth in the Closing
Date Credit Insurance Policy or on such other terms and conditions as are
reasonably acceptable to the Administrative Agent and the Canadian
Administrative Agent and (ii) endorsements with respect to the Credit Insurance
Policy described in the foregoing clause (i) in form and substance reasonably
acceptable to the Administrative Agent and the Canadian Administrative Agent
reflecting their respective interests as additional insured and loss payee, as
their respective interests may appear (it being understood and agreed that any
endorsement that is the same form and substance as the endorsement accepted by
the Administrative Agent and the Canadian Administrative Agent in satisfaction
of the requirements in clause (a) of this Section shall be acceptable to the
Administrative Agent and the Canadian Administrative Agent).

It is hereby agreed and acknowledged that if any item described in clause (a),
(b) or (d) above is not delivered on the date required thereby, such failure
shall be deemed to be an immediate Event of Default under Section 11.1(d) of the
Credit Agreement. 

                6.                       Effect of the Agreement.  Except as
expressly provided herein, the Credit Agreement and the other Loan Documents
shall remain unmodified and in full force and effect.  Except as expressly set
forth herein, this Agreement shall not be deemed (a) to be a waiver of, or
consent to, a modification of or amendment of, any other term or condition of
the Credit Agreement or any other Loan Document, (b) to prejudice any other
right or rights which the Administrative Agent or the Lenders may now have or
may have in the future under or in connection with the Credit Agreement or the
other Loan Documents or any of the instruments or agreements referred to
therein, as the same may be amended, restated, supplemented or otherwise
modified from time to time, (c) to be a commitment or any other undertaking or
expression of any willingness to engage in any further discussion with the
Borrower or any other Person with respect to any waiver, amendment, modification
or any other change to the Credit Agreement or the Loan Documents or any rights
or remedies arising in favor of the Lenders or the Administrative Agent, or any
of them, under or with respect to any such documents or (d) to be a waiver of,
or consent to or a modification or amendment of, any other term or condition of
any other agreement by and among the Borrower, on the one hand, and the
Administrative Agent or any other Lender, on the other hand. 

 

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References in the Credit Agreement to "this Agreement" (and indirect references
such as "hereunder", "hereby", "herein", and "hereof") and in any Loan Document
to the Credit Agreement shall be deemed to be references to the Credit Agreement
as modified hereby.

 

                7.                    Representations and Warranties/No
Default.  By their execution hereof,

 

(a)                   the Parent, the Borrower and each of the Grantors hereby
certifies, represents and warrants to the Administrative Agent and the Lenders
that after giving effect to the amendments set forth in Section 2 above and the
waivers set forth in Section 3 above, each of the representations and warranties
set forth in the Credit Agreement and the other Loan Documents is true and
correct in all material respects as of the date hereof (except to the extent
that (A) any such representation or warranty that is qualified by materiality or
by reference to Material Adverse Effect, in which case such representation or
warranty is true and correct in all respects as of the date hereof or (B) any
such representation or warranty relates only to an earlier date, in which case
such representation or warranty shall remain true and correct as of such earlier
date) and that no Default or Event of Default has occurred or is continuing;

 

               (b)                    the Parent, the Borrower and each of the
Grantors hereby certifies, represents and warrants to the Administrative Agent
and the Lenders that:

               (i)                     it has the right, power and authority and
has taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other documents
executed in connection herewith to which it is a party in accordance with their
respective terms and the transactions contemplated hereby; and

               (ii)                    this Agreement and each other document
executed in connection herewith has been duly executed and delivered by the duly
authorized officers of the Parent, the Borrower and each of the Grantors, and
each such document constitutes the legal, valid and binding obligation of the
Parent, the Borrower and each of the Grantors, enforceable in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar state or federal debtor relief laws from time to time in
effect which affect the enforcement of creditors' rights in general and the
availability of equitable remedies.    

 

                8.                   Reaffirmations.  Each Credit Party (a)
agrees that the transactions contemplated by this Agreement shall not limit or
diminish the obligations of such Person under, or release such Person from any
obligations under, the Credit Agreement, the Parent Guaranty Agreement, the
Subsidiary Guaranty Agreement, the Collateral Agreement and each other Security
Document to which it is a party, (b) confirms and reaffirms its obligations
under the Credit Agreement, the Parent Guaranty Agreement, the Subsidiary
Guaranty Agreement, the Collateral Agreement and each other Security Document to
which it is a party and (c) agrees that the Credit Agreement, the Parent
Guaranty Agreement, the Subsidiary Guaranty Agreement, the Collateral Agreement
and each other Security Document to which it is a party remain in full force and
effect and are hereby ratified and confirmed.

 

                9.                     Governing Law.  THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.

              10.                   Counterparts.  This Agreement may be
executed by one or more of the parties hereto in any number of separate
counterparts and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.  

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                11.                  Electronic Transmission.  A facsimile,
telecopy, pdf or other reproduction of this Agreement may be executed by one or
more parties hereto, and an executed copy of this Agreement may be delivered by
one or more parties hereto by facsimile or similar instantaneous electronic
transmission device pursuant to which the signature of or on behalf of such
party can be seen, and such execution and delivery shall be considered valid,
binding and effective for all purposes.  At the request of any party hereto, all
parties hereto agree to execute an original of this Agreement as well as any
facsimile, telecopy, pdf or other reproduction hereof.

12.                  Authorization and Acknowledgement.  Each of the Lenders
party hereto hereby (a) authorizes the Administrative Agent to execute and
deliver the New Borrower Mortgage Amendments in its capacity as Administrative
Agent by and on behalf of such Lender and (b) acknowledges and authorizes the
agreement of the Administrative Agent and the Canadian Administrative Agent, as
applicable, set forth in Section 13 of this Agreement with respect to the Credit
Insurance Policy and Section 14 of this Agreement with respect to the New
Borrower Mortgage Amendments.

13.                 Turnover with respect to Credit Insurance Policy. For good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, by their execution of this Agreement or the Tenth Amendment to the
Canadian Credit Agreement, as applicable, the Administrative Agent and the
Canadian Administrative Agent hereby acknowledge and agree that (a) the
Administrative Agent shall have the sole and exclusive right, as against the
Canadian Administrative Agent, to adjust settlement of insurance claims with
respect to the Collateral covered by the Credit Insurance Policy and (b) the
Canadian Administrative Agent shall have the sole and exclusive right, as
against the Administrative Agent, to adjust settlement of insurance claims with
respect to the Canadian Collateral covered by the Credit Insurance Policy.  In
furtherance of the foregoing, each of the Administrative Agent and the Canadian
Administrative Agent hereby agree that that upon such Person's (the "Actual
Recipient") receipt of any proceeds of the Credit Insurance Policy attributable
to collateral of such other Person (the "Rightful Recipient"), the Actual
Recipient shall segregate such proceeds and hold such proceeds in trust to be
promptly paid over to the Rightful Recipient in the same form as received. 

14.                  Sharing Provision in New Borrower Mortgage Amendments.  The
Administrative Agent, the Canadian Administrative Agent and the Borrower, on
behalf of itself and its Subsidiaries, hereby agree that the New Borrower
Mortgage Amendments shall include an amendment to the "SECOND" paragraph of
Section 4.4 thereof to provide that the proceeds applied pursuant to such
paragraph shall be applied as follows: (i) prior to the date upon which each of
the Overadvance and the Canadian Overadvance are each reduced to $0 (such date,
the "Adjustment Date") (A) to the Administrative Agent, to be distributed to the
Domestic Facility Secured Parties in accordance with the Credit Agreement, in an
aggregate amount equal to the product of (1) the U.S. Pro Rata Percentage as of
the date hereof times (2) such amount and (B) to the Canadian Administrative
Agent, to be distributed to the Canadian Facility Secured Parties in accordance
with the Canadian Credit Agreement, in an aggregate amount equal to the product
of (1) the Canadian Pro Rata Percentage as of the date hereof times (2) such
amount and to be further distributed by the Administrative Agent or Canadian
Administrative Agent (as applicable) as required pursuant to the terms of the
Credit Agreement or the Canadian Credit Agreement (as applicable) and (ii) on or
after the Adjustment Date (A) to the Administrative Agent, to be distributed to
the Domestic Facility Secured Parties in accordance with the Credit Agreement,
in an aggregate amount equal to the product of (1) the U.S. Pro Rata Percentage
as of the Adjustment Date times (2) such amount and (B) to the Canadian
Administrative Agent, to be distributed to the Canadian Facility Secured Parties
in accordance with the Canadian Credit Agreement, in an aggregate amount equal
to the product of (1) the Canadian Pro Rata Percentage as of the Adjustment Date
times (2) such amount and to be further distributed by the Administrative Agent
or Canadian Administrative Agent (as applicable) as required pursuant to the
terms of the Credit Agreement or the Canadian Credit Agreement (as
applicable)).  For purposes of this Section, except as set forth herein, all
capitalized terms used herein without definition shall have the meanings
assigned thereto in the applicable New Borrower Mortgage. 

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 [Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date and year first above written.  

 

  BORROWER:         BOWATER INCORPORATED         By:
/s/ William G. Harvey
  Name: William G. Harvey   Title: Senior Vice President and Treaurer

 

  BOWATER ALABAMA LLC         By: Bowater Newsprint South LLC, its member      
  By:
/s/ William G. Harvey
  Name: William G. Harvey   Title: Manager

                                                           

  BOWATER NEWSPRINT SOUTH LLC         By:
/s/ William G. Harvey
  Name: William G. Harvey   Title: Manager

  BOWATER NEWSPRINT SOUTH OPERATIONS LLC         By: Bowater Newsprint South
LLC, its manager         By:
/s/ William G. Harvey
  Name: William G. Harvey   Title: Manager

 

  PARENT:         ABITIBIBOWATER INC.         By:
/s/ William G. Harvey
  Name: William G. Harvey   Title: Senior Vice President and Chief Financial
Officer

 

 [Signature Pages Continue]

 

 

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  GRANTORS:         BOWATER AMERICA INC.         By:
/s/ William G. Harvey
  Name: William G. Harvey   Title: President

 

 

  BOWATER NUWAY INC.         By:
/s/ William G. Harvey
  Name: William G. Harvey   Title: Vice President

 

 

  BOWATER NUWAY MID-STATES INC.         By:
/s/ William A. McCormick
  Name: William A. McCormick   Title: Assistant Secretary

 

 

 [Signature Pages Continue]

 

 

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  WACHOVIA BANK, NATIONAL ASSOCIATION , as Administrative Agent (on behalf of
itself and the Consenting Lenders who have executed a Lender Authorization) and
as Issuing Lender, Swingline Lender and a Lender         By:
/s/ James Travagline
  Name: James Travagline   Title: Vice President

 

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Exhibit A

Form of Lender Authorization

 

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LENDER AUTHORIZATION

Bowater Incorporated and New Borrowers

Bowater Canadian Forest Products Inc.

Eighth Amendment and Waiver to U.S. Credit Agreement

Tenth Amendment and Waiver to Canadian Credit Agreement  

November 12, 2008

 

Wachovia Bank, National Association

NC0680

1525 West W.T. Harris Blvd.

Charlotte, North Carolina 28262

Attention:  Syndication Agency Services

 

The Bank of Nova Scotia

40 King Street West

Scotia Plaza, 62nd Floor

Toronto, Ontario  M5W 2X6

Attention: Corporate Banking Loan Syndication

Re:          (a) The Eighth Amendment and Waiver dated as of November 12, 2008
(the "U.S. Agreement") to that certain Credit Agreement dated as of May 31, 2006
(as amended, the "U.S. Credit Agreement") among Bowater Incorporated and the New
Borrowers party thereto (collectively, the "U.S. Borrower"), the lenders party
thereto (the "U.S. Lenders"), and Wachovia Bank, National Association, as
administrative agent (the "U.S. Administrative Agent") for the U.S. Lenders and
(b) the Tenth Amendment and Waiver dated as of November 12, 2008 (the "Canadian
Agreement" and, together with the U.S. Agreement, the "Agreements") to that
certain Credit Agreement dated as of May 31, 2006 (as amended, the "Canadian
Credit Agreement") among Bowater Canadian Forest Products Inc. (the "Canadian
Borrower"), the U.S. Borrower, the lenders party thereto (the "Canadian
Lenders"), and The Bank of Nova Scotia, as administrative agent (the "Canadian
Administrative Agent") for the Canadian Lenders.

This Lender Authorization acknowledges our receipt and review of the execution
copy of the Agreements, each in the form posted on SyndTrak Online or otherwise
distributed to us by the U.S. Administrative Agent or the Canadian
Administrative Agent.  By executing this Lender Authorization, we hereby approve
the Agreements and authorize the U.S. Administrative Agent or the Canadian
Administrative Agent (as applicable) to execute and deliver the Agreements on
our behalf. 

Each financial institution purporting to be a U.S. Lender and executing this
Lender Authorization agrees or reaffirms that it shall be a party to the
Agreements and the other Loan Documents (as defined in the U.S. Credit
Agreement) to which U.S. Lenders are parties and shall have the rights and
obligations of a "Lender" (as defined in the U.S. Credit Agreement), and agrees
to be bound by the terms and provisions applicable to a "Lender" under each such
agreement.  Each financial institution purporting to be a Canadian Lender and
executing this Lender Authorization agrees or reaffirms that it shall be a party
to the Agreements and the other Loan Documents (as defined in the Canadian
Credit Agreement) to which Canadian Lenders are parties and shall have the
rights and obligations of a "Lender" (as defined in the Canadian Credit
Agreement), and agrees to be bound by the terms and provisions applicable to a
"Lender" under each such agreement.  In furtherance of the foregoing, each
financial institution executing

 

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this Lender Authorization agrees to execute any additional documents reasonably
requested by the U.S. Administrative Agent or the Canadian Administrative Agent,
as applicable, to evidence such financial institution's rights and obligations
under the U.S. Credit Agreement or the Canadian Credit Agreement, as applicable.
 

A facsimile, telecopy, pdf or other reproduction of this Lender Authorization
may be executed by one or more parties hereto, and an executed copy of this
Lender Authorization may be delivered by one or more parties hereto by facsimile
or similar instantaneous electronic transmission device pursuant to which the
signature of or on behalf of such party can be seen, and such execution and
delivery shall be considered valid, binding and effective for all purposes. 

   
[Insert name of applicable financial institution]
              By:
 
  Name:
 
  Title:  

                                                           

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Exhibit B

Credit Agreement

 

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CREDIT AGREEMENT

dated as of May 31, 2006

(as amended by that certain First Amendment dated as of July 20, 2007,

that certain Second Amendment dated as of October 31, 2007,

that certain Third Amendment and Waiver dated as of February 25, 2008,

that certain Fourth Amendment dated as of March 31, 2008,

that certain Fifth Amendment dated as of April 30, 2008,

that certain Sixth Amendment dated as of June 30, 2008,

that certain Seventh Amendment dated as of August 7, 2008, and

that certain Eighth Amendment and Waiver dated as of November 12, 2008)

 

by and among

 

BOWATER INCORPORATED,

BOWATER ALABAMA LLC,

BOWATER NEWSPRINT SOUTH LLC, and

BOWATER NEWSPRINT SOUTH OPERATIONS LLC,

as Borrower,

 

the Lenders referred to herein,

 

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

Swingline Lender and Issuing Lender,

 

JPMORGAN CHASE BANK, N.A. and UBS SECURITIES LLC,

each as a Syndication Agent,

 

and

 

WELLS FARGO FOOTHILL, LLC

as Documentation Agent

 

WACHOVIA CAPITAL MARKETS, LLC,

as Sole Book Manager

 

WACHOVIA CAPITAL MARKETS, LLC,

as Lead Arranger

 

 

 

 

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Table of Contents

Page

ARTICLE I

DEFINITIONS

  1

 

SECTION 1.1

Definitions

  1

 

SECTION 1.2

Other Definitions and Provisions

43

 

SECTION 1.3

Accounting Terms

43

 

SECTION 1.4

UCC Terms

44

 

SECTION 1.5

Rounding

44

 

SECTION 1.6

References to Agreement and Laws

44

 

SECTION 1.7

Times of Day

44

 

SECTION 1.8

Letter of Credit Amounts

44

 

SECTION 1.9

Amount of Obligations

44

ARTICLE II

REVOLVING CREDIT FACILITY

44

 

SECTION 2.1

Revolving Credit Loans

44

 

SECTION 2.2

Swingline Loans

45

 

SECTION 2.3

Procedure for Advances of Revolving Credit Loans and Swingline Loans   46  

SECTION 2.4

Repayment and Prepayment of Revolving Credit and Swingline Loans 47

 

SECTION 2.5

Permanent Reduction of the Commitment

48

 

SECTION 2.6

Termination of Credit Facility

49

ARTICLE III

LETTER OF CREDIT FACILITY

49

 

SECTION 3.1

L/C Commitment

49

 

SECTION 3.2

Procedure for Issuance of Letters of Credit

50

 

SECTION 3.3

Commissions and Other Charges

50

 

SECTION 3.4

L/C Participations

51

 

SECTION 3.5

Reimbursement Obligation of the Borrower

52

 

SECTION 3.6

Obligations Absolute

52

 

SECTION 3.7

Effect of Letter of Credit Application

53

ARTICLE IV

GENERAL LOAN PROVISIONS

53

 

SECTION 4.1

Interest

53

 

SECTION 4.2

Notice and Manner of Conversion or Continuation of Loans

55

 

SECTION 4.3

Fees

55

 

SECTION 4.4

Manner of Payment

56

 

SECTION 4.5

Evidence of Indebtedness

56

 

SECTION 4.6

Adjustments

57

 

SECTION 4.7

Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by
the Administrative Agent                                  58

 

SECTION 4.8

Changed Circumstances

59

 

SECTION 4.9

Indemnity

59

 

 

i

 

 

 

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

 

 

SECTION 4.10

Increased Costs

60

 

SECTION 4.11

Taxes

61

 

SECTION 4.12

Mitigation Obligations; Replacement of Lenders

63

 

SECTION 4.13

Security

64

 

SECTION 4.14

Additional Subsidiary Borrowers

64

 

SECTION 4.15

Nature of Obligations; Bankruptcy Limitations; Agreement for
Contribution                                       
                                                        66

ARTICLE V

CLOSING; CONDITIONS OF CLOSING AND BORROWING

68

 

SECTION 5.1

Closing

68

 

SECTION 5.2

Conditions to Closing and Initial Extensions of Credit

68

 

SECTION 5.3

Conditions to All Extensions of Credit

72

 

SECTION 5.4

Post-Closing Conditions

72

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

74

 

SECTION 6.1

Representations and Warranties

74

 

SECTION 6.2

Survival of Representations and Warranties, Etc

81

ARTICLE VII

FINANCIAL INFORMATION AND NOTICES

81

 

SECTION 7.1

Financial Statements and Projections

81

 

SECTION 7.2

Officer's Compliance Certificate

86

 

SECTION 7.3

Accountants' Certificate

86

 

SECTION 7.4

Other Reports

86

 

SECTION 7.5

Notice of Litigation and Other Matters

86

 

SECTION 7.6

Accuracy of Information

87

ARTICLE VIII

AFFIRMATIVE COVENANTS

88

 

SECTION 8.1

Preservation of Corporate Existence and Related Matters

88

 

SECTION 8.2

Maintenance of Property; Commitment Reductions and Repayments

88

 

SECTION 8.3

Insurance

93

 

SECTION 8.4

Accounting Methods and Financial Records

94

 

SECTION 8.5

Payment of Taxes

94

 

SECTION 8.6

Compliance With Laws and Approvals

94

 

SECTION 8.7

Environmental Laws

94

 

SECTION 8.8

Compliance with ERISA

94

 

SECTION 8.9

Visits and Inspections; Consultant Matters

95

 

SECTION 8.10

Additional Subsidiaries

95

 

SECTION 8.11

Use of Proceeds

102

 

SECTION 8.12

Further Assurances

103

ARTICLE IX

FINANCIAL COVENANTS

103

 

SECTION 9.1

Consolidated Senior Secured Leverage Ratio

103

 

SECTION 9.2

Interest Coverage Ratio

103

ARTICLE X

NEGATIVE COVENANTS

104

 

 

ii

 

 

 

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

 

 

SECTION 10.1

Limitations on Indebtedness

104

 

SECTION 10.2

Limitations on Liens

107

 

SECTION 10.3

Limitations on Loans, Advances, Investments and Acquisitions

109

 

SECTION 10.4

Limitations on Mergers and Liquidation

110

 

SECTION 10.5

Limitations on Asset Dispositions

111

 

SECTION 10.6

Limitations on Dividends and Distributions

112

 

SECTION 10.7

Limitations on Exchange and Issuance of Capital Stock

113

 

SECTION 10.8

Transactions with Affiliates

113

 

SECTION 10.9

Certain Accounting Changes; Organizational Documents

114

 

SECTION 10.10

Amendments; Payments and Prepayments of Indebtedness

114

 

SECTION 10.11

Restrictive Agreements

116

 

SECTION 10.12

Nature of Business

116

 

SECTION 10.13

Borrower Jurisdiction

116

 

SECTION 10.14

Impairment of Security Interests

117

 

SECTION 10.15

Maximum Cash Balances

117

 

ARTICLE XI

 

DEFAULT AND REMEDIES

117

 

SECTION 11.1

Events of Default

117

 

SECTION 11.2

Remedies

122

 

SECTION 11.3

Rights and Remedies Cumulative; Non-Waiver; etc.

123

 

SECTION 11.4

Crediting of Payments and Proceeds

123

 

SECTION 11.5

Administrative Agent May File Proofs of Claim

124

ARTICLE XII
 

THE ADMINISTRATIVE AGENT    
125

 

SECTION 12.1

Appointment and Authority

125

 

SECTION 12.2

Rights as a Lender

126

 

SECTION 12.3

Exculpatory Provisions

126

 

SECTION 12.4

Reliance by the Administrative Agent

126

 

SECTION 12.5

Delegation of Duties

127

 

SECTION 12.6

Resignation of Administrative Agent

127

 

SECTION 12.7

Non-Reliance on Administrative Agent and Other Lenders

128

 

SECTION 12.8

No Other Duties, etc

128

 

SECTION 12.9

Collateral and Guaranty Matters

128

 

SECTION 12.10

Additional Loans

129

 

SECTION 12.11

Special Agent Advances

129

ARTICLE XIII
 

MISCELLANEOUS 
131

 

SECTION 13.1

Notices

130

 

SECTION 13.2

Amendments, Waivers and Consents

132

 

SECTION 13.3

Expenses; Indemnity

134

 

SECTION 13.4

Right of Set-off

136

 

SECTION 13.5

Governing Law

136

 

SECTION 13.6

Waiver of Jury Trial

137

 

SECTION 13.7

Reversal of Payments

137

 

SECTION 13.8

Injunctive Relief; Punitive Damages

137

 

SECTION 13.9

Accounting Matters

138

 

SECTION 13.10

Successors and Assigns; Participations

138

 

SECTION 13.11

Confidentiality

141

 

SECTION 13.12

Performance of Duties

141

 

 

iii

 

 

 

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

 

 

SECTION 13.13

All Powers Coupled with Interest

141

 

SECTION 13.14

Survival of Indemnities

142

 

SECTION 13.15

Titles and Captions

142

 

SECTION 13.16

Severability of Provisions

142

 

SECTION 13.17

Counterparts

142

 

SECTION 13.18

Integration

142

 

SECTION 13.19

Term of Agreement

142

 

SECTION 13.20

Advice of Counsel, No Strict Construction

142

 

 

SECTION 13.21

USA Patriot Act

143

 

SECTION 13.22

Inconsistencies with Other Documents; Independent Effect of Covenants

143

 

SECTION 13.23

No Novation

143

 

 

 

iv

 

 

 

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

 

EXHIBITS

Exhibit A-1

-

Form of Revolving Credit Note

Exhibit A-2

-

Form of Swingline Note

Exhibit B

-

Form of Notice of Borrowing

Exhibit C

-

Form of Notice of Account Designation

Exhibit D

-

Form of Notice of Prepayment

Exhibit E

-

Form of Notice of Conversion/Continuation

Exhibit F

-

Form of Officer's Compliance Certificate

Exhibit G

-

Form of Assignment and Assumption

Exhibit H

-

Form of Subsidiary Guaranty Agreement

Exhibit I

-

Form of Collateral Agreement

Exhibit J

-

Form of Intercompany Subordination Agreement

Exhibit K

-

Form of Borrowing Base Certificate

 

SCHEDULES

Schedule 1.1(a)

-

Existing Letters of Credit

Schedule 1.1(b)

-

Specified Existing Notes

Schedule 1.1(c)

-

Description of New Borrower Real Property

Schedule 6.1(b)

-

Subsidiaries and Capitalization

Schedule 6.1(i-1)

-

ERISA Plans

Schedule 6.1(i-2)

-

Canadian Plans

Schedule 6.1(l)

-

Significant Indebtedness

Schedule 6.1(n)

-

Burdensome Provisions

Schedule 6.1(t)

-

Litigation

Schedule 10.1

-

Permitted Indebtedness

Schedule 10.2

-

Existing Liens

Schedule 10.3

-

Existing Loans, Advances and Investments

Schedule 10.8

-

Transactions with Affiliates

 

 

 

v

 

 

 

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

 

CREDIT AGREEMENT, dated as of May 31, 2006, by and among BOWATER INCORPORATED, a
Delaware corporation (the "Original Borrower "), Bowater Alabama LLC (formerly
known as Bowater Alabama, Inc.), an Alabama limited liability company (the
"Coosa Pines Borrower"), Bowater Newsprint South LLC, a Delaware limited
liability company ("BNS Holdings") and Bowater Newsprint South Operations LLC
(formerly known as Bowater Newsprint South, Inc.), a Delaware limited liability
company and the successor by merger to Bowater Mississippi, LLC (the "Grenada
Borrower" and, collectively with the Coosa Pines Borrower and BNS Holdings, the
"New Borrowers"), together with each additional borrower that becomes a party
hereto pursuant to the terms hereof, as Borrower, the lenders who are party to
this Agreement or who may become a party to this Agreement pursuant to Section
13.10 hereof, as Lenders, and WACHOVIA BANK, NATIONAL ASSOCIATION, a national
banking association, as Administrative Agent for the Lenders.

STATEMENT OF PURPOSE

The Borrower has requested, and the Lenders have agreed, to extend certain
credit facilities to the Borrower on the terms and conditions of this Agreement.

NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged by the parties hereto, such parties hereby
agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.1       Definitions. The following terms when used in this Agreement
shall have the meanings assigned to them below:

"Abitibi" means Abitibi-Consolidated Inc.

"Abitibi Entities" means, collectively, Abitibi and its Subsidiaries.

"Accounts" has the meaning specified in Section 1.1 of the Collateral Agreement.

"Administrative Agent" means Wachovia, in its capacity as Administrative Agent
hereunder, and any successor thereto appointed pursuant to Section 12.6.

"Administrative Agent's Office" means the office of the Administrative Agent
specified in or determined in accordance with the provisions of Section 13.1(c).

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

"Affiliate" means, with respect to any Person, any other Person which directly
or indirectly through one or more intermediaries, controls, or is controlled by,
or is under common control with, such first Person or any of its Subsidiaries.
As used in this definition, the term "control" means (a) the power to vote ten
percent (10%) or more of the securities or other equity interests of a Person
having ordinary voting power (excluding, however, a Person or group

 

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

 

whose ownership in another Person is permitted to be reported on Schedule 13G
pursuant to Rule 13d-1(b) under the Securities Exchange Act of 1934, as amended)
or (b) the possession, directly or indirectly, of any other power to direct or
cause the direction of the management and policies of a Person, whether through
ownership of voting securities, by contract or otherwise. Notwithstanding the
foregoing, (i) no individual shall be an Affiliate of the Borrower or any of its
Subsidiaries solely and exclusively by reason of his or her being a director,
officer or employee of the Borrower or any of its Subsidiaries, (ii) none of the
Subsidiaries of the Borrower shall be Affiliates of the Borrower or any of its
Subsidiaries and (iii) no Borrower shall be an Affiliate of any other Borrower;
provided that the Abitibi Entities shall be Affiliates of the Borrower and its
Subsidiaries for the purposes of this Agreement and the other Loan Documents and
the Canadian Credit Agreement and the "Loan Documents" (as defined in the
Canadian Credit Agreement).

"Aggregate Credit Exposure" means the sum of (a) the aggregate amount of
outstanding Loans, (b) the aggregate amount of outstanding Canadian Revolving
Credit Loans and (c) the Canadian Swingline Commitment.

"Agreement" means this Credit Agreement, as amended by (a) the First Amendment
dated as of July 20, 2007 by and among the Original Borrower, the Subsidiary
Guarantors and the Administrative Agent (on behalf of itself and the Lenders
party thereto), (b) the Second Amendment dated as of October 31, 2007 by and
among the Original Borrower, the Subsidiary Guarantors and the Administrative
Agent (on behalf of itself and the Lenders party thereto), (c) the Third
Amendment, (d) the Fourth Amendment, (e) the Fifth Amendment dated as of April
30, 2008 by and among the Original Borrower, the Guarantors and the
Administrative Agent (on behalf of itself and the Lenders party thereto), (f)
the Sixth Amendment dated as of June 30, 2008 by and among the Borrower, the
Guarantors and the Administrative Agent (on behalf of itself and the Lenders
party thereto), (g) the Seventh Amendment and Waiver dated as of August 7, 2008
by and among the Borrower, the Guarantors and the Administrative Agent (on
behalf of itself and the Lenders party thereto), (h) the Eighth Amendment and as
further amended, restated, supplemented or otherwise modified from time to time.

"Applicable Insolvency Laws" means all Applicable Laws governing bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Sections 544, 547, 548 and 550
and other "avoidance" provisions of Title 11 of the United States Code, as
amended or supplemented).

"Applicable Law" means all applicable provisions of constitutions, laws,
statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, legally binding policies, interpretations and orders of courts or
Governmental Authorities and all orders and decrees of all courts and
arbitrators.

 

 

2

 

 

 

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

 

" Applicable Margin" means the corresponding percentages per annum as set forth
below based on the Average Utilization:

 

Pricing Level

Average Utilization Percentage

LIBOR +

Base Rate +

I

Greater than 75%

4.50%

3.50%

II

Greater than 35%, but less than or equal to 75%

4.25%

3.25%

III

Less than or equal to 35%

4.00%

3.00%

 

The Applicable Margin shall be determined by the Administrative Agent and
adjusted quarterly on each Calculation Date; provided that the Applicable Margin
shall be based on Pricing Level Ifrom and after the Eighth Amendment Effective
Date until the first Calculation Date occurring after the Eighth Amendment
Effective Date and, thereafter the Pricing Level shall be determined by
reference to the Average Utilization Percentageas of the last day of the most
recently ended fiscal quarter of the Borrower preceding the applicable
Calculation Date. The Applicable Margin shall be effective from one Calculation
Date until the next Calculation Date. Any adjustment in the Applicable Margin
shall be applicable to all Extensions of Credit then existing or subsequently
made or issued.

"Approved Fund" means any Person (other than a natural Person), including,
without limitation, any special purpose entity, that is (or will be) engaged in
making, purchasing, holding or otherwise investing in commercial loans and
similar extensions of credit in the ordinary course of its business; provided,
that such Approved Fund must be administered, managed or underwritten 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.

"April 2008 Convertible Indebtedness" means that certain Indebtedness incurred
by the Parent in accordance with the terms of Section 11.1(o)(viii) on or prior
to April 15, 2008, which is convertible into Capital Stock of the Parent.

"Asset Coverage Amount" means, as of any date of determination, an amount equal
to seventy-five percent (75%) of the net book value of the Coverage Assets as
set forth on the Consolidated balance sheet of the Borrower and its Consolidated
Subsidiaries most recently delivered pursuant to Sections 5.2 or 7.1 hereof.

"Asset Disposition" means the disposition of any or all of the assets
(including, without limitation, any Capital Stock owned thereby) of the Borrower
or any of its Subsidiaries whether by sale, lease, transfer or otherwise. The
term "Asset Disposition" shall not include any Insurance and Condemnation Event.

"Asset Sale Reduction Amount" means:

(a)       with respect to any Asset Disposition or Insurance and Condemnation
Event with respect to the New Borrower Fixed Assets, one hundred percent (100%)
of

 

 

3

 

 

 

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

 

the Net Cash Proceeds of such Asset Disposition or Insurance and Condemnation
Event; or

(b)       with respect to any other Asset Disposition or Insurance and
Condemnation Event, seventy five percent (75%) of the Net Cash Proceeds of such
Asset Disposition or Insurance and Condemnation Event.

"Assignment and Assumption" means an assignment and assumption entered into by a
Lender and an Eligible Assignee (with the consent of any party whose consent is
required by Section 13.10), and accepted by the Administrative Agent, in
substantially the form of Exhibit G or any other form approved by the
Administrative Agent.

"Attributable Indebtedness" means, on any date, (a) in respect of any Capital
Lease of any Person, the capitalized amount thereof that would appear on a
balance sheet of such Person prepared as of such date in accordance with GAAP,
and (b) in respect of any Synthetic Lease, the capitalized amount or principal
amount of the remaining lease payments under the relevant lease that would
appear on a balance sheet of such Person prepared as of such date in accordance
with GAAP if such lease were accounted for as a Capital Lease.

"Average Utilization" means, for any calendar quarter, the average daily
principal balance of all Extensions of Credit outstanding during such calendar
quarter.

"Average Utilization Percentage" means, for any calendar quarter, the ratio of
(a) the Average Utilization for such quarter to (b) the aggregate amount of the
Commitments of all Lenders as of the end of such quarter.

"Base Rate" means, at any time, the higher of (a) the Prime Rate and (b) the
Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime Rate
or the Federal Funds Rate.

"Base Rate Loan" means any Loan bearing interest at a rate based upon the Base
Rate as provided in Section 4.1(a).

"BCFC Notes" means the 7.95% Notes due 2011 issued pursuant to the Indenture
dated as of October 31, 2001 among Bowater Canada Finance Corporation, as
Issuer, the Original Borrower, as Guarantor, and The Bank of New York, as
Trustee.

"Borrower" means, collectively, the Original Borrower and New Borrowers.

"Borrowing Base" means, at any time, the amount equal to:

 

(a)

the sum of:

 

(i)

up to eighty-five percent (85%) of Eligible Domestic Accounts; plus

(ii)       the lesser of (A) up to eighty-five percent (85%)of Eligible Foreign
Accounts and (B) an amount equal to the Designated Available Foreign Account
Amount at such time (it being understood and agreed that, as of any applicable
date of determination of the Borrowing Base or the Canadian Borrowing Base, the
sum of (1) the

 

 

4

 

 

 

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

 

Designated Available Foreign Account Amount plus (2) the Designated Canadian
Available Foreign Account Amount shall not exceed the amount set forth below
during the applicable period set forth below):

 

Applicable Period

Maximum Available Foreign Account Amount

Eighth Amendment Effective Date to but excluding December 31, 2008

Lesser of (a) $115,000,000 and (b) if the Policy Sublimit is reduced to an
amount less than $75,000,000, the Policy Sublimit as of such date

December 31, 2008 to but excluding the Conversion Date

Lesser of (a) $100,000,000 and (b) if the Policy Sublimit is reduced to an
amount less than $75,000,000, the Policy Sublimit as of such date

Conversion Date to but excluding June 30, 2009

Lesser of (a) $75,000,000 and (b) the Policy Sublimit as of such date

June 30, 2009 and thereafter

Lesser of (a) $50,000,000 and (b) the Policy Sublimit as of such date

 

plus

 

(b)

the sum of:

(i)        with respect to Eligible Inventory consisting of work in process, an
amount equal to the least of: (A) up to fifty percent (50%) of the Value of such
Eligible Inventory, (B) up to eighty-five percent (85%) of the Net Recovery
Percentage of such Eligible Inventory, and (C) $1,500,000; plus

(ii)       with respect to Eligible Inventory consisting of finished goods and
raw materials, the lesser of: (A) up to seventy-five percent (75%) of the Value
of such Eligible Inventory and (B) up to eighty-five percent (85%) of the Net
Recovery Percentage of such Eligible Inventory; plus

 

(iii)

with respect to Eligible Inventory consisting of

Eligible Mill Stores Inventory, an amount equal to the least of: (A) up to ten
percent (10%) of the Value of such Eligible Inventory, (B) up to eighty-five
percent (85%) of the Net Recovery Percentage of such Eligible Inventory and (C)
the amount set forth below during the applicable period set forth below:

 

Applicable Period

Amount

Eighth Amendment Effective Date to first anniversary of Eighth Amendment
Effective Date

$7,000,000

Thereafter

$0

 

 

 

5

 

 

 

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

 

 

minus

 

(c)

any Reserves.

"Borrowing Base Certificate" means a certificate substantially in the form of
Exhibit K.

"Borrowing Limit" means, at any time, the least of:

(a)       the aggregate principal amount of the Commitments at such time less,
except with respect to Sections 2.4(b) and 5.2(e)(iii),

(i)        in the case of any request for Revolving Credit Loans, the sum of all
outstanding Swingline Loans and L/C Obligations;

(ii)       in the case of any request for Swingline Loans, the sum of all
outstanding Revolving Credit Loans and L/C Obligations; or

(iii)      in the case of any request for issuance of a Letter of Credit, the
sum of all outstanding Loans;

(b)       the amount which, when aggregated with the aggregate amount of all
other Consolidated Total Senior Secured Indebtedness, does not exceed the Asset
Coverage Amount;

(c)       at any time on or after the Eighth Amendment Effective Date but prior
to the Conversion Date, the sum of (i) the Borrowing Base at such time plus (ii)
the Overadvance Amount at such time less (iii) except with respect to Section
2.4(b),

(A)      in the case of any request for Revolving Credit Loans, the sum of all
outstanding Swingline Loans and L/C Obligations;

(B)      in the case of any request for Swingline Loans, the sum of all
outstanding Revolving Credit Loans and L/C Obligations; or

(C)      in the case of any request for issuance of a Letter of Credit, the sum
of all outstanding Loans; and

(d)       at any time on or after the Conversion Date, the Borrowing Base at
such time less, except with respect to Section 2.4(b),

(i)        in the case of any request for Revolving Credit Loans, the sum of all
outstanding Swingline Loans and L/C Obligations;

(ii)       in the case of any request for Swingline Loans, the sum of all
outstanding Revolving Credit Loans and L/C Obligations; or

(iii)      in the case of any request for issuance of a Letter of Credit, the
sum of all outstanding Loans.

 

 

6

 

 

 

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

 

"Bowater-Calhoun Arrangement" means that certain intercompany loan arrangement
pursuant to which:

(a)       the Original Borrower loaned $33,294,000 of proceeds of the McMinn
County pollution control bonds to Calhoun Newsprint Company as evidenced by an
intercompany note payable to the Original Borrower; and

(b)       Calhoun Newsprint Company loaned such proceeds back to the Original
Borrower as evidenced by an intercompany note payable to Calhoun Newsprint
Company and secured by the Original Borrower's intercompany note receivable
referred to in clause (a).

"Business Day" means (a) for all purposes other than as set forth in clause (b)
below, any day other than a Saturday, Sunday or legal holiday on which banks in
Charlotte, North Carolina, New York, New York and Toronto, Ontario, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.

"Calculation Date" means each date that is ten (10) Business Days after the end
of each fiscal quarter of the Original Borrower.

"Canadian Administrative Agent" means The Bank of Nova Scotia in its capacity as
the administrative agent under the Canadian Credit Agreement.

"Canadian Borrower" means Bowater Canadian Forest Products Inc., as borrower
under the Canadian Credit Facility.

"Canadian Borrowing Base" means the "Borrowing Base" as defined in the Canadian
Credit Agreement.

"Canadian Borrowing Base Certificate" means a "Borrowing Base Certificate" as
defined in the Canadian Credit Agreement.

"Canadian Borrowing Limit" means the "Borrowing Limit" as defined in the
Canadian Credit Agreement.

"Canadian Collateral" means the "Collateral" as defined in the Canadian Credit
Agreement.

"Canadian Credit Agreement" means that certain credit agreement dated as of the
Closing Date by and among the Canadian Borrower, as borrower, the Original
Borrower, as guarantor, the lenders party thereto, as lenders, and The Bank of
Nova Scotia, as administrative agent.

"Canadian Credit Agreement Commitment" means the "Commitment" (as defined in the
Canadian Credit Agreement) of all Canadian Lenders.

 

 

7

 

 

 

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

 

"Canadian Credit Facility" means that certain revolving credit facility
established pursuant to the Canadian Credit Agreement.

"Canadian Credit Party" means the Canadian Borrower and each Canadian Guarantor.

"Canadian Dollar" or "C$" means, at any time of determination, the lawful
currency of Canada.

"Canadian Employee Benefit Plan" means (a) any employee benefit plan that is
maintained for the benefit of employees or former employees of the Canadian
Borrower or any of the Canadian Subsidiaries registered in accordance with the
ITA or other Applicable Law which the Borrower or any of its Subsidiaries
sponsors, maintains, or to which it makes, is making, or is obligated to make,
contributions or (b) any Canadian Pension Plan or Canadian Multiemployer Plan
that has at any time within the preceding six (6) years been maintained for the
employees of the Borrower or any of its Subsidiaries, and shall not include any
Employee Benefit Plan.

"Canadian Extensions of Credit" means the "Extensions of Credit" as defined in
the Canadian Credit Agreement.

"Canadian Fixed Assets" means any Fixed Assets that are located in Canada and
are owned by the Canadian Borrower or any Canadian Subsidiary thereof.

"Canadian Guarantors" means the "Guarantors" as defined in the Canadian Credit
Agreement.

"Canadian Lender" means any "Lender" as defined in the Canadian Credit
Agreement.

"Canadian Loans" means "Loans" as defined in the Canadian Credit Agreement.

"Canadian Multiemployer Plan" means a "multi-employer pension plan" as defined
by Applicable Laws and registered in accordance with the ITA or other Applicable
Laws and as to which the Borrower or any of its Subsidiaries is making, or is
accruing an obligation to make, or has accrued an obligation to make,
contributions within the preceding six (6) years, and shall not include any
Multiemployer Plan.

"Canadian Non-Fixed Assets Collateral" means any portion of the Canadian
Collateral that consists of assets or property that are not Fixed Assets or
timberlands.

" Canadian Obligations" means the "Obligations" as defined in the Canadian
Credit Agreement.

"Canadian Overadvance Amount" means the "Overadvance Amount" as defined in the
Canadian Credit Agreement.

"Canadian Pension Plan" means any Canadian Employee Benefit Plan, other than a
Canadian Multiemployer Plan, which is registered in accordance with the ITA or
other Applicable Law and which (a) is maintained for the employees of the
Borrower or any of its

 

 

8

 

 

 

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Subsidiaries or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any of its Subsidiaries which
the Borrower or any of its Subsidiaries sponsors, maintains, or to which it
makes, is making or is obligated to make, contributions, and shall not include
any Pension Plan.

"Canadian Pro Rata Percentage" means, as of any date of determination, the
percentage obtained by the following formula:

 

(a)       the aggregate Canadian Credit Agreement Commitment applicable to all
Canadian Lenders as of 11:00 a.m. on such date of determination

 

divided by

 

(b)       the sum of (i) the aggregate Canadian Credit Agreement Commitment
applicable to all Canadian Lenders as of 11:00 a.m. on such date of
determination plus (ii) the aggregate Commitment applicable to all Lenders as of
11:00 a.m. on such date of determination.

"Canadian Required Agreement Lenders" means the "Required Agreement Lenders" as
defined in the Canadian Credit Agreement.

"Canadian Revolving Credit Loans" means the "Revolving Credit Loans" as defined
in the Canadian Credit Agreement.

"Canadian Secured Parties" means the "Secured Parties" as defined in the
Canadian Credit Agreement.

"Canadian Security Documents" means the "Security Documents" as defined in the
Canadian Credit Agreement.

"Canadian Subsidiary" means any Subsidiary that is organized under the laws of
Canada or any province or political subdivision thereof.

"Canadian Swingline Commitment" means the "Swingline Commitment" as defined in
the Canadian Credit Agreement.

"Capital Asset" means, with respect to the Borrower and its Subsidiaries, any
asset that should, in accordance with GAAP, be classified and accounted for as a
capital asset on a Consolidated balance sheet of the Borrower and its
Subsidiaries.

"Capital Expenditures" means, with respect to the Borrower and its Subsidiaries
for any period, the aggregate cost of all Capital Assets acquired by the
Borrower and its Subsidiaries during such period, as determined in accordance
with GAAP.

"Capital Lease" means any lease of any property by the Borrower or any of its
Subsidiaries, as lessee, that should, in accordance with GAAP, be classified and
accounted for as a capital lease on a Consolidated balance sheet of the Borrower
and its Subsidiaries.

 

 

9

 

 

 

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"Capital Stock" means (a) in the case of a corporation, capital stock, (b) in
the case of an association or business entity, any and all shares, interests,
participations, rights or other equivalents (however designated) of capital
stock, (c) in the case of a partnership, partnership interests (whether general
or limited), (d) in the case of a limited liability company, membership
interests and (e) any other interest or participation that confers on a Person
the right to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.

"Cash Equivalents" means, collectively:

(a)       marketable obligations issued or unconditionally guaranteed by the
United States, Canada or any agency thereof maturing within two hundred seventy
(270) days from the date of acquisition thereof;

(b)       commercial paper maturing no more than two hundred seventy (270) days
from the date of creation thereof and currently having the highest rating
obtainable from either S&P, Moody's or DBRS;

(c)       certificates of deposit, time deposits and bankers' acceptances
maturing no more than two hundred seventy (270) days from the date of creation
thereof issued by commercial banks incorporated under the laws of the United
States or Canada, each having combined capital, surplus and undivided profits of
not less than $500,000,000 and having a rating of "A" or better by a nationally
recognized rating agency; provided that the aggregate amount invested in such
certificates of deposit shall not at any time exceed $5,000,000 for any one such
certificate of deposit and $10,000,000 for any one such bank;

(d)       repurchase obligations for underlying securities of the types
described in, and satisfying the requirements specified in, clauses (a) and (c)
above entered into with any bank satisfying the requirements specified in clause
(c) above;

(e)       demand deposit accounts maintained in the ordinary course of business;
and

(f)        (i)       money market mutual or similar funds which (A) invest
solely in assets of the types described in clauses (a) through (e) above,
without regard to the limitations as to the maturity of such obligations,
bankers' acceptances, time deposits, certificates of deposit, repurchase
agreements or commercial paper set forth above, (B) are rated at least "AAm" or
"AAmg" or their equivalent by both S&P and Moody's, provided that there is no
"r-highlighter" affixed to such rating and (C) comply with Rule 2a-7 of the
Investment Company Act of 1940, as amended; and

(ii)       the money market fund called Columbia Cash Reserves, so long as
Columbia Cash Reserves continues to buy only "first tier" securities as defined
by Rule 2a-7 of the Investment Company Act of 1940, as amended.

"Cash Management Arrangement" means any cash management arrangement (a) entered
into by (i) any Credit Party and (ii) any Lender or any Affiliate thereof at the
time such cash management arrangement was entered into, as counterparty and (b)
which has been designated

 

 

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by such Lender or such Affiliate by notice to the Administrative Agent and the
Borrower no later than thirty (30) days after the execution and delivery of the
agreements governing such cash management arrangement, as a Cash Management
Arrangement. The designation of any cash management arrangement as a Cash
Management Arrangement hereunder shall not create in favor of the Lender or
Affiliate thereof that is a party thereto any rights in connection with the
management or release of any Collateral or of the Obligations of any Credit
Party under any Loan Document. For avoidance of doubt, all cash management
arrangements in existence on the Eighth Amendment Effective Date between any
Credit Party and any Lender or an Affiliate thereof shall constitute Cash
Management Arrangements hereunder.

"Change in Control" means an event or series of events by which (a) except in
the case of the conversion to Capital Stock of the April 2008 Convertible
Indebtedness (as to which this clause (a) shall not apply), any person or group
of persons (within the meaning of Section 13(d) of the Securities Exchange Act
of 1934, as amended) shall obtain ownership or control in one or more series of
transactions of more than thirty-five percent (35%) of the Capital Stock or
thirty-five percent (35%) of the voting power of the Parent entitled to vote in
the election of members of the board of directors of the Parent, (b) after
giving effect to the conversion to Capital Stock of the April 2008 Convertible
Indebtedness and solely in connection therewith, any person or group of persons
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended) shall obtain ownership or control in one or more series of transactions
of fifty percent (50%) or more of the Capital Stock or fifty percent (50%) or
more of the voting power of the Parent entitled to vote in the election of
members of the board of directors of the Parent, (c) during any period of
twenty-five (25) consecutive calendar months, a majority of the members of the
board of directors of the Parent cease to be composed of Continuing Directors,
(d) there shall have occurred under any indenture or other instrument evidencing
any Indebtedness of the Borrower or any of its Subsidiaries in excess of
$25,000,000 any "change in control" or similar provision (as set forth in the
indenture, agreement or other evidence of such Indebtedness) obligating the
Borrower or any of its Subsidiaries to repurchase, redeem or repay all or any
part of such Indebtedness or Capital Stock provided for therein (provided that
if such obligation is contingent on any other event or circumstance, then such
"change in control" shall not constitute a Change in Control hereunder unless
such other event or circumstance also has occurred or exists), (e) the Parent
shall cease to own one hundred percent (100%) of the Capital Stock of the
Original Borrower or (f) the Parent shall cease to own one hundred percent
(100%) of the Capital Stock of any New Borrower.

 

For the purposes hereof, "Continuing Directors" means, during any period of
twenty-five (25) consecutive calendar months, individuals (i) who were members
of the board of directors on the first day of such period, (ii) whose election
or nomination to the board of directors was approved by individuals who
comprised a majority of the board of directors on the first day of such period
or (iii) whose election or nomination to the board of directors was approved by
(A) individuals who were members of the board of directors on the first day of
such period or (B) individuals whose election or nomination to the board of
directors was approved by a majority of the board of directors on the first day
of such period; provided that in each case such individuals referenced in clause
(A) and clause (B) constituted a majority of the board of directors at the time
of such election or nomination.

 

 

11

 

 

 

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"Change in Law" means the occurrence, after the date of this Agreement, of any
of the following: (a) the adoption or taking effect of any law, rule, regulation
or treaty, (b) any change in any law, rule, regulation or treaty or in the
administration, interpretation or application thereof by any Governmental
Authority or (c) the making or issuance of any request, guideline or directive
(whether or not having the force of law) by any Governmental Authority.

"Closing Date" means May 31, 2006.

"Code" means the Internal Revenue Code of 1986, and the rules and regulations
thereunder, each as amended or modified from time to time.

"Collateral" means the collateral security for the Obligations and/or the
Canadian Obligations (as the case may be) pledged or granted pursuant to the
Security Documents.

"Collateral Agreement" means the collateral agreement dated as of the Closing
Date executed by the Credit Parties in favor of the Administrative Agent, for
the benefit of itself and the other Secured Parties, substantially in the form
of Exhibit I, as amended, restated, supplemented or otherwise modified from time
to time.

"Combination" means the combination of the Original Borrower with
Abitibi-Consolidated Inc., with the Parent as a common holding company, pursuant
to the terms of the Combination Agreement.

"Combination Agreement " means that certain Combination Agreement and Agreement
and Plan of Merger dated as of January 29, 2007 among the Parent,
Abitibi-Consolidated Inc., the Original Borrower, Alpha-Bravo Merger Sub Inc., a
Delaware corporation, and Bowater Canada, Inc., as the same may be amended,
modified or supplemented from time to time.

"Commitment " means (a) as to any Lender, the obligation of such Lender to make
Extensions of Credit to the Borrower hereunder in an aggregate principal amount
at any time outstanding not to exceed the amount set forth opposite such
Lender's name on the Register, as such amount may be modified at any time or
from time to time pursuant to the terms hereof and (b) as to all Lenders, the
aggregate commitment of all Lenders to make Extensions of Credit, as such amount
may be modified at any time or from time to time pursuant to the terms hereof.
The Commitment of all the Lenders on the Eighth Amendment Effective Date shall
be $407,572,707.

"Commitment Percentage" means, as to any Lender at any time, the ratio of (a)
the amount of the Commitment of such Lender to (b) the Commitments of all the
Lenders.

 

"Consolidated" means, when used with reference to financial statements or
financial statement items of any Person, such statements or items on a
consolidated basis in accordance with applicable principles of consolidation
under GAAP; provided, however, that, when used with respect to the Borrower,
"Consolidated" shall include the Original Borrower and its Subsidiaries (other
than the Abitibi Entities) combined with each New Borrower and its Subsidiaries
(if any).

 

"Consolidated Adjusted EBITDA" means, for any period, the sum for the Borrower
and its Consolidated Subsidiaries (determined on a Consolidated basis, without
duplication, in

 

 

12

 

 

 

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accordance with GAAP) of the following: (a) Consolidated EBITDA for such period
plus (b) any net gain on any Asset Disposition during such period minus (c) any
net loss on any Asset Disposition during such period; provided that, for
purposes of this Agreement, Consolidated Adjusted EBITDA shall be adjusted on a
pro forma basis, in a manner consistent with Regulation S-X of the SEC or
otherwise reasonably acceptable to the Administrative Agent, to include or
exclude, as applicable, as of the first day of any applicable period, (A) any
Permitted Acquisition closed during such period or (B) any permitted Asset
Disposition closedduring such period (other than Asset Dispositions permitted
pursuant to Section 10.5(a)-(h)) of assets having an aggregate fair market value
(at the time of the closing of such Asset Disposition) in excess of $50,000,000.

"Consolidated EBITDA" means, for any period, the sum for the Borrower and its
Consolidated Subsidiaries (determined on a Consolidated basis, without
duplication, in accordance with GAAP) of the following:

 

(a)

Consolidated Net Income for such period,

plus

(b)       the sum of the following to the extent deducted in determining
Consolidated Net Income for such period:

(i)        income taxes for such period (or minus, to the extent added in
determining Consolidated Net Income for such period, income tax benefit for such
period);

(ii)       amortization, depreciation, depletion and other non-cash charges for
such period;

 

(iii)

Consolidated Interest Expense for such period;

 

(iv)

any extraordinary charges for such period;

(v)       any unusual or non-recurring charges for such period up to an amount
not to exceed five percent (5%) of the Consolidated EBITDA of the Borrower and
its Subsidiaries (as calculated without giving effect to this clause (v) or
clause (vi) below);

(vi)      any cost savings and synergies associated with a Permitted Acquisition
not to exceed five percent (5%) of the Consolidated EBITDA of the Borrower and
its Subsidiaries (as calculated without giving effect to this clause (vi) or
clause (v) above); and

 

(vii)

any net loss on any Asset Disposition during such period,

less

(c)       the sum of the following to the extent included in determining
Consolidated Net Income for such period:

 

 

13

 

 

 

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(i)

the aggregate amount of interest income for such period;

 

(ii)

any extraordinary gains during such period;

 

(iii)

any unusual or non-recurring gains during such period; and

 

(iv)

any net gain on any Asset Disposition during such period;

provided that, for purposes of this Agreement, Consolidated EBITDA shall be
adjusted on a pro forma basis, in a manner consistent with Regulation S-X of the
SEC or otherwise reasonably acceptable to the Administrative Agent and the
Canadian Administrative Agent, to include or exclude, as applicable, as of the
first day of any applicable period, (A) any Permitted Acquisition closed during
such period or (B) any permitted Asset Disposition closedduring such period
(other than Asset Dispositions permitted pursuant to Section 10.5(a)-(h)) of
assets having an aggregate fair market value (at the time of the closing of such
Asset Disposition) in excess of $50,000,000.

"Consolidated Interest Expense" means, with respect to the Borrower and its
Consolidated Subsidiaries for any period, (a) the gross interest expense
(including, without limitation, interest expense attributable to Capital Leases
and plus the net amount payable (or minus the net amount receivable) under any
Interest Rate Contracts of the Borrower and its Consolidated Subsidiaries), plus
(b) the aggregate amount of all cash distributions or dividends paid by the
Borrower and its Consolidated Subsidiaries to the Parent pursuant to, and in
accordance with, Section 10.6(j), all determined for such period on a
Consolidated basis without duplication, in accordance with GAAP.

"Consolidated Net Income" means, with respect to the Borrower and its
Consolidated Subsidiaries, for any period of determination, the net income (or
loss) of the Borrower and its Consolidated Subsidiaries for such period,
determined on a Consolidated basis in accordance with GAAP.

"Consolidated Senior Secured Leverage Ratio" means, as of any date of
determination, the ratio of (a) Consolidated Total Senior Secured Indebtedness
on such date to (b) the sum, without duplication, of (i) Consolidated EBITDAfor
the period of four (4) consecutive fiscal quarters ending on or immediately
prior to such date plus (ii) the amount of Specified Non-Recurring Charges taken
during the period of four (4) consecutive fiscal quarters ending on or
immediately prior to such date.

"Consolidated Subsidiary" means, for any Person, each Subsidiary of such Person
(whether now existing or hereafter created or acquired) the financial statements
of which shall be (or should have been) consolidated with the financial
statements of such Person in accordance with GAAP.

"Consolidated Total Indebtedness" means, as of any date of determination,
without duplication, all Indebtedness (excluding clause (h) of the definition
thereof) of the Borrower and its Consolidated Subsidiaries.

 

 

14

 

 

 

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"Consolidated Total Leverage Ratio" means, as of any date of determination, the
ratio of (a) Consolidated Total Indebtedness on such date to (b) Consolidated
EBITDAfor the period of four (4) consecutive fiscal quarters ending on or
immediately prior to such date.

"Consolidated Total Senior Secured Indebtedness" means,

(a)       for purposes of determining the Consolidated Senior Secured Leverage
Ratio, as of any date of determination with respect to the Borrower and its
Consolidated Subsidiaries on a Consolidated basis, without duplication, the sum
of (i) all outstanding Extensions of Credit (including, without limitation, each
outstanding Letter of Credit and each outstanding Swingline Loan) under the
Credit Facility plus (ii) all outstanding Canadian Extensions of Credit
(including, without limitation, each outstanding letter of credit and each
outstanding swingline loan) plus (iii) all other outstanding Indebtedness of the
Borrower and its Consolidated Subsidiaries which is secured by any assets of the
Borrower and its Consolidated Subsidiaries other than any Hedging Agreement; and

(b)       for all other purposes, as of any date of determination with respect
to the Borrower and its Consolidated Subsidiaries on a Consolidated basis,
without duplication, the sum of (i) all outstanding Extensions of Credit
(including, without limitation, each outstanding Letter of Credit and each
outstanding Swingline Loan) under the Credit Facility plus (ii) all other
outstanding Indebtedness (other than any Hedging Agreement) of the Borrower and
its Consolidated Subsidiaries which is secured by a Lien on the Coverage Assets.

"Consultants" means a third-party consultant hired by the Administrative Agent,
on behalf of the Secured Parties and the Canadian Secured Parties; provided,
that if the Administrative Agent or the Canadian Administrative Agent shall
determine in its reasonable discretion that a separate consultant or consultants
should be hired by such Person for the benefit of the Secured Parties or the
Canadian Secured Parties, as the case may be, "Consultants" as defined in this
Agreement shall refer collectively to all of the consultants hired by the
Administrative Agent and the Canadian Administrative Agent.

"Conversion Date" means March 31, 2009; provided that, if on or prior to March
31, 2009, the Specified Abitibi Indebtedness is repurchased, repaid, exchanged
(provided that the maturity date of any Indebtedness exchanged therefor is later
than April 30, 2009) or redeemed in full, or the maturity date thereof or the
maturity date of any indebtedness exchanged therefor is, in any case, extended
to a date later than April 30, 2009, or any combination thereof, the Conversion
Date shall automatically and without further action be extended to April 29,
2009.

"Coverage Assets" means all accounts receivable (excluding any intercompany
accounts receivable) and all inventory of the Borrower and its Consolidated
Subsidiaries other than accounts receivable and inventory of the Canadian
Borrower or any Consolidated Subsidiary of the Canadian Borrower; provided that
for purposes of calculating the Asset Coverage Amount, the net book value of
inventory constituting Coverage Assets shall not, at any time, exceed
$220,000,000.

 

 

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"Credit Facility" means, collectively, the Revolving Credit Facility, the
Swingline Facility and the L/C Facility.

"Credit Insurance Policy" means a foreign accounts receivable credit insurance
policy as of any date issued by an insurer reasonably acceptable to the
Administrative Agent and the Canadian Administrative Agent, containing terms and
provisions (including, without limitation, coverage amounts, limits, deductibles
and exclusions from coverage) reasonably acceptable to the Administrative Agent
and the Canadian Administrative Agent.

"Credit Parties" means, collectively, the Borrower and the Subsidiary
Guarantors.

"DBRS" means DBRS Limited and any successor thereto.

"Debt Issuance" means the issuance by the Borrower or any of its Subsidiaries of
Indebtedness permitted pursuant to Section 10.1(h) or 10.1(m) or otherwise
consented to by the requisite Lenders pursuant to Section 13.2.

"Debt Issuance Reduction Amount" has the meaning set forth in Section
8.2(b)(ii).

"Default" means any of the events specified in Section 11.1 which with the
passage of time, the giving of notice or any other condition, would constitute
an Event of Default.

"Defaulting Lender" means any Lender that (a) has failed to fund any portion of
the Revolving Credit Loans, participations in L/C Obligations or participations
in Swingline Loans required to be funded by it hereunder within one (1) Business
Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount
required to be paid by it hereunder within one (1) Business Day of the date when
due, unless such amount is the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy, receivership or
insolvency proceeding.

"Designated Canadian Available Foreign Account Amount" means, as of any date of
determination of the Borrowing Base or the Canadian Borrowing Base, the amount
of "Eligible Foreign Accounts" (as defined in the Canadian Credit Agreement)
designated by the Canadian Borrower in the Canadian Borrowing Base Certificate
delivered as of such date.

"Designated Available Foreign Account Amount" means, as of any date of
determination of the Borrowing Base or the Canadian Borrowing Base, the amount
of Eligible Foreign Accounts designated by the Original Borrower in the
Borrowing Base Certificate delivered as of such date.

"Disputes" means any dispute, claim or controversy arising out of, connected
with or relating to this Agreement or any other Loan Document, between or among
parties hereto and to the other Loan Documents.

"Document " has the meaning specified in Section 1.1 of the Collateral
Agreement.

"Dollars" or "$" means, unless otherwise qualified, dollars in lawful currency
of the United States.

 

 

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"Domestic Subsidiary" means any Subsidiary organized under the laws of any
political subdivision of the United States.

"Eighth Amendment" means that certain Eighth Amendment and Waiver dated as of
the Eighth Amendment Effective Date by and among the Borrower, the Guarantors
and the Administrative Agent (on behalf of itself and the Lenders and the
Canadian Lenders party thereto).

"Eighth Amendment Consenting Lenders" means, collectively, each of the Lenders
that consented to the Eighth Amendment by 5:00 p.m. on November 13, 2008
(together with each such Lender's successors and permitted assignees).

"Eighth Amendment Effective Date" means November 12, 2008.

"Eighth Amendment Fee Letter" means the separate fee letter agreement executed
by the Borrower and Wachovia and/or certain of its affiliates dated October 31,
2008.

"Eligible Accounts" means, at any time, Accounts of the Borrower and its
Consolidated Subsidiaries which the Administrative Agent determines, in the
exercise of its reasonable business and credit judgment as a secured asset based
lender, are eligible as the basis for the extension of Revolving Credit Loans
and Swingline Loans and the issuance of Letters of Credit hereunder. Without
limiting the Administrative Agent's discretion provided herein, Eligible
Accounts shall not include any Account:

(a)       that does not arise out of actual and bona fide sales of goods or
rendering of services in the ordinary course of the Borrower's or the relevant
Subsidiary's business, which transactions are completed in accordance with the
terms and provisions of any documents related thereto;

(b)       that would otherwise be an Eligible Domestic Account, but is payable
other than in Dollars or Canadian Dollars, or that is otherwise on terms other
than those normal or customary in the Borrower's or the relevant Subsidiary's
business;

(c)       that would otherwise be an Eligible Foreign Account, but is payable
other than in Dollars, Canadian Dollars, Euros or Pounds Sterling or that is
otherwise on terms other than those normal or customary in the Borrower's or the
relevant Subsidiary's business;

(d)       that is owing from an account debtor where the account debtor or any
officer or employee of the account debtor with respect to such Account is an
officer, employee, agent or other Affiliate of the Borrower or any Subsidiary;

(e)       that would otherwise be an Eligible Domestic Account, but is unpaid
more than ninety (90) days past original invoice date or more than sixty
(60) days past the original due date;

 

 

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(f)        that would otherwise be an Eligible Foreign Account, but is unpaid
more than one hundred eighty (180) days past original invoice date or more than
sixty (60) days past the original due date;

(g)       of any account debtor where fifty percent (50%) or more of the
Accounts owing from such account debtor are not deemed Eligible Accounts;

(h)       that is owing by an account debtor to the extent the aggregate amount
of Accounts owing from such account debtor and its Affiliates to the Borrower or
any of its Subsidiaries exceeds ten percent (10%) of the aggregate Eligible
Accounts, but only the amount in excess thereof shall be ineligible;

(i)        that is owing from any Person that (i) has disputed liability for any
Account owing from such Person or (ii) has otherwise asserted any claim, demand
or liability against the Borrower or any of its Subsidiaries, whether by action,
suit, counterclaim or otherwise;

(j)        that is owing from any Person that shall take or be the subject of
any action or proceeding of a type described in Section 11.1(i) or (j);

(k)       that is owing from any account debtor not deemed creditworthy at any
time by the Administrative Agent in good faith;

(l)        with respect to which any check or other instrument of payment has
been returned uncollected for any reason;

 

(m)

which is evidenced by a promissory note, chattel paper or instrument;

(n)       that is owing by an account debtor located in any jurisdiction which
requires filing of a "Notice of Business Activities Report" or other similar
report in order to permit the Borrower or its applicable Subsidiary to seek
judicial enforcement in such jurisdiction of payment of such Account, unless the
Borrower or its applicable Subsidiary has filed such report or qualified to do
business in such jurisdiction;

(o)        (i) owing from any Person that is also a supplier to or creditor of
the Borrower or any of its Subsidiaries or (ii) representing any manufacturer's
or supplier's credits, discounts, incentive plans or similar arrangements
entitling the Borrower or any of its Subsidiaries to discounts on future
purchase therefrom;

(p)       that is owing by an account debtor whose chief executive office with
respect to such Account is located outside the United States or Canada, other
than Eligible Foreign Accounts;

(q)       that (i) is not evidenced by an invoice or other documentation
satisfactory to the Administrative Agent which has been sent to the account
debtor, (ii) is contingent upon the Borrower's or its Subsidiary's completion of
any further performance, (iii) represents a progress billing, or (iv) arises out
of sales on a bill-and-hold, guaranteed sale,

 

 

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sale-or-return, sale on approval, consignment, cash on delivery basis or subject
to any right of return, repurchase, setoff or charge back;

(r)        that is owing from an account debtor that is an agency, department or
instrumentality of the United States, any state thereof, Canada, any state or
province thereof or that is an agency, department or instrumentality of any
country other than the United States or Canada or any state, territory, province
or other political subdivision of a country other than the United States or
Canada unless the Borrower or its relevant Subsidiary shall have satisfied the
requirements of the Assignment of Claims Act of 1940 in the case of Accounts
owing from any agency, department or instrumentality of the United States, the
Financial Administration Act (Canada) in the case of Accounts owing from an
agency, department or instrumentality of Canada, and any similar state or
provincial legislation or any similar foreign legislation and the Administrative
Agent is satisfied as to the absence of setoffs, counterclaims and other
defenses on the part of such account debtor;

(s)       with respect to which any representation and warranty set forth in
anyLoan Document applicable to Accounts is not true and correct;

(t)        in respect of which the Collateral Agreement, after giving effect to
the related filings of financing statements that have then been made, if any,
does not or has ceased to create a valid and perfected first priority lien or
security interest in favor of the Administrative Agent, on behalf of the Secured
Parties, securing the Obligations or which is subject to any Lien except those
permitted under this Agreement which does not have priority over the Liens of
the Administrative Agent hereunder (which are subject to an intercreditor
agreement in form and substance satisfactory to the Administrative Agent between
the holder of such Lien and the Administrative Agent);

 

(u)

that is owing to a non-Wholly Owned Subsidiary;

(v)       that is, in accordance with GAAP, classified as a contra-account which
offset other assets on the balance sheet of the Borrower or its Subsidiaries;

 

(w)

that is owing by an account debtor located in an Excluded Country;

(x)       that is owing by an account debtor whose total indebtedness to the
Borrower or any of its Subsidiaries exceeds the credit limit with respect to
such account debtor as determined by the Borrower or any of its Subsidiaries
from time to time, to the extent such credit limit as to any account debtor is
established consistent with the practices of the Borrower in effect on the
Eighth Amendment Effective Date (but the portion of the Accounts not in excess
of such credit limit may be deemed Eligible Accounts); or

(y)       which the Administrative Agent otherwise determines, in the exercise
of its reasonable business and credit judgment as a secured asset based lender,
is unacceptable for any reason whatsoever.

 

 

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"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender, (c) an
Approved Fund, and (d) any other Person (other than a natural person) approved
by (i) the Administrative Agent, (ii) the Swingline Lender, (iii) each Issuing
Lender and (iv) unless a Default or Event of Default has occurred and is
continuing, the Original Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing, "Eligible
Assignee" shall not include the Borrower or any of the Borrower's Affiliates or
Subsidiaries.

"Eligible Domestic Accounts" means Eligible Accounts owing by an account debtor
whose chief executive office with respect to such Accounts is located in the
United States or in Canada.

"Eligible Foreign Accounts" means, so long as the Borrower maintains the Credit
Insurance Policy, Eligible Accounts owing by an account debtor whose chief
executive office with respect to such Accounts is located outside the United
States and Canada.

"Eligible Inventory" means, at any time, Inventory of the Borrower and its
Consolidated Subsidiaries which the Administrative Agent determines, in the
exercise of its reasonable business and credit judgment as a secured asset based
lender, are eligible as the basis for the extension of Revolving Credit Loans
and Swingline Loans and the issuance of Letters of Credit hereunder. Without
limiting the Administrative Agent's discretion provided herein, Eligible
Inventory shall not include any Inventory:

(a)       that is located on leaseholds as to which the lessor has not entered
into a collateral access agreement providing the Administrative Agent with the
right to receive notices of default, the right to repossess such Inventory at
any time and such other rights as may be requested by the Administrative Agent,
unless the Administrative Agent has established acceptable Reserves against such
Inventory in lieu of obtaining a collateral access agreement;

(b)       that is slow moving, obsolete, unusable, unmerchantable, damaged,
defective, unfit for sale, perishable or otherwise unavailable for sale;

(c)       consisting of promotional, marketing, packaging or shipping materials
and supplies, prototypes, displays or display items, bill-and-hold goods, goods
held on consignment or goods not of a types held for sale in the ordinary course
of business;

(d)       that fails to meet all standards imposed by any Governmental Authority
having regulatory authority over such Inventory or its use or sale;

(e)       that is subject to any licensing, patent, royalty, trademark, trade
name or copyright agreement with any third party unless the Administrative Agent
is satisfied that it may sell or otherwise dispose of such Inventory without (i)
infringing the rights of such party, (ii) violating any contract with such party
or (iii) incurring any liability with respect to payment of royalties other than
royalties incurred pursuant to the sale of such Inventory under the current
licensing agreements;

(f)        that is subject to a Lien of any other Person (unless such Person has
entered into an intercreditor agreement, in form and substance satisfactory to
the

 

 

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Administrative Agent which subordinates such Lien to the Liens of the
Administrative Agent);

 

(g)

that is located outside the United States;

(h)       that is not in the possession of or under the sole control of the
Borrower or any of its Subsidiaries (including any Inventory that is owned in
part by another Person);

(i)        with respect to which any representation and warranty set forth in
anyLoan Document applicable to Inventory is not true and correct;

(j)        in respect of which the Collateral Agreement, after giving effect to
the related filings of financing statements that have then been made, if any,
does not or has ceased to create a valid and perfected first priority lien or
security interest in favor of the Administrative Agent, on behalf of the Secured
Parties, securing the Obligations;

(k)       that is located in any third party warehouse or is in the possession
of a bailee (other than a third party processor) and is not evidenced by a
Document, unless such warehouseman or bailee has delivered to the Administrative
Agent a collateral access agreement in form and substance acceptable to the
Administrative Agent and such other documentation as the Administrative Agent
may require;

(l)        which is being processed offsite at a third party location or outside
processor, or is in transit to or from said third party location or outside
processor;

(m)      which is not reflected in a current perpetual inventory report of the
Borrower delivered to the Administrative Agent pursuant to Section 7.1(j);

 

(n)

for which reclamation rights have been asserted by the seller;

 

(o)

which is owned by any non-Wholly-Owned Subsidiary; or

(p)       which the Administrative Agent otherwise determines, in the exercise
of its reasonable business and credit judgment as a secured asset based lender,
is unacceptable for any reason whatsoever.

"Eligible Mill Stores Inventory" means Eligible Inventory which consists of
Inventory constituting spare parts and supplies used or consumed in connection
with the manufacturing of Inventory of Borrower or its Consolidated
Subsidiaries.

"Employee Benefit Plan" means (a) any employee benefit plan within the meaning
of Section 3(3) of ERISA that is maintained for employees of the Borrower or any
of its Subsidiaries which the Borrower or any of its Subsidiaries or any of
their ERISA Affiliates sponsors, maintains, or to which it makes, is making, or
is obligated to make, contributions or (b) any Pension Plan or Multiemployer
Plan that has at any time within the preceding six (6) years been maintained for
the employees of the Borrower or any of its Subsidiaries or any of their current
or former ERISA Affiliates.

 

 

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"EMU Legislation" means legislative measures of the Council of European Union
for the introduction of, change over to or operation of the euro.

"Environmental Claims" means any and all administrative, regulatory or judicial
actions, suits, demands, demand letters, claims, liens, accusations,
allegations, notices of noncompliance or violation, investigations (other than
internal reports prepared by any Person in the ordinary course of business and
not in response to any third party action or request of any kind) or proceedings
relating in any way to any actual or alleged violation of or liability under any
Environmental Law or relating to any permit issued, or any approval given, under
any such Environmental Law, including, without limitation, any and all claims by
Governmental Authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages, contribution, indemnification cost recovery,
compensation or injunctive relief resulting from Hazardous Materials or arising
from alleged injury or threat of injury to human health or the environment.

"Environmental Laws" means any and all federal, foreign, state, provincial and
local laws, statutes, ordinances, codes, rules, legally binding policies,
standards and regulations, permits, licenses, approvals, interpretations and
orders of courts or Governmental Authorities, relating to the protection of
human health or the environment, including, but not limited to, requirements
pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting,
investigation or remediation of Hazardous Materials.

" ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or modified from time to time.

"ERISA Affiliate" means any Person who together with the Borrower or any of its
Subsidiaries is treated as a single employer within the meaning of Section
414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA.

"euro" means the single currency to which the Participating Member States of the
European Union have converted.

"Eurodollar Reserve Percentage" means, for any day, the percentage (expressed as
a decimal and rounded upwards, if necessary, to the next higher 1/100th of 1%)
which is in effect for such day as prescribed by the Board of Governors of the
Federal Reserve System (or any successor) for determining the maximum reserve
requirement (including, without limitation, any basic, supplemental or emergency
reserves) in respect of eurocurrency liabilities or any similar category of
liabilities for a member bank of the Federal Reserve System in New York City.

"Event of Default" means any of the events specified in Section 11.1; provided
that any requirement for passage of time, giving of notice, or any other
condition, has been satisfied.

"Exchangeable Shares" means those shares of Capital Stock issued by Bowater
Canada, Inc. and listed on the Toronto Stock Exchange (under stock symbol BWX)
which are exchangeable at any time at the option of the holder of such shares
into common stock of the Parent and which entitle the holders thereof to similar
voting rights and dividend payments (on a per share basis) as those granted to
holders of the common stock of the Parent.

 

 

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"Excluded Accounts" means any deposit, securities and other investments account
of the Borrower and its Subsidiaries for which the Borrower is not providing
balances and/or statements as required pursuant to Section 7.1(f)(ii) and (iii).

 

"Excluded Country" means Venezuela, Guatemala and such other countries as
determined by the Administrative Agent or the Canadian Administrative Agent, in
each case, in the exercise of its reasonable credit judgment (it being
understood and agreed that no other country in which an account debtor is
located with respect to the Accounts specified in the Borrowing Base Certificate
dated as of September 30, 2008 shall be deemed to be an Excluded Country).

 

"Excluded Taxes" means, with respect to the Administrative Agent, any Lender,
any Issuing Lender or any other recipient of any payment to be made by or on
account of any obligation of the Borrower hereunder, (a) taxes imposed on or
measured by its overall net income (however denominated), and franchise taxes
imposed on it (in lieu of net income taxes), by the jurisdiction (or any
political subdivision thereof) under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable Lending Office is located, (b) any branch
profits taxes imposed by the United States or any similar tax imposed by any
other jurisdiction in which the Borrower is located and (c) in the case of a
Foreign Lender (other than an assignee pursuant to a request by the Borrower
under Section 4.12(b)), any withholding tax that is imposed on amounts payable
to such Foreign Lender at the time such Foreign Lender becomes a party hereto
(or designates a new Lending Office) or is attributable to such Foreign Lender's
failure or inability (other than as a result of a Change in Law) to comply with
Section 4.11(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new Lending Office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 4.11(a).

"Existing Facilities" means the collective reference to (a) the credit facility
established pursuant to that certain Credit Agreement dated as of April 22, 2004
(as amended, restated, supplemented or modified) by and among the Canadian
Borrower and the Original Borrower, as borrowers, JPMorgan Chase Bank, as U.S.
administrative agent, The Bank of Nova Scotia, as Canadian administrative agent
and the lenders party thereto and (b) the conduit facility established pursuant
that certain Loan Agreement dated as of December 19, 2002 (as amended, restated,
supplemented or modified) by and among Bowater Funding Inc., as borrower, the
Original Borrower, as initial servicer, the lenders party thereto, SunTrust
Capital Markets, Inc. and Wachovia Bank, National Association, as co-agents, and
SunTrust Capital Markets, Inc., as administrative agent.

"Existing Letters of Credit" means those letters of credit existing on the
Closing Date and identified on Schedule 1.1(a).

"Existing Notes" means the collective reference to each of the senior unsecured
notes and debentures set forth on Schedule 10.1.

 

 

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"Extensions of Credit" means, as to any Lender at any time, (a) an amount equal
to the sum of (i) the aggregate principal amount of all Revolving Credit Loans
made by such Lender then outstanding, (ii) such Lender's Commitment Percentage
of the L/C Obligations then outstanding and (iii) such Lender's Commitment
Percentage of the Swingline Loans then outstanding or (b) the making of any Loan
or participation in any Swingline Loan or any Letter of Credit by such Lender,
as the context requires.

"FDIC" means the Federal Deposit Insurance Corporation, or any successor
thereto.

"Federal Funds Rate" means, for any day, the rate per annum equal to the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers on such
day (or, if such day is not a Business Day, for the immediately preceding
Business Day), as published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day, provided that if such rate is not so
published for any day which is a Business Day, the average of the quotation for
such day on such transactions received by the Administrative Agent from three
Federal Funds brokers of recognized standing selected by the Administrative
Agent.

"Fee Letter" means the separate fee letter agreement executed by the Original
Borrower and Wachovia and/or certain of its affiliates dated April 3, 2006.

"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries ending
on December 31.

"Fixed Assets" means, collectively, each mill owned by the Borrower or any
Subsidiary (each, a "Mill"), the real property on which each such Mill is
situated, all equipment used in connection with each such Mill and all other
rights and assets used for the operation, administration and maintenance of each
such Mill. For the avoidance of doubt, the term Fixed Assets shall not include
any timberlands owned by the Borrower or any of its Subsidiaries.

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

"Foreign Pledge Documents" means any pledge agreements, charges and other
similar documents and agreements granting a lien on the Capital Stock of any
first-tier Foreign Subsidiary of any Credit Party in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties.

"Foreign Subsidiary" means any Subsidiary that is not a Domestic Subsidiary.

"Fourth Amendment" means that certain Fourth Amendment dated as of Fourth
Amendment Effective Date by and among the Original Borrower, the Subsidiary
Guarantors and the Administrative Agent (on behalf of itself and the Lenders
party thereto).

"Fourth Amendment Effective Date" means March 31, 2008.

 

 

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

"Governmental Approvals" means all authorizations, consents, approvals, permits,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.

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

"Guarantors" means the Parent Guarantor and each Subsidiary Guarantor.

"Guaranty Obligation" means, with respect to the Borrower and its Subsidiaries,
without duplication, any obligation, contingent or otherwise, of any such Person
pursuant to which such Person has directly or indirectly guaranteed any
Indebtedness of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of any
such Person (a) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness (whether arising by virtue of partnership
arrangements, by agreement to keep well, to purchase assets, goods, securities
or services, to take-or-pay, or to maintain financial statement condition or
otherwise) or (b) entered into for the purpose of assuring in any other manner
the obligee of such Indebtedness of the payment thereof or to protect such
obligee against loss in respect thereof (in whole or in part); provided, that
the term Guaranty Obligation shall not include endorsements for collection or
deposit in the ordinary course of business.

"Hazardous Materials" means any substances or materials (a) which are or become
defined as hazardous wastes, hazardous substances, pollutants, contaminants,
chemical substances or mixtures or toxic substances under any Environmental Law,
(b) which are toxic, explosive, corrosive, flammable, infectious, radioactive,
carcinogenic, mutagenic or otherwise harmful to human health or the environment
and are or become regulated by any Governmental Authority, (c) the presence of
which require investigation or remediation under any Environmental Law or common
law, (d) the discharge or emission or release of which requires a permit or
license under any Environmental Law or other Governmental Approval, (e) which
are deemed to constitute a nuisance or a trespass which pose a health or safety
hazard to Persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.

 

 

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"Hedging Agreement" means any agreement with respect to any Interest Rate
Contract, forward rate agreement, commodity swap, forward foreign exchange
agreement, currency swap agreement, cross-currency rate swap agreement, currency
option agreement or other agreement or arrangement designed to alter the risks
of any Person arising from fluctuations in interest rates, currency values or
commodity prices, all as amended, restated, supplemented or otherwise modified
from time to time.

"Hedging Obligations" means all existing or future payment and other obligations
owing by any Credit Party under any Hedging Agreement (which such Hedging
Agreement is permitted hereunder) with any Person that is a Lender or an
Affiliate of a Lender at the time such Hedging Agreement is executed.

"Immaterial Subsidiary" means:

 

(a)

each QSPE;

(b)       any Domestic Subsidiary that is not a Wholly-Owned Subsidiary to the
extent that (i) there is a provision in the organizational documents of such
Domestic Subsidiary or (ii) the Borrower or any of its Subsidiaries is party to
a legally enforceable agreement, in either case that would prohibit such
Domestic Subsidiary from being a Subsidiary Guarantor without the consent of (or
the approval of directors appointed by) a third party owner of such Domestic
Subsidiary; and

(c)       any individual Domestic Subsidiary having total assets with a book
value that is less than one percent (1%) of the aggregate book value of the
total Consolidated assets of the Borrower and its Subsidiaries (as of the most
recent date for which financial statements have been delivered).

"Indebtedness" means, with respect to any Person at any date and without
duplication, the sum of the following:

(a)       all liabilities, obligations and indebtedness for borrowed money of
such Person, including, but not limited to, obligations evidenced by bonds,
debentures, notes or other similar instruments of such Person;

(b)       all obligations of such Person to pay the deferred purchase price of
property or services (including, without limitation, all obligations under
non-competition, earn-out or similar agreementsin connection with an
acquisition), except trade payables and accrued obligations arising in the
ordinary course of business, so long as such trade accounts payable are payable
withinninety (90) days of the date the respective goods are delivered or the
respective services are rendered;

(c)       the Attributable Indebtedness of such Person with respect to such
Person's obligations in respect of Capital Leases and Synthetic Leases
(regardless of whether accounted for as indebtedness under GAAP);

(d)       all Indebtedness of any other Person secured by a Lien on any asset
owned by such Person (including indebtedness arising under conditional sales or
other title

 

 

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retention agreements), whether or not such indebtedness shall have been assumed
by such Person or is limited in recourse;

 

(e)

all Guaranty Obligations of such Person;

(f)        all obligations, contingent or otherwise, of such Person in
connection with letters of credit, whether or not drawn, including, without
limitation, any reimbursement obligation, and bankers' acceptances issued for
the account of such Person;

(g)       all cash obligations of any such Person to redeem, repurchase,
exchange, defease or otherwise make payments in respect of Capital Stock of such
Person, unless such redemption, repurchase, exchange, defeasance or other
payment is contingent (unless such contingency has been satisfied) or is not
required prior to the date that is ninety-one (91) days after the Maturity Date;

 

(h)

all Net Hedging Obligations of such Person; and

(i)        the outstanding attributed principal amount under any asset
securitization program of such Person.

For all purposes hereof, the Indebtedness of any Person shall include the
Indebtedness of any partnership or joint venture (other than a joint venture
that is itself a corporation or limited liability company) in which such Person
is a general partner or a joint venturer, unless such Person is not legally
liable therefor under Applicable Law or as a result of any legally enforceable
contractual limitation with respect to such Indebtedness.

"Indemnified Taxes" means Taxes and Other Taxes other than Excluded Taxes.

"Insurance and Condemnation Event" means the receipt by the Borrower or any of
its Subsidiaries of any cash insurance proceeds or condemnation award payable by
reason of theft, loss, physical destruction or damage, taking or similar event
with respect to any of their respective property or assets.

"Intercompany Subordination Agreement" means an Intercompany Subordination
Agreement substantially in the form of Exhibit J by and among the Administrative
Agent and the applicable Credit Parties or Subsidiaries thereof party thereto.

 

"Interest Period" has the meaning assigned thereto in Section 4.1(b).

"Interest Rate Contract" means any interest rate swap agreement, interest rate
cap agreement, interest rate floor agreement, interest rate collar agreement,
interest rate option or any other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.

"Inventory" has the meaning specified in Section 1.1 of the Collateral
Agreement.

 

 

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"ISP98" means the International Standby Practices (1998 Revision, effective
January 1, 1999), International Chamber of Commerce Publication No. 590.

"Issuing Lender" means (a) with respect to Letters of Credit issued hereunder on
or after the Closing Date, Wachovia, in its capacity as issuer thereof, or any
successor thereto or any other Lender designated as an Issuing Lender by the
Original Borrower (with reasonable prior notice of such designation by the
Original Borrower to the Administrative Agent) and (b) with respect to the
Existing Letters of Credit, the issuers thereof as identified on Schedule
1.1(a).

"ITA" means the Income Tax Act (Canada), as amended or modified from time to
time.

"Korean Fixed Assets" means the Fixed Assets owned by the Canadian Borrower or
any of its Subsidiaries and located in Mokpo, South Korea.

"Korean Shares" means all present and future outstanding Capital Stock issued by
Bowater-Korea Co., Ltd.

"L/C Commitment" means the lesser of (a) One Hundred Million Dollars
($100,000,000) and (b) the aggregate Commitments of the Lenders.

"L/C Facility" means the letter of credit facility established pursuant to
Article III.

"L/C Obligations" means at any time, an amount equal to the sum of (a) the
aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.

"L/C Participants" means the collective reference to all of the Lenders other
than the applicable Issuing Lender.

"L/C Supporting Documentation" has the meaning assigned thereto in Section 3.2.

"Lender" means each Person that is bound by the terms of this Agreement as a
Lender (including, without limitation, each Issuing Lender and the Swingline
Lender unless the context otherwise requires) and each Person that hereafter
becomes a party to this Agreement as a Lender pursuant to Section 13.10.

"Lending Office" means, with respect to any Lender, the office of such Lender
maintaining such Lender's Extensions of Credit.

"Letter of Credit Application" means an application, in the form specified by
the applicable Issuing Lender from time to time, requesting the applicable
Issuing Lender to issue a Letter of Credit.

"Letters of Credit" means the collective reference to letters of credit issued
pursuant to Section 3.1 and the Existing Letters of Credit.

 

 

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"LIBOR" means the rate of interest per annum determined on the basis of the rate
for deposits in Dollars in minimum amounts of at least $5,000,000 for a period
equal to the applicable Interest Period which appears on the Reuters Page
LIBOR01 (or any successor page) at approximately 11:00 a.m. (London time) two
(2) Business Days prior to the first day of the applicable Interest Period
(rounded upward, if necessary, to the nearest 1/100th of 1%). If, for any
reason, such rate does not appear on Reuters Page LIBOR01 (or any successor
page) then "LIBOR" shall be determined by the Administrative Agent to be the
arithmetic average of the rate per annum at which deposits in Dollars in minimum
amounts of at least $5,000,000 would be offered by first class banks in the
London interbank market to the Administrative Agent at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of the applicable
Interest Period for a period equal to such Interest Period. Each calculation by
the Administrative Agent of LIBOR shall be conclusive and binding for all
purposes, absent manifest error.

"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to the next
higher 1/100th of 1%) determined by the Administrative Agent pursuant to the
following formula:

 

LIBOR Rate =

LIBOR  

 

1.00-Eurodollar Reserve Percentage

"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the LIBOR
Rate as provided in Section 4.1(a).

"Lien" means, with respect to any asset, any mortgage, leasehold mortgage, lien,
pledge, charge, security interest, hypothec, hypothecation, assignment by way of
security or encumbrance of any kind in respect of such asset. For the purposes
of this Agreement, a Person shall be deemed to own subject to a Lien any asset
which it has acquired or holds subject to the interest of a vendor or lessor
under any conditional sale agreement, Capital Lease or other title retention
agreement relating to such asset.

"Loan Documents" means, collectively, this Agreement, each Note, the Letter of
Credit Applications, the Security Documents, the Intercompany Subordination
Agreement, and each other document, instrument, certificate and agreement
executed and delivered by the Parent, the Borrower or any of their respective
Subsidiaries in connection with this Agreement or otherwise referred to herein
or contemplated hereby (excluding any Hedging Agreement and any agreements with
respect to any Cash Management Arrangement), all as may be amended, restated,
supplemented or otherwise modified from time to time.

"Loans" means the collective reference to the Revolving Credit Loans and the
Swingline Loans, and "Loan" means any of such Loans.

"Material Adverse Effect" means, with respect to the Borrower or any of its
Subsidiaries, a material adverse effect on (a) the business, assets, liabilities
(actual or contingent), operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries, taken as a whole, or (b) the ability of any such
Person to perform its obligations under the Loan Documents to which it is a
party.

 

 

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"Material Subsidiary" means:

(a)       each Domestic Subsidiary of the Borrower, other than the Immaterial
Subsidiaries; and

(b)       each Subsidiary that, notwithstanding the definition of Immaterial
Subsidiary, is designated as a Material Subsidiary pursuant to Section 8.10(b).

Notwithstanding anything to the contrary contained in this Agreement or any
other Loan Document, any Subsidiary that (i) owns a Material Subsidiary or (ii)
provides a guaranty of (A) the Existing Notes, (B) any Indebtedness incurred to
refinance, refund, renew or extend the Existing Notes as permitted pursuant to
Section 10.1(d) or (C) any Indebtedness permitted pursuant to Section
11.1(o)(viii), in each case, shall be a Material Subsidiary.

"Maturity Date" means the earliest to occur of:

(a)       May 25, 2011; provided, however, that such date shall be accelerated
to:

(i)        the date which is ninety-one (91) days prior to the then current
maturity date of any Specified Existing Note if on the date which is one hundred
twenty (120) days prior to the then current maturity date of such Specified
Existing Note either (A)the remaining outstanding principal balance thereof
(excluding any such balance as to which sums have been set aside for the payment
thereof pursuant to any defeasance or sinking fund or escrow arrangement or
similar provisions) is in excess of $75,000,000 or (B) the Aggregate Credit
Exposure is in excess of $100,000,000 and the outstanding principal balance of
such Specified Existing Note (excluding any such balance as to which sums have
been set aside for the payment thereof pursuant to any defeasance or sinking
fund or escrow arrangement or similar provisions) has not been paid in full; or

(ii)       the date which is ninety-one (91) days prior to the then current
maturity date of any Indebtedness permitted pursuant to Section 11.1(o)(viii)
if, on the date which is one hundred twenty (120) days prior to the then current
maturity date of such Indebtedness, such Indebtedness has not been paid in full
in accordance with the terms of this Agreement or extended or refinanced such
that the maturity of such Indebtedness is more than ninety-one (91) days after
May 25, 2011.

(b)       the date of termination of the entire Commitment by the Borrower
pursuant to Section 2.5; or

(c)       the date of termination of the Commitment by the Administrative Agent
on behalf of the Lenders pursuant to Section 11.2(a).

"Moody's" means Moody's Investors Service, Inc. and any successor thereto.

"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any of its Subsidiaries or any of
their ERISA Affiliates is

 

 

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making, or is accruing an obligation to make, or has accrued an obligation to
make contributions within the preceding six (6) years.

"Net Cash Proceeds" means, as applicable;

(a)       with respect to any Asset Disposition, the gross cash proceeds
received by the Borrower or any of its Subsidiaries therefrom less the sum of
the following, without duplication, (i) selling expenses incurred in connection
with such Asset Disposition (including reasonable brokers' fees and commissions,
legal, accounting and other professional and transactional fees, transfer and
similar taxes and the Original Borrower's reasonable good faith estimate of
income taxes paid or payable in connection with such sale), (ii) reasonable
reserves with respect to post-closing adjustments, indemnities and other
contingent liabilities established in connection with such Asset Disposition
(provided that, to the extent and at the time any such amounts are released from
such reserve, such amounts shall constitute Net Cash Proceeds), (iii) subject to
Section 8.2(b), the principal amount, premium or penalty, if any, interest and
other amounts on any Indebtedness secured by a Lien on the assets (or a portion
thereof) sold in such Asset Disposition, which Indebtedness is repaid with such
proceeds and (iv) the Original Borrower's reasonable good faith estimate of cash
payments required to be made within ninety (90) days of such Asset Disposition
with respect to retained liabilities directly related to the assets (or a
portion thereof) sold in such Asset Disposition (provided that, to the extent
that cash proceeds are not used to make payments in respect of such retained
liabilities within ninety (90) days of such Asset Disposition, such cash
proceeds shall constitute Net Cash Proceeds);

(b)       with respect to any Insurance and Condemnation Event, the gross cash
proceeds received by the Borrower or any of its Subsidiaries therefrom less the
sum of the following, without duplication, (i) all fees and expenses in
connection therewith and (ii) subject to Section 8.2(b), the principal amount,
premium or penalty, if any, interest and other amounts on any Indebtedness
secured by a Lien on the assets (or a portion thereof) subject to such Insurance
and Condemnation Event, which Indebtedness is repaid in connection therewith;
and

(c)       with respect to any Debt Issuance, the gross cash proceeds received by
the Borrower or any of its Subsidiaries therefrom less all legal, underwriting
and other fees and expenses incurred in connection therewith.

"Net Hedging Obligations" means, with respect to any Hedging Agreement as of any
date, the Termination Value of such Hedging Agreement on such date.

"Net Recovery Percentage" means, at any time, the fraction, expressed as a
percentage, (a) the numerator of which is the amount equal to the recovery in
respect of Eligible Inventory at such time on a net orderly liquidation value
basis as set forth in the most recent acceptable appraisal of Eligible Inventory
received by the Administrative Agent, net of operating expenses, liquidation
expenses and commissions, and (b) the denominator of which is the applicable
original Value of the aggregate amount of the Inventory subject to such
appraisal.

 

 

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"New Borrower Fixed Assets" means, collectively, the New Borrower Mill Assets
and any and all other real property and equipment owned or thereafter acquired
by any New Borrower or in which any New Borrower has or at any time in the
future may acquire any right, title or interest, and wherever located or deemed
located to the extent related to or forming a part of the New Borrower Mill
Assets; provided, that in no event shall the New Borrower Fixed Assets include
any Coverage Assets.

"New Borrower Mill Assets" means, collectively:

(a)       (i)        that certain mill owned as of the Fourth Amendment
Effective Date by Bowater Alabama, Inc., a Subsidiary of the Original Borrower,
and located in Coosa Pines, Alabama (the "Coosa Pines Mill"), along with the
real property upon which the Coosa Pines Mill is situated (as more particularly
described on Schedule 1.1(c) hereto, the "Coosa Pines Mill Real Property");

(ii)       all equipment used in connection with the Coosa Pines Mill and
located at the Coosa Pines Mill Real Property (the "Coosa Pines Mill
Equipment"); and

(iii)      all other rights and assets used for the operation, administration
and maintenance of the Coosa Pines Mill Real Property;

(b)       (i)        that certain mill owned (directly or beneficially) as of
the Fourth Amendment Effective Date by a Subsidiary of the Original Borrower,
and located in Grenada, Mississippi (the "Grenada Mill"), along with the real
property upon which the Grenada Mill is situated (as more particularly described
on Schedule 1.1(c) hereto, the "Grenada Mill Real Property");

(ii)       all equipment used in connection with the Grenada Mill and located at
the Grenada Mill Real Property (the "Grenada Mill Equipment"); and

(iii)       all other rights and assets used for the operation, administration
and maintenance of the Grenada Mill Real Property; and

 

(c)

all operations of the foregoing.

"New Borrower Mortgages" means those certain mortgages, deeds of trust, security
agreements, subordination agreements or other real property security documents
encumbering the New Borrower Fixed Assets, in each case in form and substance
reasonably satisfactory to the Administrative Agent and the Canadian
Administrative Agent and executed by the applicable New Borrower in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties and the
Canadian Secured Parties, as amended, restated, supplemented or otherwise
modified from time to time. Unless specifically excluded, the Supplemental New
Borrower Mortgage shall be a New Borrower Mortgage.

"New Borrower Notes" has the meaning assigned thereto in Section 10.5(h).

"New Borrower Security Documents" has the meaning assigned thereto in Section
8.10(e)(ii)(B)(5).

 

 

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"New Borrower Transactions" means the transfer of the Capital Stock of each New
Borrower from the Original Borrower to the Parent in exchange for the New
Borrower Notes, in each case, to the extent permitted pursuant to, and in
accordance with the terms of, this Agreement and the Canadian Credit Agreement.

 

"New Borrowers" has the meaning assigned thereto in the introductory paragraph.

"New Material Subsidiary" has the meaning assigned thereto in Section 8.10.

"Non-Fixed Assets Collateral" means any portion of the Collateral that consists
of assets or property that are not Fixed Assets or timberlands.

"Notes" means the collective reference to the Revolving Credit Notes and the
Swingline Note.

"Notice of Account Designation" has the meaning assigned thereto in Section
2.3(b).

"Notice of Borrowing" has the meaning assigned thereto in Section 2.3(a).

"Notice of Conversion/Continuation" has the meaning assigned thereto in Section
4.2.

"Notice of Prepayment" has the meaning assigned thereto in Section 2.4(c).

"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all Hedging Obligations, (d) all obligations owing by any
Credit Party under any Cash Management Arrangement and (e) all other fees and
commissions (including reasonable attorneys' fees), charges, indebtedness,
loans, liabilities, financial accommodations, obligations, covenants and duties
owing by the Borrower or any of its Subsidiaries to the Lenders or the
Administrative Agent, in each case under any Loan Document, with respect to any
Loan or Letter of Credit, of every kind, nature and description, direct or
indirect, absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note.

"OFAC" means the U.S. Department of the Treasury's Office of Foreign Assets
Control.

"Officer's Compliance Certificate" means a certificate of the chief financial
officer, the treasurer, or the assistant treasurer of the Original Borrower
substantially in the form of Exhibit F.

"Operating Lease" means, as to any Person as determined in accordance with GAAP,
any lease of property (whether real, personal or mixed) by such Person as lessee
which is not a Capital Lease.

"Original Borrower" has the meaning assigned thereto in the introductory
paragraph.

"Other Taxes " means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or

 

 

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under any other Loan Document or from the execution, delivery or enforcement of,
or otherwise with respect to, this Agreement or any other Loan Document.

" Overadvance Amount" means, as of the Eighth Amendment Effective Date,
$60,000,000; provided, that, unless waived or extended by the Required Agreement
Lenders, such Overadvance Amount shall be reduced in monthly installments on
each of the dates set forth below in the amounts set forth below such that the
remaining Overadvance Amount is set forth opposite the applicable reduction date
set below:

 

Overadvance Amount Reduction Date

Reduction Amount

Remaining Overadvance Amount

December 31, 2008

$7,427,293

$52,572,707

January 31, 2009

$7,427,293

$45,145,414

February 28, 2009

$11,140,940

$34,004,474

March 31, 2009

$11,140,940

$22,863,534

Conversion Date

$22,863,534

$0

 

"Parent" means AbitibiBowater Inc., a Delaware corporation f/k/a Alpha-Bravo
Holdings, Inc.

"Parent Guarantor" means the Parent, as guarantor pursuant to the Parent
Guaranty Agreement.

"Parent Guaranty Agreement" means the unconditional guaranty agreement executed
by the Parent as required by the Fourth Amendment in favor of the Administrative
Agent, for the ratable benefit of the Secured Parties, in form and substance
satisfactory to the Administrative Agent, as amended, restated, supplemented or
otherwise modified from time to time.

"Parent Overhead Expenses" means (a) accounting and auditing costs and expenses
incurred by the Parent in the ordinary course of its business in connection with
preparing financial reports and tax filings; (b) customary fees and expenses
payable to the SEC and other reasonable and customary costs and expenses payable
in connection with the Parent being a publicly traded company (including,
without limitation, reasonable and customary fees and expenses required to be
paid for professional and regulatory compliance); (c) reasonable and customary
legal fees and expenses required for the corporate maintenance of the Parent and
the Borrower and its Subsidiaries; (d) reasonable and customary director fees;
(e) reasonable and customary costs and expenses payable for director and officer
insurance; (f) transfer agent fees payable in connection with Capital Stock of
the Parent; and (g) franchise taxes and other fees payable to the jurisdiction
of incorporation or qualification of the Parent incurred in the ordinary course
of conducting its business; provided that in no event shall Parent Overhead
Expenses include management fees, salaries, bonuses, debt service and dividends
and other distributions in respect of the Capital Stock of the Parent.

"Participant" has the meaning assigned thereto in Section 13.10(d).

 

 

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"Participating Member State" means each state so described in any EMU
Legislation.

"PBGC" means the Pension Benefit Guaranty Corporation or any successor agency.

" Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained for the employees of the Borrower or any of
its Subsidiaries or any of their ERISA Affiliates or (b) has at any time within
the preceding six (6) years been maintained for the employees of the Borrower or
any of its Subsidiaries or any of their current or former ERISA Affiliates which
the Borrower or any of its Subsidiaries or any of their ERISA Affiliates
sponsors, maintains, or to which it makes, is making or is obligated to make,
contributions.

"Permitted Acquisition" means any investment by the Borrower or any of its
Subsidiaries in the form of the acquisition of all or substantially all of the
business or assets, or any portion of the business or assets that constitutes a
line of business, a business unit or a division (whether by the acquisition of
Capital Stock, assets or any combination thereof), of any other Person (which
acquisition (a) was permitted prior to the Eighth Amendment Effective Date or
(b) is permitted on or after the Eighth Amendment Effective Date if consented to
by the Required Lenders pursuant to Section 13.2).

"Permitted Liens" means the Liens permitted pursuant to Section 10.2.

"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, governmental authority
or other entity.

"Policy Sublimit" means the maximum Dollar amount of the Credit Insurance Policy
against which claims may be made only by the Borrower or any of its Subsidiaries
(and not by Abitibi, the Parent or any other Subsidiary thereof).

"Pounds Sterling" means, at any time of determination, the then official
currency of the United Kingdom.

 

"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by Wachovia as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in such prime rate occurs. The parties hereto acknowledge that the rate
announced publicly by Wachovia as its prime rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.

 

"QSPE" means each of the following: (a) Calhoun Note Holdings AT LLC, (b)
Calhoun Note Holdings TI LLC, (c) Bowater Catawba Note Holdings I LLC, (d)
Bowater Catawba Note Holdings II LLC, (e) Bowater Saluda Note Holdings LLC, (f)
Timber Note Holding LLC and (g) any other qualified special purpose entity
created to facilitate the sale and/or the monetization of receivables from the
sale of timberlands pursuant to Section 10.5(g); provided that:

(i)        no portion of the Indebtedness or any other obligations (contingent
or otherwise) of any such Person (1) may be guaranteed by the Borrower or any of
its Subsidiaries, (2) may be recourse to or obligate the Borrower or any of its
Subsidiaries in any way or (3) may subject any property or asset of the Borrower
or any of its

 

 

35

 

 

 

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Subsidiaries, directly or indirectly, contingently or otherwise, to the
satisfaction thereof (other than, in the case of clauses (1) (solely with
respect to guaranties of make-whole premiums), (2) and (3), pursuant to Standard
Securitization Undertakings);

(ii)       the Borrower and its Subsidiaries may not have any material contract,
agreement, arrangement or understanding with any such Person other than on terms
no less favorable to the Borrower or any of its Subsidiaries than those that
might be obtained at the time from Persons that are not Affiliates of the
Borrower or any of its Subsidiaries; and

(iii)      the Borrower and its Subsidiaries may not (A) have any obligation to
maintain or preserve the financial condition of any such Person or (B) cause any
such Person to achieve certain levels of operating results.

"Register" has the meaning assigned thereto in Section 13.10(c).

"Reimbursement Obligation" means the obligation of the Borrower to reimburse the
applicable Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.

"Related Parties" means, with respect to any Person, such Person's Affiliates
and the directors, officers, employees, agents and advisors of such Person and
of such Person's Affiliates.

"Required Agreement Lenders" means, at any date, any combination of Lenders
having more than fifty percent (50%) of the sum of the aggregate amount of the
Commitment under this Credit Facility or, if the Commitment under this Credit
Facility has been terminated, any combination of Lenders holding more than fifty
percent (50%) of the aggregate Extensions of Credit.

"Required Lenders" means, at any date, any combination of Lenders and Canadian
Lenders having more than fifty percent (50%) of the sum of (a) the aggregate
amount of the Commitment under this Credit Facility (or if the Commitment has
been terminated, the aggregate amount of Extensions of Credit under this Credit
Facility) plus (b) the aggregate amount of the commitments under the Canadian
Credit Facility (or, if the commitments under the Canadian Credit Facility have
been terminated, the aggregate amount of the Canadian Extensions of Credit).

"Reserves" means, as of any date of determination, such amounts as the
Administrative Agent may from time to time establish and revise in good faith
reducing the amount of the Extensions of Credit which would otherwise be
available to the Borrower under the lending formulas provided herein: (a) to
reflect events, conditions, contingencies or risks which, as determined by the
Administrative Agent in good faith, adversely affect, or would have a reasonable
likelihood of adversely affecting, either (i) the Collateral or any other
property which is security for the Obligations, its value or the amount that
might be received by the Administrative Agent from the sale or other disposition
or realization upon the Collateral, or (ii) the assets, business or prospects of
the Borrower or any of its Consolidated Subsidiaries or (iii) the security
interests and other rights of the Administrative Agent or any Lender in the
Collateral (including the enforceability, perfection and priority thereof) or
(b) to reflect the Administrative

 

 

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Agent's good faith belief that any collateral report or financial information
furnished by or on behalf of the Borrower or any of its Consolidated
Subsidiaries to the Administrative Agent is or may have been incomplete,
inaccurate or misleading in any material respect or (c) in respect of any state
of facts which the Administrative Agent determines in good faith constitutes a
Default or an Event of Default. Without limiting the generality of the
foregoing, Reserves may, at the Administrative Agent's option, be established
(i) to reflect environmental liabilities and (ii) to reflect up to the average
balance for the applicable Settlement Period of commingled accounts receivable
owed by account debtors to the Borrower and its Subsidiaries but paid to Abitibi
or any of its Subsidiaries net of the average balance for such applicable
Settlement Period of commingled accounts receivable owed by account debtors to
Abitibi and its Subsidiaries but paid to the Borrower or any of its
Subsidiaries. To the extent that the Administrative Agent may revise the lending
formulas used to determine the Borrowing Base or establish new criteria or
revise existing criteria so as to address any circumstances, condition, event or
contingency in any manner satisfactory to the Administrative Agent, the
Administrative Agent shall not establish a Reserve for the same purpose. The
amount of any Reserve established by the Administrative Agent shall have a
reasonable relationship to the event, condition, or other matter which is the
basis for the Reserve as determined by the Administrative Agent in good faith.

 

"Responsible Officer" means, as to any Person, the chief executive officer,
president, chief financial officer, controller, treasurer or assistant treasurer
of such Person or any other officer of such Person reasonably acceptable to the
Administrative Agent and the Canadian Administrative Agent. Any document
delivered hereunder that is signed by a Responsible Officer of a Person shall be
conclusively presumed to have been authorized by all necessary corporate,
partnership and/or other action on the part of such Person and such Responsible
Officer shall be conclusively presumed to have acted on behalf of such Person.

"Restricted Jurisdictions" means California, North Dakota, South Dakota or
Vermont.

"Restricted Subsidiary" means any Person that is a "Restricted Subsidiary"
pursuant to the definition thereof as contained in the Existing Notes as in
effect as of the Closing Date, for so long as such Existing Notes or any
Indebtedness incurred to refinance such Existing Notes is outstanding and
includes provisions restricting the granting of a lien on the capital stock or
indebtedness of such Restricted Subsidiaries.

"Revolving Credit Facility" means the revolving credit facility established
pursuant to Article II.

"Revolving Credit Loan" means any revolving loan made to the Borrower pursuant
to Section 2.1, and all such revolving loans collectively as the context
requires.

"Revolving Credit Note" means a promissory note made by the Borrower in favor of
a Lender evidencing the Revolving Credit Loans made by such Lender,
substantially in the form of Exhibit A-1 , and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part.

"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto.

 

 

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

"Sanctioned Entity" shall mean (a) an agency of the government of, (b) an
organization directly or indirectly controlled by, or (c) a person resident in a
country that is subject to a sanctions program identified on the list maintained
by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html, or as
otherwise published from time to time as such program may be applicable to such
agency, organization or person.

"Sanctioned Person" shall mean a person named on the list of Specially
Designated Nationals or Blocked Persons maintained by OFAC available at
http://www.treas.gov/offices/

enforcement/ofac/sdn/index.html, or as otherwise published from time to time.

"Secured Parties" means the Administrative Agent, the Lenders, any party to a
Hedging Agreement that was a Lender or an Affiliate of a Lender at the time such
Hedging Agreement was executed, and any counterparty to any Cash Management
Arrangement that was a Lender or an Affiliate of a Lender at the time such Cash
Management Arrangement was executed.

"Security Documents" means the collective reference to the Collateral Agreement,
the Subsidiary Guaranty Agreement, the Parent Guaranty Agreement, the New
Borrower Mortgages, each Foreign Pledge Document and each other agreement or
writing pursuant to which the Parent or any Credit Party purports to pledge or
grant a security interest in any property or assets securing the Obligations or
any such Person purports to guaranty the payment and/or performance of the
Obligations, in each case, as amended, restated, supplemented or otherwise
modified from time to time.

"Settlement Period" means the time period within which commingled accounts
receivable owed by account debtors to Borrower and its Subsidiaries, on the one
hand, and Abitibi and its Subsidiaries, on the other hand, are settled between
the Borrower and Abitibi.

"Significant Indebtedness" means Indebtedness (other than the Obligations and
the Canadian Obligations) of the Borrower and its Subsidiaries the outstanding
principal amount of which is in excess of $25,000,000.

"Solvent" means, as to the Borrower and its Subsidiaries on a particular date,
that any such Person (a) has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage
and is able to pay its debts as they mature, (b) has assets having a value, both
at fair valuation and at present fair saleable value, greater than the amount
required to pay its probable liabilities (including contingencies), and (c) does
not believe that it will incur debts or liabilities beyond its ability to pay
such debts or liabilities as they mature.

" Special Agent Advances" shall have the meaning set forth in Section 12.11
hereof.

"Specified Abitibi Indebtedness" means Indebtedness of Abitibi evidenced by the
Credit and Guaranty Agreement dated as of April 1, 2008 by and among
Abitibi-Consolidated Company of Canada, Abitibi and certain affiliates and
subsidiaries thereof, the lenders party

 

 

38

 

 

 

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thereto and Goldman Sachs Credit Partners L.P., as administrative agent (as
amended, restated, supplemented or otherwise modified).

"Specified Existing Notes" means each of the Existing Notes which (a) as of the
Closing Date, matures or is subject to mandatory redemption prior to May 25,
2011 and (b) has an outstanding principal amount, as of the Closing Date, in
excess of $75,000,000. The Specified Existing Notes shall be set forth on
Schedule 1.1(b).

"Specified Non-Recurring Charges" means the non-recurring charges against income
taken by the Original Borrower during the following periods in the following
amounts:

(a)       with respect to the fiscal quarter ended March 31, 2007, non-recurring
charges in the amount of $9,500,000;

(b)       with respect to the fiscal quarter ended June 30, 2007, non-recurring
charges in the amount of $20,000,000;

(c)       with respect to the fiscal quarter ended September 30, 2007,
non-recurring charges in the amount of $46,000,000;

(d)       with respect to the fiscal quarter ending December 31, 2007,
non-recurring charges consisting of the following, without duplication, (i)
severance expenses of the Original Borrower, (ii) merger costs incurred with
respect to the Combination and (iii) other mill closure costs, in each case,
taken during such quarter, in an aggregate amount to be determined in accordance
with GAAP, but not to exceed $100,000,000; and

(e)       with respect to the fiscal quarter ending March 31, 2008,
non-recurring charges consisting of the following, without duplication, (i)
severance expenses of the Original Borrower, (ii) merger costs incurred with
respect to the Combination and (iii) other mill closure costs, in each case,
taken during such quarter, in an aggregate amount to be determined in accordance
with GAAP, but not to exceed $100,000,000 less the amount of Specified
Non-Recurring Charges taken pursuant to clause (d) above with respect to the
fiscal quarter ended December 31, 2007;

provided that, notwithstanding anything to the contrary contained in this
Agreement or any other Loan Document, for purposes of calculating the
Consolidated Senior Secured Leverage Ratio and the interest coverage ratio as
set forth in Section 9.2, such non-recurring charges shall be excluded from the
non-recurring charges included in clause (b)(v) of the definition of
Consolidated EBITDA.

"Standard Securitization Undertakings" means, collectively, (i) customary
arms-length servicing obligations (together with any related performance
guaranties), (ii) obligations (together with any related performance guaranties)
to refund the purchase price or grant purchase price credits for dilutive events
or misrepresentation (in each case unrelated to the collectibility of
receivables or creditworthiness of the associated account debtors), (iii)
representations, warranties, covenants and indemnities (together with any
related performance guaranties) of a type that are reasonably customary in
accounts receivable securitizations and (iv) in the case of a QSPE, a guarantee
by the

 

 

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Borrower or its Subsidiaries of any make whole premium (but not any principal or
interest) on Indebtedness of such QSPE.

"Subordinated Indebtedness" means the collective reference to any Indebtedness
of the Borrower or any of its Subsidiaries subordinated in right and time of
payment to the Obligations and containing such other terms and conditions, in
each case as are satisfactory to the Administrative Agent and the Canadian
Administrative Agent.

"Subsidiary" means as to any Person, any corporation, partnership, limited
liability company or other entity of which more than fifty percent (50%) of the
outstanding Capital Stock having ordinary voting power to elect a majority of
the board of directors or other persons or governing body performing similar
functions of such corporation, partnership, limited liability company or other
entity is at the time directly or indirectly owned or controlled by such Person
and/or one or more Subsidiaries of such Person (irrespective of whether, at the
time, Capital Stock of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency); provided, however,
notwithstanding the foregoing, the terms "Subsidiary" and "Subsidiaries":

(a)       shall include (i) all Subsidiaries of the Original Borrower (other
than those noted in clause (b) below) and (ii) all Subsidiaries of each New
Borrower; and

 

(b)

shall exclude (i) all QSPEs and (ii) all of the Abitibi Entities.

Unless otherwise qualified, references to "Subsidiary" or "Subsidiaries" herein
shall refer to those of the Borrower.

"Subsidiary Borrower" means any Domestic Subsidiary of the Borrower that is
designated as a borrower under this agreement in accordance with the terms of
Section 4.14.

"Subsidiary Guarantors" means each direct or indirect Material Subsidiary of the
Borrower (a) in existence on the Closing Date or (b) which becomes a party to
the Subsidiary Guaranty Agreement in accordance with Section 8.10.

"Subsidiary Guaranty Agreement" means the unconditional guaranty agreement dated
as of the Closing Date executed by the Subsidiary Guarantors in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties,
substantially in the form of Exhibit H, as amended, restated, supplemented or
otherwise modified from time to time.

"Supplemental New Borrower Mortgage" means that certain mortgage, deed of trust,
security agreement, subordination agreement or other real property security
document encumbering a fee interest in the Coosa Pines Mill and a leasehold
interest in the Coosa Pines Real Property or otherwise subordinating the
interests of the Industrial Development Board of the City of Childersburg, a
public corporation duly organized and existing under the laws of the State of
Alabama (such Person, the "Supplemental New Borrower Mortgagor"), in the Coosa
Pines Mill or Coosa Pines Real Property to the interests of the Administrative
Agent and the Canadian Administrative Agent therein, in each case in form and
substance reasonably satisfactory to the Administrative Agent and the Canadian
Administrative Agent and executed by

 

 

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the Supplemental New Borrower Mortgagor in favor of the Administrative Agent,
for the ratable benefit of the Secured Parties and the Canadian Secured Parties,
as amended, restated, supplemented or otherwise modified from time to time.

"Supplemental New Borrower Mortgagor" has the meaning set forth in the
definition of Supplemental New Borrower Mortgage.

"Swingline Commitment" means the lesser of (a) Ten Million Dollars
($10,000,000)and (b) the Commitment.

"Swingline Facility" means the swingline facility established pursuant to
Section 2.2.

"Swingline Lender" means Wachovia in its capacity as swingline lender hereunder.

"Swingline Loan " means any swingline loan made by the Swingline Lender to the
Borrower pursuant to Section 2.2, and all such swingline loans collectively as
the context requires.

"Swingline Note" means a promissory note made by the Borrower in favor of the
Swingline Lender evidencing the Swingline Loans made by the Swingline Lender,
substantially in the form of Exhibit A-2, and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part.

"Swingline Termination Date" means the first to occur of (a) the resignation of
Wachovia as Administrative Agent in accordance with Section 12.6 and (b) the
Maturity Date.

"Synthetic Lease" means any synthetic lease, tax retention operating lease,
off-balance sheet loan or similar off-balance sheet financing product where such
transaction is considered borrowed money indebtedness for tax purposes but is
classified as an Operating Lease in accordance with GAAP.

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

"Termination Event" means except for any such event or condition that could not
reasonably be expected to have a Material Adverse Effect: (a) a "Reportable
Event" described in Section 4043 of ERISA for which the notice requirement has
not been waived by the PBGC, or (b) the withdrawal of the Borrower or any of its
Subsidiaries or any of their ERISA Affiliates from a Pension Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, or (c) the termination of a Pension Plan, the filing of a notice of
intent to terminate a Pension Plan or the treatment of a Pension Plan amendment
as a termination, under Section 4041 of ERISA or similar provision of other
Applicable Law, if the plan assets are not sufficient to pay all plan
liabilities, or (d) the institution of proceedings to terminate, or the
appointment of a trustee with respect to, any Pension Plan by the PBGC or any
other applicable Governmental Authority under other Applicable Law, or (e) any
other event or condition which would constitute grounds under Section 4042(a) of
ERISA or other Applicable

 

 

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Law for the termination of, or the appointment of a trustee to administer, any
Pension Plan, or (f) the imposition of a Lien pursuant to Section 412 of the
Code or Section 302 of ERISA or the provisions of any other Applicable Law, or
(g) the partial or complete withdrawal of the Borrower or any of its
Subsidiaries or of any of their ERISA Affiliates from a Multiemployer Plan if
withdrawal liability is asserted by such plan, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA, or (j) the termination of a Canadian Pension Plan, the
filing of a notice of intent to terminate a Canadian Pension Plan or the
treatment of a Canadian Pension Plan amendment as a termination, under
Applicable Law, if the plan assets are not sufficient to pay all plan
liabilities, or (k) the institution of proceedings to terminate, or the
appointment of a trustee with respect to, any Canadian Pension Plan by any
applicable Governmental Authority under Applicable Law, or (l) any other event
or condition which would constitute grounds under Applicable Law for the
termination of, or the appointment of a trustee to administer, any Canadian
Pension Plan, or (m) the partial or complete withdrawal of the Borrower or any
of its Subsidiaries from a Canadian Multiemployer Plan if withdrawal liability
is asserted by such plan, or (n) any event or condition which results in the
reorganization or insolvency of a Canadian Multiemployer Plan, or (o) any event
or condition which results in the termination of a Canadian Multiemployer Plan
or the institution by any Governmental Authority of proceedings to terminate a
Canadian Multiemployer Plan.

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

" Third Amendment" means that certain Third Amendment and Waiver dated as of
Third Amendment Effective Date by and among the Original Borrower, the
Subsidiary Guarantors and the Administrative Agent (on behalf of itself and the
Lenders party thereto).

"Third Amendment Effective Date" means February 25, 2008.

"UCC" means the Uniform Commercial Code as in effect in the State of New York,
as amended or modified from time to time.

"United Kingdom" means the United Kingdom of Great Britain and Northern Ireland.

 

"United States" means the United States of America.

 

"U.S. Pro Rata Percentage" means, as of any date of determination, the
percentage obtained by the following formula:

 

 

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(a)       the aggregate Commitment applicable to all Lenders as of 11:00 a.m. on
such date of determination

 

divided by

 

(b)       the sum of (i) the aggregate Commitment applicable to all Lenders as
of 11:00 a.m. on such date of determination plus (ii) the aggregate Canadian
Credit Agreement Commitment applicable to all Canadian Lenders as of 11:00 a.m.
on such date of determination.

 

"Value" means, with respect to Inventory, the lower of (a) cost computed (i) on
a last-in first-out basis in accordance with GAAP in the case of Inventory
manufactured at the Original Borrower's Catawba and Calhoun mills and (ii) on a
first-in first-out basis in accordance with GAAP with respect to all other
Inventory or (b) market value; provided that, for purposes of the calculation of
the Borrowing Base, (i) the value of the Inventory shall not include: (A)
intercompany profit or (B) write-ups or write-downs in value with respect to
currency exchange rates and (ii) notwithstanding anything to the contrary
contained in this Agreement, the cost of the Inventory shall be computed in the
same manner and consistent with the most recent appraisal of the Inventory
received and accepted by the Administrative Agent.

"Wachovia" means Wachovia Bank, National Association, a national banking
association, and its successors.

"Wholly-Owned" means, with respect to a Subsidiary, that all of the shares of
Capital Stock of such Subsidiary are, directly or indirectly, owned or
controlled by the Borrower and/or one or more of its Wholly-Owned Subsidiaries
(except for (a) directors' qualifying shares or other shares required by
Applicable Law to be owned by a Person other than the Borrower and (b) the
Exchangeable Shares).

SECTION 1.2       Other Definitions and Provisions. With reference to this
Agreement and each other Loan Document, unless otherwise specified herein or in
such other Loan Document: (a) the definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined, (b) whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms, (c) the words "include", "includes" and "including"
shall be deemed to be followed by the phrase "without limitation", (d) the word
"will" shall be construed to have the same meaning and effect as the word
"shall", (e) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement,
instrument or other document as from time to time amended, supplemented or
otherwise modified (subject to any restrictions on such amendments, supplements
or modifications set forth herein), (f) any reference herein to any Person shall
be construed to include such Person's successors and assigns, (g) the words
"herein", "hereof" and "hereunder", and words of similar import, shall be
construed to refer to this Agreement in its entirety and not to any particular
provision hereof, (h) all references herein to Articles, Sections, Exhibits and
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (i) the words "asset" and "property" shall be
construed to have the same meaning and effect and to refer to any and all
tangible and intangible assets and properties, including cash, securities,
accounts and contract rights, (j) the term "documents" includes any and all
instruments, documents, agreements, certificates, notices, reports, financial
statements

 

 

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and other writings, however evidenced, whether in physical or electronic form,
(k) in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including;" the words "to" and
"until" each mean "to but excluding;" and the word "through" means "to and
including", and (l) Section headings herein and in the other Loan Documents are
included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document.

SECTION 1.3       Accounting Terms. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all
financial data (including financial ratios and other financial calculations)
required to be submitted pursuant to this Agreement shall be prepared in
conformity with GAAP as in effect from time to time, applied on a consistent
basis and in a manner consistent with that used in preparing the audited
financial statements required by Section 7.1(b), except as otherwise
specifically prescribed herein.

SECTION 1.4       UCC Terms. Terms defined in the UCC in effect on the Closing
Date and not otherwise defined herein shall, unless the context otherwise
indicates, have the meanings provided by those definitions. Subject to the
foregoing, the term "UCC" refers, as of any date of determination, to the UCC
then in effect.

SECTION 1.5       Rounding. Any financial ratios required to be maintained
pursuant to this Agreement shall be calculated by dividing the appropriate
component by the other component, carrying the result to one place more than the
number of places by which such ratio is expressed herein and rounding the result
up or down to the nearest number (with a rounding-up if there is no nearest
number).

SECTION 1.6       References to Agreement and Laws. Unless otherwise expressly
provided herein, (a) references to formation documents, governing documents,
agreements (including the Loan Documents) and other contractual instruments
shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such
amendments, restatements, extensions, supplements and other modifications are
not prohibited by any Loan Document; and (b) references to any Applicable Law
shall include all statutory and regulatory provisions consolidating, amending,
replacing, supplementing or interpreting such Applicable Law.

SECTION 1.7       Times of Day. Unless otherwise specified, all references
herein to times of day shall be references to Eastern time (daylight or
standard, as applicable).

SECTION 1.8       Letter of Credit Amounts. Unless otherwise specified, all
references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving
effect to all increases thereof contemplated by such Letter of Credit or the
Letter of Credit Application therefor, whether or not such maximum face amount
is in effect at such time.

SECTION 1.9       Amount of Obligations. Unless otherwise specified, for
purposes of this Agreement, any determination of the amount of any outstanding
Canadian Extensions of Credit (including, without limitation, Canadian Loans) or
Canadian Obligations shall be based upon the Dollar Amount of such outstanding
Canadian Extensions of Credit (including, without

 

 

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limitation, Canadian Loans) or Canadian Obligations. For the purpose of this
Section 1.9, "Dollar Amount" means the amount of Dollars which is equivalent to
the amount so expressed in Canadian Dollars at the most favorable spot exchange
rate reasonably determined by the Administrative Agent to be available to it at
the relevant time and "Canadian Dollar" means, at any time of determination, the
then official currency of Canada.

ARTICLE II

REVOLVING CREDIT FACILITY

SECTION 2.1       Revolving Credit Loans. Subject to the terms and conditions of
this Agreement, and in reliance upon the representations and warranties set
forth herein, each Lender severally agrees to make Revolving Credit Loans to the
Borrower from time to time from the Closing Date through, but not including, the
Maturity Date as requested by the Borrower in accordance with the terms of
Section 2.3; provided, that (a) the aggregate principal amount of all
outstanding Revolving Credit Loans (after giving effect to any amount requested)
shall not exceed the Borrowing Limit and (b) the principal amount of outstanding
Revolving Credit Loans from any Lender shall not at any time exceed such
Lender's Commitment less such Lender's Commitment Percentage of outstanding L/C
Obligations and outstanding Swingline Loans. Each Revolving Credit Loan by a
Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Revolving Credit Loans requested
on such occasion. Subject to the terms and conditions hereof, the Borrower may
borrow, repay and reborrow Revolving Credit Loans hereunder until the Maturity
Date.

 

SECTION 2.2

Swingline Loans.

(a)       Availability . Subject to the terms and conditions of this Agreement,
the Swingline Lender agrees to make Swingline Loans to the Borrower from time to
time from the Closing Date through, but not including, the Swingline Termination
Date; provided, that the aggregate principal amount of all outstanding Swingline
Loans (after giving effect to any amount requested), shall not exceed the lesser
of (i) the Borrowing Limit and (ii) the Swingline Commitment.

 

(b)

Refunding .

(i)        Swingline Loans shall be refunded by the Lenders on demand by the
Swingline Lender. Such refundings shall be made by the Lenders in accordance
with their respective Commitment Percentages and shall thereafter be reflected
as Revolving Credit Loans of the Lenders on the books and records of the
Administrative Agent. Each Lender shall fund its respective Commitment
Percentage of Revolving Credit Loans as required to repay Swingline Loans
outstanding to the Swingline Lender upon demand by the Swingline Lender but in
no event later than 1:00 p.m. on the next succeeding Business Day after such
demand is made. No Lender's obligation to fund its respective Commitment
Percentage of a Swingline Loan shall be affected by any other Lender's failure
to fund its Commitment Percentage of a Swingline Loan, nor shall any Lender's
Commitment Percentage be increased as a result of any such failure of any other
Lender to fund its Commitment Percentage of a Swingline Loan.

 

 

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(ii)       The Borrower shall pay to the Swingline Lender on demand the amount
of such Swingline Loans to the extent amounts received from the Lenders are not
sufficient to repay in full the outstanding Swingline Loans requested or
required to be refunded. In addition, the Borrower hereby authorizes the
Administrative Agent to charge any account maintained by the Borrower with the
Swingline Lender (up to the amount available therein) in order to immediately
pay the Swingline Lender the amount of such Swingline Loans to the extent
amounts received from the Lenders are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded. If any portion
of any such amount paid to the Swingline Lender shall be recovered by or on
behalf of the Borrower from the Swingline Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective Commitment Percentages (unless the amounts so
recovered by or on behalf of the Borrower pertain to a Swingline Loan extended
after the occurrence and during the continuance of an Event of Default of which
the Administrative Agent has received notice in the manner required pursuant to
Section 12.3 and which such Event of Default has not been waived by the Required
Lenders, the Required Agreement Lenders or the Lenders, as applicable).

(iii)      Each Lender acknowledges and agrees that its obligation to refund
Swingline Loans in accordance with the terms of this Section is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in
Article V. Further, each Lender agrees and acknowledges that if prior to the
refunding of any outstanding Swingline Loans pursuant to this Section, one of
the events described in Section 11.1(i) or (j) shall have occurred, each Lender
will, on the date the applicable Revolving Credit Loan would have been made,
purchase an undivided participating interest in the Swingline Loan to be
refunded in an amount equal to its Commitment Percentage of the aggregate amount
of such Swingline Loan. Each Lender will immediately transfer to the Swingline
Lender, in immediately available funds, the amount of its participation and upon
receipt thereof the Swingline Lender will deliver to such Lender a certificate
evidencing such participation dated the date of receipt of such funds and for
such amount. Whenever, at any time after the Swingline Lender has received from
any Lender such Lender's participating interest in a Swingline Loan, the
Swingline Lender receives any payment on account thereof, the Swingline Lender
will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded).

SECTION 2.3       Procedure for Advances of Revolving Credit Loans and Swingline
Loans.

(a)       Requests for Borrowing. The Original Borrower shall give the
Administrative Agent irrevocable prior written notice substantially in the form
of Exhibit B (a "Notice of Borrowing") not later than 12:00 p.m. (i) on the same
Business Day as each Base Rate Loan (including each Swingline Loan) and (ii) at
least three (3) Business Days before each LIBOR Rate Loan, of its intention to
borrow, specifying (A) the date of such borrowing, which shall be a Business
Day, (B) the amount of such borrowing, which shall be, (x) with respect to Base
Rate Loans (other than Swingline Loans) in an aggregate principal amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof, (y) with respect
to LIBOR Rate Loans in an aggregate principal amount of $3,000,000 or a whole
multiple of $1,000,000 in excess thereof and (z) with

 

 

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respect to Swingline Loans in an aggregate principal amount of $100,000 or a
whole multiple of $100,000 in excess thereof, (C) whether such Loan is to be a
Revolving Credit Loan or Swingline Loan, (D) in the case of a Revolving Credit
Loan whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in
the case of a LIBOR Rate Loan, the duration of the Interest Period applicable
thereto. A Notice of Borrowing received after 12:00 p.m. shall be deemed
received on the next Business Day. The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing.

(b)       Disbursement of Revolving Credit and Swingline Loans. Not later than
2:00 p.m. on the proposed borrowing date, (i) each Lender will make available to
the Administrative Agent, for the account of the Original Borrower, at the
Administrative Agent's Office in funds immediately available to the
Administrative Agent, such Lender's Commitment Percentage of the Revolving
Credit Loans to be made on such borrowing date and (ii) the Swingline Lender
will make available to the Administrative Agent, for the account of the Original
Borrower, at the Administrative Agent's Office in funds immediately available to
the Administrative Agent, the Swingline Loans to be made on such borrowing date.
The Borrower hereby irrevocably authorizes the Administrative Agent to disburse
the proceeds of each borrowing requested pursuant to this Section in immediately
available funds by crediting or wiring such proceeds to the deposit account of
the Original Borrower identified in the most recent notice substantially in the
form of Exhibit C (a "Notice of Account Designation") delivered by the Original
Borrower to the Administrative Agent or as may be otherwise agreed upon by the
Original Borrower and the Administrative Agent from time to time. Subject to
Section 4.7 hereof, the Administrative Agent shall not be obligated to disburse
the portion of the proceeds of any Revolving Credit Loan requested pursuant to
this Section to the extent that any Lender has not made available to the
Administrative Agent its Commitment Percentage of such Loan. Revolving Credit
Loans to be made for the purpose of refunding Swingline Loans shall be made by
the Lenders as provided in Section 2.2(b).

 

SECTION 2.4

Repayment and Prepayment of Revolving Credit and Swingline Loans.

(a)       Repayment on Maturity Date. The Borrower hereby agrees to repay the
outstanding principal amount of (i) all Revolving Credit Loans in full on the
Maturity Date, and (ii) all Swingline Loans in accordance with Section 2.2(b),
together, in each case, with all accrued but unpaid interest thereon.

 

(b)

Mandatory Prepayments.

(i)         Borrowing Limit. If at any time the outstanding principal amount of
all Revolving Credit Loans plus the sum of all outstanding Swingline Loans and
L/C Obligations exceeds the Borrowing Limit (including, without limitation,
(A) upon a reduction of the Overadvance Amount pursuant to the definition
thereof or Section 8.2(b) or otherwise, (B) pursuant to Section 8.2(b) or (C) as
otherwise required by the terms of this Agreement), the Borrower agrees to
prepay (A) if such excess results from a change to the Asset Coverage Amount,
within three (3) Business Days following the delivery of the applicable
financial statements resulting in such change or (B) in any other circumstance,
immediately upon notice from the Administrative Agent, by payment to the
Administrative Agent for the account of the Lenders, Extensions of Credit in an

 

 

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amount equal to such excess with each such repayment applied first to the
principal amount of outstanding Swingline Loans, second to the principal amount
of outstanding Revolving Credit Loans and third, with respect to any Letters of
Credit then outstanding, a payment of cash collateral into a cash collateral
account opened by the Administrative Agent, for the benefit of the Lenders in an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit (such cash collateral to be applied in accordance with Section
11.2(b)).

(ii)       Excess L/C Obligations. If at any time the outstanding amount of all
L/C Obligations exceeds the L/C Commitment, then, in each such case, the
Borrower shall promptly make a payment of cash collateral into a cash collateral
account opened by the Administrative Agent, for the benefit of itself and the
Lenders, in an amount equal to the aggregate then undrawn and unexpired amount
of such Letters of Credit (such cash collateral to be applied in accordance with
Section 11.2(b)).

(iii)      Additional Mandatory Prepayments. In addition to the foregoing, the
Borrower shall prepay the Loans in accordance with Section 8.2(b).

(c)       Optional Prepayments. The Borrower may at any time and from time to
time prepay Revolving Credit Loans and Swingline Loans, in whole or in part,
with irrevocable prior written notice to the Administrative Agent substantially
in the form of Exhibit D (a "Notice of Prepayment") given not later than 12:00
p.m. (i) on the same Business Day as the prepayment of each Base Rate Loan and
each Swingline Loan and (ii) at least three (3) Business Days before the
prepayment of each LIBOR Rate Loan, specifying the date and amount of prepayment
and whether the prepayment is of LIBOR Rate Loans, Base Rate Loans, Swingline
Loans or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of such notice, the Administrative Agent shall
promptly notify each Lender. If any such notice is given, the amount specified
in such notice shall be due and payable on the date set forth in such notice.
Partial prepayments shall be in an aggregate amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof with respect to Base Rate Loans (other
than Swingline Loans), $3,000,000 or a whole multiple of $1,000,000 in excess
thereof with respect to LIBOR Rate Loans and $100,000 or a whole multiple of
$100,000 in excess thereof with respect to Swingline Loans. A Notice of
Prepayment received after 12:00 p.m. shall be deemed received on the next
Business Day.

(d)       Limitation on Prepayment of LIBOR Rate Loans. The Borrower may not
prepay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such prepayment is accompanied by any amount
required to be paid pursuant to Section 4.9 hereof.

(e)       Hedging Agreements. No repayment or prepayment pursuant to this
Section shall affect any of the Borrower's obligations under any Hedging
Agreement.

 

SECTION 2.5

Permanent Reduction of the Commitment.

(a)       Voluntary Reduction. The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days prior written notice to
the Administrative

 

 

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Agent, to permanently reduce, without premium or penalty, (i) the entire
Commitment at any time or (ii) portions of the Commitment, from time to time, in
an aggregate principal amount not less than $5,000,000 or any whole multiple of
$5,000,000 in excess thereof. Any reduction of the Commitment shall be applied
to the Commitment of each Lender according to its Commitment Percentage. All
commitment fees accrued until the effective date of any permanent reduction of
the Commitment shall be paid on the effective date of such permanent reduction.

(b)       Mandatory Reduction. The Borrower shall permanently reduce the
Commitment, without duplication, (i) as and when the Overadvance Amount is
reduced pursuant to, and in accordance with, the definition of "Overadvance
Amount" (such reduction to be made on a dollar-for-dollar basis) and (ii)
pursuant to, and in accordance with, Section 8.2(b) (including, without
limitation, in connection with the reduction of the Overadvance Amount in
accordance with Section 8.2(b)). Any reduction of the Commitment shall be
applied to the Commitment of each Lender according to its Commitment Percentage.
All commitment fees accrued until the effective date of any permanent reduction
of the Commitment shall be paid on the effective date of such permanent
reduction.

(c)       Corresponding Payment. Each permanent reduction permitted or required
pursuant to this Section or Section 8.2(b) shall be accompanied by a payment of
principal sufficient to reduce the aggregate outstanding Revolving Credit Loans,
Swingline Loans and L/C Obligations, as applicable, after such reduction to the
Commitment as so reduced and if the Commitment as so reduced is less than the
aggregate amount of all outstanding Letters of Credit, the Borrower shall be
required to deposit cash collateral in a cash collateral account opened by the
Administrative Agent in an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Such cash collateral shall be
applied in accordance with Section 11.2(b). Any reduction of the Commitment to
zero shall be accompanied by payment of all outstanding Revolving Credit Loans
and Swingline Loans (and furnishing of cash collateral for all L/C Obligations)
and shall result in the termination of the Commitment and the Credit Facility.
Such cash collateral shall be applied in accordance with Section 11.2(b). If the
reduction of the Commitment requires the repayment of any LIBOR Rate Loan, such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 4.9 hereof.

SECTION 2.6       Termination of Credit Facility. The Credit Facility shall
terminate on the Maturity Date.

ARTICLE III

LETTER OF CREDIT FACILITY

SECTION 3.1       L/C Commitment. Subject to the terms and conditions hereof,
each Issuing Lender, in reliance on the agreements of the other Lenders set
forth in Section 3.4(a), agrees to issue standby letters of credit ("Letters of
Credit") for the account of the Borrower on any Business Day from the Closing
Date to but not including the fifth (5th) Business Day prior to the Maturity
Date in such form as may be approved from time to time by the applicable Issuing
Lender; provided, that no Issuing Lender shall have any obligation to issue any
Letter of Credit if, after giving effect to such issuance, (a) the aggregate
amount of L/C Obligations would exceed the L/C Commitment or (b) the aggregate
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Borrowing Limit. Each Letter of Credit shall (i) be denominated in Dollars in a
minimum amount of $100,000 (or such lesser amount as agreed to by the applicable
Issuing Lender), (ii) be a standby letter of credit issued to support
obligations of the Borrower or any of its Subsidiaries, contingent or otherwise,
(iii) expire on a date that is no later than the earlier of (A) twelve (12) or
thirteen (13) months (as requested by the Original Borrower) after the date of
issuance or last renewal of such Letter of Credit, and (B) the fifth (5th)
Business Day prior to the Maturity Date and (iv) be subject to ISP98 and, to the
extent not inconsistent therewith, the laws of the State of New York. No Issuing
Lender shall at any time be obligated to issue any Letter of Credit hereunder if
such issuance would conflict with, or cause such Issuing Lender or any L/C
Participant to exceed any limits imposed by, any Applicable Law. References
herein to "issue" and derivations thereof with respect to Letters of Credit
shall also include extensions or modifications of any outstanding Letters of
Credit, unless the context otherwise requires. As of the Closing Date, each of
the Existing Letters of Credit shall constitute, for all purposes of this
Agreement and the other Loan Documents, a Letter of Credit issued and
outstanding hereunder.

SECTION 3.2       Procedure for Issuance of Letters of Credit. The Borrower may
from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at such Issuing Lender's Lending Office and to
the Administrative Agent at the Administrative Agent's Office a Letter of Credit
Application therefor, completed to the reasonable satisfaction of the applicable
Issuing Lender and the Administrative Agent, and such other certificates,
documents and other papers and information as such Issuing Lender and the
Administrative Agent may reasonably request (the "L/C Supporting
Documentation"). Upon receipt of any Letter of Credit Application and the L/C
Supporting Documentation, the applicable Issuing Lender shall process such
Letter of Credit Application and the L/C Supporting Documentation delivered to
it in connection therewith in accordance with its customary procedures and
shall, after approving the same and receiving confirmation from the
Administrative Agent that sufficient availability exists under the Credit
Facility for the issuance of such Letter of Credit, subject to Section 3.1 and
Article V, promptly issue the Letter of Credit requested thereby (but in no
event shall the applicable Issuing Lender be required to issue any Letter of
Credit earlier than three (3) Business Days after its receipt of the Letter of
Credit Application therefor and the L/C Supporting Documentation relating
thereto) by issuing the original of such Letter of Credit to the beneficiary
thereof or as otherwise may be agreed by the applicable Issuing Lender and the
Original Borrower. The applicable Issuing Lender shall promptly furnish to the
Original Borrower and the Administrative Agent a copy of such Letter of Credit
and the Administrative Agent shall promptly notify each Lender of the issuance
of such Letter of Credit and, upon request by any Lender, furnish to such Lender
a copy of such Letter of Credit and the amount of such Lender's participation
therein.

 

SECTION 3.3

Commissions and Other Charges.

(a)        Letter of Credit Commissions. The Borrower shall pay to the
Administrative Agent, for the account of the each applicable Issuing Lender and
the L/C Participants, a letter of credit commission with respect to each Letter
of Credit in an amount equal to the face amount of such Letter of Credit (as
such amount may be reduced by (i) any permanent reduction of such Letter of
Credit or (ii) any amount which is drawn, reimbursed and no longer available
under such Letter of Credit) multiplied by the Applicable Margin with respect to
LIBOR Rate Loans (determined on a per annum basis). Such commission shall be
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last Business Day of each calendar quarter, on the Maturity Date and thereafter
on demand of the Administrative Agent. The Administrative Agent shall, promptly
following its receipt thereof, distribute to each applicable Issuing Lender and
the L/C Participants all commissions received pursuant to this Section in
accordance with their respective Commitment Percentages.

(b)       Issuance Fee. In addition to the foregoing commission, the Borrower
shall pay to the Administrative Agent, for the account of each applicable
Issuing Lender, an issuance fee with respect to each Letter of Credit issued by
such Issuing Lender in an amount equal to the face amount of such Letter of
Credit multiplied by one-eighth of one percent (0.125%) per annum. Such issuance
fee shall be payable quarterly in arrears on the last Business Day of each
calendar quarter commencing with the first such date to occur after the issuance
of such Letter of Credit, on the Maturity Date and thereafter on demand of the
applicable Issuing Lender.

(c)       Other Costs . In addition to the foregoing fees and commissions, the
Borrower shall pay or reimburse each Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by such Issuing Lender
in issuing, effecting payment under, amending or otherwise administering any
Letter of Credit.

 

SECTION 3.4

L/C Participations.

(a)       Each Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce such Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from such Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Commitment Percentage in
such Issuing Lender's obligations and rights under and in respect of each Letter
of Credit issued by such Issuing Lender hereunder and the amount of each draft
paid by such Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with each Issuing Lender that, if a draft is paid under any
Letter of Credit issued by such Issuing Lender for which such Issuing Lender is
not reimbursed in full by the Borrower through a Revolving Credit Loan or
otherwise in accordance with the terms of this Agreement, such L/C Participant
shall pay to such Issuing Lender upon demand at such Issuing Lender's Lending
Office an amount equal to such L/C Participant's Commitment Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.

(b)       Upon becoming aware of any amount required to be paid by any L/C
Participant to the applicable Issuing Lender pursuant to Section 3.4(a) in
respect of any unreimbursed portion of any payment made by such Issuing Lender
under any Letter of Credit issued by it, such Issuing Lender shall notify the
Administrative Agent and each L/C Participant of the amount and due date of such
required payment and such L/C Participant shall pay to such Issuing Lender the
amount specified on the applicable due date. If any such amount is paid to such
Issuing Lender after the date such payment is due, such L/C Participant shall
pay to such Issuing Lender on demand, in addition to such amount, the product of
(i) such amount, multiplied by (ii) the daily average Federal Funds Rate as
determined by the Administrative Agent during the period from and including the
date such payment is due to the date on which such payment is immediately
available to such Issuing Lender, multiplied by (iii) a fraction, the numerator
of which is the number of days that elapse during such period and the
denominator of which is 360.

 

 

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A certificate of the applicable Issuing Lender with respect to any amounts owing
under this Section shall be conclusive in the absence of manifest error. With
respect to payment to an Issuing Lender of the unreimbursed amounts described in
this Section, if the L/C Participants receive notice that any such payment is
due (A) prior to 2:00 p.m. on any Business Day, such payment shall be due that
Business Day, and (B) after 2:00 p.m. on any Business Day, such payment shall be
due on the following Business Day.

(c)       Whenever, at any time after the applicable Issuing Lender has made
payment under any Letter of Credit and has received from any L/C Participant its
Commitment Percentage of such payment in accordance with this Section, such
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrower or otherwise), or any payment of interest on account
thereof, such Issuing Lender will distribute to such L/C Participant its pro
rata share thereof; provided, that in the event that any such payment received
by such Issuing Lender shall be required to be returned by such Issuing Lender,
such L/C Participant shall return to such Issuing Lender the portion thereof
previously distributed by such Issuing Lender to it.

SECTION 3.5       Reimbursement Obligation of the Borrower. In the event of any
drawing under any Letter of Credit, the Borrower agrees to reimburse (either
with the proceeds of a Revolving Credit Loan as provided for in this Section or
with funds from other sources), in same day funds, the applicable Issuing Lender
on each date on which such Issuing Lender notifies the Original Borrower of the
date and amount of a draft paid under any Letter of Credit for the amount of (a)
such draft so paid and (b) any amounts referred to in Section 3.3(c) incurred by
such Issuing Lender in connection with such payment. The applicable Issuing
Lender shall promptly deliver written notice of any drawing under any Letter of
Credit issued by such Issuing Lender to the Administrative Agent and the
Original Borrower. Unless the Borrower shall immediately notify the applicable
Issuing Lender that the Borrower intends to reimburse such Issuing Lender for
such drawing from other sources or funds, the Borrower shall be deemed to have
timely given a Notice of Borrowing to the Administrative Agent requesting that
the Lenders make a Revolving Credit Loan bearing interest at the Base Rate on
such date in the amount of (a) such draft so paid and (b) any amounts referred
to in Section 3.3(c) incurred by such Issuing Lender in connection with such
payment, and the Lenders shall make a Revolving Credit Loan bearing interest at
the Base Rate in such amount, the proceeds of which shall be applied to
reimburse such Issuing Lender for the amount of the related drawing and costs
and expenses. Each Lender acknowledges and agrees that its obligation to fund a
Revolving Credit Loan (or a Special Agent Advance, as the case may be) in
accordance with this Section to reimburse the applicable Issuing Lender for any
draft paid under a Letter of Credit is absolute and unconditional and shall not
be affected by any circumstance whatsoever, including, without limitation,
non-satisfaction of the conditions set forth in Section 2.3(a) or Article V. If
the Borrower has elected to pay the amount of such drawing with funds from other
sources and shall fail to reimburse the applicable Issuing Lender as provided
above, the unreimbursed amount of such drawing shall bear interest at the rate
which would be payable on any outstanding Base Rate Loans which were then
overdue from the date such amounts become payable (whether at stated maturity,
by acceleration or otherwise) until payment in full.

SECTION 3.6       Obligations Absolute. The Borrower's obligations under this
Article III (including, without limitation, the Reimbursement Obligation) shall
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unconditional under any and all circumstances and irrespective of any set-off,
counterclaim or defense to payment which the Borrower may have or have had
against any Issuing Lender or any beneficiary of a Letter of Credit or any other
Person. The Borrower also agrees that no Issuing Lender nor any L/C Participant
shall be responsible for, and the Borrower's Reimbursement Obligation under
Section 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. No Issuing Lender shall be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by the applicable Issuing Lender's gross
negligence or willful misconduct, as determined by a court of competent
jurisdiction by final nonappealable judgment. The Borrower agrees that any
action taken or omitted by the applicable Issuing Lender under or in connection
with any Letter of Credit or the related drafts or documents, if done in the
absence of gross negligence or willful misconduct shall be binding on the
Borrower and shall not result in any liability of such Issuing Lender or any L/C
Participant to the Borrower. The responsibility of the applicable Issuing Lender
to the Borrower in connection with any draft presented for payment under any
Letter of Credit shall, in addition to any payment obligation expressly provided
for in such Letter of Credit, be limited to determining that the documents
(including each draft) delivered under such Letter of Credit in connection with
such presentment are in conformity with such Letter of Credit.

SECTION 3.7       Effect of Letter of Credit Application. To the extent that any
provision of any Letter of Credit Application or L/C Supporting Documentation
related to any Letter of Credit is inconsistent with the provisions of this
Article III, the provisions of this Article III shall apply.

 

ARTICLE IV

GENERAL LOAN PROVISIONS

 

SECTION 4.1

Interest .

(a)       Interest Rate Options. Subject to the provisions of this Section, at
the election of the Original Borrower, (i) Revolving Credit Loans shall bear
interest at (A) the Base Rate plus the Applicable Margin or (B) the LIBOR Rate
plus the Applicable Margin and (ii) Swingline Loans shall bear interest at the
Base Rate plus the Applicable Margin. The Original Borrower shall select the
rate of interest and Interest Period, if any, applicable to any Revolving Credit
Loan at the time a Notice of Borrowing is given pursuant to Section 2.3 or at
the time a Notice of Conversion/Continuation is given pursuant to Section 4.2.
Any Revolving Credit Loan or any portion thereof as to which the Original
Borrower has not duly specified an interest rate as provided herein shall be
deemed a Base Rate Loan.

 

 

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(b)       Interest Periods. In connection with each LIBOR Rate Loan, the
Original Borrower, by giving notice at the times described in Section 2.3 or
4.2, as applicable, shall elect an interest period (each, an "Interest Period")
to be applicable to such Revolving Credit Loan, which Interest Period shall be a
period of one (1), two (2), three (3), or six (6) months (provided, that prior
to the Conversion Date, Interest Periods of six (6) months shall only be
permitted with the consent of all Lenders); provided that:

(i)        the Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the immediately preceding Interest Period expires;

(ii)       if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided, that if any Interest Period with respect to a LIBOR Rate Loan
would otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the immediately preceding Business Day;

(iii)      any Interest Period with respect to a LIBOR Rate Loan that begins on
the last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the relevant calendar month at the
end of such Interest Period;

 

(iv)

no Interest Period shall extend beyond the Maturity Date; and

 

(v)

there shall be no more than eight (8) Interest Periods in effect at any time.

(c)        Default Rate. Subject to Section 11.3, (i) immediately upon the
occurrence and during the continuance of an Event of Default under Section
11.1(a), (b), (i) or (j), or (ii) at the election of the Required Agreement
Lenders, upon the occurrence and during the continuance of any other Event of
Default, (A) the Borrower shall no longer have the option to request LIBOR Rate
Loans, Swingline Loans or Letters of Credit, (B) all outstanding LIBOR Rate
Loans shall bear interest at a rate per annum of two percent (2%) in excess of
the rate then applicable to LIBOR Rate Loans until the end of the applicable
Interest Period and thereafter at a rate equal to two percent (2%) in excess of
the rate then applicable to Base Rate Loans, and (C) all outstanding Base Rate
Loans and other Obligations arising hereunder or under any other Loan Document
shall bear interest at a rate per annum equal to two percent (2%) in excess of
the rate then applicable to Base Rate Loans. Interest shall continue to accrue
on the Obligations after the filing by or against the Borrower of any petition
seeking any relief in bankruptcy or under any act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign.

(d)       Interest Payment and Computation. Interest on each Base Rate Loan
shall be due and payable in arrears on the last Business Day of each calendar
quarter commencing September 30, 2006; and interest on each LIBOR Rate Loan
shall be due and payable on the last day of each Interest Period applicable
thereto, and if such Interest Period extends over three (3) months, at the end
of each three (3) month interval during such Interest Period. Interest on LIBOR
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Loans and all fees payable hereunder shall be computed on the basis of a 360-day
year and assessed for the actual number of days elapsed and interest on Base
Rate Loans shall be computed on the basis of a 365/366-day year and assessed for
the actual number of days elapsed.

(e)       Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest under this Agreement charged or
collected pursuant to the terms of this Agreement exceed the highest rate
permissible under any Applicable Law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. In the event that such
a court determines that the Lenders have charged or received interest hereunder
in excess of the highest applicable rate, the rate in effect hereunder shall
automatically be reduced to the maximum rate permitted by Applicable Law and the
Lenders shall at the Administrative Agent's option (i) promptly refund to the
Original Borrower any interest received by the Lenders in excess of the maximum
lawful rate or (ii) apply such excess to the principal balance of the
Obligations on a pro rata basis. It is the intent hereof that the Borrower not
pay or contract to pay, and that neither the Administrative Agent nor any Lender
receive or contract to receive, directly or indirectly in any manner whatsoever,
interest in excess of that which may be paid by the Borrower under Applicable
Law.

SECTION 4.2       Notice and Manner of Conversion or Continuation of Loans.
Provided that no Default or Event of Default has occurred and is then
continuing, the Borrower shall have the option to (a) convert all or any portion
of any outstanding Base Rate Loans (other than Swingline Loans) in a principal
amount equal to $3,000,000 or any whole multiple of $1,000,000 in excess thereof
into one or more LIBOR Rate Loans and (b) upon the expiration of any Interest
Period, (i) convert all or any part of its outstanding LIBOR Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof into Base Rate Loans (other than Swingline Loans) or (ii) continue such
LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower desires to convert
or continue Revolving Credit Loans as provided above, the Original Borrower
shall give the Administrative Agent irrevocable prior written notice in the form
attached as Exhibit E (a "Notice of Conversion/Continuation") not later than
12:00 p.m. three (3) Business Days before the day on which a proposed conversion
or continuation of such Loan is to be effective specifying (A) the Loans to be
converted or continued, and, in the case of any LIBOR Rate Loan to be converted
or continued, the last day of the Interest Period therefor, (B) the effective
date of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate Loan.
The Administrative Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.

 

SECTION 4.3

Fees.

(a)       Commitment Fee. The Borrower shall pay to the Administrative Agent,
for the account of the Lenders, a non-refundable commitment fee at a rate per
annum equal to 1.00% on the average daily unused portion of the Commitment as in
effect from time to time during the period commencing on the Eighth Amendment
Effective Date and ending on the Maturity Date; provided, that the amount of
outstanding Swingline Loans shall not be considered usage of the Commitment for
the purpose of calculating such commitment fee. The commitment fee shall be
payable for each calendar quarter in arrears on the last Business Day of such
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during the term of this Agreement commencing with the calendar quarter ending
December 31, 2008 and ending on the Maturity Date. Such commitment fee shall be
distributed by the Administrative Agent to the Lenders pro rata in accordance
with the Lenders' respective Commitment Percentages.

(b)       Duration Fee. The Borrower shall pay to the Administrative Agent, for
the account of the Eighth Amendment Consenting Lenders, a non-refundable
duration fee in the amounts and on the dates set forth below:

 

Date of Payment

Amount of Duration Fee

March 15, 2009

0.50% on the Commitment of each Eighth Amendment Consenting Lender as in effect
on March 15, 2009

April 14, 2009

0.50% on the Commitment of each Eighth Amendment Consenting Lender as in effect
on April 14, 2009

 

Such duration fee shall be distributed by the Administrative Agent to the Eighth
Amendment Consenting Lenders.

(c)       Other Fees. The Borrower agrees to pay any fees (and other expenses)
as set forth in the Fee Letter and the Eighth Amendment Fee Letter.

SECTION 4.4       Manner of Payment. Each payment by the Borrower on account of
the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement shall be made not later than 2:00 p.m. on the date specified for
payment under this Agreement to the Administrative Agent at the Administrative
Agent's Office for the account of the Lenders (other than as set forth below)
pro rata in accordance with their respective Commitment Percentages, (except as
specified below), in Dollars, in immediately available funds and shall be made
without any set-off, counterclaim or deduction whatsoever. Any payment received
after such time but before 3:00 p.m. on such day shall be deemed a payment on
such date for the purposes of Section 11.1, but for all other purposes shall be
deemed to have been made on the next succeeding Business Day. Any payment
received after 3:00 p.m. shall be deemed to have been made on the next
succeeding Business Day for all purposes. Upon receipt by the Administrative
Agent of each such payment, the Administrative Agent shall distribute to each
Lender at its Lending Office its pro rata share of such payment in accordance
with such Lender's Commitment Percentage, (except as specified below) and shall
wire advice of the amount of such credit to each Lender. Each payment to the
Administrative Agent of the applicable Issuing Lender's fees or L/C
Participants' commissions shall be made in like manner, but for the account of
the applicable Issuing Lender or the L/C Participants, as the case may be. Each
payment to the Administrative Agent of Administrative Agent's fees or expenses
shall be made for the account of the Administrative Agent and any amount payable
to any Lender under Sections 4.9, 4.10, 4.11 or 13.3 shall be paid to the
Administrative Agent for the account of the applicable Lender. Subject to
Section 4.1(b)(ii), if any payment under this Agreement shall be specified to be
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day which is not a Business Day, it shall be made on the next succeeding day
which is a Business Day and such extension of time shall in such case be
included in computing any interest if payable along with such payment.

 

SECTION 4.5

Evidence of Indebtedness.

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

(b)       Participations. In addition to the accounts and records referred to in
subsection (a), each Lender and the Administrative Agent shall maintain in
accordance with its usual practice accounts or records evidencing the purchases
and sales by such Lender of participations in Letters of Credit and Swingline
Loans. In the event of any conflict between the accounts and records maintained
by the Administrative Agent and the accounts and records of any Lender in
respect of such matters, the accounts and records of the Administrative Agent
shall control in the absence of manifest error.

SECTION 4.6       Adjustments. If any Lender shall, by exercising any right of
setoff or counterclaim or otherwise, obtain payment in respect of any principal
of or interest on any of its Loans or other obligations hereunder resulting in
such Lender's receiving payment of a proportion of the aggregate amount of its
Loans and accrued interest thereon or other such obligations (other than
pursuant to Sections 4.9, 4.10, 4.11 or 13.3 hereof) greater than its pro rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (a) notify the Administrative Agent of such fact, and (b)
purchase (for cash at face value) participations in the Loans and such other
obligations of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them;
provided that:

(i)        if any such participations are purchased and all or any portion of
the payment giving rise thereto is recovered, such participations shall be
rescinded and the purchase price restored to the extent of such recovery,
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(ii)       the provisions of this paragraph shall not be construed to apply to
(A) any payment made by the Borrower pursuant to and in accordance with the
express terms of this Agreement or (B) any payment obtained by a Lender as
consideration for the assignment of or sale of a participation in any of its
Loans or participations in Swingline Loans and Letters of Credit to any assignee
or participant, other than to the Borrower or any of its Subsidiaries (as to
which the provisions of this paragraph shall apply).

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

SECTION 4.7       Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Revolving Credit Loans and issue or participate
in Swingline Loans or Letters of Credit are several and are not joint or joint
and several. Unless the Administrative Agent shall have received notice from a
Lender prior to a proposed borrowing date with respect to a LIBOR Rate Loan or
prior to 12:00 noon on a proposed borrowing date with respect to a Base Rate
Loan that such Lender will not make available to the Administrative Agent such
Lender's ratable portion of the amount to be borrowed on such date (which notice
shall not release such Lender of its obligations hereunder), the Administrative
Agent may assume that such Lender has made such portion available to the
Administrative Agent on the proposed borrowing date in accordance with Sections
2.3(b), and the Administrative Agent may (but shall not be required to), in
reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount not made available by such Lender in accordance with the terms
hereof, multiplied by (b) the daily average Federal Funds Rate during such
period as determined by the Administrative Agent, multiplied by (c) a fraction,
the numerator of which is the number of days that elapse from and including such
borrowing date to the date on which such amount not made available by such
Lender in accordance with the terms hereof shall have become immediately
available to the Administrative Agent, and the denominator of which is 360. A
certificate of the Administrative Agent with respect to any amounts owing under
this Section shall be conclusive, absent manifest error. If such Lender's
Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days after such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrower. The failure of any Lender to make available its Commitment Percentage
of any Revolving Credit Loan requested by the Borrower shall not relieve it or
any other Lender of its obligation, if any, hereunder to make its Commitment
Percentage of such Revolving Credit Loan available on the borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Revolving Credit Loan available on the borrowing
date.

 

 

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SECTION 4.8

Changed Circumstances.

(a)       Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with the Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via the Reuters Page
LIBOR01 (or any successor page) or offered to the Administrative Agent or such
Lender for such Interest Period, then the Administrative Agent shall forthwith
give notice thereof to the Original Borrower. Thereafter, until the
Administrative Agent notifies the Original Borrower that such circumstances no
longer exist, the obligation of the Lenders to make LIBOR Rate Loans and the
right of the Borrower to convert any Loan to or continue any Loan as a LIBOR
Rate Loan shall be suspended, and the Borrower shall repay in full (or cause to
be repaid in full) the then outstanding principal amount of each such LIBOR Rate
Loan together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.

(b)       Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any of the Lenders (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Administrative Agent and the Administrative Agent shall promptly give notice
to the Original Borrower and the other Lenders. Thereafter, until the
Administrative Agent notifies the Original Borrower that such circumstances no
longer exist, (a) the obligations of the Lenders to make LIBOR Rate Loans and
the right of the Borrower to convert any Loan or continue any Loan as a LIBOR
Rate Loan shall be suspended and thereafter the Borrower may select only Base
Rate Loans hereunder, and (b) if any of the Lenders may not lawfully continue to
maintain a LIBOR Rate Loan to the end of the then current Interest Period
applicable thereto as a LIBOR Rate Loan, the applicable LIBOR Rate Loan shall
immediately be converted to a Base Rate Loan for the remainder of such Interest
Period.

SECTION 4.9       Indemnity. The Borrower hereby indemnifies each of the Lenders
against any loss or expense which may arise or be attributable to each Lender's
obtaining, liquidating or employing deposits or other funds acquired to effect,
fund or maintain any Loan (a) as a consequence of any failure by the Borrower to
make any payment when due of any amount due hereunder in connection with a LIBOR
Rate Loan, (b) due to any failure of the Borrower to borrow, continue or convert
on a date specified therefor in a Notice of Borrowing or Notice of
Conversion/Continuation or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's sole discretion, based upon the assumption that such Lender
funded its Commitment Percentage of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such
Lender deems appropriate and practical. A certificate of such Lender setting
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for determining such amount or amounts necessary to compensate such Lender shall
be forwarded to the Original Borrower through the Administrative Agent and shall
be conclusively presumed to be correct save for manifest error.

 

SECTION 4.10

Increased Costs.

 

(a)

Increased Costs Generally. If any Change in Law shall:

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

(ii)       subject any Lender or any Issuing Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit, any
participation in a Letter of Credit or any LIBOR Rate Loan made by it, or change
the basis of taxation of payments to such Lender or such Issuing Lender in
respect thereof (except for Indemnified Taxes or Other Taxes covered by Section
4.11 and the imposition of, or any change in the rate of any Excluded Taxes
payable by such Lender or such Issuing Lender); or

(iii)      impose on any Lender or any Issuing Lender or the London interbank
market any other condition, cost or expense affecting this Agreement or LIBOR
Rate Loans made by such Lender or any Letter of Credit or participation therein;

and the result of any of the foregoing shall be to increase the cost to such
Lender of making, converting into or maintaining any LIBOR Rate Loan (or of
maintaining its obligation to make any such Loan), or to increase the cost to
such Lender or such Issuing Lender of participating in, issuing or maintaining
any Letter of Credit (or of maintaining its obligation to participate in or to
issue any Letter of Credit), or to reduce the amount of any sum received or
receivable by such Lender or such Issuing Lender hereunder (whether of
principal, interest or any other amount) then, upon written request of such
Lender or such Issuing Lender, the Borrower shall promptly pay to any such
Lender or such Issuing Lender, as the case may be, such additional amount or
amounts as will compensate such Lender or such Issuing Lender, as the case may
be, for such additional costs incurred or reduction suffered.

(b)       Capital Requirements. If any Lender or any Issuing Lender determines
that any Change in Law affecting such Lender or such Issuing Lender or any
lending office of such Lender or such Issuing Lender or such Lender's or such
Issuing Lender's holding company, if any, regarding capital requirements has or
would have the effect of reducing the rate of return on such Lender's or such
Issuing Lender's capital or on the capital of such Lender's or such Issuing
Lender's holding company, if any, as a consequence of this Agreement, the
Commitment of such Lender or the Loans made by, or participations in Letters of
Credit held by, such Lender, or the Letters of Credit issued by such Issuing
Lender, to a level below that which such Lender or such Issuing Lender or such
Lender's or such Issuing Lender's holding company could have achieved but for
such Change in Law (taking into consideration such Lender's or such Issuing
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policies and the policies of such Lender's or such Issuing Lender's holding
company with respect to capital adequacy), then from time to time upon written
request of such Lender or such Issuing Lender the Borrower shall promptly pay to
such Lender or such Issuing Lender, as the case may be, such additional amount
or amounts as will compensate such Lender or such Issuing Lender or such
Lender's or such Issuing Lender's holding company for any such reduction
suffered.

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

(d)       Delay in Requests. Failure or delay on the part of any Lender or any
Issuing Lender to demand compensation pursuant to this Section shall not
constitute a waiver of such Lender's or such Issuing Lender's right to demand
such compensation; provided that the Borrower shall not be required to
compensate a Lender or an Issuing Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than nine (9) months prior
to the date that such Lender or such Issuing Lender, as the case may be,
notifies the Original Borrower of the Change in Law giving rise to such
increased costs or reductions and of such Lender's or such Issuing Lender's
intention to claim compensation therefor (except that if the Change in Law
giving rise to such increased costs or reductions is retroactive, then the
nine-month period referred to above shall be extended to include the period of
retroactive effect thereof).

 

SECTION 4.11

Taxes.

(a)       Payments Free of Taxes. Any and all payments by or on account of any
obligation of the Borrower hereunder or under any other Loan Document shall be
made free and clear of and without reduction or withholding for any Indemnified
Taxes or Other Taxes; provided that if the Borrower shall be required by
Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from
such payments, then (i) the sum payable shall be increased as necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section) the Administrative Agent, Lender or
Issuing Lender, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) the Borrower shall make
such deductions and (iii) the Borrower shall timely pay the full amount deducted
to the relevant Governmental Authority in accordance with Applicable Law.

(b)       Payment of Other Taxes by the Borrower. Without limiting the
provisions of paragraph (a) above, the Borrower shall timely pay any Other Taxes
to the relevant Governmental Authority in accordance with Applicable Law.

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

(d)       Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Original Borrower shall deliver to the Administrative Agent the original or
a certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.

(e)       Status of Lenders. Any Foreign Lender that is entitled to an exemption
from or reduction of withholding tax under the law of the jurisdiction in which
the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Original Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by Applicable Law or
reasonably requested by the Original Borrower or the Administrative Agent, such
properly completed and executed documentation prescribed by Applicable Law as
will permit such payments to be made without withholding or at a reduced rate of
withholding. In addition, any Lender, if requested by the Original Borrower or
the Administrative Agent, shall deliver such other documentation prescribed by
Applicable Law or reasonably requested by the Original Borrower or the
Administrative Agent as will enable the Borrower or the Administrative Agent to
determine whether or not such Lender is subject to backup withholding or
information reporting requirements. Without limiting the generality of the
foregoing, in the event that the Borrower is a resident for tax purposes in the
United States, any Foreign Lender shall deliver to the Original Borrower and the
Administrative Agent (in such number of copies as shall be requested by the
recipient) on or prior to the date on which such Foreign Lender becomes a Lender
under this Agreement (and from time to time thereafter upon the request of the
Original Borrower or the Administrative Agent, but only if such Foreign Lender
is legally entitled to do so), whichever of the following is applicable:

(i)        duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States is a party,

 

(ii)

duly completed copies of Internal Revenue Service Form W-8ECI,

(iii)      in the case of a Foreign Lender claiming the benefits of the
exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank" within
the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder"
of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a
"controlled foreign corporation" described in section

 

 

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881(c)(3)(C) of the Code and (y) duly completed copies of Internal Revenue
Service Form W-8BEN, or

(iv)      any other form prescribed by Applicable Law as a basis for claiming
exemption from or a reduction in United States Federal withholding tax duly
completed together with such supplementary documentation as may be prescribed by
Applicable Law to permit the Borrower to determine the withholding or deduction
required to be made.

(f)        Treatment of Certain Refunds. If the Administrative Agent, a Lender
or an Issuing Lender determines, in its sole discretion, that it has received a
refund of any Taxes or Other Taxes as to which it has been indemnified by the
Borrower or with respect to which the Borrower has paid additional amounts
pursuant to this Section, it shall pay to the Borrower an amount equal to such
refund (but only to the extent of indemnity payments made, or additional amounts
paid, by the Borrower under this Section with respect to the Taxes or Other
Taxes giving rise to such refund), net of all out-of-pocket expenses of the
Administrative Agent, such Lender or such Issuing Lender, as the case may be,
and without interest (other than any interest paid by the relevant Governmental
Authority with respect to such refund); provided that the Borrower, upon the
request of the Administrative Agent, such Lender or such Issuing Lender, agrees
to repay the amount paid over to the Borrower (plus any penalties, interest or
other charges imposed by the relevant Governmental Authority) to the
Administrative Agent, such Lender or such Issuing Lender in the event the
Administrative Agent, such Lender or such Issuing Lender is required to repay
such refund to such Governmental Authority. This paragraph shall not be
construed to require the Administrative Agent, any Lender or any Issuing Lender
to make available its tax returns (or any other information relating to its
taxes which it deems confidential) to the Borrower or any other Person.

(g)       Survival. Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section shall survive the payment in full of the Obligations and the
termination of the Commitment.

 

SECTION 4.12

Mitigation Obligations; Replacement of Lenders.

(a)       Designation of a Different Lending Office. If any Lender requests
compensation under Section 4.10, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 4.11, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
4.10 or Section 4.11, as the case may be, in the future and (ii) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender. The Borrower hereby agrees to pay all
reasonable costs and expenses incurred by any Lender in connection with any such
designation or assignment.

(b)       Replacement of Lenders. If any Lender requests compensation under
Section 4.10, or if the Borrower is required to pay any additional amount to any
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Governmental Authority for the account of any Lender pursuant to Section 4.11,
or if any Lender defaults in its obligation to fund Loans hereunder, or if any
Lender notifies the Administrative Agent and the Original Borrower pursuant to
Section 10.13 that it may not legally do business with a Borrower or Subsidiary
Borrower incorporated, organized or formed in a Restricted Jurisdiction, then
the Borrower may, at its sole expense and effort, upon notice to such Lender and
the Administrative Agent, require such Lender to assign and delegate, without
recourse (in accordance with and subject to the restrictions contained in, and
consents required by, Section 13.10), all of its interests, rights and
obligations under this Agreement and the related Loan Documents to an assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that:

(i)        the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 13.10;

(ii)       such Lender shall have received payment of an amount equal to the
outstanding principal of its Loans and participations in Letters of Credit,
accrued interest thereon, accrued fees and all other amounts payable to it
hereunder and under the other Loan Documents (including any amounts under
Section 4.9 ) from the assignee (to the extent of such outstanding principal and
accrued interest and fees) or the Borrower (in the case of all other amounts);

(iii)      in the case of any such assignment resulting from a claim for
compensation under Section 4.10 or payments required to be made pursuant to
Section 4.11, such assignment will result in a reduction in such compensation or
payments thereafter;

(iv)      in the case of any assignment resulting from a claim that a Lender may
not legally do business with a Borrower or a Subsidiary Borrower incorporated,
organized or formed in a Restricted Jurisdiction, such new Lender may legally do
business with a Borrower or a Subsidiary Borrower incorporated, organized or
formed in a Restricted Jurisdiction; and

 

(v)

such assignment does not conflict with Applicable Law.

A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.

SECTION 4.13     Security. The Obligations of the Borrower shall be secured as
provided in the Security Documents.

SECTION 4.14     Additional Subsidiary Borrowers . The Original Borrower may
designate any Domestic Subsidiary as a Subsidiary Borrower under this Agreement
and the other Loan Documents upon satisfaction of each of the following
conditions.

(a)       The Borrower shall have delivered to the Administrative Agent a
written notice requesting that such Domestic Subsidiary be designated as a new
Subsidiary Borrower and indicating such Domestic Subsidiary's jurisdiction of
incorporation, organization or formation.

 

 

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The Administrative Agent agrees that promptly upon receipt of such notice it
will forward such notice to the Lenders requesting their approval of such
Domestic Subsidiary as a Subsidiary Borrower. If the Required Agreement Lenders
approve such designation (which approval shall occur no earlier than five (5)
Business Days after the Lenders receive written notice of the request that such
Domestic Subsidiary be designated as a new Subsidiary Borrower), the applicable
Domestic Subsidiary shall be deemed a "Borrower" under this Agreement and the
other Loan Documents and all references herein (other than the references in
Articles V, VI, VII, VIII, IX and X of this Agreement) to "Borrower" shall be
deemed to include the Subsidiary Borrower.

(b)       The Administrative Agent shall have received a duly executed
supplement to this Agreement and any other applicable Loan Documents joining
such Domestic Subsidiary as a Subsidiary Borrower hereunder (such supplement to
be in form and substance reasonably satisfactory to the Administrative Agent).

(c)       Such Domestic Subsidiary shall deliver to the Administrative Agent
such documents and certificates referred to in Section 5.2 as may be reasonably
requested by the Administrative Agent (it being agreed by the Borrower that, if
the designation of such Domestic Subsidiary as a Subsidiary Borrower obligates
the Administrative Agent or any Lender to comply with "know your customer" or
similar identification procedures in circumstances where the necessary
information is not already available to it, the Borrower shall, promptly upon
the request of the Administrative Agent or any Lender, supply such documentation
and other evidence as is reasonably requested by the Administrative Agent or any
Lender in order for the Administrative Agent or such Lender to carry out, and be
satisfied it has complied with the results of, all necessary "know your
customer" or other similar checks under all Applicable Laws).

(d)       (i)        If not previously granted to the Administrative Agent under
the Security Documents, such Domestic Subsidiary shall pledge a security
interest in all Collateral owned by such Domestic Subsidiary by delivering to
the Administrative Agent a duly executed supplement to each applicable Security
Document or such other documents as the Administrative Agent shall reasonably
deem appropriate for such purpose.

(ii)       To the extent not previously delivered to the Administrative Agent
under the Security Documents, the Borrower shall deliver to the Administrative
Agent such original Capital Stock or other certificates and stock or other
transfer powers evidencing the Capital Stock of such Domestic Subsidiary and, to
the extent required by the Security Documents, all Capital Stock or other
certificates and stock or other transfer powers evidencing the Capital Stock
owned by such Domestic Subsidiary.

(e)       The Borrower shall deliver to the Administrative Agent such updated
Schedules to the Loan Documents as requested by the Administrative Agent with
respect to such Domestic Subsidiary.

(f)        The Borrower shall deliver to the Administrative Agent such other
documents (including, without limitation, legal opinions) as may be reasonably
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Administrative Agent, all in form, content and scope reasonably satisfactory to
the Administrative Agent.

(g)       The obligations of each Subsidiary Borrower hereunder and under the
other Loan Documents shall be joint and several with the Obligations of the
Borrower and each other Subsidiary Borrower.

SECTION 4.15     Nature of Obligations; Bankruptcy Limitations; Agreement for
Contribution.

(a)       Nature of Obligations. All of the Borrowers shall be jointly and
severally liable for the Obligations, however incurred.

(b)       Bankruptcy Limitations. Notwithstanding anything to the contrary
contained in this Agreement, it is the intention of each Borrower, the
Administrative Agent and the Lenders that, in any proceeding involving the
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution or insolvency or any similar proceeding with respect to any Borrower
or its assets, the amount of such Borrower's obligations with respect to the
Obligations shall be equal to, but not in excess of, the maximum amount thereof
not subject to avoidance or recovery by operation of Applicable Insolvency Laws
after giving effect to Section 4.15(c). To that end, but only in the event and
to the extent that after giving effect to Section 4.15(c), such Borrower's
obligations with respect to the Obligations or any payment made pursuant to such
Obligations would, but for the operation of the first sentence of this Section
4.15(b), be subject to avoidance or recovery in any such proceeding under
Applicable Insolvency Laws after giving effect to Section 4.15(c), the amount of
such Borrower's obligations with respect to the Obligations shall be limited to
the largest amount which, after giving effect thereto, would not, under
Applicable Insolvency Laws, render such Borrower's obligations with respect to
the Obligations unenforceable or avoidable or otherwise subject to recovery
under Applicable Insolvency Laws. To the extent any payment actually made
pursuant to the Obligations exceeds the limitation of the first sentence of this
Section 4.15(b) and is otherwise subject to avoidance and recovery in any such
proceeding under Applicable Insolvency Laws, the amount subject to avoidance
shall in all events be limited to the amount by which such actual payment
exceeds such limitation and the Obligations as limited by the first sentence of
this Section 4.15(b) shall in all events remain in full force and effect and be
fully enforceable against such Borrower. The first sentence of this Section
4.15(b) is intended solely to preserve the rights of the Administrative Agent
and the Lenders hereunder against such Borrower in such proceeding to the
maximum extent permitted by Applicable Insolvency Laws and neither such
Borrower, any other Borrower, any Guarantor nor any other Person shall have any
right or claim under such sentence that would not otherwise be available under
Applicable Insolvency Laws in such proceeding.

(c)       Agreement for Contribution. The Borrowers hereby agree among
themselves that, if any Borrower shall make an Excess Payment (as defined
below), such Borrower shall have a right of contribution from each other
Borrower in an amount equal to such other Borrower's Contribution Share (as
defined below) of such Excess Payment. The payment obligations of any Borrower
under this Section 4.15(c) shall be subordinate and subject in right of payment
to the Obligations until such time as the Obligations have been paid in full,
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shall exercise any right or remedy under this Section 4.15(c) against any other
Borrower until such Obligations have been paid in full. For purposes of this
Section 4.15(c):

(i)        "Excess Payment" shall mean the amount paid by any Borrower in excess
of its Ratable Share of any Obligations;

(ii)       "Ratable Share" shall mean, for any Borrower in respect of any
payment of Obligations, the ratio (expressed as a percentage) as of the date of
such payment of Obligations of (A) the amount by which the aggregate present
fair salable value of all of the assets and properties of such Borrower exceeds
the amount of all debts and liabilities of such Borrower (including probable
contingent, subordinated, unmatured, and unliquidated liabilities, but excluding
the obligations of such Borrower hereunder) to (B) the amount by which the
aggregate present fair salable value of all assets and other properties of all
of the Borrowers exceeds the amount of all of the debts and liabilities
(including probable contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the Borrowers hereunder) of the
Borrowers; provided, however, that, for purposes of calculating the Ratable
Shares of the Borrowers in respect of any payment of Obligations, any Borrower
that became a Borrower subsequent to the date of any such payment shall be
deemed to have been a Borrower on the date of such payment and the financial
information for such Borrower as of the date such Borrower became a Borrower
shall be utilized for such Borrower in connection with such payment; and

(iii)      "Contribution Share" shall mean, for any Borrower in respect of any
Excess Payment made by any other Borrower, the ratio (expressed as a percentage)
as of the date of such Excess Payment of (A) the amount by which the aggregate
present fair salable value of all of the assets and properties of such Borrower
exceeds the amount of all debts and liabilities of such Borrower (including
probable contingent, subordinated, unmatured, and unliquidated liabilities, but
excluding the obligations of such Borrower hereunder) to (B) the amount by which
the aggregate present fair salable value of all assets and other properties of
the Borrowers other than the maker of such Excess Payment exceeds the amount of
all of the debts and liabilities (including probable contingent, subordinated,
unmatured, and unliquidated liabilities, but excluding the obligations of the
Borrowers) of the Borrowers other than the maker of such Excess Payment;
provided, however, that, for purposes of calculating the Contribution Shares of
the Borrowers in respect of any Excess Payment, any Borrower that became a
Borrower subsequent to the date of any such Excess Payment shall be deemed to
have been a Borrower on the date of such Excess Payment and the financial
information for such Borrower as of the date such Borrower became a Borrower
shall be utilized for such Borrower in connection with such Excess Payment.

Each of the Borrowers recognizes and acknowledges that the rights to
contribution arising hereunder shall constitute an asset in favor of the party
entitled to such contribution. No Borrower shall have any right of subrogation,
indemnity or reimbursement under Applicable Law in respect of any payment of
Obligations (other than the contribution rights set forth in this Section
4.15(c)) against any other Borrower.

 

 

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(d)       Appointment of Original Borrower as Agent. Each Borrower hereby
irrevocably appoints and authorizes the Original Borrower (i) to provide the
Administrative Agent with all notices with respect to Extensions of Credit
obtained for the benefit of such Borrower and all other notices and instructions
under this Agreement, (ii) to take such action on behalf of the Borrowers as the
Original Borrower deems appropriate on its behalf to obtain Extensions of Credit
and to exercise such other powers as are reasonably incidental thereto to carry
out the purposes of this Agreement and (iii) to act as its agent for service of
process and notices required to be delivered under this Agreement or the other
Loan Documents, it being understood and agreed that receipt by the Original
Borrower of any summons, notice or other similar item shall be deemed effective
receipt by such Borrower and its Subsidiaries.

For purposes of this Section, the term "Borrowers" means the collective
reference to the Original Borrower, each New Borrower and each Subsidiary
Borrower and "Borrower" means the Original Borrower, one of the New Borrowers or
one of the Subsidiary Borrowers, as applicable.

ARTICLE V

CLOSING; CONDITIONS OF CLOSING AND BORROWING

SECTION 5.1       Closing. The closing shall take place at the offices of
Kennedy Covington Lobdell & Hickman, L.L.P. at 10:00 a.m. on May 31, 2006 or at
such other place, date and time as the parties hereto shall mutually agree.

SECTION 5.2       Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue or participate in the initial Letter of Credit, if any, is subject to
the satisfaction of each of the following conditions:

(a)       Executed Loan Documents. This Agreement, a Revolving Credit Note in
favor of each Lender (if requested thereby), a Swingline Note in favor of the
Swingline Lender (if requested thereby) and the Security Documents, together
with any other applicable Loan Documents, shall have been duly authorized,
executed and delivered to the Administrative Agent by the parties thereto, shall
be in full force and effect and no Default or Event of Default shall exist
hereunder or thereunder.

(b)       Closing Certificates; Etc. The Administrative Agent shall have
received each of the following in form and substance reasonably satisfactory to
the Administrative Agent:

(i)        Officer's Certificate of the Original Borrower. A certificate from a
Responsible Officer of the Original Borrower to the effect that all
representations and warranties of the Original Borrower and its Subsidiaries
contained in this Agreement and the other Loan Documents are true, correct and
complete in all material respects (provided that any representation or warranty
that is qualified by materiality or by reference to Material Adverse Effect
shall be true, correct and complete in all respects); that neither the Original
Borrower nor any of its Subsidiaries is in violation of any of the covenants
contained in this Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no Default or Event
of Default has occurred and is continuing; and that each of the

 

 

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Credit Parties, as applicable, has satisfied each of the conditions set forth in
Section 5.2 and Section 5.3.

(ii)       Certificate of Secretary of each Credit Party. A certificate of a
Responsible Officer of each Credit Party certifying as to the incumbency and
genuineness of the signature of each officer of such Credit Party executing Loan
Documents to which it is a party and certifying that attached thereto is a true,
correct and complete copy of (A) the articles or certificate of incorporation or
formation of such Credit Party and all amendments thereto, certified as of a
recent date by the appropriate Governmental Authority in its jurisdiction of
incorporation or formation, (B) the bylaws or other governing document of such
Credit Party as in effect on the Closing Date, (C) resolutions duly adopted by
the board of directors or other governing body of such Credit Party authorizing
the transactions contemplated hereunder and the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a
party, and (D) each certificate required to be delivered pursuant to Section
5.2(b)(iii).

(iii)      Certificates of Good Standing. Certificates as of a recent date of
the good standing of each Credit Party under the laws of its jurisdiction of
organization and, to the extent requested by the Administrative Agent, each
other jurisdiction where such Credit Party is qualified to do business and, to
the extent available, a certificate of the relevant taxing authorities of such
jurisdictions certifying that such Credit Party has filed required tax returns
and owes no delinquent taxes.

(iv)      Opinions of Counsel. Favorable opinions of counsel to the Credit
Parties addressed to the Administrative Agent and the Lenders with respect to
the Credit Parties, the Loan Documents and such other matters as the Lenders
shall request.

(v)       Tax Forms. Copies of the United States Internal Revenue Service forms
required by Section 4.11(e).

 

(c)

Personal Property Collateral.

(i)        Filings and Recordings. The Administrative Agent shall have received
all filings and recordations that are necessary to perfect the security
interests of the Administrative Agent, on behalf of itself and the Lenders, in
the Collateral shall have been received by the Administrative Agent and the
Administrative Agent shall have received evidence reasonably satisfactory to the
Administrative Agent that upon such filings and recordations such security
interests constitute valid and perfected first priority Liens thereon.

(ii)       Pledged Collateral. The Administrative Agent shall have received
original stock certificates or other certificates evidencing the Capital Stock
pledged pursuant to the Security Documents, together with an undated stock power
for each such certificate duly executed in blank by the registered owner
thereof.

(iii)      Lien Search. The Administrative Agent shall have received the results
of a Lien search (including a search as to judgments, pending litigation and tax
matters), in form and substance reasonably satisfactory thereto, made against
the Credit Parties under the Uniform Commercial Code (or applicable judicial
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assets of such Credit Party are located, indicating among other things that its
assets are free and clear of any Lien except for Permitted Liens.

(iv)      Hazard and Liability Insurance. The Administrative Agent shall have
received certificates of property hazard, business interruption and liability
insurance, evidence of payment of all insurance premiums for the current policy
year of each insurance policy (naming the Administrative Agent as additional
insured on all certificates for liability insurance and loss payee (or
mortgagee) with respect to the Collateral on all certificates for property
insurance), and, if requested by the Administrative Agent, copies (certified by
a Responsible Officer) of insurance policies in the form required under the
Security Documents and otherwise in form and substance reasonably satisfactory
to the Administrative Agent.

 

(d)

Consents; Defaults.

(i)        Governmental and Third Party Approvals. The Credit Parties shall have
received all material governmental, shareholder and third party consents and
approvals necessary (or any other material consents as determined in the
reasonable discretion of the Administrative Agent) in connection with the
transactions contemplated by this Agreement and the other Loan Documents and the
other transactions contemplated hereby and all applicable waiting periods shall
have expired without any action being taken by any Person that could reasonably
be expected to restrain, prevent or impose any material adverse conditions on
any of the Credit Parties or such other transactions or that could seek or
threaten any of the foregoing, and no law or regulation shall be applicable
which in the reasonable judgment of the Administrative Agent could reasonably be
expected to have such effect.

(ii)       No Injunction, Etc. No action, proceeding, investigation, regulation
or legislation shall have been instituted, threatened or proposed before any
Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement or the other Loan Documents or the consummation of the transactions
contemplated hereby or thereby, or which, in the Administrative Agent's sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or the other Loan Documents or the consummation
of the transactions contemplated hereby or thereby.

 

(e)

Financial Matters.

(i)        Financial Statements. The Administrative Agent shall have received
(A) the audited Consolidated balance sheet of the Original Borrower and its
Subsidiaries as of December 31, 2005 and the related audited statements of
income and retained earnings and cash flows for the Fiscal Year then ended, (B)
any interim unaudited Consolidated balance sheet of the Original Borrower and
its Subsidiaries and related unaudited interim statements of income, cash flows
and retained earnings for each interim quarterly period (if any) ended at least
forty-five (45) days prior to the Closing Date and (C) if requested by the
Administrative Agent (on behalf of itself or any Lender), any financial
statements or projections of the Canadian Borrower and its Subsidiaries required
to be delivered by the Canadian Borrower to the Canadian Administrative Agent
pursuant to Section 5.2 of the Canadian Credit Agreement.

 

 

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(ii)       Financial Projections. The Administrative Agent shall have received
projections prepared by management of the Original Borrower, of balance sheets,
income statements and cash flow statements on a quarterly basis for 2006 and on
an annual basis for each year thereafter during the term of the Credit Facility.

(iii)      Financial Condition Certificate. The Original Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance
satisfactory to the Administrative Agent, and certified as accurate by a
Responsible Officer of the Original Borrower, that (A) the Original Borrower and
each of its Subsidiaries are each Solvent, (B) the material payables of the
Original Borrower and each of its Subsidiaries are current and not past due, (C)
attached thereto are calculations, as determined on a pro forma basis as of
March 31, 2006 and after giving effect to the transactions contemplated hereby
and any Extensions of Credit or Canadian Extensions of Credit to be made on the
Closing Date, with the covenants contained in Article IX; (D) the financial
projections previously delivered to the Administrative Agent represent the good
faith estimates (utilizing assumptions believed to be reasonable) of the
financial condition and operations of the Original Borrower and its
Subsidiaries; (E) attached thereto is a calculation of the ratio of (1)
Consolidated Total Indebtedness as of the Closing Date (after giving effect to
any Extensions of Credit or Canadian Extensions of Credit on the Closing Date)
to (2) Consolidated EBITDA for the most recently ended four (4) consecutive
fiscal quarters for which financial statements have been delivered,
demonstrating that such ratio is less than 5.80 to 1.00; (F) attached thereto is
a calculation of Consolidated Adjusted EBITDA for the most recently ended four
(4) consecutive fiscal quarters for which financial statements have been
delivered, demonstrating to the reasonable satisfaction of the Administrative
Agent that Consolidated Adjusted EBITDA (as determined in such manner) is not
less than $500,000,000; and (G) attached thereto is a calculation of the
Borrowing Limit as of the Closing Date.

(iv)      Payment at Closing; Fee Letters. The Original Borrower shall have paid
to the Administrative Agent and the Lenders the fees set forth or referenced in
Section 4.3 and any other accrued and unpaid fees or commissions due hereunder
(including, without limitation, legal (including, without limitation, local
counsel) fees and expenses) and to any other Person such amount as may be due
thereto in connection with the transactions contemplated hereby, including all
taxes, fees and other charges in connection with the execution, delivery,
recording, filing and registration of any of the Loan Documents.

 

(f)

Miscellaneous.

(i)        Notice of Borrowing. The Administrative Agent shall have received a
Notice of Borrowing from the Original Borrower in accordance with Section 2.3(a)
with respect to any Loans (if any) to be made on the Closing Date, and a Notice
of Account Designation specifying the account or accounts to which the proceeds
of any Loans made on or after the Closing Date are to be disbursed.

(ii)       Existing Facilities. Each of the Existing Facilities shall be repaid
in full and terminated and all collateral security therefor shall be released,
and the Administrative Agent shall have received pay-off letters in form and
substance satisfactory to it evidencing such repayment, termination and release.

 

 

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(iii)      Closing of the Canadian Credit Facility. The Canadian Credit Facility
shall simultaneously close on the Closing Date.

(iv)      Other Documents. All opinions, certificates and other instruments and
all proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to the Administrative
Agent. The Administrative Agent shall have received copies of all other
documents, certificates and instruments reasonably requested thereby, with
respect to the transactions contemplated by this Agreement.

SECTION 5.3       Conditions to All Extensions of Credit. The obligations of the
Lenders to make any Extensions of Credit (including any initial Extensions of
Credit), convert or continue any Loan and/or any Issuing Lender to issue or
extend any Letter of Credit are subject to the satisfaction of the following
conditions precedent on the relevant borrowing, continuation, conversion,
issuance or extension date:

(a)       Continuation of Representations and Warranties. The representations
and warranties contained in Article VI shall be true and correct in all material
respects on and as of such borrowing, continuation, conversion, issuance or
extension date with the same effect as if made on and as of such date, except
for any representation and warranty made as of an earlier date, which
representation and warranty shall remain true and correct as of such earlier
date; provided that any representation or warranty that is qualified by
materiality or by reference to Material Adverse Effect shall be true and correct
in all respects on and as of such borrowing, continuation, conversion, issuance
or extension date.

(b)       No Existing Default. No Default or Event of Default shall have
occurred and be continuing (i) on the borrowing, continuation or conversion date
with respect to such Loan or after giving effect to the Loans to be made,
continued or converted on such date or (ii) on the issuance or extension date
with respect to such Letter of Credit or after giving effect to the issuance or
extension of such Letter of Credit on such date.

(c)       Notices. The Administrative Agent shall have received a Notice of
Borrowing or Notice of Conversion/Continuation, as applicable, from the Original
Borrower in accordance with Section 2.3(a) or Section 4.2, as applicable.

(d)       Maximum Cash Balance. As of the end of the Business Day immediately
preceding the date of any such borrowing, conversion, continuation issuance or
extension and after giving effect to the Borrower's receipt of the proceeds from
any such Loan, as the case may be, and the application of such proceeds, the
aggregate amount of cash and Cash Equivalents of the Borrower and its
Subsidiaries shall not exceed $70,000,000.

 

SECTION 5.4

Post-Closing Conditions.

(a)       Prior to July 14, 2006, as such date may be extended by the
Administrative Agent in its sole discretion, the Administrative Agent shall have
received (a) a duly executed copy of each applicable Foreign Pledge Document
with respect to a pledge of sixty-five percent (65%) of the total outstanding
Capital Stock of Bowater-Korea Co., Ltd., including, without limitation, if
applicable, original stock certificates (or the equivalent thereof pursuant to
the Applicable Laws and practices of the Republic of Korea) evidencing the
Capital Stock of Bowater-Korea Co.,

 

 

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Ltd., together with an appropriate undated stock power for each certificate duly
executed in blank by the Original Borrower), (b) such documents and certificates
referred to in Section 5.2 as may be reasonably requested by the Administrative
Agent in connection therewith (including, without limitation, favorable legal
opinions of counsel addressed to the Administrative Agent and the Lenders with
respect to Bowater-Korea Co., Ltd., the Loan Documents and such other matters as
the Administrative Agent shall reasonably request), and (c) such other documents
and certificates as may be reasonably requested by the Administrative Agent (in
consultation with the Original Borrower), all in form, content and scope
reasonably satisfactory to the Administrative Agent. Notwithstanding the
foregoing, subject to Section 12.3, the Administrative Agent may waive any or
all of the requirements contained in this Section 5.4 to the extent that, in the
sole discretion of the Administrative Agent, they are impracticable or pose a
materially undue burden on the Original Borrower or Bowater-Korea Co., Ltd.

(b)       Prior to June 30, 2006, as such date may be extended by the
Administrative Agent in its sole discretion, the Administrative Agent shall have
received the following control agreements, in each case in form and substance
satisfactory to the Administrative Agent:

(i)        A deposit account control agreement executed by the applicable Credit
Party, the Administrative Agent and Bank of America, N.A. with respect to all
Deposit Accounts, other than Excluded Deposit Accounts (in each case as defined
in the Collateral Agreement), of the Credit Parties at Bank of America, N.A.;

(ii)      A deposit account control agreement executed by the applicable Credit
Party, the Administrative Agent and JPMorgan Chase Bank, N.A. with respect to
all Deposit Accounts, other than Excluded Deposit Accounts (in each case as
defined in the Collateral Agreement), of the Credit Parties at JPMorgan Chase
Bank, N.A.;

(iii)     A deposit account control agreement executed by the applicable Credit
Party, the Administrative Agent and Wachovia Bank, National Association with
respect to all Deposit Accounts, other than Excluded Deposit Accounts (in each
case as defined in the Collateral Agreement), of the Credit Parties at Wachovia
Bank, National Association;

(iv)      A securities account control agreement executed by the applicable
Credit Party, the Administrative Agent and Bank of New York with respect to all
securities accounts of the Credit Parties at Bank of New York; and

(v)       All other control agreements which the Administrative Agent requires
to be delivered pursuant to the Collateral Agreement, in each case in form and
substance satisfactory to the Administrative Agent.

(c)       Prior to June 30, 2006, as such date may be extended by the
Administrative Agent in its sole discretion, the Administrative Agent shall have
received any warehouse or similar agreement, and any other ancillary
documentation, required to be delivered thereto pursuant to Section 4.6(b) of
the Collateral Agreement (or, if any such warehouse or similar agreement, and
any other ancillary documentation, has not been delivered by such date, the
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shall take all actions required by the Administrative Agent pursuant to Section
4.6(b) in connection therewith).

ARTICLE VI

REPRESENTATIONS AND WARRANTIES OF THE BORROWER

SECTION 6.1       Representations and Warranties. To induce the Administrative
Agent and Lenders to enter into this Agreement and to induce the Lenders to make
Extensions of Credit, the Borrower hereby represents and warrants to the
Administrative Agent and Lenders both before and after giving effect to the
transactions contemplated hereunder that:

(a)       Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization except in
jurisdictions where the failure to be so qualified or in good standing could not
reasonably be expected to result in a Material Adverse Effect.

(b)       Ownership. Each Subsidiary of the Borrower as of the Closing Date is
listed on Schedule 6.1(b) together with (i) its jurisdiction of formation and
each jurisdiction in which it is qualified to do business as of the Closing
Date, (ii) each Person holding ownership interests in such Subsidiary, (iii) the
nature of the ownership interest held by each such Person and the percentage of
ownership of such Subsidiary represented by such ownership interests and (iv) a
designation of each Subsidiary that is inactive. All outstanding shares have
been duly authorized and validly issued and are fully paid and nonassessable,
with no personal liability attaching to the ownership thereof, and not subject
to any preemptive or similar rights, except as described in Schedule 6.1(b). As
of the Closing Date, there are no outstanding stock purchase warrants,
subscriptions, options, securities, instruments or other rights of any type or
nature whatsoever, which are convertible into, exchangeable for or otherwise
provide for or permit the issuance of Capital Stock of the Borrower or its
Subsidiaries, except as described on Schedule 6.1(b).

(c)       Authorization of Agreement, Loan Documents and Borrowing. Each of the
Borrower and its Subsidiaries has the right, power and authority and has taken
all necessary corporate and other action to authorize the execution, delivery
and performance of this Agreement and each of the other Loan Documents to which
it is a party in accordance with their respective terms. This Agreement and each
of the other Loan Documents have been duly executed and delivered by the duly
authorized officers of the Borrower and each of its Subsidiaries party thereto,
and each such document constitutes the legal, valid and binding obligation of
the Borrower or its Subsidiary party thereto, enforceable in accordance with its
terms, except as such enforceability may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or similar state or federal laws from
time to time in effect which affect the enforcement of creditors' rights in
general and (ii) the application of general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

 

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(d)       Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc.
The execution, delivery and performance by the Borrower and its Subsidiaries of
the Loan Documents to which each such Person is a party, in accordance with
their respective terms, the Extensions of Credit hereunder and the transactions
contemplated hereby or thereby do not and will not, by the passage of time, the
giving of notice or otherwise, (i) require any Governmental Approval or violate
any Applicable Law relating to the Borrower or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute a default under the articles
of incorporation, bylaws or other organizational documents of the Borrower or
any of its Subsidiaries, (iii) conflict with, result in a breach of or
constitute a default under any indenture, agreement or other instrument to which
such Person is a party or by which any of its properties may be bound or any
Governmental Approval relating to such Person, which could reasonably be
expected to have a Material Adverse Effect, (iv) result in or require the
creation or imposition of any Lien upon or with respect to any property now
owned or hereafter acquired by such Person other than Liens arising under the
Loan Documents or (v) require any consent or authorization of, filing with, or
other act in respect of, an arbitrator or Governmental Authority and no consent
of any other Person is required in connection with the execution, delivery,
performance, validity or enforceability of this Agreement other than consents,
authorizations, filings or other acts or consents for which the failure to
obtain or make could not reasonably be expected to have a Material Adverse
Effect and other than consents or filings under the UCC.

(e)       Compliance with Law; Governmental Approvals. Each of the Borrower and
its Subsidiaries (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect, (ii) is in compliance with its
articles of incorporation, bylaws or other organizational documents of the
Borrower or any of its Subsidiaries, except where the failure to comply could
not reasonably be expected to have a Material Adverse Effect, (iii) is in
compliance with each Governmental Approval applicable to it and in compliance
with all other Applicable Laws relating to it or any of its respective
properties, except where the failure to comply could not reasonably be expected
to have a Material Adverse Effect, and (iv) has timely filed all reports,
documents and other materials required to be filed by it under all Applicable
Laws with any Governmental Authority and has retained all records and documents
required to be retained by it under Applicable Law, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect.

(f)        Tax Returns and Payments. Each of the Borrower and its Subsidiaries
has duly filed or caused to be filed all federal and other material tax returns
required by Applicable Law to be filed, and has paid, or made adequate provision
for the payment of, all federal and other material taxes, assessments and
governmental charges or levies upon it and its property, income, profits and
assets which are due and payable. Such returns accurately reflect in all
material respects all liability for taxes of the Borrower and its Subsidiaries
for the periods covered thereby. There is no ongoing audit or examination or, to
the knowledge of the Borrower, other investigation by any Governmental Authority
of the tax liability of the Borrower and its Subsidiaries, except, in each case,
as could not reasonably be expected, individually or in the aggregate, to have a
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or other claim against the Borrower or any of its Subsidiaries with respect to
unpaid taxes which has not been discharged or resolved other than Permitted
Liens. The charges, accruals and reserves on the books of the Borrower and any
of its Subsidiaries in respect of federal and other material taxes for all
Fiscal Years and portions thereof since the organization of the Borrower and any
of its Subsidiaries are in the judgment of the Borrower adequate, and the
Borrower does not anticipate any material amount of additional taxes or
assessments for any of such years.

(g)       Intellectual Property Matters. Each of the Borrower and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, service mark, service mark rights,
trade names, trade name rights, copyrights and other rights with respect to the
foregoing which are reasonably necessary to conduct its business, except where
the failure to own or possess such rights, individually or in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any such rights, and neither the Borrower nor
any of its Subsidiaries is liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business
operations except as could not reasonably be expected to have a Material Adverse
Effect.

 

(h)

Environmental Matters.

(i)        The properties owned, leased or operated by the Borrower and its
Subsidiaries now or in the past do not contain, and to their knowledge have not
previously contained, any Hazardous Materials in amounts or concentrations which
(A) constitute or constituted a violation of applicable Environmental Laws or
(B) could give rise to liability under applicable Environmental Laws except
where such violation or liability could not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect;

(ii)       Except to the extent such matters could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, the
Borrower, each of its Subsidiaries and such properties and all operations
conducted in connection therewith are in compliance, and have been in
compliance, with all applicable Environmental Laws, and there is no
contamination at, under or about such properties or such operations which could
interfere with the continued operation of such properties;

(iii)      Neither the Borrower nor any of its Subsidiaries has received any
written notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters, Hazardous Materials, or
compliance with Environmental Laws, nor does the Borrower or any of its
Subsidiaries have knowledge or reason to believe that any such notice will be
received or is being threatened, except where such violation, alleged violation,
non-compliance, liability or potential liability which is the subject of such
notice could not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect;

(iv)      Hazardous Materials have not been transported or disposed of to or
from the properties owned, leased or operated by the Borrower and its
Subsidiaries in violation of, or in a manner or to a location which could give
rise to liability under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under any

 

 

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of such properties in violation of, or in a manner that could give rise to
liability under, any applicable Environmental Laws, except where such violation
or liability could not reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect;

(v)       No judicial proceedings or governmental or administrative action is
pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any of its Subsidiaries is or will be
named as a potentially responsible party with respect to such properties or
operations conducted in connection therewith, nor are there any consent decrees
or other decrees, consent orders, administrative orders or other orders, or
other administrative or judicial requirements outstanding under any
Environmental Law with respect to the Borrower, any of its Subsidiaries or such
properties or such operations that could reasonably be expected to have a
Material Adverse Effect; and

(vi)      There has been no release, or to the best of the Borrower's knowledge,
threat of release, of Hazardous Materials at or from properties owned, leased or
operated by the Borrower or any Subsidiary, now or in the past, in violation of
or in amounts or in a manner that could give rise to liability under
Environmental Laws that could reasonably be expected to have a Material Adverse
Effect.

 

(i)

ERISA.

(i)        As of the Closing Date, neither the Borrower nor any of its
Subsidiaries nor any ERISA Affiliate maintains or contributes to, or has any
obligation under, any Employee Benefit Plans other than those identified on
Schedule 6.1(i-1) and neither the Borrower nor any of its Subsidiaries maintains
or contributes to, or has any obligation under, any Canadian Employee Benefit
Plans other than those identified on Schedule 6.1(i-2).

(ii)       The Borrower, each of its Subsidiaries and each of their ERISA
Affiliates is in material compliance with all applicable provisions of ERISA and
the regulations and published interpretations thereunder with respect to all
Employee Benefit Plans except for any required amendments for which the remedial
amendment period as defined in Section 401(b) of the Code has not yet expired
and except where a failure to so comply could not reasonably be expected to have
a Material Adverse Effect. The Borrower and each of its Subsidiaries is in
material compliance with all applicable provisions of the ITA and other
Applicable Law and the regulations and published interpretations thereunder with
respect to all Canadian Employee Benefit Plans except where a failure to so
comply could not reasonably be expected to have a Material Adverse Effect. Each
Employee Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified,
and each trust related to such plan has been determined to be exempt under
Section 501(a) of the Code except for such plans that have not yet received
determination letters but for which the remedial amendment period for submitting
a determination letter has not yet expired. No liability has been incurred by
the Borrower, any of its Subsidiaries or any of their ERISA Affiliates which
remains unsatisfied for any taxes or penalties with respect to any Employee
Benefit Plan or any Multiemployer Plan except for a liability that could not
reasonably be expected to have a Material Adverse Effect. No liability has been
incurred by the Borrower or any of its Subsidiaries which remains unsatisfied
for any taxes or penalties with respect to any

 

 

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Canadian Employee Benefit Plan or any Canadian Multiemployer Plan, except for a
liability that could not reasonably be expected to have a Material Adverse
Effect.

(iii)      Except as set forth on Schedule 6.1(i-1) or Schedule 6.1(i-2), as of
the Closing Date, no Pension Plan or Canadian Pension Plan has been terminated,
nor has any accumulated funding deficiency (as defined in Section 412 of the
Code or any other Applicable Law) been incurred (without regard to any waiver
granted under Section 412 of the Code or any other Applicable Law), nor has any
funding waiver from the Internal Revenue Service been received or requested with
respect to any Pension Plan, nor has the Borrower, any of Subsidiaries or any of
their ERISA Affiliates failed to make any contributions or to pay any amounts
due and owing as required by Section 412 of the Code, Section 302 of ERISA or
the terms of any Pension Plan prior to the due dates of such contributions under
Section 412 of the Code or Section 302 of ERISA, nor has there been any event
requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with
respect to any Pension Plan.

(iv)      Except where the failure of any of the following representations to be
correct in all material respects could not reasonably be expected to have a
Material Adverse Effect, neither the Borrower nor any of its Subsidiaries nor
any of their ERISA Affiliates has: (A) engaged in a nonexempt prohibited
transaction described in Section 406 of the ERISA or Section 4975 of the Code,
(B) incurred any liability to the PBGC which remains outstanding other than the
payment of premiums and there are no premium payments which are due and unpaid,
(C) failed to make a required contribution or payment to a Multiemployer Plan or
a Canadian Multiemployer Plan, (D) failed to make a required installment or
other required payment under Section 412 of the Code, other Applicable Laws or
its Employee Benefit Plans or (E) failed to make a required installment or other
required payment under Applicable Laws or its Canadian Employee Benefit Plans.

 

(v)

No Termination Event has occurred or is reasonably expected to occur.

(vi)      Except where the failure of any of the following representations to be
correct in all material respects could not reasonably be expected to have a
Material Adverse Effect, no proceeding, claim (other than a benefits claim in
the ordinary course of business), lawsuit and/or investigation is existing or,
to the best knowledge of the Borrower after due inquiry, threatened concerning
or involving any (A) employee welfare benefit plan (as defined in Section 3(1)
of ERISA) currently maintained or contributed to by the Borrower, any of its
Subsidiaries or any of their ERISA Affiliates, (B) Pension Plan or Canadian
Pension Plan or (C) Multiemployer Plan or Canadian Multiemployer Plan.

(j)        Margin Stock. Neither the Borrower nor any of its Subsidiaries is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used, directly or indirectly, in Regulation U of the
Board of Governors of the Federal Reserve System). No part of the proceeds of
any of the Loans or Letters of Credit will be used for purchasing or carrying
margin stock or for any purpose which violates, or which would be inconsistent
with, the provisions of Regulation T, U or X of such Board of Governors.

 

 

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(k)       Government Regulation. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each such term is defined or used in the Investment
Company Act of 1940, as amended) and neither the Borrower nor any of its
Subsidiaries is, or after giving effect to any Extension of Credit or Canadian
Extension of Credit will be, subject to regulation under the Interstate Commerce
Act, as amended, or any other Applicable Law which limits its ability to incur
or consummate the transactions contemplated hereby.

(l)        Significant Indebtedness. Schedule 6.1(l) sets forth a complete and
accurate list of all Significant Indebtedness of the Borrower and its
Subsidiaries in effect as of the Closing Date. As of the Closing Date, other
than as set forth in Schedule 6.1(l), each indenture, agreement or other
instrument governing such Significant Indebtedness is, and after giving effect
to the consummation of the transactions contemplated by the Loan Documents will
be, in full force and effect in accordance with the terms thereof. To the extent
requested by the Administrative Agent, the Borrower and its Subsidiaries have
delivered to the Administrative Agent a true and complete copy of each
indenture, agreement or other instrument governing the Significant Indebtedness
required to be listed on Schedule 6.1(l). As of the Closing Date, neither the
Borrower nor any Subsidiary (nor, to the knowledge of the Borrower, any other
party thereto) is in breach of or in default under any Significant Indebtedness
in any material respect.

(m)      Employee Relations. Each of the Borrower and its Subsidiaries has a
stable work force in place, except as could not reasonably be expected to have a
Material Adverse Effect. The Borrower knows of no pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees or those of its Subsidiaries that could reasonably be expected to
have a Material Adverse Effect.

(n)       Burdensome Provisions. Except as described on Schedule 6.1(n), no
Subsidiary is party to any agreement or instrument or otherwise subject to any
restriction or encumbrance that restricts or limits its ability to make dividend
payments or other distributions in respect of its Capital Stock to the Borrower
or any Subsidiary or to transfer any of its assets or properties to the Borrower
or any other Subsidiary in each case other than restrictions or encumbrances
existing under or by reason of (i) the Loan Documents, (ii) Applicable Law and
(iii) legally enforceable provisions which are contained in either (A) the
organizational documents of any Subsidiary that a not Wholly-Owned Subsidiary or
(B) any other agreements with the other owner(s) of such Subsidiary (which, in
the case of such provisions existing on the Closing Date, are described on
Schedule 6.1(n)).

(o)       Financial Statements. The audited and unaudited financial statements
delivered pursuant to Section 5.2(e)(i) are complete and correct and fairly
present in all material respects on a Consolidated basis the assets, liabilities
and financial position of the Borrower and its Subsidiaries as at the respective
dates of such statements, and the results of the operations and changes of
financial position for the periods then ended (other than customary year-end
adjustments for interim financial statements). All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP. Such financial statements show all material indebtedness
and other material liabilities, direct or contingent, of the Borrower and its
Subsidiaries as of the date thereof, including material liabilities for taxes,
material commitments, and Indebtedness, in each case, to the extent required to
be disclosed

 

 

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under GAAP. The projected financial statements delivered pursuant to Section
5.2(e)(ii) were prepared in good faith on the basis of the assumptions stated
therein, which assumptions are believed to be reasonable in light of then
existing conditions.

(p)       No Material Adverse Change. Since December 31, 2005, there has been no
material adverse change in the business, assets, liabilities (actual or
contingent), operations, or condition (financial or otherwise) of the Borrower
and its Subsidiaries taken as a whole and no event has occurred or condition
arisen that could reasonably be expected to have a Material Adverse Effect.

(q)       Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder and each Canadian Extension of Credit, each
of the Credit Parties will be Solvent.

(r)        Titles to Properties. Each of the Borrower and its Subsidiaries has
such title to the real property owned or leased by it as is reasonably necessary
to the conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Borrower and its Subsidiaries delivered pursuant to
Sections 5.2(e)(i), 7.1(a) and (b), except those which have been disposed of by
the Borrower or its Subsidiaries subsequent to such date which dispositions have
been in the ordinary course of business or as otherwise expressly permitted
hereunder.

(s)       Liens. None of the properties and assets of the Borrower or any of its
Subsidiaries is subject to any Lien, except Permitted Liens. Neither the
Borrower nor any of its Subsidiaries has signed any financing statement or any
security agreement authorizing any secured party thereunder to file any
financing statement, except to perfect those Permitted Liens.

(t)        Litigation. Except for matters existing on the Closing Date and set
forth on Schedule 6.1(t), there are no actions, suits or proceedings pending
nor, to the knowledge of the Borrower, threatened against or in any other way
relating adversely to or affecting the Borrower or any of its Subsidiaries or
any of their respective properties in any court or before any arbitrator of any
kind or before or by any Governmental Authority that has or could reasonably be
expected to have a Material Adverse Effect.

(u)       Senior Indebtedness Status. The Obligations of each Credit Party under
this Agreement and each of the other Loan Documents ranks and shall continue to
rank at least senior in priority of payment to all Subordinated Indebtedness of
each such Person and is designated as "Senior Indebtedness" under all
instruments and documents, now or in the future, relating to all Subordinated
Indebtedness of such Person.

(v)       OFAC. None of the Borrower, any Subsidiary of the Borrower or any
Affiliate of the Borrower or any Guarantor: (i) is a Sanctioned Person, (ii) has
more than ten percent (10%) of its assets in Sanctioned Entities, or (iii)
derives more than ten percent (10%) of its operating income from investments in,
or transactions with Sanctioned Persons or Sanctioned Entities. The proceeds of
any Loan will not be used and have not been used to fund any operations in,
finance any investments or activities in, or make any payments to, a Sanctioned
Person or a Sanctioned

 

 

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Entity. Solely for purposes of this subsection (v), "Subsidiary" shall include
(A) each Abitibi Entity and (B) each QSPE.

(w)      Disclosure. The Borrower and/or its Subsidiaries have disclosed to the
Administrative Agent and the Lenders all agreements, instruments and corporate
or other restrictions to which the Borrower or any of its Subsidiaries are
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.
The financial statements, material reports, material certificates or other
material information furnished (whether in writing or orally), taken together as
a whole, by or on behalf of any of the Borrower or any of its Subsidiaries to
the Administrative Agent or any Lender in connection with the transactions
contemplated hereby and the negotiation of this Agreement or delivered hereunder
(as modified or supplemented by other information so furnished) do not contain
any material misstatement of fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided that, with respect to projected
financial information, pro forma financial information, estimated financial
information and other projected or estimated information, such information was
prepared in good faith based upon assumptions believed to be reasonable at the
time.

SECTION 6.2       Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including, but not limited to, any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date (except those that are expressly made as of a
specific date), shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.

ARTICLE VII

FINANCIAL INFORMATION AND NOTICES

Until all the Obligations have been paid and satisfied in full and the
Commitment terminated, unless consent has been obtained in the manner set forth
in Section 13.2, the Borrower will furnish or cause to be furnished to the
Administrative Agent (for distribution to the Lenders) at the Administrative
Agent's Office at the address set forth in Section 13.1 or such other office as
may be designated by the Administrative Agent from time to time:

 

SECTION 7.1

Financial Statements and Projections.

(a)       Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days (or, if earlier, on the date of any required
public filing thereof) after the end of each of the first three (3) fiscal
quarters of each Fiscal Year, an unaudited Consolidated balance sheet of the
Borrower and its Subsidiaries as of the close of such fiscal quarter and
unaudited Consolidated statements of income, retained earnings and cash flows
and a report containing management's discussion and analysis of such financial
statements for the fiscal

 

 

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quarter then ended and that portion of the Fiscal Year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures as of the end of and for the corresponding period in the
preceding Fiscal Year and prepared by the Borrower in accordance with GAAP and,
if applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries on a Consolidated basis as of their
respective dates and the results of operations of the Borrower and its
Subsidiaries for the respective periods then ended, subject to normal year end
adjustments.

(b)       Annual Financial Statements. As soon as practicable and in any event
within ninety (90) days (or, if earlier, on the date of any required public
filing thereof) after the end of each Fiscal Year, an audited Consolidated
balance sheet of the Borrower and its Subsidiaries as of the close of such
Fiscal Year and audited Consolidated statements of income, retained earnings and
cash flows and a report containing management's discussion and analysis of such
financial statements for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures as of the end of and for the preceding Fiscal Year and
prepared in accordance with GAAP and, if applicable, containing disclosure of
the effect on the financial position or results of operations of any change in
the application of accounting principles and practices during the year. Such
annual financial statements shall be audited by an independent certified public
accounting firm acceptable to the Administrative Agent and the Canadian
Administrative Agent, and accompanied by a report thereon by such certified
public accountants that is not qualified with respect to scope limitations
imposed by the Borrower or any of its Subsidiaries or with respect to accounting
principles followed by the Borrower or any of its Subsidiaries not in accordance
with GAAP.

(c)       Annual Business Plan and Financial Projections. As soon as practicable
and in any event within ninety (90) days after the beginning of each Fiscal
Year, a business plan of the Borrower and its Subsidiaries for such Fiscal Year,
such plan to be prepared in accordance with GAAP and to include, on a quarterly
basis, the following: a projected income statement, statement of cash flows and
balance sheet and a statement containing the volume and price assumptions by
product line used in preparing the business plan, accompanied by a certificate
from a Responsible Officer of the Borrower to the effect that, to the best of
such officer's knowledge, such projections are good faith estimates (utilizing
assumptions believed to be reasonable) of the financial condition and operations
of the Borrower and its Subsidiaries for such Fiscal Year.

(d)       Financial Statements of the Canadian Borrower and its Subsidiaries. If
requested by the Administrative Agent (on behalf of itself or any Lender), any
financial statements of the Canadian Borrower and its Subsidiaries required to
be delivered by the Canadian Borrower to the Canadian Administrative Agent
pursuant to Section 7.1 of the Canadian Credit Agreement.

(e)       Monthly Borrowing Limit Calculation. Within fifteen (15) Business Days
after the last day of each calendar month beginning after the Third Amendment
Effective Date, a report in form and substance reasonably satisfactory to the
Administrative Agent showing a calculation of the Asset Coverage Amount and
clauses (a) and (b) of the Borrowing Limit as of the last day of the preceding
calendar month.

 

 

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(f)

Balance Reporting.

(i)        Commencing with the month in which the Parent first establishes a
deposit, securities or investment account, within two (2) Business Days of the
end of each calendar month, the Parent will deliver a written daily cash balance
summary to the Administrative Agent and the Canadian Administrative Agent
showing the aggregate available balance of cash and Cash Equivalents in the
deposit, securities and other investment accounts of the Parent as of the end of
business on each Business Day of the preceding calendar month.

(ii)       Within five (5) Business Days of the end of each calendar month, the
Borrower will deliver to the Administrative Agent and the Canadian
Administrative Agent (A) commencing with the calendar month ending January 31,
2009, a written statement showing the aggregate daily available balance of cash
and Cash Equivalents in all deposit, securities and other investment accounts of
the Borrower and its Subsidiaries for which such information is available as of
the end of each Business Day of such calendar month and (B) commencing with the
calendar month ending November 30, 2008, a written statement showing the
available balance of cash and Cash Equivalents in each deposit, securities and
other investment account of the Borrower and its Subsidiaries as of the last
Business Day of such calendar month for which such information is available.

(iii)      From time to time upon the request of the Administrative Agent or the
Canadian Administrative Agent, the Borrower will promptly deliver to the
Administrative Agent and the Canadian Administrative Agent copies of any and all
deposit account statements, securities account statements and other investment
account statements of the Borrower or any Subsidiary thereof that are requested
to be delivered thereby, in each case, to the extent such statements are
available.

(g)       Monthly Borrowing Base Certificate. As soon as available, but in any
event no later than the earlier of (x) the date that is fifteen (15) Business
Days after the end of each calendar month (as such date may be extended by the
Borrower for up to an additional ten (10) days for the months ending, October
31, 2008, November 30, 2008 and December 31, 2008) (each such monthly date, a
"Borrowing Base Reporting Date") or (y) the date upon which the Canadian
Borrower delivers the Canadian Borrowing Base Certificate to the Canadian
Administrative Agent for such calendar month, commencing with the calendar month
ending November 30, 2008:

(i)        a completed Borrowing Base Certificate as at the end of such calendar
month, duly certified by a Responsible Officer of the Original Borrower (prior
to the Conversion Date, such report shall include a calculation of the amount
set forth in clause (c) of the Borrowing Limit as of the last day of the
preceding calendar month);

(ii)       a detailed schedule and aging of the Accounts (A) including all
obligors, aged by due date (and, to the extent requested by the Administrative
Agent, with an explanation of the terms offered) and, commencing with the month
ending March 31, 2009, aged by invoice date with respect to invoices generated
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(B) reconciled to the Borrowing Base Certificate delivered as of such date
prepared in a manner reasonably acceptable to the Administrative Agent, together
with (1) a summary specifying the name and balance due for each account debtor
and (2) a summary specifying such Accounts by the country in which each account
debtor is located;

(iii)      a schedule detailing the Borrower's and its Subsidiaries' Inventory,
in form and substance reasonably satisfactory to the Administrative Agent, (A)
by location (showing any Inventory located with a third party under any
consignment, bailee arrangement, or warehouse agreement), by class (raw
material, mill store inventory, work-in-process and finished goods), and in the
case of Inventory located with a third party, by volume on hand, which Inventory
shall be valued at the Value of such Inventory and adjusted for Reserves as the
Administrative Agent has previously indicated to the Borrower are deemed by the
Administrative Agent to be appropriate and (B) reconciled to the Borrowing Base
Certificate delivered as of such date;

(iv)      a report in form and substance reasonably satisfactory to the
Administrative Agent evidencing claims under the Credit Insurance Policy or such
other information with respect to the Credit Insurance Policy as the
Administrative Agent may reasonably request in its credit judgment;

(v)       a reconciliation of the Accounts and Inventory between the amounts
shown in the Borrower's general ledgers and the reports delivered pursuant to
clauses (ii) and (iii) above;

(vi)      if readily available, a schedule and aging of the accounts payable of
the Borrower and its Subsidiaries in the form historically generated by the
Borrower or such other information with respect to such accounts payable as the
Administrative Agent may reasonably request in its credit judgment; and

(vii)     concurrently with the delivery of the Borrowing Base Certificate, the
Canadian Borrowing Base Certificate;

provided, that with respect to any calendar month end that is also a fiscal
quarter end, the Borrower shall have satisfied the foregoing clauses if it
provides a draft of the applicable documentation required pursuant to such
clauses on or prior to the applicable Borrowing Base Reporting Date and a final
version of the applicable documentation (in each case with a reconciliation to
the applicable previously delivered draft documentation) by no later than the
earlier of (A) the date upon which financial statements are delivered for such
fiscal quarter pursuant to Section 7.1(a) or (B) the forty-fifth (45th) day
after such fiscal quarter end.

(h)       Cash Flow Reporting. (i) Commencing on December 15, 2008 and on the
third (3rd) Business Day following the last day of each four week period
thereafter (each such date a "Cash Flow Reporting Date"), an updated rolling
13-week forecast (the "Forecast") of cash receipts and disbursements of the
Borrower and its Consolidated Subsidiaries for the 13-consecutive week period
beginning on the date of delivery of such Forecast, which Forecast shall be in
form and substance reasonably satisfactory to the Administrative Agent and the
Canadian Administrative Agent and (ii) on each Cash Flow Reporting Date, a
written report in form and

 

 

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substance reasonably satisfactory to the Administrative Agent and the Canadian
Administrative Agent setting forth the actual aggregated cash receipts and
disbursements of the Borrower and its Consolidated Subsidiaries for the
immediately preceding four week period, together with a comparison of such
actual figures to the Forecast for such period previously delivered to the
Administrative Agent and the Canadian Administrative Agent pursuant to clause
(i) above.

(i)        Notices of certain Asset Dispositions, Insurance and Condemnation
Events and Debt Issuances. In the event of any Asset Disposition (other than an
Asset Disposition permitted pursuant to Section 10.5(a), (b), (c), (d), (e) or
(f)), Insurance and Condemnation Event or any Debt Issuance by the Borrower or
any of its Subsidiaries, (i) notice of such Asset Disposition, Insurance and
Condemnation Event or Debt Issuance, which notice shall specify the Net Cash
Proceeds to be received by the Borrower or any of its Subsidiaries in connection
with such Asset Disposition, Insurance and Condemnation Event or Debt Issuance
and (ii) in the case of any Asset Disposition or Insurance and Condemnation
Event of Eligible Inventory or Eligible Accounts, a pro forma Borrowing Base
Certificate giving effect to such Asset Disposition and Insurance and
Condemnation Event, in each case, to be delivered (A) at least five (5) Business
Days prior to such Asset Disposition if the Net Cash Proceeds of such Asset
Disposition exceed $1,000,000 or (B) within five (5) Business Days after a
Responsible Officer has knowledge of (1) such Asset Disposition if the Net Cash
Proceeds of such Asset Disposition are $1,000,000 or less or (2) any Insurance
and Condemnation Event.

 

(j)

Other Reporting.

 

(i)        At such times as may be requested by the Administrative Agent, as of
the quarter most recently ended, a list of all customer addresses, delivered
electronically in a text formatted file acceptable to the Administrative Agent;

 

(ii)

Promptly upon the Administrative Agent's request:

(A)      an appraisal of all of the Inventory of the Borrower and its
Subsidiaries, which appraisal shall be in form and substance satisfactory to the
Administrative Agent, prepared by an independent third party appraiser
acceptable to the Administrative Agent, and upon which the Administrative Agent
and the Lenders (and the successors and assigns of the Administrative Agent and
each Lender) is expressly permitted to rely; and

(B)      a schedule, which schedule shall be in form and substance satisfactory
to the Administrative Agent, detailing the balance of all intercompany accounts
of the Borrower and its Subsidiaries;

(iii)      As soon as available but in any event within thirty (30) days after
the end of each calendar month, and at such other times as may be requested by
the Administrative Agent, as of the period then ended, the Borrower's and its
Subsidiaries' sales journals, cash receipts journals (identifying trade and
non-trade cash receipts) and debit memo/credit memo journals; and

(iv)      As soon as possible and in any event within thirty (30) days after
filing thereof, copies of all tax returns filed by the Borrower or any of its
Subsidiaries with the

 

 

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U.S. Internal Revenue Service, and any other applicable Governmental Authority
in any jurisdiction.

SECTION 7.2       Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 7.1(a) or (b) and at such other
times as the Administrative Agent shall reasonably request, an Officer's
Compliance Certificate.

SECTION 7.3       Accountants' Certificate . At each time financial statements
are delivered pursuant to Section 7.1(b), a certificate of the independent
public accountants certifying such financial statements that in connection with
their audit, nothing came to their attention that caused them to believe that
the Borrower failed to comply with the terms, covenants, provisions or
conditions of Article IX, or, if such is not the case, specifying such
non-compliance and its nature and period of existence.

 

SECTION 7.4

Other Reports.

(a)       Promptly upon their becoming available, copies of all registration
statements (other than on Form S-8) and regular periodic reports on Forms 10-K,
10-Q and 8-K that the Parent, the Borrower or any of its Subsidiaries shall have
filed with the SEC, or any similar periodic reports filed with any comparable
agency in Canada (it being agreed that each such report or statement shall be
deemed delivered on the date that (i) such report or statement is posted on the
website of the SEC at www.sec.gov , on SEDAR at www.sedar.com or on the website
of the Original Borrower at www.Bowater.com and (ii) the Original Borrower has
provided the Administrative Agent with written notice of such posting).

(b)       Promptly upon the mailing thereof to the shareholders of the Parent or
the Borrower generally, copies of all financial statements, reports and proxy
statements so mailed (it being agreed that such mailing shall be deemed
delivered on the date that (i) such information is posted on the website of the
SEC at www.sec.gov, on SEDAR at www.sedar.com or on the website of the Borrower
at www.Bowater.com and (ii) the Original Borrower has provided the
Administrative Agent with written notice of such posting).

(c)       Such other information regarding the Collateral or the operations,
business affairs and financial condition of the Borrower or any of its
Subsidiaries as the Administrative Agent (for itself or on behalf of any Lender)
may reasonably request.

SECTION 7.5       Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after any Credit Party obtains knowledge thereof)
telephonic and written notice of:

(a)       the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving the Borrower or any of its
Subsidiaries or any of their respective properties, assets or businesses that if
adversely determined could reasonably be expected to have a Material Adverse
Effect;

(b)       any notice of any violation received by the Borrower or any of its
Subsidiaries from any Governmental Authority including, without limitation, any
notice of violation of

 

 

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Environmental Laws which in any such case could reasonably be expected to have a
Material Adverse Effect;

(c)       any labor controversy that has resulted in, or threatens to result in,
a strike or other work action against the Borrower or any of its Subsidiaries
which in any such case could reasonably be expected to have a Material Adverse
Effect;

(d)       any attachment, judgment, lien, levy or order exceeding $10,000,000
that is assessed against the Borrower or any of its Subsidiaries;

(e)       (i) any Default or Event of Default or (ii) any event which
constitutes or which with the passage of time or giving of notice or both would
constitute a default or event of default under any Significant Indebtedness to
which the Borrower or any of its Subsidiaries is a party or by which the
Borrower or any of its Subsidiaries or any of their respective properties may be
bound which could reasonably be expected to have a Material Adverse Effect;

(f)        (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any of its Subsidiaries or any of their ERISA Affiliates of the
PBGC's or any other Governmental Authority's intent to terminate any Pension
Plan or Canadian Pension Plan or to have a trustee appointed to administer any
Pension Plan or Canadian Pension Plan, (iii) all notices received by the
Borrower or any of its Subsidiaries or any of their ERISA Affiliates from a
Multiemployer Plan or Canadian Multiemployer Plan sponsor concerning the
imposition or amount of withdrawal liability pursuant to Section 4202 of ERISA
or any other Applicable Law and (iv) the Borrower obtaining knowledge or reason
to know that the Borrower or any of its Subsidiaries or any of their ERISA
Affiliates has filed or intends to file a notice of intent to terminate any
Pension Plan or Canadian Pension Plan under a distress termination within the
meaning of Section 4041(c) of ERISA or otherwise;

(g)       any event which makes any of the representations set forth in Section
6.1 that is subject to materiality or Material Adverse Effect qualifications
inaccurate in any respect or any event which makes any of the representations
set forth in Section 6.1 that is not subject to materiality or Material Adverse
Effect qualifications inaccurate in any material respect; and

(h)       any notice delivered to the Borrower or the Canadian Borrower, or sent
by or on behalf of the Borrower or the Canadian Borrower, with respect to the
Canadian Credit Agreement or any of the loan documents executed in connection
therewith (including a copy of any such notice).

SECTION 7.6       Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Parent or
the Borrower to the Administrative Agent or any Lender whether pursuant to this
Article VII or any other provision of this Agreement, or any of the Security
Documents, shall, at the time the same is so furnished, comply with the
representations and warranties set forth in Section 6.1(w).

 

 

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ARTICLE VIII

AFFIRMATIVE COVENANTS

Until all of the Obligations have been paid and satisfied in full and the
Commitment terminated, unless consent has been obtained in the manner provided
for in Section 13.2, the Borrower will, and will cause each of its Subsidiaries
to:

SECTION 8.1       Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 10.4, preserve and maintain its legal existence
and all material rights, franchises, licenses and privileges and qualify and
remain qualified as a foreign corporation and authorized to do business in each
jurisdiction in which the failure to so qualify could reasonably be expected to
have a Material Adverse Effect.

SECTION 8.2       Maintenance of Property; Commitment Reductions and Repayments.

(a)       Protect and preserve all properties used or useful in its business,
including copyrights, patents, trade names, service marks and trademarks;
maintain in good working order and condition, ordinary wear and tear excepted,
all buildings, equipment and other tangible real and personal property; and from
time to time make or cause to be made all repairs, renewals and replacements
thereof and additions to such property necessary for the conduct of its
business; in each case, to the extent necessary so that the business carried on
in connection therewith may be conducted in a commercially reasonable manner, it
being understood and agreed that nothing in this paragraph shall prohibit the
idling or abandonment of any property in the reasonable business judgment of the
Borrower and its Subsidiaries.

(b)       (i)        Asset Dispositions. If the Borrower or any of its
Subsidiaries receives Net Cash Proceeds from any Asset Disposition permitted
under this Agreement (other than any Asset Disposition permitted pursuant to
Section 10.5(a), (b), (c) , (d), (e) or (f)) or consented to by the Required
Lenders pursuant to Section 13.2, or, subject to clause (iv) below, from any
Insurance and Condemnation Event, in all cases, in an aggregate amount for all
such Asset Dispositions and Insurance and Condemnation Events in excess of
$2,500,000:

(A)       with respect to the Net Cash Proceeds received from any such Asset
Disposition or Insurance and Condemnation Event with respect to Canadian Fixed
Assets:

 

(1)

the Borrower shall, or shall cause the following to occur:

(x)       first, permanently reduce the Canadian Overadvance Amount (and make
any corresponding payment required pursuant to Section 2.5(c) of the Canadian
Credit Agreement) in an aggregate amount not to exceed the lesser of (I) the
Asset Sale Reduction Amount and (II) the amount of the then applicable Canadian
Overadvance Amount (it being understood and agreed that such reduction shall be
applied to reduce the remaining scheduled reductions of the Canadian Overadvance
Amount, if any, on a pro rata basis); and

 

 

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(y)       then, to the extent of any remaining portion of the Asset Sale
Reduction Amount:

(I)        permanently reduce the Commitment (and make any corresponding payment
required pursuant to Section 2.5(c)) by an amount equal to the product of (x)
the U.S. Pro Rata Percentage multiplied by (y) any such remaining Asset Sale
Reduction Amount after giving effect to the repayments, if any, made in
connection with the commitment reductions required pursuant to clause
(b)(i)(A)(1)(x) above (it being understood and agreed that such reduction shall
also be applied to reduce the remaining scheduled reductions of the Overadvance
Amount, if any, on a pro rata basis); and

(II)      permanently reduce the Canadian Credit Agreement Commitment (and make
any corresponding payment required pursuant to Section 2.5(c) of the Canadian
Credit Agreement) by an amount equal to the product of (x) the Canadian Pro Rata
Percentage multiplied by (y) any such remaining Asset Sale Reduction Amount
after giving effect to the repayments, if any, made in connection with the
commitment reductions required pursuant toclause (b)(i)(A)(1)(x) above; and

(2)       the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made in connection with the
commitment reductions required pursuant to clause (b)(i)(A)(1) above to be
applied to temporarily repay (without a corresponding commitment reduction) (x)
the Loans in the manner provided in Section 2.4(b)(i) in an amount equal to the
product of (I) the U.S. Pro Rata Percentage multiplied by (II) the aggregate
amount of such remaining Net Cash Proceeds and (y) the Canadian Loans in the
manner provided in Section 2.4(b)(i) of the Canadian Credit Agreement in an
amount equal to the product of (I) the Canadian Pro Rata Percentage multiplied
by (II) the aggregate amount of such remaining Net Cash Proceeds;

(B)      with respect to the Net Cash Proceeds received from any such Asset
Disposition or Insurance and Condemnation Event with respect to Non-Fixed Assets
Collateral:

(1)       the Borrower shall or shall cause any repayments as required pursuant
to Section 2.4(b) after giving effect to such Asset Disposition or Insurance and
Condemnation Event to be made; and

(2)      the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made pursuant to clause
(b)(i)(B)(1) above to be applied to temporarily repay (without a corresponding
commitment reduction) the Loans in the manner provided in Section 2.4(b)(i); and

 

 

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(3)       the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made pursuant to clause
(b)(i)(B)(1) and clause (b)(i)(B)(2) above to be applied to temporarily repay
(without a corresponding commitment reduction) the Canadian Loans in the manner
provided in Section 2.4(b)(i) of the Canadian Credit Agreement;

(C)     with respect to the Net Cash Proceeds received from any such Asset
Disposition or Insurance and Condemnation Event with respect to Canadian
Non-Fixed Assets Collateral (other than the Korean Shares):

(1)       the Borrower shall or shall cause any repayments as required pursuant
to Section 2.4(b) of the Canadian Credit Agreement after giving effect to such
Asset Disposition or Insurance and Condemnation Event to be made; and

(2)      the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made pursuant to clause
(b)(i)(C)(1) above to be applied to temporarily repay (without a corresponding
commitment reduction) the Canadian Loans in the manner provided in Section
2.4(b)(i) of the Canadian Credit Agreement; and

(3)       the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made pursuant to clause
(b)(i)(C)(1) and clause (b)(i)(C)(2) above to be applied to temporarily repay
(without a corresponding commitment reduction) the Loans in the manner provided
in Section 2.4(b)(i);

(D)      with respect to the Net Cash Proceeds received from any such Asset
Disposition or Insurance and Condemnation Event with respect to Korean Fixed
Assets or the Korean Shares:

 

(1)

the Borrower shall, or shall cause the following to occur:

(x)       first, permanently reduce the Canadian Overadvance Amount (and make
any corresponding payment required pursuant to Section 2.5(c) of the Canadian
Credit Agreement) in an aggregate amount not to exceed the lesser of (I) the
Asset Sale Reduction Amount and (II) the amount of the then applicable Canadian
Overadvance Amount (it being understood and agreed that such reduction shall be
applied to reduce the remaining scheduled reductions of the Canadian Overadvance
Amount, if any, on a pro rata basis);

(y)       then, to the extent of any remaining portion of the Asset Sale
Reduction Amount after giving effect to the repayments, if any, made in
connection with the commitment reductions required pursuant to clause
(b)(i)(D)(1)(x) above, permanently reduce the Overadvance Amount (and make any
corresponding payment required pursuant to Section 2.5(c)) in an aggregate
amount not to exceed the lesser of (I) such remaining Asset Sale Reduction
Amount and (II) the amount of the then applicable

 

 

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Overadvance Amount (it being understood and agreed that such reduction shall be
applied to reduce the remaining scheduled reductions of the Overadvance Amount,
if any, on a pro rata basis) and

(z)       then, to the extent of any remaining portion of the Asset Sale
Reduction Amount:

(I)        permanently reduce the Commitment (and make any corresponding payment
required pursuant to Section 2.5(c)) by an amount equal to the product of (x)
the U.S. Pro Rata Percentage multiplied by (y) any such remaining Asset Sale
Reduction Amount after giving effect to the repayments, if any, made in
connection with the commitment reductions required pursuant to clauses
(b)(i)(D)(1)(x) and (b)(i)(D)(1)(y) above; and

(II)      permanently reduce the Canadian Credit Agreement Commitment (and make
any corresponding payment required pursuant to Section 2.5(c) of the Canadian
Credit Agreement) by an amount equal to the product of (x) the Canadian Pro Rata
Percentage multiplied by (y) any such remaining Asset Sale Reduction Amount
after giving effect to the repayments, if any, made in connection with the
commitment reductions required pursuant to clauses (b)(i)(D)(1)(x) and
(b)(i)(D)(1)(y) above; and

(2)       the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made in connection with the
commitment reductions required pursuant to clause (b)(i)(D)(1) above to be
applied to temporarily repay (without a corresponding commitment reduction) (x)
the Loans in the manner provided in Section 2.4(b)(i) in an amount equal to the
product of (I) the U.S. Pro Rata Percentage multiplied by (II) the aggregate
amount of such remaining Net Cash Proceeds and (y) the Canadian Loans in the
manner provided in Section 2.4(b)(i) of the Canadian Credit Agreement in an
amount equal to the product of (I) the Canadian Pro Rata Percentage multiplied
by (II) the aggregate amount of such remaining Net Cash Proceeds; and

(E)       with respect to the Net Cash Proceeds from any such Asset Disposition
or Insurance and Condemnation Event of assets or property not covered by clauses
(b)(i)(A), (b)(i)(B), (b)(i)(C) or (b)(i)(D) above (including, without
limitation, any timberlands and any Fixed Assets that are not Canadian Fixed
Assets):

 

(1)

the Borrower shall, or shall cause the following to occur:

(x)       permanently reduce the Commitment (and make any corresponding payment
required pursuant to Section 2.5(c)) by an amount equal to the product of (I)
the U.S. Pro Rata Percentage multiplied by (II) the Asset Sale Reduction Amount
(it being understood and agreed that such reduction shall also be applied to

 

 

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reduce the remaining scheduled reductions of the Overadvance Amount, if any, on
a pro rata basis);

and

(y)       permanently reduce the Canadian Credit Agreement Commitment (and make
any corresponding payment required pursuant to Section 2.5(c) of the Canadian
Credit Agreement) by an amount equal to the product of (I) the Canadian Pro Rata
Percentage multiplied by (II) the Asset Sale Reduction Amount (it being
understood and agreed that such reduction shall also be applied to reduce the
remaining scheduled reductions of the Canadian Overadvance Amount, if any, on a
pro rata basis); and

(2)      the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made in connection with the
commitment reductions required pursuant to clause (b)(i)(E)(1) above to be
applied to temporarily repay (without a corresponding commitment reduction) (x)
the Loans in the manner provided in Section 2.4(b)(i) in an amount equal to the
product of (I) the U.S. Pro Rata Percentage multiplied by (II) the aggregate
amount of such remaining Net Cash Proceeds and (y) the Canadian Loans in the
manner provided in Section 2.4(b)(i) of the Canadian Credit Agreement in an
amount equal to the product of (I) the Canadian Pro Rata Percentage multiplied
by (II) the aggregate amount of such remaining Net Cash Proceeds.

Each such permanent reduction and each such repayment shall be made within three
(3) Business Days after the receipt of Net Cash Proceeds of any such Asset
Disposition or Insurance and Condemnation Event.

 

(ii)       Debt Issuances. If the Borrower or any of its Subsidiaries receives
Net Cash Proceeds from any Debt Issuance, the Borrower shall immediately notify
the Administrative Agent and upon receipt of such notice, the Administrative
Agent shall promptly notify the Lenders. Upon receipt of such Net Cash Proceeds,

(A)      the Commitment and the Canadian Credit Agreement Commitment shall be
reduced by an amount equal to seventy-five percent (75%) of such Net Cash
Proceeds (such amount, the "Debt Issuance Reduction Amount") with each such
reduction to be effected as follows:

(1)       to permanently reduce the Commitment (and make any corresponding
payment required pursuant to Section 2.5(c)) by an amount equal to the product
of (x) the U.S. Pro Rata Percentage multiplied by (y) the Debt Issuance
Reduction Amount (it being understood and agreed that such reduction shall also
be applied to reduce the remaining scheduled reductions of the Overadvance
Amount, if any, on a pro rata basis); and

 

 

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(2)       to permanently reduce the Canadian Credit Agreement Commitment (and
make any corresponding payment required pursuant to Section 2.5(c) of the
Canadian Credit Agreement) by an amount equal to the product of (x) the Canadian
Pro Rata Percentage multiplied by (y) the Debt Issuance Reduction Amount (it
being understood and agreed that such reduction shall also be applied to reduce
the remaining scheduled reductions of the Canadian Overadvance Amount, if
any, on a pro rata basis); and

(B)      the Borrower shall or shall cause the Net Cash Proceeds which remain
after giving effect to the repayments, if any, made in connection with the
commitment reductions required pursuant to clause (b)(ii)(A) above to be applied
to temporarily repay (without a corresponding commitment reduction) (x) the
Loans in the manner provided in Section 2.4(b)(i) in an amount equal to the
product of (I) the U.S. Pro Rata Percentage multiplied by (II) the aggregate
amount of such remaining Net Cash Proceeds and (y) the Canadian Loans in the
manner provided in Section 2.4(b)(i) of the Canadian Credit Agreement in an
amount equal to the product of (I) the Canadian Pro Rata Percentage multiplied
by (II) the aggregate amount of such remaining Net Cash Proceeds.

Each such permanent reduction and each such repayment shall be made within three
(3) Business Days after the receipt of Net Cash Proceeds of any such Debt
Issuance.

 

(iv)      Notwithstanding the foregoing, no later than five (5) Business Days
following the date of receipt by the Borrower or any of its Subsidiaries of any
Net Cash Proceeds from any Insurance and Condemnation Event, the Borrower shall
apply such Net Cash Proceeds in accordance with the applicable subclause of
clause (i) above; provided, that no such application shall be required from the
Net Cash Proceeds received by the Borrower or any of its Subsidiaries with
respect to such Insurance and Condemnation Event to the extent such Net Cash
Proceeds therefrom are either (A) used, within twelve (12) months after receipt
of such Net Cash Proceeds, to reimburse the Borrower or any of its Subsidiaries
for amounts spent by them to replace, repair and/or restore the assets that were
the subject of such Insurance and Condemnation Event or (B) committed, within
three (3) months after receipt of such Net Cash Proceeds, to be used to replace,
repair and/or restore the assets that were the subject of such Insurance and
Condemnation Event, and are thereafter actually used to replace, repair and/or
restore such assets within twelve (12) months after receipt of such Net Cash
Proceeds; provided, that any portion of the Net Cash Proceeds not so committed
to be reinvested within such three (3) month period or actually used within such
twelve (12) month period shall be applied in accordance with the applicable
subclause of clause (i) above; provided, further, that until reinvested, the
aggregate amount of the Net Cash Proceeds to be reinvested shall be used to
temporarily repay Loans and Canadian Loans in accordance with the applicable
subclause of clause (i) above.

SECTION 8.3       Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents (including, without
limitation, hazard and business interruption insurance), and on the Closing Date
and from time to time thereafter deliver to the Administrative Agent upon its
reasonable request information in reasonable detail as to the insurance then in
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stating the names of the insurance companies, the amounts of the insurance, the
dates of the expiration thereof and the properties and risks covered thereby.

SECTION 8.4       Accounting Methods and Financial Records. Maintain a system of
accounting, and keep proper books, records and accounts (which shall be true and
complete in all material respects) as may be required or as may be necessary to
permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.

SECTION 8.5       Payment of Taxes. Pay and discharge all taxes, assessments and
other governmental charges that may be levied or assessed upon it or on its
income or profits or any of its property; except for any such tax, assessment or
other governmental charge the payment of which is being contested in good faith
so long as adequate reserves are maintained with respect thereto in accordance
with GAAP.

SECTION 8.6       Compliance With Laws and Approvals. Observe and remain in
compliance with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business,
except where the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

SECTION 8.7       Environmental Laws. In addition to and without limiting the
generality of Section 8.6, (a) comply with, and ensure such compliance by all
tenants and subtenants with all applicable Environmental Laws and obtain and
comply with and maintain, and ensure that all tenants and subtenants, if any,
obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, except where the failure to do so could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect, (b) conduct
and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, and
promptly comply with all lawful orders and directives of any Governmental
Authority regarding Environmental Laws, except where the failure to conduct or
complete such actions, or comply with such orders or directions, could not
reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect and (c) defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates,
employees, agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise, arising out
of, or in any way relating to the presence of Hazardous Materials, or the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of the Borrower or any of its Subsidiaries, or any
orders, requirements or demands of Governmental Authorities related thereto,
including, without limitation, reasonable attorney's and consultant's fees,
investigation and laboratory fees, response costs, court costs and litigation
expenses, except to the extent that any of the foregoing directly result from
the gross negligence or willful misconduct of the party seeking indemnification
therefor, as determined by a court of competent jurisdiction by final
nonappealable judgment.

SECTION 8.8       Compliance with ERISA. In addition to and without limiting the
generality of Section 8.6, (a) except where the failure to so comply could not,
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the aggregate, reasonably be expected to have a Material Adverse Effect, (i)
comply with all material applicable provisions of ERISA with respect to Employee
Benefit Plans and the ITA and other Applicable Law with respect to all Canadian
Employee Benefit Plans, (ii) not take any action or fail to take action the
result of which could be a liability to the PBGC or any other Governmental
Authority or to a Multiemployer Plan or a Canadian Multiemployer Plan, (iii) not
participate in any prohibited transaction that could result in any civil penalty
under ERISA or tax under the Code and (iv) operate each Employee Benefit Plan in
such a manner that will not incur any tax liability under Section 4980B of the
Code or any liability to any qualified beneficiary as defined in Section 4980B
of the Code and (b) furnish to the Administrative Agent upon the Administrative
Agent's request such additional information about any Employee Benefit Plan or
Canadian Employee Benefit Plan as may be reasonably requested by the
Administrative Agent.

 

SECTION 8.9

Visits and Inspections; Consultant Matters.

(a)       Visits and Inspections. Permit representatives of the Administrative
Agent or any Lender, from time to time upon prior reasonable notice and during
normal business hours, at the Borrower's expense, to visit and inspect the
properties of the Borrower and its Subsidiaries; inspect, audit and make
extracts from their respective books, records and files, including, but not
limited to, management letters prepared by independent accountants; discuss with
their respective principal officers, and their respective independent
accountants, their respective business, assets, liabilities, financial
condition, results of operations and business prospects; and conduct field
audits, examinations and appraisals with respect to the Collateral and the
Canadian Collateral (including, but not limited to, the Accounts and the
Inventory), which field audits shall occur no less frequently than once per
fiscal quarter and which inventory appraisals shall occur no less frequently
than once per each six-month period. Notwithstanding the foregoing, upon the
occurrence and during the continuance of an Event of Default, the Administrative
Agent may do any of the foregoing at any time without advance notice and the
Borrower shall be required to bear the cost of all such visits, inspections,
field audits, examinations and appraisals. Notwithstanding the foregoing, field
audits, examinations and appraisals with respect to the Collateral and the
Canadian Collateral shall be conducted only by the Administrative Agent, in its
sole discretion or at the request of any Lender.

(b)       Consultant Matters. (i) Permit the retention of Consultants and (ii)
cooperate with any such Consultants and allow any such Consultants, from time to
time upon prior reasonable notice and during normal business hours, at the
Borrower's expense, to visit and inspect any of the properties of the Borrower
and its Subsidiaries, examine corporate, financial and operating records of the
Borrower and its Subsidiaries, make copies thereof or abstracts therefrom and
discuss the affairs, finances and accounts of the Borrower and its Subsidiaries
with their respective directors, officers, and independent public accountants.

 

SECTION 8.10

Additional Subsidiaries.

 

(a)       Within thirty (30) days after (i) the redesignation of an Immaterial
Subsidiary as a Material Subsidiary in accordance with Section 8.10(b) below or
(ii) the creation or acquisition of any Material Subsidiary, including in
connection with any Permitted Acquisition (any such Subsidiary, a "New Material
Subsidiary"), cause to be executed and delivered to the Administrative Agent
(unless otherwise agreed to by the Administrative Agent): (A) a duly

 

 

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executed joinder agreement in form and substance reasonably satisfactory to the
Administrative Agent joining such New Material Subsidiary to the Subsidiary
Guaranty Agreement, the Collateral Agreement and any other applicable Security
Documents, (B) such updated Schedules to the Loan Documents as requested by the
Administrative Agent with regard to such Person (including, without limitation,
updated Schedule 6.1(b) reflecting the creation or acquisition of such New
Material Subsidiary), (C) such original stock or other certificates and stock or
other transfer powers evidencing the ownership interests of the Borrower or the
applicable Material Subsidiary, as applicable, in such New Material Subsidiary
(unless such New Material Subsidiary is a Restricted Subsidiary), (D) such
documents and certificates referred to in Section 5.2 as may be reasonably
requested by the Administrative Agent (including, without limitation, favorable
legal opinions of counsel addressed to the Administrative Agent and the Lenders
with respect to the New Material Subsidiary, the Loan Documents and such other
matters as the Lenders shall request), and (E) such other documents and
certificates as may be reasonably requested by the Administrative Agent, all in
form, content and scope reasonably satisfactory to the Administrative Agent.

(b)       The Borrower may, at any time and upon written notice to the
Administrative Agent, redesignate any Immaterial Subsidiary as a Material
Subsidiary. Further, promptly after the date on which the Borrower or the
Administrative Agent determines that any Subsidiary no longer qualifies as an
Immaterial Subsidiary such Subsidiary shall be redesignated as a Material
Subsidiary and shall comply with clause (a) of this Section.

(c)       Notify the Administrative Agent at the time that any Person becomes a
first tier Foreign Subsidiary of the Borrower or any Material Subsidiary, and
promptly thereafter (and in any event within forty-five (45) days after
notification), cause to be executed and delivered to the Administrative Agent
(unless otherwise agreed to by the Administrative Agent): (i) Foreign Pledge
Documents pledging sixty-five percent (65%) of the total outstanding Capital
Stock of such new Foreign Subsidiary and a consent thereto executed by such new
Foreign Subsidiary (including, without limitation, if applicable, original stock
certificates (or the equivalent thereof pursuant to the Applicable Laws and
practices of any relevant foreign jurisdiction) evidencing the Capital Stock of
such new Foreign Subsidiary, together with an appropriate undated stock power
for each certificate duly executed in blank by the registered owner thereof),
(ii) such updated Schedules to the Loan Documents as requested by the
Administrative Agent with regard to such Person (including, without limitation,
updated Schedule 6.1(b) reflecting the creation or acquisition of such Person),
(iii) such documents and certificates referred to in Section 5.2 as may be
reasonably requested by the Administrative Agent (including, without limitation,
favorable legal opinions of counsel addressed to the Administrative Agent and
the Lenders with respect to such Person, the Loan Documents and such other
matters as the Lenders shall request), and (iv) such other documents and
certificates as may be reasonably requested by the Administrative Agent, all in
form, content and scope reasonably satisfactory to the Administrative Agent.

(d)       Within thirty (30) days after the creation or acquisition of any new
Subsidiary, including in connection with any Permitted Acquisition, cause to be
executed and delivered to the Administrative Agent (unless otherwise agreed to
by the Administrative Agent) a duly executed joinder agreement in the form
attached to the Intercompany Subordination Agreement joining such new Subsidiary
thereto.

 

 

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(e)       (i)        Parent Loan Documentation. On or prior to the Fourth
Amendment Effective Date, the Administrative Agent shall have received:

(A)      a duly executed copy of the Parent Guaranty Agreement, in form and
substance reasonably satisfactory to the Administrative Agent; and

(B)      such documents and certificates referred to in Section 5.2 as may be
reasonably requested by the Administrative Agent with respect to the Parent
(including, without limitation, favorable opinions of counsel addressed to the
Administrative Agent and the Lenders with respect to the Parent, the Loan
Documents to which it is a party and such other matters as the Lenders shall
request);

 

(ii)

New Borrower Loan Documentation.

 

(A)      As soon as practicable, but in no event later than April 15, 2008, the
Administrative Agent shall have received:

 

(1)       evidence satisfactory to the Administrative Agent that the Borrower
shall be diligently pursuing in good faith the rendering of the solvency
opinions referred to in Sections 8.10(e)(ii)(B) and 8.10(e)(ii)(C) by a third
party consultant reasonably acceptable to the Administrative Agent (including
having delivered to such third party consultant all financial and other
information necessary to provide the basis for the delivery of such solvency
opinion); and

 

(2)       information, in form and substance reasonably satisfactory to the
Administrative Agent, confirming (x) that the New Borrowers own, free and clear
of any Liens, the New Borrower Fixed Assets and (y) the ability of the New
Borrowers to grant to the Administrative Agent, on behalf of the Secured Parties
and the Canadian Secured Parties, a perfected first priority security interest
in the New Borrower Fixed Assets without the consent or approval of any third
Person; and

 

(B)      As soon as practicable, but in no event later than May 15, 2008, the
Administrative Agent shall have received:

 

(1)       a copy of a solvency opinion from Houlihan Lokey Howard & Zukin
Financial Advisors, Inc. or another opinion provider reasonably acceptable to
the Administrative Agent as to the solvency of the Original Borrower after
giving effect to the New Borrower Transactions and the transactions contemplated
by the Fourth Amendment, this Agreement and the joinder agreement referred to in
clause (2) below and such other matters as the Lenders shall request (which such
opinion shall expressly permit reliance (or be accompanied by a letter, in form
and substance satisfactory to the Administrative Agent, executed by the opinion
provider that expressly permits reliance) by the Administrative Agent, the
Lenders

 

 

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and any successors and assigns of the Administrative Agent or any Lender);

 

(2)       a duly executed joinder agreement, in form and substance reasonably
satisfactory to the Administrative Agent, joining each New Borrower to the
Credit Agreement, the Intercompany Subordination Agreement and any other
applicable Loan Documents;

 

(3)       such updated Schedules to the Loan Documents as requested by the
Administrative Agent or the Canadian Administrative Agent with regard to the New
Borrowers (including, without limitation, an updated Schedule 6.1(b));

 

(4)       a certificate of a Responsible Officer of each New Borrower certifying
as to the incumbency and genuineness of the signature of each officer of each
New Borrower executing the Loan Documents to which it is a party and certifying
that attached thereto is a true, correct and complete copy of (w) the articles
or certificate of incorporation or formation of each New Borrower and all
amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation or formation, (x)
the bylaws or other governing document of each New Borrower as in effect on the
date hereof, (y) resolutions duly adopted by the board of directors or other
governing body of each New Borrower authorizing the transactions contemplated
hereunder and the execution, delivery and performance of this Agreement and the
other Loan Documents to which it is a party, and (z) certificates as of a recent
date of the good standing of each New Borrower under the laws of its
jurisdiction of incorporation or formation;

(5)       an originally executed counterpart of a collateral agreement, in form
and substance satisfactory to the Administrative Agent, executed by each New
Borrower in favor of the Administrative Agent and the other Secured Parties and
all other Security Documents entered into in connection therewith (the "New
Borrower Security Documents"), together with all schedules, exhibits and annexes
thereto;

(6)       all filings and recordations that are necessary to perfect the
security interests of the Administrative Agent, on behalf of itself and the
other Secured Parties, in the Collateral granted by each New Borrower under the
New Borrower Security Documents and evidence satisfactory to the Administrative
Agent that upon such filings and recordations such security interests constitute
valid and perfected first priority Liens therein;

(7)       the results of a Lien search (including a search as to judgments,
pending litigation and tax matters) made against each New Borrower under the
Uniform Commercial Code (or applicable judicial docket) as in effect in each
jurisdiction in which filings or recordations

 

 

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under the Uniform Commercial Code should be made to evidence or perfect security
interests in all assets of each New Borrower, indicating among other things that
the assets of each New Borrower are free and clear of any Liens (except
Permitted Liens);

(8)       evidence in form and substance reasonably satisfactory to the
Administrative Agent confirming: (x) the adequacy and effectiveness of the
property and liability insurance coverage of the Borrower (including, without
limitation, coverage of each New Borrower) and its Subsidiaries and (y) the
interest of the Administrative Agent (as loss payee and additional insured and,
with respect to the real property subject to the New Borrower Mortgages (other
than the Supplemental New Borrower Mortgage), as mortgagee) with respect to such
insurance coverage;

(9)       a duly executed counterpart of each New Borrower Mortgage (other than
the Supplemental New Borrower Mortgage);

(10)     all filings and recordations that are necessary to perfect the security
interests of the Administrative Agent, on behalf of itself, the other Secured
Parties and the Canadian Secured Parties, in the Collateral granted by each New
Borrower under each New Borrower Mortgage (other than the Supplemental New
Borrower Mortgage) and evidence satisfactory to the Administrative Agent that
upon such filings and recordations such security interests constitute valid and
perfected first priority Liens therein;

(11)     duly executed copies of amended and restated Notes to replace the Notes
issued to the applicable Lenders on or prior to the date each New Borrower is
joined pursuant to clause (2) above;

(12)     the original New Borrower Note, along with a blank endorsement executed
by the Original Borrower (which such endorsement shall be in form and substance
satisfactory to the Administrative Agent);

(13)     favorable opinions of counsel of each New Borrower addressed to the
Administrative Agent and the Lenders with respect to the New Borrowers, this
Agreement, each of the New Borrower Mortgages (other than the Supplemental New
Borrower Mortgage) and the other Loan Documents to which the New Borrowers are a
party and such other matters as the Lenders shall reasonably request (which such
opinions shall expressly permit reliance by successors and assigns of the
Administrative Agent or any Lender); and

(14)     such other instruments, documents and certificates as the
Administrative Agent shall reasonably request.

(C)      As soon as practicable, but in no event later than May 22, 2008, the
Administrative Agent shall have received a copy of a solvency opinion from

 

 

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Houlihan Lokey Howard & Zukin Financial Advisors, Inc. or another opinion
provider reasonably acceptable to the Administrative Agent as to the solvency of
each of the New Borrowers (other than BNS Holdings if BNS Holdings is a holding
company that holds only the Capital Stock of the Coosa Pines Borrower and the
Grenada Borrower and has no creditors other than the Lenders), in each case
after giving effect to the New Borrower Transactions and the transactions
contemplated by the Fourth Amendment, this Agreement and the joinder agreement
referred to in Section 8.10(e)(ii)(B)(2) above and such other matters as the
Lenders shall request (which such opinion shall expressly permit reliance (or be
accompanied by a letter, in form and substance satisfactory to the
Administrative Agent, executed by the opinion provider that expressly permits
reliance) by the Administrative Agent, the Lenders and any successors and
assigns of the Administrative Agent or any Lender).

 

(D)      As soon as practicable, but in no event later than May 30, 2008, the
Administrative Agent shall have received:

(1)       to the extent reasonably requested by the Administrative Agent,
evidence in form and substance reasonably satisfactory to the Administrative
Agent confirming the interest of the Administrative Agent as loss payee,
additional insured and mortgagee with respect to the Coosa Pines Mill and Coosa
Pines Real Property subject to the Supplemental New Borrower Mortgage;

(2)       a duly executed counterpart of the Supplemental New Borrower Mortgage;

(3)       all filings and recordations that are necessary to perfect the
security interests of the Administrative Agent, on behalf of itself, the other
Secured Parties and the Canadian Secured Parties, in the Collateral granted by
the Supplemental New Borrower Mortgagor, and evidence satisfactory to the
Administrative Agent that upon such filings and recordations such security
interests constitute valid and perfected first priority Liens therein (or, to
the extent acceptable to the Administrative Agent, evidence satisfactory to the
Administrative Agent that upon delivery of the Supplemental New Borrower
Mortgage, all right, title and interest of the Supplemental New Borrower
Mortgagor shall be subordinated in all respects to the security interests of the
Administrative Agent, on behalf of itself, the other Secured Parties and the
Canadian Secured Parties, with respect to the interests subject to the
Supplemental New Borrower Mortgage);

(4)       favorable opinions of counsel of the Supplemental New Borrower
Mortgagor addressed to the Administrative Agent and the Lenders with respect to
the Supplemental New Borrower Mortgage and such other matters as the Lenders
shall reasonably request (which such opinions shall expressly permit reliance by
successors and assigns of the Administrative Agent or any Lender); and

 

 

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(5)       such other instruments, documents and certificates as the
Administrative Agent shall reasonably request.

(E)       As soon as possible but in any event no later than July 31, 2008 (as
such date may be extended by the Administrative Agent and the Canadian
Administrative Agent in their sole discretion):

(1)       a final title policy, insuring the first priority Liens of the Secured
Parties and the Canadian Secured Parties and showing no Liens prior to the Liens
of the Secured Parties and the Canadian Secured Parties (other than for ad
valorem taxes not yet due and payable) and containing only such other customary
title exceptions as are reasonably acceptable to the Administrative Agent, with
title insurance companies acceptable to the Administrative Agent, on each of the
Coosa Pines Mill Real Property and Grenada Mill Real Property (it being agreed
that the Borrower and its Subsidiaries shall provide or obtain any customary
affidavits and indemnities as may be required or necessary to obtain title
insurance satisfactory to the Administrative Agent);

(2)       copies of all recorded documents creating exceptions to the title
policies referred to in Section 8.10(e)(ii)(E)(1);

(3)       a certification form of a certification from the National Research
Center, or any successor agency thereto, regarding each of the Coosa Pines Mill
Real Property and the Grenada Mill Real Property;

(4)       copies of as-built surveys of a recent date of each of the Coosa Pines
Mill Real Property and the Grenada Mill Real Property, in each case certified as
of a recent date by a registered engineer or land surveyor. Each such survey
shall be accompanied by an affidavit (a "Survey Affidavit") of an authorized
signatory of the owner of such property stating that there have been no
improvements or encroachments to the property since the date of the respective
survey such that the existing survey is no longer accurate. Each such survey
shall show the area of such property, all boundaries of the land with courses
and distances indicated, including chord bearings and arc and chord distances
for all curves, and shall show dimensions and locations of all easements,
private drives, roadways, and other facts materially affecting such property,
and shall show such other details as the Administrative Agent may reasonably
request, including, without limitation, any encroachment (and the extent thereof
in feet and inches) onto the property or by any of the improvements on the
property upon adjoining land or upon any easement burdening the property; any
improvements, to the extent constructed, and the relation of the improvements by
distances to the boundaries of the property, to any easements burdening the
property, and to the established building lines and the street lines; and if
improvements are existing, (x) a statement of the number of each type of parking
space

 

 

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required by Applicable Laws, ordinances, orders, rules, regulations, restrictive
covenants and easements affecting the improvement, and the number of each such
type of parking space provided, and (y) the locations of all utilities serving
the improvement;

(5)       a Phase I environmental assessment and such other environmental report
reasonably requested by the Administrative Agent regarding each of the Coosa
Pines Mill Real Property and the Grenada Mill Real Property, in each case
prepared by an environmental engineering firm acceptable to the Administrative
Agent showing no environmental conditions in violation of Environmental Laws or
liabilities under Environmental Laws, either of which could reasonably be
expected to have a Material Adverse Effect; and

(6)       such other certificates, documents and information (including, without
limitation, engineering and structural reports, permanent certificates of
occupancy and evidence of zoning compliance, in each case, with respect to each
of the Coosa Pines Mill Real Property and the Grenada Mill Real Property) as may
be reasonably requested by the Administrative Agent, all in form, consent and
scope reasonably satisfactory to the Administrative Agent.

(iii)      In each case noted above, the Administrative Agent shall have
received, on behalf of itself, the Lenders and any other applicable Person, all
accrued and unpaid fees, expenses or commissions payable to the Administrative
Agent and the Lenders under this Agreement (including, without limitation, legal
(including, without limitation, local counsel) fees and expenses) and such
amounts as may be due to any other Person in connection with the transactions
contemplated hereby, including all taxes, fees and other charges in connection
with the execution, delivery, recording, filing and registration of any of the
Loan Documents.

SECTION 8.11     Use of Proceeds. The Borrower shall use the proceeds of the
Extensions of Credit (a) to finance the acquisition of Capital Assets, (b) to
refinance the Existing Facilities and (c) for working capital and general
corporate purposes of the Borrower and its Subsidiaries, including the payment
of certain fees and expenses incurred in connection with this Agreement.

SECTION 8.12     Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or the Required Agreement Lenders (through the Administrative Agent) may
reasonably require to document and consummate the transactions contemplated
hereby and to vest completely in and insure the Administrative Agent and the
Lenders their respective rights under this Agreement, the Letters of Credit and
the other Loan Documents.

 

 

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ARTICLE IX

FINANCIAL COVENANTS

Until all of the Obligations have been paid and satisfied in full and the
Commitment terminated, unless consent has been obtained in the manner set forth
in Section 13.2, the Borrower and its Subsidiaries on a Consolidated basis will
not:

SECTION 9.1       Consolidated Senior Secured Leverage Ratio. As of any fiscal
quarter end, permit the Consolidated Senior Secured Leverage Ratio to be greater
than the corresponding ratio set forth below:

 

Applicable Period

Maximum Ratio

Third Amendment Effective Date to March 31, 2008

4.50 to 1.00

April 1, 2008 through and including June 30, 2008

2.75 to 1.00

July 1, 2008 through and including September 30, 2008

1.50 to 1.00

October 1, 2008 through and including December 31, 2008

1.40 to 1.00

January 1, 2009 and thereafter

1.25 to 1.00

 

SECTION 9.2       Interest Coverage Ratio. As of any fiscal quarter ending
during the periods specified below, permit the ratio of (a) the sum, without
duplication, of (i) Consolidated Adjusted EBITDA for the period of four (4)
consecutive fiscal quarters ending on or immediately prior to such date, plus
(ii) the amount of Specified Non-Recurring Charges taken during the period of
four (4) consecutive fiscal quarters ending on or immediately prior to such
date, to (b) Consolidated Interest Expense paid or payable in cash for the
period of four (4) consecutive fiscal quarters ending on or immediately prior to
such date, to be less than the corresponding ratio set forth below:

 

Applicable Period

Minimum Ratio

Third Amendment Effective Date to March 31, 2008

0.75 to 1.00

April 1, 2008 through and including June 30, 2008

1.00 to 1.00

July 1, 2008 through and including September 30, 2008

1.40 to 1.00

October 1, 2008 through and including December 31, 2008

1.75 to 1.00

January 1, 2009 and thereafter

2.00 to 1.00

 

 

 

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ARTICLE X

NEGATIVE COVENANTS

Until all of the Obligations have been paid and satisfied in full and the
Commitment terminated, unless consent has been obtained in the manner set forth
in Section 13.2, the Borrower will not and will not permit any of its
Subsidiaries to:

SECTION 10.1     Limitations on Indebtedness. Create, incur, assume or suffer to
exist any Indebtedness except:

(a)       (i) the Obligations (excluding Hedging Obligations permitted pursuant
to Section 10.1(c)) and (ii) the Guaranty Obligations in favor of the
Administrative Agent for the benefit of the Secured Parties;

(b)       (i) the Canadian Obligations (excluding any Canadian Obligations
pursuant to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii)
the Guaranty Obligations in respect of the Canadian Obligations in favor of the
Canadian Administrative Agent for the benefit of the Canadian Secured Parties;

(c)       Indebtedness incurred in connection with a Hedging Agreement (i) which
is entered into for interest rate, foreign currency or other business purposes
and not for speculative purposes and (ii) with a counterparty reasonably
satisfactory to the Administrative Agent and the Canadian Administrative Agent;
provided that any counterparty that is a Lender, a Canadian Lender or any
Affiliate thereof shall be deemed satisfactory to the Administrative Agent and
the Canadian Administrative Agent;

(d)       Indebtedness existing on the Closing Date and not otherwise permitted
under this Section and, to the extent that the outstanding principal amount of
such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1
(including any Indebtedness (including, without limitation, any Guaranty
Obligation of Indebtedness of another Person, but excluding the April 2008
Convertible Indebtedness) issued to refinance or to refund such Indebtedness or
any Indebtedness which constitutes a renewal or extension of such Indebtedness);
provided that (i) the principal amount of such Indebtedness may not be increased
at the time of such refinancing, refunding, renewal or extension except (A) by
an amount equal to a reasonable premium or other reasonable amount paid, and
fees and expenses reasonably incurred, in connection with such refinancing,
refunding, renewal or extension and by an amount equal to any existing
commitments unutilized thereunder and (B) by additional amounts, to the extent
that the Consolidated Total Leverage Ratio, on a pro forma basis after giving
effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default
or Event of Default exists and is continuing or would be caused by the
refinancing, refunding, renewal or extension thereof, (iii) the Administrative
Agent and the Canadian Administrative Agent shall have received satisfactory
written evidence that the Borrower and its Subsidiaries would be in compliance
with all covenants in this Agreement and the Canadian Credit Agreement on a pro
forma basis after giving effect to the refinancing, refunding, renewal or
extension thereof, (iv) the weighted average life of such Indebtedness shall not
be shorter than the weighted average life of the Indebtedness being refinanced,
refunded, renewed or extended, (v) any terms of subordination

 

 

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set forth in the Indebtedness being refinanced, refunded, renewed or extended
are not adversely affected in any material respect, (vi) if the Indebtedness
being refinanced is not secured by the assets of any Credit Party or any of its
Subsidiaries, such refinancing Indebtedness shall also not be secured by the
assets of any Credit Party or any of its Subsidiaries and (vii) none of the
Existing Notes nor any Indebtedness incurred in accordance with this paragraph
to refinance, refund, renew or extend the Existing Notes shall be guaranteed by
the Borrower or any of its Subsidiaries (other than (A) those Existing Notes
which are guaranteed by the Borrower as of the Closing Date and identified on
Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to
refinance any Existing Notes which, as of the Closing Date, (1) have an
outstanding principal balance in excess of $50,000,000 and (2) mature or are
subject to mandatory redemption prior to the Maturity Date);

(e)       Indebtedness incurred in connection with Capital Leases, including
those Capital Leases existing on the Closing Date, and purchase money
Indebtedness, including all purchase money Indebtedness existing on the Closing
Date, in an aggregate amount not to exceed $50,000,000 on any date of
determination;

(f)        (i)        Guaranty Obligations with respect to Indebtedness
permitted pursuant to subsections (c), (e), (h), (l), (m) and (n) of this
Section (provided that any Guaranty Obligations of Indebtedness incurred
pursuant to subsection (h) or, to the extent applicable, subsection (n) of this
Section shall be subordinated to the Obligations and the Canadian Obligations to
the same extent as the Indebtedness that is being guaranteed); or

(ii)       Guaranty Obligations of the Original Borrower with respect to the
April 2008 Convertible Indebtedness; provided that (A) the Original Borrower
shall not be permitted to create, incur, assume or suffer to exist such Guaranty
Obligations unless (1) it shall have delivered to the Administrative Agent
evidence, in form and substance reasonably satisfactory to the Administrative
Agent, that the Abitibi Entities shall have consummated (or will concurrently
consummate) their previously announced financing plan which will consist of the
following: (x) $250,000,000 to $325,000,000 of new senior unsecured exchange
notes of Abitibi, (y) $350,000,000 to $450,000,000 of new 364-day term loans of
Abitibi and (z) approximately $400,000,000 of new senior secured notes or a term
loan of Abitibi not to exceed a five year term (provided that Abitibi may
replace or amend the financings described in this clause (A)(1) above so long as
such replacement or amendment consists of non-convertible debt financings of
Abitibi that are not guaranteed by, or secured by the assets of, the Borrower or
any of its Subsidiaries and would not reduce the aggregate amount of proceeds
reflected above in this clause (A) in excess of $50,000,000) or (2) the proceeds
of such Indebtedness are used to permanently reduce, on a pro rata basis, the
Commitment under this Agreement and the Canadian Credit Agreement Commitment and
to permanently repay, on a pro rata basis, Extensions of Credit under this
Agreement and Canadian Extensions of Credit under the Canadian Credit Agreement
or for such other use approved in writing by the Required Lenders (it being
understood that any use that involves the reduction of the commitments or
repayment of the extensions of credit under this Credit Facility or the Canadian
Credit Facility shall continue to be applied to this Credit Facility and the
Canadian Credit Facility on a pro rata basis unless otherwise agreed to by the
Required Agreement Lenders and the Canadian Required Agreement Lenders); and (B)
such Guaranty

 

 

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Obligations shall be unsecured and shall not exceed $350,000,000 in an aggregate
principal amount (plus any paid-in-kind interest thereon) on any date of
determination.

(g)       (i)        (A) Indebtedness owed by any Credit Party to any other
Credit Party including, without limitation, Indebtedness evidenced by the New
Borrower Notes (provided that, if requested by the Administrative Agent, such
Indebtedness shall be subordinated to the Obligations on terms and conditions
reasonably satisfactory to the Administrative Agent) and (B) Indebtedness owed
by any Canadian Credit Party (other than the Borrower) to any other Canadian
Credit Party (other than the Borrower) (provided that, if requested by the
Canadian Administrative Agent, such Indebtedness shall be subordinated to the
Canadian Obligations on terms and conditions reasonably satisfactory to the
Canadian Administrative Agent);

(ii)       (A) Indebtedness owed by any Canadian Credit Party (other than the
Borrower) to any Credit Party (provided that such Indebtedness shall be payable
by such Canadian Credit Party on demand by the applicable Credit Party) and (B)
Indebtedness owed by any Credit Party to any Canadian Credit Party (provided
that such Indebtedness shall be payable by such Credit Party (other than the
Borrower) on demand by the applicable Canadian Credit Party);

 

(iii)      Indebtedness owed by any Subsidiary which is not a Credit Party or a
Canadian Credit Party to any other Subsidiary which is not a Credit Party or a
Canadian Credit Party;

 

(iv)      Indebtedness owed by any Credit Party or any Canadian Credit Party to
a Subsidiary that is not a Credit Party or a Canadian Party (provided that such
Indebtedness (other than Indebtedness existing as of the Closing Date pursuant
to the Bowater-Calhoun Arrangement) shall be subordinated to the Obligations and
the Canadian Obligations, as applicable, pursuant to an Intercompany
Subordination Agreement); and

 

(v)       (A) Indebtedness owed by any Subsidiary that is not a Credit Party or
a Canadian Credit Party to a Credit Party or a Canadian Credit Party (provided
that such Indebtedness shall be payable by such Subsidiary on demand by the
Credit Party or the Canadian Credit Party, as applicable, to the extent required
pursuant to the Intercompany Subordination Agreement); provided that the
aggregate amount of such Indebtedness, together with any equity or capital
investments and permitted pursuant to Section 10.3(g) (without duplication),
shall not exceed $35,000,000 outstanding on any date of determination (which
amount shall be calculated as the net balance of such loans, advances and
investments as reduced by any repayments or distributions made with respect
thereto) and (B) any loans and advances made by the Borrower to Bowater Canada
Finance Corporation to pay interest on the BCFC Notes;

 

(h)       Subordinated Indebtedness; provided that in the case of each issuance
of Subordinated Indebtedness, (i) no Default or Event of Default shall have
occurred and be continuing or would be caused by the issuance of such
Subordinated Indebtedness, (ii) the Consolidated Total Leverage Ratio on pro
forma basis after giving effect to issuance of such Subordinated Indebtedness is
no greater than 5.50 to 1.00 and (iii) the Administrative Agent and the Canadian
Administrative Agent shall have received satisfactory written evidence that the
Borrower and its Subsidiaries would be in compliance with all covenants
contained in this

 

 

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Agreement and the Canadian Credit Agreement on a pro forma basis after giving
effect to the issuance of any such Subordinated Indebtedness;

(i)        Indebtedness of the Borrower or any of its Subsidiaries as an account
party in respect of trade letters of credit in an aggregate amount not to exceed
$25,000,000 on any date of determination; provided that no such trade letter of
credit shall be secured by any assets of the Borrower or any of its Subsidiaries
other than the assets being acquired or shipped pursuant to such letter of
credit;

(j)        Indebtedness (i) of any Person that becomes a Subsidiary after the
Closing Date in connection with any Permitted Acquisition or (ii) assumed in
connection with any assets acquired in connection with any Permitted
Acquisition, and the refinancing, refunding, renewal and extension (but not the
increase in the aggregate principal amount) thereof; provided that (A) such
Indebtedness exists at the time such Person becomes a Subsidiary or such assets
are acquired and is not created in contemplation of, or in connection with, such
Person becoming a Subsidiary or such assets being acquired and (B)
notwithstanding anything to the contrary contained in this Agreement, neither
the Borrower nor any other Subsidiary (other than such Person) shall have any
liability or other obligation with respect to such Indebtedness (other than any
liability or other obligation of the Borrower or any of its Subsidiaries
permitted hereunder which existed prior to the time that such Person became a
Subsidiary or such asset was acquired);

 

(k)

[Intentionally Omitted];

 

(l)

[Intentionally Omitted];

(m)      unsecured Indebtedness in a minimum principal amount of no less than
$150,000,000; provided that (i) no Default or Event of Default has occurred or
would result after giving effect thereto, (ii) the Borrower and its Subsidiaries
would be in compliance with all covenants contained in Article IX on a pro forma
basis after giving effect thereto, (iii) the Net Cash Proceeds of any such Debt
Issuance permitted pursuant to this clause (m) shall be applied pursuant to, and
in accordance with, Section 8.2(b) and (iv) the terms and conditions applicable
to such Indebtedness shall be reasonably satisfactory to the Administrative
Agent and the Canadian Administrative Agent; and

(n)       Additional Indebtedness outstanding as of the Eighth Amendment
Effective Date not otherwise permitted pursuant to this Section in an aggregate
amount not to exceed $25,000,000.

SECTION 10.2     Limitations on Liens. Create, incur, assume or suffer to exist,
any Lien on or with respect to any of its assets or properties (including,
without limitation, shares of Capital Stock), real or personal, whether now
owned or hereafter acquired, except:

(a)       (i) Liens of the Administrative Agent for the benefit of the Secured
Parties, (ii) Liens of the Canadian Administrative Agent for the benefit of the
Canadian Secured Parties and (iii) Liens on the New Borrower Fixed Assets of the
Administrative Agent for the benefit of the Secured Parties and the Canadian
Secured Parties pursuant to the New Borrower Mortgages;

 

 

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(b)       Liens not otherwise permitted by this Section and in existence on the
Closing Date and, with respect to each Credit Party and each Canadian Credit
Party, described on Schedule 10.2 (including Liens incurred in connection with
any refinancing, refunding, renewal or extension of Indebtedness pursuant to
Section 10.1(d) solely to the extent that the such Liens were in existence on
the Closing Date and described on Schedule 10.2; provided that the scope of any
such Lien shall not be increased, or otherwise expanded, to cover any additional
property or type of asset, as applicable, beyond that in existence on the
Closing Date);

(c)       Liens for taxes, assessments and other governmental charges or levies
not yet due or as to which the period of grace (not to exceed thirty (30) days),
if any, related thereto has not expired or which are being contested in good
faith and by appropriate proceedings if adequate reserves are maintained to the
extent required by GAAP;

(d)       the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings if adequate reserves are maintained to the extent
required by GAAP;

(e)       Liens consisting of deposits or pledges made in the ordinary course of
business in connection with, or to secure payment of, obligations under workers'
compensation, unemployment insurance or similar legislation;

(f)        Liens constituting encumbrances in the nature of zoning restrictions,
easements and rights or restrictions of record on the use of real property or
other similar restrictions, which do not, in any case, impair the use thereof in
the ordinary conduct of business;

(g)       Liens securing Indebtedness permitted under Section 10.1(e); provided
that (i) such Liens shall be created substantially simultaneously with the
acquisition or lease of the related asset, (ii) such Liens do not at any time
encumber any property other than the property financed by such Indebtedness,
(iii) the amount of Indebtedness secured thereby is not increased and (iv) the
principal amount of Indebtedness secured by any such Lien shall at no time
exceed one hundred percent (100%) of the original purchase price or lease
payment amount of such property at the time it was acquired;

(h)       Liens securing judgments for the payment of money not constituting an
Event of Default under Section 11.1(m) or securing appeal or other surety bonds
relating to such judgments;

(i)        Liens on tangible property or tangible assets of the Borrower or any
of its Subsidiaries acquired pursuant to a Permitted Acquisition, or on tangible
property or tangible assets of any Subsidiary of the Borrower which are in
existence at the time that such Subsidiary of the Borrower is acquired pursuant
to a Permitted Acquisition (provided that such Liens (i) are not incurred in
connection with, or in anticipation of, such Permitted Acquisition, (ii) are
applicable only to specific tangible property or tangible assets, (iii) are not
"blanket" or all asset Liens and (iv) do not attach to any other property or
assets of the Borrower or any of its Subsidiaries);

 

 

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(j)        Liens in existence as of the Closing Date in connection with the
Bowater-Calhoun Arrangement as described in clause (b) of the definition
thereof;

 

(k)

[Intentionally Omitted];

 

(l)

[Intentionally Omitted];

(m)      Liens existing on the Eighth Amendment Effective Date and not otherwise
permitted hereunder securing obligations not at any time exceeding in the
aggregate $25,000,000.

SECTION 10.3     Limitations on Loans, Advances, Investments and Acquisitions.
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
Capital Stock, interests in any partnership or joint venture (including, without
limitation, the creation or capitalization of any Subsidiary), evidence of
Indebtedness or other obligation or security, all or substantially all of the
business or assets of any other Person (or any portion of the business or assets
of any other Person that constitutes a line of business, a business unit or a
division) or any other investment or interest whatsoever in any other Person, or
make or permit to exist, directly or indirectly, any loans, advances or
extensions of credit to, or any investment in cash or by delivery of property
in, any Person (collectively, "Investments") except:

 

(a)

Investments:

(i)        existing on the Closing Date in Subsidiaries existing on the Closing
Date;

(ii)       after the Closing Date in Subsidiaries formed after the Closing Date
so long as the Borrower, the Canadian Borrower and their respective Subsidiaries
comply with the applicable provisions of Section 8.10 of this Agreement and
Section 8.10 of the Canadian Credit Agreement;

(iii)      existing on the Closing Date (other than Investments in Subsidiaries
on the Closing Date) and described on Schedule 10.3;

 

(b)

subject to Section 10.15, Investments in cash and Cash Equivalents;

 

(c)

[Intentionally Omitted];

 

(d)

Hedging Agreements permitted pursuant to Section 10.1;

(e)       Investments in the form of loans and advances to employees in the
ordinary course of business, which, in the aggregate, do not exceed at any time
$2,000,000;

(f)        (i) Investments in the form of intercompany Indebtedness permitted
pursuant to Section 10.1(g) (other than clause (v) of Section 10.1(g), but
including, without limitation, Investments by the Original Borrower in the
Parent evidenced by the New Borrower Notes so long as each of the New Borrower
Notes is pledged as security for the Obligations and delivered to the
Administrative Agent, for the ratable benefit of the Secured Parties, in each
case, pursuant to the terms of the Collateral Agreement), (ii) equity or capital
investments made by the

 

 

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Borrower or any of its Subsidiaries in any Credit Party or any Canadian Credit
Party (or made in a Wholly-Owned Subsidiary that is not a Credit Party or a
Canadian Credit Party and immediately contributed (directly or indirectly
through one or more intermediate Wholly-Owned Subsidiaries) into a Credit Party
or a Canadian Credit Party) and (iii) equity or capital investments made by any
Subsidiary that is not a Credit Party or a Canadian Credit Party in any other
Subsidiary that is not a Credit Party or a Canadian Credit Party;

(g)       (i) Investments in the form of intercompany Indebtedness permitted by
clause (v) of Section 10.1(g), together with equity or capital investments made
by any Credit Party or any Canadian Credit Party to any Subsidiary which is not
a Credit Party or a Canadian Credit Party; provided that the aggregate amount of
such intercompany Indebtedness and equity or capital investments shall not
exceed $35,000,000 outstanding as of any date of determination (which amount
shall be calculated as the net balance of such loans, advances and equity or
capital investments as reduced by any repayments or distributions made with
respect thereto) and (ii) any loans and advances made by the Borrower to Bowater
Canada Finance Corporation to pay interest on the BCFC Notes;

 

(h)

[Intentionally Omitted]; and

(i)        Investments existing on the Eighth Amendment Effective Date and not
otherwise permitted hereunder (including minority investments in joint ventures)
in an aggregate amount not to exceed $20,000,000 (which amount shall be
calculated as the net balance of such Investments as reduced by any repayments
or distributions made with respect thereto).

SECTION 10.4     Limitations on Mergers and Liquidation. Merge, amalgamate,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)
except:

(a)       any Wholly-Owned Subsidiary of the Borrower may be merged, amalgamated
or consolidated with or into:

(i)     the Borrower (provided that the continuing or surviving Person shall be
the Borrower); or

(ii)    any other Wholly-Owned Subsidiary of the Borrower (provided that the
continuing or surviving Person shall (A) be a Subsidiary Guarantor in the case
of a merger, amalgamation or consolidation involving a Subsidiary Guarantor, (B)
include the Canadian Borrower in the case of a merger, amalgamation or
consolidation involving the Canadian Borrower and (C) subject to clauses (i) and
(ii)(B) above, be a Canadian Guarantor in the case of a merger, amalgamation or
consolidation involving a Canadian Guarantor);

provided further that no Credit Party may be merged, amalgamated or consolidated
with or into a Canadian Credit Party and no Canadian Credit Party may be merged,
amalgamated or consolidated with or into a Credit Party;

 

 

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(b)       any Wholly-Owned Subsidiary of the Borrower may merge or amalgamate
into the Person such Wholly-Owned Subsidiary was formed to acquire in connection
with a Permitted Acquisition;

(c)       any Wholly-Owned Subsidiary of the Borrower may merge or amalgamate
into any Person pursuant to an Asset Disposition of all of the assets of such
Wholly-Owned Subsidiary permitted pursuant to Section 10.5; and

(d)       any Subsidiary of the Borrower (other than the Canadian Borrower) may
wind-up, liquidate or dissolve provided that (i) its assets are transferred to
the Borrower or any Wholly-Owned Subsidiary of the Borrower and (ii) if such
Subsidiary is (A) a Subsidiary Guarantor then the transferee shall be a Credit
Party and (B) a Canadian Guarantor (other than the Borrower) then the transferee
shall be a Canadian Credit Party.

SECTION 10.5     Limitations on Asset Dispositions. Make any Asset Disposition
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction) except:

 

(a)

the sale of inventory in the ordinary course of business;

(b)       the sale of obsolete, worn-out or surplus assets in the ordinary
course of business that are no longer used or usable in the business of the
Borrower or any of its Subsidiaries;

(c)       the transfer of assets to the Borrower, the Canadian Borrower or any
Wholly-Owned Subsidiary (provided that, in the case of any such transfer of
assets, (i) if the transferee of such assets is a Credit Party or a Canadian
Credit Party, such Credit Party or Canadian Credit Party shall not pay more than
the fair market value of such assets (determined as of the date of the
applicable transfer) and (ii) if the transferor of such assets is a Credit Party
or a Canadian Credit Party, the transferee shall not pay less than the fair
market value of such assets (determined as of the date of the applicable
transfer);

(d)       the Borrower or any Subsidiary may write-off, discount, sell or
otherwise dispose of defaulted or past due receivables and similar obligations
in the ordinary course of business and not as part of an accounts receivable
financing transaction;

 

(e)

the disposition of any Hedging Agreement;

 

(f)

the disposition of cash or Cash Equivalents;

 

(g)

the sale of timberlands by the Borrower or its Subsidiaries;

(h)       the transfer by the Original Borrower of the Capital Stock of the New
Borrowers to the Parent in connection with the New Borrower Transactions in
exchange for a promissory note or promissory notes, in form and substance
satisfactory to the Administrative Agent, payable by the Parent to the Original
Borrower (such notes, as amended, restated, supplemented or otherwise modified,
the "New Borrower Notes");

 

(i)

[Intentionally Omitted];

 

 

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(j)        Asset Dispositions of all or any portion of the New Borrower Fixed
Assets, the Canadian Fixed Assets, the Korean Fixed Assets or the Korean Shares;
provided that:

 

(i)

such Asset Disposition shall be for no less than fair market value;

(ii)       both before and after giving to such Asset Disposition, no Default or
Event of Default shall have occurred and be continuing;

(iii)      the Borrower shall be in pro forma compliance with each of the
covenants set forth in Article IX;

(iv)      the terms of such Asset Disposition shall be reasonably satisfactory
to the Administrative Agent and the Canadian Administrative Agent, each in its
sole discretion; and

(k)       additional Asset Dispositions not otherwise permitted pursuant to this
Section in an aggregate amount not to exceed $250,000,000 in the aggregate
during the term of this Agreement (it being understood and agreed that this
clause (k) shall not permit the sale of any New Borrower Fixed Assets).

Notwithstanding anything to the contrary contained herein, the Net Cash Proceeds
of any Asset Disposition permitted pursuant to this Section 10.5 shall be
applied in accordance with Section 8.2(b), to the extent required by such
Section 8.2(b).

SECTION 10.6     Limitations on Dividends and Distributions. Declare or pay any
dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise
acquire, directly or indirectly, any shares of its Capital Stock, or make any
distribution of cash, property or assets among the holders of shares of its
Capital Stock, or make any change in its capital structure which such change in
its capital structure could reasonably be expected to have a Material Adverse
Effect; provided that:

(a)       the Borrower or any Subsidiary may pay dividends in shares of its own
Capital Stock;

(b)       the Borrower or any Subsidiary may make cash distributions or equity
repurchases pursuant to employee benefit plans or incentive compensation plans,
in each case to the extent such distributions constitute compensation to
executives or employees of the Borrower or of the applicable Subsidiary;

(c)       any Subsidiary may pay dividends to the holders of its Capital Stock
(other than payment of dividends to holders of the Exchangeable Shares);
provided that in the case of any dividend paid by a Subsidiary that is not a
Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid
on a ratable basis to the holders of such Capital Stock in accordance with their
respective ownership percentages in such Subsidiary;

 

(d)

[Intentionally Omitted];

 

(e)

[Intentionally Omitted];

 

 

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(f)        Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may
repurchase all or a portion of the Exchangeable Shares solely through an
exchange of common stock of the Parent for the Exchangeable Shares being
repurchased;

 

(g)

the Borrower may make dividends and distributions to the Parent to pay:

(i)        taxes attributable to the consolidated operations of the Borrower and
its Subsidiaries;

(ii)       the Parent Overhead Expenses in an aggregate amount per Fiscal Year
not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead
Expenses during such Fiscal Year; and

(iii)      so long as no Default or Event of Default has occurred and is
continuing or would result after giving effect to such dividends or
distributions, an additional amount of Parent Overhead Expenses in an aggregate
amount not to exceed $10,000,000 per Fiscal Year;

 

(h)

[Intentionally Omitted];

(i)        subject to Section 11.1(o)(ix), so long as no Default or Event of
Default shall have occurred and be continuing or would be caused thereby, the
Borrower may make cash distributions or dividends to the Parent which shall be
invested in a Credit Party; and

(j)        subject to Sections 10.10 and 11.1(o)(viii)(E), the Borrower and its
Subsidiaries may make cash distributions or dividends to the Parent to allow the
Parent to make required payments on Indebtedness incurred by the Parent as
permitted pursuant to Section 11.1(o)(viii); provided that on each date any
distribution or dividend is paid and after giving effect thereto:

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

(ii)       the Borrower shall be in pro forma compliance with each of the
covenants set forth in Article IX and Section 11.1(o)(ix).

SECTION 10.7     Limitations on Exchange and Issuance of Capital Stock. Except
to the extent included as Indebtedness and incurred in accordance with Section
10.1 hereof, issue, sell or otherwise dispose of any class or series of Capital
Stock that, by its terms or by the terms of any security into which it is
convertible or exchangeable, is, or upon the happening of an event or passage of
time would be, (a) convertible or exchangeable into Indebtedness unless such
Indebtedness is permitted at the time pursuant to Section 10.1 or (b) required
to be redeemed or repurchased, including at the option of the holder, in whole
or in part, or has, or upon the happening of an event or passage of time would
have, a redemption or similar payment due.

SECTION 10.8     Transactions with Affiliates. Directly or indirectly (a) make
any loan or advance to, or purchase or assume any note or other obligation to or
from, any of its officers, directors, shareholders or other Affiliates, or to or
from any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates, or subcontract any operations to

 

 

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any of its Affiliates or (b) enter into, or be a party to, any other transaction
not described in clause (a) above with any of its Affiliates other than:

 

(i)

transactions permitted by Section 10.3, 10.4, 10.6 or 10.7;

(ii)       transactions existing on the Closing Date and described on Schedule
10.8;

(iii)      normal compensation and reimbursement of reasonable expenses of
officers and directors; and

(iv)      other transactions in the ordinary course of business on terms as
favorable as would be obtained by it on a comparable arms-length transaction
with an independent, unrelated third party.

 

SECTION 10.9

Certain Accounting Changes; Organizational Documents.

(a)       Change its Fiscal Year end, or make any change in its accounting
treatment and reporting practices except as required by GAAP.

(b)       Amend, modify or change its articles of incorporation (or corporate
charter or other similar organizational documents) or amend, modify or change
its bylaws (or other similar documents) in any manner which materially adversely
affects the rights or interests of the Lenders or the Canadian Lenders.

 

SECTION 10.10

Amendments; Payments and Prepayments of Indebtedness.

(a)       Amend, modify or change any indenture or other agreement governing the
Existing Notes in any respect which would materially adversely affect the rights
or interests of the Administrative Agent, the Canadian Administrative Agent, the
Lenders and the Canadian Lenders.

(b)       Amend, modify or change (i) any provision of this Agreement which,
under Section 13.2, is subject to the approval of the Required Lenders without
amending, modifying or changing the corresponding provision in the Canadian
Credit Agreement or (ii) any provision of the Canadian Credit Agreement which,
under Section 14.2 of the Canadian Credit Agreement, is subject to the approval
of the Required Lenders without amending, modifying or changing the
corresponding provision in this Agreement.

(c)       Amend or modify (or permit the modification or amendment of) any of
the terms or provisions of any Subordinated Indebtedness or any Indebtedness
incurred pursuant to Section 10.1(m), in each case, in any respect which would
materially adversely affect the rights or interests of the Administrative Agent,
the Canadian Administrative Agent, the Lenders and the Canadian Lenders.

(d)       Cancel, forgive, make any payment (other than regularly scheduled
interest payments) or prepayment on, or redeem or acquire for value (including,
without limitation, by way of depositing with any trustee with respect thereto
money or securities before due for the purpose of paying when due, but excluding
payments at the scheduled maturity thereof) all or

 

 

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any portion of any Subordinated Indebtedness (other than Indebtedness incurred
pursuant to Section 10.1(g)(i)), any Indebtedness incurred pursuant to Section
10.1(m), the Existing Notes or any Indebtedness incurred to refinance the
Existing Notes as permitted pursuant to Section 10.1(d), except for:

(i)        refinancings, refundings, renewals, extensions or exchange of any
Subordinated Indebtedness permitted by Section 10.1(h) subject to the
satisfaction of each of the conditions to a refinance, refunding, renewal or
extension set forth in Section 10.1(d);

 

(ii)

[Intentionally Omitted];

(iii)      refinancings, refundings, renewals, extensions or exchange of any
Existing Notes permitted by Section 10.1(d); and

(iv)      cash redemptions or repayments of the Existing Notes or any
Indebtedness incurred to refinance the Existing Notes as permitted pursuant to
Section 10.1(d); provided that (A) no Default or Event of Default shall have
occurred and be continuing at the time of such redemption or repayment or would
result from such redemption or repayment and (B) if at the time of such
redemption or repayment (or immediately after giving effect thereto), the
Aggregate Credit Exposure exceeds $100,000,000, the Administrative Agent shall
have received satisfactory written evidence that:

 

(1)       the Borrower and its Subsidiaries would be in compliance with all
covenants in this Agreement on a pro forma basis after giving effect to such
redemption;

 

(2)       the principal amount of availability under this Credit Facility and
the Canadian Credit Facility both before and after giving effect to such
redemption is equal to or greater than $50,000,000;

 

(3)       the Consolidated Total Senior Secured Indebtedness, both before and
immediately after giving effect thereto, is less than or equal to eighty percent
(80%) of the net book value of the Coverage Assets as set forth on the
Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
most recently delivered pursuant to Section 5.2 or 7.1 hereof; and

 

(4)       the principal amount of outstanding loans and the face amount of
outstanding letters of credit under the Canadian Credit Facility, both before
and immediately after giving effect thereto, is less than or equal to fifty
percent (50%) of the net book value of the accounts receivable and inventory
owned by the Canadian Borrower andeach of its Canadian Subsidiaries as set forth
on the Consolidatedbalance sheet of the Canadian Borrower and its Consolidated
Subsidiaries most recently delivered pursuantto Section 5.2 or 7.1 of the
Canadian Credit Agreement.

 

 

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(e)       Amend, modify, waive or supplement (or permit the modification,
amendment, waiver or supplement of) any of the terms or provisions of the April
2008 Convertible Indebtedness (including the Purchase Agreement dated March 24,
2008 by and between the Parent and Fairfax Financial Holdings Limited (including
the exhibits and schedules thereto) and each other material document,
instrument, certificate and agreement executed or delivered in connection
therewith), other than the waiver of any of the closing conditions set forth in
Section 6 of the Purchase Agreement, in any respect which would adversely affect
the rights or interests of the Administrative Agent, the Canadian Administrative
Agent, the Lenders and the Canadian Lenders.

 

SECTION 10.11

Restrictive Agreements.

 

(a)

Enter into any Indebtedness which:

(i)        contains any covenants more restrictive than the provisions of
Articles VIII, IX and X; or

(ii)       contains any negative pledge on assets or restricts, limits or
otherwise encumbers its ability to incur Liens on or with respect to any of its
assets or properties other than the assets or properties securing such
Indebtedness (other than (A) the Existing Notes (provided that such provisions
may not be amended or modified to be more restrictive), (B) any Indebtedness
incurred in accordance with Section 10.1(d) to refinance the Existing Notes
(provided that such provisions may not be more restrictive than those contained
in the Existing Notes), (C) the Canadian Credit Facility (provided that such
provisions shall not be amended or modified except as permitted hereunder and
thereunder) and (D) any Indebtedness incurred pursuant to Section 10.1(m)
(provided that such provisions may not be more restrictive than those contained
in this Agreement).

(b)       Enter into or permit to exist any agreement which impairs or limits
the ability of any Subsidiary of the Borrower to pay dividends to the Borrower
or to make or repay loans or advances to the Borrower other than (i)
restrictions and conditions imposed by Applicable Law or the Loan Documents,
(ii) legally enforceable restrictions and conditions which are permitted by
clause (iii) of Section 6.1(n) and (iii) customary restrictions and conditions
contained in agreements relating to the sale of a Subsidiary or its assets
pending such sale; provided that such restrictions and conditions apply only to
the Subsidiary that is to be sold and such sale is permitted under this
Agreement.

SECTION 10.12   Nature of Business. Alter in any material respect the character
or conduct of the business conducted by the Borrower and its Subsidiaries as of
the Closing Date.

SECTION 10.13   Borrower Jurisdiction. No Borrower nor any Subsidiary Borrower
shall at any time be, or become, incorporated, organized or formed (as the case
may be) in a Restricted Jurisdiction unless:

(a)       the Original Borrower has provided thirty (30) days prior written
notice to the Administrative Agent and the Lenders of such circumstance; and

 

 

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(b)       subject to the rights of the Original Borrower pursuant to Section
4.12(b), no Lender has indicated in writing to the Administrative Agent and the
Original Borrower that is unable to legally do business with a Borrower or
Subsidiary Borrower incorporated, organized or formed under the laws of such
Restricted Jurisdiction.

SECTION 10.14   Impairment of Security Interests. Take or omit to take any
action, which might or would have the result of materially impairing the
security interests in favor of the Administrative Agent with respect to the
Collateral or grant to any Person (other than the Administrative Agent for the
benefit of itself and the Secured Parties or the Canadian Secured Parties, as
the case may be, pursuant to the Security Documents) any interest whatsoever in
the Collateral, except for Permitted Liens and Asset Dispositions permitted
under Section 10.5.

SECTION 10.15   Maximum Cash Balances. (a) Permit the aggregate amount of cash
and Cash Equivalents of the Borrower and its Subsidiaries (other than cash and
Cash Equivalents erroneously credited to any deposit, securities or other
investment account of the Borrower and its Subsidiaries so long as such amount
is removed from such account within two (2) Business Days after its deposit
therein) to exceed $70,000,000 as of the end of any Business Day for more than
two (2) Business Days or (b) permit the aggregate amount on deposit at any time
in all Excluded Accounts to exceed $500,000.

ARTICLE XI

DEFAULT AND REMEDIES

SECTION 11.1     Events of Default. Each of the following shall constitute an
Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:

(a)       Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrower or any other Credit Party shall default in any payment
of principal of any Loan or Reimbursement Obligation when and as due (whether at
maturity, by reason of acceleration or otherwise).

(b)       Other Payment Default. The Borrower or any other Credit Party shall
default in the payment when and as due (whether at maturity, by reason of
acceleration or otherwise) of interest on any Loan or Reimbursement Obligation
or the payment of any other Obligation, and such default shall continue for a
period of three (3) or more Business Days.

(c)       Misrepresentation. Any representation, warranty, certification or
statement of fact made or deemed made by or on behalf of the Borrower or any
other Credit Party herein, in any other Loan Document, or in any document
delivered in connection herewith or therewith that is subject to materiality or
Material Adverse Effect qualifications, shall be incorrect or misleading in any
respect when made or deemed made or any representation, warranty, certification
or statement of fact made or deemed made by or on behalf of the Borrower or any
other Credit Party herein, any other Loan Document, or in any document delivered
in connection herewith or

 

 

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therewith that is not subject to materiality or Material Adverse Effect
qualifications, shall be incorrect or misleading in any material respect when
made or deemed made.

(d)       Default in Performance of Certain Covenants. The Borrower or any other
Credit Party shall default in the performance or observance of any covenant or
agreement contained in Sections 5.4, 7.1 (other than Section 7.1(g)), 7.2,
7.5(e)(i), 8.2(b), 8.10(e)(i), 8.10(e)(ii), Articles IX or X.

(e)       Default in Performance of Other Covenants and Conditions. The Borrower
or any other Credit Party shall default in the performance or observance of:

(i)        Section 7.1(g) of this Agreement and such default shall continue for
a period of two (2) Business Days; and

(ii)       any other term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section) or
any other Loan Document and such default shall continue for a period of thirty
(30) days after written notice thereof has been given to the Borrower by the
Administrative Agent.

(f)        Hedging Agreement. The Borrower or any other Credit Party shall
default in the performance or observance of any terms, covenant, condition or
agreement (after giving effect to any applicable grace or cure period) under any
Hedging Agreement and such default causes the termination of such Hedging
Agreement and the Termination Value owed by such Credit Party as a result
thereof exceeds $25,000,000.

 

(g)

Indebtedness Cross-Default.

(i)        Any "Event of Default" (as defined in the Canadian Credit Agreement)
shall occur under the Canadian Credit Agreement.

(ii)       Any default shall occur in the payment of any Indebtedness of the
Borrower or any of its Subsidiaries (other than the Loans, any Reimbursement
Obligation or the Canadian Credit Facility) the aggregate outstanding amount of
which Indebtedness is in excess of $25,000,000 beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created.

(iii)      Any default in the observance or performance of any other agreement
or condition relating to any Indebtedness of the Borrower or any of its
Subsidiaries (other than the Loans, any Reimbursement Obligation or the Canadian
Credit Facility) the aggregate outstanding amount of which Indebtedness is in
excess of $25,000,000 or contained in any instrument or agreement evidencing,
securing or relating thereto or any other event shall occur or condition exist,
the effect of which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, with the giving of notice if
required, any such Indebtedness to become due prior to its stated maturity (any
applicable grace period having expired).

 

 

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(iv)      Any payment default or any other event of default or any other similar
event, including any change in control, shall occur under any agreement executed
in connection with the April 2008 Convertible Indebtedness.

 

(h)

Change in Control. Any Change in Control shall occur.

(i)        Voluntary Bankruptcy Proceeding. The Borrower or any of its
Subsidiaries shall (i) commence a voluntary case under the federal bankruptcy
laws (as now or hereafter in effect), (ii) file a petition seeking to take
advantage of any other laws, domestic or foreign, relating to bankruptcy,
insolvency, reorganization, winding up or composition for adjustment of debts,
(iii) consent to or fail to contest in a timely and appropriate manner any
petition filed against it in an involuntary case under such bankruptcy laws or
other laws, (iv) apply for or consent to, or fail to contest in a timely and
appropriate manner, the appointment of, or the taking of possession by, a
receiver, custodian, trustee, or liquidator of itself or of a substantial part
of its property, domestic or foreign, (v) admit in writing its inability to pay
its debts as they become due, (vi) make a general assignment for the benefit of
creditors, or (vii) take any corporate action for the purpose of authorizing any
of the foregoing.

(j)        Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower or any of its Subsidiaries in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any of its Subsidiaries or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.

(k)       Failure of Agreements. (i) Any provision of this Agreement or any
provision of any other Loan Document shall for any reason cease to be valid and
binding on the Borrower or any other Credit Party party thereto or any such
Person shall so state in writing, (ii) any Loan Document shall for any reason
cease to create a valid and perfected first priority Lien on, or security
interest in, any of the Collateral securing the Obligations purported to be
covered thereby or (iii) any subordination provision in any document or
instrument governing any Subordinated Indebtedness, any subordination provision
in any subordination agreement that relates to any Subordinated Indebtedness or
any subordination provision in any guaranty by any Credit Party of any
Subordinated Indebtedness shall, in any case, cease to be in full force and
effect, or any Person shall contest in any manner the validity, binding nature
or enforceability of any such provision, in each of the foregoing clauses (i),
(ii) and (iii), other than in accordance with the express terms hereof or
thereof

(l)        Termination Event. The occurrence of any of the following events: (i)
the Borrower or any of its Subsidiaries or any of their ERISA Affiliates fails
to make full payment when due of all amounts which, under the provisions of any
Pension Plan or Section 412 of the Code, the Borrower or any of its Subsidiaries
or any of their ERISA Affiliates is required to pay as contributions thereto,
(ii) the Borrower or any of its Subsidiaries fails to make full payment

 

 

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when due of all amounts which, under the provisions of any Canadian Pension Plan
or other Applicable Law, the Borrower or any of its Subsidiaries is required to
pay as contributions thereto, (iii) an accumulated funding deficiency in excess
of $25,000,000 occurs or exists, whether or not waived, with respect to any
Pension Plan or Canadian Pension Plan, (iv) a Termination Event, (v) the
Borrower or any of its Subsidiaries or any of their ERISA Affiliates as
employers under one or more Multiemployer Plans makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plan notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$25,000,000 or (vi) the Borrower or any of its Subsidiaries as employers under
one or more Canadian Multiemployer Plans makes a complete or partial withdrawal
from any such Canadian Multiemployer Plan and the plan sponsor of such Canadian
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$25,000,000.

(m)      Judgment. A judgment or order for the payment of money which causes the
aggregate amount of all such judgments or orders to exceed (i) $10,000,000 in
the aggregate (to the extent not covered by independent third-party insurance as
to which the insurer does not dispute coverage) or (ii) $50,000,000in the
aggregate (regardless of insurance)shall be entered against the Borrower or any
of its Subsidiaries by any court and such judgment or order shall continue
without having been paid and satisfied, discharged, vacated or stayed for a
period of thirty (30) days after the entry thereof.

(n)       Environmental. Any one or more Environmental Claims shall have been
asserted against the Borrower or any of its Subsidiaries; the Borrower or any of
its Subsidiaries would be reasonable likely to incur liability as a result
thereof; and such liability would be reasonably likely, individually or in the
aggregate, to have a Material Adverse Effect.

(o)       Activities of Parent. The Parent shall engage in any business,
operations or activities other than:

(i)        (A) holding all of the Capital Stock of the Original Borrower, each
New Borrower, the Donohue Corp., a Delaware corporation (or an intermediate
holding company that owns the Capital Stock of the Donahue Corp.) and
Abitibi-Consolidated Inc. or any of its subsidiaries; (B) holding certain
preferred Capital Stock of Bowater Canadian Holdings Incorporated, a company
organized under the laws of Nova Scotia, so long as promptly upon receipt
thereof, the Parent either (1) distributes such Capital Stock to the Original
Borrower, (2) distributes such Capital Stock to another Credit Party or (3)
pledges such Capital Stock as collateral support for the Obligations in
accordance with the Collateral Agreement, (C) the employment of management and
(D) activities reasonably complimentary and related to the foregoing (including,
without limitation, investments in the Borrower);

(ii)       guaranteeing the Obligations in favor of the Administrative Agent,
for the ratable benefit of the Secured Parties, pursuant to the Parent Guaranty
Agreement;

 

(iii)

[Intentionally Omitted];

 

 

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(iv)      granting a security interest in its assets and properties (other than
(A) the Capital Stock of the Borrower or (B) in connection with the Indebtedness
permitted pursuant to the following clause (viii)); provided that (x) the
Administrative Agent is given a Lien on such assets and properties that is prior
to such other Lien, or (y) to the extent that a Lien is granted in the stock of
Abitibi-Consolidated Inc., then the Administrative Agent shall be granted a Lien
in the stock of the Original Borrower;

(v)       granting a security interest in the Capital Stock of the Borrower in
favor of the Administrative Agent, for the ratable benefit of the Secured
Parties, to secure the Obligations;

(vi)      engaging in non-revenue generating activities reasonably related to
restructuring of the Subsidiaries of the Parent; provided, that in the case of
any restructuring involving the Credit Parties or the Canadian Credit Parties,
the Administrative Agent and the Canadian Administrative Agent shall have
received (A) an organizational chart of the Parent and its Subsidiaries after
giving effect thereto and (B) a final summary of the steps involved in any such
restructuring;

(vii)     guaranteeing obligations of Subsidiaries of the Parent or of the
Abitibi Entities to the extent that such obligations are unsecured, relate to
indemnification obligations with respect to asset sales or trade obligations
incurred in the ordinary course of business and do not constitute Indebtedness
of such Subsidiary or of such Abitibi Entity; and

(viii)    to the extent not otherwise permitted hereunder, incurring unsecured
Indebtedness; provided, that:

(A)      the Administrative Agent and the Canadian Administrative Agent shall
have received reasonably satisfactory written evidence that the Borrower and its
Subsidiaries would be in compliance with the covenants set forth in Article IX
and Section 11.1(o)(ix) on a pro forma basis after giving effect to such
Indebtedness;

(B)      no Default or Event of Default shall have occurred and be continuing or
would be caused by the issuance of such Indebtedness;

(C)      no portion of such Indebtedness of the Parent may be recourse to any
Credit Party (except to the extent permitted pursuant to Section 10.1(d) or
(f)(ii)) or any Canadian Credit Party (it being understood and agreed that no
Credit Party (except to the extent permitted pursuant to Section 10.1(d) or
(f)(ii)) or Canadian Credit Party shall have any obligation whatsoever to repay
such Indebtedness or any other obligation related thereto);

 

(D)

[Intentionally Omitted];

(E)       the Parent may not cancel, forgive or make any payment (other than
regularly scheduled interest payments) or prepayments on, or redeem or acquire
for value (including, without limitation, by way of depositing with any

 

 

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trustee with respect thereto money or securities before due for the purpose of
paying when due, but excluding payments at the scheduled maturity thereof) any
such Indebtedness; provided, that the Parent may pay a cash settlement of any
convertible Indebtedness so long as on the date of any such payment and after
giving effect thereto:

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

(2)       the Borrower shall be in pro forma compliance with each of the
covenants set forth in Article IX;

(3)       the Aggregate Credit Exposure shall not exceed $100,000,000; and

(4)       the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50
to 1.00;

(F)       except to the extent such Indebtedness is guaranteed by a Credit Party
pursuant to Section 10.1(d), the proceeds of such Indebtedness are used solely
for working capital and general corporate purposes of, or to repay outstanding
Indebtedness of, the Parent and its Subsidiaries or any Abitibi Entity;

(ix)      holding a cash balance in the deposit, securities and other investment
accounts of the Parent as of the end of any Business Day in excess of
$25,000,000, unless the amount of such balance that is in excess of $25,000,000
is as promptly as possible, but in no event later than one (1) Business Day,
invested in the Borrower; provided that notwithstanding this Section
11.1(o)(ix), the Parent may retain the proceeds of the April 2008 Convertible
Indebtedness until no later than April 15, 2008; and

(x)       to the extent not otherwise permitted hereunder, incurring
Indebtedness payable to the Original Borrower pursuant to the New Borrower
Notes.

(p)       Permitted Secured Indebtedness. The "Permitted Secured Indebtedness"
(as defined in the Canadian Credit Agreement) is less than or equal to
C$58,000,000.

SECTION 11.2     Remedies. Except as otherwise expressly provided in any other
Loan Document, upon the occurrence of an Event of Default, with the consent of
the Required Agreement Lenders, the Administrative Agent may, or upon the
request of the Required Agreement Lenders, the Administrative Agent shall, by
notice to the Borrower:

(a)       Acceleration; Termination of Facilities. Terminate the Commitment and
declare the principal of and interest on the Loans and the Reimbursement
Obligations at the time outstanding, and all other amounts owed to the Lenders
and to the Administrative Agent under this Agreement or any of the other Loan
Documents (including, without limitation, all L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
or shall be entitled to present the documents required thereunder) and all other
Obligations (other than Hedging Obligations and Obligations owing by the Credit
Parties under

 

 

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any Cash Management Arrangement), to be forthwith due and payable, whereupon the
same shall immediately become due and payable without presentment, demand,
protest or other notice of any kind, all of which are expressly waived by each
Credit Party, anything in this Agreement or the other Loan Documents to the
contrary notwithstanding, and terminate the Credit Facility and any right of the
Borrower to request borrowings or Letters of Credit thereunder; provided , that
upon the occurrence of an Event of Default specified in Section 11.1(i) or (j),
the Credit Facility shall be automatically terminated and all Obligations (other
than Hedging Obligations and Obligations owing by the Credit Parties under any
Cash Management Arrangement) shall automatically become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived by each Credit Party, anything in this Agreement or in any
other Loan Document to the contrary notwithstanding.

(b)       Letters of Credit. With respect to all Letters of Credit with respect
to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, the Borrower shall at such
time deposit in a cash collateral account opened by the Administrative Agent an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit. Amounts held in such cash collateral account shall be applied by the
Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations on a pro rata basis. After all such Letters of Credit shall
have expired or been fully drawn upon, the Reimbursement Obligation shall have
been satisfied and all other Obligations shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower.

(c)       Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.

SECTION 11.3     Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise. No delay or failure to take action
on the part of the Administrative Agent or any Lender in exercising any right,
power or privilege shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
or shall be construed to be a waiver of any Event of Default. No course of
dealing between the Borrower, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.

SECTION 11.4  Crediting of Payments and Proceeds. In the event that the Borrower
shall fail to pay any of the Obligations when due or the Obligations have been
accelerated pursuant to Section 11.2, all payments received by the Lenders upon
the Obligations and all net proceeds from the enforcement of the Obligations
shall be applied:

 

 

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First, to payment of that portion of the Obligations constituting fees,
indemnities, expenses and other amounts, including attorney fees, payable to the
Administrative Agent in its capacity as such and each Issuing Lender in its
capacity as such (ratably among the Administrative Agent and each Issuing Lender
in proportion to the respective amounts described in this clause First payable
to them);

Second, to payment of that portion of the Obligations constituting fees,
indemnities and other amounts (other than principal and interest) payable to the
Lenders, including attorney fees (ratably among the Lenders in proportion to the
respective amounts described in this clause Second payable to them);

Third, to payment of that portion of the Obligations constituting accrued and
unpaid interest on the Loans (including any interest on Special Agent Advances)
and Reimbursement Obligations (including any accrued and unpaid interest
thereon) (ratably among the Lenders in proportion to the respective amounts
described in this clause Third payable to them);

Fourth, to payment of that portion of the Obligations constituting unpaid
principal of the Special Agent Advances (ratably among the Lenders in proportion
to the respective amounts described in this clause Fourth held by them);

Fifth, to payment of that portion of the Obligations constituting unpaid
principal of the Loans (other than the Special Agent Advances) and Reimbursement
Obligations (ratably among the Lenders in proportion to the respective amounts
described in this clause Fifth held by them);

Sixth, to the Administrative Agent for the account of each Issuing Lender, to
cash collateralize any L/C Obligations then outstanding (ratably among the
Issuing Lenders in proportion to the respective amounts described in this clause
Sixth payable to them);

Seventh, to the payment of that portion of the Obligations constituting Hedging
Obligations (including any termination payments and any accrued and unpaid
interest thereon) and Obligations owing by the Credit Parties under any Cash
Management Arrangement (ratably among the Secured Parties providing the Hedging
Agreements giving rise to such Hedging Obligations and the Cash Management
Arrangements giving rise to such Obligations thereunder in proportion to the
respective amounts described in this clause Seventh payable to them); and

Last, the balance, if any, after all of the Obligations have been indefeasibly
paid in full, to the Borrower or as otherwise required by Applicable Law.

SECTION 11.5     Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Credit Party, the Administrative Agent (irrespective
of whether the principal of any Loan or L/C Obligation shall then be due and
payable as herein expressed or by declaration or otherwise and irrespective of
whether the Administrative Agent shall have made any demand on the Borrower)
shall be entitled and empowered, by intervention in such proceeding or
otherwise:

(a)       to file and prove a claim for the whole amount of the principal and
interest owing and unpaid in respect of the Loans, L/C Obligations and all other
Obligations that are owing and

 

 

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unpaid and to file such other documents as may be necessary or advisable in
order to have the claims of the Lenders and the Administrative Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Lenders and the Administrative Agent and their respective agents and
counsel and all other amounts due the Lenders and the Administrative Agent under
Sections 3.3, 4.3 and 13.3) allowed in such judicial proceeding; and

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

and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 3.3, 4.3 and 13.3.

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

ARTICLE XII

THE ADMINISTRATIVE AGENT

SECTION 12.1     Appointment and Authority. Each of the Lenders and each of the
Issuing Lenders hereby irrevocably appoints Wachovia to act on its behalf as the
Administrative Agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent, the Lenders and the Issuing Lenders, and neither the
Borrower nor any of its Subsidiaries shall have rights as a third party
beneficiary of any of such provisions.

SECTION 12.2     Rights as a Lender. The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.

 

 

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SECTION 12.3     Exculpatory Provisions. The Administrative Agent shall not have
any duties or obligations except those expressly set forth herein and in the
other Loan Documents. Without limiting the generality of the foregoing, the
Administrative Agent:

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

(b)       shall not have any duty to take any discretionary action or exercise
any discretionary powers, except discretionary rights and powers expressly
contemplated hereby or by the other Loan Documents that the Administrative Agent
is required to exercise as directed in writing by the Required Lenders or
Required Agreement Lenders, as applicable (or such other number or percentage of
the Lenders as shall be expressly provided for herein or in the other Loan
Documents), provided that the Administrative Agent shall not be required to take
any action that, in its opinion or the opinion of its counsel, may expose the
Administrative Agent to liability or that is contrary to any Loan Document or
Applicable Law; and

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

The Administrative Agent shall not be liable for any action taken or not taken
by it (i) with the consent or at the request of the Required Lenders or Required
Agreement Lenders, as applicable (or such other number or percentage of the
Lenders as shall be necessary, or as the Administrative Agent shall believe in
good faith shall be necessary, under the circumstances as provided in Section
13.2 and Section 11.2) or (ii) in the absence of its own gross negligence or
willful misconduct as determined by a court of competent jurisdiction by final
nonappealable judgment. The Administrative Agent shall be deemed not to have
knowledge of any Default unless and until notice describing such Default is
given to the Administrative Agent by the Borrower, a Lender or an Issuing Lender
in accordance with Section 13.1. In the event that the Administrative Agent
receives such a notice, it shall promptly give notice thereof to the Lenders and
the Issuing Lenders.

The Administrative Agent shall not be responsible for or have any duty to
ascertain or inquire into (i) any statement, warranty or representation made in
or in connection with this Agreement or any other Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements or other terms or conditions set
forth herein or therein or the occurrence of any Default, (iv) the validity,
enforceability, effectiveness or genuineness of this Agreement, any other Loan
Document or any other agreement, instrument or document or (v) the satisfaction
of any condition set forth in Article V or elsewhere herein, other than to
confirm receipt of items expressly required to be delivered to the
Administrative Agent.

SECTION 12.4     Reliance by the Administrative Agent. The Administrative Agent
shall be entitled to rely upon, and shall not incur any liability for relying
upon, any notice, request, certificate, consent, statement, instrument, document
or other writing (including any electronic message, Internet or intranet website
posting or other distribution) believed by it to be genuine

 

 

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and to have been signed, sent or otherwise authenticated by the proper Person.
The Administrative Agent also may rely upon any statement made to it orally or
by telephone and believed by it to have been made by the proper Person, and
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Loan, or the issuance of a
Letter of Credit, that by its terms must be fulfilled to the satisfaction of a
Lender or the applicable Issuing Lender, the Administrative Agent may presume
that such condition is satisfactory to such Lender or such Issuing Lender unless
the Administrative Agent shall have received notice to the contrary from such
Lender or such Issuing Lender prior to the making of such Loan or the issuance
of such Letter of Credit. The Administrative Agent may consult with legal
counsel (who may be counsel for the Borrower), independent accountants and other
experts selected by it, and shall not be liable for any action taken or not
taken by it in accordance with the advice of any such counsel, accountants or
experts.

SECTION 12.5   Delegation of Duties. The Administrative Agent may perform any
and all of its duties and exercise its rights and powers hereunder or under any
other Loan Document by or through any one or more sub-agents appointed by the
Administrative Agent. The Administrative Agent and any such sub-agent may
perform any and all of its duties and exercise its rights and powers by or
through their respective Related Parties. The exculpatory provisions of this
Article shall apply to any such sub-agent and to the Related Parties of the
Administrative Agent and any such sub-agent and to the Consultants, and shall
apply to their respective activities in connection with the syndication of the
credit facilities provided for herein as well as activities as Administrative
Agent.

 

SECTION 12.6

Resignation of Administrative Agent.

(a)       The Administrative Agent may at any time give notice of its
resignation to the Lenders, each Issuing Lender and the Borrower. Upon receipt
of any such notice of resignation, the Required Agreement Lenders shall have the
right, in consultation with the Borrower, to appoint a successor, which shall be
a bank with an office in the United States, or an Affiliate of any such bank
with an office in the United States. If no such successor shall have been so
appointed by the Required Agreement Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may on behalf of the
Lenders and the Issuing Lenders, appoint a successor Administrative Agent
meeting the qualifications set forth above provided that if the Administrative
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (i) the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder and under
the other Loan Documents (except that in the case of any collateral security
held by the Administrative Agent on behalf of any Lender or any Issuing Lender
under any of the Loan Documents, the retiring Administrative Agent shall
continue to hold such collateral security until such time as a successor
Administrative Agent is appointed) and (ii) all payments, communications and
determinations provided to be made by, to or through the Administrative Agent
shall instead be made by or to each Lender and each Issuing Lender directly,
until such time as the Required Agreement Lenders appoint a successor
Administrative Agent as provided for above in this paragraph. Upon the
acceptance of a successor's appointment as Administrative Agent hereunder, such
successor shall succeed to and become vested with all of the rights, powers,
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Administrative Agent, and the retiring Administrative Agent shall be discharged
from all of its duties and obligations hereunder or under the other Loan
Documents (if not already discharged therefrom as provided above in this
paragraph). The fees payable by the Borrower to a successor Administrative Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Borrower and such successor. After the retiring Administrative
Agent's resignation hereunder and under the other Loan Documents, the provisions
of this Article and Section 13.3 shall continue in effect for the benefit of
such retiring Administrative Agent, its sub-agents and their respective Related
Parties in respect of any actions taken or omitted to be taken by any of them
while the retiring Administrative Agent was acting as Administrative Agent.

(b)       Any resignation by Wachovia as Administrative Agent pursuant to this
Section shall also constitute its resignation as an Issuing Lender and the
Swingline Lender. Upon the acceptance of a successor's appointment as
Administrative Agent hereunder, (i) such successor shall succeed to and become
vested with all of the rights, powers, privileges and duties of the retiring
Issuing Lender and Swingline Lender, (ii) the retiring Issuing Lender and
Swingline Lender shall be discharged from all of their respective duties and
obligations hereunder or under the other Loan Documents, and (iii) the successor
Issuing Lender shall issue letters of credit in substitution for the Letters of
Credit, if any, outstanding at the time of such succession or make other
arrangement satisfactory to the retiring Issuing Lender to effectively assume
the obligations of the retiring Issuing Lender with respect to such Letters of
Credit.

SECTION 12.7     Non-Reliance on Administrative Agent and Other Lenders. Each
Lender and each Issuing Lender acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Lender or any of
their Related Parties or the Consultants and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender and each Issuing Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender or any of their Related Parties or any
Consultants and based on such documents and information as it shall from time to
time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any other Loan Document or any
related agreement or any document furnished hereunder or thereunder.

SECTION 12.8  No Other Duties, etc. Anything herein to the contrary
notwithstanding, none of the syndication agents, documentation agents,
co-agents, book manager, lead manager, arranger, lead arranger or co-arranger
listed on the cover page or signature pages hereof shall have any powers, duties
or responsibilities under this Agreement or any of the other Loan Documents,
except in its capacity, as applicable, as the Administrative Agent, a Lender or
an Issuing Lender hereunder.

SECTION 12.9     Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Administrative Agent, at its option and in its discretion:

(a)       to release any Lien on any Collateral granted to or held by the
Administrative Agent, for the ratable benefit of the Secured Parties, under any
Loan Document (i) upon repayment of the outstanding principal of and all accrued
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Reimbursement Obligations, payment of all outstanding fees and expenses
hereunder, the termination of the Commitment and the expiration or termination
of all Letters of Credit, (ii) that is sold or to be sold or otherwise
transferred as part of or in connection with any sale or transfer permitted
hereunder or under any other Loan Document, or (iii) subject to Section 13.2, if
approved, authorized or ratified in writing by the Required Agreement Lenders;

(b)       to subordinate or release any Lien on any Collateral granted to or
held by the Administrative Agent under any Loan Document to the holder of any
Permitted Lien; and

(c)       to release any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty Agreement, the Collateral Agreement and any other Loan
Documents if such Person ceases to be a Subsidiary as a result of a
transaction(s) permitted hereunder.

Upon request by the Administrative Agent at any time, the Required Agreement
Lenders will confirm in writing the Administrative Agent's authority to release
or subordinate its interest in particular types or items of property, or to
release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty Agreement pursuant to this Section.

SECTION 12.10   Additional Loans. The Administrative Agent and the Swingline
Lender shall not make any Loans and the Issuing Lender shall not issue any
Letter of Credit to the Borrower on behalf of the Lenders intentionally and with
actual knowledge that such Loan or Letter of Credit would cause the aggregate
amount of the total outstanding Loans and Letters of Credit to exceed the
Borrowing Base, except, that, from and after the Conversion Date, the
Administrative Agent may make additional Revolving Credit Loans or the Issuing
Lender may provide such additional Letters of Credit on behalf of Lenders,
intentionally and with actual knowledge that such Revolving Credit Loans or
Letters of Credit will cause the total outstanding Loans and Letters of Credit
to exceed the Borrowing Base, as the Administrative Agent may deem necessary or
advisable in its discretion; provided, that: (a) the sum of (i) the total
principal amount of the additional Revolving Credit Loans or additional Letters
of Credit to the Borrower that the Administrative Agent may make or provide
after obtaining such actual knowledge that the aggregate principal amount of the
Loans and the Letters of Credit equals or exceeds the Borrowing Base plus (ii)
the amount of Special Agent Advances made pursuant to Section 12.11(b)
outstanding as of any date of determination shall not exceed an amount equal to
ten percent (10%) of the aggregate Commitments as of such date without the prior
written consent of the Required Agreement Lenders and shall not cause (A) the
total principal amount of the Loans and Letters of Credit to exceed the
aggregate Commitments as of such date or (B) the outstanding Letters of Credit
to exceed the L/C Commitment and (b) no such additional Revolving Credit Loan or
Letter of Credit shall be outstanding more than ninety (90) days after the date
such additional Revolving Credit Loan or Letter of Credit is made or issued (as
the case may be), except as the Required Agreement Lenders may otherwise agree.
Each Lender shall be obligated to pay to the Administrative Agent the amount of
its Commitment Percentage of any such additional Revolving Credit Loans or
Letters of Credit in accordance with the applicable Sections of this Agreement.

SECTION 12.11   Special Agent Advances. The Administrative Agent may, at its
option, from time to time after the Conversion Date, at any time upon the
occurrence and continuation of an Event of Default or upon any other failure of
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Loans and Letters of Credit hereunder, make such disbursements and advances
(collectively, the "Special Agent Advances") which the Administrative Agent, in
its sole discretion, (a) deems necessary or desirable either to preserve or
protect the Collateral or any portion thereof or (b) to enhance the likelihood
or maximize the amount of repayment by the Credit Parties of the Loans and other
Obligations; provided, that (i) the aggregate principal amount of the Special
Agent Advances pursuant to this clause (b) outstanding as of any date of
determination plus the then outstanding principal amount of the additional Loans
and Letters of Credit that the Administrative Agent and/or the Issuing Lender
may make or provide as set forth in Section 12.10, shall not exceed an aggregate
amount equal to ten percent (10%) of the aggregate Commitments as of such date
without the prior written consent of the Required Agreement Lenders and (ii) the
aggregate principal amount of the Special Agent Advances pursuant to this clause
(b) outstanding as of any date of determination plus the then outstanding
principal amount of the Loans and Letters of Credit, shall not exceed the
aggregate Commitments as of such date, except at the Administrative Agent's
option, provided, that, to the extent that the aggregate principal amount of
Special Agent Advances plus the then outstanding principal amount of the Loans
and Letters of Credit exceed the aggregate Commitments, the Special Agent
Advances that are in excess of the aggregate Commitments shall be for the sole
account and risk of the Administrative Agent and notwithstanding anything to the
contrary set forth below, no Lender shall have any obligation to provide its
share of such Special Agent Advances in excess of the such aggregate
Commitments, or (c) to pay any other amount chargeable to any Credit Party
pursuant to the terms of this Agreement or any of the other Loan Documents
consisting of costs, fees and expenses and payments to the Issuing Lender in
respect of any Obligations with respect to Letters of Credit. The Special Agent
Advances shall be repayable on demand and together with all interest thereon
shall constitute Obligations secured by the Collateral. Special Agent Advances
shall not constitute Loans but shall otherwise constitute Obligations hereunder.
Interest on Special Agent Advances shall be payable at the interest rate
(including the Applicable Margin) then applicable to Base Rate Loans and shall
be payable on demand. Without limitation of its obligations pursuant to Section
4.7, each Lender agrees that it shall make available to the Administrative
Agent, upon the Administrative Agent's demand, in immediately available funds,
the amount equal to such Lender's Commitment Percentage of each such Special
Agent Advance. If such funds are not made available to the Administrative Agent
by such Lender, such Lender shall be deemed a Defaulting Lender and the
Administrative Agent shall be entitled to recover such funds, on demand from
such Lender together with interest thereon for each day from the date such
payment was due until the date such amount is paid to the Administrative Agent
at the Federal Funds Rate for each day during such period and if such amounts
are not paid within three (3) days of the Administrative Agent's demand, at the
highest interest rate provided for in Section 4.1 applicable to Base Rate Loans.

ARTICLE XIII

MISCELLANEOUS

 

SECTION 13.1

Notices .

(a)       Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing (for
purposes hereof, the term "writing" shall include information in electronic
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pages), or by telephone subsequently confirmed in writing. Any notice shall be
effective if delivered by hand delivery or sent via electronic mail, posting on
an internet web page, telecopy, recognized overnight courier service or
certified mail, return receipt requested, and shall be presumed to be received
by a party hereto (i) on the date of delivery if delivered by hand or sent by
electronic mail, posting on an internet web page, telecopy, (ii) on the next
Business Day if sent by recognized overnight courier service and (iii) on the
third (3rd) Business Day following the date sent by certified mail, return
receipt requested. A telephonic notice to the Administrative Agent as understood
by the Administrative Agent will be deemed to be the controlling and proper
notice in the event of a discrepancy with or failure to receive a confirming
written notice.

(b)       Addresses for Notices. Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are
notified in writing.

 

If to the Borrower:

Bowater Incorporated

 

1155 Metcalfe Street, Suite 800

 

Montreal, Quebec

 

CANADA H3B 5H2

 

Attention: Treasurer

 

Telephone No.: (514) 394-2375

 

Telecopy No.: (514) 394-2267

 

With copies to:

Hazen H. Dempster

Troutman Sanders LLP

Suite 5200

600 Peachtree Street, N.E.

Atlanta, Georgia  30308-2216

Telephone No.:  (404) 885-3126

Telecopy No.:   (404) 962-6544

 

If to Wachovia as

Wachovia Bank, National Association

 

Administrative Agent:

NC0680

 

1525 West W. T. Harris Blvd.

 

Charlotte, North Carolina 28262

 

Attention: Syndication Agency Services

 

Telephone No.: (704) 590-2703

 

Telecopy No.: (704) 590-3481

 

 

With copies to:

Wachovia Bank, National Association

 

One Wachovia Center

 

301 South College Street

 

Mail Code: 0537

 

Charlotte, NC 28288

 

Attention: Mark Hedrick

 

Telephone No.: (704) 383-0297

 

Telecopy No.: (704) 383-6249

 

 

If to any Lender:

To the address set forth on the Register

 

 

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(c)       Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrower and Lenders, as the Administrative Agent's Office referred to herein,
to which payments due are to be made and at which Loans will be disbursed and
Letters of Credit requested.

SECTION 13.2     Amendments, Waivers and Consents. Except as set forth below or
as specifically provided in any Loan Document, any term, covenant, agreement or
condition of this Agreement or any of the other Loan Documents may be amended or
waived by the Lenders, and any consent given by the Lenders, if, but only if,
(a) in the case of an amendment, waiver or consent for which a substantially
similar corresponding amendment, waiver or consent with regard to the Canadian
Credit Agreement will be made effective thereunder contemporaneously, such
amendment, waiver or consent is in writing signed by the Required Lenders (or by
the Administrative Agent with the consent of the Required Lenders) and delivered
to the Administrative Agent and, in the case of an amendment, signed by the
Borrower and (b) in the case of any other amendment, waiver or consent
specifically impacting only this Agreement and the other Loan Documents, such
amendment, waiver or consent is in writing signed by the Required Agreement
Lenders (or by the Administrative Agent with the consent of the Required
Agreement Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Borrower; provided, that no amendment, waiver or
consent shall:

(a)       waive any condition set forth in Section 5.2 without the written
consent of each Lender directly affected thereby;

(b)       extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Section 11.2) or the amount of Loans of any
Lender without the written consent of such Lender;

(c)       postpone any date fixed by this Agreement or any other Loan Document
for any payment of principal, interest, fees or other amounts due to the Lenders
(or any of them) hereunder or under any other Loan Document without the written
consent of each Lender directly affected thereby; provided, that only the
consent of the Required Lenders shall be necessary in order to waive (in whole
or in part) any prepayment required pursuant to Section 8.2(b).

(d)       reduce the principal of, or the rate of interest specified herein on,
any Loan or Reimbursement Obligation, or (subject to clause (iv) of the second
proviso to this Section) any fees or other amounts payable hereunder or under
any other Loan Documentwithout the written consent of each Lender directly
affected thereby; provided that only the consent of the Required Agreement
Lenders shall be necessary to waive any obligation of the Borrower to pay
interest at the rate set forth in Section 4.1(c) during the continuance of an
Event of Default;

(e)       change Section 4.4 or Section 11.4 in a manner that would alter the
pro rata sharing of payments required thereby without the written consent of
each Lender directly affected thereby;

 

 

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(f)        change any provision of this Section or the definitions of "Required
Lenders" or "Required Agreement Lenders" or any other provision hereof
specifying the number or percentage of Lenders required to amend, waive or
otherwise modify any rights hereunder or make any determination or grant any
consent hereunder, without the written consent of each Lender and each Canadian
Lender directly affected thereby;

(g)       increase the percentage specified in the definition of "Asset Coverage
Amount"; reduce or eliminate any of the Indebtedness specified in part (b) of
the definition of "Consolidated Total Senior Secured Indebtedness" in
determining the Borrowing Limit; or add additional categories or types of assets
to the definition of "Coverage Assets", in each case without the written consent
of each Lender directly affected thereby;

(h)       release all of the Guarantors or release Guarantors comprising
substantially all of the credit support for the Obligations, in either case,
from any Guaranty Agreement (other than as authorized in Section 12.9), without
the written consent of each Lender;

(i)        release all or substantially all of the Collateral or release any
Security Document (other than as authorized in Section 12.9 or as otherwise
specifically permitted or contemplated in this Agreement or the applicable
Security Document) without the written consent of each Lender; or

(j)        change Article XI of the Canadian Credit Agreement without the
written consent of each Lender;

(k)       add as Collateral any assets of any Person that is not organized under
the laws of the United States or any state thereof without the written consent
of the Canadian Administrative Agent and the Canadian Required Agreement Lenders
(it being understood that under the terms of the Canadian Credit Agreement a
vote of the Administrative Agent and the Required Agreement Lenders shall be
required to add as Collateral for the Canadian Credit Facility any assets of any
Person that is not organized under the laws of Canada or any province thereof);
or

(l)        join as a Credit Party any Person that is not organized under the
laws of the United States or any state thereof without the written consent of
the Canadian Administrative Agent and the Canadian Required Agreement Lenders
(it being understood that under the terms of the Canadian Credit Agreement a
vote of the Administrative Agent and the Required Agreement Lenders shall be
required to join as a Canadian Credit Party any Person that is not organized
under the laws of Canada or any province thereof);

provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the applicable Issuing Lender in addition to the Lenders
required above, affect the rights or duties of such Issuing Lender under this
Agreement or any Letter of Credit Application relating to any Letter of Credit
issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless
in writing and signed by the Swingline Lender in addition to the Lenders
required above, affect the rights or duties of the Swingline Lender under this
Agreement; (iii) no amendment, waiver or consent shall, unless in writing and
signed by the Administrative Agent in addition to the Lenders required above,
affect the rights or duties of the Administrative Agent under this Agreement or
any other Loan Document; and (iv) the Fee Letter may be amended, or rights or

 

 

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privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have
any right to approve or disapprove any amendment, waiver or consent hereunder,
except that the Commitment of such Lender may not be increased or extended
without the consent of such Lender.

 

SECTION 13.3

Expenses; Indemnity.

(a)       Costs and Expenses. The Borrower and the other Credit Parties, jointly
and severally, shall pay (i) all reasonable out-of-pocket expenses incurred by
the Administrative Agent and its Affiliates (including the reasonable fees,
charges and disbursements of (A) counsel for the Administrative Agent and (B)
the Consultants), in connection with the syndication of the credit facilities
provided for herein, the preparation, negotiation, execution, delivery and
administration of this Agreement and the other Loan Documents or any amendments,
modifications or waivers of the provisions hereof or thereof (whether or not the
transactions contemplated hereby or thereby shall be consummated), (ii) all
reasonable out-of-pocket expenses incurred by each Issuing Lender in connection
with the issuance, amendment, renewal or extension of any Letter of Credit or
any demand for payment thereunder, (iii) all out-of-pocket expenses incurred by
the Administrative Agent, any Lender or any Issuing Lender (including the fees,
charges and disbursements of (A) any counsel for the Administrative Agent, any
Lender or any Issuing Lender and (B) the Consultants), in connection with the
enforcement or protection of its rights (1) in connection with this Agreement
and the other Loan Documents, including its rights under this Section, (2) in
connection with the Loans made or Letters of Credit issued hereunder, including
all such out-of-pocket expenses incurred during any workout, restructuring or
negotiations in respect of such Loans or Letters of Credit or (3) with respect
to the preservation and protection of the Collateral and (iv) all out-of-pocket
expenses and costs heretofore and from time to time hereafter incurred by the
Administrative Agent and the Consultants during the course of periodic field
audits, examinations and appraisals with respect to the Collateral and the
operations of the Credit Parties and their Subsidiaries, plus a per diem charge
at the Administrative Agent's then standard rate for the Administrative Agent's
examiners in the field and office.

(b)       Indemnification. The Borrower and the other Credit Parties shall
indemnify the Administrative Agent (and any sub-agent thereof), each Lender and
each Issuing Lender and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims (including, without limitation, any
Environmental Claims or civil penalties or fines assessed by OFAC), damages,
liabilities and related expenses (including the fees, charges and disbursements
of any counsel for any Indemnitee), incurred by any Indemnitee or asserted
against any Indemnitee by any third party or by the Borrower or any other Credit
Party arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan Document or any agreement or
instrument contemplated hereby or thereby, the performance by the parties hereto
of their respective obligations hereunder or thereunder or the consummation of
the transactions contemplated hereby or thereby, (ii) any Loan or Letter of
Credit or the use or proposed use of the proceeds therefrom (including any
refusal by any Issuing Lender to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly
comply with the terms of such Letter of Credit), (iii) any actual or alleged
presence or Release of Hazardous Materials on or from any property owned or
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Borrower or any of its Subsidiaries, or any Environmental Claim related in any
way to the Borrower or any of its Subsidiaries, (iv) any actual or prospective
claim, litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory, whether brought by a third
party or by the Borrower or any other Credit Party, and regardless of whether
any Indemnitee is a party thereto, or (v) any claim (including, without
limitation, any Environmental Claims or civil penalties or fines assessed by
OFAC), investigation, litigation or other proceeding (whether or not the
Administrative Agent or any Lender is a party thereto) and the prosecution and
defense thereof, arising out of or in any way connected with the Loans, this
Agreement, any other Loan Document, or any documents contemplated by or referred
to herein or therein or the transactions contemplated hereby or thereby,
including without limitation, reasonable attorneys and consultant's fees,
provided that such indemnity shall not, as to any Indemnitee, be available to
the extent that such losses, claims, damages, liabilities or related expenses
(x) are determined by a court of competent jurisdiction by final and
nonappealable judgment to have resulted from the gross negligence or willful
misconduct of such Indemnitee or (y) result from a claim brought by the Borrower
or any other Credit Party against an Indemnitee for breach in bad faith of such
Indemnitee's obligations hereunder or under any other Loan Document, if the
Borrower or such Credit Party has obtained a final and nonappealable judgment in
its favor on such claim as determined by a court of competent jurisdiction.

(c)       Reimbursement by Lenders. To the extent that the Borrower for any
reason fails to indefeasibly pay any amount required under clause (a) or (b) of
this Section to be paid by it to the Administrative Agent (or any sub-agent
thereof), any Issuing Lender or any Related Party of any of the foregoing, each
Lender severally agrees to pay to the Administrative Agent (or any such
sub-agent), such Issuing Lender or such Related Party, as the case may be, such
Lender's Commitment Percentage (determined as of the time that the applicable
unreimbursed expense or indemnity payment is sought) of such unpaid amount,
provided that the unreimbursed expense or indemnified loss, claim, damage,
liability or related expense, as the case may be, was incurred by or asserted
against the Administrative Agent (or any such sub-agent) or such Issuing Lender
in its capacity as such, or against any Related Party of any of the foregoing
acting for the Administrative Agent (or any such sub-agent) or such Issuing
Lender in connection with such capacity. The obligations of the Lenders under
this clause (c) are subject to the provisions of Section 4.7.

(d)       Waiver of Consequential Damages, Etc. To the fullest extent permitted
by Applicable Law, the Borrower and each other Credit Party shall not assert,
and hereby waives, any claim against any Indemnitee, on any theory of liability,
for special, indirect, consequential or punitive damages (as opposed to direct
or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated
hereby, the transactions contemplated hereby or thereby, any Loan or Letter of
Credit or the use of the proceeds thereof. No Indemnitee referred to in clause
(b) above shall be liable for any damages arising from the use by unintended
recipients of any information or other materials distributed by it through
telecommunications, electronic or other information transmission systems in
connection with this Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby.

 

 

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(e)       Payments. All amounts due under this Section shall be payable promptly
after demand therefor.

SECTION 13.4     Right of Set-off. If an Event of Default shall have occurred
and be continuing, each Lender, each Issuing Lender, the Swingline Lender and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by Applicable Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final, in whatever currency) at any time held and other obligations (in whatever
currency) at any time owing by such Lender, such Issuing Lender, the Swingline
Lender or any such Affiliate to or for the credit or the account of the Borrower
or any other Credit Party against any and all of the obligations of the Borrower
or such Credit Party now or hereafter existing under this Agreement or any other
Loan Document to such Lender, such Issuing Lender or the Swingline Lender,
irrespective of whether or not such Lender, such Issuing Lender or the Swingline
Lender shall have made any demand under this Agreement or any other Loan
Document and although such obligations of the Borrower or such Credit Party may
be contingent or unmatured or are owed to a branch or office of such Lender,
such Issuing Lender or the Swingline Lender different from the branch or office
holding such deposit or obligated on such indebtedness. The rights of each
Lender, each Issuing Lender, the Swingline Lender and their respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender, such Issuing Lender, the
Swingline Lender or their respective Affiliates may have. Each Lender, each
Issuing Lender and the Swingline Lender agrees to notify the Borrower and the
Administrative Agent promptly after any such setoff and application; provided
that the failure to give such notice shall not affect the validity of such
setoff and application.

 

SECTION 13.5

Governing Law.

(a)       Governing Law . This Agreement and the other Loan Documents, unless
expressly set forth therein, shall be governed by, and construed in accordance
with, the law of the State of New York, without reference to the conflicts of
law principles thereof.

(b)       Submission to Jurisdiction. The Borrower and each other Credit Party
irrevocably and unconditionally submits, for itself and its property, to the
nonexclusive jurisdiction of the courts of the State of New York sitting in New
York County and of the United States District Court for the Southern District of
New York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement or any other Loan Document, or for
recognition or enforcement of any judgment, and each of the parties hereto
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in such New York State court
or, to the fullest extent permitted by Applicable Law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement or in any other Loan Document shall affect any right that the
Administrative Agent, any Lender or any Issuing Lender may otherwise have to
bring any action or proceeding relating to this Agreement or any other Loan
Document against the Borrower or any other Credit Party or its properties in the
courts of any jurisdiction.

 

 

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(c)       Waiver of Venue. The Borrower and each other Credit Party irrevocably
and unconditionally waives, to the fullest extent permitted by Applicable Law,
any objection that it may now or hereafter have to the laying of venue of any
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
Applicable Law, the defense of an inconvenient forum to the maintenance of such
action or proceeding in any such court.

(d)       Service of Process. Each party hereto irrevocably consents to service
of process in the manner provided for notices in Section 13.1. Nothing in this
Agreement will affect the right of any party hereto to serve process in any
other manner permitted by Applicable Law.

SECTION 13.6     Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION

SECTION 13.7     Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
Collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.

 

SECTION 13.8

Injunctive Relief; Punitive Damages.

(a)       The Borrower recognizes that, in the event the Borrower fails to
perform, observe or discharge any of its obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrower agrees that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.

(b)       The Administrative Agent, the Lenders and the Borrower (on behalf of
itself and the other Credit Parties) hereby agree that no such Person shall have
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exemplary damages against any other party to a Loan Document and each such
Person hereby waives any right or claim to punitive or exemplary damages that
they may now have or may arise in the future in connection with any Dispute,
whether such Dispute is resolved through arbitration or judicially.

SECTION 13.9     Accounting Matters. If at any time any change in GAAP would
affect the computation of any financial ratio or requirement set forth in any
Loan Document, and either the Borrower or the Required Lenders shall so request,
the Administrative Agent, the Lenders and the Borrower shall negotiate in good
faith to amend such ratio or requirement to preserve the original intent thereof
in light of such change in GAAP (subject to the approval of the Required
Lenders); provided that, until so amended, (a) such ratio or requirement shall
continue to be computed in accordance with GAAP prior to such change therein and
(b) the Borrower shall provide to the Administrative Agent and the Lenders
financial statements and other documents required under this Agreement or as
reasonably requested hereunder setting forth a reconciliation between
calculations of such ratio or requirement made before and after giving effect to
such change in GAAP.

 

SECTION 13.10

Successors and Assigns; Participations.

(a)       Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that neither the
Borrower nor any other Credit Party may assign or otherwise transfer any of its
rights or obligations hereunder without the prior written consent of the
Administrative Agent and each Lender and no Lender may assign or otherwise
transfer any of its rights or obligations hereunder except (i) to an Eligible
Assignee in accordance with the provisions of paragraph (b) of this Section,
(ii) by way of participation in accordance with the provisions of paragraph (d)
of this Section or (iii) by way of pledge or assignment of a security interest
subject to the restrictions of paragraph (f) of this Section (and any other
attempted assignment or transfer by any party hereto shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby, Participants to the extent provided in paragraph (d)
of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or
equitable right, remedy or claim under or by reason of this Agreement.

(b)       Assignments by Lenders. Any Lender may at any time assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that

(i)        except in the case of an assignment of the entire remaining amount of
the assigning Lender's Commitment and the Loans at the time owing to it or in
the case of an assignment to a Lender or an Affiliate of a Lender or an Approved
Fund with respect to a Lender, the aggregate amount of the Commitment (which for
this purpose includes Loans outstanding thereunder) or, if the applicable
Commitment is not then in effect, the principal outstanding balance of the Loans
of the assigning Lender subject to each such assignment (determined as of the
date the Assignment and Assumption with respect to such assignment is delivered
to the Administrative Agent or, if "Trade Date" is specified

 

 

138

 

 

 

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in the Assignment and Assumption, as of the Trade Date) shall not be less than
$5,000,000, unless (A) such assignment is made to an existing Lender, to an
Affiliate thereof, or to an Approved Fund, in which case no minimum amount shall
apply, or (B) each of the Administrative Agent and, so long as no Default or
Event of Default has occurred and is continuing, the Borrower otherwise consent
(each such consent not to be unreasonably withheld or delayed);

(ii)       each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loans or the Commitment assigned;

(iii)      (A) the consent of the Administrative Agent (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment in
respect of the Credit Facility if such assignment is to a Person that is not a
Lender, an Affiliate of such Lender or an Approved Fund with respect to such
Lender, (B) the consent of each Issuing Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that
increases the obligation of the assignee to participate in exposure under one or
more Letters of Credit (whether or not then outstanding) and (C) the consent of
the Swingline Lender (such consent not to be unreasonably withheld or delayed)
shall be required for any assignment in respect of the Credit Facility; and

(iv)      the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Assumption, together with a processing
and recordation fee of $3,500 for each assignment, and the Eligible Assignee, if
it shall not be a Lender, shall deliver to the Administrative Agent an
Administrative Questionnaire.

Subject to acceptance and recording thereof by the Administrative Agent pursuant
to paragraph (c) of this Section, from and after the effective date specified in
each Assignment and Assumption, the Eligible Assignee thereunder shall be a
party to this Agreement and, to the extent of the interest assigned by such
Assignment and Assumption, have the rights and obligations of a Lender under
this Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Assumption, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Assumption covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 4.8, 4.9, 4.10, 4.11 and 13.3 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this Section.

(c)       Register. The Administrative Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at one of its offices in Charlotte,
North Carolina, a copy of each Assignment and Assumption delivered to it and a
register for the recordation of the names and addresses of the Lenders, and the
Commitment of, and principal amounts of the Loans owing to, each Lender pursuant
to the terms hereof from time to time (the "Register"). The entries in the
Register shall be conclusive, and the Borrower, the Administrative Agent and the
Lenders may

 

 

139

 

 

 

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treat each Person whose name is recorded in the Register pursuant to the terms
hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding
notice to the contrary. The Register shall be available for inspection by the
Borrower and any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

(d)       Participations. Any Lender may at any time, without the consent of, or
notice to, the Borrower and the Administrative Agent (except that notice shall
be provided to the Borrower and the Administrative Agent with respect to any
participations to a Person that would be a Foreign Lender), sell participations
to any Person (other than a natural person or the Borrower or any of the
Borrower's Affiliates or Subsidiaries) (each, a "Participant") in all or a
portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement.

Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver or modification described in Section
13.2 that directly affects such Participant. Subject to paragraph (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 4.8, 4.9, 4.10 and 4.11 to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to paragraph (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 13.4 as though it were a Lender, provided
such Participant agrees to be subject to Section 4.6 as though it were a Lender.

(e)       Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Sections 4.10 and 4.11than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 4.11 unless (i) the Borrower is notified of
the participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 4.11(e) as though it were a
Lender and (ii) the applicable Lender shall provide the Borrower with
satisfactory evidence that the participation is in registered form and shall
permit the Borrower to review such register as reasonably needed for the
Borrower to comply with its obligations under Applicable Laws.

(f)        Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation any pledge or
assignment to secure obligations to a Federal Reserve Bank; provided that no
such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party
hereto.

 

 

140

 

 

 

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SECTION 13.11   Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its 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, or required to be disclosed to, any rating agency, or regulatory or similar
authority (including any self-regulatory authority, such as the National
Association of Insurance Commissioners), (c) to the extent required by
Applicable Laws or regulations or by any subpoena or similar legal process, (d)
to any other party hereto, (e) in connection with the exercise of any remedies
under this Agreement or under any other Loan Document (or any Hedging Agreement
with a Lender or the Administrative Agent) or any action or proceeding relating
to this Agreement or any other Loan Document (or any Hedging Agreement with a
Lender or the Administrative Agent) or the enforcement of rights hereunder or
thereunder, (f) subject to an agreement containing provisions substantially the
same as those of this Section, to (i) any purchasing Lender, proposed purchasing
Lender, Participant or proposed Participant, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower, (h) to
Gold Sheets and other similar bank trade publications, such information to
consist of deal terms and other information customarily found in such
publications, or (i) to the extent such Information (x) becomes publicly
available other than as a result of a breach of this Section or (y) becomes
available to the Administrative Agent or any Lender on a nonconfidential basis
from a source other than the Borrower or (j) to governmental regulatory
authorities in connection with any regulatory examination of the Administrative
Agent or any Lender or in accordance with the Administrative Agent's or any
Lender's regulatory compliance policy if the Administrative Agent or such Lender
deems necessary for the mitigation of claims by those authorities against the
Administrative Agent or such Lender or any of its subsidiaries or affiliates.
For purposes of this Section, "Information" means all information received from
any Credit Party relating to any Credit Party or any of their respective
businesses, other than any such information that is available to the
Administrative Agent or any Lender on a nonconfidential basis prior to
disclosure by any Credit Party; provided that, in the case of information
received from a Credit Party 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.

 

SECTION 13.12   Performance of Duties. Each of the Credit Party's obligations
under this Agreement and each of the other Loan Documents shall be performed by
such Credit Party at its sole cost and expense.

SECTION 13.13   All Powers Coupled with Interest. All powers of attorney and
other authorizations granted to the Lenders, the Administrative Agent and any
Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied, any of the Commitment remains in
effect or the Credit Facility has not been terminated.

 

 

141

 

 

 

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SECTION 13.14   Survival of Indemnities. Notwithstanding any termination of this
Agreement, the indemnities to which the Administrative Agent and the Lenders are
entitled under the provisions of this Article XIII and any other provision of
this Agreement and the other Loan Documents shall continue in full force and
effect and shall protect the Administrative Agent and the Lenders against events
arising after such termination as well as before.

SECTION 13.15   Titles and Captions. Titles and captions of Articles, Sections
and subsections in, and the table of contents of, this Agreement are for
convenience only, and neither limit nor amplify the provisions of this
Agreement.

SECTION 13.16   Severability of Provisions. Any provision of this Agreement or
any other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such jurisdiction, be ineffective only to the extent of such
prohibition or unenforceability without invalidating the remainder of such
provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.

SECTION 13.17   Counterparts. This Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.

SECTION 13.18   Integration. This Agreement, together with the other Loan
Documents, comprises the complete and integrated agreement of the parties on the
subject matter hereof and thereof and supersedes all prior agreements, written
or oral, on such subject matter. In the event of any conflict between the
provisions of this Agreement and those of any other Loan Document, the
provisions of this Agreement shall control; provided that the inclusion of
supplemental rights or remedies in favor of the Administrative Agent or the
Lenders in any other Loan Document shall not be deemed a conflict with this
Agreement. Each Loan Document was drafted with the joint participation of the
respective parties thereto and shall be construed neither against nor in favor
of any party, but rather in accordance with the fair meaning thereof.

SECTION 13.19   Term of Agreement. This Agreement shall remain in effect from
the Closing Date through and including the date upon which all Obligations
arising hereunder or under any other Loan Document shall have been indefeasibly
and irrevocably paid and satisfied in full and the Commitment has been
terminated. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination or in
respect of any provision of this Agreement which survives such termination.

SECTION 13.20   Advice of Counsel, No Strict Construction. Each of the parties
represents to each other party hereto that it has discussed this Agreement with
its counsel. The parties hereto have participated jointly in the negotiation and
drafting of this Agreement. In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

 

 

142

 

 

 

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SECTION 13.21   USA Patriot Act. The Administrative Agent and each Lender hereby
notifies the Borrower 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
Borrower and each Guarantor, which information includes the name and address of
each Borrower and each Guarantor and other information that will allow such
Lender to identify such Borrower or Guarantor in accordance with the Act.

SECTION 13.22   Inconsistencies with Other Documents; Independent Effect of
Covenants.

(a)       In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; provided that any provision of the Security Documents which imposes
additional burdens on the Borrower or its Subsidiaries or further restricts the
rights of the Borrower or its Subsidiaries or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent
with this Agreement and shall be given full force and effect.

(b)       The Borrower expressly acknowledges and agrees that each covenant
contained in Articles VIII, IX, or X hereof shall be given independent effect.
Accordingly, the Borrower shall not engage in any transaction or other act
otherwise permitted under any covenant contained in Articles VIII, IX, or X if,
before or after giving effect to such transaction or act, the Borrower shall or
would be in breach of any other covenant contained in Articles VIII, IX, or X.

SECTION 13.23   No Novation. The execution and delivery of this Agreement shall
not constitute a novation of any indebtedness or other obligations owing to the
Lenders or the Administrative Agent based on facts or events occurring or
existing prior to the execution and delivery of this Agreement.

 

 

 

143

 

 

 

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EXHIBIT B

to

Credit Agreement

dated as of May 31, 2006

by and among

Bowater Incorporated,

as Borrower,

the Lenders party thereto,

as Lenders,

and

Wachovia Bank, National Association,

as Administrative Agent

 

 

FORM OF NOTICE OF BORROWING

 

 

 

144

 

 

 

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

 

NOTICE OF BORROWING

 

Dated as of: _____________

 

Wachovia Bank, National Association, as Administrative Agent

NC0680

1525 West W. T. Harris Blvd.

Charlotte, North Carolina 28262

Attention: Syndication Agency Services

 

Ladies and Gentlemen:

 

This irrevocable Notice of Borrowing is delivered to you pursuant to Section 2.3
of the Credit Agreement dated as of May 31, 2006 (as amended, restated,
supplemented or otherwise modified, the "Credit Agreement") by and among Bowater
Incorporated, a Delaware corporation, as Borrower, the lenders who are or may
become party thereto, as Lenders, and Wachovia Bank, National Association, as
Administrative Agent.

 

1.         The Borrower hereby requests that the Lenders make a [Revolving
Credit Loan] [Swingline Loan] to the Borrower in the aggregate principal amount
of $___________. (Complete with an amount in accordance with Section 2.3(a) of
the Credit Agreement.)

 

2.         The Borrower hereby requests that such Loan be made on the following
Business Day: ____________________. (Complete with a Business Day in accordance
with Section 2.3(a) of the Credit Agreement).

 

3.         The Borrower hereby requests that such Loan bear interest at the
following interest rate, plus the Applicable Margin, as set forth below:

 

 

Component
of Loan

 

 

Interest Rate

Interest Period (LIBOR

Rate only)

Termination Date for Interest Period
(if applicable)

 

 

 

 

 

[Base Rate or LIBOR Rate]1

 

 

 

 

 

 

 

4.         The principal amount of all Loans and L/C Obligations outstanding as
of the date hereof (including the Loan requested herein) does not exceed the
maximum amount permitted to be outstanding pursuant to the terms of the Credit
Agreement.

_________________________

 

1 

Complete with (i) the Base Rate or the LIBOR Rate for Revolving Credit Loans
(provided that the LIBOR Rate shall not be available until three (3) Business
Days after the Closing Date) or (ii) the Base Rate for Swingline Loans.

 

 

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

 

5.         As of the end of the Business Day immediately preceding the date of
this Notice of Borrowing and after giving effect to the Borrower's receipt of
the proceeds from the Loan requested pursuant to this Notice of Borrowing and
the application of the proceeds thereof, the aggregate amount of cash and Cash
Equivalents of (a) the Borrower and its Subsidiaries equals $____________ and
(b) the Parent equals $_________. (To be completed by Borrower.)

 

6.         All of the conditions applicable to the Loan requested herein as set
forth in the Credit Agreement have been satisfied as of the date hereof and will
remain satisfied to the date of such Loan.

 

7.         Capitalized terms used herein and not defined herein shall have the
meanings assigned thereto in the Credit Agreement.

 

[Signature Page Follows]

 

 

2

 

 

 

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

 

IN WITNESS WHEREOF, the undersigned has executed this Notice of Borrowing as of
the day and year first written above.

 

 

 

 

BOWATER INCORPORATED

 

 

 

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

3

 

 

 

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EXHIBIT K

to

Credit Agreement

dated as of May 31, 2006

by and among

Bowater Incorporated,

as Borrower,

the Lenders party thereto,

as Lenders,

and

Wachovia Bank, National Association,

as Administrative Agent

 

 

FORM OF BORROWING BASE CERTIFICATE

 

SEE ATTACHED

 

 

 

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

BORROWING BASE CERTIFICATE

Exhibit K

 

Bowater Incorporated

Amended Credit Agreement Date:

11/XX/2008

Amounts in Thousands

Report Date :

9/30/08

 

Reports

 

Pursuant to the provisions of the Amended Credit Agreement dated as of
11/XX/2008 (said Agreement, as it may be amended or otherwise modified from time
to time) and the terms defined therein being used herein as therein defined,
among Bowater Incorporated (Borrower), and Wachovia Bank, National Association
(Agent), the undersigned hereby certifies that the following information is
true, complete, and accurate as the those of business on September 30, 2008.

 

 

 

 

 

A/R as of :

 

 

A/R ineligible as of :

 

 

Inventory as of:

 

 

Inventory ineligible as of:

 

 

Exchange Rate USD/CAD$

 

 

A.

Bowater incorporated Accounts Collateral

 

 

 

 

 

 

 

 

 

 

 

1.  Accounts balance (from AR Schedule)

 

 

Bowater Incorporated

Combined

 

2.  Less: Total Ineligible Accounts (from AR Schedule)

 

US/CAN

Foreign

Accounts

 

3.  Eligible Accounts (A1-A2)

 

 

$                 -

$                -

$              -

 

4.  Eligible Accounts Advance Rate

 

 

                   - 

                  -

                  -

 

5.  Account. Availability (A3* A4)

 

 

                   -      

                  -

                  -

 

6.  Availability Sublimits

Consolidated Foreign AR Sublimit**

BCFPI Foreign AR Availability

BI Foreign AR Sublimit

$     115,000

85,0%

85,0%

#DIV/01

 

7.  Accounts Net Availability

-

$                 -

$                -

$                 -

 

 

 115,000

 

115,000

 

 

 

 

 

$                 -

$                 -

$                 -

 

 

 

 

 

 

 

 

 

 

Bowater Incorporated

 

B.

Bowater Incorporated Inventory Collateral

 

Raw Material

Work-in Process

US Finished Good

Mills Stores

Total Inventory

 

1.  Perpetual Inventory of Borrower (from Inventory Schedule)

$              -

$           -

$            -

$            -

$                -

 

2.  Less: Total Ineligible Inventory (from Inventory Schedule)

                 -

                  -

                  -

                  -

                  -

 

3  Eligible Inventory (B1 - B2)

 

                  -

                  -

                  -

                  -

                  -

 

 

 

 

 

 

 

 

 

4.  Net Orderly Liquidation Value (NOLV %)

 

53.8%

36.2%

83.2%

8.2%

#DIV//0!

 

5.  Eligible Inventory Advance Rata on NOLV (B4* 85%)

45.7%

30.8%

70.7%

7.0%

#DIV/0!

 

6.  NOLV Available Inventory (B3* B5)

 

$                -

$                -

$                -

$               -

        #DIV/0!

 

 

 

 

 

 

 

 

 

7.  Eligible Inventory Advance Rate on Cost

 

75.0%

50.0%

75.0%

10.0%

#DIV/0!

 

8.  Cost Available Inventory (B3* B7)

 

$               -

$               -

$                -

$               -

$                -

 

 

 

 

 

 

 

 

 

9.  Leaser of NOLV or Advance Rata on Cost (Lesser of: B6 or B8)

 

 

 

 

 

 

 

 

 

 

 

 

 

10.  Availability Sublimits

 

$

$   1,500

$               

$    7,000

$                -

 

11.  Inventory Net Availability

 

$                -

$                -

$                -

$                -

$                -

 

 

 

 

 

 

 

 

D.

Allowed Over Advance (Subject to Amortization Per Credit Agreement

 

 

$                -

 

 

 

 

 

 

 

 

E.

Combined Reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

Reserves

 

1.  Credit Insurance Deductible

 

 

 

 

 

-

 

2.  Credit Insurance Premiums

 

 

 

 

 

-

 

3.  Unpaid Employee Compensation/Benefits

 

 

 

 

 

-

 

4.  Rent Reserves (3-months)

 

 

 

 

 

-

 

5.  UK Customs & Guarantee

 

 

 

 

 

-

 

6.  Total Reserves (sum D1 to D5)

 

 

 

 

 

$                -

 

 

 

 

 

 

 

 

F.

Loan Status

 

 

 

 

 

Loan Status

 

 

 

 

 

 

 

 

 

1.  Total Revolver Credit Amount

 

 

 

 

 

$     407,573

 

2.  Total Borrowing Base Availability:

 

 

 

 

 

$                -

 

3.  Total Net Borrowing Base Availability (Leaser of E1 and E2)

 

 

 

                  -

 

 

 

 

 

 

 

 

 

4.  Less: Total Swingline Outstanding

 

 

 

 

 

-

 

5.  Less: Total Revolving Loans Outstanding

 

 

 

 

 

-

 

6.  Less: letters of Credit Outstanding

 

 

 

 

 

-

 

7.  Excess Availability

 

 

 

 

 

$                -

 

 

 

 

 

 

 

 

           

 

   

 

 

*Mill Stores inventory availability will be zero after first anniversary.

**Consolidated (BI + BCFPI) Foreign AR availability sublimit amortizes as
follows: $115 million (thru 12/31/08). $100 million (12/31/08 -3/31/09), $75
million (03/31/09 -06/30/09), and $50 million (06/30/09 and thereafter)

***Notwithstanding to the above, prior to 06/30/2009, if credit insurance
maximum credit loss limit decreases below $75 million, consolidated foreign AR
availability sublimit will reduce to such lower amount.

 

In connection with the foregoing, we hereby acknowledge and agree that, as of
the date hereof, the Agreement remains in full force and effect, is binding upon
us and enforceable against us in accordance with its term., and we certify to
you that, as of the date hereof, there exists no Event of Default under the
Agreement or event which, with the passage of time or the giving of notice, or
both, would so constitute an Event of Default. We hereby restate and renew each
and every representation and warranty made by in the Agreement or in connection
therewith, effective as of the date hereof.

Bowater Incorporated

 

 

 

 

Title

 

  Date

 

 

pg. 1

 

 

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

 

 

 

 

 

BORROWING BASE CERTIFICATE

Accounts Receivable Detail

Exhibit K

 

 

Bowater Incorporated

Amended Credit Agreement Date:

11/XX/2008

Amounts in Thousands

Report Date :

9/30/08

 

Reports

 

Pursuant to the provisions of the Amended Credit Agreement dated as of
11/XX/2008 (said Agreement, as it may be amended or otherwise modified from time
to time) and the terms defined therein being used herein as therein defined,
among Bowater Incorporated (Borrower), and Wachovia Bank, National Association
(Agent), the undersigned hereby certifies that the following information is
true, complete, and accurate as the those of business on September 30, 2008.

 

 

 

 

 

A/R as of :

 

 

A/R ineligible as of :

 

 

Inventory as of:

 

 

 

 

 

 

 

A.

Accounts Collateral

 

 

 

 

 

1.

Beginning Accounts balance (A5 from previous BBC)

 

 

$                 -

 

2.

Credit Sales (+)

 

 

                       -

 

 

3.

Adjustments (-)

 

 

 

                       -

 

 

4.

Net Collections (-)

 

 

 

                       -

 

 

5.

End of Period Accounts balance (roll forward)

 

 

 

                      =

$                  -

 

6.

BCFPI Net Activity from Coda AR System

 

 

 

                       -

 

 

7.

Future Dated Invoices (*)

 

 

                       -

 

 

8.

Un-reconcilable Amount (+)

 

 

 

                       -

 

 

9.

Consolidated Accounts Receivable balance (per Aging)

 

 

                      =

$                  -

 

10.

Unapplied Cash (-)

 

 

 

               

             

 

11.

Consolidated Accounts Receivable balance (per Aging)

 

 

 

                      =

$                  -

 

 

 

 

 

 

 

 

 

 

 

Bowater Incorporated

 

 

 

 

 

 

 

B.

Bowater Incorporated (US/Canada)

 

   

 

$                  -

 

1.

Accounts Receivable  balance (per Aging)

 

 

 

 

 

2.

Less: Total Ineligible Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a.

> 90 days after the original invoice data or > 60 days past due date

 

  -  

 

 

b.

Cross Aged 50%

 

 

 

-

 

 

 

c.

Credit Balances in the Past Due category

 

 

 

-

 

 

 

d.

Offsets

 

 

 

-

 

 

 

e.

Counterclaims

 

 

 

-

 

 

 

f.

Disputes

 

 

 

-

 

 

 

g.

Deductions

 

 

 

-

 

 

 

h.

Discounts

 

 

 

-

 

 

 

i.

Recoupment

 

 

 

-

 

 

 

j.

Reserves

Defense

 

 

-

 

 

 

k.

Defense

 

 

 

-

 

 

 

l.

Intercompany accounts

 

 

 

-

 

 

 

m.

Customers exceeding 10% of total outstanding receivables

 

 

 

-

 

 

 

n.

Accrued customer rebates

 

 

 

-

 

 

 

o.

Risky Accounts (i.e. Improper Evidence, Credit Unworthy. Bankruptcy)

 

 

 

-

 

 

 

p.

Pondered Newsprint Joint Venture Receivables

 

 

-

 

 

 

q.

Mersey Paper Joint Venture Receivables

 

 

-

 

 

 

r.

Bill and Hold Receivables

 

 

-

 

 

 

s.

Guaranteed Sales

 

 

 

 

 

 

 

t.

Sales or Returns

 

 

 

 

 

 

u.

Sale on Approval

 

 

 

 

 

 

 

v.

Consignment

 

 

 

 

 

 

 

w.

Other Repurchase or Return Basis

 

 

 

-

 

 

 

x.

Accounts deemed ineligible per Agent's reasonable discretion

 

 

-

 

 

3.

Less: Total ineligible Accounts (sum of B2)

 

 

 

=

$                -

 

4.

Eligible Accounts (B1-B3)

 

 

=

$                -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Bowater Incorporated

 

D.

Bowater Incorporated (foreign)

 

 

 

 

 

1.

Accounts Receivable  balance (per Aging)

 

 

 

$                 -

 

2.

Less: Total Ineligible Accounts

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

a.

> 180 days after the original invoice data or > 60 days past due date

 

 

 

-

 

 

 

b.

Cross Aged 50%

 

 

 

-

 

 

 

c.

Credit Balances in the Past Due category

 

 

 

-

 

 

 

d.

Offsets

 

 

 

-

 

 

 

e.

Counterclaims

 

 

 

-

 

 

 

f.

Disputes

 

 

 

-

 

 

 

g.

Deductions

    -  

 

 

h.

Discounts

 

 

 

-

 

 

 

i.

Recoupment

 

 

 

-

 

 

 

j.

Reserves

Defense

 

 

-

 

 

 

k.

Defense

 

 

 

-

 

 

 

l.

Customers exceeding 10% of total outstanding receivables

 

 

-

 

 

 

m.

Excluded Countries (Venezuela, Guatemala)

 

 

 

-

 

 

 

n.

Foreign Uninsured and/or Over Cap

 

 

 

-

 

 

 

o.

Accounts deemed ineligible per Agent's reasonable discretion

 

 

 

 

-

 

 

3.

Less: Total ineligible Accounts (sum of D2)

 

 

 

= 

$                -

 

4.

Eligible Account. (D1-D3)

 

 

                           =

$                -

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

pg. 2

 

 

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

BORROWING BASE CERTIFICATE

Inventory Detail

Exhibit K

 

 

Bowater Incorporated

 

Amended Credit Agreement D.

TBD

Amounts in Thousands

 

Report Date :

9/30/08

 

 

Reports

 

Pursuant to the provisions of the Amended Credit Agreement dated as of
11/XX/2008 (said Agreement, as it may be amended or otherwise modified from time
to time) and the terms defined therein being used herein as therein defined,
among Bowater Incorporated (Borrower), and Wachovia Bank, National Association
(Agent), the undersigned hereby certifies that the following information is
true, complete, and accurate as the those of business on September 30, 2008.

 

 

 

 

 

Inventory as of:

 

 

Inventory ineligible as of:

 

 

Exchange Rate USD/CAD$

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Inventory Categories:

A.

Inventory Collateral

 

Raw Materials

Work-in-Process

US Finished Goods

Mills

Stores*

Total Inventory

 

 

 

 

 

1.

Perpetual Inventory of Borrower ***

 

2.

Less: Ineligible Inventory for All Inventory Categories:

 

$               -

$             -

$             -

$             -

$             -

   

 

 

a.

Inventory that does not have a valid and marketable title

 

-

-

-

-

-

 

 

 

b.

Foreign inventory including Mokpo

 

-

-

-

-

-

 

 

 

c.

Warehouses < $100,000

 

-

-

-

-

-

 

 

 

d.

Customer Locations

 

-

-

-

-

-

 

 

 

e.

Slow-moving

 

-

-

-

-

-

 

 

 

f.

Obsolete

 

-

-

-

-

-

 

 

 

g.

Returns Not for Resale

 

-

-

-

-

-

 

 

 

h.

Damaged

 

-

-

-

-

-

 

 

 

i.

Consigned Inventory

 

-

-

-

-

-

 

 

 

j.

Offsite Lumber

 

-

-

-

-

-

 

 

 

k.

Calhoun Inventory

 

-

-

-

-

-

 

 

 

I.

Mersey Inventory

 

-

-

-

-

-

 

 

 

m.

Oakhill (Bridgewater) Nova Scotia Inventory

 

-

-

-

-

-

 

 

 

n.

Goods that do not conform to the representations, warranties and covenants
contained in  agreements

 

-

-

-

-

-

 

 

 

o.

Intercompany Profit

 

-

-

-

-

-

 

 

 

p.

"Other" and Partnership Charges

 

-

-

-

-

-

 

 

 

q.

Inventory that is not subject to a perfected first priority interest in favor
Agent

 

-

-

-

-

-

 

 

 

r.

Samples, labels, bags, packaging or shipping materials, display items and other
similar  non-merchandise categories

 

-

-

-

-

-

 

 

 

s.

Machine Cloth

 

-

-

-

-

-

 

 

 

t.

Project Stores

 

-

-

-

-

-

 

 

 

u.

Repair Parts 1 Spare Parts

 

-

-

-

-

-

 

 

 

v.

Freight

 

-

-

-

-

-

 

 

 

w.

Fuel & Chemicals

 

-

-

-

-

-

 

 

 

x.

Inventory not reflected in perpetual inventory

 

-

-

-

-

-

 

 

 

y.

Inventory that is subject to any license or other arrangement

 

-

-

-

-

-

 

 

 

z.

In-Transit Inventory

 

-

-

-

-

-

 

 

 

 

 

-

-

 

 

 

 

 

3.

Total Ineligible Inventory for All Categories (sum of A2)

 

-

-

-

-

-

 

 

4.

Eligible Inventory Collateral (A1 -A3)

 

$                -

-

$               -

$               -

$               -

 

                               

 

 

 

 

• Mill Stores inventory availability will be zero after first anniversary.

 

 

 

 

 

pg. 3

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

UPDATED SCHEDULE 1.1(C)

TO EACH CREDIT AGREEMENT

 

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

GRENADA REAL PROPERTY

 

LEGAL DESCRIPTION

 

TRACT NO. 1

 

A  part  or  parcel of Section 25, Township 23 North, Range 4 East, Sections 30
and 31 in Township 23 North, Range 5 East, and Section 6, Township 22 North,
Range 5 East all being in Grenada County, Mississippi, and being more
particularly described as follows:  

The following description is based on the Mississippi State Plane Coordinate
System (West Zone), using a convergence angle of 00 degrees 17 minutes 19
seconds and a combined scale factor of .999977825, based on a closed traverse
starting at National Geodetic Survey reference point R-166, said monument found
intact and in stable condition at the Grenada Airport.  

Beginning at a point where the south right-of-way of "Paper Mill Road"
intersects the west right-of-way of the Illinois Central Gulf Railroad
right-of-way, said point according to deed, "being south 570.88 feet, more or
less, and east 2,180.78 feet, more or less, from the northwest corner of Section
30, Township 23 North, Range 5 East," (and having a coordinate value of
N-1578000.896, E-2453940.793 feet on the above referenced coordinate system and
lying North 80 degrees 18 minutes 21 seconds West 6,723.90 feet from NGS
Reference marker R-166); thence South 15 degrees 38 minutes 29 seconds East,
partially along a fence, for a distance of 10,559.21 feet along the west
right-of-way of the Illinois Central Gulf Railroad to a concrete monument;
thence along a curve to the left having a radius of 1411.31 feet, a chord
bearing South 25 degrees 38 minutes 33 seconds East 491.79 feet to a point in
the center of Riverdale (Boteler) Creek; thence along the centerline of said
creek, generally along the following courses and distances: Thence South 42
degrees 42 minutes 11 seconds West for 75.82 feet; thence South 06 degrees 02
minutes 46 seconds West for 500.91 feet; thence along a curve to the right for
404.26 feet, said curve having a radius of 498.18 feet, a Delta angle of 46
degrees 29 minutes 40 seconds and a chord bearing South 29 degrees 17 minutes 39
seconds West 393.26 feet; thence South 52 degrees 32 minutes 29 seconds West for
426.69 feet; thence along a curve to the left for 207.34 feet said curve having
a radius of 818.44 feet, a Delta angle of 14 degrees 30 minutes 53 seconds and a
chord bearing South 45 degrees 17 minutes 02 seconds West 206.78 feet; thence
South 38 degrees 01 minutes 35 seconds West for 195.05 feet; thence along a
curve to the right for 289.61 feet said curve having a radius of 424.38 feet, a
Delta angle of 39 degrees 06 minutes 05 seconds and a chord bearing South 57 d e
grees 34 minutes 41 se conds West 284.03 feet; thence South 77 degrees 07
minutes 43 seconds West for 61.24 feet; thence along a curve to the left for
170.81 feet said curve having a radius of 286.45 feet, a Delta angle of 34
degrees 09 minutes 55 seconds and a chord bearing South 60 degrees 02 minutes 45
seconds West 168.29 feet; thence South 42 degrees 57 minutes 47 seconds West for
702.44 feet; Thence along a curve to the left for 154.13 feet said curve having
a radius of 498.15 feet, a Delta angle of 17 degrees 43 minutes 39   seconds
 and  a  chord  bearing South  34  degrees  05 minutes  58  seconds  West
 153.52

 

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

 

feet; thence South 26 degrees 08 minutes 20 minutes West for 177.23 feet to a
point on the East right-of-way of U.S. Highway 51 (as of 2007); Thence along
said Highway right-of-way, North 28 degrees 34 minutes 03 seconds West for a
distance of 132.34 feet; thence North 42 degrees 07 minutes 00 seconds West for
a distance of 414.16 feet; thence North 44 degrees 52 minutes 33 seconds West
for a distance of  463.01 feet; Thence South 45 degrees 07 minutes 27 seconds
West for a distance of 13.97 feet; thence along the meanderings of a fence North
44 degrees 58 minutes 18 seconds West for a distance of 1648.76 feet to a
right-of-way marker at a fence corner on the east right-of-way of U.S. Highway
51 (having a coordinate value of N-1566791.85, E-2453167.15 feet on the above
referenced coordinate system); Thence North 00 degrees 05 minutes 01 minutes
East for a distance of 1,163.71 feet along the meanderings of a fence to a
concrete monument at a fence corner (having a coordinate value of N-1567955.56,
E-2453168.85 on the above referenced coordinate system); Thence South 89 degrees
55 minutes 56 seconds West for a distance of 440.95 feet along the meanderings
of a fence to a concrete monument (having a coordinate value of N-1567955.04,
E-2452727.90 feet on the above referenced coordinate system); Thence North 00
degrees 03 minutes 48 seconds West for a distance of 4,508.20 feet along the
meanderings of a fence to 3/4 inch rebar in the fence; Thence North 00 degrees
55 minutes 48 seconds West for a distance of 1,012.63 feet along the meanderings
of a fence to a concrete monument (having a coordinate value of N-157347573,
E-2452706.47 feet on the above referenced coordinate system); Thence South 89
degrees 15 minutes 42 seconds West for a distance of 1,754.60 feet to a 3/4
seconds rebar (having a coordinate value of N-1573453.12, E-2450952.02 feet on
the above referenced coordinate system); Thence North 00 degrees 44 minutes 18
seconds West for a distance of 190.96 feet to a concrete monument on the east
right-of-way of "Paper Mill Road" (having a coordinate value of N-1573644.07,
E-2450949.56 feet on the above referenced coordinate system); Thence along the
east right-of-way of said road as follows: North 36 degrees 38 minutes 27
seconds East for a distance of 703.25 feet to a concrete monument (having a
coordinate value of N-1574208.35, E-2451369.25 feet on the above referenced
coordinate system); thence along a curve to the left for 694.19 feet to a 3/4
inch rebar, said curve having a radius of 1959.87 feet, a Delta angle of 20
degrees 17 minutes 40 seconds and a chord bearing North 26 degrees 28 minutes 11
seconds East 690.57 feet (having a coordinate value of N-1574826.53,
E-2451677.06 feet on the above referenced coordinate system); thence North 48
degrees 29 minutes 15 seconds East for a distance of 218.14 feet to a 3/4 inch
rebar; thence North 15 degrees 39 minutes 10 seconds West for a distance of
55.27 feet to a railroad spike in the road; thence North 15 degrees 49 minutes
42 seconds East for a distance of 52.53 feet to a 3/4 inch rebar; thence North
39 degrees 52 minutes 18 seconds West for a distance of 145.22 feet to a 3/4
inch rebar; thence along a curve to the left for 191.10 feet to a concrete right
of way marker, said curve having a radius of 1959.87 feet, a Delta angle of 05
degrees 35 minutes 12 seconds and a chord bearing North 02 degrees 47 minutes 51
seconds East 191.03 feet (having a coordinate value of N-1575377.13,
E-2451756.05 feet on the above referenced coordinate system); thence continue
along the right of way line North 00 degrees 00 minutes 25 seconds West for a
distance of 1265.12 feet to a concrete right of way  marker  (having a
 coordinate  value  of  N-1576642.25, E-2451755.90 feet on the above

 

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

 

referenced coordinate system); thence along a curve to the right for 1485.65
feet, said curve having a radius of 1095.78 feet, a Delta ang1e of 77 degrees 40
minutes 53 seconds and a chord bearing North 38 degrees 51 minutes 32 seconds
East 1374.45 feet; thence North 77 degrees 42 minutes 00 seconds East for
1353.63 feet to the "Point of Beginning", enclosing 882.64 acres, more or less.
 

LESS AND EXCEPT NO. 1  

A parcel conveyed to BRICK ACADEMY M.B. CHURCH as per deed in Book 234, page 101
and therein described as follows:  

A part or parcel of Section 30, Township 23 North, Range 5 East, Grenada County,
Mississippi, and being more particularly described as follows:  

Beginning at a point 2,512.07 feet south, and 77.48 feet East of the Northeast
corner of Section 30, Township 23 North, Range 5 East, thence North 63°52'58"
East for 92.20 feet to a point; North 15°05'47" East for 149.69 feet to a point;
thence North 48°23'29" East for 173.80 feet to a point; thence North 85°23'15"
East. for 139.80 feet to a point; thence South 24°55'10" West for 267.65 feet to
a point; thence South 62°36'33" West for 307.56 feet to a point; thence North
04°07'06" West for 72.65 feet to the 'Point of Beginning' of the property herein
described, containing 1.37 acres, more or less.  

Along with an access easement described as follows:  

A part or parcel of Section 30, Township 23 North, Range 5 East, Grenada County,
Mississippi, and being more particularly described as follows:  

Beginning at a point 2,512.07 feet south, and 77.48 feet East of the Northeast
corner of Section 30, Township 23 North, Range 5 East, thence South 04°07'06"
East for 17.04 feet to a point; South 53°58'25" West for 120.84 feet to a point;
thence North 88°45'18" West for 4.86 feet to a point on the east right-of-way of
"Paper Mill Road"; thence North 00°33'32" East. for 32.52 feet along the east
right-of-way of "Paper Mill Road"; thence South 88°45'18" East for 24.09 feet to
a point; thence North 53°58'25" East for 95.16 feet to the 'Point of Beginning'
enclosing 0.047 acres, more or less.  

The above described TRACT 1 is also subject to the following servitudes and
easements:  

A 40 foot easement to Mississippi Power and Light Company found in Book 239,
page 541, (Tract 2).  

An easement for a gas line and metering station to Mississippi Valley Gas
Company found in Book 242, page 101.  

An easement 75 feet wide in favor of the U.S.A. as per deed found in Book 84,
page 171.

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

 

An Easement for a transmission line in favor of T.V.A. found in Book 239, page
541.  

The above described TRACT t is also subject to two encroachments as shown on
this survey: a 0.30 acre encroachment lying in a fenced area east of exception
No.1 and a 0.40 acre area being used for farming purposes in the western most
portion of TRACT I.  

TRACT NO. 2A  

A part or parcel of Section 30, in Township 23 North, Range 5 East, Grenada
County, Mississippi and being more particularly described as follows:  

The following description is based on the Mississippi State Plane Coordinate
System (West Zone), using a convergence angle of 00 degrees 17 minutes 19
seconds and a combined scale factor of .999977825, based on a closed traverse
starting at National Geodetic Survey reference point R-166, said monument found
intact and in stable condition at the Grenada Airport.  

Commence at a point where the south right-of-way of "Paper Mill Road" intersects
the west right-of-way of the Illinois Central Gulf Railroad right-of-way, (said
point according to deed, "being south 570.88 feet, more or less, and east
2,180.78 feet, more or less, from the northwest corner of Section 30, Township
23 North, Range 5 East," and having a coordinate value of N-1578000.896,
E-2453940.793 feet on the above referenced coordinate system and lying North 80
degrees 18 minutes 21 seconds West 6,723.90 feet from NGS Reference marker
R-166); thence run North 15 degrees 42 minutes 29 seconds West a distance of
100.12 feet to the intersection of the west line of the railroad right of way
with the north line of "Paper Mill Road"; thence run along the existing north
right of way of "Paper Mill Road" South 77 degrees 42 minutes 00 minutes West
for 1189.19 feet to the west line of a tract conveyed to Grenada County Economic
Development District said point is the Point of Beginning of the herein
described tract;  

From the Point of Beginning thence continue along the north line of "Paper Mill
Road" South 77 degrees 42 minutes 00 minutes West for a distance of 158.59 feet;
thence along a curve to the left for 1061.68 feet, said curve having a radius of
1193.45 feet, a Delta angle of 50 degrees 59 minutes 04 seconds and a chord
bearing South 52 degrees 15 minutes 17 seconds West 1027.29 feet; thence North
01 degrees 45 minutes 19 seconds West a distance of 350.14 feet to a concrete
monument found, (said monument previously the Beginning Point of Original Tract
2, and being described in previous deeds as being "1020.23 feet, more or less
South and 9.17 feet, more or less East of the northwest corner of Section 30,
Township 23 North, Range 5 East" and having a coordinate value of N 1577531.35,
E 2451773.89 on the above referenced coordinate system); thence continue North
02 degrees 31 minutes 53 seconds West a distance of 292.47 feet to a 3/4 inch
rebar set on the south right of way of Riverdale road (being the same point as
the Beginning point described in Parcel 2 of the deed to Newsprint South, Inc.,
in that certain deed recorded in Book 255, page 18, said point described in said
deed as being "located 720.00' South  of the Northwest  corner  of  Section  30,
 Township  23  North,  Range  5  East");  thence  along

 

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

said south line of Riverdale Road North 41 degrees 07 minutes 37 seconds East
for 52.60 feet; thence North 38 degrees 33 minutes 37 seconds East a distance of
38.50 feet; thence North 34 degrees 41 minutes 37 seconds East a distance of
67.30 feet; thence North 32 degrees 09 minutes 37 seconds East a distance of
169.50 feet; thence North 34 degrees 24 minutes 37 seconds East for 53.60 feet;
thence North 36 degrees 52 minutes 37 seconds East a distance of 65.10 feet;
thence North 42 degrees 59 minutes 12 seconds East a distance of 124.34 feet to
a 3/4 inch pipe found; thence leave the right of way and run South 23 degrees 33
minutes 16 seconds East a distance of 382.05 feet 3/4 inch iron pipe found;
thence run North 50 degrees 44 minutes 12 seconds East a distance of 134.61
feet; thence North 12 degrees 20 minutes 54 seconds West a distance of 415.18
feet to a 3/ 4 inch iron pipe found on the south line of Riverdale Road; thence
North 52 degrees 05 minutes 16 seconds East a distance of 7.63 feet; thence
North 59 degrees 21 minutes 05 seconds East a distance of 72.20 feet; thence
North 65 degrees 34 minutes 05 seconds East a distance of 56.1 0 feet; thence
North 72 degrees 32 minutes 05 seconds East a distance of 57.10 feet; thence
North 78 degrees 49 minutes 05 seconds East a distance of 84.68 feet to the
northwest corner of a tract conveyed to the Grenada County Economic Development
District, being a concrete monument found, (said monument having the coordinate
value of N 1578518.15, E 2452527.08 on the above referenced coordinate system);
thence South 18 degrees 26 minutes 35 seconds East, along said west property
line, for a distance of 710.63 feet to the Point of Beginning of the property
herein described, containing 12.51 acres, more or less.  

The above described TRACT 2A is also subject to the following servitudes and
easements:  

A 10 foot easement for an electric power line to Tallahatchie Valley Electric
Power Association as found in Book 242, page 116 (Tract I).  

The same Tallahatchie Valley Electric Power Association power line also
encumbers the property and exists thereon property now owned by Bowater
Newsprint South, Inc. lying north of the above easement, but no documentation
has been provided this surveyor.  

TRACT NO. 2B  

A part or parcel of Section 30, in Township 23 North, Range 5 East, Grenada
County, Mississippi and being more particularly described as follows:  

The following description is based on the Mississippi State Plane Coordinate
System (West Zone), using a convergence angle of 00 degrees 17 minutes 19
seconds and a combined scale factor of .999977825, based on a closed traverse
starting at National Geodetic Survey reference point R-166, said monument found
intact and in stable condition at the Grenada Airport.

Commence at a point where the south right-of-way of "Paper Mill Road" intersects
the west right-of-way of the Illinois Central Gulf Railroad right-of-way, said
point according  to  deed,  "being south  570.88  feet,  more  or less, and east
2,180.78 feet,

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

 

more or less, from the northwest corner of Section 30, Township 23 North, Range
5 East," (and having a coordinate value of N-1578000.896, E-2453940.793 feet on
the above referenced coordinate system and lying North 80 degrees 18 minutes 21
seconds West 6,723.90 feet from NGS Reference marker R-166); thence run North 15
degrees 42 minutes 29 seconds West a distance of 100.12 feet to the intersection
of the west line of the railroad right of way with the north line of "Paper Mill
Road," said point is the Point of Beginning of the herein described tract: From
the Point of Beginning thence run along the existing north right of way of
"Paper Mill Road" South 77 degrees 42 minutes 00 minutes West for 982.59 feet to
the east line of a tract conveyed to Grenada County Economic Development
District; thence along said east property line North 16 degrees 43 minutes 01
seconds West a distance of 368.25 feet to a concrete monument found; thence
continue North 16 degrees 43 minutes 01 seconds West a distance of 299.98 feet
to a fence post in concrete found on the south right of way of Riverdale road;
thence along said south line of Riverdale Road; thence along the south line of
Riverdale road North 88 degrees 39 minutes 52 seconds East for 124.87 feet;
thence North 89 degrees 55 minutes 42 seconds East a distance of 178.55 feet;
thence South 88 degrees 23 minutes 52 seconds East for 138.94 feet; thence South
86 degrees 11 minutes 03 seconds East a distance of 273.89 feet to a 3/4 inch
pipe found; thence South 85 degrees 28 minutes 06 seconds East a distance of
329.24 feet to point, said point being the intersection of the south line of
Riverdale Road and the west right of way of the Illinois Central Gulf Railroad;
thence South 15 degrees 42 minutes 29 seconds East, partially along a fence, for
300.00 feet along the West right-of-way of the Illinois Central Gulf Railroad to
a concrete monument; thence continue along said right of way and fence South 15
degrees 42 minutes 29 seconds East a distance of 100.68 feet to the Point of
Beginning of the property herein described, containing 12.36 acres, more or
less.  

LESS AND EXCEPT NO.2  

(STAHAM CEMETERY PER BOOK 233, PAGE 328)

(As per deed description of record):  

A part or parcel of Section 30, Township 23 North, Range 5 East, all being in
Grenada County, Mississippi, and being more particularly described as follows:

Beginning at a concrete monument 436.89 feet South, and 1,207.71 feet east of
the Northwest corner of Section 30; then South 08°48'12" East for 104.36 feet to
a concrete monument; then North 81°11'48" East, for 104.36 feet to a concrete
monument; then North 08°48'12" West, for 104.36 feet to a concrete monument;
then South 81°11'48" West for 104.36 feet to the "Point of Beginning", of the
property herein described, containing 0.25 acres, more or less.  

ALSO:  

Any cloud on title due to the erroneous description of Tract 3, of Book 247,
Page 358. The description of Tract 2B above considers that the intent of the
conveyance in Book 247, page 358 was to convey four (4) contiguous parcels.
 

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The above described TRACT 28 is also subject to the following servitudes and
casements:  

A 10 foot easement for an electric power line to Tallahatchie Valley Electric
Power Association as found in Book 242, page 116 (both tracts).  

The same Tallahatchie Valley Electric Power Association power line also
encumbers the property and exists thereon property now owned by Bowater
Newsprint South, Inc. lying north of the above easement, but no documentation
has been provided this surveyor.  

An easement of ingress and egress to and from "'Less and Except No.2", for which
no description has been defined.  

TRACT NO. 3  

A part or parcel of Sections 6 and 7, Township 22 North, Range 5 East, all being
in Grenada County, Mississippi, and being more particularly described as
follows:  

Beginning at a concrete monument at a fence corner; said monument is located
10,606.16 feet more or less South, and 872.84 feet more or less east of the
northwest corner of Section 30, Township 23 North, Range 5 East, Grenada County,
Mississippi, from said concrete monument, thence South 4,888.11 feet and
1,157.75 feet east to a concrete monument, said point being the "Point of
Beginning" of the property herein described; then south 38°05'28" east, 305.99
feet to a point; then south 51°54'32" west, 500.00 feet, to a point at the
centerline of the Yalobusha River; then north 38°05'28" west 500.00 feet along
the centerline of said river to a point where the centerline of Riverdale Creek
intersects the centerline of the Yalobusha River; then north 51°17'12" east,
500.03 feet along the centerline of Riverdale Creek to a point; then south
38°05'28" east 199.46 feet to the "Point of Beginning seconds of the property
herein described, containing 5.77 acres, more or less.  

Subject to that perpetual easement in favor of the United States of America as
same is recorded in book 103, Page 133 of the Land Deed Records of Grenada
County, Mississippi.  

And the following perpetual rights of way for road purposes and a perpetual
easement for purposes of installing and maintaining water and other utility
lines over, under and across the following described property in Grenada County,
Mississippi, to wit:  

A part or parcel of Section 6, Township 22 North, Range 5 East, all being in
Grenada County, Mississippi, and being more particularly described as follows:  

Beginning at a concrete monument at a fence corner, said monument is located
10,606.16 feet more or less south, and 872.84 feet more or less east of the
northwest

 

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corner of Section 30, Township 23 north. Range 5 east, Grenada County,
Mississippi, from said concrete monument, thence South 3,582.31 feet and
2,011.21 feet east to a concrete monument, said point bein2 the 'Point of
Be2inning seconds of the property herein described; then south 33°10'06" west,
1,559.98 feet to a concrete monument; then north 38°05'28" west, 104.77 feet to
a concrete monument; then north 33°10'06" east, 1,574.92 feet to a concrete
monument; then south 30°43'52" east, 110.48 feet to the "Point of Be2inning
seconds of the property herein described, containing 3.57 acres, more or less;  

and also,  

A part or parcel of Section 6, Township 22 North, Range 5 East, all being in
Grenada County, Mississippi, and being more particularly described as follows:  

Beginning at a concrete monument at a fence corner, said monument is located
10,606.16 feet more or less south, and 872.84 feet more or less east of the
northwest corner of Section 30, Township 23 north. Range 5 east, Grenada County,
Mississippi, from said concrete monument, thence South 3,582.31 feet and
2,011.21 feet east to a concrete monument, said point being the 'Point of
Beginning' of the property herein described; then north 30 degrees 43 minutes 52
seconds west, 188.01 feet to a point at the centerline of Riverdale Creek; then
north 44°58'07" east, 103.20 feet along the centerline of said creek to a point
on the west, right-of-way of U.S. Highway 51; then south 30°43'52" east, 271.13
feet along the west right-of-way to a point; then south 59°16'08" west, 100.00
feet to a point; then north 30°43'52" west 57.63 feet to the "Point of Beginning
seconds, of the property herein described, containing 0.59 acres, more or less.

 

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COOSA PINES

REAL PROPERTY - FEE  

LEGAL DESCRIPTION  

TRACT NO. 1  

COMMENCE AT THE SOUTH EAST CORNER OF SECTION 5, TOWNSHIP 20 SOUTH, RANGE 3 EAST,
TALLADEGA COUNTRY, ALABAMA; THENCE.: NORTH 00°01'14" WEST ALONG THE EAST
BOUNDARY OF SAID SECTION A DISTANCE OF 435.45 FEET TO THE  POINT-OF- BEGINNING.
FROM THE POINT-OF-BEGINNING;THENCE SOUTH 88°37'51" WEST FOR A DISTANCE OF
3904.74 FEET TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 00°18'01" FAST A
DISTANCE OF 685.74 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF ALABAMA
HIGHWAY NO. 235; THENCE, ALONG; SAID EAST RIGHT-OF-WAY LINE, NORTH 51°57'00"
WEST A DISTANCE OF 313.76 FEET TO THE P.C. OF A CONCAVE CURVE RIGHT; THENCE,
CONTINUING ON SAID EAST RIGHT-OF-WAY, ALONG SAID CURVE TO THE RIGHT WITH A
RADIUS OF 1372.40 FEET, A CHORD BEARING OF NORTH 34°41'39" WEST A CHORD DISTANCE
OF 985.90 FEET TO A FOUND IRON PIN; THENCE, LEAVING SAID EAST RIGHT-OF-WAY NORTH
85°52'31" FAST A DISTANCE OF 228.05 FEET TO A SET IRON PIN; THENCE NORTH
00o07'30" WEST A DISTANCE OF 325.60 FEET TO A SET IRON PIN; THENCE SOUTH
85°49'28" WEST A DISTANCE OF 267.50 FEET TO FOUND IRON PIN ON THE EAST
RIGHT-OF-WAY LINE OF SAID ALABAMA HIGHWAY NO. 235; THENCE, ALONG SAID EAST
RIGHT-OF-WAY LINE NORTH 00°14'28" WEST A DISTANCE OF 564.88 FEET TO THE P.C. OF
A CONCAVE CURVE LEFT; THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY, ALONG SAID
CURVE TO THE LEFT WITH A RADIUS OF 1987.73 FEET, A CHORD HEARING OF NORTH
09°49'18" WEST A CHORD DISTANCE OF 658.42 FEET TO THE P.T. OF SAID CURVE; THENCE
CONTINUING ON SAID EAST RIGHT-OF-WAY, NORTH 15°25'13" WEST A DISTANCE OF 1240.12
FEET TO THE P.C. OF A CONCAVE CURVE RIGHT; THENCE, CONTINUING ON SAID EAST
RIGHT-OF-WAY, ALONG SAID CURVE TO THE RIGHT WITH A RADIUS OF 1848.50 FEET, A
CHORD BEARING OF NORTH 06°48'36" WEST A CHORD DISTANCE OF 553.50 FEET TO THE
P.T. OF SAID CURVE; THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY, NORTH
00°07'17" EAST A DISTANCE OF 1267.14 FEET TO THE P.C. OF A CONCAVE CURVE RIGHT;
THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY, ALONG SAID CURVE TO THE RIGHT WITH
A RADIUS OF 1372.39 FEET, A CHORD BEARING OF NORTH 14°38'49" EAST A CHORD
DISTANCE OF 755.96 FEET TO THE P.T. OF SAID CURVE; THENCE, CONTINUING ON SAID
EAST RIGHT-OF-WAY, NORTH 29°33'44" EAST A DISTANCE OF 268.30 FEET TO A FOUND
CONCRETE MONUMENT AT THE P.C. OF A CONCAVE CURVE LEFT; THENCE, CONTINUING ON
SAID EAST RIGHT- OF-WAY, ALONG SAID CURVE TO THE LEFT WITH A RADIUS OF 1454.47
FEET, A CHORD BEARING OF NORTH 21°25'25" EAST A CHORD DISTANCE  OF  344.27  FEET
TO  A  FOUND  IRON PIN; THENCE, LEAVING

 

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SAID EAST RIGHT-OF-WAY, SOUTH 89°58'6'' EAST A DISTANCE OF 37.39  FEET TO A SET
IRON PIN; THENCE SOUTH 00°05'3'' WEST A DISTANCE OF 310.00 FEET TO A POINT;
THENCE NORTH 90°00'00" EAST A DISTANCE OF 248.00 FEET TO A POINT THAT IS 12 FEET
NORTH OF AND AT RIGHT ANGLES TO THE CENTERLINE OF A RAILROAD SPUR TRACK; THENCE
NORTH 64°35'03" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A
DISTANCE OF 135.91 FEET; THENCE NORTH 67°25'24'' EAST PARALLEL TO AND 12 FEET
NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 66.23 FEET; THENCE NORTH
76°00'26" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A
DISTANCE OF 73.18 FEET; THENCE NORTH 85°31'37" EAST PARALLEL TO AND 12 FEET
NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 90.35 FEET; THENCE NORTH
85°03'20" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A
DISTANCE OF 79.70 FEET; THENCE NORTH 74°19'35" EAST PARALLEL TO AND 12 FEET
NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 101.92 FEET; THENCE NORTH
62°21'50" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A
DISTANCE OF 89.57 FEET; THENCE NORTH 51°10'37" EAST PARALLEL TO AND 12 FEET
NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 113.83 FEET; THENCE NORTH
39°46'49" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A
DISTANCE OF 49.10 FEET TO SET IRON PIN; THENCE NORTH 00°00'6'' EAST A DISTANCE
OF 316.39 FEET TO A SET IRON PIN; THENCE NORTH 89°59'12" WEST A DISTANCE OF
958.84 FEET TO A FOUND CONCRETE MONUMENT ON THE EAST RGHT-OF-WAY LINE OF SAID
ALABAMA HIGHWAY 235; THENCE, ALONG SAID EAST RIGHT-OF-WAY, ALONG A CURVE TO THE
LEFT WITH A RADIUS OF 958.05 FEET, A CHORD BEARING OF NORTH 02°36'11". EAST A
CHORD DISTANCE OF 42.53 FEET TO A FOUND CONCRETE MONUMENT; THENCE, LEAVING SAID
EAST RIGHT-OF-WAY, NORTH 89°54'55" EAST A DISTANCE 985.00 FEET TO A SET IRON
PIN; THENCE SOUTH 80°05'41" EAST A DISTANCE OF 250.00 FEET TO A SET IRON PIN;
THENCE SOUTH 25°26'11" EAST A DISTANCE OF 39.28 FEET TO A FENCE CORNER; THENCE
SOUTH 49°17'11" EAST A DISTANCE OF 120.95 FEET TO A FOUND CONCRETE MONUMENT;
THENCE SOUTH 64°56'35" EAST A DISTANCE OF 151.58 FEET TO A FOUND CONCRETE
MONUMENT; THENCE NORTH 89°59'26" EAST A DISTANCE OF 109.96 FEET TO A FOUND
CONCRETE MONUMENT; THENCE SOUTH 00°05'23" EAST A DISTANCE OF 119.99 FEET TO A
FOUND CONCRETE MONUMENT; THENCE NORTH 89°54'01" EAST A DISTANCE OF 10504.30 FEET
TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 30°04'34" EAST A DISTANCE OF 1589.89
FEET TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 46°24'37" WEST A DISTANCE OF
1043.84 FEET TO FOUND IRON PIN; THENCE SOUTH 46°15'58" WEST A DISTANCE OF
2344.35 FEET TO A FOUND IRON PIN; THENCE SOUTH 63°32'16" WEST A DISTANCE OF
3427.78 FEET TO A FOUND CONCRETE MONUMENT, SAID POINT BEING LOCATED ON THE EAST
BOUNDARY  OF THE SOUTHEAST ONE-FOURTH  OF  THE  SOUTHWEST  ONE-FOURTH  OF
 SECTION 4,

 

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TOWNSHIP 20 SOUTH, RANGE 3 EAST, TALLADEGA COUNTY, ALABAMA; THENCE SOUTH
00°14'33" EAST ALONG THE EAST BOUNDARY OF SAID QUARTER-QUARTER SECTION FOR A
DISTANCE OF 759.27 FEET TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 88o37'51"
WEST A DISTANCE OF 26.30.64 FEET TO THE POINT-OF-BEGINNING.  

THE ABOVE DESCRIBE LAND IS LOCATED IN THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST
ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHWEST
ONE-FOURTH OF THE SOUTH-WEST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE
SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH AND
THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF SECTION 32, TOWNSHIP 19
SOUTH, RANGE 3 EAST; THE SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE
SOUTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH AND THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST
ONE-FOURTH OF SECTION 33, TOWNSHIP 19 SOUTH, RANGE 3 EAST; THE SOUTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH AND THE SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF
SECTION 34, TOWNSHIP 19 SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE
NORTHWEST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
NORTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF
THE NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH,
THE SOUTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH
OF THE NORTHWEST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHEAST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
SOUTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE
SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH
AND THE SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 5, TOWNSHIP
20 SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH AND
THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH OF SECTION 8, TOWNSHIP 20
SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE- FOURTH, THE
NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF
THE NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH,
THE SOUTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH,   THE   SOUTHWEST
   ONE-FOURTH  OF   THE

 

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NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
SOUTHWEST ONE-FOURTH O THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE
NORTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH,
THE SOUTHEAST ONE-FOURTH OF THE SOUTHIWEST ONE-FOURTH AND THE SOUTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 4, TOWNSHIP 20 SOUTH, RANGE 3
EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHEAST
ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
NORTHEAST ONE-FOURHT, THE SOUTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
SOUTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH AND THE NORTHWEST ONE-FOURTH OF
THE SOUTHWEST ONE-FOURTH OF SECTION 3, TOWNSHIP 20 SOUTH, RANGE 3 EAST,
TALLADEDA COUNTY, ALABAMA, AND CONTAINS 1519.43 ACRES MORE OR LESS.  

TRACT NO.2  

COMMENCE AT THE SOUTHEAST CORNER OF SECTION 5, TOWNSHIP 20 SOUTH, RANGE 3 EAST,
TALLADEGA COUNTY, ALABAMA; THENCE NORTH 00°01'14" WEST ALONG THE EAST BOUNDARY
OF SAID SECTION A DISTANCE OF 435.45 FEET; THENCE SOUTH 88°37'51" WEST A
DISTANCE OF 3904.74 FEET TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 00°18'01"
EAST A DISTANCE OF 685.74 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF
ALABAMA HIGHWAY 235; THENCE SOUTH 15°19'07" WEST A DISTANCE OF 130.11 FEET TO A
P.T. ON THE WEST RIGHT-OF-WAY LINE OF SAID HIGHWAY, SAID POINT BEING THE
POINT-OF-BEGINNING. FROM SAID POINT-OF-BEGINNING, ALONG SAID WEST RIGHT-OF-WAY,
ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 2907.08 FEET, A CHORD BEARING OF
SOUTH 46°50'20" EAST A CHORD DISTANCE OF 363.13  FEET  TO  A  FOUND  CONCRETE
 MONUMENT;  THENCE, ALONG SAID WEST  RIGHT-OF-WAY,  SOUTH 16°47'50"  EAST A
 DISTANCE  OF  102.00  FEET TO A POINT,  SAID POINT  BEING  THE  P.C.  OF  A
 CONCAVE  CURVE   RIGHT; THENCE, ALONG  SAID  WEST  RIGHT-OF-WAY,  ALONG  A
 CURVE  TO  THE RIGHT  WITH  A  RADIUS  OF  1266.43  FEET,   A    CHORD  BEARING
  OF  SOUTH  30°31 '54" EAST A CHORD  DISTANCE   OF 360.99 FEET TO A POINT BEING
THE P.C.C. OF A CONCAVE CURVE RIGHT; THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG
 A  CURVE  TO THE  RIGHT WITH A RADIUS OF 1373.05  FEET,  A  CHORD  BEARING  OF
SOUTH  04°23'57"  EAST  A  CHORD  DISTANCE OF 901.30  FEET  TO  THE P.T.  OF
 SAID  CURVE;  THENCE,  ALONG  SAID  WEST  RIGHT-OF-WAY, SOUTH  14°50'27"  WEST
 A  DISTANCE  OF 270.16  FEET  TO ITS POINT OF

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INTERSECTION WITH THE NORTHERLY BANK OF TALLADEGA CREEK, THENCE, LEAVING SAID
WEST RIGHT-OF-WAY NORTH 82°02'05" WEST ALONG THE NORTHERLY BANK OF SAID CREEK A
DISTANCE OF 955.11 FEET; THENCE NORTH 89°22'49" WEST ALONG THE NORTHERLY BANK OF
SAID CREEK A DISTANCE OF 393.55 FEET; THENCE SOUTH 67°21 '42" WEST ALONG THE
NORTHERLY BANK OF SAID CREEK A DISTANCE OF 145.25 FEET TO ITS POINT OF
INTERSECTION WITH THE EAST BANK OF THE COOSA RIVER; THENCE NORTH 11°09'16" WEST
ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 218.25 FEET; THENCE NORTH
18°43'47" WEST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 545.19 FEET;
THENCE NORTH 23°17'47" WEST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF
809.60 FEET; THENCE NORTH 33°28'31" WEST ALONG THE EAST BANK OF SAID RIVER A
DISTANCE OF 923.89 FEET; THENCE NORTH 38°40'43" WEST ALONG THE EAST BANK OF SAID
RIVER A DISTANCE OF 1096.84 FEET; THENCE NORTH 28°58'02" WEST ALONG THE EAST
BANK OF SAID RIVER A DISTANCE OF 484.20 FEET; THENCE NORTH 17°34'17" WEST ALONG;
THE EAST BANK OF SAID RIVER A DISTANCE OF 373.45 FEET; THENCE NORTH 00°38'39"
WEST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 401.12 FEET; THENCE NORTH
09°34'23" EAST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 406.75 FEET;
THENCE NORTH 14°32'05" EAST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF
1024.24 FEET; THENCE NORTH 22°45'53" EAST ALONG THE EAST BANK OF SAID RIVER A
DISTANCE OF 606.03 FEET; THENCE NORTH 30°13'12" EAST ALONG THE EAST BANK OF SAID
RIVER A DISTANCE OF 349.43 FEET; THENCE NORTH 18°26'48" EAST ALONG THE EAST BANK
OF SAID RIVER A DISTANCE OF 641.35 FEET; THENCE NORTH 02°51'52" EAST ALONG THE
EAST BANK OF SAID RIVER A DISTANCE OF 360.98 FEET; THENCE NORTH 09°33'20" WEST
ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 498.13 FEET; THENCE SOUTH
89°19'26" WEST ALONG THE BANK OF THE RIVER AND ALONG THE EDGE OF THE RIVER PUMP
HOUSE A DISTANCE OF 57.62 FEET; THENCE NORTH 00°07'03" EAST ALONG THE EDGE OF
THE RIVER PUMP HOUSE A DISTANCE OF 37.57 FEET; THENCE NORTH 88°50'36" WEST ALONG
THE EDGE OF THE RIVER PUMP HOUSE A DISTANCE OF 29.08 FEET; THENCE NORTH
00°18'41" WEST ALONG THE EDGE OF THE RIVER PUMP HOUSE A DISTANCE OF 31.47 FEET;
THENCE NORTH 89°54'13" EAST ALONG THE EDGE OF THE RIVER PUMP HOUSE A DISTANCE OF
27.94 FEET; THENCE NORTH 00°06'59" EAST ALONG THE EDGE OF THE RIVER PUMP HOUSE A
DISTANCE OF 38.37 FEET; THENCE NORTH 19°33'01 EAST ALONG THE EAST BANK OF SAID
RIVER A DISTANCE OF 112.60 FEET TO A FOUND IRON PIN; THENCE, LEAVING SAID RIVER,
NORTH 89°51'15" EAST A DISTANCE OF 400.08 FEET TO A FOUND IRON PIN; THENCE SOUTH
03°31'19" EAST A DISTANCE OF 601.42 FEET TO A SET IRON PIN; THENCE NORTH
85°05'19" EAST A 11ISTANCE OF 363.93 FEET TO A FOUND IRON PIN ON THE WEST
RIGHT-OF-WAY OF SAID ALABAMA HIGHWAY NO. 235;  THENCE,  ALONG SAID WEST
RIGHT-OF-WAY. ALONG A CURVE TO

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THE RIGHT WITH A RADIUS OF 1492.39 FEET, A CIIORD HEARING OF SOUTH 03°06'52"
WEST A CHORD DISTANCE OF 228.69 FEET TO THE P.T. OF SAID CUIRVE; THENCE, ALONG
SAID WEST RIGHT-OF-WAY, SOUTH 00°07'17" WEST TO THE P.C. OF A CONCAVE CURVE TO
THE LEFT; THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG A CURVE TO THE LEFT WITH A
RADIUS OF 1968.50 FEET, A CHORD) BEARING OF SOUTH 06°50'09" EAST A CHORD
DISTANCE OF 587.66 FEET TO THE P.T. OF SAID CURVE; THENCE, ALONG SAID WEST
RIGTH-OF-WAY, SOUTH 15°25'13" EAST A DISTANCE OF 1244.31 FEET TO THE P.C. OF A
CONCAVE CUJRVE TO THE RIGHT THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG A CURVE
TO THE RIGHT WITH A RADIUS OF 1867.73 FEET, A CHORD BEARING OF SOUTH 09°53'02"
EAST A CHORD DISTANCE OF 622.67 FEET TO THE P.T. OF SAID CURVE; THENCE, ALONG
SAID WEST RIGHT-OF-WAY, SOUTH 00°14'28" EAST A DISTANCE OF 564.88 FEET TO THE
P.C. OF A CONCAVE CURVE TO THE LEFT; THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG
A CURVE TO THE LEFT WITH A RADIUS OF 1492.40 FEET, A CHORD BEARING OF SOUTH
27°48'34" EAST A CHORD DISTANCE OF 1387.36 FEET TO THE P.T. OF SAID CURVE;
THENCE, ALONG SAID WEST RIGHT-OF-WAY, SOUTH 51°57'00" EAST A DISTANCE OF 363.16
FEET TO THE POINT-OF-BEGINNING.  

THE ABOVE DESCRIBED LAND IS LOCATED IN THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST
ONE-FOURTH OF SECTION 31, TOWNSHIP 19 SOUTH, RANGE 3 EAST, TALLADEGA COUNTY,
ALABAMA; THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHEAST
ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE
SOUTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE
SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH AND THE SOUTHWEST ONE-FOURTH OF THE NORTHEAST
ONE-FOURTH OF SECTION 6, TOWNSHIP 20 SOUTH, RANGE 3 EAST; THE SOUTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
SOUTHWEST AND THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH OF SECTION 5,
TOWNSHIP 20 SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE SOUTHEAST
ONE-FOURTH OF THE NORTHWEST ONE-FOURTH AND THE SOUTHWEST ONE-FOURTH OF THE
NORTHWEST ONE-FOURTH OF SECTION 8, TOWNSHIP 20 SOUTH, RANGE 3 EAST; THE
NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH OF SECTION 7, TOWNSHIP 20
SOUTH, RANGE 3 EAST AND CONTAINS 274.86 ACRES MORE OR LESS.

 

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TRACT NO.3  

COMMENCE AT THE SOUTHEAST CORNER OF SECTION 5, TOWNSHIP 20 SOUTH, RANGE 3 EAST,
TALLADEGA COUNTY, ALABAMA; THENCE SOUTH 55°2~'14" WEST A DISTANCE OF 4238.27
FEET TO A POINT OF INTERSECTION BETWEEN THE WEST RIGHT-OF-WAY OF ALABAMA HIGHWAY
NO. 235 ANID THE SOUTH BANK OF TALLADEGA CREEK, SAID POINT BEING THE
POINT-OF-BEGINNING, FROM SAID POINT-OF-BEGINNING, THENCE, ALONG SAID WEST
RIGHT-OF-WAY, SOUTH 14o50'27" WEST A DISTANCE OF 296.71 FEET TO THE P.C. OF A
CONCAVE CURVE LEFT; THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG A CURVE TO THE
LEFT WITH A RADIUS OF 1716.27 FEET, A CHORD BEARING OF SOUTH 04°06'31" EAST A
CHORD DISTANCE OF 1114.63 FEET TO THE P.T. OF SAID CURVE; THENCE, ALONG SAID
WEST RIGHT-OF-WAY, SOUTH 20°38'30" EAST A DISTANCE OF 7.40 FEET TO ITS POINT OF
INTERSECTION WITH THE SOUTH BOUNDARY OF AN ALABAMA POWER COMPANY TRANSMISSION
LINE RIGHT-OF-WAY; THENCE SOUTH 66°52'56" WEST ALONG THE SOUTH BOUNDARY OF SAID
ALABAMA POWER COMPANY RIGHT-OF-WAY A DISTANCE OF 357.06 FEET TO A POINT ON THE
NORMAL POOL ELEVATION OF LAY LAKE; THENCE NORTH 21°38'43" EAST ALONG THE NORMAL
POOL ELEVATION OF SAID LAKE A DISTANCE OF 140.84 FEET TO A POINT ON THE NORTH
BOUNDARY OF SAID ALABAMA POWER COMPANY RIGHT-OF-WAY; THENCE NORTH 04°03'08" WEST
ALONG THE NORMAL POOL ELEVATION OF SAID LAKE A DISTANCE OF 514.78 FEET; THENCE
NORTH 67°50'50" WEST ALONG THE NORMAL POOL ELEVATION OF SAID LAKE A DISTANCE OF
62.84 FEET; THENCE SOUTH 02°18'13" WEST ALONG THE NORMAL POOL ELEVATION OF SAID
LAKE A DISTANCE OF 429.05 FEET; THENCE SOUTH 26°04'08" WEST ALONG THE NORMAL
POOL ELEVATION OF SAID LAKE A DISTANCE OF 219.84 FEET TO ITS POINT OF
INTERSECTION WITH THE NORTH BOUNDARY OF SAID ALABAMA POWER COMPANY RIGHT-Of-WAY;
THENCE SOUTH 66°52'54" WEST ALONG THE NORTH BOUNDARY OF SAID ALABAMA POWER
COMPANY RIGHT-OF-WAY AND ALONG THE NORMAL POOL ELEVATION OF SAID LAY LAKE A
DISTANCE OF 333.54 FEET TO ITS POINT OF INTERSECTION WITH THE EAST BANK OF THE
COOSA RIVER; THENCE NORTH 24°59'29" WEST ALONG THE EAST BOUNDARY OF SAID COOSA
RIVER A DISTANCE OF 545.38 FEET; THENCE NORTH 23°23'23" WEST ALONG THE EAST
BOUNDARY OF SAID COOSA RIVER A DISTANCE OF 450.66 FEET; THENCE NORTH 15°04'42"
WEST ALONG THE EAST BANK OF SAID COOSA RIVER A DISTANCE OF 522.07 FEET; THENCE
NORTH 06°38'59" WEST ALONG THE EAST BANK OF SAID COOSA RIVER A DISTANCE OF
223.39 FEET TO ITS POINT OF INTERSECTION WITH THE SOUTH BANK OF THE
AFOREMENTIONED TALLADEGA CREEK; THENCE NORTH 46°21'05" EAST  ALONG  THE  SOUTH
BANK OF SAID CREEK A DISTANCE OF 131.09 FEET;  THENCE  NORTH 83°08'27"  EAST
 ALONG  THE  SOUTH BANK OF SAID  CREEK  A  DISTANCE  OF  234.50  FEET;  THENCE
 SOUTH

 

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81o37'09" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF 576.06 FEET;
THENCE SOUTH 85°47'43" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF
459.84 FEET TO THE POINT-OF-BEGINNING.  

THE ABOVE DESCRIBED LAND IS LOCATED IN THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH AND THE NORTHEAST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH OF SECTION 8, TOWNSHIP 20 SOUTH, RANGE 3 EAST, TALLADEGA
COUNTY, ALABAMA, AND CONTAINS 37.68 ACRES MORE OR LESS.  

TRACT NO. 4  

COMMENCE AT THE NORTHEAST CORNER OF THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST
ONE-FOURTH OF SECTION 31, TOWNSHIP 19 SOUTH, RANGE 3 EAST, SHELHY COUNTY,
ALABAMA, SAID POINT BEING THE POINT-OF-BEGINNING FROM SAID POINT-OF-BEGINNING
NORTH 01°20'25" WEST ALONG THE WEST BOUNDARY OF THE SOUTHEAST ONE-FOURTH OF THE
NORTHWEST ONE-FOURTH A DISTANCE OF 763.60 FEET TO A POINT ON THE SOUTH BANK OF
LOCUST CREEK; THENCE SOUTH 59°26'01" EAST ALONG THE SOUTH BANK OF SAID CREEK A
DISTANCE OF 213.67 FEET; THENCE NORTH 44°53'50" EAST ALONG THE SOUTH BANK OF
SAID CREEK A DISTANCE OF 217.05 FEET; THENCE SOUTH 88°58'40" EAST ALONG THE
SOUTH BANK OF SAID CREEK A DISTANCE OF 406.02 FEET; THENCE NORTH 64°05'43" EAST
ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF 396.78 FEET; THENCE SOUTH
88°49'31" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF 100.36 FEET;
THENCE SOUTH 14°36'12" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF
172.64 FEET; THENCE SOUTH 60°46'14" EAST ALONG THE SOUTH BANK OF SAID CREEK A
DISTANCE OF 225.00 FEET; THENCE SOUTH 73°40'27" EAST ALONG THE SOUTH BANK OF
SAID CREEK A DISTANCE OF 121.57 FEET; THENCE SOUTH 19°07'15" EAST ALONG THE WEST
BANK OF SAID CREEK A DISTANCE OF 143.44 FEET; THENCE SOUTH 33°11'50" EAST ALONG
THE WEST BANK OF SAID CREEK A DISTANCE OF 287.78 FEET TO A POINT ON THE WEST
BANK OF THE COOSA RIVER; THENCE SOUTHERLY ALONG THE WEST BANK OF SAID COOSA
RIVER FOR THE FOLLOWING BEARINGS AND DISTANCES: SOUTH 31°30'30" EAST, 363.96
FEET; SOUTH 35°32'33" EAST, 475.09 FEET; SOUTH 24°58'25" EAST, 465.35 FEET;
SOUTH 29°56'42" EAST, 337.54 FEET; SOUTH 16°38'07" EAST, 698.94 FEET; SOUTH
07°58'51" EAST, 405.89 FEET; SOUTH 09o09'-29' EAST, 539.08 FEET; SOUTH'
11°18'37" EAST, 559.69 FEET; SOUTH 23°32'15" WEST, 813.59 FEET; SOUTH 22°31 '30"
WEST, 802.31 FEET; SOUTH 11°54'33" WEST, 630.32 FEET; SOUTH 04°36'19"  WEST,
 482.98 FEET; SOUTH 09°09'29" EAST, 397.34 FEET; SOUTH

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20°45'10" EAST, 571.47 FEET; SOUTH 35°57'15" EAST, 1018..U FEET; SOUTH 40°48'00"
EAST, 478.69 FEET; SOUTH 31°24'11" EAST, 515.30 FEET; SOUTH 25°06'51" EAST,
580.45 FEET; SOUTH 20°59'52" EAST, 8()5.17 FEET; SOUTH 14°27'12" EAST, 565.60
FEET; SOUTH 14°17'16" EAST, 641.26 FEET; SOUTH 26°47'13" EAST, 1135.20 FEET;
SOUTH 18°53'31" EAST, 675.37 FEET; SOIITH 01°43'47" EAST, 280.10 FEET; SOUTH
17°15'35" EAST, 387.64 FEET; SOUTH 05°41'45" EAST, 249.70 FEET; SOUTH 01°10'19"
WEST, 346.22 FEET; SOUTH 07°28'35" WEST, 340.37 FEET; SOUTH 16°49'10" WEST,
277.42 FEET; SOUTH 38°17'03" WEST, 368.02 FEET; SOUTH 49°21'38" WEST, 363.42
FEET; SOUTH 50°05'28" WEST, 332.96 FEET; SOUTH 56°41'29" WEST, 385.46 FEET;
SOUTH 61°36'41" WEST, 367.02 FEET TO ITS POINT OF INTERSECTION WITH THE EASTERLY
RIGHT-OF-WAY LINE OF THE CENTRAL OF GEORGIA RAILROAD RIGHT-OF-WAY; THENCE NORTH
22°07'08" WEST ALONG THE EAST RIGHT-OF-WAY LINE OF SAID RAILROAD RIGHT-OF-WAY A
DISTANCE OF 11980.03 FEET TO THE P.C. OF A CONCAVE CURVE LEFT; THENCE, ALONG
SAID EAST RAILROAD RIGHT-OF-WAY, ALONG A CURVE TO THE LEFT WITH A RADIUS OF
4991.53 FEET A CHORD BEARING OF NORTH 25°01 '51" WEST A CHORD DISTANCE OF 722.06
FEET TO THE P.T. OF SAID CURVE; THENCE ALONG SAID EAST RAILROAD RIGHT-OF-WAY,
NORTH 29°10'43" WEST A DISTANCE OF 2599.18 FEET TO A POINT ON THE SOUTHEASTERLY
RIGHT-OF-WAY LINE OF A SHELBY COUNTY PAVED ROAD THENCE, ALONE; THE SOUTHEASTERLY
RIGHT-OF-WAY LINE OF SAID ROAD NORTH 35°56'58" EAST A DISTANCE OF 270.48 FEET TO
A FOUND IRON PIN; THENCE NORTH 88°58'54" EAST A DISTANCE OF 248.39 FEET TO A
FOUND IRON PIN; THENCE NORTH 84°35'21" EAST A DISTANCE OF 782.78 FEET TO A FOUND
IRON PIN, SAID PIN BEING NORTH 00°20'18" WEST OF AND 180.02 FEET FROM THE
SOUTHWEST CORNER OF THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SAID
SECTION 31, TOWNSHIP 19 SOUTH, RANGE 3 EAST, SHELBY COUNTY, ALABAMA; THENCE
NORTH 00°24'33" WEST ALONG THE WEST BOUNDARY OF SAID NORTHWEST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH OF SAID SECTION A DISTANCE OF 1104.13 FEET TO FOUND
CONCRETE MONUMENT LOCATED ON THE SOUTH BOUNDARY OF A DIRT ROAD; THENCE, ALONG
THE SOUTH BOUNDARY OF SAID DIRT ROAD SOUTH 85°31'31" EAST A DISTANCE OF 187.77
FEET; THENCE, ALONG THE SOUTH BOUNDARY OF SAID DIRT ROAD, NORTH 87°58'52" EAST A
DISTANCE OF 91.63 FEET; THENCE, ALONG THE SOUTH BOUNDARY OF SAID DIRT ROAD,
NORTH 68°26'52" EAST A DISTANCE OF 88.72 FEET; THENCE, ALONG THE SOUTH BOUNDARY
OF SAID DIRT ROAD, NORTH 59°58'33" EAST A DISTANCE OF 148.44 FEET TO ITS POINT
OF INTERSECTION WITH THE NORTH BOUNDARY OF SAID QUARTER-QUARTER SECTION; THENCE
NORTH 87°33'19" EAST ALONG THE NORTH BOUNDARY OF SAID NORTHWEST ONE-FOURTH OF
THE SOUTHWEST ONE-FOURTH OF SAID SECTION A DISTANCE OF 848.86 FEET TO THE
POINT-OF-BEGINNING.

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THE ABOVE DESCRIBED LAND IS LOCATED IN THE SOUTHIEAST ONE-FOURTH OF THE
NORTHWEST ONE-FORTH, THE SOUTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FORTH, THE
NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF
THE SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH,
THE SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH
OF THE SOUTHWEST ONE-FOURTH, THE SOUTHWWEST ONE-FOURTH OF THE SOUTHEAST
ONE-FOURTH AND THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF SECTION
31, TOWNSHIP 19 SOUTH, RANGE 3 EAST; THE NORTHEAST ONE-FOURTH OF THE SOUTHEAST
ONE-FOURTH AND THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF SECTION
36, TOWNSHIP 19 SOUTH, RANGE 2 EAST, SHELBY COUNTY, ALABAMA; THE NORTHEAST
ONE-FOURTH OF THE NORTHEAST ONE-FOURTH OF SECTION I, TOWNSHIP 20 SOUTH, RANGE 2
EAST, SHELHY COUNTY, ALABAMA; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST
ONE-FOURTH OF THE NORTHEAST ONE-FOURTH; THE NORTHEAST ONE-FOURTH OF THE
NORTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
SOUTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH; SOUTHWEST ONE-FOURTH OF THE
NORTHEAST ONE-FOURTH AND THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH,
THE NORTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH
OF THE SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE SOUTHWEST
ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHWEST
ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH AND SOUTHEAST ONE-FOURTH OF THE SOUTHEAST
ONE-FOURTH OF SECTION 6, TOWNSHIP 20 SOUTH, RANGE 3 EAST, SHELBY COUNTY,
ALABAMA, THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST
ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE
NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE
SOUTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, SOUTHEAST ONE-FOURTH OF THE
NORTHWEST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE
NORTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH AND THE SOUTHEAST ONE- FOURTH  OF  THE  SOUTHEAST
 ONE-FOURTH  OF  SECTION 7, TOWNSHIP  20  SOUTH,  RANGE  3  EAST;  THE SOUTHWEST
ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH  AND THE  SOUTHWEST  ONE-FOURTH  OF THE  SOUTHWEST
 ONE-FOURTH  OF  SECTION  8,  TOWNSHIP  20 SOUTH,  RANGE 3  EAST;  THE NORTHWEST
ONE-FOURTH  OF   THE   NORTHWEST   ONE-FOURTH    AND    THE    SOUTHWEST   ONE-

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FOURTH OF THE NORTHWEST ONE-FOURTH OF SECTION 17, TOWNSHIP 20 SOUTH, RANGE 3
EAST; THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHEAST
ONE-FOURTH OF THE NORTHEAST ONE-FOURTH AND THE NORTHWEST ONE-FOURTH OF THE
NORTHEAST ONE-FOURTH OF SECTION 18 , TOWNSHIP 20 SOUTH, RANGE 3 EAST, SHELBY
COUNTY, ALABAMA, SAID PROPERTY CONTAINING 1062.25 ACRES MORE OR LESS.

 

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COOSA PINES

REAL PROPERTY - LEASEHOLD

 

LEGAL DESCRIPTION  

TRACT NO. 1  

COMMENCE AT THE SOUTHEAST CORNER OF SECTION 5, TOWNSHIP 20 SOUTH, RANGE 3 EAST,
TALLADEGA COUNTY, ALABAMA; THENCE NORTH 00°01'14" WEST ALONG THE EAST BOUNDARY
OF SAID SECTION A DISTANCE OF 0435.45 FEET TO THE POINT-OF-BEGINNING. FROM THE
POINT-OF-BEGINNING; THENCE SOUTH 88°37'51" WEST FOR A DISTANCE OF 3904.74 FEET
TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 00°18'01" EAST A DISTANCE OF 685.74
FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF ALABAMA NO. 235; THENCE, ALONG
SAID EAST RIGHT-OF-WAY LINE, NORTH 51°57'00" WEST A DISTANCE OF 313.76 FEET TO
THENCE OF A CONCAVE CURVE RIGHT; THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY,
ALONG SAID CURVE TO THE RIGHT WITH A RADIUS OF 1372.40 FEET, A CHORD BEARING OF
NORTH 304°41'39" WEST A CHORD DISTANCE OF 985.90 FEET TO A FOUND IRON PIN;
THENCE, LEAVING SAID EAST RIGHT-OF-WAY NORTH 85°52'31" EAST A DISTANCE OF 228.05
FEET TO A SET IRON PIN; THENCE NORTH 00°07'30" WEST A DISTANCE OF 325.60 FEET TO
A SET IRON PIN; THENCE SOUTH 85°49'28" WEST A DISTANCE OF 267.50 FEET TO FOUND
IRON PIN ON THE EAST RIGHT-OF-WAY LINE OF SAID ALABAMA HIGHWAY NO. 235; THENCE,
ALONG SAID EAST RIGHT-OF-WAY LINE NORTH 00°14'28" WEST A DISTANCE OF 564.88 FEET
TO THE P.C. OF A CONCAVE CURVE LEFT; THENCE, CONTINUING ON SAID EAST
RIGHT-OF-WAY, ALONG SAID CURVE TO THE LEFT WITH A RADIUS OF 1987.73 FEET, A
CHORD BEARING OF NORTH 09°49'18" WEST A CHORD DISTANCE OF 658.42 FEET TO THE
P.T. OF SAID CURVE; THENCE CONTINUING ON SAID EAST RIGHT-OF-WAY , NORTH
15°25'13" WEST A DISTANCE OF 1240.12 FEET TO THE P.C OF A CONCAVE CURVE RIGHT;
THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY, ALONG SAID CURVE TO THE RIGHT WITH
A RADIUS OF 1848.50 FEET, A CHORD BEARING OF NORTH 06°48'36" WEST A CHIORD
DISTANCE OF 553.50 FEET TO THE P.T. OF SAID CURVE; THENCE, CONTINUING ON SAID
EAST RIGIIT-OF-WAY, NORTH 00°07'17" EAST A DISTANCE OF 1267.14 FEET TO THE P.C
OF A CONCAVE CURVE RIGHT; THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY, ALONG
SAID CURVE TO THE RIGHT WITH A RADIUS OF 1372.39 FEET, A CHORD BEARING OF NORTH
14°38'49" EAST A CHORD DISTANCE OF 755.96 FEET TO THE P.T. OF SAID CURVE;
THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY, NORTH 29°33'44" EAST A DISTANCE OF
268.30 FEET TO A FOUND CONCRETE MONUMENT AT THE P.C OF A CONCAVE CURVE LEFT;
THENCE, CONTINUING ON SAID EAST RIGHT-OF-WAY, ALONG SAID CURVE TO THE LEFT WITH
A RADIUS OF 1454.47 FEET, A CHORD BEARING OF NORTH 21°25'25" EAST A CHORD
DISTANCE OF 344.27 FEET TO A FOUND IRON PIN; THENCE, LEAVING  SAID  EAST
 RIGHT-OF-WAY,  SOUTH  89°58'46" EAST A DISTANCE OF 37.39

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FEET TO A SET IRON PIN; THENCE SOUTH 00°05'43" WEST A DISTANCE OF 310.00 FEET TO
A POINT; THENCE NORTH 90°00'00" EAST A DISTANCE OF 248.00 FEET TO A POINT THAT
IS 12 FEET NORTH OF AND AT RIGHT ANGLES TO THE CENTERLIN OF A RAILROAD SPUR
TRACK; THENCE NORTH 64°35'03" EAST PARALLEL TO AND 12 FEET NORTH OF SAID
RAILROAD SPUR TRACK A DISTANCE OF 135.91 FEET; THENCE NORTH 67°25'24" EAST
PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 66.23
FEET; THENCE NORTH 76°00'26" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD
SPUR TRACK A DISTANCE OF 73.18 FEET; THENCE NORTH 85°31'37" EAST PARALLEL TO AND
12 FEET NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 90.35 FEET; THENCE NORTH
85°03'20" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A
DISTANCE OF 79.70 FEET; THENCE NORTH 74°19'35" EAST PARALLEL TO AND 12 FEET
NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 101.92 FEET; THENCE NORTH 62°21
'50" EAST PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE
OF 89.57 FEET; THENCE NORTH 51°10'37" EAST PARALLEL TO AND 12 FEET NORTH OF SAID
RAILROAD SPUR TRACK A DISTANCE OF 113.83 FEET; THENCE NORTH 39°46'49" EAST
PARALLEL TO AND 12 FEET NORTH OF SAID RAILROAD SPUR TRACK A DISTANCE OF 49.10
FEET TO SET IRON PIN; THENCE NORTH 00°00'46" EAST A DISTANCE OF 316.39 FEET TO A
SET IRON PIN; THENCE NORTH 89°59'12" WEST A DISTANCE OF 958.84 FEET TO A FOUND
CONCRETE MONUMENT ON THE EAST RIGHT-OF-WAY LINE OF SAID ALABAMA HIGHWAY 235;
THENCE, ALONG SAID EAST RIGHT-OF-WAY, ALONG A CURVE TO THE LEFT WITH A RADIUS OF
958.05 FEET, A CHORD BEARING OF NORTH 02°36'11" EAST A CHORD DISTANCE OF 42.53
FEET TO A FOUND CONCRETE MONUMENT; THENCE, LEAVING SAID EAST RIGHT-OF-WAY, NORTH
89°54'55" EAST A DISTANCE 985.00 FEET TO A SET IRON PIN; THENCE SOUTH 80°05'41"
EAST A DISTANCE OF 250.00 FEET TO A SET IRON PIN; THENCE SOUTH 25°26'11" EAST A
DISTANCE OF 39.28 FEET TO A FENCE CORNER; THENCE SOUTH 49°17'11" EAST A DISTANCE
OF 120.95 FEET TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 64°56'35" EAST A
DISTANCE OF 151.58 FEET TO A FOUND CONCRETE MONUMENT; THENCE NORTH 89°59'26"
EAST A DISTANCE OF 109.96 FEET TO A FOUND CONCRETE MONUMENT; THENCE SOUTH
00°05'23" EAST A DISTANCE OF 119.99 FEET TO A FOUND CONCRETE MONUMENT; THENCE
NORTH 89°54'01" EAST A DISTANCE OF 10504.30 FEET TO A FOUND CONCRETE MONUMENT;
THENCE SOUTH 30°04'34" EAST A DISTANCE OF 1589.89 FEET TO A FOUND CONCRETE
MONUMENT; THENCE SOUTH 46°24'37" WEST A DISTANCE OF 1043.84 F~ET TO FOUND IRON
PIN; THENCE SOUTH 46°15'58" WEST A DISTANCE OF 2344.35 FEET TO A FOUND IRON PIN;
THENCE SOUTH 63°32'16" WEST A DISTANCE OF 3427.78 FEET TO A FOUND CONCRETE
MONUMENT, SAID POINT BEING LOCATED ON THE EAST BOUNDARY OF THE SOUTHEAST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 4, TOWNSHIP 20 SOUTH, RANGE 3
EAST, TALLADEGA COUNTY, ALABAMA; THENCE  SOUTH 00°14'33"  EAST  ALONG  THE  EAST
 BOUNDARY  OF    SAID

 

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QUARTER-QUARTER SECTION FOR A DISTANCE OF 759.27 FEET TO A FOUND CONCRETE
MONUMENT; THENCE SOUTH 88°37'51" WEST A DISTANCE OF 2630.64 FEET TO THE
POINT-OF-BEGINNING.  

THE ABOVE DESCRIBED LAND IS LOCATED IN THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST
ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH AND
THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF SECTION 32, TOWNSHIP 19
SOUTH, RANGE 3 EAST; THE SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE
SOUTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH AND THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST
ONE-FOURTH OF SECTION 33, TOWNSHIP 19 SOUTH, RANGE 3 EAST; THE SOUTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH AND THE SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF
SECTION 34, TOWNSHIP 19 SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE
NORTHWEST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
NORTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF
THE NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH,
THE SOUTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH
OF THE NORTHWEST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHEAST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
SOUTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE
SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH
AND THE SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 5, TOWNSHIP
20 SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH AND
THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH OF SECTION 8, TOWNSHIP 20
SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF
THE NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH,
THE SOUTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH
OF THE NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST    ONE-FOURTH,   THE
  NORTHWEST    ONE-FOURTH   OF    THE

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

SOUTHWEST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE
NORTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOIIRTH OF
THE SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOlIlH'1I OF THE SOUTHEAST
ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH AND THE
SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 4, TOWNSHIP 20
SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF
THE NORTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH,
THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH AND THE NORTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 3, TOWNSHIP 20 SOUTH, RANGE 3
EAST, TALLADEGA COUNTY, ALABAMA, AND CONTAINS 1519.43 ACRES MORE OR LESS.  

TRACT NO.2  

COMMENCE AT THE SOUTHEAST CORNER OF SECTION 5, TOWNSHIP 20 SOUTH, RANGE 3 EAST,
'I'ALLADEGA COUNTY, ALABAMA; THENCE NORTH 00°01'14" WEST ALONG THE EAST BOUNDARY
OF SAID SECTION A DISTANCE OF 435.45 FEET; THENCE SOUTH 88°37'51" WEST A
DISTANCE OF 3904.74 FEET TO A FOUND CONCRETE MONUMENT; THENCE SOUTH 00°18'01"
EAST A DISTANCE OF 685.74 FEET TO A POINT ON THE EAST RIGHT-OF-WAY LINE OF
ALABAMA HIGHWAY 235; THENCE SOUTH 15°19'07" WEST A DISTANCE OF 130.11 FEET TO A
P.T. ON THE WEST RIGHT-OF-WAY LINE OF SAID HIGHWAY, SAID POINT BEING THE
POINT-OF-BEGINNING FROM SAID POINT-OF-BEGINNING, ALONG SAID WEST RIGHT-OF-WAY,
ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 2907.08 FEET, A CHORD BEARING OF
SOUTH 46°50'20" EAST A CHORD DISTANCE OF 363.13 FEET TO A FOUND CONCRETE
MONUMENT; THENCE, ALONG SAID WEST RIGHT-OF-WAY, SOUTH 16°47'50" EAST A DISTANCE
OF 102.00 FEET TO A POINT, SAID POINT BEING THE P.C. OF A CONCAVE CURVE RIGHT;
THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG A CURVE TO THE RIGHT WITH A RADIUS
OF 1266.43 FEET, A CHORD BEARING OF SOUTH 30°31'54" EAST A CHORD DISTANCE OF
360.99 FEET TO A POINT BEING THE P.C.C. OF A CONCAVE CURVE RIGHT; THENCE, ALONG
SAID WEST RIGHT-OF-WAY, ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 1373.05
FEET, A CHORD BEARING OF SOUTH 04°23'57" EAST A CHORD DISTANCE OF 901.30 FEET TO
THE P.T. OF SAID CURVE; THENCE, ALONG SAID WEST RIGHT-OF-WAY, SOUTH 14°50'27"
WEST A DISTANCE 0.1' 270.16 FEET TO ITS POINT OF INTERSECTION WITH THE NORTHERLY
BANK OF TALLADEGA CREEK, THENCE, LEAVING SAID WEST RIGHT-OF-WAY NORTH 82°02'05"
WEST ALONG THE NORTHERLY BANK OF SAID CREEK A DISTANCE OF 955.11 FEET;  THENCE
 NORTH 89°22'49"  WEST ALONG  THE NORTHERLY      BANK

 

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OF SAID CREEK A DISTANCE OF 393.55 FEET; THENCE SOUTH 67°21'42" WEST ALONG THE
NORTHERLY BANK OF SAID CREEK A DISTANCE OF 145.25 FEET TO ITS POINT OF
INTERSECTION WITH THE EAST BANK OF THE COOSA RIVER; THENCE NORTH 11°09'16" WEST
ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 218.25 FEET; THENCE NORTH
18°43'47" WEST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 545.19 FEET;
THENCE NORTH 23°17'47" WEST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF
809.60 FEET; THENCE NORTH 33°28'31" WEST ALONG THE EAST BANK OF SAID RIVER A
DISTANCE OF 923.89 FEET; THENCE NORTH 38°40'43" WEST ALONG; THE EAST BANK OF
SAID RIVER A DISTANCE OF 1096.84 FEET; THENCE NORTH 28°58'02" WEST ALONG; THE
EAST BANK OF SAID RIVER A DISTANCE OF 484.20 FEET; THENCE NORTH 17°34'17" WEST
ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 373,45 FEET; THENCE NORTH
00°38'39" WEST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 401.12 FEET;
THENCE NORTH 09°34'23" EAST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF
406.75 FEET; THENCE NORTH 14°32'05" EAST ALONG THE EAST BANK OF SAID RIVER A
DISTANCE OF 1024.24 FEET; THENCE NORTH 22°45'53" EAST ALONG THE EAST BANK OF
SAID RIVER A DISTANCE OF 606.03 FEET; THENCE NORTH 30°13'12" EAST ALONG THE EAST
BANK OF SAID RIVER A DISTANCE OF 349.43 FEET; THENCE NORTH 18°26'48" EAST ALONG
THE EAST BANK OF SAID RIVER A DISTANCE OF 641.35 FEET; THENCE NORTH 02°51 '52"
EAST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 360.98 FEET; THENCE NORTH
09°33'20" WEST ALONG THE EAST BANK OF SAID RIVER A DISTANCE OF 498.13 FEET;
THENCE SOUTH 89°19'26" WEST ALONG THE BANK OF THE RIVER AND ALONG THE EDGE OF
THE RIVER PUMP HOUSE A DISTANCE OF 57.62 FEET; THENCE NORTH 00°07'03" EAST ALONG
THE EDGE OF THE RIVER PUMP HOUSE A DISTANCE OF 37.57 FEET; THENCE NORTH
88°50'36" WEST ALONG THE EDGE OF THE RIVER PUMP HOUSE A DISTANCE OF 29.08 FEET;
THENCE NORTH 00°18'41" WEST ALONG THE EDGE OF THE RIVER PUMP HOUSE A DISTANCE OF
31.47 FEET; THENCE NORTH 89°54'13" EAST ALONG THE EDGE OF THE RIVER PUMP HOUSE A
DISTANCE OF 27.94 FEET; THENCE NORTH 00°06'59" EAST ALONG THE EDGE OF THE RIVER
PUMP HOUSE A DISTANCE OF 38.37 FEET; THENCE NORTH 19°33'01 EAST ALONG THE EAST
BANK OF SAID RIVER A DISTANCE OF 112.60 FEET TO A FOUND IRON PIN; THENCE,
LEAVING SAID RIVER, NORTH 89°51'15" EAST A DISTANCE OF 400.08 FEET TO A FOUND
IRON PIN; THENCE SOUTH 03°31'19" EAST A DISTANCE OF 601.42 FEET TO A SET IRON
PIN; THENCE NORTH 85°05' 19" EAST A DISTANCE OF 363.93 FEET TO A FOUND IRON PIN
ON THE WEST RIGHT-OF-WAY OF SAID ALABAMA HIGHWAY NO. 235; THENCE, ALONG SAID
WEST RIGHT-OF-WAY, ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 1492.39 FEET, A
CHORD BEARING OF SOUTH 03°06'52" WEST A CHORD DISTANCE OF 228.69 FEET TO THE
P.T. OF SAID CURVE; THENCE, ALONG SAID WEST RIGHT-OF-WAY, SOUTH 00°07'17" WEST
TO THE P.C. OF A CONCAVE CURVE TO THE LEFT; THENCE,  ALONG  SAID  WEST
 RIGHT-OF-WAY,  ALONG   A CURVE TO THE

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

 

LEFT WITH A RADIUS OF 1968.50 FEET, A CHORD BEARING OF SOUTH 06°50'09" EAST A
CHORD DISTANCE OF 587.66 FEET TO THE P.T. OF SAID CURVE; THENCE. ALONG SAID WEST
RIGHT-OF-WAY, SOUTH 15°25'13" EAST A DISTANCE OF 1244.31 FEET TO THE P.C. A
CONCAVE CURVE TO THE RIGHT; THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG A CURVE
TO THE RIGHT WITH A RADIUS OF 1867.73 FEET, A CHORD BEARING OF SOUTH 09°53'02"
EAST A CHORD DISTANCE OF 622.67 FEET TO THE P.T. OF SAID CURVE; THENCE, ALONG
SAID WEST RIGHT-OF-WAY, SOUTH 00o14'28" EAST A DISTANCE OF 564.88 FEET TO THE
P.C. OF A CONCAVE CURVE TO THE LEFT; THENCE, ALONG SAID WEST RIGHT-OF-WAY, ALONG
A CURVE TO THE LEFT WITH A RADIUS OF 1492.40 FEET, A CIIORD BEARING OF SOUTH
27°48'34" EAST A CHORD DISTANCE OF 1387.36 FEET TO THE P.T. OF SAID CURVE;
THENCE, ALONG SAID WEST RIGHT-OF-WAY, SOUTH 51°57'00" EAST A DISTANCE OF 363.16
FEET TO THE POINT-OF-BEGINNING.  

THE ABOVE DESCRIBED LAND IS LOCATED IN THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST
ONE-FOURTH OF SECTION 31, TOWNSHIP 19 SOUTH, RANGE 3 EAST, TALLADEGA COUNTY,
ALABAMA; THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHEAST
ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE
SOUTHEAST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE
SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH AND THE SOUTHWEST ONE-FOURTH OF THE NORTHEAST
ONE-FOURTH OF SECTION 6, TOWNSHIP 20 SOUTH, RANGE 3 EAST; THE SOUTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
SOUTHWEST AND THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH OF SECTION 5,
TOWNSHIP 20 SOUTH, RANGE 3 EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE SOUTHEAST
ONE-FOURTH OF THE NORTHWEST ONE-FOURTH AND THE SOUTHWEST ONE-FOURTH OF THE
NORTHWEST ONE-FOURTH OF SECTION 8, TOWNSHIP 20 SOUTH, RANGE 3 EAST; THE
NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH OF SECTION 7, TOWNSHIP 20
SOUTH, RANGE 3 EAST AND CONTAINS 274.86 ACRES MORE OR LESS.  

TRACT NO.3  

COMMENCE AT THE SOUTHEAST CORNER OF SECTION 5, TOWNSHIP 20 SOUTH, RANGE 3 EAST,
TALLADEGA COUNTY, ALABAMA; THENCE SOUTH 55°24'14" WEST A DISTANCE OF 4238.27
FEET TO A POINT OF INTERSECTION BETWEEN THE WEST RIGHT-OF-WAY OF ALABAMA HIGHWAY
NO. 235 AND THE SOUTH BANK OF TALLADEGA CREEK,  SAID POINT  BEING  THE
POINT-OF-BEGINNING.  FROM  SAID  POINT-OF-

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

 

BEGINNING, THENCE, ALONG SAID WEST RIGHT-OF-WAY, SOUTH 14°50'27" WEST A DISTANCE
OF 296.71 FEET TO THE P.C. OF A CONCAVE CURVE LEFT; THENCE, ALONG SAID WEST
RIGHT-OF-WAY, ALONG; A CURVE TO THE LEFT WITH A RADIUS OF 1716.24 FEET, A CHORD
BEARING OF SOUTH 04°06'31" EAST A CHORD DISTANCE OF 1114.63 FEET TO THE P.T. OF
SAID CURVE; THENCE, ALONG; SAID WEST RIGHT-OF-WAY, SOUTH 20°38'30" EAST A
DISTANCE OF 7.40 FEET TO ITS POINT OF INTERSECTION WITH THE SOUTH BOUNDARY OF AN
ALABAMA POWER COMPANY TRANSMISSION LINE RIGHT-OF-WAY; THENCE SOUTH 66°52'56"
WEST ALONG THE SOUTH BOUNDARY OF SAID ALABAMA POWER COMPANY RIGHT-OF-WAY A
DISTANCE OF 357.06 FEET TO A POINT ON THE NORMAL POOL ELEVATION OF LAY LAKE;
THENCE NORTH 21°38'43" EAST ALONG; THE NORMAL POOL ELEVATION OF SAID LAKE A
DISTANCE OF 140.84 FEET TO A POINT ON THE NORTH BOUNDARY OF SAID ALABAMA POWER
COMPANY RIGHT-OF-WAY; THENCE NORTH 04°03'08" WEST ALONG THE NORMAL POOL
ELEVATION OF SAID LAKE A DISTANCE OF 514.78 FEET; THENCE NORTH 67°50'50" WEST
ALONG THE NORMAL POOL ELEVATION OF SAID LAKE A DISTANCE OF 62.84 FEET; THENCE
SOUTH 02°18'13" WEST ALONG THE NORMAL POOL ELEVATION OF SAID LAKE A DISTANCE OF
429.05 FEET; THENCE SOUTH 26°04'08" WEST ALONG THE NORMAL POOL ELEVATION OF SAID
LAKE A DISTANCE OF 219.84 FEET TO ITS POINT OF INTERSECTION WITH THE NORTH
BOUNDARY OF SAID ALABAMA POWER COMPANY RIGHT-OF-WAY; THENCE SOUTH 66°52'54" WEST
ALONG THE NORTH BOUNDARY OF SAID ALABAMA POWER COMPANY RIGHT-OF-WAY AND ALONG
THE NORMAL POOL ELEVATION OF SAID LAY LAKE A DISTANCE OF 333.54 FEET TO ITS
POINT OF INTERSECTION WITH THE EAST BANK OF THE COOSA RIVER; THENCE NORTH
24°59'29" WEST ALONG THE EAST BOUNDARY OF SAID COOSA RIVER A DISTANCE OF 545.38
FEET; THENCE NORTH 23°23'23" WEST ALONG THE EAST BOUNDARY OF SAID COOSA RIVER A
DISTANCE OF 450.66 FEET; THENCE NORTH 15°04'42" WEST ALONG THE EAST BANK OF SAID
COOSA RIVER A DISTANCE OF 522.07 FEET; THENCE NORTH 06°38'59" WEST ALONG THE
EAST BANK OF SAID COOSA RIVER A DISTANCE OF 223.39 FEET TO ITS POINT OF
INTERSECTION WITH THE SOUTH BANK OF THE AFOREMENTIONED TALLADEGA CREEK; THENCE
NORTH 46°21'05" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF 131.09
FEET; THENCE NORTH 83°08'27" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE
OF 234.50 FEET; THENCE SOUTH 81°37'09" EAST ALONG THE SOUTH BANK OF SAID CREEK A
DISTANCE OF 576.06 FEET; THENCE SOUTH 85°47'43" EAST ALONG THE SOUTH BANK OF
SAID CREEK A DISTANCE OF 459.84 FEET TO THE POINT-OF-BEGINNING.  

THE ABOVE DESCRIBED LAND IS LOCATED IN THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST
ONE-FOURTH   OF   THE   SOUTHWEST   ONE-FOURTH    AND   THE    NORTHEAST

 

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

ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 8, TOWNSHIP 20 SOUTH, RANGE 3
EAST, TALLADEGA COUNTY, ALABAMA, AND CONTAINS 37.68 ACRES MORE OR LESS.

 

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

EXHIBIT "B"

 

LEGAL DESCRIPTION OF THE TRACT LOCATED IN

SHELHY COUNTY, ALABAMA

THAT IS HEREBY DELETED FROM THE MORTGAGE

 

TRACT NO.4  

COMMENCE AT THE NORTHEAST CORNER OF THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST
ONE-FOURTH OF SECTION 31, TOWNSHIP 19 SOUTH, RANGE 3 EAST, SHELBY COUNTY,
ALABAMA, SAID POINT BEING THE POINT-OF-BEGINNING FROM SAID POINT-OF-BEGINNING
NORTH 01°20'25" WEST ALONG THE WEST BOUNDARY OF THE SOUTHEAST ONE-FOURTH OF THE
NORTHWEST ONE-FOURTH A DISTANCE OF 763.60 FEET TO A POINT ON THE SOUTH BANK OF
LOCUST CREEK; THENCE SOUTH 59°26'01" EAST ALONG THE SOUTH BANK OF SAID CREEK A
DISTANCE OF 213.67 FEET; THENCE NORTH 44°53'50" EAST ALONG THE SOUTH BANK OF
SAID CREEK A DISTANCE OF 217.05 FEET; THENCE SOUTH 88°58'40" EAST ALONG THE
SOUTH BANK OF SAID CREEK A DISTANCE OF 406.02 FEET; THENCE NORTH 64°05'43" EAST
ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF 396.78 FEET; THENCE SOUTH
88°49'31" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF 100.36 FEET;
THENCE SOUTH 14°36'12" EAST ALONG THE SOUTH BANK OF SAID CREEK A DISTANCE OF
172.64 FEET; THENCE SOUTH 60°46'14" EAST ALONG THE SOUTH BANK OF SAID CREEK A
DISTANCE OF 225.00 FEET; THENCE SOUTH 73°40'27" EAST ALONG THE SOUTH BANK OF
SAID CREEK A DISTANCE OF 121.57 FEET; THENCE SOUTH 19°07'15" EAST ALONG THE WEST
BANK OF SAID CREEK A DISTANCE OF 143.44 FEET; THENCE SOUTH 33°11'50" EAST ALONG
THE WEST BANK OF SAID CREEK A DISTANCE OF 287.78 FEET TO A POINT ON THE WEST
BANK OF THE COOSA RIVER; THENCE SOUTHERLY ALONG THE WEST BANK OF SAID COOSA
RIVER FOR THE FOLLOWING BEARINGS AND DISTANCES: SOUTH 31°30'30" EAST, 363.96
FEET; SOUTH 35°32'33" EAST, 475.09 FEET; SOUTH 24°58'25" EAST, 465.35 FEET;
SOUTH 29°56'42" EAST, 337.54 FEET; SOUTH 16°38'07" EAST, 698.94 FEET; SOUTH
07°58'51" EAST, 405.89 FEET; SOUTH 00°09'48" EAST, 539.08 FEET; SOUTH 11°18'37"
EAST, 559.69 FEET; SOUTH 23°32'15" WEST, 813.59 FEET; SOUTH 22°31'30" WEST,
802.31 FEET; SOUTH 11°54'33" WEST, 630.32 FEET; SOUTH 04°36'19" WEST, 482.98
FEET; SOUTH 09°09'29" EAST, 397.34 FEET; SOUTH 20°45'10" EAST, 571.47 FEET;
SOUTH 35°57'15" EAST, 1018.32 FEET; SOUTH 40°48'00" EAST, 478.69 FEET; SOUTH
31°24'11" EAST, 515.30 FEET; SOUTH 25°06'51" EAST, 580.45 FEET; SOUTH 20°59'52"
EAST, 865.17 FEET; SOUTH 14°27'12" EAST, 565.60 FEET; SOUTH 14°17'16" EAST,
641.26 FEET; SOUTH 26°47'13" EAST, 1135.20 FEET; SOUTH 18°53'31" EAST, 675.37
FEET; SOUTH 01°43'47" EAST, 280.10 FEET; SOUTH 17°15'35" EAST, 387.64 FEET;
SOUTH 05°41'45" EAST, 249.70 FEET; SOUTH 01°10'19" WEST, 346.22 FEET; SOUTH
07°28'35" WEST, 340.37 FEET;  SOUTH  16°49'10"  WEST,  277.42  FEET;  SOUTH

 

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38°17'03" WEST, 368.02 FEET; SOUTH "9°21 '38" WEST, 363."2 FEET; SOUTH 50°05'28"
WEST, 332.96 FEET; SOUTH 56°41'29" WEST, 385.46 FEET; SOUTH 61°36'''1'' WEST,
367.02 FEET TO ITS POINT OF INTERSECTION WITH THE EASTERLY RIGHT-OF-WAY LINE OF
THE CENTRAL OF GEORGIA RAILROAD RIGHT-OF-WAY; THENCE NORTH 22°07'08" WEST ALONG;
THE EAST RIGHT-OF-WAY LINE OF SAID RAILROAD RIGHT-OF-WAY A DISTANCE OF 11980.03
FEET TO THE P.C. OF A CONCAVE CURVE LEFT; THENCE, ALONG SAID EAST RAILROAD
RIGHT-OF-WAY, ALONG A CURVE TO THE LEFT WITH A RADIUS OF 4991.53 FEET A CHORD
BEARING; OF NORTH 25°01 '51" WEST A CHORD DISTANCE OF 722.06 FEET TO THE P.T. OF
SAID CURVE; THENCE ALONG SAID EAST RAILROAD RIGHT-OF-WAY, NORTH 29°10'''3'' WEST
A DISTANCE OF 2599.18 FEET TO A POINT ON THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF
A SHELBY COUNTY PAVED ROAD; THENCE, ALONG THE SOUTHEASTERLY RIGHT-OF-WAY LINE OF
SAID ROAD NORTH 35°56'58" EAST A DISTANCE OF 270.48 FEET TO A FOUND IRON PIN;
THENCE NORTH 88°58'54" EAST A DISTANCE OF 2"8.39 FEET TO A FOUND IRON PIN;
THENCE NORTH 84°35'21" EAST A DISTANCE OF 782.78 FEET TO A FOUND IRON PIN, SAID
PIN BEING; NORTH 00°20'18" WEST OF AND 180.02 FEET FROM THE SOUTHWEST CORNER OF
THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SAID SECTION 31,
TOWNSHIP 19 SOUTH, RANGE 3 EAST, SHELBY COUNTY, ALABAMA; THENCE NORTH 00°24'33"
WEST ALONG THE WEST BOUNDARY OF SAID NORTHWEST ONE-FOURTH OF THE SOUTHWEST
ONE-FOURTH OF SAID SECTION A DISTANCE OF 1104.13 FEET TO FOUND CONCRETE MONUMENT
LOCATED ON THE SOUTH BOUNDARY OF A DIRT ROAD; THENCE, ALONG THE SOUTH BOUNDARY
OF SAID DIRT ROAD SOUTH 85°31 '31" EAST A DISTANCE OF 187.77 FEET; THENCE, ALONG
THE SOUTH BOUNDARY OF SAID DIRT ROAD, NORTH 87°58'52" EAST A DISTANCE OF 91.63
FEET; THENCE, ALONG THE SOUTH BOUNDARY OF SAID DIRT ROAD, NORTH 68°26'52" EAST A
DISTANCE OF 88.72 FEET; THENCE, ALONG THE SOUTH BOUNDARY OF SAID DIRT ROAD,
NORTH 59°58'33" EAST A DISTANCE OF 148.44 FEET TO ITS POINT OF INTERSECTION WITH
THE NORTH BOUNDARY OF SAID QUARTER-QUARTER SECTION; THENCE NORTH 87°33'19" EAST
ALONG THE NORTH BOUNDARY OF SAID NORTHWEST ONE-FOURTH OF THE SOUTHWEST
ONE-FOURTH OF SAID SECTION A DISTANCE OF 848.86 FEET TO THE POINT-OF-BEGINNING.
 

THE ABOVE DESCRIBED LAND IS LOCATED IN THE SOUTHEAST ONE-FOURTH OF THE NORTHWEST
ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE NORTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE
SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE
SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHEAST ONE-FOURTH OF
THE SOUTHWEST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF  THE SOUTHEAST ONE-FOURTH
AND THE SOUTHEAST ONE-FOURTH  OF   THE  SOUTHEAST  ONE-FOURTH  OF  SECTION  31,
TOWNSHIP

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

 

19 SOUTH RANGE 3 EAST; THE NORTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH AND
THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF SECTION 36, TOWNSHIP 19
SOUTH, RANGE 2 EAST. SHELBY COUNTY. ALABAMA; THE NORTHEAST ONE-FOURTH OF THE
NORTHEAST ONE-FOURTH OF SECTION I, TOWNSHIP 20 SOUTH, RANGE 2 EAST, SHELBY
COUNTY. ALABAMA; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
NORTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF
THE NORTHEAST ONE-FOURTH; THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH,
THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH. THE SOUTHEAST ONE-FOURTH
OF THE NORTHWEST ONE-FOURTH; SOUTHWEST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH
AND THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH. THE NORTHEAST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE
SOUTHEAST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH AND SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF
S.:CTION 6, TOWNSHIP 20 SOUTH, RANGE 3 EAST, SHELBY COUNTY, ALABAMA, THE
NORHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF THE
NORTHEAST ONE-FOURTH, THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE
SOUTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF
THE NORTHEAST ONE-FOURTH, SOUTHEAST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH, THE
NORTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH, THE NORTHWEST ONE-FOURTH OF
THE SOUTHEAST ONE-FOURTH, THE SOUTHWEST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH
AND THE SOUTHEAST ONE-FOURTH OF THE SOUTHEAST ONE-FOURTH OF SECTION 7, TOWNSHIP
20 SOUTH, RANGE 3 EAST; THE SOUTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH,
THE NORTHWEST ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH AND THE SOUTHWEST
ONE-FOURTH OF THE SOUTHWEST ONE-FOURTH OF SECTION 8, TOWNSHIP 20 SOUTH, RANGE 3
EAST; THE NORTHWEST ONE-FOURTH OF THE NORTHWEST ONE-FOURTH AND THE SOUTHWEST
ONE-FOURTH OF THE NORTHWEST ONE-FOURTH OF SECTION 17, TOWNSHIP 20 SOUTH, RANGE 3
EAST; THE NORTHEAST ONE-FOURTH OF THE NORTHEAST ONE-FOURTH, THE SOUTHEAST
ONE-FOURTH OF THE NORTHEAST ONE-FOURTH AND THE NORTHWEST ONE-FOURTH OF THE
NORTHEAST ONE-FOURTH OF SECTION 18 , TOWNSHIP 20 SOUTH, RANGE 3 EAST, SHELBY
COUNTY, ALABAMA, SAID PROPERTY CONTAINING 1062.25 ACRES MORE OR LESS.

 

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