Exhibit 10.13
 
NEENAH FOUNDRY COMPANY
AND
THE SUBSIDIARIES OF NEENAH FOUNDRY COMPANY
IDENTIFIED ON THE SIGNATURE PAGES HERETO,
AS BORROWERS
 
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
Dated as of December 29, 2006
$100,000,000
(with a possible increase up to $110,000,000)
 
BANK OF AMERICA, N.A.,
Individually and as Agent for any Lender which is
or becomes a Party hereto,
BANC OF AMERICA SECURITIES LLC AND CREDIT SUISSE
SECURITIES (USA) LLC,
as Co-Lead Arrangers and Book Managers,
CREDIT SUISSE SECURITIES (USA) LLC,
as Syndication Agent, and
THE ADDITIONAL LENDERS NOW AND FROM TIME TO TIME
PARTY HERETO
 

 

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TABLE OF CONTENTS

              Page  
SECTION 1. CREDIT FACILITY
    1  
1.2. Letters of Credit; LC Guaranties
    6  
1.3. [Intentionally Omitted]
    7  
1.4. Borrowing Agent
    7  
 
       
SECTION 2. INTEREST, FEES AND CHARGES
    7  
1.5. Computation of Interest and Fees
    8  
1.6. Fee Letter; Prepayment Fee under Original Loan Agreement
    8  
1.7. Letter of Credit and LC Guaranty Fees
    9  
1.8. Unused Line Fee
    10  
1.9. [Intentionally Omitted]
    10  
1.10. Audit Fees
    10  
1.11. Reimbursement of Expenses
    10  
1.12. Bank Charges
    11  
1.13. Collateral Protection Expenses; Appraisals
    11  
1.14. Payment of Charges
    12  
1.15. No Deductions
    12  
1.16. Joint and Several Obligations
    13  
 
       
SECTION 3. LOAN ADMINISTRATION
    15  
1.17. Payments
    18  
1.18. Mandatory and Optional Prepayments
    20  
1.19. Application of Payments and Collections
    22  
1.20. All Loans to Constitute One Obligation
    23  
1.21. Loan Account
    23  
1.22. Statements of Account
    23  
1.23. Increased Costs
    24  
1.24. Basis for Determining Interest Rate Inadequate
    25  
1.25. Sharing of Payments, Etc
    26  
1.26. Optional Prepayment/Replacement of Lenders
    26  
 
       
SECTION 4. TERM AND TERMINATION
    27  
1.27. Termination
    27  
 
       
SECTION 5. SECURITY INTERESTS
    28  
 
       
NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, THE LIENS AND SECURITY
INTERESTS GRANTED TO THE AGENT PURSUANT TO THIS AGREEMENT AND THE EXERCISE OF
ANY RIGHT OR REMEDY BY THE AGENT HEREUNDER, ARE SUBJECT TO THE LIMITATIONS AND
PROVISIONS OF THE
       

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              Page  
INTERCREDITOR AGREEMENT DATED AS OF DECEMBER 29, 2006 (AS AMENDED, RESTATED,
SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE “INTERCREDITOR
AGREEMENT”), AMONG AGENT, THE BANK OF NEW YORK TRUST COMPANY, N.A., NEENAH AND
THE SUBSIDIARIES OF NEENAH PARTY THERETO. IN THE EVENT OF ANY CONFLICT BETWEEN
THE TERMS OF THE INTERCREDITOR AGREEMENT AND THE TERMS OF THIS AGREEMENT, THE
TERMS OF THE INTERCREDITOR AGREEMENT SHALL GOVERN
    28  
1.28. Other Collateral
    30  
1.29. Lien Perfection; Further Assurances
    30  
1.30. Lien on Realty
    31  
 
       
SECTION 6. COLLATERAL ADMINISTRATION
    31  
1.31. Administration of Accounts
    33  
1.32. Administration of Inventory
    35  
1.33. Administration of Equipment
    35  
1.34. Payment of Charges
    36  
 
       
SECTION 7. REPRESENTATIONS AND WARRANTIES
    36  
1.35. Continuous Nature of Representations and Warranties
    43  
1.36. Survival of Representations and Warranties
    44  
 
       
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
    44  
1.37. Negative Covenants
    49  
1.38. Specific Financial Covenants
    61  
 
       
SECTION 9. CONDITIONS PRECEDENT
    61  
1.39. Conditions Precedent to all Loans and other Credit Accommodations
    63  
 
       
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
    63  
1.40. Acceleration of the Obligations
    68  
1.41. Other Remedies
    68  
1.42. Set Off and Sharing of Payments
    69  
1.43. Remedies Cumulative; No Waiver
    70  
 
       
SECTION 11. THE AGENT
    70  
1.44. Agent’s Reliance, Etc
    71  
1.45. BofA and Affiliates
    72  
1.46. Lender Credit Decision
    72  
1.47. Indemnification
    72  
1.48. Rights and Remedies to be Exercised by Agent Only
    73  
1.49. Agency Provisions Relating to Collateral
    73  
1.50. Agent’s Right to Purchase Commitments
    74  
1.51. Right of Sale, Assignment, Participations
    74  

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              Page  
1.52. [Intentionally Omitted]
    76  
1.53. Resignation of Agent; Appointment of Successor
    76  
1.54. Audit and Examination Reports; Disclaimer by Lenders
    76  
1.55. Syndication Agent and Arrangers
    77  
1.56. Real Property Collateral
    77  
 
       
SECTION 12. MISCELLANEOUS
    78  
1.57. Indemnity
    79  
1.58. Amendments
    80  
1.59. Sale of Interest
    81  
1.60. Severability
    81  
1.61. Successors and Assigns
    81  
1.62. Cumulative Effect; Conflict of Terms
    81  
1.63. Execution in Counterparts
    81  
1.64. Notice
    82  
1.65. Consent
    82  
1.66. Credit Inquiries
    83  
1.67. Time of Essence
    83  
1.68. Entire Agreement
    83  
1.69. Interpretation
    83  
1.70. Confidentiality
    83  
1.71. GOVERNING LAW; CONSENT TO FORUM
    84  
1.72. WAIVERS
    85  
1.73. Advertisement
    85  

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AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT
          THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT is made as of
this 29th day of December, 2006, by and among BANK OF AMERICA, N.A. (“BofA”),
with an office at One South Wacker Drive, Suite 3400, Chicago, Illinois 60606,
individually as a Lender and as Agent (“Agent”) for itself and the other
Lenders, each other financial institution which is or becomes a party hereto and
any registered assigns of any such Person (each such financial institution,
including BofA, is referred to hereinafter individually as a “Lender” and
collectively as the “Lenders”), CREDIT SUISSE SECURITIES (USA) LLC, as
Syndication Agent for Lenders, BANC OF AMERICA SECURITIES LLC (“BAS”) and CREDIT
SUISSE SECURITIES (USA) LLC, as Co-Lead Arrangers and Book Managers (together,
“Arrangers”), and each of NEENAH FOUNDRY COMPANY, a Wisconsin corporation with
its chief executive office and principal place of business at 2121 Brooks
Avenue, Neenah, Wisconsin 54956 (“Neenah”) and EACH SUBSIDIARY OF NEENAH THAT IS
IDENTIFIED ON THE SIGNATURE PAGES HERETO AS A BORROWER; Neenah and each such
Subsidiary are hereafter referred to collectively, as “Borrowers” and
individually, as “Borrower”. Capitalized terms used in this Agreement have the
meanings assigned to them in Appendix A, General Definitions. Accounting terms
not otherwise specifically defined herein shall be construed in accordance with
GAAP consistently applied. This Agreement amends and restates in its entirety
that certain Loan and Security Agreement dated October 8, 2003, as amended or
otherwise modified through the date hereof, by and among Agent, the syndication
agent, documentation agent and arranger party thereto, the financial
institutions party thereto as Lenders, and Borrowers (the “Original Loan
Agreement”), and, with respect to the Loan Documents, following the execution
and delivery of this Agreement, all references to the “Loan Agreement” in the
Loan Documents shall be deemed to refer to this Agreement (as it may be amended,
restated, supplemented or otherwise modified from time to time); provided, that
the “Obligations” arising under the Original Loan Agreement shall remain
outstanding and in full force and effect hereunder; and, provided further, that
the execution and delivery of this Agreement shall not constitute a novation of
any such Obligations.
SECTION 1. CREDIT FACILITY
          Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lenders agree to make available to Borrowers a Total Credit Facility
of up to $100,000,000 (with a possible increase up to $110,000,000 pursuant to
the provisions of subsection 1.1.7) upon a Borrower’s request therefor, as
follows:
     1.1.1. Revolving Credit Loans. Subject to the terms and conditions hereof,
each Lender agrees, severally and not jointly, to make Revolving Credit Loans to
Borrowers from time to time during the period from the date hereof to but not
including the last day of the Term, as requested by Borrowers in the manner set
forth in Section 1.4 and subsection 3.1.1, up to a maximum principal amount at
any time outstanding equal to the lesser of (i) such Lender’s Revolving Loan
Commitment

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minus the product of such Lender’s Revolving Loan Percentage and the LC Amount
minus the product of such Lender’s Revolving Loan Percentage and Reserves, if
any and (ii) the product of (A) such Lender’s Revolving Loan Percentage and
(B) an amount equal to the Borrowing Base at such time minus the LC Amount minus
Reserves, if any. Subject to the third to last sentence of this subsection
1.1.1, Agent shall have the right to establish Reserves, including without
limitation or duplication with respect to (i) price adjustments, damages,
unearned discounts, returned products or other matters for which a Borrower
issues credit memoranda in the ordinary course of such Borrower’s business; (ii)
potential dilution related to Accounts; (iii) shrinkage, spoilage and
obsolescence of Inventory; (iv) slow moving Inventory; (v) other sums due and
payable within ninety (90) days and chargeable (but not yet charged) against a
Borrower’s Loan Account as Revolving Credit Loans under any section of this
Agreement; (vi) amounts owing by a Borrower to any Person to the extent secured
by a Lien on, or trust over, any Property of a Borrower (excluding Liens
permitted under subsection 8.2.5(iv) or subsection 8.2.5(ix)); (vii) amounts
owing by a Borrower to Bank, Agent or any Affiliate of Bank or Agent in
connection with Product Obligations; (viii) Inventory that consists of coke,
sand or grinding wheels; (ix) wages and other amounts payable under the
Wisconsin Business Closing/Mass Layoff Law; (x) any Rent Reserves and (xi) such
other specific events, conditions or contingencies as to which Agent, in its
reasonable credit judgment exercised in good faith, determines Reserves should
be established from time to time hereunder. Notwithstanding anything contained
in this Agreement to the contrary, Agent shall not establish any Reserves in
respect of any matters relating to any items of Collateral that have been taken
into account in determining Eligible Inventory, Eligible Patterns and Core Boxes
or Eligible Accounts, as applicable. Agent agrees that it shall provide
Borrowers with reasonably prompt notice of the establishment of a Reserve. The
Revolving Credit Loans shall be repayable in accordance with the terms of the
Revolving Notes and shall be secured by all of the Collateral. Borrowers,
Lenders and Agent agree that, effective as of the Closing Date (but immediately
prior to the making of the inter-Lender transfers provided in subsection 1.1.6),
(i) any and all “Revolving Credit Loans” under and as defined in the Original
Loan Agreement that are outstanding as of the Closing Date shall be deemed to be
Revolving Credit Loans advanced by the Lenders under this Agreement and (ii) the
outstanding principal balance of the “Term Loan” under and as defined in the
Original Loan Agreement as of the Closing Date shall convert to and be
reconstituted as Revolving Credit Loans outstanding under this Agreement.
     1.1.2. Overadvances. Insofar as a Borrower may request and Agent or all
Lenders (as provided below) may be willing in their sole and absolute discretion
to make Revolving Credit Loans to such Borrower at a time when the unpaid
balance of Revolving Credit Loans plus the sum of the LC Amount plus the amount
of LC Obligations that have not been reimbursed by Borrowers or funded with a
Revolving Credit Loan, plus reserves, exceeds, or would exceed with the making
of any such Revolving Credit Loan, the Borrowing Base (such Loan or Loans being
herein referred to individually as an “Overadvance” and collectively, as
“Overadvances”),

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Agent shall enter such Overadvances as debits in the Loan Account. All
Overadvances shall be repaid on demand, shall be secured by the Collateral and
shall bear interest as provided in this Agreement for Revolving Credit Loans
generally. Any Overadvance made pursuant to the terms hereof shall be made by
all Lenders ratably in accordance with their respective Revolving Loan
Percentages. Overadvances in the aggregate amount of $2,500,000 or less may,
unless a Default or Event of Default has occurred and is continuing (other than
a Default or Event of Default caused by the existence or making of such
Overadvance), be made in the sole and absolute discretion of Agent. Overadvances
in an aggregate amount of more than $2,500,000 and Overadvances to be made after
the occurrence and during the continuation of a Default or an Event of Default
(other than a Default or Event of Default caused by the existence or making of
such Overadvance) shall require the consent of all Lenders. The foregoing
notwithstanding, in no event, unless otherwise consented to by all Lenders,
(w) shall any Overadvances be outstanding for more than sixty (60) consecutive
days, (x) after all outstanding Overadvances have been repaid, shall Agent or
Lenders make any additional Overadvances unless sixty (60) days or more have
expired since the last date on which any Overadvances were outstanding,
(y) shall Overadvances be outstanding on more than ninety (90) days within any
one hundred eighty day (180) period or (z) shall Agent make Revolving Credit
Loans on behalf of Lenders under this subsection 1.1.2 to the extent such
Revolving Credit Loans would cause a Lender’s share of the Revolving Credit
Loans to exceed such Lender’s Revolving Loan Commitment minus such Lender’s
Revolving Loan Percentage of the LC Amount.
     1.1.3. Use of Proceeds. The Revolving Credit Loans shall be used solely for
(i) the satisfaction of existing Indebtedness of Borrowers, (ii) the payment of
fees and expenses associated with the transactions contemplated hereby,
(iii) Borrowers’ general operating capital needs (including Capital Expenditures
permitted hereunder) in a manner consistent with the provisions of this
Agreement and all applicable laws, (iv) to fund Permitted Acquisitions, and
(v) other purposes permitted under this Agreement.
     1.1.4. Swingline Loans. Subject to the terms and conditions hereof, in
order to reduce the frequency of transfers of funds from Lenders to Agent for
making Revolving Credit Loans, Agent shall be permitted (but not required) to
make Revolving Credit Loans to Borrowers upon request by Borrowers (such
Revolving Credit Loans to be designated as “Swingline Loans”) provided that the
aggregate amount of Swingline Loans outstanding at any time will not (i) exceed
$5,000,000; (ii) when added to the principal amount of Agent’s other Revolving
Credit Loans then outstanding plus Agent’s Revolving Loan Percentage of the LC
Amount, exceed Agent’s Revolving Credit Commitment; or (iii) when added to the
principal amount of all other Revolving Credit Loans then outstanding plus the
LC Amount, exceed the Borrowing Base. Within the foregoing limits, each Borrower
may borrow, repay and reborrow Swingline Loans. All Swingline Loans shall be
treated as Revolving Credit Loans for purposes of this Agreement, except that
(a) all Swingline Loans shall be

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Base Rate Portions and (b) notwithstanding anything herein to the contrary
(other than as set forth in the next succeeding sentence), all principal and
interest paid with respect to Swingline Loans shall be for the sole account of
Agent in its capacity as the lender of Swingline Loans. Notwithstanding the
foregoing, not more than 2 Business Days after (1) Lenders receive notice from
Agent that a Swingline Loan has been advanced in respect of a drawing under a
Letter of Credit or LC Guaranty or (2) in any other circumstance, demand is made
by Agent during the continuance of an Event of Default, each Lender shall
irrevocably and unconditionally purchase and receive from Agent, without
recourse or warranty from Agent, an undivided interest and participation in each
Swingline Loan to the extent of such Lender’s Revolving Loan Percentage thereof,
by paying to Agent, in same day funds, an amount equal to such Lender’s
Revolving Loan Percentage of such Swingline Loan. Swingline Loans will be
settled between the Agent and the Lenders in the manner set forth in subsection
3.1.3. Borrowers, Agent and the Lenders hereby agree that any and all “Swingline
Loans” under and as defined in the Original Loan Agreement that are outstanding
as of the Closing Date shall be deemed to be Swingline Loans advanced under this
Agreement.
     1.1.5. Agent Loans. Upon the occurrence and during the continuance of an
Event of Default, Agent, in its sole discretion, may make Revolving Credit Loans
on behalf of Lenders, in an aggregate amount not to exceed $5,000,000 (such
maximum amount being reduced by the outstanding balance of any Overadvances that
have been authorized by Agent alone pursuant to subsection 1.1.2), if Agent, in
its reasonable business judgment, deems that such Revolving Credit Loans are
necessary or desirable (i) to protect all or any portion of the Collateral,
(ii) to enhance the likelihood, or maximize the amount of, repayment of the
Loans and the other Obligations, or (iii) to pay any other amount chargeable to
any Borrower pursuant to this Agreement, including without limitation costs,
fees and expenses as described in Sections 2.8 and 2.9 (hereinafter, “Agent
Loans”); provided, that in no event shall (a) the maximum principal amount of
the Revolving Credit Loans exceed the aggregate Revolving Loan Commitments and
(b) Majority Lenders may at any time revoke Agent’s authorization to make
further Agent Loans. Any such revocation must be in writing and shall become
effective prospectively upon Agent’s receipt thereof. Each Lender shall be
obligated to advance its Revolving Loan Percentage of each Agent Loan. If Agent
Loans are made pursuant to this subsection 1.1.5, then (a) the Borrowing Base
shall be deemed increased by the amount of such permitted Agent Loans, but only
for so long as Agent allows such Agent Loans to be outstanding, and
(b) notwithstanding any terms contained herein to the contrary (including,
without limitation, the terms of subsection 10.2.2), all Lenders that have
committed to make Revolving Credit Loans shall be bound to make, or permit to
remain outstanding, such Agent Loans based upon their Revolving Loan Percentages
in accordance with the terms of this Agreement.
     1.1.6. Inter-Lender Assignments. Each “Lender” party to the Original Loan
Agreement hereby sells and assigns to each other Lender, without recourse,

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representation or warranty (except as set forth below), and each such Lender
hereby purchases and assumes from each “Lender” party to the Original Loan
Agreement a percentage interest in the Revolving Loan Commitments and Revolving
Credit Loans hereunder as may be required to reflect the allocation of Revolving
Loan Commitments as set forth on the signature pages hereto. The Lenders agree
to make such inter-Lender wire transfers as may be required to give effect to
the foregoing assignments and assumptions and, as a result of such assignments
and assumptions, each “Lender” party to the Original Loan Agreement shall be
absolutely released from any obligations, covenants or agreements with respect
to the Revolving Loan Commitments and Revolving Credit Loans so assigned. With
respect to such Revolving Loan Commitments and Revolving Credit Loans so
assigned, each “Lender” party to the Original Loan Agreement makes no
representation or warranty whatsoever, except that it represents and warrants
that it is the legal and beneficial owner of the same, free and clear of any
adverse claim.
     1.1.7. Request for Increase of Revolving Credit Commitments. The Lenders
agree that Borrowers may, on any Business Day from time to time after the
Closing Date and so long as (i) no Default or Event of Default has occurred and
is continuing, (ii) Agent has consented in writing to any increase of the
Revolving Loan Commitments that is requested pursuant to this subsection 1.1.7,
such consent to be provided or withheld by Agent in its sole discretion and
(iii) the increased Revolving Loan Commitments provided for under this
subsection 1.1.7 are syndicated to the satisfaction of Agent, deliver a written
notice to Agent and each Lender (an “Increase Notice”) requesting an increase in
the Revolving Loan Commitments in an aggregate amount for all such increases
collectively of up to $10,000,000 (a “Requested Revolver Increase”). If
Borrowers deliver an Increase Notice, each Lender shall have the option to
participate in the Requested Revolver Increase to the extent of its Revolving
Loan Percentage thereof by delivering a written notice to the Agent and
Borrowers within ten Business Days of such Lender’s receipt of the Increase
Notice (it being agreed and understood that such Lender shall be deemed to have
elected not to participate in the Requested Revolver Increase if it does not
respond to the Increase Notice within ten Business Days of its receipt thereof).
If one or more of the Lenders elect not to participate in the Requested Revolver
Increase, then the Lenders participating in the Requested Revolver Increase may,
at their option, elect to participate in such remaining portion of the Requested
Revolver Increase (with such remaining portion to be allocated ratably among
such participating Lenders based on their respective Revolving Loan Percentages
or as otherwise may be agreed by such participating Lenders). If there is less
than full participation by existing Lenders in the Requested Revolver Increase
after the foregoing procedures are completed, then one or more new Lenders
reasonably acceptable to the Agent, and Borrowers may be added as parties to
this Agreement for purposes of participating in such remaining portion. After
giving effect to the procedures described in this subsection 1.1.7, each Lender
participating in the Requested Revolver Increase shall have its Revolving Loan
Commitment increase to the extent of its participation and, upon the request of
such Lender, Borrowers will execute a replacement Revolving Note for such Lender

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reflecting the increased amount of its Revolving Loan Commitment. Each Borrower
agrees to execute such amendments and supplements to the Security Documents as
Agent reasonably deems necessary in connection with a Requested Revolver
Increase. No Increase Notice may be given unless it relates to a Requested
Revolver Increase of at least $5,000,000 and no more than three Increase Notices
may be delivered by Borrowers pursuant to this subsection 1.1.7. In connection
with any increase of the Revolving Loan Commitments that occurs pursuant to this
subsection 1.1.7, Borrowers shall pay any closing fees as may be agreed among
Borrowers and the Lenders participating in such increase.
     1.2. Letters of Credit; LC Guaranties.
     1.2.1. Issuance of Letters of Credit and LC Guarantees. Subject to the
terms and conditions hereof, each of Agent and, if applicable, any Lender
designated by Agent and Neenah as a Letter of Credit Issuer (each such Lender, a
“Letter of Credit Issuer”) agrees, if requested by a Borrower, to (i) issue its,
or, in the case of Agent, cause to be issued by Bank or another Affiliate of
Agent, on the date requested by such Borrower, Letters of Credit for the account
of a Borrower or (ii) execute LC Guaranties by which Agent, such Letter of
Credit Issuer, Bank, or another Affiliate of Agent, on the date requested by a
Borrower, shall guaranty the payment or performance by a Borrower of its
reimbursement obligations with respect to letters of credit issued for a
Borrower’s account by other Persons; provided that the LC Amount shall not
exceed $20,000,000 at any time. No Letter of Credit or LC Guaranty may have an
expiration date after the last day of the Term. Borrowers, Lenders, Agent and
Letter of Credit Issuer agree that each “Letter of Credit” and “LC Guaranty”,
and all “LC Obligations”, under and as defined in the Original Loan Agreement
that are outstanding on the Closing Date shall continue as and shall constitute
a Letter of Credit, LC Guaranty and LC Obligations under this Agreement.
     1.2.2. Lender Participation. Immediately upon the issuance of a Letter of
Credit or an LC Guaranty under this Agreement (or, in the case of any “Letters
of Credit”, “LC Guaranties” and “LC Obligations” under and as defined in the
Original Loan Agreement that are outstanding on the Closing Date, on the Closing
Date), each Lender shall be deemed to have irrevocably and unconditionally
purchased and received from Agent, without recourse or warranty, an undivided
interest and participation therein equal to the applicable LC Obligations
multiplied by such Lender’s Revolving Loan Percentage. Agent will notify each
Lender on a weekly basis, or if determined by Agent, a more frequent basis, upon
presentation to it of a draw under a Letter of Credit or a demand for payment
under a LC Guaranty. On a weekly basis, or more frequently if requested by
Agent, each Lender shall make payment to Agent in immediately available funds,
of an amount equal to such Lender’s pro rata share of the amount of any payment
made by Agent in respect to any Letter of Credit or LC Guaranty. The obligation
of each Lender to reimburse Agent under this subsection 1.2.2 shall be
unconditional, continuing, irrevocable and absolute, except in respect of
indemnity claims arising out of Agent’s gross negligence or willful misconduct.
In the event that any Lender fails to make payment

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to Agent of any amount due under this subsection 1.2.2, Agent shall be entitled
to receive, retain and apply against such obligation the principal and interest
otherwise payable to such Lender hereunder until Agent receives such payment
from such Lender or such obligation is otherwise fully satisfied; provided,
however, that nothing contained in this sentence shall relieve such Lender of
its obligation to reimburse the Agent for such amount in accordance with this
subsection 1.2.2.
     1.2.3. Reimbursement. Notwithstanding anything to the contrary contained
herein, Borrowers, Agent, each Letter of Credit Issuer and Lenders hereby agree
that all LC Obligations and all obligations of each Borrower relating thereto
shall be satisfied by the prompt issuance of one or more Revolving Credit Loans
that are Base Rate Portions, which Borrowers hereby acknowledge are requested
and Lenders hereby agree to fund. In the event that Revolving Credit Loans are
not, for any reason, promptly made to satisfy all then existing LC Obligations,
each Lender hereby agrees to pay to Agent, on demand, an amount equal to such LC
Obligations multiplied by such Lender’s Revolving Loan Percentage, and until so
paid, such amount shall be secured by the Collateral and shall bear interest and
be payable at the same rate and in the same manner as Base Rate Portions. In no
event shall Agent or any Lender make any Revolving Credit Loan in respect of any
Obligation that has already been satisfied by any Borrower.
     1.3. [Intentionally Omitted].
     1.4. Borrowing Agent.
          For ease of administration of this Agreement, each Borrower other than
Neenah hereby appoints Neenah as its borrowing agent hereunder. In such
capacity, Neenah will request all Revolving Credit Loans to be made pursuant to
Section 1.1, will request all Letters of Credit and LC Guaranties to be issued
pursuant to Section 1.2, will deliver any Increase Notices pursuant to
subsection 1.1.7, and will submit all LIBOR Requests with respect to obtaining
any LIBOR Portion pursuant to subsection 3.1.7, converting any Base Rate Portion
into a LIBOR Portion pursuant to subsection 3.1.8 or continuing any LIBOR
Portion into a subsequent Interest Period pursuant to subsection 3.1.9, in each
case pursuant to the procedures set forth in Section 3.1. Notwithstanding
anything to the contrary contained in this Agreement, no Borrower other than
Neenah shall be entitled to request any Revolving Credit Loans, Letters of
Credit or LC Guaranties, to deliver any Increase Notices pursuant to subsection
1.1.7, or to submit any LIBOR Requests hereunder. The proceeds of all Revolving
Credit Loans made hereunder shall be advanced to or at the direction of Neenah
and used solely for the purposes described in subsection 1.1.3.
SECTION 2. INTEREST, FEES AND CHARGES
     1.4.1. Rates of Interest. Interest shall accrue on the principal amount of
the Base Rate Portions outstanding at the end of each day at a fluctuating rate
per annum equal to the Applicable Margin then in effect for the Base Rate
Portions plus the Base Rate. Said rate of interest shall increase or decrease by
an amount equal to any

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increase or decrease in the Base Rate, effective as of the opening of business
on the day that any such change in the Base Rate occurs. If a Borrower exercises
its LIBOR Option as provided in Section 3.1, interest shall accrue on the
principal amount of the LIBOR Portions outstanding at the end of each day at a
rate per annum equal to the Applicable Margin then in effect for the LIBOR
Portions plus the LIBOR applicable to each LIBOR Portion for the corresponding
Interest Period.
     1.4.2. Default Rate of Interest. At the option of Agent or the Majority
Lenders, upon and after the occurrence of an Event of Default arising under
subsection 10.1.1, subsection 10.1.3 (as a result of a breach of subsection
8.1.3, subsection 8.1.4, subsection 8.2.4, subsection 8.2.6, subsection 8.2.7,
subsection 8.2.8, subsection 8.2.12 or Section 8.3) or subsection 10.1.8, and
during the continuation thereof, the principal amount of all Loans shall bear
interest at a rate per annum equal to 2.0% plus the interest rate otherwise
applicable thereto (the “Default Rate”).
     1.4.3. Maximum Interest. In no event whatsoever shall the aggregate of all
amounts deemed interest hereunder or under the Notes and charged or collected
pursuant to the terms of this Agreement or pursuant to the Notes exceed the
highest rate permissible under any law which a court of competent jurisdiction
shall, in a final determination, deem applicable hereto. If any provisions of
this Agreement or the Notes are in contravention of any such law, such
provisions shall be deemed amended to conform thereto (the “Maximum Rate”). If
at any time, the amount of interest paid hereunder is limited by the Maximum
Rate, and the amount at which interest accrues hereunder is subsequently below
the Maximum Rate, the rate at which interest accrues hereunder shall remain at
the Maximum Rate, until such time as the aggregate interest paid hereunder
equals the amount of interest that would have been paid had the Maximum Rate not
applied.
     1.5. Computation of Interest and Fees.
          Interest, Letter of Credit and LC Guaranty fees and Unused Line Fees
hereunder shall be calculated daily and shall be computed on the actual number
of days elapsed over a year of 360 days.
     1.6. Fee Letter; Prepayment Fee under Original Loan Agreement.
          Borrowers shall jointly and severally pay to Agent certain fees and
other amounts in accordance with the terms of the fee letter among Borrowers and
Agent (the “Fee Letter”). In addition, for any “Lenders” under and as defined in
the Original Loan Agreement that have not agreed to waive the prepayment fee
payable to such “Lenders” pursuant to the provisions of Section 2.6 of the
Original Loan Agreement, on the Closing Date Borrowers shall jointly and
severally pay to any such “Lenders” the amount of such prepayment fee (it being
agreed and understood that BofA has waived the amount of such prepayment fee to
which BofA would otherwise be entitled pursuant to the provisions of Section 2.6
of the Original Loan Agreement).

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     1.7. Letter of Credit and LC Guaranty Fees.
Borrowers shall jointly and severally pay to Agent:
     (i) for standby Letters of Credit and LC Guaranties of standby letters of
credit, for the ratable benefit of Lenders a per annum fee equal to the
Applicable Margin then in effect for LIBOR Portions multiplied by the weighted
average daily balance of the aggregate undrawn face amount of such Letters of
Credit and LC Guaranties outstanding from time to time during the term of this
Agreement, plus all normal and customary charges associated with the issuance
thereof, which fees and charges shall be deemed fully earned upon issuance of
each such Letter of Credit or LC Guaranty, shall be due and payable in arrears
on the first Business Day of each month and shall not be subject to rebate or
proration upon the termination of this Agreement for any reason; provided that
at any time that the Default Rate is in effect, the fee applicable under this
subsection shall be equal to the otherwise applicable fee plus 2.00%;
     (ii) for documentary Letters of Credit and LC Guaranties of documentary
letters of credit, for the ratable benefit of Lenders a per annum fee equal to
the Applicable Margin then in effect for LIBOR Portions multiplied by the
weighted average daily balance of the aggregate undrawn face amount of such
Letters of Credit and LC Guaranties outstanding from time to time during the
term of this Agreement, plus all normal and customary charges associated with
the issuance and administration of each such Letter of Credit or LC Guaranty
(which fees and charges shall be fully earned upon issuance, renewal or
extension (as the case may be) of each such Letter of Credit or LC Guaranty,
shall be due and payable in arrears on the first Business Day of each month, and
shall not be subject to rebate or proration upon the termination of this
Agreement for any reason); provided that at any time that the Default Rate is in
effect, the fee applicable under this subsection shall be equal to the otherwise
applicable fee plus 2.00%;
     (iii) with respect to all Letters of Credit and LC Guaranties issued by
Agent, Bank or another Affiliate of Agent, for the account of Agent only, a
fronting fee equal to 0.125% per annum of the weighted average daily balance of
the aggregate undrawn face amount of such Letters of Credit and LC Guaranties
outstanding from time to time during the term of this Agreement issued by such
Person, which fronting fees shall be due and payable monthly in arrears on the
first Business Day of each month and shall not be subject to rebate or proration
upon the termination of this Agreement for any reason; and
     (iv) with respect to all Letters of Credit and LC Guaranties issued by a
Letter of Credit Issuer, for the account of such Letter of Credit Issuer only, a
fronting fee equal to 0.125% per annum of the weighted average daily balance of
the aggregate undrawn face amount of such Letters of Credit and LC

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Guaranties outstanding from time to time during the term of this Agreement
issued by such Letter of Credit Issuer, which fronting fees shall be due and
payable monthly in arrears on the first Business Day of each month and shall not
be subject to rebate or proration upon the termination of this Agreement for any
reason.
          1.8. Unused Line Fee.
          Borrowers shall jointly and severally pay to Agent, for the ratable
benefit of Lenders, a fee (the “Unused Line Fee”) equal to the Applicable Margin
per annum for the Unused Line Fee multiplied by the average daily amount by
which the Revolving Credit Maximum Amount exceeds the sum of (i) the outstanding
principal balance of the Revolving Credit Loans plus (ii) the LC Amount. The
Unused Line Fee shall be payable monthly in arrears on the first day of each
month hereafter.
          1.9. [Intentionally Omitted].
          1.10. Audit Fees.
          Borrowers shall jointly and severally pay to Agent audit fees (for
auditors that are employees of BofA, at a rate of $850 per auditor per day, and,
for third-party auditors, at the daily rates actually charged by such
third-party auditors) in connection with audits of the books and records and
Properties of each Borrower and its Subsidiaries and such other matters as Agent
shall deem appropriate in its reasonable credit judgment, plus all reasonable
out-of-pocket expenses incurred by Agent in connection with such audits;
provided, that so long as no Event of Default has occurred and is continuing,
Borrowers shall not be liable for such audit fees incurred in connection with
more than three complete audits during any fiscal year, whether such audits are
conducted by employees of Agent or by third parties hired by Agent. Such audit
fees and out-of-pocket expenses shall be payable on the first day of the month
following the date of issuance by Agent of a request for payment thereof to
Neenah. Agent may, in its discretion, provide for the payment of such amounts by
making appropriate Revolving Credit Loans to one or more Borrowers and charging
the appropriate Loan Account or Loan Accounts therefor.
          1.11. Reimbursement of Expenses.
          If, at any time or times regardless of whether or not an Event of
Default then exists, (i) Agent or either Arranger incurs reasonable and
documented legal or accounting expenses or any other costs or out-of-pocket
expenses in connection with (1) the negotiation and preparation of this
Agreement or any of the other Loan Documents, any amendment of or modification
of this Agreement or any of the other Loan Documents, or any syndication or
attempted syndication of the Obligations (including, without limitation,
printing and distribution of materials to prospective Lenders and all costs
associated with bank meetings, but excluding any closing fees paid to Lenders in
connection therewith) or (2) the administration of this Agreement or any of the
other Loan Documents and the transactions contemplated hereby and thereby; or
(ii) Agent or any Lender incurs reasonable and documented legal or accounting

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expenses or any other costs or out-of-pocket expenses in connection with (1) any
litigation, contest, dispute, suit, proceeding or action (whether instituted by
Agent, any Lender, any Borrower or any other Person) relating to the Collateral,
this Agreement or any of the other Loan Documents or any Borrower’s, any of its
Subsidiaries’ or any Guarantor’s affairs; (2) any amendment, modification,
waiver or consent with respect to the Loan Documents that is requested of
Lenders at a time when an Event of Default is in existence (provided, that
Borrowers shall only be responsible under this clause (2) for the reasonable and
documented fees of one law firm, acting on behalf of all Lenders other than
BofA), (3) any attempt to enforce any rights of Agent or any Lender against any
Borrower or any other Person which may be obligated to Agent or any Lender by
virtue of this Agreement or any of the other Loan Documents, including, without
limitation, the Account Debtors; or (4) any attempt to inspect, verify, protect,
preserve, restore, collect, sell, liquidate or otherwise dispose of or realize
upon the Collateral; then all such legal and accounting expenses, other costs
and out of pocket expenses of Agent or any Lender, as applicable, shall be
charged to Borrowers on a joint and several basis; provided, that Borrowers
shall not be responsible for such expenses, costs and out-of-pocket expenses to
the extent incurred because of the gross negligence, bad faith or willful
misconduct (as determined by a court of competent jurisdiction in a final
nonappealable judgment) of Agent or any Lender seeking reimbursement. All
amounts chargeable to Borrowers under this Section 2.8 shall be Obligations
secured by all of the Collateral, shall be payable within 15 days following
demand to Agent or such Lender, as the case may be, and shall bear interest from
the date due and owing until paid in full at the rate applicable to Base Rate
Portions from time to time. Borrowers shall also jointly and severally reimburse
Agent for expenses incurred by Agent in its administration of the Collateral to
the extent and in the manner provided in Sections 2.9 and 2.10 hereof.
          1.12. Bank Charges.
          Borrowers shall jointly and severally pay to Agent and each applicable
Lender, on demand, any and all fees, costs or expenses which Agent or any such
Lender pays to a bank or other similar institution arising out of or in
connection with (i) the forwarding to any Borrower or any other Person on behalf
of any Borrower, by Agent or any Lender, of proceeds of Loans made to any
Borrower pursuant to this Agreement and (ii) the depositing for collection by
Agent or any Lender of any check or item of payment received or delivered to
Agent or any Lender on account of the Obligations.
          1.13. Collateral Protection Expenses; Appraisals.
          All out-of-pocket expenses incurred in protecting, storing,
warehousing, insuring, handling, maintaining and shipping the Collateral, and
any and all excise, property, sales, and use taxes imposed by any state,
federal, or local authority on any of the Collateral or in respect of the sale
thereof shall be jointly and severally borne and paid by Borrowers. If Borrowers
fail to promptly pay any portion thereof when due, Agent may, at its option, but
shall not be required to, pay the same and charge one or more Borrowers
therefor. On an annual basis, Agent may, and, at the request of Majority
Lenders, shall, at Borrowers’ joint and several expense, obtain an appraisal of
the Patterns and Core Boxes of Borrowers from a third party appraiser reasonably
acceptable to Agent, which appraisal shall include an assessment of the net

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orderly liquidation percentage of each category or type of Eligible Patterns and
Core Boxes. Further, if average Availability for any 30-day period during any
fiscal year of Borrowers (as determined by Agent in its reasonable credit
judgment) is less than $40,000,000, Agent may, and, at the request of Majority
Lenders, shall, on an annual basis for such fiscal year and each fiscal year
thereafter and at Borrowers’ joint and several expense, obtain an appraisal of
the Inventory of Borrowers from a third party appraiser reasonably acceptable to
Agent, which appraisal shall include an assessment of the net orderly
liquidation percentage of each category or type of Eligible Inventory.
Additionally, from time to time, if obtaining appraisals is necessary in order
for Agent or any Lender to comply with applicable laws or regulations, and at
any time if an Event of Default shall have occurred and be continuing, Agent
may, at Borrowers’ joint and several expense, obtain appraisals from appraisers
(who may be personnel of Agent), stating the then current fair market value
and/or net orderly liquidation value of all or any portion of the real Property
or personal Property of any Borrower or any of its Subsidiaries, including
without limitation the Inventory and the Patterns and Core Boxes of any Borrower
or any of its Subsidiaries.
          1.14. Payment of Charges.
          All amounts chargeable to any Borrower under this Agreement shall be
Obligations secured by all of the Collateral, shall be, unless specifically
otherwise provided, payable on demand and shall bear interest from the date
demand was made or such amount is due, as applicable, until paid in full at the
rate applicable to Base Rate Portions from time to time.
     1.15. No Deductions.
     1.15.1. Any and all payments or reimbursements made hereunder shall be made
free and clear of and without deduction for any and all taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto;
excluding, however, the following: taxes imposed on the income of Agent or any
Lender or franchise taxes by the jurisdiction under the laws of which Agent or
any Lender is organized or doing business or any political subdivision thereof
and taxes imposed on its income by the jurisdiction of Agent’s or such Lender’s
applicable lending office or any political subdivision thereof or franchise
taxes (all such taxes, levies, imposts, deductions, charges or withholdings and
all liabilities with respect thereto but excluding such taxes imposed on net
income, “Tax Liabilities”). If any Borrower shall be required by law to deduct
any such Tax Liabilities from or in respect of any sum payable hereunder to
Agent or any Lender, then the sum payable hereunder by Borrowers shall be
increased as may be necessary so that, after all required deductions are made,
Agent or such Lender receives an amount equal to the sum it would have received
had no such deductions been made.
     1.15.2. Each Lender that is organized in a jurisdiction outside the United
States hereby agrees that it shall, no later than the Closing Date or, if later,
the date on which such Lender became a party hereto (and from time to time
thereafter, upon reasonable request of Borrowers or Agent), (i) furnish to
Borrowers and Agent two

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accurate, complete and signed copies of either United States Internal Revenue
Service Form W-8BEN or United States Internal Revenue Service Form W-8ECI (on
which such Lender claims entitlement to complete exemption from United States
federal withholding tax on all interest payments hereunder) and (ii) to the
extent that such Lender is legally able to do so, provide Borrowers and Agent a
new Form W-8BEN or Form W-8ECI upon the obsolescence of any previously delivered
form, duly executed and completed by such Lender, and comply with all applicable
United States laws and regulations as in effect from time to time with regard to
such withholding tax exemption. Notwithstanding anything to the contrary in this
Section 2.12, for the avoidance of doubt, (A) Borrowers shall be entitled, to
the extent they are required to do so by law, to deduct or withhold Taxes
imposed by the United States (or any political subdivision or taxing authority
thereof or therein) from any amounts payable hereunder to any Lender that is not
a United States person (as defined in Section 7701(a)(30) of the Internal
Revenue Code of 1986, as amended) to the extent the Lender has not provided to
Borrowers the United States Internal Revenue Service forms described above, and
(B) after the date a Lender becomes a party hereto, Borrowers shall have no
obligation to make additional payments under this Section 2.12 to any Lender
organized outside the United States if the Lender has not provided such forms to
the Borrower.
     1.16. Joint and Several Obligations.
          Each Borrower acknowledges that it is jointly and severally liable for
all of the Obligations and as a result hereby unconditionally guaranties the
full and prompt payment when due, whether at maturity or earlier, by reason of
acceleration or otherwise, and at all times thereafter, of all indebtedness,
liabilities and obligations of every kind and nature of each other Borrower to
Agent and Lenders and, howsoever created, arising or evidenced, whether direct
or indirect, absolute or contingent, joint or several, now or hereafter
existing, or due or to become due, and howsoever owned, held or acquired by
Agent or any Lender. Each Borrower agrees that if this guaranty, or any Liens
securing this guaranty, would, but for the application of this sentence, be
unenforceable under applicable law, this guaranty and each such Lien shall be
valid and enforceable to the maximum extent that would not cause this guaranty
or such Lien to be unenforceable under applicable law, and this guaranty shall
automatically be deemed to have been amended accordingly at all relevant times.
          Each Borrower hereby agrees that its obligations under this guaranty
shall be unconditional, irrespective of (a) the validity or enforceability of
the Obligations or any part thereof, or of any promissory note or other document
evidencing all or any part of the Obligations, (b) the absence of any attempt to
collect the Obligations from any other Borrower or any Guarantor or other action
to enforce the same, (c) the waiver or consent by Agent or any Lender with
respect to any provision of any agreement, instrument or document evidencing or
securing all or any part of the Obligations, or any other agreement, instrument
or document now or hereafter executed by any other Borrower and delivered to
Agent or any Lender (other than a waiver, forgiveness or consent by Agent and
Lenders that reduces the amount of any of the Obligations), (d) the failure by
Agent or any Lender to take any steps to perfect and maintain its security
interest in, or to preserve its rights to, any security or Collateral for the
Obligations, for

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its benefit, (e) Agent’s or any Lender’s election, in any proceeding instituted
under the United States Bankruptcy Code or any other similar bankruptcy or
insolvency legislation, of the application of Section 1111(b)(2) of the United
States Bankruptcy Code or any other similar bankruptcy or insolvency
legislation, (f) any borrowing or grant of a security interest by any Borrower
as debtor-in-possession, under Section 364 of the United States Bankruptcy Code
or any other similar bankruptcy or insolvency legislation, (g) the disallowance,
under Section 502 of the United States Bankruptcy Code or any other similar
bankruptcy or insolvency legislation, of all or any portion of Agent’s or any
Lender’s claim(s) for repayment of the Obligations or (h) any other circumstance
which might otherwise constitute a legal or equitable discharge or defense of a
borrower or a guarantor.
          Each Borrower hereby waives diligence, presentment, demand of payment,
filing of claims with a court in the event of receivership or bankruptcy of any
Borrower, protest or notice with respect to the Obligations and all demands
whatsoever, and covenants that this guaranty will not be discharged, except by
complete and irrevocable payment and performance of the Obligations. No notice
to any Borrower or any other party shall be required for Agent or any Lender to
make demand hereunder. Such demand shall constitute a mature and liquidated
claim against the applicable Borrower. Upon the occurrence of any Event of
Default, Agent or any Lender may, in its sole election, proceed directly and at
once, without notice, against all or any Borrower to collect and recover the
full amount or any portion of the Obligations, without first proceeding against
any other Borrower or any other Person, or any security or collateral for the
Obligations. During the existence of an Event of Default, Agent and each Lender
shall have the exclusive right to determine the application of payments and
credits, if any from any Borrower, any other Person or any security or
collateral for the Obligations, on account of the Obligations or of any other
liability of any Borrower to Agent or any Lender.
          Each Borrower expressly waives all rights it may have now or in the
future under any statute, or at common law, or at law or in equity, or
otherwise, to compel Agent or Lenders to marshal assets or to proceed in respect
of the Obligations guaranteed hereunder against any other Borrower or any
Guarantor, any other party or against any security for the payment and
performance of the Obligations before proceeding against, or as a condition to
proceeding against, such Borrower. It is agreed among each Borrower, Agent and
Lenders that the foregoing waivers are of the essence of the transaction
contemplated by this Agreement and the other Loan Documents and that, but for
the provisions of this Section 2.13 and such waivers, Agent and Lenders would
decline to enter into this Agreement.
          Notwithstanding anything to the contrary set forth in this
Section 2.13, it is the intent of the parties hereto that the liability incurred
by each Borrower in respect of the Obligations of the other Borrowers (and any
Lien granted by each Borrower to secure such Obligations), not constitute a
fraudulent conveyance under Section 548 of the United States Bankruptcy Code or
a fraudulent conveyance or fraudulent transfer under the provisions of any
applicable law of any state or other governmental unit (“Fraudulent
Conveyance”). Consequently, each Borrower, Agent and each Lender hereby agree
that if a court of competent jurisdiction determines that the incurrence of
liability by any Borrower in respect of the Obligations of any other Borrower
(or any Liens granted by such Borrower to secure such Obligations) would, but
for the application of this sentence, constitute a Fraudulent

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Conveyance, such liability (and such Liens) shall be valid and enforceable only
to the maximum extent that would not cause the same to constitute a Fraudulent
Conveyance, and this Agreement and the other Loan Documents shall automatically
be deemed to have been amended accordingly.
SECTION 3. LOAN ADMINISTRATION.
          Borrowings under the credit facility established pursuant to Section 1
hereof shall be as follows:
     1.16.1. Loan Requests. A request for a Revolving Credit Loan shall be made,
or shall be deemed to be made, in the following manner: (a) subject to the terms
of Section 1.4, a Borrower may give Agent notice of its intention to borrow, in
which notice such Borrower shall specify the amount of the proposed borrowing of
a Revolving Credit Loan and the proposed borrowing date, which shall be a
Business Day, no later than 11:00 a.m. (Chicago, Illinois time) on the proposed
borrowing date (or in accordance with subsection 3.1.7, 3.1.8 or 3.1.9, as
applicable, in the case of a request for a LIBOR Portion); and (b) the becoming
due and payable of any amount required to be paid under this Agreement, or the
Notes, whether as interest or for any other Obligation, shall be deemed
irrevocably to be a request by a Borrower for a Revolving Credit Loan on the due
date in the amount required to pay such interest or other Obligation in
accordance with subsection 3.1.4.
     1.16.2. Disbursement. Each Borrower hereby irrevocably authorizes Agent to
disburse the proceeds of each Loan requested, or deemed to be requested,
pursuant to subsection 3.1.1 as follows: (i) the proceeds of each Revolving
Credit Loan requested under subsection 3.1.1(a) shall be disbursed by Agent in
lawful money of the United States of America in immediately available funds, in
the case of the initial borrowing, in accordance with the terms of the written
disbursement letter from Borrowers, and in the case of each subsequent
borrowing, by wire transfer to such bank account as may be agreed upon by
Borrowers and Agent from time to time (it being agreed and understood that such
bank account may be any operating account of Borrowers, with no requirement that
such amount that is disbursed to an operating account be deposited in a Dominion
Account) or elsewhere if pursuant to a written direction from a Borrower and
(ii) the proceeds of each Revolving Credit Loan deemed requested under
subsection 3.1.1(b) shall be disbursed by Agent by way of direct payment of the
relevant interest or other Obligation. If at any time any Loan is funded by
Agent or Lenders in excess of the amount requested or deemed requested by a
Borrower, such Borrower agrees to repay the excess to Agent immediately upon the
earlier to occur of (a) such Borrower’s discovery of the error and (b) notice
thereof to such Borrower from Agent or any Lender.
     1.16.3. Payment by Lenders. Promptly, and in no event later than 12:00 noon
(Chicago time) on a proposed borrowing date, Agent shall give to each Lender
written notice by facsimile, telex or cable of the receipt by Agent from a
Borrower of any request for a Revolving Credit Loan. Each such notice shall
specify the requested

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date and amount of such Revolving Credit Loan, whether such Revolving Credit
Loan shall be subject to the LIBOR Option, and the amount of each Lender’s
advance thereunder (in accordance with its applicable Revolving Loan
Percentage). Each Lender shall, not later than 2:00 p.m. (Chicago time) on such
requested date, wire to a bank designated by Agent the amount of that Lender’s
Revolving Loan Percentage of the requested Revolving Credit Loan. The failure of
any Lender to make the Revolving Credit Loans to be made by it shall not release
any other Lender of its obligations hereunder to make its Revolving Credit Loan.
Neither Agent nor any other Lender shall be responsible for the failure of any
other Lender to make the Revolving Credit Loan to be made by such other Lender.
The foregoing notwithstanding, Agent, in its sole discretion, may from its own
funds make a Revolving Credit Loan on behalf of any Lender. In such event, the
Lender on behalf of whom Agent made the Revolving Credit Loan shall reimburse
Agent for the amount of such Revolving Credit Loan made on its behalf, on a
weekly (or more frequent, as determined by Agent in its sole discretion) basis.
In addition, Agent shall notify Lenders on a weekly (or more frequent, as
determined by Agent in its sole discretion) basis regarding settlement of the
Swingline Loans, and promptly following such notice, each Lender shall reimburse
Agent (in accordance with its applicable Revolving Loan Percentage) for the
amount of the Swingline Loans outstanding. On each such settlement date, Agent
will pay to each Lender the net amount owing to such Lender in connection with
such settlement, including without limitation amounts relating to Loans, fees,
interest and other amounts payable hereunder. The entire amount of interest
attributable to such Revolving Credit Loan for the period from the date on which
such Revolving Credit Loan was made by Agent on such Lender’s behalf until Agent
is reimbursed by such Lender, shall be paid to Agent for its own account.
     1.16.4. Authorization. Each Borrower hereby irrevocably authorizes Agent,
in Agent’s sole discretion, to advance to Neenah or another Borrower, and to
charge to the appropriate Borrower’s Loan Account hereunder as a Revolving
Credit Loan (which shall be a Base Rate Portion), a sum sufficient to pay all
interest accrued on the Obligations during the immediately preceding month, to
pay all regularly scheduled payments of principal and mandatory prepayments of
principal due and payable at any time and to pay all fees, costs and expenses
and other Obligations due and payable at any time by Borrowers to Agent or any
Lender hereunder.
     1.16.5. Letter of Credit and LC Guaranty Requests. A request for a Letter
of Credit or LC Guaranty shall be made in the following manner: a Borrower shall
give Agent and Bank (or, if the same is to be issued by a Letter of Credit
Issuer, Agent and such Letter of Credit Issuer) a written notice of its request
for the issuance of a Letter of Credit or LC Guaranty, not later than 11:00 a.m.
(Chicago, Illinois time), at least one Business Day before the proposed issuance
date thereof, in which notice such Borrower shall specify the proposed issuer,
issuance date and format and wording for the Letter of Credit or LC Guaranty
being requested (which shall be satisfactory to Agent and the Person being asked
to issue such Letter of Credit or LC Guaranty).

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Such request shall be accompanied by an executed application and reimbursement
agreement in form and substance satisfactory to Agent and the Person being asked
to issue the Letter of Credit or LC Guaranty, as well as any required corporate
resolutions or other documents reasonably requested by Agent or the Person being
asked to issue the Letter of Credit or LC Guaranty. In the event of any
inconsistency or conflict between any such application and reimbursement
agreement between a Borrower and the Person issuing a Letter of Credit or LC
Guaranty, and this Agreement, the terms and provisions of this Agreement shall
govern and control.
     1.16.6. Method of Making Requests. As an accommodation to Borrowers, unless
a Default or an Event of Default is then in existence, (i) Agent shall permit
telephonic or electronic requests for Revolving Credit Loans to Agent,
(ii) Agent and Bank, or a Letter of Credit Issuer, as applicable, may, in their
discretion, permit electronic transmittal of requests for Letters of Credit and
LC Guaranties to them, and (iii) Agent may, in Agent’s discretion, permit
electronic transmittal of instructions, authorizations, agreements or reports to
Agent. Unless a Borrower specifically directs Agent, Bank or a Letter of Credit
Issuer, as applicable in writing not to accept or act upon telephonic or
electronic communications from such Borrower (which direction shall only be
applicable to the Persons who have received the same in writing), neither Agent,
Bank, any Letter of Credit Issuer, nor any Lender shall have any liability to
any Borrower for any loss or damage suffered by any Borrower as a result of
Agent’s, Bank’s or a Letter of Credit Issuer’s honoring of any requests,
execution of any instructions, authorizations or agreements or reliance on any
reports communicated to it telephonically or electronically and purporting to
have been sent to Agent, Bank or a Letter of Credit Issuer by any Borrower
(except for any such loss or damage resulting from Agent’s, Bank’s or any Letter
of Credit Issuer’s gross negligence or willful misconduct), and neither Agent,
Bank nor any Letter of Credit Issuer shall have any duty to verify the origin of
any such communication or the authority of the Person sending it. Each
telephonic request for a Letter of Credit or LC Guaranty accepted by Agent, Bank
or a Letter of Credit Issuer, as applicable, hereunder shall be promptly
followed by a written confirmation of such request from the applicable Borrower
to Agent and Bank or such Letter of Credit Issuer, if applicable.
     1.16.7. LIBOR Portions. In the event a Borrower desires to obtain a LIBOR
Portion, such Borrower shall give Agent a LIBOR Request no later than 11:00 a.m.
(Chicago, Illinois time) on the third Business Day prior to the requested
borrowing date; provided, that neither Agent nor any Lender shall be obligated
to honor such request if a Default or Event of Default exists as of the date of
the LIBOR Request or as of the first day of the Interest Period for the
requested LIBOR Portion. Each LIBOR Request shall be irrevocable and binding on
Borrowers. In no event shall Borrowers be permitted to have outstanding at any
one time LIBOR Portions with more than seven (7) different Interest Periods.
     1.16.8. Conversion of Base Rate Portions. Provided that as of both the date
of the LIBOR Request and the first day of the Interest Period, no Default or
Event of

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Default exists, a Borrower may, on any Business Day, convert any Base Rate
Portion of such Borrower into a LIBOR Portion. If a Borrower desires to convert
a Base Rate Portion, such Borrower shall give Agent a LIBOR Request no later
then 11:00 a.m. (Chicago, Illinois time) on the third Business Day prior to the
requested conversion date. After giving effect to any conversion of Base Rate
Portions to LIBOR Portions, Borrowers shall not be permitted to have outstanding
at any one time LIBOR Portions with more than seven (7) different Interest
Periods.
     1.16.9. Continuation of LIBOR Portions. Provided that as of both the date
of the LIBOR Request and the first day of the Interest Period, no Default or
Event of Default exists, a Borrower may, on any Business Day, continue any LIBOR
Portions of such Borrower into a subsequent Interest Period of the same or a
different permitted duration. If a Borrower desires to continue a LIBOR Portion,
such Borrower shall give Agent a LIBOR Request no later than 11:00 a.m.
(Chicago, Illinois time) on the second Business Day prior to the requested
continuation date. After giving effect to any continuation of LIBOR Portions,
Borrowers shall not be permitted to have outstanding at any one time LIBOR
Portions with more than seven (7) different Interest Periods. If a Borrower
shall fail to give timely notice of its election to continue any LIBOR Portion
or portion thereof as provided above, or if such continuation shall not be
permitted, such LIBOR Portion or portion thereof, unless such LIBOR Portion
shall be repaid, shall automatically be converted into a Base Rate Portion at
the end of the Interest Period then in effect with respect to such LIBOR
Portion.
     1.16.10. Inability to Make LIBOR Portions. Notwithstanding any other
provision hereof, if any applicable law, treaty, regulation or directive, or any
change therein or in the interpretation or application thereof, shall make it
unlawful for any Lender (for purposes of this subsection 3.1.10, the term
“Lender” shall include the office or branch where such Lender or any corporation
or bank then controlling such Lender makes or maintains any LIBOR Portions) to
make or maintain its LIBOR Portions, or if with respect to any Interest Period,
Agent is unable to determine the LIBOR relating thereto, or adverse or unusual
conditions in, or changes in applicable law relating to, the London interbank
market make it, in the reasonable judgment of Agent, impracticable to fund
therein any of the LIBOR Portions, or make the projected LIBOR unreflective of
the actual costs of funds therefor to any Lender, the obligation of Agent and
Lenders to make or continue LIBOR Portions or convert Base Rate Portions to
LIBOR Portions hereunder shall forthwith be suspended during the pendency of
such circumstances and the applicable Borrower shall, if any affected LIBOR
Portions are then outstanding, promptly upon request from Agent, convert such
affected LIBOR Portions into Base Rate Portions.
     1.17. Payments.
          Except where evidenced by notes or other instruments issued or made by
one or more Borrowers to any Lender and accepted by such Lender specifically
containing payment instructions that are in conflict with this Section 3.2 (in
which case the conflicting provisions of

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said notes or other instruments shall govern and control), the Obligations shall
be payable as follows:
     1.17.1. Principal.
     Principal on account of Revolving Credit Loans shall be payable by
Borrowers to Agent for the ratable benefit of Lenders immediately upon the
earliest of (i) at any time when a Dominion Period is in effect, the receipt by
Agent or any Borrower of any proceeds of any of the Collateral (except as
otherwise provided herein), including without limitation as required pursuant to
subsections 3.3.1 and 6.2.4, to the extent of said proceeds, subject to
Borrowers’ rights to reborrow such amounts in compliance with subsection 1.1.1
hereof, (ii) the acceleration of the Revolving Credit Loans in accordance with
the terms of Section 10.2, (iii) subject to the provisions of subsection 1.1.2
and the proviso to this subsection 3.2.1, at all times that the calculations set
forth in subsection 1.1.1 reflect a negative amount, to the extent of such
amount on demand by Agent or Majority Lenders therefor, or (iv) termination of
this Agreement pursuant to Section 4 hereof; provided, however, that, if an
Overadvance shall exist at any time, Borrowers shall, on demand therefor (or, in
the case of an Overadvance caused by, and created at the time of, Agent’s
establishment of a new reserve or a new eligibility criterion, within 5 days of
demand therefor), jointly and severally repay the Overadvance. Each payment
(including principal prepayment) by a Borrower on account of principal of the
Revolving Credit Loans shall be applied first to Base Rate Portions and then to
LIBOR Portions.
     1.17.2. Interest.
     (i) Base Rate Portion. Interest accrued on Base Rate Portions shall be due
and payable on the earliest of (1) the first calendar day of each month (for the
immediately preceding month), computed through the last calendar day of the
preceding month, (2) the acceleration of such Base Rate Portion in accordance
with the terms of Section 10.2 or (3) termination of this Agreement pursuant to
Section 4 hereof.
     (ii) LIBOR Portion. Interest accrued on each LIBOR Portion shall be due and
payable on each LIBOR Interest Payment Date and on the earlier of (1) the
acceleration of such LIBOR Portion in accordance with the terms of Section 10.2
or (2) termination of this Agreement pursuant to Section 4 hereof.
     1.17.3. Costs, Fees and Charges. Costs, fees and charges payable pursuant
to this Agreement shall be jointly and severally payable by Borrowers to Agent,
as and when provided in Section 2 or Section 3 hereof, as applicable to Agent or
a Lender, as applicable, or to any other Person designated by Agent or such
Lender in writing.

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     1.17.4. Other Obligations. The balance of the Obligations (other than
unasserted contingent indemnity obligations) requiring the payment of money, if
any, shall be jointly and severally payable by Borrowers to Agent for
distribution to Lenders, as appropriate, as and when provided in this Agreement,
the Other Agreements or the Security Documents, or on demand, whichever is
later.
     1.17.5. Prepayment of/Failure to Borrow LIBOR Portions. Borrowers may
prepay a LIBOR Portion only upon at least three (3) Business Days prior written
notice to Agent (which notice shall be irrevocable). Subject to the terms of
subsection 3.3.4, in the event of (i) the payment of any principal of any LIBOR
Portion other than on the last day of the Interest Period applicable thereto
(including as a result of an Event of Default), (ii) the conversion of any LIBOR
Portion other than on the last day of the Interest Period applicable thereto, or
(iii) the failure to borrow, convert, continue or prepay any LIBOR Portion on
the date specified in any notice delivered pursuant hereto, then, in any such
event, Borrowers shall compensate each Lender for the actual loss, cost and
expense incurred by such Lender that is attributable to such event, together
with any normal, reasonable and customary administrative charges applicable
thereto.
     1.18. Mandatory and Optional Prepayments.
     1.18.1. Proceeds of Sale, Loss, Destruction or Condemnation of Collateral.
Except for dispositions of assets permitted by subsection 8.2.9(ii) and
dispositions in accordance with this Agreement of assets that are subject to a
Lien permitted by subsection 8.2.5(iv) (in each case, the proceeds of which
shall, at any time when a Dominion Period is in effect, be applied to reduce the
outstanding principal balance of the Revolving Credit Loans, but shall not
permanently reduce the Revolving Loan Commitments), if any Borrower or any of
its Subsidiaries sells any of the Collateral or if any of the Collateral is
lost, damaged or destroyed or taken by condemnation, at any time when a Dominion
Period is in effect, the applicable Borrower shall, unless otherwise agreed by
Majority Lenders, pay to Agent for the ratable benefit of Lenders as and when
received by such Borrower or such Subsidiary and as a mandatory prepayment of
the Loans, as herein provided, a sum equal to the proceeds (including insurance
payments but net of costs and taxes incurred in connection with such sale or
event) received by such Borrower or such Subsidiary from such sale, loss,
damage, destruction or condemnation.
          Prepayments pursuant to this subsection 3.3.1 shall, subject to the
third sentence of subsection 3.4.1, be applied first, to Agent’s costs and
expenses relating to the relevant transaction, and second, to reduce the
outstanding principal balance of the Revolving Credit Loans, but shall not
permanently reduce the Revolving Loan Commitments (it being understood that
prepayments required to be made pursuant to subsection 3.3.3 shall also be
applied as set forth in this sentence). In addition, if the Collateral subject
to such sale, loss, damage, destruction or condemnation consists of Eligible
Accounts, Eligible Extended Municipal Accounts, Eligible Extra Extended
Municipal Accounts, Eligible Inventory or Eligible Patterns and Core Boxes, such
prepayment shall be

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specifically applied against the portion of the Borrowing Base predicated on
such Collateral.
          Notwithstanding anything to the contrary set forth in this subsection
3.3.1, if with respect to any disposition, loss, damage, destruction or
condemnation of Property that constitutes “Noteholder Priority Collateral” under
and as defined in the Secured Bond Intercreditor Agreement, Borrowers use the
proceeds thereof to permanently reduce the outstanding principal balance of,
and/or pay accrued and unpaid interest, costs and expenses relating to, the
Secured Bonds, Borrowers shall not be obligated to make any prepayment of the
Loans otherwise required by this subsection 3.3.1 with respect to such proceeds.
In addition, the provisions of this subsection 3.3.1 shall be subject to the
terms and conditions of the Secured Bond Intercreditor Agreement and, in the
event of any conflict between the application of proceeds contemplated by this
subsection 3.3.1 and the application of such proceeds provided for under the
Secured Bond Intercreditor Agreement, the Secured Bond Intercreditor Agreement
shall govern and control.
          Nothing in this subsection 3.3.1 shall be construed to constitute
Agent’s or any Lender’s consent to the consummation of any disposition or other
transaction that is not otherwise permitted by another provision of this
Agreement (including, without limitation, subsection 8.2.9 hereof) or another
Loan Document.
          1.18.2. Proceeds from Issuance of Additional Indebtedness or Equity.
If a Dominion Period is in effect and Ultimate Parent, Parent or any Borrower
issues any additional Indebtedness or issues any additional equity for cash
(other than equity (including stock options) issued to officers and employees in
connection with incentive plans, equity resulting in proceeds used to make
Capital Expenditures and equity resulting in proceeds used to consummate a
Permitted Acquisition, in each case to the extent that the proceeds of such
equity are promptly used as consideration for all or a portion of the purchase
price for such Capital Expenditure or Permitted Acquisition), Borrowers shall
pay to Agent for the ratable benefit of Lenders, when and as received by
Ultimate Parent, Parent or any Borrower and as a mandatory prepayment of the
Obligations, a sum equal to 50% of the net proceeds to Ultimate Parent, Parent
or such Borrower of the issuance of such Indebtedness or equity; provided, that
the foregoing shall not apply in connection with an issuance of Indebtedness or
equity to a Person that is a Related Person of a Borrower. Any such prepayment
shall be applied to the Loans in the manner specified in the second sentence of
subsection 3.3.1 until payment thereof in full.
          1.18.3. Other Mandatory Prepayments. At any time when a Dominion
Period is in effect, if any Borrower or any Subsidiary receives any cash
proceeds from any tax refunds actually received, indemnity payments or pension
plan reversions, Borrowers shall jointly and severally pay to Agent for the
benefit of Lenders, when and as received by such Borrower or such Subsidiary,
and as a mandatory prepayment of the Obligations, a sum equal to 100% of such
proceeds of such tax refund, indemnity payment or pension plan reversions. Any
such prepayment shall be

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applied to the Obligations in the manner specified in the second sentence of
subsection 3.3.1 until payment thereof in full.
          1.18.4. LIBOR Portions. If the application of any payment made in
accordance with the provisions of this Section 3.3 at a time when no Event of
Default has occurred and is continuing would result in termination of a LIBOR
Portion prior to the last day of the Interest Period for such LIBOR Portion, the
amount of such prepayment shall not be applied to such LIBOR Portion, but will,
at Borrowers’ option, be held by Agent in a non-interest bearing account at a
Lender or another bank satisfactory to Agent in its discretion, which account is
in the name of Agent and from which account only Agent can make any withdrawal,
in each case to be applied as such amount would otherwise have been applied
under this Section 3.3 at the earlier to occur of (i) the last day of the
relevant Interest Period or (ii) the occurrence of a Default or an Event of
Default.
          1.18.5. [Intentionally Omitted]
          1.18.6. Optional Reductions of Revolving Loan Commitments. Borrowers
may, at their option from time to time upon not less than 3 Business Days’ prior
written notice to Agent, terminate in whole or permanently reduce ratably in
part, the unused portion of the Revolving Loan Commitments, provided, however,
that (i) each such partial reduction shall be in an amount of $5,000,000 or
integral multiples of $1,000,000 in excess thereof and (ii) unless the Agreement
is terminated pursuant to subsection 4.2.2, the aggregate of all optional
reductions to the Revolving Credit Commitments may not exceed $30,000,000 during
the Term. Except for charges under subsection 3.2.5 applicable to prepayments of
LIBOR Portions, such prepayments shall be without premium or penalty.
          1.19. Application of Payments and Collections.
          1.19.1. Collections. All items of payment received by Agent in
immediately available funds by 12:00 noon, Chicago, Illinois, time, on any
Business Day shall be deemed received on that Business Day. All items of payment
received after 12:00 noon, Chicago, Illinois, time, on any Business Day shall be
deemed received on the following Business Day. If as the result of collections
of Accounts as authorized by subsection 6.2.4 hereof or otherwise (including,
without limitation, as authorized under subsection 3.3.3 and under subsection
6.1.2), a credit balance exists in the Loan Account, such credit balance shall
not accrue interest in favor of Borrowers, but shall be disbursed to a Borrower
or otherwise at a Borrower’s direction in the manner set forth in subsection
3.1.2, upon a Borrower’s request at any time, so long as no Event of Default
then exists (it being acknowledged and agreed that such Borrower may direct the
disbursement of such credit balance to an operating account, with no requirement
that such amount that is disbursed to such operating account be deposited in a
Dominion Account). Agent may at its option, offset such credit balance against
any of the Obligations upon and during the continuance of an Event of Default.

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          1.19.2. Apportionment, Application and Reversal of Payments. Principal
and interest payments shall be apportioned ratably among Lenders (according to
the unpaid principal balance of the Loans to which such payments relate held by
each Lender). All payments shall be remitted to Agent and all such payments not
relating to principal or interest of specific Loans, or not constituting payment
of specific fees, and all proceeds of Accounts, or, except as provided in
subsection 3.3.1, other Collateral received by Agent, including without
limitation all amounts deposited in a Dominion Account, shall be applied,
ratably, subject to the provisions of this Agreement and whether or not an Event
of Default exists, first, to pay any fees, indemnities, or expense
reimbursements (other than amounts related to Product Obligations) then due to
Agent or Lenders from any Borrower; second, to pay interest due from Borrowers
in respect of all Loans, including Swingline Loans and Agent Loans; third, to
pay or prepay principal of Swingline Loans and Agent Loans; fourth, to pay or
prepay principal of the Revolving Credit Loans (other than Swingline Loans and
Agent Loans) and unpaid reimbursement obligations in respect of Letters of
Credit; fifth, to pay an amount to Agent equal to all outstanding Letter of
Credit Obligations to be held as cash Collateral for such Obligations (in an
amount of 105% of the aggregate amount thereof); sixth, to the payment of any
other Obligation (other than amounts related to Product Obligations) due to the
Agent or any Lender by any Borrower; and seventh, to pay any amounts owing in
respect of Product Obligations. As between Agent and Borrowers, after the
occurrence and during the continuance of an Event of Default, Agent shall have
the continuing exclusive right to apply and reapply any and all such payments
and collections received at any time or times hereafter by Agent or its agent
against the Obligations, in such manner as Agent may deem advisable,
notwithstanding any entry by Agent or any Lender upon any of its books and
records.
          1.20. All Loans to Constitute One Obligation.
          The Loans, Letters of Credit and LC Guarantees shall constitute one
general joint and several Obligation of Borrowers, and shall be secured by
Agent’s Lien upon all of the Collateral.
          1.21. Loan Account.
          Agent shall enter all Loans as debits to one or more loan accounts
(each, a “Loan Account”) and shall also record in the Loan Account all payments
made by or on behalf of each Borrower on any Obligations and all proceeds of
Collateral which are finally paid to Agent, and may record therein, in
accordance with customary accounting practice, other debits and credits,
including interest and all charges and expenses properly chargeable to each
Borrower.
          1.22. Statements of Account.
          Agent will account to Borrowers monthly with a statement of Loans,
charges and payments made pursuant to this Agreement during the immediately
preceding month, and such account rendered by Agent shall be deemed final,
binding and conclusive upon Borrowers

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absent demonstrable error unless Agent is notified by Borrowers in writing to
the contrary within 90 days of the date each accounting is received by
Borrowers. Such notice shall only be deemed an objection to those items
specifically objected to therein.
          1.23. Increased Costs.
          If any law or any governmental or quasi-governmental rule, regulation,
policy, guideline or directive (whether or not having the force of law, but if
not having the force of law, being a guideline or directive with which such
Lender is accustomed to comply) adopted or implemented after the date of this
Agreement and having general applicability to all banks or finance companies
within the jurisdiction in which any Lender operates (excluding, for the
avoidance of doubt, the effect of and phasing in of capital requirements or
other regulations or guidelines passed prior to the date of this Agreement), or
any interpretation or application thereof by any governmental authority charged
with the interpretation or application thereof, or the compliance of such Lender
therewith, shall:
     (i) (1) subject such Lender to any United States taxes with respect to this
Agreement (other than (a) any tax based on or measured by net income or
otherwise in the nature of a net income tax, including, without limitation, any
franchise tax or any similar tax based on capital, net worth or comparable basis
for measurement and (b) any tax collected by a withholding on payments and which
neither is computed by reference to the net income of the payee nor is in the
nature of an advance collection of a tax based on or measured by the net income
of the payee) or (2) change the basis of taxation of payments to such Lender of
principal, fees, interest or any other amount payable hereunder or under any
Loan Documents (other than in respect of (a) any tax based on or measured by net
income or otherwise in the nature of a net income tax, including, without
limitation, any franchise tax or any similar tax based on capital, net worth or
comparable basis for measurement and (b) any tax collected by a withholding on
payments and which neither is computed by reference to the net income of the
payee nor is in the nature of an advance collection of a tax based on or
measured by the net income of the payee; provided, that in either case the
Lender shall have complied with the requirements of Section 2.12.2 to the extent
applicable to such Lender);
     (ii) impose, modify or hold applicable any reserve (except any reserve
taken into account in the determination of the applicable LIBOR), special
deposit, assessment or similar requirement against assets held by, or deposits
in or for the account of, advances or loans by, or other credit extended by, any
office of such Lender, including (without limitation) pursuant to Regulation D
of the Board of Governors of the Federal Reserve System; or
     (iii) impose on such Lender or the London interbank market any other
condition with respect to any Loan Document;

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and the result of any of the foregoing is to increase the cost to such Lender of
making, renewing or maintaining Loans hereunder or the result of any of the
foregoing is to reduce the rate of return on such Lender’s capital as a
consequence of its obligations hereunder, or the result of any of the foregoing
is to reduce the amount of any payment (whether of principal, interest or
otherwise) in respect of any of the Loans, then, in any such case, Borrowers
shall jointly and severally pay such Lender, upon demand and certification not
later than sixty (60) days following its receipt of notice of the imposition of
such increased costs, such additional amount as will compensate such Lender for
such additional cost or such reduction, as the case may be, to the extent such
Lender has not otherwise been compensated, with respect to a particular Loan,
for such increased cost as a result of an increase in the Base Rate or the
LIBOR. An officer of the applicable Lender shall reasonably determine the amount
of such additional cost or reduced amount using reasonable averaging and
attribution methods and shall certify the amount of such additional cost or
reduced amount to Borrowers, which certification shall include a written
explanation of such additional cost or reduction to Borrowers. Such
certification shall be conclusive absent manifest error. If a Lender claims any
additional cost or reduced amount pursuant to this Section 3.8, then such Lender
shall use reasonable efforts (consistent with legal and regulatory restrictions)
to designate a different lending office (and update the Register, as applicable)
or to file any certificate or document reasonably requested by Borrowers, or
take any other action requested by Borrowers that is not inconsistent with such
Lender’s internal policies, if the making of such designation or filing or the
taking of such action would avoid the need for, or reduce the amount of, any
such additional cost or reduced amount and would not in good faith, in the sole
reasonable discretion of such Lender, be otherwise disadvantageous to such
Lender.
          1.24. Basis for Determining Interest Rate Inadequate.
          In the event that Agent or any Lender shall have determined that:
     (i) reasonable means do not exist for ascertaining the LIBOR for any
Interest Period; or
     (ii) Dollar deposits in the relevant amount and for the relevant maturity
are not available in the London interbank market with respect to a proposed
LIBOR Portion, or a proposed conversion of a Base Rate Portion into a LIBOR
Portion; then
Agent or such Lender shall give Borrowers prompt written, telephonic or
electronic notice of the determination of such effect. If such notice is given,
(i) any such requested LIBOR Portion shall be made as a Base Rate Portion,
unless Borrowers shall notify Agent no later than 10:00 a.m. (Chicago, Illinois
time) three (3) Business Days prior to the date of such proposed borrowing that
the request for such borrowing shall be canceled or made as an unaffected type
of LIBOR Portion, and (ii) any Base Rate Portion which was to have been
converted to an affected type of LIBOR Portion shall be continued as or
converted into a Base Rate Portion, or, if Borrowers shall notify Agent, no
later than 10:00 a.m. (Chicago, Illinois time) three (3) Business Days prior to
the proposed conversion, shall be maintained as an unaffected type of LIBOR
Portion.

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          1.25. Sharing of Payments, Etc.
          If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off, or otherwise) on
account of any Loan made by it in excess of its ratable share of payments on
account of Loans made by all Lenders, such Lender shall forthwith purchase from
each other Lender such participation in such Loan as shall be necessary to cause
such purchasing Lender to share the excess payment ratably with each other
Lender; provided, that if all or any portion of such excess payment is
thereafter recovered from such purchasing Lender, such purchase from each Lender
shall be rescinded and such Lender shall repay to the purchasing Lenders the
purchase price to the extent of such recovery, together with an amount equal to
such Lender’s ratable share (according to the proportion of (i) the amount of
such Lender’s required repayment to (ii) the total amount so recovered from the
purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered. Borrowers agree
that any Lender so purchasing a participation from another Lender pursuant to
this Section 3.10 may, to the fullest extent permitted by law, exercise all its
rights of payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of each
Borrower in the amount of such participation. Notwithstanding anything to the
contrary contained herein, all purchases and repayments to be made under this
Section 3.10 shall be made through Agent.
          1.26. Optional Prepayment/Replacement of Lenders.
          If (a) Borrowers are required to pay increased sums to a particular
Lender pursuant to the last sentence of subsection 2.12.1 or Section 3.8,
(b) Borrowers are notified that a Lender will not make or maintain LIBOR
Portions pursuant to subsection 3.1.10 or Section 3.9, (c) a particular Lender
refuses or fails to execute a waiver of any provision hereof or a consent to any
amendment hereto that has been requested by Borrowers and approved by Majority
Lenders or (d) a particular Lender has exercised its option to refuse to fund
additional Revolving Credit Loans during the existence of a Default or Event of
Default pursuant to subsection 10.2.2 at a time when Majority Lenders continue
funding Revolving Credit Loans notwithstanding the existence of such Default or
Event of Default (any such Lender, an “Affected Lender”), Borrowers may obtain,
at Borrowers’ expense, a replacement Lender (“Replacement Lender”) for such
Affected Lender, which Replacement Lender shall be reasonably satisfactory to
Agent. In the event Borrowers obtain a Replacement Lender that will refinance
all outstanding Obligations owed to such Affected Lender and assume its entire
Revolving Loan Commitment hereunder within one hundred twenty (120) days
following notice of Borrowers’ intention to do so, the Affected Lender shall
sell and assign all of its rights and delegate all of its obligations under this
Agreement to such Replacement Lender in accordance with the provisions of
subsection 11.9.1, provided that Borrowers have reimbursed such Affected Lender
for (1) any fees owing by such Affected Lender under subsection 11.9.1 and
(2) the amount of fees and expenses as to which such Affected Lender is entitled
to reimbursement by Borrowers hereunder through the date of such sale and
assignment.

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SECTION 4. TERM AND TERMINATION
          Subject to the right of Lenders to cease making Loans to Borrowers
during the continuance of any Default or Event of Default, this Agreement shall
be in effect through and including December 31, 2011 (the “Term”), unless
terminated as provided in Section 4.2 hereof.
     1.27. Termination.
     1.27.1. Termination by Lenders. Agent may, and at the direction of Majority
Lenders shall, terminate this Agreement upon notice during the continuance of an
Event of Default.
     1.27.2. Termination by Borrowers. Upon at least 10 days prior written
notice to Agent and Lenders, Borrowers may, at their option, terminate this
Agreement; provided, however, no such termination shall be effective until
Borrowers have paid or collateralized to Agent’s reasonable satisfaction all of
the Obligations (other than unasserted contingent indemnity obligations) in
immediately available funds, all Letters of Credit and LC Guaranties have
expired, terminated or have been cash collateralized (in an amount equal to 105%
of the LC Amount) to Agent’s reasonable satisfaction and Borrowers have complied
with subsection 3.2.5. Without limiting Borrowers’ right to reduce the amount of
the Revolving Loan Commitments pursuant to subsection 3.3.6, Borrowers may elect
to terminate this Agreement in its entirety only. No section of this Agreement
or type of Loan available hereunder may be terminated singly.
     1.27.3. Effect of Termination. All of the Obligations shall be immediately
due and payable upon the termination date stated in any notice of termination of
this Agreement. All undertakings, agreements, covenants, warranties and
representations of Borrowers contained in the Loan Documents shall survive any
such termination and Agent shall retain its Liens in the Collateral and Agent
and each Lender shall retain all of its rights and remedies under the Loan
Documents notwithstanding such termination until Borrowers have paid or
collateralized to Agent’s reasonable satisfaction all of the Obligations (other
than unasserted contingent indemnity obligations) in immediately available
funds, all Letters of Credit and LC Guaranties have expired, terminated or have
been cash collateralized (in an amount equal to 105% of the LC Amount) to
Agent’s reasonable satisfaction and Borrowers have complied with subsection
3.2.5; and, upon such payments and other events having occurred, Agent’s Liens
on the Collateral shall terminate (other than Collateral specifically retained
to collateralize outstanding Obligations) and Agent shall, at the expense of
Borrowers, execute and deliver any and all termination statements, releases and
other documents reasonably requested by Borrowers to evidence such termination.
Notwithstanding the foregoing, Agent shall not be required to terminate its
Liens in the Collateral unless, solely to the extent necessary to protect
against any loss or damage Agent may incur as a result of dishonored checks or
other returned items of payment received by Agent from any Borrower or any
Account Debtor and applied to the Obligations, Agent shall, at its option,
(i) have received a written

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agreement reasonably satisfactory to Agent, executed by Borrowers and by any
Person whose loans or other advances to any Borrower are used in whole or in
part to satisfy the Obligations, indemnifying Agent and each Lender from any
such loss or damage or (ii) have retained cash Collateral or other Collateral
for such period of time as Agent, in its reasonable discretion, may deem
necessary to protect Agent and each Lender from any such loss or damage.
SECTION 5. SECURITY INTERESTS
Notwithstanding anything herein to the contrary, the liens and security
interests granted to the Agent pursuant to this Agreement and the exercise of
any right or remedy by the Agent hereunder, are subject to the limitations and
provisions of the Intercreditor Agreement dated as of December 29, 2006 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Intercreditor Agreement”), among Agent, The Bank of New York Trust Company,
N.A., Neenah and the Subsidiaries of Neenah party thereto. In the event of any
conflict between the terms of the Intercreditor Agreement and the terms of this
Agreement, the terms of the Intercreditor Agreement shall govern.
          To secure the prompt payment and performance to Agent and each Lender
of the Obligations, each Borrower hereby grants to Agent for the benefit of
itself and each Lender (and hereby reaffirms its prior grant, pursuant to the
terms of the Original Loan Agreement, to Agent for the benefit of itself and
each Lender, of) a continuing Lien upon all of such Borrower’s assets, including
all of the following Property and interests in Property of such Borrower,
whether now owned or existing or hereafter created, acquired or arising and
wheresoever located:
          (i) Accounts;
          (ii) Certificated Securities;
          (iii) Chattel Paper;
          (iv) Computer Hardware and Software and all rights with respect
thereto, including, any and all licenses, options, warranties, service
contracts, program services, test rights, maintenance rights, support rights,
improvement rights, renewal rights and indemnifications, and any substitutions,
replacements, additions or model conversions of any of the foregoing;
          (v) Contract Rights;
          (vi) Deposit Accounts;
          (vii) Documents;
          (viii) Equipment;
          (ix) Financial Assets;

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          (x) Fixtures;
          (xi) General Intangibles, including Payment Intangibles and Software;
          (xii) Goods (including all of its Equipment, Fixtures and Inventory),
and all accessions, additions, attachments, improvements, substitutions and
replacements thereto and therefor;
          (xiii) Instruments;
          (xiv) Intellectual Property;
          (xv) Inventory;
          (xvi) Investment Property;
          (xvii) money (of every jurisdiction whatsoever);
          (xviii) Letter-of-Credit Rights;
          (xix) Payment Intangibles;
          (xx) Security Entitlements;
          (xxi) Software;
          (xxii) Supporting Obligations;
          (xxiii) Uncertificated Securities; and
          (xxiv) to the extent not included in the foregoing, all other personal
property of any kind or description;
together with all books, records, writings, data bases, information and other
property relating to, used or useful in connection with, or evidencing,
embodying, incorporating or referring to any of the foregoing, and all Proceeds,
products, offspring, rents, issues, profits and returns of and from any of the
foregoing; provided, that to the extent that the provisions of any lease,
license, contract, permit, Document or Instrument expressly prohibit (which
prohibition is enforceable under applicable law) any assignment thereof (unless
such prohibition specifically excludes from its scope an assignment for
collateral security purposes) or the grant of a Lien therein, (i) Agent will not
enforce its Lien in the applicable Borrower’s rights under such lease, license,
contract, permit, Document or Instrument (other than in respect of the Proceeds
thereof) for so long as such prohibition continues, and (ii) to the extent a
violation of any such prohibition caused by the Lien under this Section 5.1
would allow the counterparty to any such lease, license, contract, permit,
Document or Instrument to terminate the same under applicable law, then such
lease, license, contract, permit, Document or Instrument (other than in respect
of the Proceeds thereof) shall not constitute Collateral for so long as such
prohibition continues; it

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being understood that upon request of Agent, such Borrower will in good faith
use reasonable efforts to obtain consent for the creation of a Lien in favor of
Agent (and to Agent’s enforcement of such Lien) in any lease, license, contract,
permit, Document or Instrument that prohibits any assignment thereof or the
grant of a Lien therein; and provided, further, that no Lien is granted in any
“intent to use” trademark applications until such time as a verified statement
of use is filed.
     1.28. Other Collateral.
     1.28.1. Commercial Tort Claims. The applicable Borrower shall promptly
notify Agent in writing upon having a Commercial Tort Claim that arises after
the Closing Date against any third party and, upon request of Agent, promptly
enter into an amendment to this Agreement and take such other action reasonably
deemed necessary by Agent to give Agent a security interest in any such
Commercial Tort Claim. Each Borrower represents and warrants that as of the date
of this Agreement, to its knowledge, it does not have any Commercial Tort
Claims.
     1.28.2. Other Collateral. The applicable Borrower shall (i) promptly notify
Agent in writing upon acquiring or otherwise obtaining any Collateral after the
date hereof that consists of, Deposit Accounts, Investment Property or
Letter-of-Credit Rights in (or relating to) an amount in excess of $250,000 or
Electronic Chattel Paper in (or relating to) an amount in excess of $1,000,000
and, upon the request of Agent, promptly execute such other documents, and do
such other acts or things deemed appropriate by Agent to deliver to Agent
control with respect to such Collateral; (ii) promptly notify Agent in writing
upon acquiring or otherwise obtaining any Collateral after the date hereof that
consists of, Documents or Instruments in (or relating to) an amount in excess of
$250,000 and, upon the request of Agent, will promptly execute such other
documents, and take such other action deemed appropriate by Agent to deliver to
Agent possession of such Documents which are negotiable and Instruments, and,
with respect to nonnegotiable Documents, to have such nonnegotiable Documents
issued in the name of Agent; (iii) promptly notify Agent in writing upon
acquiring or otherwise obtaining any Collateral after the date hereof that
consists of, motor vehicles and other Goods subject to a certificate of title
statute having an aggregate amount in excess of $250,000 and, upon the request
of Agent, promptly deliver such certificates of title, execute such other
documents, and do such other acts or things deemed appropriate by Agent to cause
Agent to have a perfected security interest with respect to such Collateral; and
(iv) with respect to any Collateral having a value in excess of $250,000 that is
in the possession of a third party, other than Certificated Securities and Goods
covered by a Document, obtain an acknowledgement from the third party that it is
holding the Collateral for the benefit of Agent.
     1.29. Lien Perfection; Further Assurances.
          Each Borrower shall execute such instruments, assignments or documents
as are necessary to perfect Agent’s Lien upon any of the Collateral and shall
take such other action as

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may be required to perfect or to continue the perfection of Agent’s Lien upon
the Collateral. Unless prohibited by applicable law, each Borrower hereby
authorizes Agent to execute and file any such financing statement, including,
without limitation, financing statements that indicate the Collateral (i) as all
assets of such Borrower or words of similar effect, or (ii) as being of an equal
or lesser scope, or with greater or lesser detail, than as set forth in
Section 5.1, on such Borrower’s behalf. Each Borrower also hereby ratifies its
authorization for Agent to have filed in any jurisdiction any like financing
statements or amendments thereto if filed prior to the date hereof. The parties
agree that a carbon, photographic or other reproduction of this Agreement shall
be sufficient as a financing statement and may be filed in any appropriate
office in lieu thereof. At Agent’s request, each Borrower shall also promptly
execute or cause to be executed and shall deliver to Agent any and all
documents, instruments and agreements reasonably deemed necessary by Agent to
give effect to or carry out the terms of the Loan Documents.
          1.30. Lien on Realty.
          The due and punctual payment and performance of the Obligations shall
also be secured by the Lien created by Mortgages upon all real Property of each
Borrower now or hereafter owned. Each Mortgage (and, in the case of Mortgages
dated on or about the Original Closing Date, Mortgage amendments reflecting the
amended and restated loan facility provided for hereunder and Mortgage
subordinations reflecting the subordination of the Liens in favor of Agent on
such real Property to the Liens on such real Property in favor of the Secured
Bond Trustee securing the Secured Bonds) shall be executed by the applicable
Borrower in favor of Agent. Each Mortgage and Mortgage amendment, as applicable,
shall be duly recorded, at Borrowers’ joint and several expense, in each office
where such recording is required to constitute a fully perfected first Lien
(subject to Permitted Liens) on the real Property covered thereby. If so
requested by Agent or Majority Lenders, the applicable Borrower shall deliver to
Agent, at Borrowers’ joint and several expense, mortgagee title insurance
policies (or, in the case of title insurance policies issued in connection with
Mortgages dated on or about the Original Closing Date, date-down endorsements)
issued by a title insurance company that is selected by Borrowers and reasonably
satisfactory to Agent, which policies and endorsements, as applicable, shall be
in form and substance reasonably satisfactory to Agent and shall insure a valid
first Lien (subject to Permitted Liens) in favor of Agent, for the benefit of
itself and the Lenders, on the Property covered by each Mortgage (other than
with respect to the Ashland Parcel and the real Property of Neenah located at
500 Winneconne Avenue in Neenah, Wisconsin), subject only to those exceptions
reasonably acceptable to Agent and its counsel. The applicable Borrower shall
deliver to Agent such other documents, including, without limitation, as-built
survey prints of the real Property, as Agent and its counsel may reasonably
request relating to the real Property subject to the Mortgages, other than with
respect to the Ashland Parcel and the real Property of Neenah located at 500
Winneconne Avenue in Neenah, Wisconsin.
SECTION 6. COLLATERAL ADMINISTRATION
     1.30.1. Location of Collateral. All Collateral, other than Goods in
transit, motor vehicles, Goods (other than Eligible Inventory) in the possession
of employees in the ordinary course of business and other miscellaneous
immaterial items of

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Collateral not having a value that exceeds $250,000 in the aggregate, will at
all times be kept by a Borrower or one of its Subsidiaries, or a bailee,
distributor, consignee, warehousemen or similar party of a Borrower or one of
its Subsidiaries, at one or more of the business locations set forth in
Exhibit 6.1.1 hereto, as updated by Borrowers providing prior written notice to
Agent of any new location.
     1.30.2. Insurance of Collateral. Borrowers shall maintain and pay for
insurance upon all Collateral wherever located and with respect to the business
of each Borrower and each of its Subsidiaries, covering casualty, hazard, public
liability, workers’ compensation, business interruption and such other risks in
such amounts and with such insurance companies as are reasonably satisfactory to
Agent. Borrowers shall deliver certified copies of such policies to Agent as
promptly as practicable, with satisfactory lender’s loss payable endorsements,
naming Agent (on behalf of the Lenders) as a loss payee, assignee or additional
insured, as appropriate, as its interest may appear, showing only such other
loss payees, assignees and additional insureds as are satisfactory to Agent and
with respect to business interruption insurance, an executed collateral
assignment thereof. Each policy of insurance or endorsement shall contain a
clause requiring the insurer to give not less than 10 days’ prior written notice
to Agent in the event of cancellation of the policy for nonpayment of premium
and not less than 30 days’ prior written notice to Agent in the event of
cancellation of the policy for any other reason whatsoever and a clause
specifying that the interest of Agent shall not be impaired or invalidated by
any act or neglect of any Borrower, any of its Subsidiaries or the owner of the
Property or by the occupation of the premises for purposes more hazardous than
are permitted by said policy. Borrowers agree to deliver to Agent, promptly as
rendered, true copies of all reports made in any reporting forms to insurance
companies. At any time when a Dominion Period is in effect, all net proceeds of
business interruption insurance (if any) of each Borrower and its Subsidiaries
shall be remitted to Agent for application to the outstanding balance of the
Revolving Credit Loans (subject to the third sentence of subsection 3.4.1).
     By its execution of this Agreement, Agent acknowledges that, as of the date
hereof, the insurance coverages of Borrowers and its Subsidiaries and the
insurance companies providing such coverages are satisfactory to Agent in its
reasonable judgment.
     Unless Borrowers provide Agent with evidence of the insurance coverage
required by this Agreement, Agent may purchase insurance at Borrowers’ joint and
several expense to protect Agent’s interests in the Properties of each Borrower
and its Subsidiaries. This insurance may, but need not, protect the interests of
each Borrower and its Subsidiaries. The coverage that Agent purchases may not
pay any claim that a Borrower or any Subsidiary of such Borrower makes or any
claim that is made against a Borrower or any such Subsidiary in connection with
said Property. Borrowers may later cancel any insurance purchased by Agent, but
only after providing Agent with evidence that Borrowers and their Subsidiaries
have obtained insurance as required by this Agreement. If Agent purchases
insurance, Borrowers will be jointly and severally

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responsible for the costs of that insurance, including interest and any other
charges Agent may impose in connection with the placement of insurance, until
the effective date of the cancellation or expiration of the insurance. The costs
of the insurance may be added to the Obligations. The costs of the insurance may
be more than the cost of insurance that Borrowers and the Subsidiaries may be
able to obtain on their own.
     1.30.3. Protection of Collateral. Neither Agent nor any Lender shall be
liable or responsible in any way for the safekeeping of any of the Collateral or
for any loss or damage thereto (except for reasonable care in the custody
thereof while any Collateral is in Agent’s or any Lender’s actual possession) or
for any diminution in the value thereof, or for any act or default of any
warehouseman, carrier, forwarding agency, or other person whomsoever, but the
same shall be at Borrowers’ sole risk.
     1.31. Administration of Accounts.
     1.31.1. Records, Schedules and Assignments of Accounts. Each Borrower shall
keep accurate and complete records in all material respects of its Accounts and
all payments and collections thereon and shall submit to Agent on such periodic
basis as Agent shall reasonably request a sales and collections report for the
preceding period, in form consistent with the reports currently prepared by such
Borrower with respect to such information. Concurrently with the delivery of
each Borrowing Base Certificate described in subsection 8.1.4, or more
frequently as reasonably requested by Agent, from and after the date hereof,
each Borrower shall deliver to Agent a detailed aged trial balance of all of its
Accounts, specifying the names, addresses, face values, dates of invoices and
due dates for each Account Debtor obligated on an Account so listed (“Schedule
of Accounts”), and upon Agent’s request therefor, copies of proof of delivery
and the original copy of all documents, including, without limitation, repayment
histories and present status reports relating to the Accounts so scheduled and
such other matters and information relating to the status of then existing
Accounts as Agent shall reasonably request. During the continuance of an Event
of Default, if requested by Agent, each Borrower shall execute and deliver to
Agent formal written assignments of all of its Accounts weekly, which shall
include all Accounts that have been created since the date of the last
assignment, together with copies of invoices or invoice registers related
thereto.
     1.31.2. Discounts, Allowances, Disputes. If a Borrower grants any
discounts, allowances or credits that are not shown on the face of the invoice
for the Account involved, such Borrower shall report such discounts, allowances
or credits, as the case may be, to Agent as part of the next required Schedule
of Accounts.
     1.31.3. Account Verification. Any of Agent’s officers, employees or agents
shall have the right, at any time or times hereafter, in the name of Agent, any
designee of Agent or a Borrower, to verify the validity and amount of any
Accounts by mail, telephone, electronic communication or otherwise; provided,
that Agent shall conduct Account verifications with appropriate discretion in
accordance with its customary practices and procedures solely to verify the
validity and amounts of Accounts and, so

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long as no Event of Default has occurred and is continuing, (a) Agent shall
provide Borrowers with at least 1 Business Day’s prior notice that Agent will be
conducting Account verifications pursuant to this subsection 6.2.3 (it being
understood that Agent shall have no duty to identify any of the specific Account
Debtors to be contacted by Agent in connection therewith) and (b) Agent shall
afford Borrowers the opportunity to have an observational role with respect to
any Account verifications conducted pursuant to this subsection 6.2.3 (it being
understood that Borrowers shall have no right to be an active participant with
respect to any such Account verifications). Each Borrower shall cooperate with
all reasonable requests of Agent in an effort to facilitate and promptly
conclude any such verification process.
     1.31.4. Maintenance of Dominion Account. Each Borrower shall maintain a
Dominion Account or Accounts pursuant to lockbox and blocked account
arrangements acceptable to Agent with such banks as may be selected by such
Borrower and be acceptable to Agent. Each Borrower shall issue to any such banks
an irrevocable letter of instruction directing such banks to deposit all
payments or other remittances received in the lockbox and blocked accounts to
the Dominion Account. Each Borrower shall obtain the agreement by the applicable
banks in favor of Agent to waive any recoupment, setoff rights, and any security
interest in, or against, the funds so deposited. All funds deposited in the
Dominion Account shall be available to Borrowers at their discretion unless a
Dominion Period is in effect. If a Dominion Period is in effect, all funds in
the Dominion Account shall (i) immediately become the property of Agent, for the
ratable benefit of Lenders and (ii) be applied on account of the Obligations as
provided in subsection 3.2.1. If a Dominion Event occurs at any time, Agent may,
and, at the direction of Majority Lenders Agent, shall, send the appropriate
notice to Borrowers to commence a Dominion Period. The provisions of this
subsection 6.2.4 shall not apply to any collateral proceeds account that is
established pursuant to and in accordance with the provisions of the Secured
Bond Indenture for the purpose of holding only proceeds of “Noteholder Priority
Collateral” under and as defined in the Secured Bond Intercreditor Agreement.
     1.31.5. Collection of Accounts, Proceeds of Collateral. Each Borrower
agrees that all invoices rendered and other requests made by such Borrower for
payment in respect of Accounts shall contain a written statement directing
payment in respect of such Accounts to be paid to a lockbox or a blocked account
established pursuant to subsection 6.2.4. To expedite collection, each Borrower
shall endeavor in the first instance to make collection of its Accounts for
Agent in a manner that is consistent with the ordinary course of its business.
All remittances received by each Borrower on account of Accounts, together with
the proceeds of any other Collateral, shall be immediately deposited in kind in
the Dominion Account and shall, at any time when a Dominion Period is in effect,
be held by such Borrower until such deposit has occurred as trustee of an
express trust on behalf of Agent (for its benefit and the benefit of the
Lenders). Agent retains the right at all times after the occurrence and during
the continuance of an Event of Default to notify Account

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Debtors that each Borrower’s Accounts have been assigned to Agent and to collect
each Borrower’s Accounts directly in its own name, or in the name of Agent’s
agent, and to charge the collection costs and expenses, including attorneys’
fees, jointly and severally to Borrowers.
     1.31.6. Taxes. If an Account includes a charge for any tax payable to any
governmental taxing authority, Agent is authorized, in its sole discretion, to
pay the amount thereof to the proper taxing authority for the account of any
Borrower and to charge that Borrower for such tax, except for taxes that (i) are
being actively contested in good faith and by appropriate proceedings and for
which the applicable Borrower maintains reasonable reserves on its books and
(ii) would not reasonably be expected to result in any Lien other than a
Permitted Lien. In no event shall Agent or any Lender be liable for any taxes of
any Borrower due and payable to any governmental taxing authority.
          1.32. Administration of Inventory.
          Each Borrower shall keep records of its Inventory which records shall
be complete and accurate in all material respects. Each Borrower shall furnish
to Agent Inventory reports concurrently with the delivery of each Borrowing Base
Certificate described in subsection 8.1.4 or more frequently as reasonably
requested by Agent, which reports will be in such format and detail as Agent
shall reasonably request and shall include a current list of all locations of
such Borrower’s Inventory. Each Borrower shall conduct a physical inventory no
less frequently than annually and shall provide to Agent a report based on each
such physical inventory promptly thereafter, together with such supporting
information as Agent shall reasonably request.
          1.33. Administration of Equipment.
          Each Borrower shall keep records of its Equipment (including, without
limitation, all Patterns and Core Boxes) which shall be complete and accurate in
all material respects itemizing and describing the kind, type, quality, quantity
and book value of its Equipment and all dispositions made in accordance with
subsection 8.2.9 hereof, and each Borrower shall, and shall cause each of its
Subsidiaries to, furnish Agent with a current schedule containing the foregoing
information on at least an annual basis and more often during the continuance of
an Event of Default if reasonably requested by Agent. In addition to the
foregoing, each Borrower shall furnish to Agent reporting on Patterns and Core
Boxes concurrently with the delivery of each Borrowing Base Certificate
described in subsection 8.1.4 or more frequently as reasonably requested by
Agent, which reporting will be in such format and detail as Agent shall
reasonably request and shall include a current list of all locations of such
Borrower’s Patterns and Core Boxes. Promptly after the request therefor by
Agent, each Borrower shall deliver to Agent any and all evidence of ownership,
if any, of any of its Equipment.

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          1.34. Payment of Charges.
          All amounts chargeable to any Borrower under Section 6 hereof shall be
Obligations secured by all of the Collateral, shall be payable on demand and
shall bear interest from the date such advance was made until paid in full at
the rate applicable to Base Rate Portion from time to time.
SECTION 7. REPRESENTATIONS AND WARRANTIES
          To induce Agent and each Lender to enter into this Agreement and to
make advances hereunder, each Borrower warrants, represents and covenants to
Agent and each Lender that:
     1.34.1. Qualification. Each Borrower and each of its Subsidiaries is a
corporation, limited partnership or limited liability company duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
incorporation or organization. Each Borrower and each of its Subsidiaries is
duly qualified and is authorized to do business and is in good standing as a
foreign limited liability company, limited partnership or corporation, as
applicable, in (a) as of the date hereof, each state or jurisdiction listed on
Exhibit 7.1.1 hereto and (b) all states and jurisdictions in which the failure
of such Borrower or any of its Subsidiaries to be so qualified would reasonably
be expected to have a Material Adverse Effect.
     1.34.2. Power and Authority. Each Borrower and each of its Subsidiaries is
duly authorized and empowered to enter into, execute, deliver and perform this
Agreement and each of the other Loan Documents to which it is a party. The
execution, delivery and performance of this Agreement and each of the other Loan
Documents have been duly authorized by all necessary corporate or other relevant
action and do not and will not (i) require any consent or approval of the
shareholders of such Borrower or any of the shareholders, partners or members,
as the case may be, of any Subsidiary of such Borrower; (ii) contravene such
Borrower’s or any of its Subsidiaries’ charter, articles or certificate of
incorporation, partnership agreement, certificate of formation, by-laws, limited
liability agreement, operating agreement or other organizational documents (as
the case may be); (iii) violate, or cause such Borrower or any of its
Subsidiaries to be in default under, any provision of any law, rule, regulation,
order, writ, judgment, injunction, decree, determination or award in effect
having applicability to such Borrower or any of its Subsidiaries, the violation
of which would reasonably be expected to have a Material Adverse Effect;
(iv) result in a breach of or constitute a default under any indenture or loan
or credit agreement or any other agreement, lease or instrument to which such
Borrower or any of its Subsidiaries is a party or by which it or its Property
may be bound or affected, the breach of or default under which could reasonably
be expected to have a Material Adverse Effect; or (v) result in, or require, the
creation or imposition of any Lien (other than Permitted Liens) upon or with
respect to any of the Property now owned or hereafter acquired by such Borrower
or any of its Subsidiaries.

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     1.34.3. Legally Enforceable Agreement. This Agreement is, and each of the
other Loan Documents when delivered under this Agreement will be, a legal, valid
and binding obligation of each Borrower and each of its Subsidiaries party
thereto, enforceable against it in accordance with its respective terms, subject
to the effects of applicable bankruptcy, insolvency, moratorium, reorganization
or similar laws affecting creditors’ rights generally and equitable principles
of general applicability (regardless of whether such enforceability is
considered in a proceeding at law or in equity).
     1.34.4. Capital Structure. Exhibit 7.1.4 hereto states, as of the date
hereof, (i) the correct name of each of the Subsidiaries of each Borrower, its
jurisdiction of incorporation or organization and the percentage of its Voting
Stock owned by such Borrower, (ii) the name of each Borrower’s and each of its
Subsidiaries’ corporate or joint venture relationships and the nature of the
relationship, (iii) the number, nature and holder of all outstanding Securities
of each Borrower and the holder of Securities of each Subsidiary of such
Borrower and (iv) the number of authorized, issued and treasury Securities of
each Borrower. Each Borrower has good title to all of the Securities it purports
to own of each of such Subsidiaries, free and clear in each case of any Lien
other than Permitted Liens. All such Securities have been duly issued and are
fully paid and non-assessable. As of the date hereof, there are no outstanding
options to purchase, or any rights or warrants to subscribe for, or any
commitments or agreements to issue or sell any Securities or obligations
convertible into, or any powers of attorney relating to any Securities of any
Borrower or any of its Subsidiaries. Except as set forth on Exhibit 7.1.4, as of
the date hereof, there are no outstanding agreements or instruments binding upon
any of any Borrower’s or any of its Subsidiaries’ partners, members or
shareholders, as the case may be, relating to the ownership of its Securities.
     1.34.5. Names; Organization. As of the date hereof, within the last five
years neither any Borrower nor any of its Subsidiaries has been known as or has
used any legal, fictitious or trade names except those listed on Exhibit 7.1.5
hereto. Except as set forth on Exhibit 7.1.5, during the last 5 years neither
any Borrower nor any of its Subsidiaries has been the surviving entity of a
merger or consolidation or has acquired all or substantially all of the assets
of any Person. As of the date hereof, each Borrower’s and each of its
Subsidiaries’ state(s) of incorporation or organization, Type of Organization
and Organizational I.D. Number is set forth on Exhibit 7.1.5. As of the date
hereof, the exact legal name of each Borrower and each of its Subsidiaries is
set forth on Exhibit 7.1.5.
     1.34.6. Business Locations; Agent for Process. Each Borrower’s and each of
its Subsidiary’s chief executive office, location of books and records and other
places of business are as listed on Exhibit 6.1.1 hereto, as updated from time
to time by Borrowers in accordance with the provisions of subsection 6.1.1.
During the preceding six-month period, neither any Borrower nor any of its
Subsidiaries has had a principal place of business, chief executive office or
location of tangible Collateral (except for miscellaneous immaterial items of
Collateral not having a value that

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exceeds $250,000 in the aggregate), other than as listed on Exhibit 6.1.1. All
tangible Collateral is kept by a Borrower and its Subsidiaries in accordance
with subsection 6.1.1. Except for miscellaneous immaterial items of Collateral
not having a value that exceeds $250,000 in the aggregate or as shown on
Exhibit 6.1.1, as of the date hereof, no Inventory is stored with a bailee,
distributor, warehouseman or similar party, nor is any Inventory consigned to
any Person.
     1.34.7. Title to Properties; Priority of Liens. Each Borrower and each of
its Subsidiaries has good, indefeasible and marketable title to and fee simple
ownership of, or, to the extent relating to the leased location at 135 Church
Street in Wheatland, Pennsylvania or at any leased property that involves rental
payments exceeding $50,000 in the aggregate per fiscal year, valid leasehold
interests in, all of its real Property, and good title to all of the Collateral
and all of its other Property, in each case, free and clear of all Liens except
Permitted Liens. Each Borrower and each of its Subsidiaries has paid or
discharged all lawful claims that are due and payable which, if unpaid, would
reasonably be expected to become a Lien against any of such Borrower’s or such
Subsidiary’s Properties that is not a Permitted Lien. The Liens granted to Agent
under Section 5 hereof are first priority Liens, subject only to Permitted
Liens.
     1.34.8. Accounts. Agent may rely, in determining which Accounts are
Eligible Accounts, on all statements and representations made by each Borrower
with respect to any Account or Accounts. With respect to each of each Borrower’s
Eligible Accounts, unless otherwise disclosed to Agent in writing:
     (i) It is genuine and in all respects what it purports to be, and it is not
evidenced by a judgment;
     (ii) It arises out of a completed, bona fide sale and delivery of goods
(excluding any goods that constitute “Noteholder Priority Collateral” under and
as defined in the Secured Bond Intercreditor Agreement) or rendition of services
by such Borrower, in the ordinary course of its business and in accordance with
the material terms and conditions of all purchase orders, contracts or other
documents relating thereto and forming a part of the contract between such
Borrower and the Account Debtor;
     (iii) It is for a liquidated amount maturing as stated in the duplicate
invoice covering such sale or rendition of services, a copy of which has been
furnished or is available to Agent;
     (iv) There are no facts, events or occurrences which in any material way
impair the validity or enforceability of any Eligible Accounts or tend to reduce
the amount payable thereunder from the face amount of the invoice and statements
delivered or made available to Agent with respect thereto;

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     (v) To the best of such Borrower’s knowledge, the Account Debtor thereunder
(1) had the capacity to contract at the time any contract or other document
giving rise to the Eligible Account was executed and (2) such Account Debtor is
Solvent; and
     (vi) To the best of such Borrower’s knowledge, there are no proceedings or
actions which are threatened or pending against the Account Debtor thereunder
which would reasonably be expected to result in any material adverse change in
such Account Debtor’s financial condition or the collectibility of such Account.
     1.34.9. [Intentionally Omitted].
     1.34.10. Financial Statements; Fiscal Year. The audited Consolidated and
consolidating balance sheets of Neenah and Neenah’s Subsidiaries (including the
accounts of all Borrowers and their respective Subsidiaries for the respective
periods during which a Subsidiary relationship existed) as of September 30,
2005, and the related statements of income, changes in shareholders’ equity, and
changes in financial position for the period ended on such date, have been
prepared in accordance with GAAP, and present fairly in all material respects
the financial positions of Neenah and Neenah’s Subsidiaries, taken as a whole,
at such date and the results of the operations of Neenah and Neenah’s
Subsidiaries, taken as a whole, as reflected in the balance sheets as of such
date. The unaudited Consolidated and consolidating balance sheets of Neenah and
Neenah’s Subsidiaries (including the accounts of all Borrowers and their
respective Subsidiaries for the respective periods during which a Subsidiary
relationship existed) as of November 30, 2006, and the related statements of
income, changes in shareholder’s equity, and changes in financial position for
the period ended on such date, have been prepared in accordance with GAAP
(except for the absence of footnotes and subject to audit and year-end
adjustments), and present fairly in all material respects the financial
positions of Neenah and Neenah’s Subsidiaries, taken as a whole, at such date
and the results of the operations of Neenah and Neenah’s Subsidiaries, taken as
a whole, for such period. Since September 30, 2005, no Material Adverse Effect
has occurred, it being understood that changes or events affecting general
economic conditions, but not otherwise materially and adversely affecting the
business, assets or financial condition of Borrowers’ and Borrowers’
Subsidiaries, shall not be considered a Material Adverse Effect for purposes of
the foregoing. As of the date hereof, the fiscal year of Parent and each of its
Subsidiaries ends on September 30 of each year.
     1.34.11. Full Disclosure. The financial statements referred to in
subsection 7.1.10 hereof do not, nor does this Agreement, or any other written
statement of any Borrower to Agent or any Lender contain any untrue statement of
a material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading in light of the circumstances in
which they were made. To the best of Borrowers’ knowledge after reasonable
inquiry, there is no fact

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which any Borrower has failed to disclose to Agent or any Lender in writing
which would reasonably be expected to have a Material Adverse Effect.
     1.34.12. Solvent Financial Condition. After giving effect to the initial
Loans to be made and the initial Letters of Credit and LC Guaranties to be
issued hereunder, the issuance of the Secured Bonds and the Subordinated Bonds
and the consummation of the other transactions contemplated hereby, each of
Ultimate Parent, Parent, Borrowers and the Subsidiaries of Borrowers will be
Solvent on a consolidated basis (after giving effect to all rights of
contribution and the like).
     1.34.13. Surety Obligations. Except as set forth on Exhibit 7.1.13, as of
the date hereof, neither any Borrower nor any of its Subsidiaries is obligated
as surety or indemnitor under any surety or similar bond or other contract
issued for the benefit of any Person (including without limitation a Borrower or
a Subsidiary of a Borrower) that in any case involves an amount exceeding
$250,000, or has issued or entered into any agreement to assure payment,
performance or completion of performance of any undertaking or obligation of any
Person (including, without limitation, a Borrower or a Subsidiary of a Borrower)
that in any case involves an amount exceeding $250,000, except as otherwise
expressly permitted under subsection 8.2.3 hereof.
     1.34.14. Taxes. Each Borrower and each of its Subsidiaries has filed all
applicable federal, state and local tax returns and other reports relating to
taxes it is required by law to file, other than such returns and reports where
the amounts due and payable as shown do not exceed $100,000 individually or
$250,000 in the aggregate, and each Borrower and each of its Subsidiaries has
paid when due and payable, or made provision for the payment of when due and
payable, all taxes shown on its returns and all assessments, fees, levies and
other governmental charges shown thereon or therein, other than taxes,
assessments, fees, levies and other governmental charges that do not exceed
$100,000 individually or $250,000 in the aggregate, unless and to the extent any
thereof are being actively contested in good faith and by appropriate
proceedings and each Borrower and each of its Subsidiaries maintains reasonable
reserves on its books therefor. The provision for taxes on the books of each
Borrower and its Subsidiaries is adequate for the current fiscal year.
     1.34.15. Brokers. Except as shown on Exhibit 7.1.15 hereto, there are no
claims for brokerage commissions, finder’s fees or investment banking fees
payable by any Borrower or any of its Subsidiaries in connection with the
transactions contemplated by this Agreement, including, without limitation, the
issuance of the Secured Bonds and the Subordinated Bonds.
     1.34.16. Patents, Trademarks, Copyrights and Licenses. Each Borrower and
each of its Subsidiaries owns, possesses or licenses or has the right to use all
the patents, trademarks, service marks, trade names, copyrights, licenses and
other Intellectual Property necessary for the present and planned future conduct
of its business without any known conflict with the rights of others, except for
such conflicts as could not reasonably be expected to have a Material Adverse
Effect. All

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patents, U.S. federally registered trademarks, U.S. federally registered service
marks, U.S. federally registered trade names, U.S. federally registered
copyrights, material licenses, and other material similar rights owned by a
Borrower or a Subsidiary of a Borrower as of the date hereof (and not abandoned)
are listed on Exhibit 7.1.16 hereto, as updated from time to time by notice to
Agent. As of the date hereof, no claim has been asserted to any Borrower or any
of its Subsidiaries which is currently pending that their use of their
Intellectual Property or the conduct of their business does or may infringe upon
the Intellectual Property rights of any third party. To the knowledge of each
Borrower and except as set forth on Exhibit 7.1.16 hereto, as of the date
hereof, no Person is engaging in any activity that infringes in any material
respect upon any Borrower’s or any of its Subsidiaries material Intellectual
Property. Except as set forth on Exhibit 7.1.16, each Borrower’s and each of its
Subsidiaries’ (i) material trademarks, service marks, and copyrights are
registered with the U.S. Patent and Trademark Office or in the U.S. Copyright
Office, as applicable and (ii) neither any Borrower nor any of its Subsidiaries
has any material license agreements. The consummation and performance of the
transactions and actions contemplated by this Agreement and the other Loan
Document, including without limitation, the exercise by Agent of any of its
rights or remedies under Section 10, will not result in the termination or
impairment of any of any Borrower’s or any of its Subsidiaries ownership or
rights relating to its Intellectual Property, except for such Intellectual
Property rights the loss or impairment of which could not reasonably be expected
to have a Material Adverse Effect.
     1.34.17. Governmental Consents. Except as disclosed on Exhibit 7.1.17, each
Borrower and each of its Subsidiaries has, and is in good standing with respect
to, all governmental consents, approvals, licenses, authorizations, permits,
certificates, inspections and franchises necessary to continue to conduct its
business as heretofore or proposed to be conducted by it and to own or lease and
operate its Property as now owned or leased by it, except where the failure to
obtain, possess or so maintain such rights, consents, approvals, licenses,
authorizations, permits, certificates, inspections and franchises would not
reasonably be expected to have a Material Adverse Effect.
     1.34.18. Compliance with Laws. Each Borrower and each of its Subsidiaries
has duly complied, and its Property, business operations and leaseholds are in
compliance with, the provisions of all federal, state and local laws, rules and
regulations applicable to such Borrower or such Subsidiary, as applicable, its
Property or the conduct of its business, except for such non-compliance as would
not reasonably be expected to have a Material Adverse Effect, and there have
been no citations, notices or orders of noncompliance issued to any Borrower or
any of its Subsidiaries under any such law, rule or regulation, except where
such noncompliance would not reasonably be expected to have a Material Adverse
Effect or as disclosed on Exhibit 7.1.18. No Inventory has been produced in
violation of the Fair Labor Standards Act (29 U.S.C. §201 et seq.), as amended.

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     1.34.19. Restrictions. Neither any Borrower nor any of its Subsidiaries is
a party or subject to any contract or agreement which by its terms limits the
right or ability of such Borrower or such Subsidiary to incur Indebtedness,
other than as set forth on Exhibit 7.1.19 hereto, none of which prohibit the
execution of or compliance with this Agreement or the other Loan Documents by
any Borrower or any of its Subsidiaries, as applicable.
     1.34.20. Litigation. Except as set forth on Exhibit 7.1.20 hereto, there
are no actions, suits, proceedings or investigations pending, or to the
knowledge of each Borrower, threatened, against or affecting any Borrower or any
of its Subsidiaries, or the business, operations, Property, prospects, profits
or condition of any Borrower or any of its Subsidiaries which, singly or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
Neither any Borrower nor any of its Subsidiaries is in default with respect to
any order, writ, injunction, judgment, decree or rule of any court, governmental
authority or arbitration board or tribunal, which, singly or in the aggregate,
would reasonably be expected to have a Material Adverse Effect, except as
disclosed on Exhibit 7.1.20.
     1.34.21. No Defaults. No event has occurred and no condition exists which
would, upon or after the execution and delivery of this Agreement or any
Borrower’s performance hereunder, constitute a Default or an Event of Default.
Neither any Borrower nor any of its Subsidiaries is in default in (and no event
has occurred and no condition exists which constitutes, or which the passage of
time or the giving of notice or both would constitute, a default in) the payment
of any Indebtedness to any Person in excess of $500,000.
     1.34.22. Leases. Exhibit 7.1.22 hereto is a complete listing as of the date
hereof of all capitalized and operating personal property leases of each
Borrower and its Subsidiaries and all real property leases of each Borrower and
its Subsidiaries, in each case having annual lease payments in excess of
$150,000. Each Borrower and each of its Subsidiaries is not in breach or default
under any of its respective capitalized and operating leases, except where the
failure to so comply would not reasonably be expected to have a Material Adverse
Effect or except as disclosed on Exhibit 7.1.22.
     1.34.23. Pension Plans. As of the date hereof, except as disclosed on
Exhibit 7.1.23 hereto, neither any Borrower nor any of its Subsidiaries has any
Plan. Each Borrower and each of its Subsidiaries is in compliance with the
requirements of ERISA with respect to each Plan, except where the failure to so
comply could not reasonably be expected to have a Material Adverse Effect. No
fact or situation that could reasonably be expected to result in a Material
Adverse Effect exists in connection with any Plan. Except as disclosed on
Exhibit 7.1.23 hereto, neither any Borrower nor any of its Subsidiaries has any
withdrawal liability in connection with a Multiemployer Plan.

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     1.34.24. Trade Relations. There exists no actual or, to each Borrower’s
knowledge, threatened termination, cancellation or limitation of, or any
modification or change in, the business relationship between any Borrower or any
of its Subsidiaries and any customer or any group of customers whose purchases
individually or in the aggregate are material to the business of such Borrower
and its Subsidiaries, or with any material supplier, except in each case, where
the same could not reasonably be expected to have a Material Adverse Effect, and
there exists no present condition or state of facts or circumstances which would
prevent any Borrower or any of its Subsidiaries from conducting such business
after the consummation of the transactions contemplated by this Agreement in
substantially the same manner in which it has heretofore been conducted.
     1.34.25. Labor Relations. Except as described on Exhibit 7.1.25 hereto, as
of the date hereof, neither any Borrower nor any of its Subsidiaries is a party
to any collective bargaining agreement. Except as described on Exhibit 7.1.25
hereto, there are no material grievances, disputes or controversies with any
union or any other organization of any Borrower’s or any of its Subsidiaries’
employees, or, to the best of Borrowers’ knowledge after reasonable inquiry,
threats of strikes, work stoppages or any asserted pending demands for
collective bargaining by any union or organization, except those that would not
reasonably be expected to have a Material Adverse Effect.
     1.34.26. [Intentionally Omitted].
     1.34.27. Business Activity. As of the date hereof, neither Ultimate Parent,
Parent nor any Inactive Subsidiary is engaged in any active operating business
or incurs any Indebtedness, other than the ownership of the equity interests of
Parent (in the case of Ultimate Parent) and Neenah (in the case of Parent), the
ownership of the Ashland Parcel (in the case of Dalton — Ashland), the
performance of the Obligations, the performance of the Indebtedness evidenced by
the Secured Bonds and the Subordinated Bonds, the guaranty of Indebtedness
incurred by a Borrower or an active Subsidiary, and the performance of its
obligations under intercompany agreements and agreements with its shareholders
that have been disclosed to Agent in writing.
          1.35. Continuous Nature of Representations and Warranties.
          Each representation and warranty contained in this Agreement and the
other Loan Documents shall be deemed to have been remade at the time of each
request for a Loan, Letter of Credit or LC Guaranty hereunder and at the time
that any Loan is deemed to have been made under subsection 3.1.1. Each such
request for a Loan, Letter of Credit or LC Guaranty (and the making of any Loan
deemed to have been made under subsection 3.1.1) shall constitute a
representation by Borrowers that such representations and warranties remain
accurate, complete and not misleading at such time, except to the extent that
such representations and warranties relate solely to an earlier date and except
for changes in the nature of a Borrower’s or one of such Borrower’s Subsidiary’s
business or operations that would render the information in

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any exhibit attached hereto or to any other Loan Document either inaccurate,
incomplete or misleading, so long as Majority Lenders have consented to such
changes, such changes are expressly permitted by this Agreement, or such changes
have been indicated in an update to an Exhibit that has been made in accordance
with subsection 8.1.12.
          1.36. Survival of Representations and Warranties.
          All representations and warranties of each Borrower contained in this
Agreement or any of the other Loan Documents shall survive the execution,
delivery and acceptance thereof by Agent and each Lender and the parties thereto
and the closing of the transactions described therein or related thereto.
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
          During the Term, and thereafter for so long as there are any
Obligations (other than unasserted contingent indemnity obligations)
outstanding, Borrowers jointly and severally covenant that they shall:
     1.36.1. Visits and Inspections; Lender Meeting. Permit (i) representatives
of Agent, and during the continuation of any Event of Default, any Lender, from
time to time, as often as may be reasonably requested, but only during normal
business hours, to visit and inspect the Properties of each Borrower and each of
its Subsidiaries, inspect, audit and make extracts from its books and records,
and discuss with its officers and its independent accountants, each Borrower’s
and each of its Subsidiaries’ business, assets, liabilities, financial
condition, business prospects and results of operations; provided that (a)
unless an Event of Default is in existence, Borrowers shall not have a
reimbursement obligation with respect to more than two such visits and
inspections during any fiscal year, (b) Neenah shall be afforded the reasonable
opportunity to be involved in any such discussions or communications with such
independent accountants and (c) Agent and, to the extent applicable, Lenders,
shall use their respective best efforts not to interfere with the business of
any Borrower or any Subsidiary of a Borrower in conducting any such visits,
inspections or discussions and (ii) appraisers engaged pursuant to Section 2.10
(whether or not personnel of Agent), from time to time, but only during normal
business hours, to visit and inspect the Properties of each Borrower and each of
its Subsidiaries, to the extent necessary to complete the appraisals that are
specifically provided for under Section 2.10. Agent, if no Event of Default then
exists, shall give the applicable Borrower reasonable prior notice of any such
inspection or audit. Without limiting the foregoing, Borrowers will participate
and will cause their key management personnel to participate in a meeting with
Agent and Lenders once during each fiscal year (except that during the
continuation of an Event of Default such meetings may be held more frequently as
requested by Agent or Majority Lenders), which meeting(s) shall be held at such
times at Neenah’s principal place of business as may be reasonably requested by
Agent. It is agreed and understood that so long as no Event of Default has
occurred and is continuing, a failure by Borrowers to comply with any reasonable
request made pursuant to the terms of this subsection 8.1.1 shall not

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constitute a breach of this subsection 8.1.1 unless such failure has continued
for more than 1 Business Day.
     1.36.2. Notices. Promptly notify Agent, any Letter of Credit Issuers and
Lenders in writing of the occurrence of a Default or an Event of Default.
     1.36.3. Financial Statements. Keep, and cause each of its Subsidiaries,
Ultimate Parent and Parent to keep, adequate records and books of account with
respect to its business activities in which proper entries are made in
accordance with customary accounting practices reflecting all its material
financial transactions; and cause to be prepared and furnished to Agent (with
Agent then promptly furnishing the same to the Lenders), the following, all to
be prepared in accordance with GAAP applied on a consistent basis, unless
Neenah’s certified public accountants concur in any change therein and such
change is disclosed to Agent and is consistent with GAAP:
     (i) not later than 90 days after the close of each fiscal year of Neenah,
unqualified (except for a qualification for a change in accounting principles
with which the accountant concurs) audited financial statements of Neenah and
Neenah’s Subsidiaries as of the end of such year, on a Consolidated and
consolidating basis, certified by a firm of independent certified public
accountants of recognized standing selected by Neenah but acceptable to Agent
and, within a reasonable time thereafter a copy of any management letter issued
in connection therewith;
     (ii) not later than 30 days after the end of each month hereafter,
including the last month of each fiscal year of Neenah, unaudited interim
financial statements of Neenah and Neenah’s Subsidiaries as of the end of such
month and of the portion of the fiscal year then elapsed, on a Consolidated and
consolidating basis, certified by the chief financial officer of Neenah as
prepared in accordance with GAAP and fairly presenting in all material respects
the financial position and results of operations of Neenah and Neenah’s
Subsidiaries for such month and period subject only to changes from audit and
year-end adjustments and except that such statements need not contain notes;
     (iii) together with each delivery of financial statements pursuant to
clause (i) of this subsection 8.1.3, a management report (1) setting forth in
comparative form the corresponding figures for the corresponding periods of the
previous fiscal year and the corresponding figures from the most recent
Projections for the current fiscal year delivered pursuant to subsection 8.1.7
and (2) identifying the reasons for any significant variations. The information
above shall be presented in reasonable detail and shall be certified by the
chief financial officer of Neenah to the effect that such information fairly
presents in all material respects the financial position and the results of
operation of Neenah and Neenah’s Subsidiaries as of the dates and for the
periods indicated;

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     (iv) promptly after the sending or filing thereof, as the case may be,
copies of any proxy statements, financial statements or reports and copies of
any regular, periodic and special reports or registration statements which
Ultimate Parent, Parent, any Borrower or any Subsidiary of such Borrower files
with the Securities and Exchange Commission or any governmental authority which
may be substituted therefor, or any national securities exchange;
     (v) upon request of Agent, copies of any annual report to be filed pursuant
to ERISA in connection with each Plan;
     (vi) not later than 120 days after the close of each fiscal year of Neenah,
a written statement by Neenah’s independent public accountants stating whether,
in connection with their audit examination, any Event of Default has come to
their attention and, if such an Event of Default has come to their attention,
specifying the nature and period of the existence thereof; provided, that if
Neenah’s independent public accountants are unable to provide such written
statement due to the existence of a rule, regulation or policy prohibiting such
accountants from delivering such written statement, then the requirement to
provide such written statement hereunder will not apply; and
     (vii) within a reasonably prompt time after request therefor, such other
data and information (financial and otherwise) as Agent or any Lender, from time
to time, may reasonably request, bearing upon or related to the Collateral or
Ultimate Parent’s, Parent’s, any Borrower’s or any of its Subsidiaries’
financial position or results of operations.
               Concurrently with the delivery of the financial statements
described in paragraph (i) and (ii) (but solely for the last month of each
fiscal quarter of Borrowers) of this subsection 8.1.3, or more frequently if
reasonably requested by Agent, Borrowers shall cause to be prepared and
furnished to Agent a Compliance Certificate in the form of Exhibit 8.1.3 hereto
executed by the Chief Financial Officer of Neenah (a “Compliance Certificate”)
in such Person’s capacity as such.
     1.36.4. Borrowing Base Certificates. On or before the 15th day of each
month from and after the date hereof, Borrowers shall deliver to Agent, in form
acceptable to Agent, a Borrowing Base Certificate as of the last day of the
immediately preceding month, with such supporting materials as Agent shall
reasonably request which shall include, without limitation, a report of Eligible
Inventory on a category-by-category basis and a location-by-location basis. If
Borrowers deem it advisable, or if Agent or Majority Lenders so request at any
time that Availability (as determined by Agent in its reasonable credit
judgment) is less than $15,000,000, Borrowers shall execute and deliver to Agent
Borrowing Base Certificates more frequently than monthly. Such Borrowing Base
Certificates shall reflect all information for each Borrower on a Consolidated
and consolidating basis.

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     1.36.5. Landlord, Processor and Storage Agreements. Provide Agent with
copies of all agreements between any Borrower or any of its Subsidiaries and any
landlord, processor, distributor, warehouseman or consignee which owns any
premises at which any Collateral having a value in excess of $250,000 may, from
time to time, be kept.
     1.36.6. Guarantor Financial Statements. Deliver or cause to be delivered to
Agent financial statements, if any, for each Guarantor (to the extent not
consolidated with the financial statements delivered to Agent under subsection
8.1.3) in form and substance satisfactory to Agent at such intervals and
covering such time periods as Agent may request.
     1.36.7. Projections. Within thirty (30) days after the beginning of each
fiscal year of Borrowers, deliver to Agent (with Agent then promptly furnishing
the same to the Lenders) Projections of Neenah and Neenah’s Subsidiaries for
such fiscal year, on a month-by-month basis and for the remaining portion of the
Term, on a year-by-year basis (provided, that a Default (but not an Event of
Default) arising solely due a breach of this subsection 8.1.7 shall not be used
as a basis by Agent or any Lender to refuse to honor a request for a Loan
hereunder that otherwise complies with the terms and conditions hereof).
     1.36.8. Subsidiaries. Cause each of its newly created domestic
Subsidiaries, promptly upon Agent’s request therefor, to execute and deliver to
Agent a Guaranty Agreement and a security agreement pursuant to which such
domestic Subsidiary guaranties the payment of all Obligations and grants to
Agent a first priority Lien (subject only to Permitted Liens) on all of its
Properties (of the types, and subject to the exclusions, described in
Section 5). Additionally, each Borrower and Parent shall execute and deliver to
Agent a Pledge Agreement pursuant to which such Person grants to Agent a first
priority Lien (subject only to Permitted Liens) with respect to all of the
issued and outstanding Securities of each Subsidiary of such Person. In
connection with the foregoing documentation, Borrowers shall also cause Agent to
be provided with such legal opinions, certificates and corporate authority
materials that Agent may reasonably request.
     1.36.9. Deposit and Brokerage Accounts. For each deposit account (other
than payroll and trust accounts) or brokerage account that any Borrower at any
time opens or maintains, such Borrower shall, pursuant to an agreement in form
and substance reasonably satisfactory to Agent, cause the depository bank or
securities intermediary, as applicable, to agree to comply at any time that an
Event of Default has occurred and is continuing with instructions from Agent to
such depository bank or securities intermediary, as applicable, directing the
disposition of funds from time to time credited to such deposit or brokerage
account to the Dominion Account (with respect to accounts covered by subsection
6.2.4) or to such other accounts as Agent may direct, without further consent of
such Borrower. The provisions of this subsection 8.1.9 shall not apply to any
collateral proceeds account that is established pursuant to and in accordance
with the provisions of the Secured Bond Indenture for

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the purpose of holding only proceeds of “Noteholder Priority Collateral” under
and as defined in the Secured Bond Intercreditor Agreement.
     1.36.10. Redemption of Remaining Subordinated Bonds (2003 Series). With
respect to the Subordinated Bonds (2003 Series) that are not redeemed, exchanged
or otherwise retired as of the Closing Date, (x) such Subordinated Bonds (2003
Series) shall be redeemed or otherwise retired in full on or before February 15,
2007 and (y) pending such redemption or retirement on or before February 15,
2007, funds shall be set aside by Borrowers, or reserves shall otherwise be
established, in either case in a manner reasonably acceptable to Agent, for the
purpose of effectuating such redemption or retirement on or before February 15,
2007.
     1.36.11. Intercompany Loans. Upon request by Agent from time to time,
Borrowers shall provide Agent with written statements, with reasonable detail,
of the current balances of the Intercompany Loans. At all times, Borrowers shall
cause the Intercompany Loans to be evidenced by revolving promissory notes, in
form and substance reasonably satisfactory to Agent, which notes are assigned to
Agent as security for the Obligations.
     1.36.12. Updated Information. Promptly notify Agent in writing of (a) each
state or jurisdiction in which any Borrower or any Subsidiary qualifies to do
business after the date hereof, (b) the use by any Borrower or any Subsidiary of
a legal, fictitious or trade name not listed on Exhibit 7.1.5 hereto, (c) any
change after the date hereof in the tax identification number of any Borrower or
any of its Subsidiaries, (d) any change after the date hereof in the list of
surety obligations listed on Exhibit 7.1.13, (e) on a quarterly basis, the
ownership by any Borrower or any Subsidiary of any registered patent, registered
trademark, registered service mark, registered trade name, registered copyright,
material license or other similar material rights not listed on Exhibit 7.1.16,
(f) the assertion by any Person in writing of a claim against any Borrower or
any Subsidiary that its use of its Intellectual Property or the conduct of its
business does or may infringe upon the Intellectual Property rights of any third
party, (g) any change after the date hereof in the list of capitalized and
operating personal property leases and real property leases of any Borrower or
any Subsidiary listed on Exhibit 7.1.22 hereto, (h) any change after the date
hereof in the list of Plans listed on Exhibit 7.1.23 hereto and (i) any change
after the date hereof in the list of collective bargaining agreements listed on
Exhibit 7.1.25 hereto.
     1.36.13. Equipment. Keep the Equipment (including, without limitation, any
Patterns and Core Boxes) of each Borrower and each Subsidiary of a Borrower in
good operating condition and repair, reasonable wear and tear excepted; prevent
any material Equipment of a Borrower or a Subsidiary of a Borrower from becoming
affixed to any real Property leased to such Borrower or such Subsidiary such
that an interest arises therein under the real estate laws of the applicable
jurisdiction, unless the landlord of such real Property has executed a landlord
waiver or leasehold mortgage in favor of and in form reasonably acceptable to
Agent; and prevent any material Equipment of a Borrower or a Subsidiary of a
Borrower from becoming an

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accession to any personal Property other than Equipment that is subject to first
priority (except for Permitted Liens) Liens in favor of Agent.
          1.37. Negative Covenants.
          During the Term, and thereafter for so long as there are any
Obligations (other than unasserted contingent indemnity obligations)
outstanding, Borrowers jointly and severally covenant that they shall not:
     1.37.1. Mergers; Consolidations; Acquisitions; Structural Changes. Merge or
consolidate, or permit any of its Subsidiaries to merge or consolidate, with any
Person; nor change its or any of its Subsidiaries’ state of incorporation or
organization, Type of Organization or Organizational I.D. Number; nor change its
or any of its Subsidiaries’ legal name; nor acquire, nor permit any of its
Subsidiaries to acquire, all or any substantial part of the Properties of any
Person, except for:
     (i) mergers of any wholly-owned Subsidiary of a Borrower into such Borrower
or another wholly-owned Subsidiary of such Borrower;
     (ii) acquisitions of assets consisting of fixed assets or real property
that constitute Capital Expenditures permitted under subsection 8.2.8;
     (iii) liquidations or dissolutions of Subsidiary Guarantors, so long as
Agent has received prior written notice of any such liquidation or dissolution
and any assets of any such Subsidiary Guarantor to be liquidated or dissolved
have been transferred to a Borrower or to another Subsidiary Guarantor;
     (iv) Permitted Acquisitions;
     (v) mergers and consolidations permitted under subsection 8.2.9(iv)(B); and
     (vi) the Neenah Reorganization, if consummated, so long as all of the
following conditions are satisfied: (a) the Neenah Reorganization is consummated
on terms, and pursuant to documents, reasonably acceptable to Agent in all
respects, and (b) if Neenah is reincorporated in the State of Delaware
(“Reincorporated Neenah”) as part of the Neenah Reorganization,
(i) Reincorporated Neenah succeeds to all of all of the obligations,
liabilities, indebtedness and rights of Neenah (as currently incorporated in the
State of Wisconsin) under this Agreement and each of the other Loan Documents,
(ii) Reincorporated Neenah shall have executed and delivered to Agent such
joinder and ratification documents as are reasonably requested by Agent to
confirm that Reincorporated Neenah is subject to and bound by all of the terms
and conditions of this Agreement and the other Loan Documents, (iii) Agent shall
have received a certificate of an executive officer of Reincorporated Neenah
that includes a section as to incumbency of officers and that attaches the final
organizational documents for Reincorporated Neenah and the

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resolutions of the board of directors of Reincorporated Neenah as to the Loan
Documents and the Obligations, which certificate, organizational documents and
resolutions shall be reasonably acceptable to Agent in all respects, (iv) if
requested, Agent shall have received an opinion of legal counsel to
Reincorporated Neenah regarding Reincorporated Neenah and the Loan Documents by
which such Reincorporated Neenah is becoming bound, which legal opinion shall be
reasonably acceptable to Agent in all respects and (v) Agent shall have received
such other documents as are reasonably deemed necessary by Agent to carry out
the purposes of the Loan Documents in respect of Reincorporated Neenah.
     1.37.2. Loans. Make, or permit any of its Subsidiaries to make, any loans
or other advances of money to any Person, other than (i) for salary, travel
advances, entertainment, relocation, advances against commissions and other
similar advances to employees in the ordinary course of business,
(ii) extensions of trade credit in the ordinary course of business,
(iii) deposits with financial institutions permitted under this Agreement,
(iv) prepaid expenses, (v) extensions of credit consisting of Investments not
prohibited by subsection 8.2.12, (vi) non-cash loans made to managers to enable
such managers to acquire stock issued in connection with incentive plans and
(vii) loans by a Borrower to another Borrower or to any domestic wholly-owned
Subsidiary (other than any Inactive Subsidiary) of a Borrower (“Intercompany
Loans”).
     1.37.3. Total Indebtedness. Create, incur, assume, or suffer to exist, or
permit any of its Subsidiaries to create, incur or suffer to exist, any
Indebtedness, except:
     (i) Obligations owing to Agent or any Lender under this Agreement or any of
the other Loan Documents;
     (ii) Indebtedness evidenced by the Subordinated Bonds and the other
Subordinated Bond Documents (each as in effect as of the date hereof or as
modified in compliance with subsection 8.2.6, subject to clause (xiii) below),
so long as such Indebtedness remains subordinated to the Obligations pursuant to
the subordination provisions provided for in the Subordinated Bonds;
     (iii) Indebtedness evidenced by the Secured Bonds and the other Secured
Bond Documents, each as in effect as of the date hereof or as modified in
compliance with subsection 8.2.6 (subject to clause (xiii) below);
     (iv) Indebtedness, including without limitation Subordinated Debt and
intercompany indebtedness, existing as of the date of this Agreement and listed
on Exhibit 8.2.3;

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     (v) Capitalized Lease Obligations and Permitted Purchase Money Indebtedness
not to exceed in the aggregate at any time outstanding the greater of (x)
$10,000,000 or (y) the amount that is equal to 3% of Tangible Assets (measured
at the time of the incurrence of any such Capitalized Lease Obligations or
Permitted Purchase Money Indebtedness), in each case less the amount of any
refinancing Capitalized Lease Obligations and Permitted Purchase Money
Indebtedness outstanding pursuant to clause (xiii) below; provided, that no
Indebtedness may be incurred pursuant to this clause (v) in order to finance any
part of the purchase price or cost of construction or improvement of the New
Mold Line;
     (vi) contingent liabilities arising out of endorsements of checks and other
negotiable instruments for deposit or collection in the ordinary course of
business;
     (vii) guaranties of any Indebtedness permitted under this subsection 8.2.3;
     (viii) Indebtedness in respect of Intercompany Loans;
     (ix) unsecured Derivative Obligations incurred in the ordinary course of
business in respect of the Loans hereunder;
     (x) [intentionally omitted];
     (xi) Indebtedness incurred in the ordinary course of business with respect
to surety and appeal bonds, performance bonds and other similar obligations not
to exceed $2,000,000 in the aggregate at any time outstanding;
     (xii) Indebtedness not included in paragraphs (i) through (xi) above which
does not exceed at any time, in the aggregate, $15,000,000;
     (xiii) subject to the limitations set forth in subsection 8.2.6,
refinancings of any Indebtedness permitted under the foregoing clauses
(i) through (xii) of this subsection 8.2.3, so long as (a) such refinancing
Indebtedness has a maximum principal amount not in excess of the sum of the
principal amount of, and accrued interest in respect of, the Indebtedness being
refinanced at the time of refinancing, plus reasonable direct expenses of such
refinancing, (b) the refinancing Indebtedness is secured only by Liens on
assets, if any, that secured the Indebtedness being refinanced, (c) the average
weighted average life to maturity of the refinancing Indebtedness is not shorter
than that of the Indebtedness being refinanced, (d) the refinancing Indebtedness
has terms that are not more adverse in any material respect to Agent, Lenders or
the applicable Borrower or Subsidiary of a Borrower than the Indebtedness being
refinanced (it being understood that the foregoing restriction shall not
prohibit refinancing Indebtedness from having (1) a term

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that is longer, or that ends later, than the term of the Indebtedness being
refinanced or (2) a then current market rate of interest that is not more than
200 basis points higher than the interest rate applicable to the Indebtedness
being refinanced), (e) if such Indebtedness being refinanced is Subordinated
Debt, any such refinancing Indebtedness includes subordination terms that are at
least as beneficial to Agent and Lenders as the subordination terms associated
with such Subordinated Debt being refinanced, (f) if any of the Liens securing
such Indebtedness being refinanced are subordinated to the Liens securing the
Obligations, the Liens securing any such refinancing Indebtedness are
subordinated to the Liens securing the Obligations pursuant to terms that are at
least as beneficial to Agent and Lenders as the terms associated with the Liens
securing such Indebtedness being refinanced and (g) if such Indebtedness being
refinanced is the Indebtedness evidenced by the Secured Bonds, any such
refinancing Indebtedness shall be subject to an intercreditor agreement that is
at least as beneficial to Agent and Lenders as the terms of the Secured Bond
Intercreditor Agreement; and
     (xiv) Indebtedness incurred where (a) average Availability (as determined
by Agent in its reasonable credit judgment) for the thirty (30) day period
ending on the date of any such incurrence of Indebtedness (giving effect to such
incurrence of Indebtedness and the consummation of any transactions occurring in
connection therewith for each day in such thirty (30) day period) is not less
than $25,000,000 and (b) actual Availability (as determined by Agent in its
reasonable credit judgment) on the date of any such incurrence of Indebtedness,
after giving effect to such incurrence of Indebtedness and the consummation of
any transactions occurring in connection therewith, is not less than
$25,000,000.
     1.37.4. Affiliate Transactions. Enter into, or be a party to, or permit any
of its Subsidiaries to enter into or be a party to, any transaction with any
Affiliate of any Borrower or any holder of any Securities of any Borrower or any
of its Subsidiaries, including without limitation any management, consulting or
similar fees, except (i) in the ordinary course of and pursuant to the
reasonable requirements of such Borrower’s or such Subsidiary’s business and
upon fair and reasonable terms which are fully disclosed to Agent and are no
less favorable to such Borrower or such Subsidiary than would be obtained in a
comparable arms-length transaction with a Person not an Affiliate or Security
holder of such Borrower or such Subsidiary, as determined and certified by the
applicable Borrower’s or Subsidiary’s board of directors in good faith
(provided, that with respect to any transaction involving aggregate payments
exceeding $20,000,000, except for any such transaction that results in the
repayment of the Obligations (other than unasserted contingent indemnity
obligations) in full, Agent shall have received an opinion as to the fairness to
the applicable Borrower or Subsidiary from a financial point of view issued by a
nationally recognized independent financial advisor), (ii) employment agreements
and other incentive compensation with management shareholders approved from time
to time by the

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board of directors of such Borrower and employee arrangements and related
incentive compensation arrangements entered into with other full time employees
of such Borrower or such Subsidiary in the ordinary course of business,
(iii) reasonable directors’ fees and expenses approved from time to time by the
board of directors of such Borrower, (iv) with respect to Intercompany Loans,
(v) with respect to the Secured Bonds and the Subordinated Bonds (and with
respect to the retirement of the Subordinated Bonds (2003 Series)),
(vi) non-exclusive intercompany licenses of Intellectual Property, (vii) with
respect to Indebtedness permitted hereunder that is provided by an Affiliate,
(viii) with respect to equity issued in compliance with the terms hereof that is
issued to an Affiliate, (ix) the agreements listed on Exhibit 8.2.4, and
(x) transactions entered into where (a) average Availability (as determined by
Agent in its reasonable credit judgment) for the thirty (30) day period ending
on the date of any such transaction (giving effect to such transaction and the
consummation of any other transactions occurring in connection therewith for
each day in such thirty (30) day period) is not less than $25,000,000 and
(b) actual Availability (as determined by Agent in its reasonable credit
judgment) on the date of any such transaction, after giving effect to such
transaction and the consummation of any other transactions occurring in
connection therewith, is not less than $25,000,000.
     1.37.5. Limitation on Liens. Create or suffer to exist, or permit any of
its Subsidiaries to create or suffer to exist, any Lien upon any of its
Property, income or profits, whether now owned or hereafter acquired, except:
     (i) Liens at any time granted in favor of Agent for the benefit of Agent
and Lenders;
     (ii) Liens for taxes, assessments or governmental charges (excluding any
Lien imposed pursuant to any of the provisions of ERISA, but including, without
limitation, those for non-delinquent taxes or assessments in respect of real
Property) not yet due, or being contested in the manner described in subsection
7.1.14 hereto;
     (iii) Liens arising in the ordinary course of the business of such Borrower
or any of its Subsidiaries by operation of law or regulation (including, without
limitation, mechanic’s liens, materialmen’s liens, warehousemen’s liens and the
like) but only if (a) payment in respect of any such Lien is not at the time
required or is being contested in good faith by appropriate proceedings (with
appropriate reserves established in respect thereof in accordance with GAAP) and
(b) such Liens do not, in the aggregate, materially detract from the value of
the Property of such Borrower or any of its Subsidiaries or materially impair
the use thereof in the operation of the business of such Borrower or any of its
Subsidiaries;
     (iv) Purchase Money Liens securing Permitted Purchase Money Indebtedness
and Liens securing Capitalized Lease Obligations permitted to be incurred under
subsection 8.2.3, in each case so long as such Liens are

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confined to the assets that are the subject of such Permitted Purchase Money
Indebtedness and Capitalized Lease Obligations; provided, that no Liens may be
granted pursuant to this clause (iv) in order to secure Indebtedness incurred to
finance any part of the purchase price or cost of construction or improvement of
the New Mold Line;
     (v) such other Liens as appear on Exhibit 8.2.5 hereto;
     (vi) Liens incurred or deposits or pledges made in the ordinary course of
business in connection with (1) worker’s compensation, social security,
unemployment insurance and other like laws or (2) sales contracts, leases,
statutory obligations, work in progress advances and other similar obligations
not incurred in connection with the borrowing of money or the payment of the
deferred purchase price of property;
     (vii) reservations, easements, covenants, zoning and other land use
regulations, title exceptions or encumbrances that are granted in the ordinary
course of business or shown on surveys or inspections that have been required
by, delivered to and accepted by Agent (or, if not required by Agent, that would
be disclosed by an accurate survey or inspection), affecting real Property owned
or leased by a Borrower or any of its Subsidiaries; provided that such
exceptions do not or would not in the aggregate materially interfere with the
use of such Property in the ordinary course of such Borrower’s or such
Subsidiary’s business;
     (viii) judgment Liens that do not give rise to an Event of Default under
subsection 10.1.15;
     (ix) Liens created under the Secured Bond Documents on the Collateral and
on the Securities of Neenah and the Subsidiaries of Neenah, so long as such
Liens remain subject to the terms of the Secured Bond Intercreditor Agreement;
     (x) Liens in favor of customs and revenues authorities which secure payment
of customs duties in connection with the importation of Inventory;
     (xi) Liens on insurance policies and the proceeds thereof securing the
financing of the premiums with respect thereto;
     (xii) Liens consisting of rights of set-off of a customary nature or
banker’s liens on amounts on deposit in accounts of such Borrower or any of its
Subsidiaries (other than in a Dominion Account), whether arising by contract or
operation of law, incurred in the ordinary course of business;
     (xiii) Liens on fixed assets acquired in compliance with the terms of this
Agreement to the extent that such Liens existed prior to such acquisition;

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     (xiv) Liens incurred or deposits made to secure the performance of bids,
tenders, leases, trade contracts (other than Indebtedness), public or statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business;
     (xv) Leases or subleases and licenses and sublicenses granted to others in
the ordinary course of such Borrower’s or such Subsidiary’s business which do
not interfere in any material respect with the business of such Borrower or such
Subsidiary, and any interest or title of a lessor, licensor, sublessor or
sublicensor under a lease or license;
     (xvi) Liens arising from the filing of UCC financing statements for
precautionary purposes relating solely to operating leases under which such
Borrower or any of its Subsidiaries is a lessee;
     (xvii) such other Liens as Majority Lenders may hereafter approve in
writing; and
     (xviii) Liens granted or otherwise arising where (a) average Availability
(as determined by Agent in its reasonable credit judgment) for the thirty
(30) day period ending on the date of any such granting or creation of Liens
(giving effect to such granting or creation of Liens and the consummation of any
transactions occurring in connection therewith for each day in such thirty
(30) day period) is not less than $25,000,000 and (b) actual Availability (as
determined by Agent in its reasonable credit judgment) on the date of any such
granting or creation of Liens, after giving effect to such granting or creation
of Liens and the consummation of any transactions occurring in connection
therewith, is not less than $25,000,000.
     1.37.6. Payments and Amendments of Certain Debt.
     (i) make or permit any of its Subsidiaries to make any voluntary
prepayment, purchase or redemption of the Indebtedness evidenced by the Secured
Bonds (or any Indebtedness that has refinanced the Secured Bonds), except
(x) voluntary prepayments of principal on the Secured Bonds where (a) average
Availability (as determined by Agent in its reasonable credit judgment) for the
thirty (30) day period ending on the date of any such voluntary prepayment
(giving effect to such voluntary prepayment and the consummation of any
transactions occurring in connection therewith for each day in such thirty
(30) day period) is not less than $25,000,000 and (b) actual Availability (as
determined by Agent in its reasonable credit judgment) on the date of any such
voluntary prepayment, after giving effect to such voluntary prepayment and the
consummation of any transactions occurring in connection therewith, is not less
than $25,000,000, and (y) a voluntary prepayment of the remaining principal
balance of the Secured Bonds that is made using the proceeds of refinancing
Indebtedness permitted to be incurred under

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subsection 8.2.3 (it being agreed and understood that this clause (i) shall not
apply to the making of regularly scheduled payments of interest under the
Secured Bond Documents as in effect as of the date hereof or as modified in
compliance with this subsection 8.2.6);
     (ii) make or permit any of its Subsidiaries to make any payment of any part
or all of the Subordinated Debt evidenced by the Subordinated Bonds and the
other Subordinated Bond Documents (including, without limitation, any mandatory
or voluntary prepayment, purchase or redemption), except, in each case so long
as any such payment of interest is made in accordance with the subordination
terms included in the Subordinated Bond Documents, (w) regularly scheduled cash
payments of interest pursuant to the Subordinated Bond Documents (each as in
effect as of the date hereof or as modified in compliance with this subsection
8.2.6) at a rate of up to 12.5% per annum, (x) cash payments of interest
previously deferred pursuant to the terms of the Subordinated Bond Documents (as
in effect as of the date hereof or as modified in compliance with this
subsection 8.2.6), so long as both immediately prior to and after giving effect
to any such payment of deferrable interest, (1) average Availability (as
determined by Agent in its reasonable credit judgment) for the thirty (30) day
period ending on the date of any such payment (giving effect to such payment of
deferrable interest for each day in such thirty (30) day period) is not less
than $10,000,000 and (2) actual Availability (as determined by Agent in its
reasonable credit judgment) on the date of any such payment is not less than
$10,000,000, (y) mandatory and voluntary repayments or prepayments of principal
amounts owing under the Subordinated Bond Documents, either (I) using the
proceeds of a concurrent issuance of common equity to a Related Person of a
Borrower at a time when no Default or Event of Default exists or (II) where
(1) average Availability (as determined by Agent in its reasonable credit
judgment) for the thirty (30) day period ending on the date of any such
prepayment (giving effect to such prepayment and the consummation of any
transactions occurring in connection therewith for each day in such thirty
(30) day period) is not less than $25,000,000 and (2) actual Availability (as
determined by Agent in its reasonable credit judgment) on the date of any such
voluntary prepayment, after giving effect to such voluntary prepayment and the
consummation of any transactions occurring in connection therewith, is not less
than $25,000,000, and (z) a voluntary prepayment of the remaining principal
balance of the Subordinated Bonds that is made using the proceeds of refinancing
Indebtedness permitted to be incurred under subsection 8.2.3;
     (iii) with respect to any Subordinated Debt other than that evidenced by
the Subordinated Bonds and the other Subordinated Bond Documents, make or permit
any of its Subsidiaries to make any payment of any part or all of any
Subordinated Debt or take any other action or omit to take any other action in
respect of any Subordinated Debt, except in accordance with the

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subordination agreement relative thereto or the subordination provisions
thereof; or
     (iv) (1) amend or modify any Secured Bond Document (or the documentation
any Indebtedness that has refinanced the Secured Bonds), or (2) amend or modify
any Subordinated Bond Document or any agreement, instrument or document
evidencing or relating to any other Subordinated Debt, in each case to the
extent that any such amendment or modification would (a) increase the interest
rate on such Indebtedness or the principal amount of such Indebtedness; (b) move
forward the dates upon which any payments of principal or interest on such
Indebtedness are due; (c) add any event of default or make more restrictive any
existing event of default with respect to such Indebtedness; (d) add or make
more restrictive any covenant with respect to such Indebtedness; (e) move
forward any redemption or prepayment dates with respect to such Indebtedness, or
add or increase any redemption or prepayment amounts; (f) if applicable, change
the subordination or intercreditor provisions applicable to such Indebtedness;
(g) change or amend any other term if such change or amendment would materially
increase the obligations of the obligor or confer additional material rights on
the holder of such Indebtedness in a manner adverse to any Borrower or Lenders;
or (h) require to be paid in cash any interest which may be paid in kind instead
of cash.
     1.37.7. Distributions. Declare or make, or permit any of its Subsidiaries
to declare or make, any Distributions, except for:
     (i) Distributions by any Subsidiary of a Borrower (including any such
Subsidiary that is a Borrower) to such Borrower;
     (ii) Distributions paid solely in Securities of a Borrower or any of its
Subsidiaries;
     (iii) Distributions by each Borrower in amounts necessary to permit such
Borrower to repurchase Securities of such Borrower from officers, directors or
employees, or former officers, directors or employees, of such Borrower or any
of its Subsidiaries upon death, disability, retirement, severance or termination
of employment or pursuant to any agreement pursuant to which such Securities
were issued, so long as no Default or Event of Default exists at the time of or
would be caused by the making of such Distributions and the aggregate cash
amount of all such Distributions by all Borrowers, measured at the time when
made, does not exceed $1,000,000 in any fiscal year of Borrowers;
     (iv) until the consummation, if ever, of the Neenah Full Reorganization,
Distributions by each Borrower in an amount sufficient to permit Ultimate Parent
to pay its consolidated combined unitary U.S. federal,

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state or local tax liabilities relating to the business of Borrowers and
Borrowers’ Subsidiaries; provided that Ultimate Parent applies the amount of
such Distributions for such purpose at such time;
     (v) until the consummation, if ever, of the Neenah Full Reorganization,
Distributions by Borrowers to the extent necessary to permit Parent (unless a
Neenah Partial Reorganization has occurred) and Ultimate Parent to (a) pay audit
fees related to the business of Borrowers and Borrowers’ Subsidiaries, (b) make
payments in respect of its indemnification obligations owing to directors and
officers, (c) make payments in respect of indemnification obligations and cost
and expenses (including initial and annual listing fees, SEC registration fees
and legal fees and expenses) incurred by Ultimate Parent in connection with any
offering or public listing of common stock of Ultimate Parent and (d) pay other
costs and expenses related to the business of Borrowers and Borrowers’
Subsidiaries of up to $500,000 in the aggregate per fiscal year, not to exceed
$2,000,000 in the aggregate for all such payments under this clause (v) in any
fiscal year of Borrowers and in each so long as Parent or Ultimate Parent, as
applicable, applies the amount of such Distributions for such purposes; and
     (vi) Distributions made where (a) average Availability (as determined by
Agent in its reasonable credit judgment) for the thirty (30) day period ending
on the date of any such Distribution (giving effect to such Distribution and the
consummation of any transactions occurring in connection therewith for each day
in such thirty (30) day period) is not less than $25,000,000 and (b) actual
Availability (as determined by Agent in its reasonable credit judgment) on the
date of any such Distribution, after giving effect to such Distribution and the
consummation of any transactions occurring in connection therewith, is not less
than $25,000,000.
     1.37.8. Capital Expenditures. For fiscal years through and including the
fiscal year of Borrowers ending on September 30, 2008, make Capital Expenditures
(including, without limitation, by way of capitalized leases, but excluding
(i) Capital Expenditures made using the proceeds of equity securities issued in
compliance with the terms hereof and (ii) the principal portion of Capitalized
Lease Obligations incurred in compliance with the terms hereof) which, in the
aggregate, as to all Borrowers and all of Borrowers’ Subsidiaries, exceed (x)
$65,000,000, during the fiscal year of Borrowers ending on September 30, 2007 or
(y) $60,000,000, during the fiscal year of Borrowers ending on September 30,
2008, except that 75% of the unused portion of the Capital Expenditure allowance
for any fiscal year may be carried over to the immediately succeeding fiscal
year only, to be used in such succeeding fiscal year after all of the Capital
Expenditure allowance for that year has been used. For the fiscal quarter ending
on December 31, 2008, make Capital Expenditures (including, without limitation,
by way of capitalized leases, but excluding (i) Capital Expenditures made using
the proceeds of equity securities issued in compliance with the terms hereof and
(ii) the principal portion of Capitalized Lease

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Obligations incurred in compliance with the terms hereof) which, in the
aggregate, as to all Borrowers and all of Borrowers’ Subsidiaries, exceed
$15,000,000 for such fiscal quarter.
     1.37.9. Disposition of Assets. Sell, lease or otherwise dispose of any of,
or permit any of its Subsidiaries to sell, lease or otherwise dispose of any of,
its Properties, including any disposition of Property as part of a sale and
leaseback transaction, to or in favor of any Person, except for:
     (i) sales of Inventory and collections of Accounts in the ordinary course
of business;
     (ii) transfers of Property to a Borrower by another Borrower or by a
wholly-owned Subsidiary of such Borrower;
     (iii) dispositions of investments described in paragraphs (iv), (v),
(vi) and (vii) of the definition of the term “Restricted Investments”;
     (iv) (A) the merger or consolidation of any Inactive Subsidiary or any
Person that does not own any assets with any other Person that is a Borrower or
a Subsidiary Guarantor (provided that such other Person that is a Borrower or
Subsidiary Guarantor is the Person surviving such merger or consolidation) and
(B) the liquidation, dissolution or winding up of any Inactive Subsidiary;
     (v) sales, leases and other dispositions of Property with a fair market
value of up to $12,000,000 in the aggregate in any fiscal year, in each case so
long as (a) no Event of Default is in existence or would result therefrom,
(b) with respect to a transaction involving any Accounts, Inventory or Patterns
and Core Boxes, not less than one hundred percent (100%) of the consideration
received in respect of such Accounts, Inventory or Patterns and Core Boxes is in
the form of cash, (c) after giving effect to any such transaction and the
application of the proceeds thereof, no Overadvance shall exist and (d) the
consideration received in respect of such Property is equal to the fair market
value thereof;
     (vi) so long as no Event of Default exists, sales, leases or other
dispositions of Equipment or other fixed assets that are worn, excess, damaged
or obsolete or consist of scrap and that (other than in the case of scrap) are
replaced with Equipment or other fixed assets that are usable in the ordinary
course of business of the applicable Borrower or Subsidiary of a Borrower; and
     (vii) licenses of Intellectual Property in the ordinary course of business.

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     1.37.10. Securities of Subsidiaries. Permit any of its Subsidiaries to
issue any additional Securities except to such Borrower and except for
director’s qualifying Securities.
     1.37.11. Bill-and-Hold Sales, Etc. Except for sales to customers in the
ordinary course of Borrowers’ business consistent with past practice, make, or
permit any of its Subsidiaries to make, a sale to any customer on a
bill-and-hold, guaranteed sale, sale and return, sale on approval, repurchase or
return or consignment basis.
     1.37.12. Restricted Investment. Make or have, or permit any of its
Subsidiaries of such Borrower to make or have, any Restricted Investment.
     1.37.13. Subsidiaries and Joint Ventures. Create, acquire or otherwise
suffer to exist, or permit any Subsidiary of such Borrower to create, acquire or
otherwise suffer to exist, any Subsidiary or joint venture arrangement not in
existence as of the date hereof, except in connection with a Permitted
Acquisition.
     1.37.14. Tax Consolidation. File or consent to the filing of any
consolidated income tax return with any Person other than Ultimate Parent,
Parent, Borrowers and Borrowers’ Subsidiaries.
     1.37.15. Organizational Documents. Agree to, or suffer to occur, any
amendment, supplement or addition to its or any of its Subsidiaries’ charter,
articles or certificate of incorporation, certificate of formation, limited
partnership agreement, bylaws, limited liability agreement, operating agreement
or other organizational documents (as the case may be), that would reasonably be
expected to have a Material Adverse Effect.
     1.37.16. Fiscal Year End. Change, or permit any of its Subsidiaries,
Ultimate Parent or Parent to change, its fiscal year end.
     1.37.17. Negative Pledges. Enter into any agreement (other than the Loan
Documents, the Secured Bond Documents and the Subordinated Bond Documents)
limiting the ability of such Borrower or any of its Subsidiaries to
(i) voluntarily create Liens upon any of its Property, (ii) pay dividends or
make any other Distributions on its Securities; (iii) make loans or advances to
any Borrower or any Subsidiary; (iv) pay any Indebtedness owed to any Borrower
or any Subsidiary of a Borrower; or (v) transfer any of its Property to any
Borrower or any Subsidiary.
     1.37.18. Incurrence of Credit Facilities other than this Agreement. Create,
incur, assume, or suffer to exist, or permit any of its Subsidiaries to create,
incur or suffer to exist, any “Credit Facilities” under and as defined in the
Secured Note Indenture, other than this Agreement and the Obligations, that
exceed $5,000,000 in aggregate principal amount at any time outstanding.
     1.37.19. Leases. Become, or permit any of its Subsidiaries to become, a
lessee under any operating lease (other than a lease under which such Borrower
or

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such Subsidiary is lessor) of Property if the aggregate Rentals payable during
any current or future period of twelve (12) consecutive months under the lease
in question and all other leases under which any Borrowers or any of its
Subsidiaries is then lessee would exceed $6,000,000. The term “Rentals” means,
as of the date of determination, all payments which the lessee is required to
make by the terms of any lease.
     1.37.20. Business Activity. Permit Ultimate Parent, Parent or any Inactive
Subsidiary to engage in any business activity or incur any Indebtedness other
than the ownership of the equity interests of Parent (in the case of Ultimate
Parent) and Neenah (in the case of Parent), the performance of such Person’s
obligations under the Loan Documents to which it is a party (in the case of
Parent and the Inactive Subsidiaries), the performance of the Obligations, the
performance of the Indebtedness evidenced by the Secured Bonds and the
Subordinated Bonds, the guaranty of Indebtedness incurred by a Borrower or an
active Subsidiary in compliance with the terms hereof and the performance of its
obligations under intercompany agreements and agreements with its shareholders
that are permitted hereunder and have been disclosed to Agent in writing (with
Agent disclosing to Lenders any such agreements that are disclosed to Agent in
writing and, if requested by a Lender, providing to such Lender copies of any
documents evidencing any such agreements that have been furnished to Agent).
     1.38. Specific Financial Covenants.
          During the Term, and thereafter for so long as there are any
Obligations (other than unasserted contingent indemnity obligations)
outstanding, each Borrower covenants that it shall comply with all of the
financial covenants set forth in Exhibit 8.3 hereto; provided, however, that
such financial covenants shall only be tested for a fiscal period if
Availability is less than $15,000,000 for any period of three consecutive
Business Days during the final fiscal quarter in such fiscal period.
SECTION 9. CONDITIONS PRECEDENT
          Notwithstanding any other provision of this Agreement or any of the
other Loan Documents, and without affecting in any manner the rights of Agent or
any Lender under the other sections of this Agreement, no Lender shall be
required to make any Loan on the Closing Date, nor shall Agent or any Letter of
Credit Issuer be required to or issue or procure any Letter of Credit or LC
Guaranty on the Closing Date unless and until each of the following conditions
has been and continues to be satisfied:
     1.38.1. Documentation. Agent and the Lenders shall have received, in form
and substance satisfactory to Agent and its counsel and the Lenders, a duly
executed copy of this Agreement and the other Loan Documents, together with such
additional documents, instruments, opinions and certificates as Agent and its
counsel shall reasonably require in connection therewith from time to time
(including, without limitation, the Secured Bond Documents, and the lockbox and
blocked account

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documentation to be executed in connection with the requirements of subsection
6.2.4), all in form and substance satisfactory to Agent and its counsel and the
Lenders.
     1.38.2. No Default. No Default or Event of Default shall exist.
     1.38.3. Availability. Agent shall have determined in its reasonable credit
judgment that immediately after giving effect to the consummation of the
transactions contemplated hereby to occur on the Closing Date, the making of any
Revolving Credit Loans to be made on the Closing Date, and the issuance of any
Letters of Credit or LC Guaranties to be issued on the Closing Date, and after
Borrowers have paid (or, if accrued, treated as paid), all closing costs
incurred in connection with the transactions contemplated hereby (including,
without limitation, the issuance of the Secured Bonds), and have reserved an
amount sufficient to pay all trade payables greater than 60 days past due,
Availability shall not be less than $50,000,000.
     1.38.4. No Litigation. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is materially adversely related to or
arises out of this Agreement, the Secured Bond Documents, or the consummation of
the transactions contemplated hereby or thereby.
     1.38.5. Secured Bonds and Subordinated Bonds. Neenah shall have received
not less than $220,000,000 in net cash proceeds from the issuance of the Secured
Bonds in accordance with the terms of the Secured Bond Documents and all
applicable laws; the net cash proceeds from such issuance of the Secured Bonds
shall have been used by Neenah to satisfy certain existing Indebtedness of
Borrowers, as more particularly set forth in the flow of funds statement
delivered by Borrowers to Agent on the Closing Date; and a Secured Bond
Intercreditor Agreement shall have been entered into with the Secured Bond
Trustee. Neenah shall have issued the Subordinated Bonds in an initial principal
amount of $75,000,000 in accordance with the terms of the Subordinated Bond
Documents and all applicable laws in exchange for Subordinated Bonds (2003
Series) in a corresponding aggregate principal amount; and the Subordinated Bond
Documents shall contain subordination provisions that are acceptable to Agent
and Lenders.
     1.38.6. Material Adverse Effect. As of the Closing Date, since
September 30, 2005, there has not been (i) any material adverse change in the
business, assets, liabilities, financial condition, business prospects or
results of operations of Borrowers (taken as a whole), it being understood that
changes or events affecting general economic conditions, but not otherwise
materially and adversely affecting the business, assets, liabilities, financial
condition, business prospects or results of operations of Borrowers’ and
Borrowers’ Subsidiaries, shall not be considered material adverse changes for
purposes of the foregoing or (ii) any material disruption or material adverse
change in the financial, banking or capital

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markets that is material to the syndication of the Revolving Loan Commitments
and Revolving Credit Loans.
     1.38.7. Existing Bonds. Not less than $75,000,000 in aggregate principal
amount of the Subordinated Bonds (2003 Series) shall have been defeased,
exchanged for Subordinated Bonds, redeemed or otherwise retired, and a notice of
redemption for the remaining balance of the Subordinated Bonds (2003 Series)
shall have been issued to the trustee for the Subordinated Bonds (2003 Series)
in accordance with the provisions of the “Subordinated Bond Indenture” as
defined in the Original Loan Agreement and shall provide for a redemption no
later than February 15, 2007. All of the Secured Bonds (2003 Series) shall have
been repurchased by Neenah pursuant to the tender offer documents issued by
Neenah on December 15, 2006.
     1.38.8. Audits, Appraisals and Environmental Reports. All of the appraisals
and audits of the real and personal Property and business of Borrowers being
conducted by Agent (or a third party designated by Agent) prior to the Closing
Date, and all of the Phase I environmental assessments of the real Property of
Borrowers being conducted by Agent (or a third party designated by Agent) prior
to the Closing Date, shall have been completed to Agent’s reasonable
satisfaction.
     1.39. Conditions Precedent to all Loans and other Credit Accommodations.
          Notwithstanding any other provision of this Agreement or any other
Loan Documents, and without affecting in any manner the rights of any Agent or
any Lender under the other sections of this Agreement, no Lender shall be
required to make any Loan, nor shall Agent or any Letter of Credit Issuer be
required to issue or procure any Letter of Credit or LC Guaranty unless and
until each of the following conditions has been and continues to be satisfied:
     1.39.1. No Default. No Default or Event of Default shall exist.
     1.39.2. No Litigation. No action, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, or which is materially adversely related to or
arises out of, any of the Loan Documents.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
          The occurrence of one or more of the following events shall constitute
an “Event of Default”:
     1.39.3. Payment of Obligations. Borrowers shall (i) fail to pay any of the
Obligations hereunder (other than the Obligations described in the following
clause (ii)) or under any Note on the due date thereof (whether due at stated
maturity, on demand, upon acceleration or otherwise) or (ii) fail to pay any
audit fees required to be paid by Borrowers pursuant to Section 2.7 or satisfy
any expenses required to be

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satisfied by Borrowers pursuant to subsection 2.8 within five days following
receipt by Borrowers of written notice of such failure.
     1.39.4. Misrepresentations. Any representation, warranty or other statement
made or furnished to Agent or any Lender by or on behalf of any Borrower, any of
its Subsidiaries or any Guarantor in this Agreement, any of the other Loan
Documents or any instrument, certificate or financial statement furnished in
compliance with or in reference thereto proves to have been false or misleading
in any material respect when made, furnished or reaffirmed pursuant to
Section 7.2 hereof; provided, that no breach of a representation or warranty
occurring solely in respect of an Inactive Subsidiary (other than a breach of
the representation and warranty contained in subsection 7.1.27) shall result in
an Event of Default unless such event would reasonably be expected to have a
Material Adverse Effect.
     1.39.5. Breach of Specific Covenants. Borrowers shall fail or neglect to
perform, keep or observe any covenant contained in Section or subsection 6.2.4,
6.2.5, 8.1.1, 8.1.2, 8.1.3(vi), 8.1.4 (at a time when Borrowing Base
Certificates are required to be delivered more frequently than monthly), 8.1.10,
8.2 (other than subsection 8.2.20) or 8.3 hereof on the date that Borrowers are
required to perform, keep or observe such covenant, shall fail or neglect to
perform, keep or observe any covenant contained in Section 8.1.4 hereof (at a
time when Borrowing Base Certificates are required to be delivered on a monthly
basis) within 1 Business Day following the date on which Borrowers are required
to perform, keep or observe such covenant, or shall fail or neglect to perform,
keep or observe any covenant contained in subsection 8.1.3(ii) or 8.1.3(iv)
hereof within 5 days following the date on which Borrowers are required to
perform, keep or observe such covenant.
     1.39.6. Breach of Other Covenants. Borrowers shall fail or neglect to
perform, keep or observe any covenant contained in this Agreement (other than a
covenant which is dealt with specifically elsewhere in Section 10.1 hereof) and
the breach of such other covenant is not cured to Agent’s reasonable
satisfaction within 30 days after the sooner to occur of Borrowers’ receipt of
notice of such breach from Agent or the date on which such failure or neglect
first becomes known to any officer of any Borrower.
     1.39.7. Default Under Security Documents or Other Agreements. Any event of
default shall occur under, or any Borrower, any of its Subsidiaries or any
Guarantor shall default in the performance or observance of any term, covenant,
condition or agreement applicable to such Person contained in, any of the
Security Documents or the Other Agreements (excluding any representations and
warranties set forth in such Security Documents and Other Agreements) and such
default shall continue, after the sooner to occur of such Person’s receipt of
notice of such default from Agent or the date on which such default first
becomes known to any officer of such Person, beyond any applicable grace period;
provided, that no event covered by this subsection 10.1.5 and occurring solely
in respect of an Inactive Subsidiary shall result in an Event of

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Default unless such event would reasonably be expected to have a Material
Adverse Effect.
     1.39.8. Other Defaults. There shall occur any event of default on the part
of any Borrower, any of its Subsidiaries or any Guarantor under any agreement,
document or instrument to which such Borrower, such Subsidiary or such Guarantor
is a party or by which such Borrower, such Subsidiary or such Guarantor or any
of its Property is bound, evidencing or relating to any Indebtedness (other than
the Obligations) with an outstanding principal balance in excess of $1,000,000,
if the payment or maturity of such Indebtedness is or could be accelerated in
consequence of such event of default or demand for payment of such Indebtedness
is made or could be made in accordance with the terms thereof; or there shall
occur any event which permits the holders of the Indebtedness under any such
agreement, document or instrument to require the repurchase or redemption of
such Indebtedness.
     1.39.9. Uninsured Losses. Any material loss, theft, damage or destruction
of any portion of the Collateral having a fair market value of $2,000,000, in
the aggregate, if not fully covered (subject to such deductibles and
self-insurance retentions as Agent shall have permitted) by insurance.
     1.39.10. Insolvency and Related Proceedings. Ultimate Parent, Parent, any
Borrower, any of its Subsidiaries or any Guarantor shall cease to be Solvent or
shall suffer the appointment of a receiver, trustee, custodian or similar
fiduciary, or shall make an assignment for the benefit of creditors, or any
petition for an order for relief shall be filed by or against Parent, any
Borrower, any of its Subsidiaries or any Guarantor under U.S. federal bankruptcy
laws (if against Parent, any Borrower, any of its Subsidiaries or any Guarantor
the continuation of such proceeding for more than 60 days), or Parent, any
Borrower, any of its Subsidiaries or any Guarantor shall make any offer of
settlement, extension or composition to their respective unsecured creditors
generally; provided, that no event covered by this subsection 10.1.8 and
occurring solely in respect of an Inactive Subsidiary shall result in an Event
of Default unless such event would reasonably be expected to have a Material
Adverse Effect.
     1.39.11. Business Disruption; Condemnation. There shall occur a cessation
of a substantial part of the business of Borrowers and their Subsidiaries (taken
as a whole) for a period which materially adversely affects the capacity of
Borrowers and their Subsidiaries to continue their business on a profitable
basis; or any Borrower, any of its Subsidiaries or any Guarantor shall suffer
the loss or revocation of any material license or permit now held or hereafter
acquired by such Borrower, such Subsidiary or such Guarantor which is necessary
to the continued or lawful operation of a material portion of the business of
Borrowers and their Subsidiaries (taken as a whole); or any Borrower, any of its
Subsidiaries or any Guarantor shall be enjoined, restrained or in any way
prevented by court, governmental or administrative order from conducting all or
any material part of the business affairs of Borrowers and their Subsidiaries
(taken as a whole); or any material lease or agreement pursuant to which

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any Borrower, any of its Subsidiaries or any Guarantor leases, uses or occupies
any Property shall be canceled or terminated prior to the expiration of its
stated term, except any such lease or agreement the cancellation or termination
of which could not reasonably be expected to have a Material Adverse Effect; or
any material portion of the Collateral shall be taken through condemnation or
the value of such Property shall be materially impaired through condemnation,
except for any such condemnation that would not reasonably be expected to have a
Material Adverse Effect.
     1.39.12. Change of Control. (a) any transaction is consummated the result
of which is that any “person” or “group” (as such terms are used for purposes of
Sections 13(d) and 14(d) of the Exchange Act) other than the Permitted Holders
is or becomes the “beneficial owner” (as such term is used in Rule 13d-3 under
the Exchange Act), directly or indirectly, of, in the aggregate, more than 50%
of the total Voting Stock of Ultimate Parent (or, upon and after the
consummation of the Neenah Full Reorganization, if it occurs, Neenah), whether
as a result of the purchase of Securities of Ultimate Parent (or, upon and after
the consummation of the Neenah Full Reorganization, if its occurs, Neenah) then
outstanding, the issuance of Securities of Ultimate Parent (or, upon and after
the consummation of the Neenah Full Reorganization, if its occurs, Neenah), any
merger, consolidation, liquidation or dissolution of Ultimate Parent (or, upon
and after the consummation of the Neenah Full Reorganization, if it occurs,
Neenah) or otherwise; (b) individuals who on the date hereof constituted the
board of directors of Neenah together with any new directors whose election by
the board of directors or whose nomination for election by the stockholders of
Neenah was approved by a majority of the directors then still in office who were
either directors or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority of the board of
directors of Neenah then in office; (c) until the consummation of a Neenah
Reorganization, if ever, Ultimate Parent shall cease to own and control,
beneficially and of record (directly or indirectly), 100% of the issued and
outstanding Securities of Parent; (d) until the consummation of the Neenah
Reorganization, if ever, Parent shall cease to own and control, beneficially and
of record (directly or indirectly), 100% of the issued and outstanding
Securities of Neenah; (e) after the consummation of a Neenah Partial
Reorganization, if ever, Ultimate Parent shall cease to own and control,
beneficially and of record (directly or indirectly), 100% of the issued and
outstanding Securities of Neenah; (f) Neenah shall cease to own and control,
beneficially and of record (directly or indirectly), 100% of the issued and
outstanding Securities of each other Borrower and each of its other Subsidiaries
(provided, that this clause (e) shall not prohibit the sale of all of the issued
and outstanding Securities of a Subsidiary of Neenah that is permitted under the
terms of subsection 8.2.9, it being agreed and understood that if any such
Subsidiary is a Borrower, such Subsidiary shall cease to be a Borrower in all
respects upon the consummation of such sale); (g) any “Change of Control” under
and as defined in the Secured Bond Indenture, or in any documentation evidencing
Indebtedness that has refinanced the Secured Bonds, shall occur; or (h) any
“Change of Control” under and as defined in

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the Subordinated Bond Indenture, or in any documentation evidencing Indebtedness
that has refinanced the Subordinated Bonds, shall occur.
     1.39.13. ERISA. A Reportable Event shall occur which constitutes grounds
for the termination by the Pension Benefit Guaranty Corporation of any Plan or
for the appointment by the appropriate United States district court of a trustee
for any Plan under Section 4042 of ERISA, or if any Plan shall be terminated or
any such trustee shall be requested or appointed, or any Borrower or any of its
Subsidiaries is in “default” (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from such Borrower’s or
such Subsidiary’s complete or partial withdrawal from such Plan and any such
event could reasonably be expected to have a Material Adverse Effect.
     1.39.14. Challenge to Agreement. Parent, any Borrower, any Subsidiary of
any Borrower (other than an Inactive Subsidiary) or any Guarantor (other than an
Inactive Subsidiary), or any Affiliate of any of them, shall challenge or
contest in any action, suit or proceeding the validity or enforceability of this
Agreement or any of the other Loan Documents, the legality or enforceability of
any of the Obligations or the perfection or priority of any Lien granted to
Agent.
     1.39.15. Repudiation of or Default Under Guaranty Agreement. Any Guarantor
(other than an Inactive Subsidiary) shall revoke or attempt to revoke the
Guaranty Agreement signed by such Guarantor, or shall repudiate such Guarantor’s
liability thereunder or shall be in default under the terms thereof.
     1.39.16. Criminal Forfeiture. Any Borrower or any of its Subsidiaries shall
be criminally indicted or convicted under any law that could lead to a
forfeiture of any Property of such Borrower or such Subsidiary, except for any
Property the forfeiture of which would not reasonably be expected to have a
Material Adverse Effect.
     1.39.17. Judgments. Any money judgments, writ of attachment or similar
processes (collectively, “Judgments”) are issued or rendered against any
Borrower, any of its Subsidiaries or any Guarantor, or any of their respective
Property (i) in the case of money judgments, in an amount of $1,000,000 or more
for any single judgment, attachment or process or $2,000,000 or more for all
such judgments, attachments or processes in the aggregate, in each case in
excess of any applicable insurance (or indemnity from a creditworthy source that
is reasonably acceptable to Agent) with respect to which the insurer (or the
indemnifying party, if applicable) has admitted liability, and (ii) in the case
of non-monetary Judgments, such Judgment or Judgments (in the aggregate) could
reasonably be expected to have a Material Adverse Effect, in each case which
Judgment is not stayed, released or discharged within 60 days; provided, that no
event covered by this subsection 10.1.15 and occurring solely in respect of an
Inactive Subsidiary shall result in an Event of Default unless such event would
reasonably be expected to have a Material Adverse Effect.

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     1.40. Acceleration of the Obligations.
          Upon or at any time after the occurrence and during the continuance of
an Event of Default, (i) the Revolving Loan Commitments shall, at the option of
Agent or Majority Lenders be terminated and/or (ii) Agent or Majority Lenders
may declare all or any portion of the Obligations at once due and payable
without presentment, demand protest or further notice by Agent or any Lender,
and Borrowers shall forthwith pay to Agent, the full amount of such Obligations,
provided, that upon the occurrence of an Event of Default specified in
subsection 10.1.8 hereof, the Revolving Loan Commitments shall automatically be
terminated and all of the Obligations shall become automatically due and
payable, in each case without declaration, notice or demand by Agent or any
Lender.
     1.41. Other Remedies.
          Upon the occurrence and during the continuance of an Event of Default,
Agent shall have and may exercise from time to time the following other rights
and remedies:
     1.41.1. All of the rights and remedies of a secured party under the UCC or
under other applicable law, and all other legal and equitable rights to which
Agent or Lenders may be entitled, all of which rights and remedies shall be
cumulative and shall be in addition to any other rights or remedies contained in
this Agreement or any of the other Loan Documents, and none of which shall be
exclusive.
     1.41.2. The right to take immediate possession of the Collateral, and to
(i) require each Borrower and each of its Subsidiaries to assemble the
Collateral, at Borrower’s joint and several expense, and make it available to
Agent at a place designated by Agent which is reasonably convenient to both
parties, and (ii) enter any premises where any of the Collateral shall be
located and to keep and store the Collateral on said premises until sold (and if
said premises be the Property of any Borrower or any of its Subsidiaries, such
Borrower agrees not to charge, or permit such Subsidiary to charge, Agent for
storage thereof).
     1.41.3. The right to sell or otherwise dispose of all or any Collateral in
its then condition, or after any further manufacturing or processing thereof, at
public or private sale or sales, with such notice as may be required by law, in
lots or in bulk, for cash or on credit, all as Agent, in its sole discretion,
may deem advisable. Agent may, at Agent’s option, disclaim any and all
warranties regarding the Collateral in connection with any such sale. Each
Borrower agrees that 10 days’ written notice to such Borrower or any of its
Subsidiaries of any public or private sale or other disposition of Collateral
shall be reasonable notice thereof, and such sale shall be at such locations as
Agent may designate in said notice. Agent shall have the right to conduct such
sales on any Borrower’s or any of its Subsidiaries’ premises, without charge
therefor, and such sales may be adjourned from time to time in accordance with
applicable law. Agent shall have the right to sell, lease or otherwise dispose
of the Collateral, or any part thereof, for cash, credit or any combination
thereof, and Agent, on behalf of Lenders, may purchase all or any part of the
Collateral at public

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or, if permitted by law, private sale and, in lieu of actual payment of such
purchase price, may set off the amount of such price against the Obligations.
The proceeds realized from the sale of any Collateral shall be applied in the
manner provided for in subsection 3.4.2. If any deficiency shall arise, each
Borrower and each Guarantor shall remain jointly and severally liable to Agent
and Lenders therefore. Any surplus shall be remitted to whomsoever shall be
legally entitled to the same.
     1.41.4. Agent is hereby granted a non-exclusive license or other right to
use, without charge, effective upon the occurrence and continuance of an Event
of Default, each Borrower’s and each of its Subsidiaries’ labels, patents,
copyrights, licenses, rights of use of any name, trade secrets, tradenames,
trademarks and advertising matter, or any Property of a similar nature, as it
pertains to the Collateral, in completing, advertising for sale and selling any
Collateral and each Borrower’s and each of its Subsidiaries’ rights under all
licenses and all franchise agreements shall inure to Agent’s benefit.
     1.41.5. Agent may, at its option, require Borrowers to deposit with Agent
funds equal to 105% of the LC Amount and, if Borrowers fail to promptly make
such deposit, Agent may advance such amount as a Revolving Credit Loan (whether
or not an Overadvance is created thereby). Each such Revolving Credit Loan shall
be secured by all of the Collateral and shall constitute a Base Rate Portion.
Any such deposit or advance shall be held by Agent as a reserve to fund future
payments on such LC Guaranties and future drawings against such Letters of
Credit. At such time as all LC Guaranties have been paid or terminated and all
Letters of Credit have been drawn upon or expired, any amounts remaining in such
reserve shall be applied against any outstanding Obligations, or, if all
Obligations have been indefeasibly paid in full, returned to Borrowers.
     1.42. Set Off and Sharing of Payments.
          In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, during the continuance of
any Event of Default, each Lender is hereby authorized by each Borrower at any
time or from time to time, with prior written consent of Agent and with
reasonably prompt subsequent notice to such Borrower (any prior or
contemporaneous notice to such Borrower being hereby expressly waived) to set
off and to appropriate and to apply any and all (i) balances held by such Lender
at any of its offices for the account of such Borrower or any of its
Subsidiaries (regardless of whether such balances are then due to such Borrower
or its Subsidiaries), and (ii) other property at any time held or owing by such
Lender to or for the credit or for the account of such Borrower or any of its
Subsidiaries, against and on account of any of the Obligations. Any Lender
exercising a right to set off shall, to the extent the amount of any such set
off exceeds its Revolving Loan Percentage of the amount set off, purchase for
cash (and the other Lenders shall sell) interests in each such other Lender’s
pro rata share of the Obligations as would be necessary to cause such Lender to
share such excess with each other Lender in accordance with their respective
Revolving Loan Percentages. Each Borrower agrees, to the fullest extent
permitted by law, that any Lender may exercise its right to set off with respect
to amounts in excess of its pro rata share of the

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Obligations and upon doing so shall deliver such excess to Agent for the benefit
of all Lenders in accordance with the Revolving Loan Percentages.
     1.43. Remedies Cumulative; No Waiver.
          All covenants, conditions, provisions, warranties, guaranties,
indemnities, and other undertakings of each Borrower contained in this Agreement
and the other Loan Documents, or in any document referred to herein or contained
in any agreement supplementary hereto or in any schedule or in any Guaranty
Agreement given to Agent or any Lender or contained in any other agreement
between any Lender and such Borrower or between Agent and such Borrower
heretofore, concurrently, or hereafter entered into, shall be deemed cumulative
to and not in derogation or substitution of any of the terms, covenants,
conditions, or agreements of such Borrower herein contained. The failure or
delay of Agent or any Lender to require strict performance by any Borrower of
any provision of this Agreement or to exercise or enforce any rights, Liens,
powers, or remedies hereunder or under any of the aforesaid agreements or other
documents or security or Collateral shall not operate as a waiver of such
performance, Liens, rights, powers and remedies, but all such requirements,
Liens, rights, powers, and remedies shall continue in full force and effect
until all Loans and other Obligations owing or to become owing from such
Borrower to Agent and each Lender have been fully satisfied. None of the
undertakings, agreements, warranties, covenants and representations of any
Borrower contained in this Agreement or any of the other Loan Documents and no
Default or Event of Default by any Borrower under this Agreement or any other
Loan Documents shall be deemed to have been suspended or waived by Lenders,
unless such suspension or waiver is by an instrument in writing specifying such
suspension or waiver and is signed by a duly authorized representative of Agent
and directed to Borrowers.
SECTION 11. THE AGENT
          Each Lender hereby appoints and authorizes Agent to take such action
on its behalf and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto. Each Lender
hereby acknowledges that Agent shall not have by reason of this Agreement
assumed a fiduciary relationship in respect of any Lender. In performing its
functions and duties under this Agreement, Agent shall act solely as agent of
Lenders and shall not in its capacity as such assume, or be deemed to have
assumed, any obligation toward, or relationship of agency or trust with or for,
any Borrower. As to any matters not expressly provided for by this Agreement and
the other Loan Documents (including without limitation enforcement and
collection of the Notes), Agent may, but shall not be required to, exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Majority Lenders, whenever such instruction shall
be requested by Agent or required hereunder, or a greater or lesser number of
Lenders if so required hereunder, and such instructions shall be binding upon
all Lenders; provided, that Agent shall be fully justified in failing or
refusing to take any action which exposes Agent to any liability or which is
contrary to this Agreement, the other Loan Documents or applicable law, unless
Agent is indemnified to its satisfaction by the other Lenders against any and
all

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liability and expense which it may incur by reason of taking or continuing to
take any such action. If Agent seeks the consent or approval of the Majority
Lenders (or a greater or lesser number of Lenders as required in this
Agreement), with respect to any action hereunder, Agent shall send notice
thereof to each Lender and shall notify each Lender at any time that the
Majority Lenders (or such greater or lesser number of Lenders) have instructed
Agent to act or refrain from acting pursuant hereto.
          1.44. Agent’s Reliance, Etc.
          Neither Agent, any Affiliate of Agent, nor any of their respective
directors, officers, agents or employees shall be liable in their capacity as
such for any action taken or omitted to be taken by it or them under or in
connection with this Agreement or the other Loan Documents, except for its or
their own gross negligence or willful misconduct. Without limitation of the
generality of the foregoing, Agent: (i) may treat each Lender party hereto as
the holder of Obligations until Agent receives written notice of the assignment
or transfer of such Lender’s portion of the Obligations signed by such Lender
and in form reasonably satisfactory to Agent; (ii) may consult with legal
counsel, independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts,
(iii) makes no warranties or representations to any Lender and shall not be
responsible to any Lender for any recitals, statements, warranties or
representations made in or in connection with this Agreement or any other Loan
Documents; (iv) shall not have any duty beyond Agent’s customary practices in
respect of loans in which Agent is the only lender, to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or conditions
of this Agreement or the other Loan Documents on the part of any Borrower, to
inspect the property (including the books and records) of any Borrower, to
monitor the financial condition of any Borrower or to ascertain the existence or
possible existence or continuation of any Default or Event of Default; (v) shall
not be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or the other
Loan Documents or any other instrument or document furnished pursuant hereto or
thereto; (vi) shall not be liable to any Lender for any action taken, or
inaction, by Agent upon the instructions of Majority Lenders pursuant to
Section 11.1 hereof or refraining to take any action pending such instructions;
(vii) shall not be liable for any apportionment or distributions of payments
made by it in good faith pursuant to Section 3 hereof; (viii) shall incur no
liability under or in respect of this Agreement or the other Loan Documents by
acting upon any notice, consent, certificate, message or other instrument or
writing (which may be by telephone, facsimile, telegram, cable or telex)
believed in good faith by it to be genuine and signed or sent by the proper
party or parties; and (ix) may assume that no Event of Default has occurred and
is continuing, unless Agent has actual knowledge of the Event of Default, has
received notice from a Borrower or a Borrower’s independent certified public
accountants stating the nature of the Event of Default, or has received notice
from a Lender stating the nature of the Event of Default and that such Lender
considers the Event of Default to have occurred and to be continuing. In the
event any apportionment or distribution described in clause (vii) above is
determined to have been made in error, the sole recourse of any Person to whom
payment

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was due but not made shall be to recover from the recipients of such payments
any payment in excess of the amount to which they are determined to have been
entitled.
          1.45. BofA and Affiliates.
          With respect to its commitment hereunder to make Loans, BofA shall
have the same rights and powers under this Agreement and the other Loan
Documents as any other Lender and may exercise the same as though it were not
Agent; and the terms “Lender,” “Lenders” or “Majority Lenders” shall, unless
otherwise expressly indicated, include BofA in its individual capacity as a
Lender. BofA and its Affiliates may lend money to, and generally engage in any
kind of business with, each Borrower, and any Person who may do business with or
own Securities of each Borrower all as if BofA were not Agent and without any
duty to account therefor to any other Lender.
          1.46. Lender Credit Decision.
          Each Lender acknowledges that it has, independently and without
reliance upon Agent or any other Lender and based on the financial statements
referred to herein and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender also acknowledges that it will, independently and without
reliance upon Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement. Agent
shall not have any duty or responsibility, either initially or on an ongoing
basis, to provide any Lender with any credit or other similar information
regarding any Borrower.
          1.47. Indemnification.
          Lenders agree to indemnify Agent and each Arranger (to the extent not
reimbursed by Borrowers), in accordance with their respective Aggregate
Percentages, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Agent or either Arranger in any way relating to or arising out
of this Agreement or any other Loan Document or any action taken or omitted by
Agent or either Arranger under this Agreement; provided that no Lender shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from Agent’s gross negligence or willful misconduct. Without limitation of the
foregoing, each Lender agrees to reimburse Agent and each Arranger promptly upon
demand for its ratable share, as set forth above, of any out-of-pocket expenses
(including reasonable attorneys’ fees) incurred by Agent or either Arranger in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiation, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement and each other Loan Document, to the
extent that Agent or either Arranger, as applicable, is not reimbursed for such
expenses by Borrowers. The obligations of Lenders under this Section 11.5 shall
survive the payment in full of all Obligations and the termination of this
Agreement. If after

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payment and distribution of any amount by Agent to Lenders, any Lender or any
other Person, including any Borrower, any creditor of any Borrower, a
liquidator, administrator or trustee in bankruptcy, recovers from Agent or
either Arranger any amount found to have been wrongfully paid to Agent or either
Arranger or disbursed by Agent or either Arranger to Lenders, then Lenders, in
accordance with their respective Aggregate Percentages, shall reimburse Agent or
such Arranger, as applicable, for all such amounts.
          1.48. Rights and Remedies to be Exercised by Agent Only.
          Each Lender agrees that, except as set forth in Section 10.4, no
Lender shall have any right individually (i) to realize upon the security
created by this Agreement or any other Loan Document, (ii) to enforce any
provision of this Agreement or any other Loan Document, or (iii) to make demand
for payment by Borrower or any Guarantor under this Agreement or any other Loan
Document.
          1.49. Agency Provisions Relating to Collateral.
          Each Lender authorizes and ratifies Agent’s entry into this Agreement
and the Security Documents for the benefit of Lenders. Each Lender agrees that
any action taken by Agent with respect to the Collateral in accordance with the
provisions of this Agreement or the Security Documents, and the exercise by
Agent of the powers set forth herein or therein, together with such other powers
as are reasonably incidental thereto, shall be authorized and binding upon all
Lenders. Agent is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender to take any action
with respect to any Collateral or the Loan Documents which may be necessary to
perfect and maintain perfected Agent’s Liens upon the Collateral, for its
benefit and the ratable benefit of Lenders. Lenders hereby irrevocably authorize
Agent, at its option and in its discretion, to release any Lien granted to or
held by Agent upon any Collateral (i) upon termination of the Agreement and
payment and satisfaction of all Obligations; it being understood that Agent
shall release its Lien on the Collateral upon termination of the Agreement
pursuant to release documentation that is reasonably requested by Borrowers (and
Agent agrees with Borrowers to provide such release); or (ii) constituting
property being sold or disposed of if the sale or disposition is made in
compliance with subsection 8.2.9, as it may be amended from time to time in
accordance with the provisions of Section 12.3; it being understood that Agent
shall release its Lien on any Collateral that is sold or otherwise disposed of
in compliance with subsection 8.2.9 pursuant to release documentation that is
reasonably requested by Borrowers (and Agent agrees with Borrowers to provide
such releases); or (iii) constituting property in which no Borrower owned any
interest at the time the Lien was granted or at any time thereafter; or (iv) in
connection with any foreclosure sale or other enforcement action with respect to
Collateral or in connection with the other exercise by Agent of remedies
hereunder or under another Loan Document, in each case after the occurrence and
during the continuation of an Event of Default or (v) if approved, authorized or
ratified in writing by Agent at the direction of all Lenders. Upon request by
Agent at any time, Lenders will confirm in writing Agent’s authority to release
particular types or items of Collateral pursuant hereto. Agent shall have no
obligation whatsoever to any Lender or to any other Person to assure that the
Collateral exists or is owned by any Borrower or is cared for, protected or
insured or has

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been encumbered or that the Liens granted to Agent herein or pursuant to the
Security Documents have been properly or sufficiently or lawfully created,
perfected, protected or enforced or are entitled to any particular priority, or
to exercise at all or in any particular manner or under any duty of care,
disclosure or fidelity, or to continue exercising, any of its rights,
authorities and powers granted or available to Agent in this Section 11.7 or in
any of the Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, Agent may act in any
manner it may deem appropriate, in its sole discretion, but consistent with the
provisions of this Agreement, including given Agent’s own interest in the
Collateral as a Lender and that Agent shall have no duty or liability whatsoever
to any Lender.
          1.50. Agent’s Right to Purchase Commitments.
          Agent shall have the right, but shall not be obligated, at any time
upon written notice to any Lender and with the consent of such Lender, which may
be granted or withheld in such Lender’s sole discretion, to purchase for Agent’s
own account all of such Lender’s interests in this Agreement, the other Loan
Documents and the Obligations, for the face amount of the outstanding
Obligations owed to such Lender, including without limitation all accrued and
unpaid interest and fees.
          1.51. Right of Sale, Assignment, Participations.
          Each Borrower hereby consents to any Lender’s participation, sale,
assignment, transfer or other disposition, at any time or times hereafter, of
this Agreement and any of the other Loan Documents, or of any portion hereof or
thereof, including, without limitation, such Lender’s rights, title, interests,
remedies, powers, and duties hereunder or thereunder subject to the terms and
conditions set forth below:
     1.51.1. Sales, Assignments. Each Lender hereby agrees that, with respect to
any sale or assignment (i) no such sale or assignment shall be for an amount of
less than $5,000,000 or any integral multiple of $1,000,000 in excess thereof
(or, if less, the aggregate amount of the Loans and Loan Commitments of such
Lender), (ii) Agent and, in the absence of a Default or Event of Default,
Borrowers, must consent, such consent not to be unreasonably withheld, to each
such assignment to a Person that is not an original signatory to this Agreement,
(iii) the assigning Lender shall pay to Agent a processing and recordation fee
of $3,500 and any out-of-pocket attorneys’ fees and expenses incurred by Agent
in connection with any such sale or assignment and (iv) Agent, the assigning
Lender and the assignee Lender shall each have executed and delivered an
Assignment and Acceptance Agreement. After such sale or assignment has been
consummated and the Register is updated (x) the assignee Lender thereupon shall
become a “Lender” for all purposes of this Agreement and (y) the assigning
Lender shall have no further liability for funding the portion of Revolving Loan
Commitments assumed by such other Lender.
     1.51.2. Participations. Upon the consent of Agent and, in the absence of an
Event of Default, Borrowers (such consent not to be unreasonably withheld), any

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Lender may grant participations in its extensions of credit hereunder to any
other Lender or other lending institution (a “Participant”), provided that
(i) no such participation shall be for an amount of less than $5,000,000 or any
integral multiple of $1,000,000 in excess thereof (or, if less, the aggregate
amount of the Loans and Loan Commitments of such Lender), (ii) no Participant
shall thereby acquire any direct rights under this Agreement, (iii) no
Participant shall be granted any right to consent to any amendment, except to
the extent any of the same pertain to (1) reducing the aggregate principal
amount of, or interest rate on, or fees applicable to, any Loan or (2) extending
the final stated maturity of any Loan or the stated maturity of any portion of
any payment of principal of, or interest or fees applicable to, any of the
Loans; provided, that the rights described in this subclause (2) shall not be
deemed to include the right to consent to any amendment with respect to or which
has the effect of requiring any mandatory prepayment of any portion of any Loan
or any amendment or waiver of any Default or Event of Default, (iv) no sale of a
participation in extensions of credit shall in any manner relieve the
originating Lender of its obligations hereunder, (v) the originating Lender
shall remain solely responsible for the performance of such obligations,
(vi) Borrowers and Agent shall continue to deal solely and directly with the
originating Lender in connection with the originating Lender’s rights and
obligations under this Agreement and the other Loan Documents, (vii) in no event
shall any financial institution purchasing the participation grant a
participation in its participation interest in the Loans without the prior
written consent of Agent, and, in the absence of a Default or an Event of
Default, Borrowers, which consents shall not unreasonably be withheld and
(viii) all amounts payable by Borrowers hereunder shall be determined as if the
originating Lender had not sold any such participation.
     1.51.3. Certain Agreements of Borrowers. Each Borrower agrees that (i) it
will use its commercially reasonable efforts to cooperate with each Lender to
effect the sale of participation in or assignments of any of the Loan Documents
or any portion thereof or interest therein, including, without limitation,
assisting in the preparation of appropriate disclosure documents and making
members of management available at reasonable times to meet with and answer
questions of potential assignees and Participants; and (ii) subject to the
provisions of Section 12.15 hereof, such Lender may disclose credit information
regarding each Borrower to any potential Participant or assignee.
     1.51.4. Non U.S. Resident Transferees. If, pursuant to this Section 11.9,
any interest in this Agreement or any Loans is transferred to any transferee
which is organized under the laws of any jurisdiction other than the United
States or any state thereof, the transferor Lender shall cause such transferee
(other than any Participant), and may cause any Participant, concurrently with
and as a condition precedent to the effectiveness of such transfer, to
(i) represent to the transferor Lender (for the benefit of the transferor
Lender, Agent, and Borrowers) that under applicable law and treaties no taxes
will be required to be withheld and paid by Agent, Borrowers or the transferor
Lender with respect to any payments to be made to such transferee in

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respect of the interest so transferred and (ii) comply with the provisions of
Section 2.12(b).
     1.51.5. Register. Pursuant to this subsection 11.9.5, Borrowers hereby
designate Agent to serve as agent for the purposes of this subsection 11.9.5,
and Agent agrees, to maintain, or cause to be maintained at its offices, a
listing of the name and address of each Lender and the Revolving Loan Commitment
of, the principal balance of and stated interest on the Loans owing to, each
Lender (the “Register”). The entries in such listing shall be conclusive and
binding for all purposes, absent manifest error, and Borrowers, Agent and
Lenders shall treat each Person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. Loans and Commitments may
be assigned or sold in whole or in part only by recordation of such assignment
or sale in the Register. The Register shall be available for inspection by
Borrowers and any Lender at any reasonable time upon reasonable prior notice.
     1.52. [Intentionally Omitted].
     1.53. Resignation of Agent; Appointment of Successor.
          Agent may resign as Agent by giving not less than thirty (30) days’
prior written notice to Lenders and Borrowers. If Agent shall resign under this
Agreement, then, (i) subject to the consent of Borrowers (which consent shall
not be unreasonably withheld and which consent shall not be required during any
period in which a Default or an Event of Default exists), Majority Lenders shall
appoint from among Lenders a successor agent for Lenders or (ii) if a successor
agent shall not be so appointed and approved within the thirty (30) day period
following Agent’s notice to Lenders and Borrowers of its resignation, then Agent
shall appoint a successor agent who shall serve as Agent until such time as
Majority Lenders appoint a successor agent, subject to Borrowers’ consent as set
forth above. Upon its appointment, such successor agent shall succeed to the
rights, powers and duties of Agent and the term “Agent” shall mean such
successor effective upon its appointment, and the former Agent’s rights, powers
and duties as Agent shall be terminated without any other or further act or deed
on the part of such former Agent or any of the parties to this Agreement. After
the resignation of any Agent hereunder, the provisions of this Section 11 shall
inure to the benefit of such former Agent and such former Agent shall not by
reason of such resignation be deemed to be released from liability for any
actions taken or not taken by it while it was an Agent under this Agreement.
     1.54. Audit and Examination Reports; Disclaimer by Lenders.
     By signing this Agreement, each Lender:
     (a) is deemed to have requested that Agent furnish such Lender, promptly
after it becomes available, a copy of each audit or examination report (each a
“Report” and collectively, “Reports”) prepared by or on behalf of Agent;

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     (b) expressly agrees and acknowledges that Agent (i) does not make any
representation or warranty as to the accuracy of any Report, and (ii) shall not
be liable for any information contained in any Report;
     (c) expressly agrees and acknowledges that the Reports are not
comprehensive audits or examinations, that Agent or other party performing any
audit or examination will inspect only specific information regarding each
Borrower and will rely significantly upon each Borrower’s books and records, as
well as on representations of each Borrower’s personnel;
     (d) agrees to keep all Reports confidential and strictly for its internal
use, and not to distribute except to its assignees or participants, or use any
Report in any other manner, in accordance with the provisions of Section 12.15;
and
     (e) without limiting the generality of any other indemnification provision
contained in this Agreement, agrees: (i) to hold Agent and any such other Lender
preparing a Report harmless from any action the indemnifying Lender may take or
conclusion the indemnifying Lender may reach or draw from any Report in
connection with any loans or other credit accommodations that the indemnifying
Lender has made or may make to any Borrower, or the indemnifying Lender’s
participation in, or the indemnifying Lender’s purchase of, a loan or loans of
any Borrower; and (ii) to pay and protect, and indemnify, defend and hold Agent
and any such other Lender preparing a Report harmless from and against, the
claims, actions, proceedings, damages, costs, expenses and other amounts
(including attorney’s fees and expenses) incurred by Agent and any such other
Lender preparing a Report as the direct or indirect result of any third parties
who might obtain all or part of any Report through the indemnifying Lender.
     1.55. Syndication Agent and Arrangers.
     None of the Syndication Agent or the Arrangers identified in the
introductory paragraph of this Agreement, in its capacity as such, shall have
any rights, powers, duties or responsibilities, and no rights, powers, duties or
responsibilities shall be read into this Agreement or any other Loan Document or
otherwise exist on behalf of or against such entity, in its capacity as such. If
any of the Syndication Agent or the Arrangers resigns, in its capacity as such,
no successor Syndication Agent or Arranger (as applicable) shall be appointed.
     1.56. Real Property Collateral.
     Notwithstanding any provision of this Agreement or any other Loan Document
to the contrary, Agent shall not take any action to foreclose upon, acquire or
take possession of or occupy, or exercise any remedies by which it will take
title or otherwise come into ownership in respect of Collateral

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consisting of real Property (the “Affected Collateral”) or purchase or otherwise
acquire (including in lieu of actual payment of a purchase price) any stock or
other equity interest in any Borrower or other Person that owns the Affected
Collateral unless and until (i) Lenders have obtained, at Borrowers’ joint and
several expense, a Phase II environmental site assessment with respect to the
Affected Collateral, prepared by an environmental consultant reasonably
acceptable to Lenders and (ii) each Lender has confirmed that no remediation is
required by such Lender or that any remediation has been completed to the
satisfaction of such Lender with respect to the Affected Collateral.
SECTION 12. MISCELLANEOUS
          Each Borrower hereby irrevocably designates, makes, constitutes and
appoints Agent (and all Persons designated by Agent) as such Borrower’s true and
lawful attorney (and agent-in-fact), solely with respect to the matters set
forth in this Section 12.1, and Agent, or Agent’s agent, may, without notice to
any Borrower and in such Borrower’s or Agent’s name, but at the cost and expense
of such Borrower:
     1.56.1. Subject to the third sentence of subsection 3.4.1 to the extent
that the taking of any action pursuant to this subsection 12.1.1 causes a credit
balance to exist in the Loan Account, at such time or times as Agent or said
agent, in its sole discretion, may determine, endorse such Borrower’s name on
any checks, notes, acceptances, drafts, money orders or any other evidence of
payment or proceeds of the Collateral which come into the possession of Agent or
under Agent’s control.
     1.56.2. At such time or times after the occurrence and during the
continuance of an Event of Default (provided that the occurrence of an Event of
Default shall not be required with respect to clauses (iv), (vi)(except as set
forth below in such clause (vi)), (viii) and (ix) below), as Agent or its agent
in its sole discretion may determine: (i) demand payment of the Accounts from
the Account Debtors, enforce payment of the Accounts by legal proceedings or
otherwise, and generally exercise all of such Borrower’s rights and remedies
with respect to the collection of the Accounts; (ii) settle, adjust, compromise,
discharge or release any of the Accounts or other Collateral or any legal
proceedings brought to collect any of the Accounts or other Collateral;
(iii) sell or assign any of the Accounts and other Collateral upon such terms,
for such amounts and at such time or times as Agent deems advisable, and at
Agent’s option, with all warranties regarding the Collateral disclaimed;
(iv) take control, in any manner, of any item of payment or proceeds relating to
any Collateral at any time when a Dominion Period is in effect; (v) prepare,
file and sign such Borrower’s name to a proof of claim in bankruptcy or similar
document against any Account Debtor or to any notice of lien, assignment or
satisfaction of lien or similar document in connection with any of the
Collateral; (vi) receive, open and dispose of all mail addressed to such
Borrower and, if an Event of Default has occurred and is continuing, notify
postal authorities to change the address for delivery thereof to such address as
Agent may designate until such time as no Event of Default exists; provided,
that any contents of such mail other than any

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checks, notes, acceptances, drafts, money orders or other evidence of payment or
proceeds of the Collateral shall be furnished by Agent to such Borrower in
accordance with written instructions provided by such Borrower; (vii) endorse
the name of such Borrower upon any of the items of payment or proceeds relating
to any Collateral and deposit the same to the account of Agent on account of the
Obligations; (viii) endorse the name of such Borrower upon any chattel paper,
document, instrument, invoice, freight bill, bill of lading or similar document
or agreement relating to any Collateral; (ix) use such Borrower’s stationery and
sign the name of such Borrower to verifications of the Accounts and notices
thereof to Account Debtors (provided that Agent shall deliver drafts of any such
written communication to such Borrower prior to the delivery thereof to any
Account Debtors); (x) use the information recorded on or contained in any data
processing equipment and Computer Hardware and Software relating to the
Accounts, Inventory, Equipment and any other Collateral; (xi) make and adjust
claims under policies of insurance to the extent related to the Collateral; and
(xii) do all other acts and things necessary, in Agent’s determination, to
fulfill such Borrower’s obligations under this Agreement.
          The power of attorney granted hereby shall constitute a power coupled
with an interest and shall be irrevocable.
          1.57. Indemnity.
          Each Borrower hereby agrees to jointly and severally indemnify Agent,
each Arranger and each Lender (and each of their Affiliates) and hold Agent,
each Arranger and each Lender (and each of their Affiliates) harmless from and
against any liability, loss, damage, suit, action or proceeding suffered or
incurred by any such Person (including reasonable documented attorneys fees and
legal expenses) as the result of such Borrower’s failure to observe, perform or
discharge such Borrower’s duties hereunder (subject to subsection 2.12) or
arising from or relating to this Agreement, the other Loan Documents or the
transactions contemplated hereby or thereby, except those determined by a court
of competent jurisdiction in a final nonappealable judgment to have arisen out
of the bad faith, gross negligence or willful misconduct of, or breach of the
terms of this Agreement or any other Loan Document by, Agent, either Arranger or
such Lender. In addition, each Borrower shall defend Agent, each Arranger and
each Lender (and each of their Affiliates) against and hold it harmless from all
claims of any Person with respect to the Collateral (except those determined by
a court of competent jurisdiction in a final nonappealable judgment to have
resulted from the bad faith, gross negligence or intentional misconduct of, or
breach of the terms of this Agreement or any other Loan Document by, any such
Person seeking indemnity). Without limiting the generality of the foregoing,
each Borrower shall indemnify and hold harmless Agent, each Arranger and each
Lender (and each of their Affiliates) from and against any loss, damage, cost,
expense or liability directly or indirectly arising out of or under the
Environmental Laws, or attributable to the use, generation, storage, release,
threatened release, discharge, disposal or presence of any pollutants,
flammables, explosives, petroleum (including crude oil) or any fraction thereof,
radioactive materials, hazardous wastes, toxic substances or related materials,
including, without limitation, any substances defined as or included in the
definition of toxic or hazardous substances, wastes, or materials under any
Environmental Law, except for those losses,

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damages, costs, expenses or liabilities determined by a court of competent
jurisdiction in a final nonappealable judgment to have arisen out of the bad
faith, gross negligence or willful misconduct of Agent, either Arranger or such
Lender. Notwithstanding any contrary provision in this Agreement, the obligation
of each Borrower under this Section 12.2 shall survive the payment in full of
the non-indemnity Obligations and the termination of this Agreement.
          1.58. Amendments.
          No amendment or waiver of any provision of this Agreement or any other
Loan Document (including without limitation any Note), nor consent to any
departure by any Borrower therefrom, shall in any event be effective unless the
same shall be in writing and signed by the Majority Lenders and Borrowers, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given; provided, that no amendment, waiver or
consent shall be effective, unless (i) in writing and signed by each Lender, if
it does any of the following: (1) increase or decrease the aggregate Loan
Commitments, or any Lender’s Revolving Loan Commitment, (2) reduce the principal
of, or interest on, any amount payable on any date hereunder or under any Note,
other than those payable only to BofA in its capacity as Agent, which may be
reduced by BofA unilaterally, (3) decrease any interest rate payable hereunder,
the Unused Line Fee or any other fee payable to Lenders (as opposed to Agent or
either Arranger), (4) postpone any date fixed for any payment of principal of,
or interest on, any amounts payable hereunder or under any Note, other than
those payable only to BofA in its capacity as Agent, which may be postponed by
BofA unilaterally; provided, that notwithstanding the foregoing or any other
provision of this Section 12.3 to the contrary, the extension of a due date for
a mandatory prepayment of the Obligations required under subsection 3.3.1, 3.3.2
or 3.3.3 or a modification of the manner in which any such prepayment is applied
to the Obligations shall be subject to the approval of the Majority Lenders and
Borrowers, (5) modify the definitions of any of the terms Borrowing Base
(including, without limitation, the percentages set forth in the definition of
such term), Eligible Account, Eligible Inventory, Eligible Extended Municipal
Accounts, Eligible Extra Extended Municipal Accounts, and Eligible Patterns and
Core Boxes if the effect of such modification is to increase the amount
available to be borrowed in respect of the Revolving Loans, or modify the
definitions of any of the terms Dominion Event and Dominion Period, (6) reduce
the number of Lenders that shall be required for Lenders or any of them to take
any action hereunder, (7) release or discharge any Person (other than an
Inactive Subsidiary) liable for the performance of any obligations of any
Borrower hereunder or under any of the Loan Documents, (8) amend any provision
of this Agreement that requires the consent of all Lenders or consent to or
waive any breach thereof, (9) amend the definition of the term “Majority
Lenders”, (10) amend this Section 12.3, subsection 1.1.2, subsection 1.1.4(i) or
subsection 1.1.5, (11) release Collateral having a fair market value that
exceeds $5,000,000 in the aggregate, unless otherwise permitted pursuant to
Section 11.7 hereof or (12) subordinate the Obligations to any other
Indebtedness or subordinate any of the Liens on the Collateral securing the
Obligations to any other Liens, except in the case of subordination of Agent’s
Liens on assets subject to permitted Capitalized Lease Obligations or Permitted
Purchase Money Indebtedness or pursuant to the terms of the Secured Bond
Intercreditor Agreement or any intercreditor agreement applicable to
Indebtedness that has refinanced the Secured Bonds in

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compliance with subsection 8.2.3 (in each case which Agent shall be permitted to
effect without the consent of any other Lender), or amend the terms of the
Secured Bond Intercreditor Agreement in a manner that is adverse to the Lenders;
or (ii) in writing and signed by Agent in addition to the Lenders required above
to affect the rights or duties of Agent under this Agreement, any Note or any
other Loan Document. If a fee is to be paid by Borrowers in connection with any
waiver or amendment hereunder, the agreement evidencing such amendment or waiver
may, at the discretion of Agent (but shall not be required to), provide that
only Lenders executing such agreement by a specified date may share in such fee
(and in such case, such fee shall be divided among the applicable Lenders on a
pro rata basis without including the interests of any Lenders who have not
timely executed such agreement).
          1.59. Sale of Interest.
          No Borrower may sell, assign or transfer any interest in this
Agreement, any of the other Loan Documents, or any of the Obligations, or any
portion thereof, including, without limitation, such Borrower’s rights, title,
interests, remedies, powers, and duties hereunder or thereunder, without the
prior written consent of Agent and each Lender.
          1.60. Severability.
          Wherever possible, each provision of this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be prohibited by or invalid under
applicable law, such provision shall be ineffective only to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Agreement.
          1.61. Successors and Assigns.
          This Agreement, the Other Agreements and the Security Documents shall
be binding upon and inure to the benefit of the successors and assigns of
Borrowers, Agent and each Lender permitted under Section 11.9 hereof.
          1.62. Cumulative Effect; Conflict of Terms.
          The provisions of the Other Agreements and the Security Documents are
hereby made cumulative with the provisions of this Agreement. Except as
otherwise provided in any of the other Loan Documents by specific reference to
the applicable provision of this Agreement, if any provision contained in this
Agreement is in direct conflict with, or inconsistent with, any provision in any
of the other Loan Documents, the provision contained in this Agreement shall
govern and control.
          1.63. Execution in 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 and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.

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          1.64. Notice.
          Except as otherwise provided herein, all notices, requests and demands
to or upon a party hereto, to be effective, shall be in writing, return receipt
requested, by personal delivery against receipt, by overnight courier or by
facsimile and, unless otherwise expressly provided herein, shall be deemed to
have been validly served, given, delivered or received, as applicable,
immediately when delivered against receipt, one Business Day after deposit with
an overnight courier or, in the case of facsimile notice, when sent, addressed
as follows:

     
If to Agent:
  Bank of America, N.A.
 
  One South Wacker Drive
 
  Suite 3400
 
  Chicago, Illinois 60606
 
  Attention: Business Capital, Senior Portfolio
 
  Manager
 
  Facsimile No.: (312) 332-6537
 
   
With a copy to:
  Goldberg, Kohn, Bell, Black,
 
  Rosenbloom & Moritz, Ltd.
 
  55 East Monroe Street
 
  Suite 3700
 
  Chicago, Illinois 60603
 
  Attention: David L. Dranoff, Esq.
 
  Facsimile No.: (312) 332-2196
 
   
If to any Borrower:
  c/o Neenah Foundry Company
 
  2121 Brooks Avenue
 
  Neenah, Wisconsin 54956
 
  Attention: Mr. Gary LaChey
 
  Facsimile No.: (920) 729-3633
 
   
With a copy to:
  Quarles & Brady LLP
 
  411 East Wisconsin Avenue
 
  Milwaukee, Wisconsin 53202-4497
 
  Attention: Andrew M. Barnes, Esq.
 
  Facsimile No.: (414) 978-8990

or to such other address as each party may designate for itself by notice given
in accordance with this Section 12.9; provided, however, that any notice,
request or demand to or upon Agent or a Lender pursuant to subsection 3.1.1 or
4.2.2 hereof shall not be effective until received by Agent or such Lender.
          1.65. Consent.
          Whenever Agent’s, Majority Lenders’ or all Lenders’ consent is
required to be obtained under this Agreement, any of the Other Agreements or any
of the Security Documents

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as a condition to any action, inaction, condition or event, except as otherwise
specifically provided herein, Agent, Majority Lenders or all Lenders, as
applicable, shall be authorized to give or withhold such consent in their sole
and absolute discretion and to condition its consent upon the giving of
additional Collateral security for the Obligations, the payment of money or any
other matter.
          1.66. Credit Inquiries.
          Each Borrower hereby authorizes and permits Agent and each Lender to
respond to usual and customary credit inquiries from third parties concerning
such Borrower or any of its Subsidiaries, subject to the provisions of
Section 12.15.
          1.67. Time of Essence.
          Time is of the essence of this Agreement, the Other Agreements and the
Security Documents.
          1.68. Entire Agreement.
          Except as otherwise expressly provided herein with respect to the
Original Loan Agreement, this Agreement and the other Loan Documents, together
with all other instruments, agreements and certificates executed by the parties
in connection therewith or with reference thereto, embody the entire
understanding and agreement between the parties hereto and thereto with respect
to the subject matter hereof and thereof and supersede all prior agreements,
understandings and inducements, whether express or implied, oral or written.
          1.69. Interpretation.
          No provision of this Agreement or any of the other Loan Documents
shall be construed against or interpreted to the disadvantage of any party
hereto by any court or other governmental or judicial authority by reason of
such party having or being deemed to have structured or dictated such provision.
          1.70. Confidentiality.
          Agent and each Lender shall keep confidential (and shall use best
efforts to cause its respective agents to keep confidential) all nonpublic
information obtained pursuant to the requirements of this Agreement in
accordance with Agent’s and such Lender’s customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices and in any event may make disclosure reasonably required by a
prospective participant or assignee in connection with the contemplated
participation or assignment or as required or requested by any governmental
authority or representative thereof or pursuant to legal process and shall
require any such participant or assignee to agree to comply with this
Section 12.15. The provisions of this Section 12.15 shall remain operative and
in full force and effect regardless of the expiration or termination of this
Agreement.

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          1.71. GOVERNING LAW; CONSENT TO FORUM.
          THIS AGREEMENT HAS BEEN NEGOTIATED, EXECUTED AND DELIVERED IN AND
SHALL BE DEEMED TO HAVE BEEN MADE IN CHICAGO, ILLINOIS. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF
ILLINOIS (WITHOUT REGARD TO ANY PRINCIPLES OF CONFLICTS OF LAWS); PROVIDED,
HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED IN ANY JURISDICTION
OTHER THAN ILLINOIS, THE LAWS OF SUCH JURISDICTION SHALL GOVERN THE METHOD,
MANNER AND PROCEDURE FOR FORECLOSURE OF AGENT’S LIEN UPON SUCH COLLATERAL AND
THE ENFORCEMENT OF AGENT’S OTHER REMEDIES IN RESPECT OF SUCH COLLATERAL TO THE
EXTENT THAT THE LAWS OF SUCH JURISDICTION ARE DIFFERENT FROM OR INCONSISTENT
WITH THE LAWS OF ILLINOIS. AS PART OF THE CONSIDERATION FOR NEW VALUE RECEIVED,
AND REGARDLESS OF ANY PRESENT OR FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS
OF ANY BORROWER, AGENT OR ANY LENDER, EACH BORROWER HEREBY CONSENTS AND AGREES
THAT THE CIRCUIT COURT OF COOK COUNTY, ILLINOIS, OR, AT AGENT’S OPTION, THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN
DIVISION, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR
DISPUTES BETWEEN BORROWERS ON THE ONE HAND AND AGENT OR ANY LENDER ON THE OTHER
HAND PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATED TO
THIS AGREEMENT. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN ANY AGREEMENT TO
WHICH ANY BORROWER IS A PARTY, EACH BORROWER EXPRESSLY SUBMITS AND CONSENTS IN
ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT,
AND EACH BORROWER HEREBY WAIVES ANY OBJECTION WHICH SUCH BORROWER MAY HAVE BASED
UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS. EACH
BORROWER HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER
PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH
SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
ADDRESSED TO SUCH BORROWER AT THE ADDRESS SET FORTH IN THIS AGREEMENT OR
OTHERWISE PROVIDED TO AGENT AS A NEW NOTICE ADDRESS IN ACCORDANCE WITH THE TERMS
HEREOF AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF
SUCH BORROWER’S ACTUAL RECEIPT THEREOF OR 5 BUSINESS DAYS AFTER DEPOSIT IN THE
U.S. MAILS, PROPER POSTAGE PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO AFFECT THE RIGHT OF AGENT OR ANY LENDER TO SERVE LEGAL PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW, OR TO PRECLUDE THE ENFORCEMENT BY AGENT OR ANY
LENDER OF ANY JUDGMENT OR ORDER OBTAINED IN SUCH

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FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO ENFORCE SAME IN ANY
OTHER APPROPRIATE FORUM OR JURISDICTION.
          1.72. WAIVERS.
          EACH BORROWER WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH AGENT AND
EACH LENDER HEREBY ALSO WAIVES) IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS, THE
OBLIGATIONS OR THE COLLATERAL; (ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE
OF PRESENTMENT, PROTEST, DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE,
SETTLEMENT, EXTENSION OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS,
CONTRACT RIGHTS, DOCUMENTS, INSTRUMENTS , CHATTEL PAPER AND GUARANTIES AT ANY
TIME HELD BY AGENT OR ANY LENDER ON WHICH SUCH BORROWER MAY IN ANY WAY BE
LIABLE; (iii) NOTICE PRIOR TO AGENT’S TAKING POSSESSION OR CONTROL OF THE
COLLATERAL OR ANY BOND OR SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO
ALLOWING AGENT TO EXERCISE ANY OF AGENT’S REMEDIES; (iv) THE BENEFIT OF ALL
VALUATION, APPRAISEMENT AND EXEMPTION LAWS; (v) NOTICE OF ACCEPTANCE HEREOF AND
(vi) EXCEPT AS PROHIBITED BY LAW, ANY RIGHT TO CLAIM OR RECOVER ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN
ADDITION TO, ACTUAL DAMAGES (SUCH DAMAGES BEING WAIVED BY BORROWERS ALSO BEING
WAIVED BY AGENT AND EACH LENDER). EACH BORROWER ACKNOWLEDGES THAT THE FOREGOING
WAIVERS ARE A MATERIAL INDUCEMENT TO AGENT’S AND EACH LENDER’S ENTERING INTO
THIS AGREEMENT AND THAT AGENT AND EACH LENDER IS RELYING UPON THE FOREGOING
WAIVERS IN ITS FUTURE DEALINGS WITH SUCH BORROWER. EACH BORROWER WARRANTS AND
REPRESENTS THAT IT HAS REVIEWED THE FOREGOING WAIVERS WITH ITS LEGAL COUNSEL AND
HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS JURY TRIAL RIGHTS FOLLOWING
CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY
BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
          1.73. Advertisement.
          Each Borrower hereby authorizes Agent to publish the name of such
Borrower and the amount of the credit facility provided hereunder in any
“tombstone” or comparable advertisement which Agent elects to publish. In
addition, each Borrower agrees that, notwithstanding the provisions of
Section 12.15, Agent may provide lending industry trade organizations with
information necessary and customary for inclusion in league table measurements
after the Closing Date.

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          IN WITNESS WHEREOF, this Agreement has been duly executed on the day
and year specified at the beginning of this Agreement.

            BORROWERS:

NEENAH FOUNDRY COMPANY
DEETER FOUNDRY, INC.
MERCER FORGE CORPORATION
DALTON CORPORATION
DALTON CORPORATION, STRYKER MACHINING FACILITY CO.
DALTON CORPORATION, WARSAW MANUFACTURING FACILITY
ADVANCED CAST PRODUCTS, INC.
GREGG INDUSTRIES, INC.
A & M SPECIALTIES, INC.
NEENAH TRANSPORT, INC.
DALTON CORPORTION, KENDALLVILLE MANUFACTURING FACILITY
      By /s/ Gary W. LaChey       Its Corporate Vice President - Finance and   
    Chief Financial Officer   

 

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            AGENT, LENDERS AND LETTER OF CREDIT ISSUERS:

BANK OF AMERICA, N.A., as Agent and as a Lender
      By /s/ Robert Lund       Title Senior Vice President        Revolving Loan
Commitment: $75,000,000   

 

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            CREDIT SUISSE SECURITIES (USA) LLC, as
Syndication Agent, Co-Lead Arranger and
Co-Book Manager

    By /s/ Joseph Adipietro     Title Managing Director         CREDIT SUISSE,
CAYMAN ISLANDS BRANCH, as a Lender
      By /s/ Ian Nalitt       Title Vice President        By /s/ Thomas Cantello
      Title Vice President        Revolving Loan Commitment: $25,000,000   

 

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            BANC OF AMERICA SECURITIES LLC, as
Co-Lead Arranger and Co-Book Manager

    By Janet Jarrett     Title Principal  

 

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APPENDIX A
GENERAL DEFINITIONS
          When used in the Amended and Restated Loan and Security Agreement
dated as of December 29, 2006, by and among BANK OF AMERICA, N.A., individually
as a Lender and as Agent for Lenders, CREDIT SUISSE SECURITIES (USA) LLC, as
Syndication Agent for Lenders, BANC OF AMERICA SECURITIES LLC AND CREDIT SUISSE
SECURITIES (USA) LLC, as Co-Lead Arrangers and Book Managers, the other
financial institutions which are or become parties thereto as Lenders and NEENAH
FOUNDRY COMPANY AND EACH SUBSIDIARY OF NEENAH FOUNDRY COMPANY IDENTIFIED ON THE
SIGNATURES PAGES THERETO AS A BORROWER, (a) the terms Account, Certificated
Security, Chattel Paper, Commercial Tort Claims, Deposit Account, Document,
Electronic Chattel Paper, Equipment, Financial Asset, Fixture, General
Intangibles, Goods, Instruments, Inventory, Investment Property,
Letter-of-Credit Rights, Payment Intangibles, Proceeds, Security Entitlement,
Software, Supporting Obligations, Tangible Chattel Paper and Uncertificated
Security have the respective meanings assigned thereto under the UCC; (b) all
terms reflecting Collateral having the meanings assigned thereto under the UCC
shall be deemed to mean such Property, whether now owned or hereafter created or
acquired by a Borrower or in which such Borrower now has or hereafter acquires
any interest; (c) capitalized terms which are not otherwise defined have the
respective meanings assigned thereto in said Amended and Restated Loan and
Security Agreement; and (d) the following terms shall have the following
meanings (terms defined in the singular to have the same meaning when used in
the plural and vice versa):
     Account Debtor — any Person who is or may become obligated under or on
account of any Account, Contract Right, Chattel Paper or General Intangible.
     Advanced Cast – Advanced Cast Products, Inc., a Delaware corporation.
     Affected Collateral – as defined in subsection 11.14 of the Agreement.
     Affiliate — a Person (other than a Subsidiary): (i) which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, a Person; (ii) which beneficially owns or holds
10% or more of any class of the Voting Stock of a Person; or (iii) 10% or more
of the Voting Stock (or in the case of a Person which is not a corporation, 10%
or more of the equity interest) of which is beneficially owned or held by a
Person or a Subsidiary of a Person.
     Agent – Bank of America, N.A. in its capacity as agent for the Lenders
under the Agreement and any successor in that capacity appointed pursuant to
subsection 11.11 of the Agreement.
     Agent Loans – as defined in subsection 1.1.5 of the Agreement.
     Aggregate Percentage — with respect to each Lender, the percentage equal to
the quotient of (i) such Lender’s Loan Commitment divided by (ii) the aggregate
of all Loan Commitments.

 

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     Agreement — the Amended and Restated Loan and Security Agreement referred
to in the first sentence of this Appendix A, all Exhibits and Schedules thereto
and this Appendix A, as each of the same may be amended from time to time.
     Applicable Margin — from the Closing Date to, but not including, the first
Adjustment Date (as hereinafter defined) the percentages set forth below with
respect to the Base Rate Portion, the LIBOR Portion, and the Unused Line Fee:

         
Base Rate Portion
    0.00 %
LIBOR Portion
    1.25 %
Unused Line Fee
    0.25 %

     The percentages set forth above will be adjusted on the first day of the
month following delivery by Borrowers to Agent of the Borrowing Base Certificate
required to be delivered pursuant to subsection 8.1.4, and the financial
statements required to be delivered pursuant to subsection 8.1.3(ii) of the
Agreement (and the related Compliance Certificate), for each March 31, June 30,
September 30 and December 31 during the Term, commencing with the Borrowing Base
Certificate, and financial statements (and the related Compliance Certificate),
required to be delivered for the month ending on December 31, 2007 (each such
date, an “Adjustment Date”), effective prospectively, by reference to the
applicable “Financial Measurement” (as defined below) for the fiscal quarter
most recently ending in accordance with the following:

                          Financial Measurement   Base Rate Portion   LIBOR
Portion   Unused Line Fee
Less than $35,000,000
    0.25 %     1.75 %     0.25 %
 
                       
Greater than or equal to $35,000,000 but less than $70,000,000
    0.00 %     1.50 %     0.25 %
 
                       
Greater than or equal to $70,000,000
    0.00 %     1.25 %     0.25 %

     provided; that (i) if Borrowers fail to deliver the Borrowing Base
Certificate required to be delivered pursuant to subsection 8.1.4, or the
financial statements required to be delivered pursuant to subsection 8.1.3(ii)
of the Agreement (and the related Compliance Certificate), on or before the due
date thereof, the Applicable Margin shall automatically adjust to the highest
pricing tier set forth above, effective prospectively from such due date until
the date such financial statements have been delivered and (ii) if the Total
Leverage Ratio as of the last day of any fiscal quarter of Borrowers is less
than 3.0:1.0, the Applicable Margin as it relates to Base Rate Portions and
LIBOR Portions shall be reduced by 0.25% for the period commencing on the
Adjustment Date immediately following such fiscal quarter end date and ending on
the next succeeding Adjustment Date (provided, further, that (x) in no

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event shall any adjustment pursuant to this clause (ii) cause the Applicable
Margin as it relates to Base Rate Portions to be less than 0.00%) and (y) if
Borrowers’ audited financial statements for any fiscal year delivered pursuant
to subsection 8.1.3(i) of the Agreement (and the related Compliance Certificate)
reflect a Total Leverage Ratio that yields a higher Applicable Margin than that
yielded by the monthly financial statements previously delivered pursuant to
subsection 8.1.3(ii) of the Agreement (and the related Compliance Certificate)
for the last month of such fiscal year, the Applicable Margin shall be
readjusted retroactively for the period that was incorrectly calculated).
     For purposes hereof, “Financial Measurement” shall mean, as of any
Adjustment Date, average Availability (as determined by Agent in its reasonable
credit judgment) for the most recently completed fiscal quarter of Borrowers.
     Arrangers – Banc of America Securities LLC and Credit Suisse Securities
(USA) LLC, in their respective capacities as Co-Lead Arrangers and Book Managers
under the Agreement.
     Ashland Parcel – the real Property of Dalton — Ashland located at 1681
Orange Road, Ashland, Ohio.
     Assignment and Acceptance Agreement – an assignment and acceptance
agreement in the form attached hereto as Exhibit A-1 pursuant to which a Lender
assigns to another Lender all or any portion of any of such Lender’s Revolving
Loan Commitment, as permitted pursuant to the terms of this Agreement.
     Availability — the aggregate amount of additional money which Borrowers are
entitled to borrow from time to time as Revolving Credit Loans, such amount
being the difference derived when the sum of the principal amount of Revolving
Credit Loans then outstanding (including any amounts which Agent or any Lender
may have paid for the account of any Borrower pursuant to any of the Loan
Documents and which have not been reimbursed by Borrowers), the LC Amount and
any Reserves is subtracted from the Borrowing Base (as the Borrowing Base is
reflected on the most recent Borrowing Base Certificate that has been delivered
by Borrowers to Agent pursuant to subsection 8.1.4 of the Agreement). If the
amount outstanding is equal to or greater than the Borrowing Base, Availability
is 0.
     Bank –Bank of America, N.A..
     Base Rate – the higher of (i) the rate of interest announced or quoted by
Bank from time to time as its prime rate for commercial loans, whether or not
such rate is the lowest rate charged by Bank to its most preferred borrowers
(and, if such prime rate for commercial loans is discontinued by Bank as a
standard, a comparable reference rate designated by Bank as a substitute
therefor) or (ii) the Federal Funds Rate plus 50 basis points per annum.

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     Base Rate Portion — that portion of the Revolving Credit Loans that is not
subject to a LIBOR Option.
     Belcher — Belcher Corporation, a Delaware corporation.
     Borrowing Base — as at any date of determination thereof, an amount equal
to the least of:
     (i) the Revolving Credit Maximum Amount;
     (ii) an amount equal to the sum of
     (a) 85% of the net amount of Eligible Accounts outstanding at such date;
plus
     (b) the lesser of (1) $3,000,000 or (2) the sum of (i) 50% of the net
amount of Eligible Extended Municipal Accounts outstanding at such date plus
(ii) 25% of the net amount of Eligible Extra Extended Municipal Accounts
outstanding at such date; plus
     (c) the lesser of (1) (i) during the period beginning on January 1 of each
year and ending on March 31 of such year, 95% of the net orderly liquidation
percentage of each category or type of Eligible Inventory at such date and
(ii) during the period beginning on April 1 of each year and ending on
December 31 of such year, 85% of the net orderly liquidation percentage of each
category or type of Eligible Inventory at such date; or (2) 75% of the amount of
each category or type of Eligible Inventory at such date; plus
     (d) the lesser of (1) $5,000,000 or (2) 85% of the net orderly liquidation
percentage of Eligible Patterns and Core Boxes; or
     (iii) the “Borrowing Base Amount” under and as defined in the Secured Bond
Indenture.
     During the occurrence and continuance of an Event of Default, the
limitations set forth in the immediately preceding sentence may be adjusted
downward by Agent and the requirements in the definitions of Eligible Accounts,
Eligible Extended Municipal Accounts, Eligible Extra Extended Municipal
Accounts, Eligible Inventory and Eligible Patterns and Core Boxes may be
supplemented by Agent, as Agent shall deem necessary or appropriate in its
reasonable credit judgment (with Agent agreeing to provide Borrowers with
reasonably prompt notice of the making of any such adjustment or the
establishment of any such supplement). For purposes hereof,

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(1) the net amount of Eligible Accounts at any time shall be the face amount of
such Eligible Accounts less any and all returns, rebates, discounts (which may,
at Agent’s option, be calculated on shortest terms), credits, allowances or
excise taxes of any nature at any time issued, owing, claimed by Account
Debtors, granted, outstanding or payable in connection with such Accounts at
such time, (2) the amount of Eligible Inventory shall be determined on a
first-in, first-out, lower of cost or market basis in accordance with GAAP and
(3) the net orderly liquidation percentage of each category or type of Eligible
Inventory and of Eligible Patterns and Core Boxes shall be determined by a third
party appraiser reasonably acceptable to Agent and shall be as reflected in the
most recent appraisal of Inventory or Patterns and Core Boxes, as applicable,
that has been delivered to Agent under this Agreement.
     Borrowing Base Certificate – a certificate by a responsible officer of
Neenah, substantially in the form of Exhibit 8.1.4 (or another form reasonably
acceptable to Agent) setting forth the calculation of the Borrowing Base,
including a calculation of each component thereof, all in such detail as shall
be reasonably satisfactory to Agent. All calculations of the Borrowing Base in
connection with the preparation of any Borrowing Base Certificate shall
originally be made by Neenah and certified to Agent.
     Business Day — any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the State of Wisconsin, the State of Connecticut
or the State of Illinois or is a day on which banking institutions located in
any of such states are closed.
     Capital Expenditures — expenditures made or liabilities incurred for the
acquisition of any fixed assets or improvements, replacements, substitutions or
additions thereto which have a useful life of more than one year, including the
total principal portion of Capitalized Lease Obligations, that are required to
be capitalized under GAAP.
     Capitalized Lease Obligation — any Indebtedness represented by obligations
under a lease that is required to be capitalized for financial reporting
purposes in accordance with GAAP.
     Cast Alloys – Cast Alloys, Inc., a California corporation.
     Closing Date — the date on which all of the conditions precedent in
Section 9 of the Agreement are satisfied or waived and the initial Loan is made
(or otherwise becomes outstanding) or the initial Letter of Credit or LC
Guaranty is issued (or otherwise becomes outstanding) under the Agreement.
     Collateral — all of the Property and interests in Property described in
Section 5 of the Agreement, and all other Property and interests in Property
that now or hereafter secure the payment and performance of any of the
Obligations.

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     Compliance Certificate – as defined in subsection 8.1.3 of the Agreement.
     Computer Hardware and Software – all of each Borrower’s rights (including
rights as licensee and lessee) with respect to (i) computer and other electronic
data processing hardware, including all integrated computer systems, central
processing units, memory units, display terminals, printers, computer elements,
card readers, tape drives, hard and soft disk drives, cables, electrical supply
hardware, generators, power equalizers, accessories, peripheral devices and
other related computer hardware; (ii) all Software and all software programs
designed for use on the computers and electronic data processing hardware
described in clause (i) above, including all operating system software,
utilities and application programs in any form (source code and object code in
magnetic tape, disk or hard copy format or any other listings whatsoever);
(iii) any firmware associated with any of the foregoing; and (iv) any
documentation for hardware, Software and firmware described in clauses (i),
(ii) and (iii) above, including flow charts, logic diagrams, manuals,
specifications, training materials, charts and pseudo codes.
     Consolidated — the consolidation in accordance with GAAP of the accounts or
other items as to which such term applies.
     Contract Right – any right of each Borrower to payment under a contract for
the sale or lease of goods or the rendering of services, which right is at the
time not yet earned by performance.
     Current Assets — at any date means all of the current assets of a Person
would be properly classified as current assets shown on a balance sheet at such
date in accordance with GAAP.
     Dalton – Dalton Corporation, an Indiana corporation.
     Dalton — Ashland – Dalton Corporation, Ashland Manufacturing Facility, an
Ohio corporation.
     Deeter – Deeter Foundry, Inc., a Nebraska corporation.
     Default — an event or condition the occurrence of which would, with the
lapse of time or the giving of notice, or both, become an Event of Default.
     Default Rate — as defined in subsection 2.1.2 of the Agreement.
     Derivative Obligations — every obligation of a Person under any forward
contract, futures contract, exchange contract, swap, option or other financing
agreement or arrangement (including, without limitation, caps, floors, collars
and similar agreement), the value of which is dependent upon interest rates,
currency exchange rates, commodities or other indices.

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     Distribution — in respect of any Person means and includes: (i) the payment
of any dividends or other distributions on Securities (except distributions in
such Securities) and (ii) the redemption or acquisition of Securities of such
Person, as the case may be, unless made contemporaneously from the net proceeds
of the sale of Securities.
     Dominion Account — a special bank account or accounts of Agent established
by a Borrower pursuant to subsection 6.2.4 of the Agreement at banks selected by
such Borrower, but acceptable to Agent in its reasonable discretion, and over
which Agent shall have sole and exclusive access and control for withdrawal
purposes.
     Dominion Event – the occurrence of either one of the following events on
any date: (a) Availability (as determined by Agent in its reasonable credit
judgment) is less than $15,000,000 or (b) an Event of Default occurs.
     Dominion Period – the period commencing with prior written notice by Agent
to Borrowers of the occurrence of a Dominion Event and ending (a) no less than
60 days thereafter and (b) only after such Dominion Event is no longer in
existence or has been waived by Majority Lenders for a period of at least 60
consecutive days, provided, that no other Dominion Event has been in existence
during such 60 consecutive day period.
     Eligible Account — an Account arising in the ordinary course of the
business of a Borrower from the sale of goods or rendition of services;
provided, that no Account shall be an Eligible Account if:
     (i) it arises out of a sale made or services rendered by a Borrower to a
Subsidiary of a Borrower or an Affiliate of a Borrower or to a Person controlled
by an Affiliate of a Borrower (unless it is an Account arising out of an
arms-length transaction with a Person that is an Affiliate of a Borrower, or a
Person controlled by an Affiliate of a Borrower, solely by virtue of being a
portfolio company of a Permitted Holder); or
     (ii) (1) it is not a Municipal Account and it remains unpaid more than
90 days after the original invoice date shown on the invoice or more than
60 days after the original due date shown on the invoice; or (2) it is a
Municipal Account and it remains unpaid more than 120 days after the original
invoice date shown on the invoice or more than 90 days after the original due
date shown on the invoice; or
     (iii) the total Accounts of the Account Debtor exceed 20% of the net amount
of all Eligible Accounts, but only to the extent of such excess; or
     (iv) any covenant, representation or warranty contained in the Agreement
with respect to such Account has been breached; or

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     (v) the Account Debtor is also a creditor or supplier of a Borrower or any
Subsidiary of a Borrower, or the Account Debtor has disputed liability with
respect to such Account, or the Account Debtor has made any claim with respect
to any other Account due from such Account Debtor to a Borrower or any
Subsidiary of a Borrower, or the Account otherwise is subject to right of setoff
by the Account Debtor, provided, that in each case any such Account shall be
eligible to the extent such amount thereof exceeds such contract, dispute,
claim, setoff or similar right; or
     (vi) the Account Debtor (other than Dana Corporation relating to Accounts
arising from Dana Corporation on a post-petition basis) has commenced a
voluntary case under the federal bankruptcy laws, as now constituted or
hereafter amended, or made an assignment for the benefit of creditors, or a
decree or order for relief has been entered by a court having jurisdiction in
the premises in respect of the Account Debtor in an involuntary case under the
federal bankruptcy laws, as now constituted or hereafter amended, or any other
petition or other application for relief under the federal bankruptcy laws, as
now constituted or hereafter amended, has been filed against the Account Debtor,
or if the Account Debtor has suspended business or consented to or suffered a
receiver, trustee, liquidator or custodian to be appointed for it or for all or
a significant portion of its assets or affairs; or
     (vii) it arises from a sale made or services rendered to an Account Debtor
outside the United States, unless the sale is either (1) to an Account Debtor
located in Ontario or any other province of Canada in which the Personal
Property Security Act has been adopted in substantially the same form as
currently in effect in Ontario or (2) on letter of credit, guaranty or
acceptance terms (with the rights thereunder having been assigned to Agent), in
each case acceptable to Agent in its reasonable credit judgment; or
     (viii) (1) it arises from a sale to the Account Debtor on a bill-and-hold,
guaranteed sale, sale-or-return, sale-on-approval, consignment, or any other
repurchase or return basis, except to the extent that (a) the sale has been
completed, (b) an invoice has been generated, (c) such goods are no longer
subject to return and (d) payment of the invoice is unconditionally due from the
Account Debtor; or (2) it is subject to a reserve established by a Borrower for
potential returns or refunds, to the extent of such reserve; or
     (ix) the Account Debtor is the United States of America or any department,
agency or instrumentality thereof, unless the applicable Borrower assigns its
right to payment of such Account to Agent, in a manner satisfactory to Agent, in
its reasonable credit judgment, so as to comply with the Assignment of Claims
Act of 1940 (31 U.S.C. §203 et seq., as amended); or

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     (x) it is not subject to Agent’s duly perfected, first priority security
interest or is subject to a Lien that is not a Permitted Lien (but only to the
extent of the underlying obligation which such Lien secures); or
     (xi) the goods giving rise to such Account have not been delivered to and
accepted by the Account Debtor or the services giving rise to such Account have
not been performed by the applicable Borrower and accepted by the Account Debtor
or the Account otherwise does not represent a final sale; or
     (xii) the Account is evidenced by chattel paper or an instrument of any
kind, or has been reduced to judgment; or
     (xiii) a Borrower or a Subsidiary of a Borrower has made any agreement with
the Account Debtor for any extension, compromise, settlement or modification of
the Account or deduction therefrom, except for volume discounts and discounts or
allowances which are made in the ordinary course of business (in each case which
discounts or allowances are reflected in the calculation of the face value of
each invoice related to such Account); or
     (xiv) 50% or more of the Accounts owing from the Account Debtor are not
Eligible Accounts hereunder; or
     (xv) it represents service charges, late fees or similar charges; or
     (xvi) it arises out of a sale of any goods that constitute “Noteholder
Priority Collateral” under and as defined in the Secured Bond Intercreditor
Agreement.
     Eligible Extended Municipal Account – a Municipal Account that (a) would
constitute an “Eligible Account” without the application of the requirements in
clause (ii) of the definition thereof and (b) does not remain unpaid more than
180 days after the original invoice date shown on the invoice or more 150 days
after the original due date shown on the invoice.
     Eligible Extra Extended Municipal Account – a Municipal Account that
(a) would constitute an “Eligible Extended Municipal Account” without the
application of the requirements in clause (b) of the definition thereof and
(b) does not remain unpaid more than 270 days after the original invoice date
shown on the invoice or more 240 days after the original due date shown on the
invoice.
     Eligible Inventory — Inventory of a Borrower (other than packing and
shipping materials, tooling, patterns, samples and literature); provided, that
no Inventory shall be Eligible Inventory if:
     (i) it is not raw materials, work in process or supplies that are, in
Agent’s opinion, readily marketable in its current form, or finished goods

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which meet the specifications of the purchase order or contract for such
Inventory, if any; or
     (ii) it is not in good, new and saleable condition; or
     (iii) it is slow-moving, obsolete, defective or unmerchantable; or
     (iv) it does not meet all standards imposed by any governmental agency or
authority; or
     (v) it does not conform in all respects to any covenants, warranties and
representations set forth in the Agreement; or
     (vi) it is not subject to Agent’s duly perfected, first priority security
interest or is subject to a Lien that is not a Permitted Lien; or
     (vii) it is not situated at a location in compliance with the Agreement,
provided that Inventory situated at a location not owned by a Borrower will be
Eligible Inventory only if Agent has received a satisfactory landlord’s
agreement or bailee’s letter, as applicable, with respect to such location or if
it is a leased location and Agent has established a Rent Reserve with respect to
such location; or
     (viii) it has been consigned to a Borrower’s customer, unless (a) it is has
been delivered to a customer location in respect of which a satisfactory access
agreement has been received by Agent, (b) it is segregated or otherwise
separately identifiable from any goods of any other Person at the applicable
customer location, (c) a UCC-1 financing statement has been filed in the
jurisdiction of the applicable customer’s organization, which names such
customer as debtor, the applicable Borrower as secured party and Agent as
assignee of secured party and which identifies the Inventory in the possession
of such customer as the collateral and (d) a notice that complies with the terms
of Section 9-324 of the UCC has been delivered to the secured creditors, if any,
of the applicable customer that have a perfected lien in the Inventory of such
customer; provided, up to an aggregate amount of $1,000,000 of Inventory that
has been consigned to customers of Borrowers shall be excluded from the
requirements of this clause (viii) so long any such Inventory so excluded from
such requirements is at a location that has been approved by Agent where at
least $100,000 of Inventory of a Borrower is located; and provided, further,
that in no event shall the amount of Eligible Inventory that consists of
consigned Inventory exceed $5,000,000 in the aggregate; or
     (ix) it contains or bears any Intellectual Property that is licensed to a
Borrower by any third-party or is otherwise owned by any third-party, unless
Agent is satisfied that it may sell or otherwise dispose of such Inventory in
connection with any exercise of remedies pursuant to the terms of this

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Agreement and any applicable Security Documents (1) without infringing upon the
rights of such third-party, (2) without violating any contract with such
third-party (and without payment of any royalties other than any royalties due
with respect to the sale or disposition of such Inventory pursuant to the
existing license agreement with such third-party), and (3) otherwise without
interference from such third-party; or
     (x) it is Inventory in transit; or
     (xi) it is located outside of the continental United States of America; or
     (xii) it represents capitalization of freight charges.
     Eligible Patterns and Core Boxes – Patterns and Core Boxes of a Borrower;
provided, that no Patterns and Core Boxes shall be Eligible Patterns and Core
Boxes if:
     (i) it is not owned and fully paid for by a Borrower; or
     (ii) it has become affixed to any real Property (other than real Property
that is owned by a Borrower and subject to a Mortgage); or
     (iii) it is not subject to Agent’s duly perfected, first priority security
interest or is subject to a Lien that is not a Permitted Lien; or
     (iv) it is not situated at a location in compliance with the Agreement,
provided that Patterns and Core Boxes situated at a location not owned by a
Borrower will be Eligible Patterns and Core Boxes only if it is a leased
location and Agent has received a satisfactory landlord’s agreement with respect
to such location or Agent has established a Rent Reserve with respect to such
location; or
     (v) it is not in good and saleable condition; or
     (vi) it does not consist of municipal Patterns and Core Boxes; or
     (vii) it does not meet all standards imposed by any governmental agency or
authority; or
     (viii) it does not conform in all respects to any covenants, warranties and
representations set forth in the Agreement; or
     (ix) it is located outside of the continental United States of America.

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     Environmental Laws — all federal, state and local laws, rules, regulations,
ordinances, orders and consent decrees relating to health, safety and
environmental matters.
     ERISA — the Employee Retirement Income Security Act of 1974, as amended,
and any successor statute, and all rules and regulations from time to time
promulgated thereunder.
     Event of Default — as defined in Section 10.1 of the Agreement.
     Exchange Act – the Securities and Exchange Act of 1934, as amended.
     Federal Funds Rate — means, for any day, a floating rate equal to the
weighted average of the rates on overnight federal funds transactions among
members of the Federal Reserve System, as determined by Agent in its sole
discretion, which determination shall be final, binding and conclusive (absent
manifest error).
     Fee Letter – as defined in Section 2.3 of the Agreement.
     Fixed Charge Coverage Ratio – as defined in Exhibit 8.3 to the Agreement.
     GAAP — generally accepted accounting principles in the United States of
America in effect from time to time.
     Gregg – Gregg Industries, Inc., a California corporation.
     Guarantors — Parent, each Subsidiary Guarantor and each other Person who
now or hereafter guarantees payment or performance of the whole or any part of
the Obligations.
     Guaranty Agreements — the Continuing Guaranty Agreement which is to be
executed on the Closing Date by each of Parent and each Subsidiary Guarantor, in
form and substance satisfactory to Agent, together with each other guaranty
hereafter executed by any Guarantor, each as amended from time to time in
accordance with its respective terms.
     Inactive Subsidiaries — each of Cast Alloys; Belcher; Peerless Corporation;
and Dalton – Ashland.
     Increase Notice – as defined in subsection 1.1.7 of the Agreement.
     Indebtedness — as applied to a Person means, without duplication:
     (i) indebtedness arising from the lending of money by any Person to any
Borrower or any of its Subsidiaries;
     (ii) indebtedness, whether or not in any such case arising from the lending
by any Person of money to any Borrower or any of its Subsidiaries, (1) which is

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represented by notes payable or drafts accepted that evidence extensions of
credit, (2) which constitutes obligations evidenced by bonds, debentures, notes
or similar instruments, or (3) upon which interest charges are customarily paid
(other than accounts payable) or that was issued or assumed as full or partial
payment for Property;
     (iii) Capitalized Lease Obligations and Purchase Money Indebtedness;
     (iv) reimbursement obligations with respect to letters of credit or
guaranties of letters of credit,
     (v) Derivative Obligations; and
     (vi) indebtedness of any Borrower or any of its Subsidiaries under any
guaranty of obligations that would constitute Indebtedness under clauses
(i) through (iii) hereof, if owed directly by a Borrower or any of its
Subsidiaries. Indebtedness shall not include trade payables or accrued expenses.
For the avoidance of doubt, the foregoing definition of “Indebtedness” shall not
include preferred stock of any Person.
     Obligations in respect of Subordinated Bonds (2003 Series) having an
outstanding principal balance of up to $25,000,000 in the aggregate shall not be
considered “Indebtedness” for any purposes under the Agreement (including,
without limitation, for purposes of subsection 8.2.3, Section 8.3 or subsection
10.1.6 of the Agreement) to the extent that there is compliance with the
provisions of subsection 8.1.10 of the Agreement in respect of such Subordinated
Bonds (2003 Series).
     Intellectual Property — all past, present and future: trade secrets,
know-how and other proprietary information; trademarks, internet domain names,
service marks, trade dress, trade names, business names, designs, logos, slogans
(and all translations, adaptations, derivations and combinations of the
foregoing) indicia and other source and/or business identifiers, and the
goodwill of the business relating thereto and all registrations or applications
for registrations which have heretofore been or may hereafter be issued thereon
throughout the world; copyrights (including copyrights for computer programs)
and copyright registrations or applications for registrations which have
heretofore been or may hereafter be issued throughout the world and all tangible
property embodying the copyrights, unpatented inventions (whether or not
patentable); patent applications and patents; industrial design applications and
registered industrial designs; license agreements related to any of the
foregoing and income therefrom; books, records, writings, computer tapes or
disks, flow diagrams, specification sheets, computer software, source codes,
object codes, executable code, data, databases and other physical
manifestations, embodiments or incorporations of any of the foregoing; the right
to sue for all past, present and future infringements of any of the foregoing;
all other intellectual property; and all common law and other rights throughout
the world in and to all of the foregoing. Notwithstanding the foregoing,
Intellectual Property shall not include any trademarks, trade names, business
names or service marks that incorporate the word “Peerless”.

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     Intercompany Loans – as defined in subsection 8.2.2 of the Agreement.
     Interest Coverage Ratio — as defined in Exhibit 8.3 to the Agreement.
     Interest Period – as applicable to any LIBOR Portion, a period commencing
on the date such LIBOR Portion is advanced, continued or converted, and ending
on the date which is one (1) month, two (2) months, three (3) months, or six
(6) months later, as may then be requested by Borrowers; provided that (x) all
loans outstanding on the Closing Date shall be Base Rate Portions and (y) unless
Agent notifies Borrowers that the initial syndication of the Loan Commitments
have been completed, each Interest Period commencing (a) within the first
60 days after the Closing Date shall be a period of 1 month and (b) thereafter
shall be a period of 7 days; and provided further that (i) any Interest Period
which would otherwise end on a day which is not a Business Day shall end in the
next preceding or succeeding Business Day as is Agent’s custom in the market to
which such LIBOR Portion relates; (ii) there remains a minimum of one (1) month,
two (2) months, three (3) months or six (6) months (depending upon which
Interest Period a Borrower selects) in the Term, unless Borrowers and Lenders
have agreed to an extension of the Term beyond the expiration of the Interest
Period in question; and (iii) all Interest Periods of the same duration which
commence on the same date shall end on the same date.
     LC Amount — at any time, the aggregate undrawn face amount of all Letters
of Credit and LC Guaranties then outstanding.
     LC Guaranty — any guaranty pursuant to which Agent, a Letter of Credit
Issuer or any Affiliate of Agent shall guaranty the payment or performance by a
Borrower of its reimbursement obligation under any letter of credit.
     LC Obligations — Any Obligations that arise from any draw against any
Letter of Credit or against any letter of credit supported by an LC Guaranty.
     Letter of Credit — any standby or documentary letter of credit issued by
Agent, a Letter of Credit Issuer or any Affiliate of Agent for the account of a
Borrower.
     Letter of Credit Issuer – as defined in Section 1.2 of the Agreement.
     LIBOR – as applicable to any LIBOR Portion, for the applicable Interest
Period, the rate per annum (rounded upward, if necessary, to the nearest 1/8 of
one percent) as determined on the basis of the offered rates for deposits in
U.S. dollars, for a period of time comparable to such Interest Period which
appears on the Telerate page 3750 as of 11:00 a.m. (London time) on the day that
is two (2) London Banking Days preceding the first day of such Interest Period;
provided, however, if the rate described above does not appear on the Telerate
System on any applicable interest determination date, the LIBOR shall be the
rate (rounded upwards as described above, if necessary) for deposits in U.S.
dollars for a period substantially equal to the Interest Period on the Reuters
Page “LIBO” (or such other page as may replace the LIBO

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Page on that service for the purpose of displaying such rates), as of 11:00 a.m.
(London Time), on the day that is two (2) London Banking Days prior to the first
day of such Interest Period. If both the Telerate and Reuters systems are
unavailable, then the rate for that date will be determined on the basis of the
offered rates for deposits in U.S. dollars for a period of time comparable to
such Interest Period which are offered by four (4) major banks in the London
interbank market at approximately 11:00 a.m. (London time), on the day that is
two (2) London Banking Days preceding the first day of such Interest Period as
selected by Agent. The principal London office of each of the major London banks
so selected will be requested to provide a quotation of its U.S. dollar deposit
offered rate. If at least two (2) such quotations are provided, the rate for
that date will be the arithmetic mean of the quotations. If fewer than two
quotations are provided as requested, the rate for that date will be determined
on the basis of the rates quoted for loans in U.S. dollars to leading European
banks for a period of time comparable to such Interest Period offered by major
banks in New York City at approximately 11:00 a.m. (New York City time), on the
day that is two (2) London Banking Days preceding the first day of such Interest
Period. In the event that Agent is unable to obtain any such quotation as
provided above, it will be determined that LIBOR pursuant to a Interest Period
cannot be determined. In the event that the Board of Governors of the Federal
Reserve System shall impose a Reserve Percentage with respect to LIBOR deposits
of Bank then for any period during which such Reserve Percentage shall apply,
LIBOR shall be equal to the amount determined above divided by an amount equal
to 1 minus the Reserve Percentage.
     LIBOR Interest Payment Date — the first day of each calendar month during
the applicable Interest Period and the last day of the applicable Interest
Period.
     LIBOR Option – the option granted pursuant to Section 3.1 of the Agreement
to have the interest on all or any portion of the principal amount of the
Revolving Credit Loans based on the LIBOR.
     LIBOR Request — a notice in writing (or by telephone confirmed
electronically or by telecopy or other facsimile transmission on the same day as
the telephone request) from a Borrower to Agent requesting that interest on a
Revolving Credit Loan be based on the LIBOR, specifying: (i) the first day of
the Interest Period (which shall be a Business Day); (ii) the length of the
Interest Period; (iii) whether the LIBOR Portion is a new Loan, a conversion of
a Base Rate Portion, or a continuation of a LIBOR Portion, and (iv) the dollar
amount of the LIBOR Portion, which shall be in an amount not less than
$1,000,000 or an integral multiple of $100,000 in excess thereof.
     LIBOR Portion — that portion of the Revolving Credit Loans specified in a
LIBOR Request (including any portion of Revolving Credit Loans which is being
borrowed by a Borrower concurrently with such LIBOR Request) which, as of the
date of the LIBOR Request specifying such LIBOR Portion, has met the conditions

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for basing interest on the LIBOR in Section 3.1 of the Agreement and the
Interest Period of which has not terminated.
     Lien — any interest in Property securing an obligation owed to, or a claim
by, a Person other than the owner of the Property, whether such interest is
based on common law, statute or contract. The term “Lien” shall also include
rights of seller under conditional sales contracts or title retention
agreements, reservations, exceptions, encroachments, easements, rights-of-way,
covenants, conditions, restrictions, leases and other title exceptions and
encumbrances affecting Property. For the purpose of this definition, any
Property which a Borrower has acquired or holds subject to a conditional sale
agreement or other arrangement pursuant to which title to the Property has been
retained by or vested in some other Person for security purposes shall be deemed
to be subject to a Lien.
     Loan Account – each loan account established on the books of Agent pursuant
to Section 3.6 of the Agreement.
     Loan Commitment – with respect to any Lender, the amount of such Lender’s
Revolving Loan Commitment.
     Loan Documents — the Agreement, the Other Agreements and the Security
Documents.
     Loans — all loans and advances of any kind made by Agent, any Lender, or
any Affiliate of Agent or any Lender, pursuant to the Agreement.
     London Banking Day – any date on which commercial banks are open for
business in London, England.
     Majority Lenders — as of any date, Lenders holding 51% of the Revolving
Loan Commitments determined on a combined basis and following the termination of
the Revolving Loan Commitments, Lenders holding 51% or more of the outstanding
Loans, LC Amounts and LC Obligations not yet reimbursed by a Borrower or funded
with a Revolving Credit Loan; provided, that (i) in each case, if there are 2 or
more Lenders with outstanding Loans, LC Amounts, unfunded and unreimbursed LC
Obligations or Revolving Loan Commitments, at least 2 Lenders shall be required
to constitute Majority Lenders; and (ii) prior to termination of the Revolving
Loan Commitments, if any Lender breaches its obligation to fund any requested
Revolving Credit Loan, for so long as such breach exists, its voting rights
hereunder shall be calculated with reference to its outstanding Loans, LC
Amounts and unfunded and unreimbursed LC Obligations, rather than its Revolving
Loan Commitment.
     Material Adverse Effect — (i) a material adverse effect on the business,
condition (financial or otherwise), operation, performance or properties of
Borrowers and their Subsidiaries taken as a whole, (ii) a material adverse
effect on the rights and remedies of Agent or Lenders under the Loan Documents,
or (iii) the material

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impairment of the ability of Borrowers and Borrowers’ Subsidiaries (taken as a
whole) to perform their obligations hereunder or under any Loan Document.
     Mercer – Mercer Forge Corporation, a Delaware corporation.
     Mortgages – (i) the deed of trust executed by Gregg on or about the
Original Closing Date in favor of Agent, for the benefit of itself and Lenders,
by which Gregg has granted to Agent, as security for the Obligations, a Lien
upon the real Property of Gregg located at 10460 Hickson Street, El Monte,
California, (ii) the mortgage executed by Mercer on or about the Original
Closing Date in favor of Agent, for the benefit of itself and Lenders, by which
Mercer has granted to Agent, as security for the Obligations, a Lien upon the
real Property of Mercer located at 200 Brown Street, Mercer, Pennsylvania,
(iii) the mortgage executed by Dalton — Ashland on or about the Original Closing
Date in favor of Agent, for the benefit of itself and Lenders, by which Dalton —
Ashland has granted to Agent, as security for the Obligations, a Lien upon the
Ashland Parcel; (iv) the mortgage executed by Dalton Corporation, Stryker
Machining Facility Co. on or about the Original Closing Date in favor of Agent,
for the benefit of itself and Lenders, by which Dalton Corporation, Stryker
Machining Facility Co. has granted to Agent, as security for the Obligations, a
Lien upon the real Property of Dalton Corporation, Stryker Machining Facility
Co. located at 310 Ellis Street, Stryker, Ohio; (v) the mortgage executed by
Advanced Cast on or about the Original Closing Date in favor of Agent, for the
benefit of itself and Lenders, by which Advanced Cast has granted to Agent, as
security for the Obligations, a Lien upon the real Property of Advanced Cast
located at 18700 Mill Street, Meadville, Pennsylvania; (vi) the mortgage
executed by Dalton Corporation, Kendallville Manufacturing Facility on or about
the Original Closing Date in favor of Agent, for the benefit of itself and
Lenders, by which Dalton Corporation, Kendallville Manufacturing Facility has
granted to Agent, as security for the Obligations, a Lien upon the real Property
of Dalton Corporation, Kendallville Manufacturing Facility located at 200 West
Ohio Street, Kendallville, Indiana; (vii) the mortgages executed by Dalton and
Dalton Corporation, Warsaw Manufacturing Facility on or about the Original
Closing Date in favor of Agent, for the benefit of itself and Lenders, by which
Dalton and Dalton Corporation, Warsaw Manufacturing Facility have granted to
Agent, as security for the Obligations, a Lien upon the real Property of Dalton
and Dalton Corporation, Warsaw Manufacturing Facility located at 1900 East
Jefferson Street, Warsaw, Indiana; (viii) the mortgage executed by Neenah on or
about the Original Closing Date in favor of Agent, for the benefit of itself and
Lenders, by which Neenah has granted to Agent, as security for the Obligations,
a Lien upon the real Property of Neenah located at 2121 Brooks Street, Neenah,
Wisconsin 54956; (ix) the mortgage executed by Neenah on or about the Original
Closing Date in favor of Agent, for the benefit of itself and Lenders, by which
Neenah has granted to Agent, as security for the Obligations, a Lien upon the
real Property of Neenah located at 500 Winneconne Ave., Neenah, Wisconsin 54956;
(x) the deed of trust executed by Deeter on or about the Original Closing Date
in favor of Agent, for the benefit of itself and Lenders, by which Deeter has
granted to Agent, as security for the

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Obligations, a Lien upon the real Property of Deeter located at 5945 North 70th
Street, Lincoln, Nebraska; (xi) the mortgage executed by Neenah on or about the
Original Closing Date in favor of Agent, for the benefit of itself and Lenders,
by which Neenah has granted to Agent, as security for the Obligations, a Lien
upon the real Property of Neenah located at 545 Kimberly Drive, Carol Stream,
Illinois, (xii) the mortgage executed by Neenah on or about the Original Closing
Date in favor of Agent, for the benefit of itself and Lenders, by which Neenah
has granted to Agent, as security for the Obligations, a Lien upon the real
Property of Neenah located at 3831 Zane Trace Drive, Columbus, Ohio, (xiii) the
mortgage executed by Neenah on or about the Original Closing Date in favor of
Agent, for the benefit of itself and Lenders, by which Neenah has granted to
Agent, as security for the Obligations, a Lien upon the real Property of Neenah
located at 5950 West 82nd Street, Indianapolis, Indiana, (xiv) the mortgage
executed by Neenah on or about the Original Closing Date in favor of Agent, for
the benefit of itself and Lenders, by which Neenah has granted to Agent, as
security for the Obligations, a Lien upon the real Property of Neenah located at
5075 28th Avenue, Rockford, Illinois, (xv) the deed of trust executed by Neenah
on or about the Original Closing Date in favor of Agent, for the benefit of
itself and Lenders, by which Neenah has granted to Agent, as security for the
Obligations, a Lien upon the real Property of Neenah located at 55 Cherokee
Drive, St. Peters, Missouri, (xvi) the mortgage executed by Neenah on or about
the Original Closing Date in favor of Agent, for the benefit of itself and
Lenders, by which Neenah has granted to Agent, as security for the Obligations,
a Lien upon the real Property of Neenah located at 701 Industrial Circle S.,
Shakopee, Minnesota and (xvii) all other mortgages, deeds of trust and
comparable documents creating a Lien on real property (or any leasehold or other
interest in real property) now or at any time hereafter securing the whole or
any part of the Obligations, each as amended from time to time in accordance
with its respective terms.
     Multiemployer Plan — has the meaning set forth in Section 4001(a)(3) of
ERISA.
     Municipal Account — an Account of Neenah or Deeter that arises out of a
sale of any castings that Neenah or Deeter categorize as municipal castings in a
manner that is consistent with the practices of Neenah and Deeter in effect as
of the Closing Date.
     Neenah Full Reorganization – the merger of each of Ultimate Parent and
Parent with and into Neenah, with Neenah remaining in existence after such
merger, and, if elected by the parties to the reorganization transaction in
their sole discretion, the reconstitution of Neenah as a Delaware corporation.
     Neenah Partial Reorganization – the merger of Parent with and into either
Ultimate Parent or Neenah, with both Neenah and Ultimate Parent remaining in
existence after such merger, and, if elected by the parties to the
reorganization transaction in their sole discretion, the reconstitution of
Neenah as a Delaware corporation.

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     Neenah Reorganization – either the Neenah Full Reorganization or the Neenah
Partial Reorganization, as applicable.
     Neenah Transport – Neenah Transport, Inc., a Wisconsin corporation.
     New Mold Line – the new mold line of Borrowers described in the final
offering circular for the Secured Bonds.
     Notes – the Revolving Notes.
     Obligations — all Loans, all LC Obligations and all other advances, debts,
liabilities, obligations, covenants and duties, together with all interest, fees
and other charges thereon, owing, arising, due or payable from each Borrower to
Agent, for its own benefit, from each Borrower to Agent for the benefit of any
Lender, from each Borrower to any Lender, from each Borrower to any Letter of
Credit Issuer and from each Borrower to Bank or any other Affiliate of Agent, of
any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under the Agreement, any of the
other Loan Documents or any agreements evidencing the Product Obligations,
whether direct or indirect (including those acquired by assignment), absolute or
contingent, primary or secondary, due or to become due, now existing or
hereafter arising and however acquired, and including, without limitation, any
Product Obligations.
     Organizational I.D. Number – with respect to any Person, the organizational
identification number assigned to such Person by the applicable governmental
unit or agency of the jurisdiction of organization of such Person.
     Original Closing Date – October 8, 2003.
     Original Loan Agreement – as defined in the preamble to the Agreement.
     Other Agreements — any and all agreements, instruments and documents (other
than the Agreement and the Security Documents), heretofore, now or hereafter
executed by any Borrower, any of its Subsidiaries, any Guarantor or any other
third party and delivered to Agent or any Lender in respect of the transactions
contemplated by the Agreement, each as amended from time to time in accordance
with its respective terms.
     Overadvance – as defined in subsection 1.1.2 of the Agreement.
     Parent – NFC Castings, Inc., a Delaware corporation.
     Patterns and Core Boxes – Goods consisting of casting patterns and core
boxes.
     Peerless – Peerless Corporation, an Ohio corporation.

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     Permitted Acquisition — any acquisition after the Closing Date by any
Borrower or any Subsidiary formed by such Borrower for such purpose (a “New
Subsidiary”), by any means, of all or substantially all of the assets or capital
stock, an operating division or a business unit, of any Person that is a going
concern, that has been incorporated or organized under the laws of a State
within the United States and that is in a similar or related field of business
to a Borrower as of the date hereof, and so long as Agent and Lenders shall have
received evidence at least 3 Business Days prior to the closing date of such
acquisition that such acquisition satisfies the following conditions (provided,
that the conditions set forth in clauses (b), (c), (h) and (i) below shall not
apply with respect to an Acquisition where (x) average Availability (as
determined by Agent in its reasonable credit judgment) for the thirty (30) day
period ending on the date of any such Acquisition (giving effect to the making
of such Acquisition and the consummation of any transactions occurring in
connection therewith for each day in such thirty (30) day period) is not less
than $25,000,000 and (y) actual Availability (as determined by Agent in its
reasonable credit judgment) on the date of any such Acquisition, after giving
effect to the making of such Acquisition and the consummation of any
transactions occurring in connection therewith, is not less than $25,000,000):

  (a)   no Default or Event of Default is in existence at the time of such
acquisition or would be caused thereby after giving effect thereto;     (b)  
after giving effect to the proposed acquisition, Borrowers are in compliance
with each of the financial covenants set forth in Section 8.3 of the Agreement
on a pro forma, but unadjusted, basis;     (c)   the Person or business to be
acquired has shown an unadjusted positive EBITDA (calculated in accordance with
GAAP) for the twelve month period ended immediately prior to the date of
acquisition, as determined by Agent;     (d)   the Board of Directors and/or
owners of the entity whose business is to be acquired have provided all
requisite authorization of the proposed transaction;     (e)   Agent has
received at least ten (10) days’ prior written notice of such Acquisition and,
as soon as available, copies of all agreements delivered in connection
therewith;     (f)   subsection 8.1.8 of the Agreement has been satisfied with
respect to such assets, Person or New Subsidiary and, as a result thereof, Agent
has obtained a first priority Lien (subject only to Permitted Liens) on the
applicable stock and assets;     (g)   Agent has received a certificate from
Neenah’s chief financial officer (in such Person’s capacity as such) certifying
that all of the applicable

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      conditions contained herein to treating such acquisition as a Permitted
Acquisition have been satisfied;     (h)   if the total consideration (including
cash, notes and other debt, maximum earnouts, consulting and non-compete
payments and the like) for such acquisition, together with all other
acquisitions completed since the Closing Date, exceeds $5,000,000, Agent and
Majority Lenders have consented in writing to such acquisition;     (i)  
immediately after giving effect to the consummation of such acquisition, average
Availability (as determined by Agent in its reasonable credit judgment) for the
thirty (30) day period ending on the date of such acquisition is not less than
$15,000,000 and actual Availability (as determined by Agent in its reasonable
credit judgment) on the date of such acquisition is not less than $15,000,000;
provided, that the foregoing test shall not apply if the consideration for such
acquisition is paid solely in equity of a Borrower having terms reasonably
acceptable to Agent; and     (j)   consents have been obtained in favor of Agent
to the collateral assignment of rights and indemnities under the related
acquisition documents.

     In no event shall any Accounts, Inventory or Patterns and Core Boxes
acquired in connection with a Permitted Acquisition be deemed eligible for
advance hereunder unless and until Agent has completed (at Borrowers’ expense) a
Collateral audit and appraisal of such Property so acquired or to be acquired
(which audit and appraisal shall be conducted in a manner that is consistent
with the audits and appraisals conducted pursuant to subsection 2.7 and
subsection 2.10, respectively, of the Loan Agreement).
     Permitted Holders – any or all of the following: (i) Tontine Capital
Partners, L.P., (ii) any Affiliate of Tontine Capital Partners, L.P. and
(iii) any Person the Securities of which (or, in the case of a trust, the
beneficial interests of which) are owned 80% by Persons specified in the
foregoing clauses (i) and (ii).
     Permitted Liens — any Lien of a kind specified in subsection 8.2.5 of the
Agreement.
     Permitted Purchase Money Indebtedness — Purchase Money Indebtedness of any
Borrower incurred after the date hereof which is secured by a Purchase Money
Lien and the principal amount of which, when aggregated with the principal
amount of all other such Indebtedness and Capitalized Lease Obligations of
Borrowers and the Borrowers’ Subsidiaries at the time outstanding, does not
exceed the dollar limitation set forth in subsection 8.2.3(v) of the Agreement.
For the purposes of this definition, the principal amount of any Purchase Money
Indebtedness consisting of capitalized leases (as opposed to operating leases)
shall be computed as a Capitalized Lease Obligation.

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     Person — an individual, partnership, corporation, limited liability
company, joint stock company, land trust, business trust, or unincorporated
organization, or a government or agency or political subdivision thereof.
     Plan — an employee benefit plan now or hereafter maintained for employees
of any Borrower or any of its Subsidiaries that is covered by Title IV of ERISA.
     Pledge Agreements – collectively, (i) the Amended and Restated Pledge
Agreement executed by Parent on or about the Closing Date in favor of Agent, for
the benefit of itself and Lenders, by which Parent has granted to Agent, as
security for the Obligations, a Lien on the 100% of the Securities of Neenah,
(ii) the Amended and Restated Pledge Agreement executed by Neenah on or about
the Closing Date in favor of Agent, for the benefit of itself and Lenders, by
which Neenah has granted to Agent, as security for the Obligations, a Lien on
the 100% of the Securities of Neenah Transport, Deeter, Mercer, Dalton, Advanced
Cast, Cast Alloys and Gregg, (iii) the Amended and Restated Pledge Agreement
executed by Mercer on or about the Closing Date in favor of Agent, for the
benefit of itself and Lenders, by which Mercer has granted to Agent, as security
for the Obligations, a Lien on the 100% of the Securities of its Subsidiaries,
(iv) the Amended and Restated Pledge Agreement executed by Dalton on or about
the Closing Date in favor of Agent, for the benefit of itself and Lenders, by
which Dalton has granted to Agent, as security for the Obligations, a Lien on
the 100% of the Securities of its Subsidiaries, (v) the Amended and Restated
Pledge Agreement executed by Advanced Cast on or about the Closing Date in favor
of Agent, for the benefit of itself and Lenders, by which Advanced Cast has
granted to Agent, as security for the Obligations, a Lien on the 100% of the
Securities of its Subsidiaries and (vi) all other pledge agreements and
comparable documents now or at any time hereafter securing the whole or any part
of the Obligations, each as amended from time to time in accordance with its
respective terms.
     Product Obligations – every obligation of Borrowers owing to Bank, Agent or
any Affiliate of Bank or Agent under and in respect of any one or more of the
following types of services or facilities extended to any Borrower by Bank,
Agent or any Affiliate of Bank or Agent: (i) credit cards, (ii) cash management
or related services including the automatic clearing house transfer of funds for
the account of any Borrower pursuant to agreement or overdraft, (iii) controlled
disbursement services and (iv) Derivative Obligations.
     Projections – Neenah’s forecasted Consolidated and consolidating
(i) balance sheets, (ii) profit and loss statements, (iii) cash flow statements,
and (iv) capitalization statements, all prepared on a consistent basis with the
historical financial statements of Borrowers and Borrowers’ Subsidiaries,
together with appropriate supporting details and a statement of underlying
assumptions.
     Property — any interest of Borrower or any Subsidiary in any kind of
property or asset, whether real, personal or mixed, or tangible or intangible.

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     Purchase Money Indebtedness — means and includes (i) indebtedness (other
than the Obligations) for the payment of all or any part of the purchase price
of any fixed assets, (ii) any indebtedness (other than the Obligations) incurred
at the time of, or within 10 days prior to or 60 days after, the acquisition or
completion of construction or improvement of any fixed assets for the purpose of
financing all or any part of the purchase price or cost (as applicable) thereof,
and (iii) any renewals, extensions or refinancings thereof, but not any
increases in the principal amounts thereof outstanding at the time.
     Purchase Money Lien — a Lien upon fixed assets which secures Purchase Money
Indebtedness, but only if such Lien shall at all times be confined solely to the
fixed assets the purchase price of which was financed through the incurrence of
the Purchase Money Indebtedness secured by such Lien.
     Register – as defined in subsection 11.9.5 of the Agreement.
     Related Person – of any Person means any other Person directly or
indirectly owning (a) 5% or more of the outstanding common stock of such Person
(or, in the case of a Person that is not a corporation, 5% or more of the equity
interests in such Person) or (b) 5% or more of the combined voting power of the
Voting Stock of such Person.
     Rent Reserve – means, with respect to any location leased by a Borrower
where Eligible Inventory is located and a satisfactory landlord’s agreement has
not been provided, a reserve in an amount equal to the sum of all rental
payments scheduled to come due in the next 3 months for such location.
     Rentals – as defined in subsection 8.2.19 of the Agreement.
     Reportable Event — any of the events set forth in Section 4043(c) of ERISA.
     Requested Revolver Increase – as defined in subsection 1.1.7 of the
Agreement.
     Reserves – reserves against the amount of Revolving Credit Loans which
Borrowers may otherwise request under the Agreement that have been established
by Agent in such amounts and with respect to such matters as Agent shall
reasonably deem necessary or appropriate in its reasonable credit judgment
exercised in good faith.
     Reserve Percentage – the maximum aggregate reserve requirement (including
all basic, supplemental, marginal and other reserves) which is imposed on member
banks of the Federal Reserve System against “Euro-currency Liabilities” as
defined in Regulation D.
     Restricted Investment — any investment made in cash or by delivery of
Property to any Person, whether by acquisition of stock, Indebtedness or other

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obligation or Security, or by loan, advance or capital contribution, or
otherwise, or in any Property except the following:
     (i) investments by a Borrower, to the extent existing on the Closing Date,
in one or more Subsidiaries of such Borrower;
     (ii) Property to be used in the ordinary course of business;
     (iii) Current Assets arising from the sale of goods and services in the
ordinary course of business of any Borrower or any of its Subsidiaries;
     (iv) investments in direct obligations of the United States of America, or
any agency thereof or obligations guaranteed by the United States of America,
provided that such obligations mature within one year from the date of
acquisition thereof;
     (v) investments in certificates of deposit maturing within one year from
the date of acquisition and fully insured by the Federal Deposit Insurance
Corporation;
     (vi) investments in commercial paper given the highest rating by a national
credit rating agency and maturing not more than 270 days from the date of
creation thereof;
     (vii) investments in money market, mutual or similar funds having assets in
excess of $100,000,000 and the investments of which are limited to investment
grade securities;
     (viii) Intercompany Loans;
     (ix) investments made in exchange for Accounts arising in the ordinary
course of business which have not been collected for 120 days and which are, in
the good faith judgment of such Borrower or one of its Subsidiaries,
substantially uncollectable, provided that the instrument evidencing such
investment is delivered to Agent to be held as security for the Obligations
pursuant to the terms of the Agreement;
     (x) investments in evidence of Indebtedness, securities or other Property
received from another Person by such Borrower or any of its Subsidiaries in
connection with any bankruptcy case or by reason of a composition or a
readjustment of debt or reorganization of such Person as a result of
foreclosure, perfection or enforcement of any Lien in exchange for evidence of
Indebtedness, securities or other Property of such Person;
     (xi) repurchase agreements with respect to securities described in clause
(iv) above entered into with an office of a bank or trust company which

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is organized under the laws of the United States or any State thereof and has
capital, surplus and undivided profits aggregating at least $500,000,000;
     (xii) investments consisting of loans for salary, travel advances,
entertainment, relocation, advances against commissions and other similar
advances to employees in the ordinary course of business.
     (xiii) investments existing on the date hereof and listed on Exhibit 8.2.12
hereto;
     (xiv) investments otherwise expressly permitted pursuant to the Agreement;
and
     (xv) investments made where (x) average Availability (as determined by
Agent in its reasonable credit judgment) for the thirty (30) day period ending
on the date of any such investment (giving effect to the making of such
investment and the consummation of any transactions occurring in connection
therewith for each day in such thirty (30) day period) is not less than
$25,000,000 and (y) actual Availability (as determined by Agent in its
reasonable credit judgment) on the date of any such investment, after giving
effect to the making of such investment and the consummation of any transactions
occurring in connection therewith, is not less than $25,000,000.
     Revolving Credit Loan — a Loan made by any Lender pursuant to Section 1.1
of the Agreement.
     Revolving Credit Maximum Amount – $100,000,000, as such amount may be
reduced from time to time pursuant to the terms of the Agreement or increased
pursuant to the terms of subsection 1.1.7 of the Agreement.
     Revolving Loan Commitment — with respect to any Lender, the amount of such
Lender’s Revolving Loan Commitment pursuant to subsection 1.1.1 of the
Agreement, as set forth below such Lender’s name on the signature page hereof or
any Assignment and Acceptance Agreement executed by such Lender.
     Revolving Loan Percentage — with respect to each Lender, the percentage
equal to the quotient of such Lender’s Revolving Loan Commitment divided by the
aggregate of all Revolving Loan Commitments.
     Revolving Notes — the Secured Promissory Notes to be jointly and severally
executed by Borrowers on or about the Closing Date in favor of each Lender to
evidence the Revolving Credit Loans, which shall be in the form of Exhibit 1.1
to the Agreement, together with any replacement or successor notes therefor.
     Secured Bonds – the 9.5% Senior Secured Notes of Neenah due 2017 issued as
of the date of the Agreement pursuant to the Secured Bond Documents in the
original principal amount of $225,000,000.

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     Secured Bond Documents – the Secured Bond Indenture, the Secured Bonds, any
guaranty, mortgage, security agreement or other collateral document securing the
Secured Bonds and all other documents, agreements and instruments now existing
or hereinafter entered into in connection with the foregoing, in each case as
amended from time to time.
     Secured Bond Indenture – that certain Indenture providing for the issuance
of the Secured Bonds among Neenah, as issuer, the Subsidiaries of Neenah party
thereto as subsidiary guarantors and the Secured Bond Trustee, dated as of the
date of the Agreement, as amended from time to time in compliance with its terms
and in compliance with the terms hereof.
     Secured Bond Intercreditor Agreement – that certain Intercreditor Agreement
dated as of the date of the Agreement by and among Agent, the Secured Bond
Trustee, Borrowers and Guarantors, as amended from time to time in accordance
with its terms.
     Secured Bond Trustee – The Bank of New York Trust Company, N.A.
     Secured Bonds (2003 Series) – as defined in the Original Loan Agreement.
     Secured Bond Documents (2003 Series) – as defined in the Original Loan
Agreement.
     Security — all shares of stock, partnership interests, membership
interests, membership units or other ownership interests in any other Person and
all warrants, options or other rights to acquire the same.
     Security Documents – the Guaranty Agreements, the Mortgages, the Pledge
Agreements, and all other instruments and agreements now or at any time
hereafter securing the whole or any part of the Obligations, each as amended
from time to time in accordance with its respective terms.
     Solvent — as to any Person, that such Person (i) owns Property whose fair
saleable value as a going concern is greater than the amount required to pay all
of such Person’s debts (including contingent debts), (ii) is able to pay all of
its debts as such debts mature and (iii) has capital sufficient to carry on its
business and transactions and all business and transactions in which it is about
to engage.
     Subordinated Bonds – the 12.5% Senior Subordinated Notes of Neenah due 2013
issued as of the date of the Agreement pursuant to the Subordinated Bond
Documents in the original principal amount of $75,000,000.
     Subordinated Bond Documents – the Subordinated Bond Indenture, the
Subordinated Bonds, any guaranty, mortgage, security agreement or other
collateral document securing the Subordinated Bonds and all other documents,
agreements and

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instruments now existing or hereinafter entered into in connection with the
foregoing, in each case as amended from time to time.
     Subordinated Bond Indenture – the Indenture attached as Exhibit A to the
Subordinated Bond issued on the Closing Date.
     Subordinated Bond Trustee – The Bank of New York Trust Company, N.A.
     Subordinated Bonds (2003 Series) – as defined in the Original Loan
Agreement.
     Subordinated Bond Documents (2003 Series) – as defined in the Original Loan
Agreement.
     Subordinated Debt – Indebtedness of any Borrower or any of its Subsidiaries
permitted under the Agreement that is subordinated to the Obligations in a
manner reasonably satisfactory to Agent, and contains terms, including without
limitation, payment terms, satisfactory to Agent.
     Subsidiary — any Person of which another Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the Voting Stock
at the time of determination.
     Subsidiary Guarantors – each of Cast Alloys; Belcher; Peerless Corporation;
Dalton – Ashland; and each other Subsidiary of Ultimate Parent, Parent or Neenah
that now or hereafter executes a Guaranty Agreement.
     Swingline Loans – as defined in subsection 1.1.4 of the Agreement.
     Syndication Agent – Credit Suisse Securities (USA) LLC, in its capacity as
Syndication Agent under the Agreement.
     Tangible Assets – the total amount of assets of Neenah and its “Restricted
Subsidiaries” under and as defined in the Secured Bond Indenture (less
applicable depreciation, depletion, amortization and other valuation reserves),
after deducting therefrom all goodwill, trade names, trademarks, patents,
unamortized debt discount and expense and other like intangibles, all as (i) set
forth on the most recent balance sheet of Neenah and its “Restricted
Subsidiaries” under and as defined in the Secured Bond Indenture delivered
pursuant to subsection 8.1.3 of the Agreement, (ii) determined in accordance
with GAAP and (iii) calculated on a pro forma basis after giving effect to asset
dispositions or acquisitions, or the designation of a “Restricted Subsidiary”
under and as defined in the Secured Bond Indenture as an “Unrestricted
Subsidiary” under and as defined in the Secured Bond Indenture occurring after
the date of such most recent balance sheet delivered pursuant to subsection
8.1.3 of the Agreement.
     Term — as defined in Section 4.1 of the Agreement.

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     Total Credit Facility – $100,000,000, as such amount may be reduced from
time to time pursuant to the terms of the Agreement or increased pursuant to the
terms of subsection 1.1.7 of the Agreement.
     Total Leverage Ratio – as defined in Exhibit 8.1.3 to the Agreement.
     Type of Organization – with respect to any Person, the kind or type of
entity by which such Person is organized, such as a corporation or limited
liability company.
     UCC – the Uniform Commercial Code as in effect in the State of Illinois on
the date of this Agreement, as it may be amended or otherwise modified.
     Ultimate Parent – ACP Holding Company, a Delaware corporation.
     Unused Line Fee – as defined in Section 2.5 of the Agreement.
     Voting Stock — Securities of any class or classes of a corporation, limited
partnership or limited liability company or any other entity the holders of
which are ordinarily, in the absence of contingencies, entitled to vote with
respect to the election of corporate directors (or Persons performing similar
functions).
          Other Terms. All other terms contained in the Agreement shall have,
when the context so indicates, the meanings provided for by the UCC to the
extent the same are used or defined therein.
          Certain Matters of Construction. The terms “herein”, “hereof” and
“hereunder” and other words of similar import refer to the Agreement as a whole
and not to any particular section, paragraph or subdivision. Any pronoun used
shall be deemed to cover all genders. The section titles, table of contents and
list of exhibits appear as a matter of convenience only and shall not affect the
interpretation of the Agreement. All references to statutes and related
regulations shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall include any and
all modifications thereto and any and all extensions or renewals thereof.

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