Exhibit 10.1


 


SIXTH AMENDMENT, dated as of
May 15, 2008 (this “Amendment”),
to the Credit Agreement dated as of November 30, 2004 (as heretofore
amended, supplemented, or otherwise modified, the “Credit  Agreement”)
among NEENAH PAPER, INC., a Delaware corporation (the “Parent”), each subsidiary of the
Parent listed as a “Borrower” on the signature pages thereto (together
with the Parent, each a “Borrower” and collectively, the “Borrowers”),
each subsidiary of the Parent listed as a “Guarantor” on the signature pages thereto,
the lenders party thereto (the “Lenders”), JPMORGAN CHASE BANK, N.A., as
agent for the Lenders (in such capacity, the “Agent”), and J.P. MORGAN SECURITIES INC., as the exclusive
arranger and sole bookrunner (“Book-Runner”).


 


The
Credit Parties have requested that the Lenders agree to amend certain
provisions of the Credit Agreement.  The
Lenders party hereto are willing to amend the Credit Agreement as set forth
herein on the terms and subject to the conditions set forth herein.  Capitalized terms used but not defined herein
have the meanings assigned to them in the Credit Agreement, including after
giving effect to the amendments set forth in this Amendment.


 


Accordingly,
in consideration of the mutual agreements herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:


 


SECTION 1.           Amendments to Section 1.1 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof, Section 1.1
of the Credit Agreement is hereby amended


 


(a)           by adding the
following new definitions in their appropriate alphabetical order:


 


Pictou Disposition shall mean the
related series of transactions consisting of (i) the transfer of the
Pictou Properties to the Pictou Subsidiaries and the cash capital contribution
by one of more of the Credit Parties to the Pictou Subsidiaries in an aggregate
amount not to exceed $15,000,000, and (ii) the sale of all equity
interests in the Pictou Subsidiaries to Azure Capital Holdings LP or one or
more of its Affiliates.  Notwithstanding
anything to the contrary contained in Section 6.10 of this Agreement, the
Pictou Subsidiaries shall not be required to become Guarantors, to grant a
security interest in their assets or to have their Stock pledged, so long as
the Pictou Disposition is consummated within the time provided in clause (xii)(3) of
Section 7.4(4).


 


Pictou Properties shall mean the
Property comprising, located at or used solely in connection with the Pictou
County, Nova Scotia facilities, as well as any or all of the real property or
related personal property owned by Neenah Paper Company of Canada in or near
Abercrombie Point and Boat Harbour, Pictou County, Nova Scotia (excluding the
Nova Scotia Woodlands, but including the woodland operations and nursery
operations, and real property related to the 


 

















 


nursery operations, in or
near Debert, Nova Scotia), plus all related Inventory and Receivables of Neenah
Paper Company of Canada.


 


Pictou Subsidiaries shall mean
Azure Mountain Capital Financial Corporation, an unlimited liability company
incorporated under the laws of Nova Scotia, and Northern Pulp Nova Scotia
Corporation, an unlimited liability company incorporated under the laws of Nova
Scotia, both of which are newly formed or to be formed Subsidiaries of Neenah
Paper Company of Canada as of the Sixth Amendment Effective Date.


 


Sixth Amendment Effective
Date shall mean May 15, 2008.


 


Special Fixed Asset
Component shall mean $20,000,000; provided, that,
the Special Fixed Asset Component shall reduce (i) in equal installments
of $1,666,666.67 commencing on August 31, 2008, and continuing on the last
day of each third month thereafter, (ii) upon the consummation of
Dispositions of Timberland Properties, Eligible Equipment and Mill Properties
consisting of Eligible Real Estate, by the applicable percentage of the Net
Recovery Value Percentage of the Property so disposed of, and (iii) to
zero ($0.00) on the earlier to occur of (A) October 31, 2009, and (B) the
Agent’s receipt from Parent of an irrevocable written notice to permanently
reduce the Special Fixed Asset Component to zero ($0.00); provided, that
such notice may not be delivered (1) prior to May 30, 2009, (2) unless
Availability would be greater than zero ($0.00) after giving effect to such
reduction, and (3) unless no Default or Event of Default exists.


 


SFAC Loans shall mean, at
any time, that portion of the Revolving Loans then outstanding that is equal to
the Special Fixed Asset Component at such time; provided, that if
the aggregate amount of all Revolving Loans outstanding at such time is less
than the Special Fixed Asset Component, all of such Revolving Loans shall be
deemed to be SFAC Loans.


 


(b)           by deleting the definition of “Applicable Margin”
and by inserting the following in lieu thereof:


 


Applicable Margin shall mean,
with respect to any Loan, a rate per annum determined in accordance with this
definition.  The “Applicable Margin” from
and after the Sixth Amendment Effective Date and continuing until June 30,
2008 shall be the applicable rate set forth below in Category 4.  As of the end of each fiscal quarter of the
Credit Parties, and also as of the end of the third full calendar month after
the consummation of the Pictou Disposition, the Applicable Margin shall be
adjusted upward or downward, as applicable, to the respective amounts shown in
the schedule below based on Availability, tested on an average daily basis for
the most recent fiscal quarter of the Credit Parties. For purposes hereof, any
such adjustment in the respective amounts of the Applicable Margin, whether
upward or downward, shall be effective ten (10) Business Days after the
Borrowing Base Compliance Certificate of the Credit Parties and their 


 


2

















 


Subsidiaries with respect to
the final month of such fiscal quarter (or, if it occurs sooner, with respect
to the third full calendar month after the consummation of the Pictou
Disposition) has been delivered to and received by the Agent in accordance with
the terms of Section 6.3(i) hereof; provided, however, if any such
Borrowing Base Compliance Certificate is not delivered in a timely manner as
required under the terms of Section 6.3(i) hereof, the Applicable
Margin from the date such Borrowing Base Compliance Certificate was due until
ten (10) Business Days after Agent and Lenders receive the same will be
the applicable rate set forth below in Category 1.  Notwithstanding the foregoing, from and after
the date on which the Pictou Disposition is consummated and continuing until
the end of the third full calendar month following the consummation of the
Pictou Disposition, the Applicable Margin shall be the applicable rate set
forth below in Category 2.


 


	
  Availability

  	
   

  	
  Per Annum 

  Percentage 

  for Non-

  FAC Loan 

  LIBOR 

  Borrowings

  	
   

  	
  Per Annum 

  Percentage 

  for Non-

  FAC Loan 

  Alternate 

  Base Rate 

  Borrowings

  	
   

  	
  Per Annum 

  Percentage 

  for FAC 

  Loan 

  LIBOR 

  Borrowings

  	
   

  	
  Per Annum 

  Percentage 

  for FAC 

  Loan 

  Alternate 

  Base Rate 

  Borrowings

  	
   

  	
  Per Annum 

  Percentage 

  for SFAC 

  Loan 

  LIBOR 

  Borrowings

  	
   

  	
  Per Annum 

  Percentage 

  for SFAC 

  Loan 

  Alternate 

  Base Rate 

  Borrowings

  	
   

  
	
  Category 1:

  Less than $30,000,000

  	
   

  	
  2.00

  	
  %

  	
  0.50

  	
  %

  	
  2.25

  	
  %

  	
  0.75

  	
  %

  	
  3.50

  	
  %

  	
  2.00

  	
  %

  
	
  Category 2:

  Less than $50,000,000, but greater than or equal to $30,000,000

  	
   

  	
  1.75

  	
  %

  	
  0.25

  	
  %

  	
  2.00

  	
  %

  	
  0.50

  	
  %

  	
  3.25

  	
  %

  	
  1.75

  	
  %

  
	
  Category 3:

  Less than $90,000,000, but greater than or equal to $50,000,000

  	
   

  	
  1.50

  	
  %

  	
  0.0

  	
  %

  	
  1.75

  	
  %

  	
  0.25

  	
  %

  	
  3.00

  	
  %

  	
  1.50

  	
  %

  
	
  Category 4:

  Greater than or equal to $90,000,000

  	
   

  	
  1.25

  	
  %

  	
  0.0

  	
  %

  	
  1.50

  	
  %

  	
  0.0

  	
  %

  	
  2.75

  	
  %

  	
  1.25

  	
  %

  



 


3

















 


(c)           by deleting the definition of “Borrowing Base” and
inserting the following in lieu thereof:


 


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


 


(a)           85%
of Eligible Receivables; plus


 


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


 


(c)           the
lesser of (i) $60,000,000 and (ii) the Margined PP&E Amount; plus


 


(d)           the
Fixed Asset Component; plus


 


(e)           the
Special Fixed Asset Component, provided, that, the Special Fixed
Asset Component shall not be included in the Borrowing Base until such time as
the Pictou Disposition has been consummated pursuant to Section 7.4(4)(xii).


 


(d)           by deleting the
definition of “Capital Expenditures” and by inserting the following in
lieu thereof:


 


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


 


(e)           by deleting the
definition of “FAC Loans” and by inserting the following in lieu
thereof:


 


FAC Loans shall mean, at
any time, that portion of the Revolving Loans then outstanding that is equal to
the Fixed Asset Component at such time; provided, that if the
aggregate amount of all Revolving Loans outstanding at such time is less than
the sum of the Fixed Asset Component and the Special Fixed Asset Component,
then only the portion of the Revolving Loans outstanding at such time which
exceeds the Special Fixed Asset Component shall be deemed to be FAC Loans.


 


4

















 


(f)            by deleting the
definition of “Fixed Asset Component” and by inserting the following in
lieu thereof:


 


Fixed Asset Component  shall mean $15,000,000; provided, that, the
Fixed Asset Component shall reduce (i) in equal installments of $2,500,000
commencing on July 31, 2008, and continuing on the last day of each third
month thereafter, and (ii) upon the consummation of Dispositions of
Timberland Properties, Eligible Equipment and Mill Properties consisting of
Eligible Real Estate, by the applicable percentage of the Net Recovery Value
Percentage of the Property so disposed of; provided, that any
reductions resulting from such Dispositions shall first reduce the Special
Fixed Asset Component until the Special Fixed Asset Component has been reduced
to zero ($0.00) and thereafter (and without duplication) shall reduce the Fixed
Asset Component.


 


(g)           by
deleting the definition of “Fixed Charge Coverage Ratio” and by
inserting the following in lieu thereof:


 


Fixed Charge Coverage Ratio shall mean,
with respect to any Person and without duplication, the ratio of (i) EBITDA
less (A) Capital Expenditures not funded by Indebtedness permitted
by Section 7.1(c) or Section 7.1(m); less (B) loans,
advances and Investments (other than the Pledged Inter-Company Loans so long as
an Unpledged Inter-Company Loan in an equal amount is made substantially
contemporaneously therewith) made to Persons that are not Credit Parties, less
(C) cash payments of federal, state, provincial and local income or
franchise taxes, plus (D) principal and interest payments paid in
cash on the Pledged Inter-Company Note, plus (E) Cash Dividends and
other distributions with respect to Stock held by a Credit Party to the extent
received in cash by a Credit Party from any Person that is not a Credit Party, plus
(F) the Fox Paper Initial Cash Restructuring Charges, to (ii) the sum
of (A) cash Interest Expense, plus (B) Scheduled Principal
Payments, plus (C) Cash Dividends, plus (D) $1,250,000
per calendar quarter in respect of scheduled reductions, if any, of the Fixed
Asset Component as set forth in clause (i) of the definition of Fixed
Asset Component, plus (E) the aggregate amount of the scheduled
reductions, if any, of the Special Fixed Asset Component as set forth in clause
(i) of the definition of Special Fixed Asset Component.


 


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


 


(h)           by deleting the definition of “Net
Income” and by inserting the following in lieu thereof:


 


5

















 


Net Income shall mean,
with respect to any Person for any period, net income of such Person for the
applicable calculation period determined in accordance with GAAP; provided,
that there shall not be included in such calculation of net income
(without duplication) (a) any extraordinary gains or losses (including in
connection with the sale or write-up of assets), (b) any nonrecurring
gains or losses, (c) any gains or losses from dispositions of property or
assets, other than dispositions of Inventory and Equipment in the ordinary
course of business, and the tax consequences thereof, (d) the net income
or loss of any other Person that is not a Subsidiary of such Person for whom
net income is being calculated (or is accounted for by such Person by the
equity method of accounting), (e) the net income (or loss) of any other
Person acquired by, or merged with, such Person for whom net income is being
calculated or any of its Subsidiaries for any period prior to the date of such
acquisition, (f) the net income of any Subsidiary of such Person for whom
net income is being calculated to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary of such net income is not
at the time permitted by operation of the terms of its charter, certificate of
incorporation or formation or other constituent document or any agreement or
instrument or Legal Requirement applicable to such Subsidiary, all as
determined in accordance with GAAP, (g) any non-cash non-recurring impairment
charges with respect to a writedown of the carrying amount of the Consolidated
assets of the Credit Parties acquired after the Third Amendment Effective Date
(either through direct asset purchase or as part of the acquisition of all or
substantially all of the Stock of another Person) based on the impairment of
such assets, pursuant to the provisions of Section 7.4(f) and
any benefits (including tax benefits) resulting from such writedown, (h) any
non-cash compensation expense realized for grants of performance shares, stock
options or other rights to officers, directors and employees, provided that
such shares, options or other rights can be redeemed at the option of the
holder only for capital stock of such Person, (i) with respect to the
Credit Parties, any non-recurring charges or other expenses (determined in
accordance with GAAP and as reflected in the Company’s financial statements
produced from time to time pursuant to Section 6.3(a) and 6.3(b))
related to the restructuring, closure or Disposition of Neenah Paper Company of
Canada’s Terrace Bay facility, not to exceed $120,000,000 in the aggregate, but
excluding any cash charges or payments made in connection with the Disposition
of the Terrace Bay facility, (j) with respect to the Credit Parties, any
non-recurring charges or other expenses (determined in accordance with GAAP and
as reflected in the Company’s financial statements produced from time to time
pursuant to Section 6.3(a) and 6.3(b)) related to the
restructuring or permanent closure of any facility (other than Neenah Paper
Company of Canada’s Terrace Bay facility) of any Credit Party, which
non-recurring charges or other expenses shall not exceed $5,000,000 in any
calendar year or $10,000,000 in the aggregate during the term of this Agreement,
(k) with respect to the Credit Parties, any non-cash non-recurring charges
or other non-cash costs, expenses or liabilities (determined in accordance with
GAAP and as reflected in the Company’s financial statements produced from time
to time pursuant to Section 6.3(a) and 6.3(b)) incurred
during 


 


6

















 


the eight (8) fiscal
quarters commencing with and including the fiscal quarter in which the Fox
Paper Merger Effective Date occurs related to the restructuring, closure or
Disposition of Fox PP&E acquired on the Fox Merger Effective Date as part
of the Fox Merger; (l) non-cash impairment costs and other non-cash
write-offs related to the Pictou Disposition; and (m) with respect to the
Credit Parties, the non-recurring cash charges or expenses (determined in
accordance with GAAP and as reflected in the Company’s financial statements
produced from time to time pursuant to Section 6.3(a) and 6.3(b))
consisting of the capital contributions and other cash payments associated with
the Pictou Disposition and pre-closing maintenance expenses incurred in
connection with the annual maintenance closure of the Pictou Properties during April and
May, 2008, not to exceed $25,000,000 in the aggregate.


 


(i)            by deleting the definition of “Non-FAC
Loans” and by inserting the following in lieu thereof:


 


Non-FAC Loans shall mean
Revolving Loans which are neither FAC Loans nor SFAC Loans.


 


SECTION 2.           Amendment to Section 5.10 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof, Section 5.10
of the Credit Agreement is hereby amended and restated in its entirety as
follows:


 


5.10         Permits,
Licenses, Etc.  (a) Neenah Paper
Company of Canada owns, possesses or has the benefit of the Canadian Licenses
listed in clauses (i) through (vi) of the definition thereof, and (b) each
Credit Party owns, possesses or has the benefit of all other material permits,
licenses (including intellectual property licenses) and intellectual property
rights which are required (i) to conduct its respective business or (ii) for
the operation and use of each Real Property Asset owned in fee and each
Material Leasehold Property; provided, that if Neenah Paper
Company of Canada is not operating or has disposed of (in accordance with the
terms of this Agreement) the Property with respect to which a Canadian License
was obtained, it shall not be required to own, possess or have the benefit of
such Canadian License, nor shall it be required to own, possess or have the benefit
of any other permits, licenses and intellectual property rights which would
otherwise be required to own or operate such facility or other Property; provided,
further  that the Credit Parties shall be required to comply in
all material respects with all Legal Requirements (including, without
limitation, Environmental Laws) related to the continued ownership (but not the
operation) of any Property located in Canada so long as such Property is owned
a Credit Party.  Except as set forth in Schedule
5.10, there are no material permits and licenses or agreements held by or
issued to any Credit Party pertaining to or in connection with any part of the
business or operations in Canada of such Credit Party; provided  that
such schedule may be updated by the Credit Parties from time to time to reflect
the changes not otherwise prohibited by the Loan Documents, so long as any
permit, license or agreement added thereto is subject to the Lien of the Agent
(or the Canadian Collateral Agent, as applicable), if such 


 


7

















 


Lien can be obtained using
commercially reasonable efforts, pursuant to the Loan Documents.


 


SECTION 3.           Amendment to Section 5.28 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof, Section 5.28
of the Credit Agreement is hereby amended and restated in its entirety as
follows:


 


5.28         Electricity
Activities.  No Credit Party nor any
of its Subsidiaries is a “market participant” (as that term is defined
in the Electricity Act (Ontario) S.O. 1998, Ch. 15, Schedule A (the “Electricity
Act”)) other than Neenah Paper Company of Canada which may at times be a
market participant.  Other than as set
forth on Schedule 5.28, Neenah Paper Company of Canada does not carry on
any of the following activities (the “Electricity Activities”):


 


(a)           own
or operate, or direct the operations of, a “distribution system” or “transmission
system”;


 


(b)           generate,
purchase or sell electricity through the “IMO-administered markets” or directly
from a “generator”; or


 


(c)           provide,
purchase or sell “ancillary services” (whether directly or through the
IMO-administered markets); or


 


(d)           “retail”
electricity,


 


in Ontario other than in material compliance
with applicable Legal Requirements or in material compliance with applicable
statutory or regulatory exemptions. 
Except as (and to the extent) set forth on Schedule 5.28, each
Credit Party has furnished to the Agent all licenses, permits, registrations
and authorizations in respect of any Electricity Activities carried on by it or
any of its Subsidiaries.  Terms in
quotation marks used in this Section 5.28 and Section 6.24
and not defined elsewhere shall have the respective meanings ascribed thereto
in the OEB Act and the Electricity Act.


 


SECTION 4.           Amendment to Section 6.1 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof,
clauses (a) and (b) of Section 6.1 of the Credit Agreement are
hereby amended and restated in their entirety as follows:


 


(a) do or cause to be done all things
reasonably necessary to obtain, preserve, renew and keep in full force and
effect the rights, licenses, permits, franchises, and Intellectual Property
material to the conduct of its businesses; provided, that so long
as the Credit Parties are not operating the processing facility at the Mill
Property located at Terrace Bay, Ontario, or have sold or otherwise disposed of
the Pictou Properties as permitted by this Agreement, they shall not be
required to obtain, preserve, renew and keep in full force and effect the
rights, licenses, permits, franchises, and Intellectual Property material to
the conduct of such facility or facilities; (b) maintain and operate such
businesses in the same general manner in which they are presently conducted and
operated, 


 


8

















 


with such changes as such
Credit Party deems prudent or as otherwise permitted by this Agreement; provided,
that the Credit Parties shall not be required to continue the operation
of the Mill Property located at Terrace Bay, Ontario;


 


SECTION 5.           Amendment to Section 6.3 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof,
clauses (c) and (d) of Section 6.3 of the Credit Agreement are
hereby amended and restated in their entirety as follows:


 


(c)           as
soon as available and in any event within thirty (30) days after the end of the
month, Monthly Unaudited Financial Statements of the Credit Parties and their
Subsidiaries; provided, however, that (i) except as
provided in clause (ii) of this Section 6.3(c) such Monthly
Unaudited Financial Statements for the months of January and February,
2007, for the calendar month in which the Pictou Disposition is consummated,
and each of the immediately succeeding three (3) calendar months, shall be
due as soon as available and in any event no later than forty-five (45) days
after the end of each such respective calendar month, and (ii) the Monthly
Unaudited Financial Statements for the first three months ending following the
Fox Merger Effective Date shall be due as soon as available and in any event
within sixty (60) days after the end of such calendar months;


 


(d)           concurrently
with the financial statements provided for in Subsections 6.3(a), 6.3(b) and
6.3(c) hereof, (i) a Compliance Certificate, signed by a
Responsible Officer of the Borrowers’ Agent, and (ii) a written
certificate in Proper Form, identifying each Subsidiary which is otherwise
required by the provisions of Section 6.10 hereof to become a
Guarantor at the request of the Agent, but which has not yet done so as of the
date of such certificate, and providing an explanation of the reasons why each
such Subsidiary is not a Guarantor, signed by a Responsible Officer of the
Borrowers’ Agent;


 


SECTION 6.           Amendment to Section 7.1 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof, Section 7.1
of the Credit Agreement is hereby amended by deleting clause (g) thereof
in its entirety and by inserting in place thereof the following new clause (g):


 


(g)           Contingent
Obligations of a Credit Party permitted by Section 7.3(e), and
Contingent Obligations of a Credit Party with respect to (i) Indebtedness
of another Credit Party that is permitted hereunder or (ii) Indebtedness
of an Offshore Entity that is permitted under Section 7.20;


 


SECTION 7.           Amendment to Section 7.3 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof, Section 7.3
of the Credit Agreement is hereby amended by deleting the word “and” at the end
of clause (c), by deleting the period at the end of clause (d) and
inserting in place thereof “; and”, and by inserting a new clause (e) which
shall read in full as follows:


 


(e)           The
guarantees, indemnities and similar Contingent Obligations given by any Credit
Party in respect of deferred capital contributions in 


 


9

















 


connection with the Pictou
Disposition not to exceed $10,000,000 in the aggregate.


 


SECTION 8.           Amendment to Section 7.4 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof,
clause (4) of the proviso to Section 7.4 of the Credit Agreement is
hereby amended and restated in its entirety as follows:


 


(4)           any of the Credit Parties may (i) sell Inventory in
the ordinary course of business, (ii) sell, exchange or otherwise dispose
of Permitted Investment Securities in the ordinary course of business; (iii) terminate,
surrender or sublease a lease of real Property in the ordinary course of
business; (iv) sell equipment and fixtures that are obsolete, worn out or
no longer needed in the business of the Credit Parties; (v) sell the
Offered Timberland Properties for an aggregate amount of not less than
$75,000,000 in cash consideration in a single or related series of transactions
occurring substantially simultaneously on or prior to July 31, 2006; (vi) sell,
exchange, lease, transfer or otherwise dispose of, in one or more transactions,
the Property comprising, located at or used solely in connection with the
Terrace Bay, Ontario facility, as well as any or all of the apartment
buildings, golf courses and other real property or personal property owned by
Neenah Paper Company of Canada in or near Terrace Bay, Ontario (in each case
for fair market value, giving due consideration to any diminution in value that
may result from the closure of the Terrace Bay facility); (vii) terminate,
assign or subcontract the rights and obligations of Parent relating solely to
the Terrace Bay facility under the Pulp Supply Agreement (provided  that
the rights and obligations retained shall not be less favorable in any material
respect to the Credit Parties than the rights and obligations which have
historically benefited and been satisfied by the operations of the Credit
Parties other than the operations of such Terrace Bay facility); (viii) sell,
exchange, lease, transfer or otherwise dispose of (in each case for reasonably
equivalent value) Timberland Properties in the Province of Nova Scotia other
than the Offered Timberland Properties, and/or other real Property (wherever
located) having a fair market value not to exceed the sum of (1) $2,000,000
for all such transactions in the aggregate in any calendar year; plus (2) the
excess (if any) of $2,000,000 over the amount of dispositions pursuant to this
clause (viii) consummated in the immediately preceding calendar year; (ix) sell,
exchange, lease, transfer or otherwise dispose (in each case for reasonably
equivalent value) of Property of any Credit Party acquired after the Third
Amendment Effective Date (either through direct asset purchase or as part of
the acquisition of all or substantially all of the Stock of another Person)
having a fair market value not to exceed $5,000,000 in the aggregate during any
twelve month period; (x) so long as Indebtedness secured by the Fox
PP&E permitted pursuant to Section 7.1(n) (including any
permitted refinancing thereof) is outstanding, sell, exchange, lease, transfer
or otherwise dispose of Fox PP&E to the extent permitted under the Fox
PP&E Financing Documents provided, that the net proceeds thereof are
applied to the retirement, redemption or repayment of such Indebtedness in
accordance with the terms of the Fox PP&E Financing Documents; (xi) at any
time there is no Indebtedness secured by the Fox PP&E outstanding, sell for
fair and adequate consideration 


 


10

















 


any
Real Property Asset comprising the Fox Real Estate (1) on which the
facilities located on such Real Property Asset have permanently ceased
operations, and (2) which is no longer needed in the business of the
Credit Parties; (xii) complete the Pictou Disposition, including, without
limitation, the assignment of all rights and obligations of the Credit Parties
under the Pulp Supply Agreement relating solely to the Pictou Properties; provided that (1) contemporaneously with
the consummation of the Pictou Disposition, the Borrowing Base shall be
recomputed after giving effect to such disposition and the Credit Parties shall
deliver a duly completed and executed Borrowing Base Compliance Certificate
dated and prepared as of such date after giving effect to such disposition, (2) the
sum of (A) all cash capital contributions paid to the Pictou Subsidiaries
sold as part of the Pictou Disposition and (B) all payments in nature of
guaranty, indemnity or similar payments made by the Credit Parties in respect
of deferred capital contributions in connection with the Pictou Disposition
shall not exceed $25,000,000 in the aggregate, less a credit for one-half of
the pre-closing maintenance expenses (estimated to be $8,846,092 as of the
Sixth Amendment Effective Date) incurred in connection with the annual
maintenance closure of the Pictou Properties during April and May, 2008,
and (3) the Pictou Disposition shall occur within ninety (90) days from
the Sixth Amendment Effective Date; and (xiii) sell for fair and adequate
consideration any other equipment and fixtures having a fair market value not
to exceed $1,000,000 in the aggregate during the period from the Closing Date
through the Termination Date; provided  that, upon the occurrence
and during the continuation of a Dominion Event, all net proceeds of any and
all of the foregoing shall be paid to the Agent for application in accordance
with Section 2.7 to outstanding Loans or other Obligations, to the
extent then outstanding;


 


SECTION 9.           Amendment to Section 7.5 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof, Section 7.5
of the Credit Agreement is hereby amended and restated in its entirety as
follows:


 


7.5           Nature
of Business.  Materially change the
nature of its business or enter into any business which is substantially
different from the business in which it is engaged as of the Third Amendment
Effective Date, except for entry into related businesses that do not in the
aggregate substantially change the overall composition of the Credit Parties’
or the Offshore Entities respective businesses; provided  that the
Credit Parties shall not be required to remain in the pulp business.


 


SECTION 10.         Amendment to Section 7.7 of the
Credit Agreement.  Upon effectiveness
of this Amendment in accordance with Section 13 hereof, Section 7.7
of the Credit Agreement is hereby amended by deleting the word “and” at the end
of clause (k), by deleting clause (l) thereof in its entirety,
and by inserting, immediately after clause (k) of Section 7.7,
the following as new clauses (l) and (m):


 


(l)            Investments
in the Pictou Subsidiaries as permitted by Section 7.3(e) and Section 7.4(4)(xii);
and


 


11

















 


(m)          Other
loans, advances or Investments not covered by clauses (a) through (l) above,
in any aggregate amount not to exceed $10,000,000 at any time outstanding.


 


SECTION 11.         Amendment to Section 7.20 of
the Credit Agreement.  Upon
effectiveness of this Amendment in accordance with Section 13 hereof,
clause (b) of Section 7.20 of the Credit Agreement is hereby amended
and restated in its entirety as follows:


 


(b)           the
Offshore Entities (other than FinCo) to create, incur, assume or suffer to
exist Indebtedness in excess of €50,000,000 at any time outstanding.


 


SECTION 12.         Representations and Warranties.  To induce the other parties hereto to enter
into this Amendment, the Credit Parties represent and warrant to the Agent and
each of the other Lender Parties that, as of the Effective Date (defined
below):


 


(a)           the representations and warranties of
the Credit Parties set forth in Section 5 of the Credit Agreement are true
and correct in all material respects on and as of the Effective Date with the
same effect as if made on and as of the Effective Date, except to the extent
such representations and warranties expressly relate to an earlier date, in
which case such representations and warranties were true and correct as of such
earlier date, and except for any change of facts expressly permitted under the
provisions of the Credit Agreement and the other Documents;


 


(b)           no Default has occurred and is
continuing under the Credit Agreement; and


 


(c)           this Amendment has been duly executed
and delivered by the Credit Parties and the Credit Agreement, as amended
hereby, constitutes a legal, valid and binding obligation of the Credit
Parties, enforceable against the Credit Parties in accordance with its terms,
subject to applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors’ rights generally and subject to general
principles of equity, regardless of whether considered in a proceeding in
equity or at law.


 


SECTION 13.         Conditions to Effectiveness of
Amendment.  This Amendment shall become
effective as of the date (the “Effective Date”) on which each of the
following conditions has been satisfied:


 


(a)           the Agent shall have received
counterparts of this Amendment that, when taken together, bear the signatures
of the Credit Parties and all the Lenders;


 


(b)           the Agent shall have received payment
of any and all fees owing in connection with this Amendment, including an
amendment fee payable to each Lender in the amount of 15 basis points (0.15%)
on the amount of such Lender’s Commitment;


 


(c)           to the extent invoiced, the Lenders,
the Agent and the Book-Runner shall have received payment or reimbursement of
their out-of-pocket expenses in connection with this Amendment and any other
out-of-pocket expenses of the Lenders, the Agent or the Book-Runner 


 


12

















 


required to be paid or
reimbursed pursuant to the Credit Agreement, including the reasonable fees,
charges and disbursements of counsel for the Agent;


 


(d)           the Borrowers shall have delivered to
the Agent such certificates of authorized officers of the Borrowers and the
Guarantors, certificates of Governmental Authorities, certified copies of the
certificates of incorporation, or formation, bylaws and operating agreements, as
applicable, of the Borrowers and the Guarantors (or certified confirmation that
no amendments, modifications or revisions have been to those previously
certified and delivered to the Agent, as applicable), certified copies of
resolutions of the directors, managers or members, as applicable of the
Borrowers and the Guarantors and such other documents, instruments and
agreements as the Agent shall require to evidence the valid corporate existence
and authority to conduct business of the Borrowers and the Guarantors and the
due authorization, execution and delivery of this Amendment any other documents
related to this Amendment, and any other legal matters relating to the
Borrowers, the Guarantors, any Subsidiary or the other Loan Documents by the
Borrowers and/or the Guarantors, all in a form and substance reasonable
satisfactory to the Agent and its counsel;


 


(e)           the Borrowers shall have delivered to
the Agent favorable opinions of Powell Goldstein LLP, counsel to the Borrowers
and the Guarantors, and general counsel to the Parent, each dated as of the
Effective Date, addressed to the Agent and the Lenders and covering such
matters in connection with the foregoing as the Agent or the Lenders may
reasonably request, in a form and substance reasonably satisfactory to the
Agent and its counsel; and


 


(f)            the Borrowers shall have delivered
to the Agent the definitive documents relating to the Pictou Disposition, the
terms of which will be reasonably satisfactory to the Agent and its counsel.


 


SECTION 14.         Effect of Amendment.  Except as expressly set forth herein, this
Amendment shall not by implication or otherwise limit, impair, constitute a
waiver of, amend, or otherwise affect the rights and remedies of the Agent or
the other Lender Parties under the Credit Agreement or any other Loan Document
and shall not alter, modify, amend or in any way affect any of the terms,
conditions, obligations, covenants or agreements contained in the Credit
Agreement or any other Loan Document, all of which are ratified and affirmed in
all respects and shall continue in full force and effect.  This Amendment shall apply and be effective
with respect only to the matters expressly referred to herein, and nothing
herein shall be deemed to entitle the Borrower to a consent to, or a waiver,
amendment, modification or other change of, any of the terms, conditions,
obligations, covenants or agreements contained in the Credit Agreement or any
other Loan Document in similar or different circumstances.  This Amendment shall constitute a “Loan Document”
for all purposes of the Credit Agreement.


 


SECTION 15.         APPLICABLE LAW.  THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.


 


SECTION 16.         Counterparts.  This Amendment 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 an original but all of
which when taken together shall 


 


13

















 


constitute but one and the
same instrument.  Delivery of an executed
signature page of this Amendment by facsimile transmission shall be
effective as delivery of a manually executed counterpart hereof.


 


SECTION 17.         Costs and Expenses.  The Borrowers agree to reimburse the Agent
for its reasonable out-of-pocket expenses in connection with this Amendment,
including the reasonable fees, charges and disbursements of counsel for the
Agent actually incurred.


 


SECTION 18.         Headings.  The headings of this Amendment are for purposes
of reference only and shall not limit or otherwise affect the meaning hereof.


 


SECTION 19.         Severability.  Any provision of this Amendment which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.


 


SECTION 20.         No Party Deemed Drafter.  Each of the parties hereto agrees that no
party hereto shall be deemed to be the drafter of this Amendment.


 


SECTION 21.         Ratification of Guaranty.  Each Guarantor hereby consents to this
Amendment and hereby confirms and agrees that (a) notwithstanding the
effectiveness of this Amendment, the Guaranty is, and shall continue to be, in
full force and effect and is hereby ratified and confirmed in all respects,
except that, on and after the effectiveness of this Amendment, each reference
in the Guaranty to the “Agreement”, “thereunder”, “thereof” or words of like
import referring to the Credit Agreement shall mean and be a reference to the
Credit Agreement as amended by this Amendment, and (b) the Loan Documents
to which it is a party and all of the Collateral described therein do, and shall
continue to, secure the payment of all of the Obligations secured thereby.


 


[SIGNATURE PAGES FOLLOW]


 


14
















 


IN WITNESS WHEREOF, the
parties hereto have caused this Amendment to be duly executed by their
authorized officers as of the day and year first written above.


 


	
   

  	
  NEENAH PAPER, INC., as a
  Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEENAH PAPER MICHIGAN,
  INC., as a 

  Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NPCC HOLDING COMPANY,
  LLC, as a 

  Borrower

  
	
   

  	
  By:

  	
  Neenah
  Paper, Inc., as its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  NEENAH PAPER
  INTERNATIONAL 

  
	
   

  	
  HOLDING COMPANY, LLC, as a
  Borrower

  
	
   

  	
  By:

  	
  Neenah
  Paper, Inc., as its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
														



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  NEENAH PAPER
  INTERNATIONAL, LLC, as 

  
	
   

  	
  a Borrower

  
	
   

  	
  By:

  	
  Neenah
  Paper International Holding 

  Company, LLC, as its sole member

  
	
   

  	
   

  	
  By:

  	
  Neenah
  Paper, Inc., as its sole member

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEENAH PAPER FVC, INC., as a
  Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEENAH PAPER FR, LLC, as a
  Borrower

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  NEENAH PAPER COMPANY OF
  CANADA, as 

  a Guarantor

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
														



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  JPMORGAN CHASE BANK,
  N.A., individually 

  and as Agent

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Jeff A. Tompkins

  
	
   

  	
   

  	
  Vice President

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  JPMORGAN CHASE BANK,
  N.A., TORONTO 

  BRANCH, as Canadian Collateral Agent,

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  SIGNATURE PAGE TO SIXTH
  AMENDMENT 

  DATED AS OF MAY       , 2008 TO THE 

  NEENAH PAPER CREDIT AGREEMENT 

  DATED AS OF NOVEMBER 30, 2004

  
	
   

  	
   

  	
   

  
	
   

  	
  To approve this Amendment:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Institution:

  
	
   

  	
   

  	
   

  
	
   

  	
  WELLS FARGO FOOTHILL,
  L.L.C.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  SIGNATURE PAGE TO SIXTH
  AMENDMENT 

  DATED AS OF MAY       , 2008 TO THE 

  NEENAH PAPER CREDIT AGREEMENT 

  DATED AS OF NOVEMBER 30, 2004

  
	
   

  	
   

  	
   

  
	
   

  	
  To approve this Amendment:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Institution:

  
	
   

  	
   

  	
   

  
	
   

  	
  BANK OF AMERICA, N.A.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  SIGNATURE PAGE TO SIXTH
  AMENDMENT 

  DATED AS OF MAY       , 2008 TO THE 

  NEENAH PAPER CREDIT AGREEMENT 

  DATED AS OF NOVEMBER 30, 2004

  
	
   

  	
   

  	
   

  
	
   

  	
  To approve this Amendment:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Institution:

  
	
   

  	
   

  	
   

  
	
   

  	
  THE CIT GROUP/BUSINESS
  CREDIT, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  SIGNATURE PAGE TO SIXTH
  AMENDMENT 

  DATED AS OF MAY       , 2008 TO THE 

  NEENAH PAPER CREDIT AGREEMENT 

  DATED AS OF NOVEMBER 30, 2004

  
	
   

  	
   

  	
   

  
	
   

  	
  To approve this Amendment:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Institution:

  
	
   

  	
   

  	
   

  
	
   

  	
  RBS BUSINESS CAPITAL, as a Lender

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  SIGNATURE PAGE TO SIXTH
  AMENDMENT 

  DATED AS OF MAY       , 2008 TO THE 

  NEENAH PAPER CREDIT AGREEMENT 

  DATED AS OF NOVEMBER 30, 2004

  
	
   

  	
   

  	
   

  
	
   

  	
  To approve this Amendment:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Institution:

  
	
   

  	
   

  	
   

  
	
   

  	
  UBS AG, STAMFORD BRANCH

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


[Signature Page — Sixth Amendment]


 

















 


	
   

  	
  SIGNATURE PAGE TO SIXTH
  AMENDMENT 

  DATED AS OF MAY       , 2008 TO THE 

  NEENAH PAPER CREDIT AGREEMENT 

  DATED AS OF NOVEMBER 30, 2004

  
	
   

  	
   

  	
   

  
	
   

  	
  To approve this Amendment:

  
	
   

  	
   

  	
   

  
	
   

  	
  Name of Institution:

  
	
   

  	
   

  	
   

  
	
   

  	
  GOLDMAN SACHS CREDIT
  PARTNERS L.P.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
						



 


[Signature Page — Sixth Amendment]