Exhibit 10.7


 


 


EXECUTION COPY


 


REVOLVING


CREDIT AND GUARANTY AGREEMENT


 


dated as of May 2, 2005


 


among


 


NEWPAGE CORPORATION,


 


NEWPAGE HOLDING CORPORATION,


 


CERTAIN SUBSIDIARIES OF NEWPAGE CORPORATION,


as Guarantors,


 


VARIOUS LENDERS,


 


GOLDMAN SACHS CREDIT PARTNERS L.P.,


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

Agent,


 


UBS SECURITIES
LLC,


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


 


WACHOVIA
CAPITAL MARKETS, LLC,


as
Co-Syndication Agent,


 


BANK OF
AMERICA, N.A.,


as
Documentation Agent


 


and


 


JPMORGAN CHASE BANK


as Collateral Agent


 










 


$350,000,000 Senior Secured Revolving Loan
Credit Facilities


 










 





















 


TABLE OF CONTENTS


 


	
  SECTION 1.
  DEFINITIONS AND INTERPRETATION

  	
   

  
	
  1.1. Definitions

  	
   

  
	
  1.2. Accounting Terms

  	
   

  
	
  1.3. Interpretation, etc.

  	
   

  
	
  SECTION 2. LOANS AND LETTERS OF CREDIT

  	
   

  
	
  2.1. [Reserved]

  	
   

  
	
  2.2. Revolving Loans

  	
   

  
	
  2.3. Swing Line Loans

  	
   

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

  	
   

  
	
  2.5. Pro Rata Shares; Availability of Funds

  	
   

  
	
  2.6. Use of Proceeds

  	
   

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

  	
   

  
	
  2.8. Interest on Loans

  	
   

  
	
  2.9. Conversion/Continuation

  	
   

  
	
  2.10. Default Interest

  	
   

  
	
  2.11. Fees

  	
   

  
	
  2.12. [Reserved]

  	
   

  
	
  2.13. Voluntary Prepayments/Commitment
  Reductions

  	
   

  
	
  2.14. Mandatory Prepayments

  	
   

  
	
  2.15. Application of Prepayments

  	
   

  
	
  2.16. General Provisions Regarding Payments

  	
   

  
	
  2.17. Ratable Sharing

  	
   

  
	
  2.18. Making or Maintaining Eurodollar Rate
  Loans

  	
   

  
	
  2.19. Increased Costs; Capital Adequacy

  	
   

  
	
  2.20. Taxes; Withholding, etc.

  	
   

  
	
  2.21. Obligation to Mitigate

  	
   

  
	
  2.22. Defaulting Lenders

  	
   

  
	
  2.23. Removal or Replacement of a Lender

  	
   

  
	
  2.24. Determination of Borrowing Base

  	
   

  
	
  SECTION 3. CONDITIONS PRECEDENT

  	
   

  
	
  3.1. Closing Date

  	
   

  
	
  3.2. Conditions to Each Credit Extension

  	
   

  
	
  SECTION 4. REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
  4.1. Organization; Requisite Power and
  Authority; Qualification

  	
   

  
	
  4.2. Capital Stock and Ownership

  	
   

  
	
  4.3. Due Authorization

  	
   

  
	
  4.4. No Conflict

  	
   

  



 


i





















 


	
  4.5. Governmental Consents

  	
   

  
	
  4.6. Binding Obligation

  	
   

  
	
  4.7. Historical Financial Statements

  	
   

  
	
  4.8. Projections

  	
   

  
	
  4.9. No Material Adverse Change

  	
   

  
	
  4.10. Wickliffe Paper Company

  	
   

  
	
  4.11. Adverse Proceedings, etc.

  	
   

  
	
  4.12. Payment of Taxes

  	
   

  
	
  4.13. Properties

  	
   

  
	
  4.14. Environmental Matters

  	
   

  
	
  4.15. No Defaults

  	
   

  
	
  4.16. Material Contracts

  	
   

  
	
  4.17. Governmental Regulation

  	
   

  
	
  4.18. Margin Stock

  	
   

  
	
  4.19. Employee Matters

  	
   

  
	
  4.20. Employee Benefit Plans

  	
   

  
	
  4.21. Certain Fees

  	
   

  
	
  4.22. Solvency

  	
   

  
	
  4.23. Related Agreements

  	
   

  
	
  4.24. Compliance with Statutes, etc.

  	
   

  
	
  4.25. Disclosure

  	
   

  
	
  4.26. Patriot Act

  	
   

  
	
  4.27. Location of Material Inventory

  	
   

  
	
  4.28. Accuracy of Borrowing Base

  	
   

  
	
  4.29. Post-Audit Asset Dispositions

  	
   

  
	
  4.30. Collateral Documents

  	
   

  
	
  4.31. NewPageHoldCo

  	
   

  
	
  4.32. Common Enterprise

  	
   

  
	
  SECTION 5. AFFIRMATIVE COVENANTS

  	
   

  
	
  5.1. Financial Statements and Other Reports

  	
   

  
	
  5.2. Existence

  	
   

  
	
  5.3. Payment of Taxes and Claims

  	
   

  
	
  5.4. Maintenance of Properties

  	
   

  
	
  5.5.
  Insurance

  	
   

  
	
  5.6. Maintaining Records; Access to
  Properties and Inspections

  	
   

  
	
  5.7. Lenders Meetings

  	
   

  
	
  5.8. Compliance with Laws

  	
   

  
	
  5.9. Environmental

  	
   

  
	
  5.10. Subsidiaries

  	
   

  



 


ii





















 


	
  5.11. [Reserved

  	
   

  
	
  5.12. Interest Rate Protection

  	
   

  
	
  5.13. Security Interests; Further
  Assurances

  	
   

  
	
  5.14. Miscellaneous Business Covenants

  	
   

  
	
  5.15. Information Regarding Collateral

  	
   

  
	
  5.16. Post-Closing Collateral Matters

  	
   

  
	
  5.17. Borrowing Base-Related Reports

  	
   

  
	
  SECTION 6. NEGATIVE COVENANTS

  	
   

  
	
  6.1. Indebtedness

  	
   

  
	
  6.2. Liens

  	
   

  
	
  6.3. Equitable Lien

  	
   

  
	
  6.4. No Further Negative Pledges

  	
   

  
	
  6.5. Restricted Junior Payments

  	
   

  
	
  6.6. Restrictions on Subsidiary
  Distributions

  	
   

  
	
  6.7. Investments

  	
   

  
	
  6.8. Financial Covenants

  	
   

  
	
  6.9. Fundamental Changes; Disposition of
  Assets; Acquisitions

  	
   

  
	
  6.10. Disposal of Subsidiary Interests

  	
   

  
	
  6.11. Sales and Lease-Backs

  	
   

  
	
  6.12. Transactions with Shareholders and
  Affiliates.

  	
   

  
	
  6.13. Conduct of Business

  	
   

  
	
  6.14. Permitted Activities of NewPageHoldCo

  	
   

  
	
  6.15. Amendments or Waivers of Certain
  Related Agreements

  	
   

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

  	
   

  
	
  6.17. Fiscal Year

  	
   

  
	
  SECTION 7. GUARANTY

  	
   

  
	
  7.1. Guaranty of the Obligations

  	
   

  
	
  7.2. Contribution by Guarantors

  	
   

  
	
  7.3. Payment by Guarantors

  	
   

  
	
  7.4. Liability of Guarantors Absolute

  	
   

  
	
  7.5. Waivers by Guarantors

  	
   

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

  	
   

  
	
  7.7. Subordination of Other Obligations

  	
   

  
	
  7.8. Continuing Guaranty

  	
   

  
	
  7.9. Authority of Guarantors or NewPageCo

  	
   

  
	
  7.10. Financial Condition of NewPageCo

  	
   

  
	
  7.11. Bankruptcy, etc.

  	
   

  
	
  7.12. Discharge of Guaranty Upon Sale of
  Guarantor

  	
   

  



 


iii





















 


	
  SECTION 8. EVENTS OF DEFAULT

  	
   

  
	
  8.1. Events of Default

  	
   

  
	
  SECTION 9. COLLATERAL ACCOUNT;
  APPLICATION OF COLLATERAL PROCEEDS

  	
   

  
	
  9.1. Accounts and Account Collections

  	
   

  
	
  9.2. Inventory

  	
   

  
	
  SECTION 10. AGENTS

  	
   

  
	
  10.1. Appointment of Agents.

  	
   

  
	
  10.2. Powers and Duties

  	
   

  
	
  10.3. General Immunity

  	
   

  
	
  10.4. Agents Entitled to Act as Lender

  	
   

  
	
  10.5. Lenders’ Representations, Warranties
  and Acknowledgment

  	
   

  
	
  10.6. Right to Indemnity

  	
   

  
	
  10.7. Successor Administrative Agent and
  Swing Line Lender

  	
   

  
	
  10.8. Collateral Documents and Guaranty

  	
   

  
	
  10.9. Overadvances

  	
   

  
	
  10.10. Collateral Matters

  	
   

  
	
  10.11. Withholding Tax

  	
   

  
	
  SECTION 11. MISCELLANEOUS

  	
   

  
	
  11.1.
  Notices

  	
   

  
	
  11.2. Expenses

  	
   

  
	
  11.3. Indemnity

  	
   

  
	
  11.4. Set-Off

  	
   

  
	
  11.5. Amendments and Waivers

  	
   

  
	
  11.6. Successors and Assigns;
  Participations

  	
   

  
	
  11.7. Independence of Covenants

  	
   

  
	
  11.8. Survival of Representations,
  Warranties and Agreements

  	
   

  
	
  11.9. No Waiver; Remedies Cumulative

  	
   

  
	
  11.10. Marshalling; Payments Set Aside

  	
   

  
	
  11.11. Severability

  	
   

  
	
  11.12. Obligations Several; Independent
  Nature of Lenders’ Rights

  	
   

  
	
  11.13. Headings

  	
   

  
	
  11.14. APPLICABLE LAW

  	
   

  
	
  11.15. CONSENT TO JURISDICTION

  	
   

  
	
  11.16. WAIVER OF JURY TRIAL

  	
   

  
	
  11.17. Confidentiality

  	
   

  
	
  11.18. Usury Savings Clause

  	
   

  
	
  11.19. Counterparts

  	
   

  
	
  11.20. Effectiveness

  	
   

  



 


iv





















 


	
  11.21. Patriot Act

  	
   

  
	
  11.22. Electronic Execution of Assignments

  	
   

  



 


v





















 


	
  APPENDICES:

  	
   

  	
  A

  	
  Revolving Loan Commitments

  
	
   

  	
   

  	
  B

  	
  Notice Addresses

  
	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
  3.1(j)

  	
  Phase I Environmental Reports

  
	
   

  	
   

  	
  4.1

  	
  Jurisdictions of Organization and Qualification

  
	
   

  	
   

  	
  4.2

  	
  Capital Stock and Ownership

  
	
   

  	
   

  	
  4.13

  	
  Real Estate Assets

  
	
   

  	
   

  	
  4.14

  	
  Environmental Matters

  
	
   

  	
   

  	
  4.16

  	
  Material Contracts

  
	
   

  	
   

  	
  4.20

  	
  Employee Benefit Plans

  
	
   

  	
   

  	
  4.27

  	
  Locations of Material Inventory

  
	
   

  	
   

  	
  5.16

  	
  Post-Closing Collateral Matters

  
	
   

  	
   

  	
  6.1

  	
  Existing Indebtedness

  
	
   

  	
   

  	
  6.2

  	
  Existing Liens

  
	
   

  	
   

  	
  6.7

  	
  Existing Investments

  
	
   

  	
   

  	
  6.12

  	
  Existing Affiliate Transactions

  
	
   

  	
   

  	
   

  	
   

  
	
  EXHIBITS:

  	
   

  	
  A-1

  	
  Funding Notice

  
	
   

  	
   

  	
  A-2

  	
  Conversion/Continuation Notice

  
	
   

  	
   

  	
  A-3

  	
  Issuance Notice

  
	
   

  	
   

  	
  B-1

  	
  Revolving Loan Note

  
	
   

  	
   

  	
  B-2

  	
  Swing Line Note

  
	
   

  	
   

  	
  C

  	
  Compliance Certificate

  
	
   

  	
   

  	
  D

  	
  Opinions of Counsel

  
	
   

  	
   

  	
  E

  	
  Assignment Agreement

  
	
   

  	
   

  	
  F

  	
  Certificate Re Non-bank Status

  
	
   

  	
   

  	
  G-1

  	
  Closing Date Certificate

  
	
   

  	
   

  	
  G-2

  	
  Solvency Certificate

  
	
   

  	
   

  	
  H

  	
  Counterpart Agreement

  
	
   

  	
   

  	
  I

  	
  Pledge and Security Agreement

  
	
   

  	
   

  	
  J

  	
  [Reserved]

  
	
   

  	
   

  	
  K

  	
  Landlord Waiver and Consent Agreement

  
	
   

  	
   

  	
  L

  	
  Intercreditor Agreement

  
	
   

  	
   

  	
  M

  	
  Borrowing Base Certificate

  
	
   

  	
   

  	
  N-1

  	
  Form of Perfection Certificate

  



 


vi





















 


	
   

  	
   

  	
  N-2

  	
  Form of Perfection Certificate Supplement

  
	
   

  	
   

  	
  O

  	
  Form of Access Grant and Easement Agreement

  



 


vii





















 


REVOLVING CREDIT AND GUARANTY AGREEMENT


 


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


 


RECITALS:


 


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


 


WHEREAS,
Lenders have agreed to extend certain credit facilities to NewPageCo, in an
aggregate principal amount not to exceed $350,000,000 of Revolving Loans, the
proceeds of which will be used (i) to fund the Paper Business Acquisition,
(ii) to pay related transaction costs, fees, commissions and expenses, (iii) to
fund permitted capital expenditures and permitted acquisitions, (iv) to
fund certain interest and commodities hedging arrangements, (v) to provide
for the ongoing working capital requirements of the Paper Business, and (vi) for
general corporate purposes of NewPageCo;


 


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


 


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


 


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


 





















 


SECTION 1.   DEFINITIONS AND INTERPRETATION


 


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


 


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


 


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


 


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


 


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


 


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


 


2





















 


such Interest Rate
Determination Date, by (ii) an amount equal to (a) one minus (b) the
Applicable Reserve Requirement.


 


“Administrative
Agent” as defined in the preamble hereto.


 


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


 


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


 


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


 


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


 


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


 


“Aggregate
Amounts Due” as defined in Section 2.17.


 


“Aggregate
Payments” as defined in Section 7.2.


 


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


 


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


 


3





















 


“Applicable
Margin’’ means (i) with respect to Revolving Loans that
are Eurodollar Rate Loans, (a) from the Closing Date until the date of
delivery of the Compliance Certificate and the financial statements for the
period ending on the last day of the second full Fiscal Quarter ending after
the Closing Date, an amount equal to 2.00% per annum, and (b) thereafter,
a percentage, per annum, determined by reference to the Total Leverage Ratio in
effect from time to time as set forth below:


 




	
  Leverage

  Ratio

  	
   

  	
  Applicable Margin

  for Revolving Loans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  >3.75:1.00

  	
   

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  <3.75:1.00

  >2.75:1.00

  	
   

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  <2.75:1.00

  	
   

  	
  1.50

  	
  %

  






 


and (ii) with
respect to Swing Line Loans and Revolving Loans that are Base Rate Loans, an
amount equal to (a) the Applicable Margin for Eurodollar Rate Loans as set
forth in clause (i)(a) or (i)(b) above, as applicable, minus (b) 1.00%
per annum.  Each change in the Applicable
Margin shall become effective three Business Days after the date on which
Administrative Agent shall have received the applicable financial statements
and a Compliance Certificate pursuant to Section 5.1(d) calculating
the Total Leverage Ratio as at the end of the Fiscal Quarter to which such
Compliance Certificate relates.  At any
time NewPageCo has not submitted to Administrative Agent the applicable
information as and when required under Section 5.1(d), the Applicable
Margin shall be determined for the period from the date such information was
required to have been delivered under Section 5.1(d) until three
Business Days after the actual delivery thereof as if the Total Leverage Ratio
were in excess of 3.75:1.00 for such period. 
Within one Business Day of receipt of the applicable information under Section 5.1(d),
Administrative Agent shall give each Lender telefacsimile or telephonic notice
(confirmed in writing) of the Applicable Margin in effect from such date.


 


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


 


4





















 


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


 


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


 


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


 


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


 


“Authorized
Officer” means, as applied to any Person, any individual
holding the position of chairman of the board (if an officer), chief executive
officer, president or one of


 


5





















 


its vice
presidents (or the equivalent thereof), and such Person’s chief financial
officer, treasurer, secretary, or other person expressly authorized by
resolution or written consent to represent such entity in such capacity.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6





















 


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


 


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


 


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


 


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


 


“Canadian
Dollars” means the lawful money of Canada.


 


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


 


7





















 


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


 


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


 


“Cash
Dominion Trigger Event” shall mean the occurrence of any one of the following events:  (i) at any time after September 30,
2005, Excess Availability shall be less than $40.0 million for any period of
ten (10) consecutive Business Days or (ii) an Event of Default shall
occur and be continuing; provided, that, to the extent that the
Cash Dominion Trigger Event has occurred due to clause (i) of this
definition, if Excess Availability shall be equal to or greater than $40.0
million for at least sixty (60) consecutive days, the Cash Dominion Trigger
Event shall be deemed to be over.  At any
time that a Cash Dominion Trigger Event shall be deemed to be over or otherwise
cease to exist, the Agents shall take such actions, including delivering such
notices and directions to depositary institutions at which Blocked Accounts are
established, to terminate the cash sweeps and other transfers existing pursuant
to Section 9.01(e) as a result of any Activation Notice or
other notices or directions given by any Agent during the existence of such
Cash Dominion Trigger Event.


 


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


 


8





















 


than 90 days for
underlying securities of the types described in clause (i) above entered
into with any bank meeting the qualifications specified in clause (iv) above.


 


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


 


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


 


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


 


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


 


9





















 


Secured Floating
Rate Note Documents, the Senior Secured Fixed Rate Note Documents or the Senior
Subordinated Note Documents shall occur.


 


“Closing
Date” means May 2, 2005.


 


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


 


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


 


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


 


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


 


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


 


“Collateral
Agent” as defined in the preamble hereto.


 


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


 


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


 


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


 


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


 


10





















 


NewPageCo or any
Borrowing Base Guarantor or any of their respective Subsidiaries in the
ordinary course of their businesses.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(5)           nonrecurring costs,
charges or expenses made or incurred in connection with any Permitted
Acquisition or any production continuation, remediation, relocation, severance
and benefits continuation costs in connection with plant closings, in each
case, to the


 


11





















 


extent deducted in computing such Consolidated
Net Income and not to exceed $50,000,000 in the aggregate from and after the
Closing Date; minus


 


(6)           non-cash
items increasing such Consolidated Net Income for such period, other than the
accrual of revenue in the ordinary course of business,


 


in each case, on a
consolidated basis and determined in accordance with GAAP; provided
that for each Fiscal Quarter during 2004 and for the first Fiscal Quarter of
2005, the Consolidated Adjusted EBITDA of NewPageCo will be deemed to be $85.0
million and for the portion of the second Fiscal Quarter of 2005 occurring
prior to the Closing Date the Consolidated Adjusted EBITDA of NewPageCo will be
deemed to be the Consolidated Adjusted EBITDA of the Paper Business for such
portion of such Fiscal Quarter.


 


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


 


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


 


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


 


12





















 


described in
clauses (ii), (iii) and (iv) above shall be calculated by annualizing
the actual amounts thereof calculated from the Closing Date through the end of
the applicable Fiscal Quarter as of which such calculation is being made.


 


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


 


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


 


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


 


 (3)          any
interest on Indebtedness of another Person that is guaranteed by NewPageHoldCo
or one of its Subsidiaries or secured by a Lien on assets of NewPageHoldCo or
one of its Subsidiaries, whether or not such guarantee or Lien is called upon;


 


 in each
case, determined on a consolidated basis in accordance with GAAP; provided that for each Fiscal Quarter during 2004 and for
the first Fiscal Quarter of 2005, the Consolidated Interest Expense of
NewPageCo will be deemed to be $34.5 million and for the portion of the second
Fiscal Quarter of 2005 occurring prior to the Closing Date the Consolidated
Interest Expense will be deemed to be $11.5 million.


 


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


 


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


 


(2)           the
Net Income (or loss) of any Person accrued prior to the date it becomes a
Subsidiary of NewPageHoldCo or is merged into or consolidated with
NewPageHoldCo or any


 


13





















 


of its
Subsidiaries or that Person’s assets are acquired by NewPageHoldCo or any of
its Subsidiaries will be excluded;


 


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


 


 (4)          all
goodwill impairment charges will be excluded;


 


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


 


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


 


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


 


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


 


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


 


“Contributing
Guarantors” as defined in Section 7.2.


 


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


 


14





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


15





















 


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


 


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


 


“Defaulted
Loan” as defined in Section 2.22.


 


“Defaulting
Lender” as defined in Section 2.22.


 


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


 


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


 


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


 


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


 


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


 


16





















 


NewPageHoldCo or
Sponsor other than a Sponsor Affiliated Lender shall be an Eligible Assignee.


 


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


 


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


 


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


 


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


 


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


 


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


 


17





















 


definition with
respect to the period such entity was an ERISA Affiliate of NewPageHoldCo or
such Subsidiary and with respect to liabilities arising after such period for
which NewPageHoldCo or such Subsidiary could be liable under the Internal
Revenue Code or ERISA.


 


“ERISA
Event” means (i) a “reportable event” within the meaning
of Section 4043 of ERISA and the regulations issued thereunder with
respect to any Pension Plan (excluding those for which the provision for 30-day
notice to the PBGC has been waived by regulation); (ii) the failure to
meet the minimum funding standard of Section 412 of the Internal Revenue
Code with respect to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make
by its due date a required installment under Section 412(m) of the
Internal Revenue Code with respect to any Pension Plan or the failure to make
any required contribution to a Multiemployer Plan; (iii) the provision by
the administrator of any Pension Plan pursuant to Section 4041(a)(2) of
ERISA of a notice of intent to terminate such plan in a distress termination
described in Section 4041(c) of ERISA; (iv) the withdrawal by
NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA
Affiliates from any Pension Plan with two or more contributing sponsors or the
termination of any such Pension Plan resulting in liability to NewPageHoldCo,
any of its Subsidiaries or any of their respective Affiliates pursuant to Section 4063
or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan, or the occurrence of any event or condition which
might constitute grounds under ERISA for the termination of, or the appointment
of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on NewPageHoldCo, any of its Subsidiaries or any of their respective
ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by
reason of the application of Section 4212(c) of ERISA; (vii) the
withdrawal of NewPageHoldCo, any of its Subsidiaries or any of their respective
ERISA Affiliates in a complete or partial withdrawal (within the meaning of
Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any
potential liability therefore, or the receipt by NewPageHoldCo, any of its Subsidiaries
or any of their respective ERISA Affiliates of notice from any Multiemployer
Plan that it is in reorganization or insolvency pursuant to Section 4241
or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A
or 4042 of ERISA; (viii) the occurrence of an act or omission which could
give rise to the imposition on NewPageHoldCo, any of its Subsidiaries or any of
their respective ERISA Affiliates of material fines, penalties, taxes or
related charges under Chapter 43 of the Internal Revenue Code or under Section 409,
Section 502(c), (i) or (l), or Section 4071 of ERISA in respect
of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against NewPageHoldCo, any
of its Subsidiaries or any of their respective ERISA Affiliates in connection
with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service
of notice of the failure of any Pension Plan (or any other Employee Benefit
Plan intended to be qualified under Section 401(a) of the Internal
Revenue Code) to qualify under Section 401(a) of the Internal Revenue
Code, or the failure of any trust forming part of any Pension Plan to qualify


 


18





















 


for exemption from
taxation under Section 501(a) of the Internal Revenue Code; or (xi)
the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the
Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Fair
Share” as defined in Section 7.2.


 


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


 


“Federal
Funds Effective Rate” means for any day, the rate per annum
(expressed, as a decimal, rounded upwards, if necessary, to the next higher
1/100 of 1%) equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers on such day, as published by the


 


19





















 


Federal Reserve
Bank of New York on the Business Day next succeeding such day; provided,
(i) if such day is not a Business Day, the Federal Funds Effective Rate
for such day shall be such rate on such transactions on the next preceding
Business Day as so published on the next succeeding Business Day, and (ii) if
no such rate is so published on such next succeeding Business Day, the Federal
Funds Effective Rate for such day shall be the average rate charged to
Administrative Agent, in its capacity as a Lender, on such day on such
transactions as determined by Administrative Agent.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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“Funding
Default” as defined in Section 2.22.


 


“Funding
Guarantors” as defined in Section 7.2.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Guaranteed
Obligations” as defined in Section 7.1.


 


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


 


“Guarantor
Subsidiary” means each Guarantor other than NewPageHoldCo.


 


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


 


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


 


21





















 


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


 


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


 


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


 


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


 


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


 


“Indebtedness”,
as applied to any Person, means, without duplication, (i) all indebtedness
for borrowed money; (ii) that portion of obligations with respect to
Capital Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP; (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed
money; (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from
the date of incurrence of the


 


22





















 


obligation in
respect thereof including any earn out or similar obligation payable more than
six months after the date of any Permitted Acquisition or (b) evidenced by
a note or similar written instrument; (v) all indebtedness secured by any
Lien on any property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed by that Person
or is nonrecourse to the credit of that Person; (vi) the face amount of
any letter of credit issued for the account of that Person or as to which that
Person is otherwise liable for reimbursement of drawings; (vii) the direct
or indirect guaranty, endorsement (otherwise than for collection or deposit in
the ordinary course of business), co-making, discounting with recourse or sale
with recourse by such Person of the obligation of another; (viii) any
obligation of such Person the primary purpose or intent of which is to provide
assurance to an obligee that the obligation of the obligor thereof will be paid
or discharged, or any agreement relating thereto will be complied with, or the
holders thereof will be protected (in whole or in part) against loss in respect
thereof; (ix) any liability of such Person for an obligation of another
through any agreement (contingent or otherwise) (a) to purchase,
repurchase or otherwise acquire such obligation or any security therefor, or to
provide funds for the payment or discharge of such obligation (whether in the
form of loans, advances, stock purchases, capital contributions or otherwise)
or (b) to maintain the solvency or any balance sheet item, level of income
or financial condition of another if, in the case of any agreement described
under subclauses (a) or (b) of this clause (ix), the primary purpose
or intent thereof is as described in clause (viii) above; and (x) all
obligations of such Person in respect of any exchange traded or over the counter
derivative transaction, including, without limitation, any Interest Rate
Agreement and Currency Agreement, whether entered into for hedging or
speculative purposes; provided, in no event shall obligations under any
Interest Rate Agreement and any Currency Agreement be deemed “Indebtedness” for
any purpose under Section 6.8.  For
purposes of this definition, (A) the amount of any Indebtedness
represented by a guaranty or other similar instrument shall be the lesser of
the principal amount of the obligations guaranteed and still outstanding and
the maximum amount for which the guaranteeing Person may be liable pursuant to
the terms of the instrument embodying such Indebtedness, (B) the amount of
any Indebtedness described in clause (iv) above for which recourse is
limited to certain property of such Person shall be the lower of the amount of
the obligation and fair market value of the property securing such obligation,
and (C) the principal amount of the Indebtedness under any Hedge Agreement
at any time shall be equal to the amount payable as a result of the termination
of such Hedge Agreement at such time. Notwithstanding the foregoing, in
connection with the purchase by NewPageCo or any of its Subsidiaries of any
business, the term “Indebtedness” will exclude post-closing payment adjustments
to which the seller may become entitled to the extent such payment is
determined by a final closing balance sheet or such payment depends on the
performance of such business after the closing; provided,
however, that at the time of closing,
the amount of any such payment is not determinable and, to the extent such
payment thereafter becomes fixed and determined, the amount is paid within 30
days thereafter.


 


23


















 


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


 


“Indemnitee”
as defined in Section 11.3.


 


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


 


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


 


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


 


24





















 


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


 


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


 


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


 


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


 


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


 


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


 


“Investment”
means (i) any direct or indirect purchase or other acquisition by
NewPageHoldCo or any of its Subsidiaries of, or of a beneficial interest in,
any of the Securities of any other Person (other than NewPageCo or a Guarantor
Subsidiary); (ii) any direct or indirect purchase or other acquisition for
value, by any Subsidiary of NewPageHoldCo from any Person (other than
NewPageHoldCo, NewPageCo or any Guarantor Subsidiary), of any Capital Stock of
such Person; and (iii) any direct or indirect loan, advance (other than
advances to officers and


 


25





















 


employees for
moving, entertainment and travel expenses, drawing accounts and similar
expenditures in the ordinary course of business) or capital contribution by
NewPageHoldCo or any of its Subsidiaries to any other Person (other than
NewPageHoldCo, NewPageCo or any Guarantor Subsidiary), including all
indebtedness and accounts receivable from that other Person that are not
current assets or did not arise from sales to that other Person in the ordinary
course of business. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any adjustments
for increases or decreases in value, or write-ups, write-downs or write-offs
with respect to such Investment.


 


“IPO” means a bona fide underwritten initial
public offering of Capital Stock of NewPageHoldCo (or the direct or indirect
parent of NewPageHoldCo) pursuant to a registration statement filed with and
declared effective by the Securities and Exchange Commission resulting in total
gross proceeds received by NewPageHoldCo, its direct or indirect parent or any
holder of the Capital Stock of NewPageHoldCo or such parent of at least
$150,000,000.


 


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


 


“Issuing
Bank” means JP Morgan Chase Bank, N.A. as Issuing Bank
hereunder, together with its permitted successors and assigns in such capacity.


 


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


 


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


 


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


 


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


 


“Lender”
means each financial institution listed on the signature pages hereto as a
Lender, and any other Person that becomes a party hereto pursuant to an
Assignment Agreement.


 


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


 


26





















 


“Letter
of Credit Sublimit” means the lesser of (i) $75,000,000
and (ii) the aggregate unused amount of the Revolving Commitments then in
effect.


 


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


 


“Lien”
means (i) any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, and any
lease in the nature thereof) and any option, trust or other preferential
arrangement having the practical effect of any of the foregoing and (ii) in
the case of Securities, any purchase option, call or similar right of a third
party with respect to such Securities.


 


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


 


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


 


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


 


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


 


“MeadWestvaco”
means MeadWestvaco Corporation, a Delaware corporation.


 


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


 


27





















 


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


 


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


 


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


 


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


 


28





















 


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


 


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


 


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


 


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


 


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


 


“NewPageCo”
as defined in the preamble hereto.


 


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


 


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


 


“NewPageCo First Lien Term Loan
Documents” means the NewPageCo First Lien Term Loan
Agreement, the notes issues pursuant thereto and each other document executed
in connection therewith, and any documents executed in connection with any
refinancings or


 


29





















 


replacements
thereof to the extent permitted under Section 6.1, as each such document
may be amended, restated, supplemented or otherwise modified from time to time.


 


“NewPageHoldCo”
as defined in the preamble hereto.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Obligations”
means (i) all obligations of every nature of each Credit Party from time
to time owed to the Agents (including former Agents), the Lenders or any of
them under any Credit Document, whether for principal, interest (including
interest which, but for the filing of a petition in bankruptcy with respect to
such Credit Party, would have accrued on any Obligation, whether or not a claim
is allowed against such Credit Party for such interest in the


 


30





















 


related bankruptcy
proceeding), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnification or otherwise and (ii) the due and punctual payment and performance of all obligations (not to
exceed $1,500,000 in the aggregate for all such obligations) in respect of any
purchasing card or similar program owed to any Lender, any Affiliate of any
Lender, the Administrative Agent or the Collateral Agent.


 


“Obligee
Guarantor” as defined in Section 7.7.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


32





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Phase I
Report’’ means, with respect to any Facility, a report that (i) conforms
to the ASTM Standard Practice for Environmental Site Assessments, E 1527-00 or,
if reasonably requested by the Administrative Agent, USEPA’s currently
applicable standards for “All Appropriate Inquiry”, and (ii) was conducted
no more than six months prior to the date such report is required to be
delivered hereunder by one or more environmental consulting firms reasonably
satisfactory to Administrative Agent.


 


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


 


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


 


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


 


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


 


“Projections”
as defined in Section 4.8.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Replacement
Lender” as defined in Section 2.23.


 


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


 


“Requisite
Lenders” means one or more Lenders having or holding
Revolving Exposure and representing more than 50% of the aggregate Revolving
Exposure of all Lenders that are not Sponsor Affiliated Lenders.


 


 “Reserves” shall mean reserves established against the
Borrowing Base that the Collateral Agent may, in its Permitted Discretion,
establish from time to time.


 


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


 


“Revolving
Commitment” means the commitment of a Lender to make or
otherwise fund any Revolving Loan and to acquire participations in Letters of
Credit and Swing Line Loans hereunder and “Revolving
Commitments” means such commitments of all Lenders


 


36





















 


in the
aggregate.  The amount of each Lender’s
Revolving Commitment, if any, is set forth on Appendix A or in the applicable
Assignment Agreement, subject to any adjustment or reduction pursuant to the
terms and conditions hereof.  The
aggregate amount of the Revolving Commitments as of the Closing Date is
$350,000,000.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


37





















 


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


 


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


 


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


 


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


 


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


 


“Senior
Secured Fixed Rate Notes” means the 10% Senior Secured Fixed
Rate Notes Due 2012 of NewPageCo in the aggregate principal amount of not less
than $350,000,000 and issued pursuant to the Senior Secured Fixed Rate Notes
Indenture, and any registered notes issued by NewPageCo in exchange for, and as
contemplated by, such notes with substantially identical terms as such notes,
and any promissory notes issued in respect of any refinancing or replacement of
such Senior Secured Fixed Rate Notes in a transaction permitted under Section 6.1,
in each case as such notes may thereafter be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under Section 6.16.


 


“Senior Secured Fixed Rate Notes
Documents” means the Senior Secured Fixed Rate Notes
Indenture, the Senior Secured Fixed Rate Notes and each other document executed
in connection with the Notes.


 


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


 


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


 


38





















 


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


 


“Senior Secured Floating Rate
Notes” means the Senior Secured Floating Rate Notes Due 2012
of NewPageCo in the aggregate principal amount of not less than $225,000,000
and issued pursuant to the Senior Secured Floating Rate Notes Indenture, and
any registered notes issued by NewPageCo in exchange for, and as contemplated
by, such notes with substantially identical terms as such notes, and any
promissory notes issued in respect of any refinancing or replacement of such
Senior Secured Floating Rate Notes in a transaction permitted under Section 6.1,
in each case as such notes may thereafter be amended, restated, supplemented or
otherwise modified from time to time to the extent permitted under Section 6.16.


 


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


 


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


 


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


 


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


 


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


 


“Senior Subordinated Notes
Documents” means the Senior Subordinated Notes Indenture, the
Senior Subordinated Notes and each other document executed in connection with
the Notes.


 


39





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


40





















 


Lender or (v) make
or bring any claim, in its capacity as Lender, against the Agent or any Lender
with respect to the duties and obligations of such Persons under the Credit
Documents.


 


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


 


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


 


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


 


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


 


“Swing
Line Lender” means Goldman Sachs Credit Partners L.P. in its
capacity as Swing Line Lender hereunder, together with its permitted successors
and assigns in such capacity.


 


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


 


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


 


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“Swing
Line Sublimit” means the lesser of (i) $15,000,000, and (ii) the
aggregate unused amount of Revolving Commitments then in effect.


 


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


 


“Terminated
Lender” as defined in Section 2.23.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


“Transition
Services Agreement” means (i) the Transition Services Agreement between MeadWestvaco
Corporation and NewPageCo, (ii) the Information Technology Transition
Services Agreement between MeadWestvaco Corporation and NewPageCo, (iii) the
Human Resources Transition Services Agreement between MeadWestvaco Corporation
and NewPageCo, (iv) the Wickliffe Services Agreement between MeadWestvaco
Corporation and NewPageCo, (v) the Chillicothe Services Agreement between
MeadWestvaco Corporation and Chillicothe Paper, Inc., and (vi) the
Lease and Services Agreement between MeadWestvaco Corporation and Chillicothe
Paper, Inc, each dated as of April 30, 2005, as the same may be amended,
restated, supplemented or otherwise modified from time to time to the extent
permitted under Section 6.15.


 


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


 


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


 


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


 


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


 


43





















 


such time.  Unless otherwise set forth herein, reference
in this Agreement to “Wholly Owned Subsidiary” shall mean NewPageCo’s direct
and indirect Wholly Owned Subsidiaries.


 


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


 


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


 


SECTION 2.   LOANS AND LETTERS OF CREDIT


 


2.1.   [Reserved].


 


2.2.   Revolving
Loans.


 


(a)   Revolving Commitments.  During the Revolving Commitment Period,
subject to the terms and conditions hereof, each Lender severally agrees to
make Revolving


 


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


 


(b)   Borrowing Mechanics for Revolving Loans.


 


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


 


(ii)   Whenever NewPageCo desires that Lenders make
Revolving Loans, NewPageCo shall deliver to Administrative Agent a fully
executed Funding Notice no later than 10:00 a.m. (New York City time) at
least three Business Days in advance of the proposed Credit Date in the case of
a Eurodollar Rate Loan, and at least one Business Day in advance of the
proposed Credit Date in the case of a Revolving Loan that is a Base Rate
Loan.  Except as otherwise provided
herein, a Funding Notice for a Revolving Loan that is a Eurodollar Rate Loan
shall be irrevocable on and after the related Interest Rate Determination Date,
and NewPageCo shall be bound to make a borrowing in accordance therewith.


 


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


 


(iv)   Each Lender shall make the amount of its Revolving
Loan available to Administrative Agent not later than 12:00 p.m. (New York
City time) on the applicable Credit Date by wire transfer of same day funds in
Dollars, at the Principal Office designated by Administrative Agent.  Except as provided herein, upon satisfaction
or


 


45





















 


waiver of the
conditions precedent specified herein, Administrative Agent shall make the
proceeds of such Revolving Loans available to NewPageCo on the applicable
Credit Date by causing an amount of same day funds in Dollars equal to the
proceeds of all such Revolving Loans received by Administrative Agent from
Lenders to be credited to the account of NewPageCo at the Principal Office
designated by Administrative Agent or such other account as may be designated
in writing to Administrative Agent by NewPageCo.


 


2.3.   Swing
Line Loans.


 


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


 


(b)   Borrowing Mechanics for Swing Line Loans.


 


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


 


(ii)   Whenever NewPageCo desires that Swing Line Lender
make a Swing Line Loan, NewPageCo shall deliver to Administrative Agent a
Funding Notice no later than 12:00 p.m. (New York City time) on the
proposed Credit Date.


 


(iii)   Swing Line Lender shall make the amount of
its Swing Line Loan available to Administrative Agent not later than 2:00 p.m.
(New York City time) on the applicable Credit Date by wire transfer of same day
funds in Dollars, at Administrative Agent’s Principal Office.  Except as provided herein, upon satisfaction
or waiver of the conditions precedent specified herein, Administrative Agent
shall make the proceeds of such Swing Line Loans available to NewPageCo on the
applicable Credit Date by causing an amount of same day funds in Dollars equal
to the proceeds of all such Swing Line Loans received by Administrative Agent
from Swing Line Lender to be credited to the account of NewPageCo at
Administrative Agent’s Principal Office, or to such other account as may be
designated in writing to Administrative Agent by NewPageCo.


 


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(iv)   With respect to any Swing Line Loans which
have not been voluntarily prepaid by NewPageCo pursuant to Section 2.13,
Swing Line Lender may at any time in its sole and absolute discretion (but no
less frequently than weekly), deliver to Administrative Agent (with a copy to
NewPageCo), no later than 11:00 a.m. (New York City time) at least one
Business Day in advance of the proposed Credit Date, a notice (which shall be
deemed to be a Funding Notice given by NewPageCo) requesting that each Lender
holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to
NewPageCo on such Credit Date in an amount equal to the amount of such Swing
Line Loans (the “Refunded Swing Line Loans”) outstanding on the date such notice is given which
Swing Line Lender requests Lenders to prepay. 
Anything contained in this Agreement to the contrary notwithstanding, (1) the
proceeds of such Revolving Loans made by the Lenders other than Swing Line
Lender shall be immediately delivered by Administrative Agent to Swing Line
Lender (and not to NewPageCo) and applied to repay a corresponding portion of
the Refunded Swing Line Loans and (2) on the day such Revolving Loans are
made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall
be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line
Lender to NewPageCo, and such portion of the Swing Line Loans deemed to be so
paid shall no longer be outstanding as Swing Line Loans and shall no longer be
due under the Swing Line Note of Swing Line Lender but shall instead constitute
part of Swing Line Lender’s outstanding Revolving Loans to NewPageCo and shall
be due under the Revolving Loan Note issued by NewPageCo to Swing Line
Lender.  NewPageCo hereby authorizes
Administrative Agent and Swing Line Lender to charge NewPageCo’s accounts with
Administrative Agent and Swing Line Lender (up to the amount available in each
such account) in order to immediately pay Swing Line Lender the amount of the
Refunded Swing Line Loans to the extent of the proceeds of such Revolving Loans
made by Lenders, including the Revolving Loans deemed to be made by Swing Line
Lender, are not sufficient to repay in full the Refunded Swing Line Loans.  If any portion of any such amount paid (or
deemed to be paid) to Swing Line Lender should be recovered by or on behalf of
NewPageCo from Swing Line Lender in bankruptcy, by assignment for the benefit
of creditors or otherwise, the loss of the amount so recovered shall be ratably
shared among all Lenders in the manner contemplated by Section 2.17.


 


(v)   If for any reason Revolving Loans are not
made pursuant to Section 2.3(b)(iv) in an amount sufficient to repay
any amounts owed to Swing Line Lender in respect of any outstanding Swing Line
Loans on or before the third Business Day after demand for payment thereof by
Swing Line Lender, each Lender holding a Revolving Commitment shall be deemed
to, and hereby agrees to, have purchased a participation in such outstanding
Swing Line Loans, and in an amount equal to its Pro Rata Share of the
applicable unpaid amount together with accrued interest thereon.  Upon one Business


 


47





















 


Day’s notice from
Swing Line Lender, each Lender holding a Revolving Commitment shall deliver to
Swing Line Lender an amount equal to its respective participation in the
applicable unpaid amount in same day funds at the Principal Office of Swing
Line Lender. In order to evidence such participation each Lender holding a Revolving
Commitment agrees to enter into a participation agreement at the request of
Swing Line Lender in form and substance reasonably satisfactory to Swing Line
Lender.  In the event any Lender holding
a Revolving Commitment fails to make available to Swing Line Lender the amount
of such Lender’s participation as provided in this paragraph, Swing Line Lender
shall be entitled to recover such amount on demand from such Lender together
with interest thereon for three Business Days at the rate customarily used by
Swing Line Lender for the correction of errors among banks and thereafter at
the Base Rate, as applicable.


 


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


 


48





















 


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


 


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


 


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


 


49





















 


amendment or
modification to a Letter of Credit and the amount of such Lender’s respective
participation in such Letter of Credit pursuant to Section 2.4(e).  In the event there shall be any conflict
between the terms contained in any Issuance Notice and this Agreement, the
terms of this Agreement shall govern.


 


(c)   Responsibility of Issuing Bank With
Respect to Requests for Drawings and Payments.  In determining whether to honor any drawing
under any Letter of Credit by the beneficiary thereof, Issuing Bank shall be
responsible only to examine the documents delivered under such Letter of Credit
with reasonable care so as to ascertain whether they appear on their face to be
in accordance with the terms and conditions of such Letter of Credit.  As between NewPageCo and Issuing Bank,
NewPageCo assumes all risks of the acts and omissions of, or misuse of the
Letters of Credit issued by Issuing Bank, by the respective beneficiaries of
such Letters of Credit.  In furtherance
and not in limitation of the foregoing, Issuing Bank shall not be responsible
for: (i) the form, validity, sufficiency, accuracy, genuineness or legal
effect of any document submitted by any party in connection with the
application for and issuance of any such Letter of Credit, even if it should in
fact prove to be in any or all respects invalid, insufficient, inaccurate,
fraudulent or forged; (ii) the validity or sufficiency of any instrument
transferring or assigning or purporting to transfer or assign any such Letter
of Credit or the rights or benefits thereunder or proceeds thereof, in whole or
in part, which may prove to be invalid or ineffective for any reason; (iii) failure
of the beneficiary of any such Letter of Credit to comply fully (so long as
such beneficiary has complied substantially) with any conditions required in
order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v) errors
in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences
arising from causes beyond the control of Issuing Bank, including any
Governmental Acts; none of the above shall affect or impair, or prevent the
vesting of, any of Issuing Bank’s rights or powers hereunder.  Without limiting the foregoing and in
furtherance thereof, any action taken or omitted by Issuing Bank under or in
connection with the Letters of Credit or any documents and certificates
delivered thereunder, if taken or omitted in good faith, shall not give rise to
any liability on the part of Issuing Bank to NewPageCo.  Notwithstanding anything to the contrary
contained in this Section 2.4(c), NewPageCo shall retain any and all
rights it may have against Issuing Bank for any liability arising solely out of
the gross negligence, willful misconduct or bad faith of Issuing Bank.


 


(d)   Reimbursement by NewPageCo of Amounts
Drawn or Paid Under Letters of Credit. 
In the event Issuing Bank has determined to honor a drawing under a
Letter of Credit, it shall immediately notify NewPageCo and Administrative
Agent, and NewPageCo shall


 


50





















 


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


 


(e)   Lenders’ Purchase of Participations in
Letters of Credit.  Immediately upon
the issuance of each Letter of Credit, each Lender having a Revolving
Commitment shall be deemed to have purchased, and hereby agrees to irrevocably
purchase, from Issuing Bank a participation in such Letter of Credit and any
drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share
(with respect to the Revolving Commitments) of the maximum amount which is or
at any time may become available to be drawn thereunder.  In the event that NewPageCo shall fail for
any reason to reimburse Issuing Bank as provided in Section 2.4(d),
Issuing Bank shall promptly notify each Lender of the unreimbursed amount of
such honored drawing and of such Lender’s respective participation therein
based on such Lender’s Pro Rata Share of the Revolving Commitments.  Each Lender shall make available to Issuing
Bank an amount equal to its respective participation, in Dollars and in same
day funds, at the office of Issuing Bank specified in such notice, not later
than 12:00 p.m. (New York City time) on the first business day (under the
laws of the jurisdiction in which such office of Issuing Bank is located) after
the date notified by Issuing Bank.  In
the event that any Lender fails to make available to Issuing Bank on such
business day the amount of such Lender’s participation in such Letter of Credit
as provided in this Section 2.4(e), Issuing Bank shall be entitled to
recover such amount on demand from such Lender together with interest thereon
for three Business Days at the rate customarily used by Issuing Bank for the
correction of errors among banks and thereafter at the


 


51





















 


Base
Rate.  Nothing in this Section 2.4(e) shall
be deemed to prejudice the right of any Lender to recover from Issuing Bank any
amounts made available by such Lender to Issuing Bank pursuant to this Section in
the event that it is determined that the payment with respect to a Letter of
Credit in respect of which payment was made by such Lender constituted gross
negligence, willful misconduct or bad faith on the part of Issuing Bank.  In the event Issuing Bank shall have been
reimbursed by other Lenders pursuant to this Section 2.4(e) for all
or any portion of any drawing honored by Issuing Bank under a Letter of Credit,
such Issuing Bank shall distribute to each Lender which has paid all amounts
payable by it under this Section 2.4(e) with respect to such honored
drawing such Lender’s Pro Rata Share of all payments subsequently received by
Issuing Bank from NewPageCo in reimbursement of such honored drawing when such
payments are received.  Any such
distribution shall be made to a Lender at its primary address set forth below
its name on Appendix B or at such other address as such Lender may request.


 


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


 


(g)   Indemnification. Without duplication
of any obligation of NewPageCo under Section 11.2 or 11.3, in addition to
amounts payable as provided herein, NewPageCo hereby


 


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agrees to
protect, indemnify, pay and save harmless Issuing Bank from and against any and
all claims, demands, liabilities, damages, losses, costs, charges and expenses
(including reasonable fees, expenses and disbursements of counsel and allocated
costs of internal counsel) which Issuing Bank may incur or be subject to as a
consequence, direct or indirect, of (i) the issuance of any Letter of
Credit by Issuing Bank, other than as a result of (1) the gross
negligence, willful misconduct or bad faith of Issuing Bank or (2) the
wrongful dishonor by Issuing Bank of a proper demand for payment made under any
Letter of Credit issued by it, or (ii) the failure of Issuing Bank to
honor a drawing under any such Letter of Credit as a result of any Governmental
Act.


 


2.5.   Pro Rata Shares; Availability of Funds.


 


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


 


(b)   Availability of Funds.  Unless Administrative Agent shall have been
notified by any Lender prior to the applicable Credit Date that such Lender
does not intend to make available to Administrative Agent the amount of such
Lender’s Loan requested on such Credit Date, Administrative Agent may assume
that such Lender has made such amount available to Administrative Agent on such
Credit Date and Administrative Agent may, in its sole discretion, but shall not
be obligated to, make available to NewPageCo a corresponding amount on such
Credit Date.  If such corresponding
amount is not in fact made available to Administrative Agent by such Lender,
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender together with interest thereon, for each day from such
Credit Date until the date such amount is paid to Administrative Agent, at the
customary rate set by Administrative Agent for the correction of errors among
banks for three Business Days and thereafter at the Base Rate.  If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent’s demand therefor,
Administrative Agent shall promptly notify NewPageCo and NewPageCo shall
immediately pay such corresponding amount to Administrative Agent together with
interest thereon, for each day from such Credit Date until the date such amount
is paid to Administrative Agent, at the rate payable hereunder for Base Rate
Loans.  Nothing in this Section 2.5(b) shall
be deemed to relieve any Lender from its obligation to fulfill its Revolving
Commitments hereunder or to prejudice any rights that NewPageCo may have
against any Lender as a result of any default by such Lender hereunder.


 


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


 


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


 


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


 


(b)   Register.  Administrative Agent (or its agent or
sub-agent appointed by it) shall maintain at the Principal Office a register
for the recordation of the names and addresses of Lenders and the Revolving
Commitments and Loans of each Lender from time to time (the “Register”). 
The Register, as in effect at the close of business on the preceding
Business Day, shall be available for inspection by NewPageCo or any Lender at
any reasonable time and from time to time upon reasonable prior notice.  Administrative Agent shall record, or shall
cause to be recorded, in the Register the Revolving Commitments and the Loans
in accordance with the provisions of Section 11.6, and each repayment or
prepayment in respect of the principal amount of the Loans, and any such
recordation shall be conclusive and binding on NewPageCo and each Lender,
absent manifest error; provided, failure to make any such recordation,
or any error in such recordation, shall not affect any Lender’s Revolving
Commitments or NewPageCo’s Obligations in respect of any Loan.  NewPageCo hereby designates GSCP to serve as
NewPageCo’s agent solely for purposes of maintaining the Register as provided
in this Section 2.7, and NewPageCo hereby agrees that, to the extent GSCP
serves in such capacity, GSCP and its officers, directors, employees, agents,
sub-agents and Affiliates shall constitute “Indemnitees.”


 


(c)   Notes. 
If so requested by any Lender by written notice to NewPageCo (with a
copy to Administrative Agent) at least two Business Days prior to the Closing
Date, or at any


 


54


















 


time
thereafter, NewPageCo shall execute and deliver to such Lender (and/or, if
applicable and if so specified in such notice, to any Person who is an assignee
of such Lender pursuant to Section 11.6) on the Closing Date (or, if such
notice is delivered after the Closing Date, promptly after NewPageCo’s receipt
of such notice) a Note or Notes to evidence such Lender’s Revolving Loan or
Swing Line Loan, as the case may be.


 


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


 


2.8.   Interest
on Loans.


 


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


 


(i)            in the case of Revolving Loans,


 


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


 


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


 


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


 


(b)   The basis for determining the rate of
interest with respect to any Loan (except a Swing Line Loan which can be made
and maintained as Base Rate Loans only), and the Interest Period with respect
to any Eurodollar Rate Loan, shall be selected by NewPageCo and


 


55





















 


notified to
Administrative Agent and Lenders pursuant to the applicable Funding Notice or
Conversion/Continuation Notice, as the case may be.  If on any day a Loan is outstanding with
respect to which a Funding Notice or Conversion/Continuation Notice has not
been delivered to Administrative Agent in accordance with the terms hereof
specifying the applicable basis for determining the rate of interest, then for
that day such Loan shall be a Base Rate Loan.


 


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


 


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


 


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


 


56





















 


however, with
respect to any voluntary prepayment of a Base Rate Loan, accrued interest shall
instead be payable on the applicable Interest Payment Date.


 


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


 


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


 


2.9.   Conversion/Continuation.


 


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


 


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


 


57





















 


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


 


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


 


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


 


2.11.   Fees.


 


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


 


(i)   commitment fees equal to (1) the average
of the daily difference between (a) the Revolving Commitments, and (b) the
Total Utilization of Revolving Commitments, times (2) 0.50% per annum; and


 


(ii)   letter of credit fees equal to (1) the
Applicable Margin for Revolving Loans that are Eurodollar Rate Loans, times (2) the
average aggregate daily maximum


 


58





















 


amount available to
be drawn under all such Letters of Credit (regardless of whether any conditions
for drawing could then be met and determined as of the close of business on any
date of determination).


 


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


 


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


 


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


 


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


 


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


 


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


 


2.12.   [Reserved].


 


2.13.   Voluntary Prepayments/Commitment Reductions.


 


(a)   Voluntary Prepayments.


 


(i)   Any time and from time to time:


 


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


 


59





















 


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


 


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


 


(ii)   All such prepayments shall be made:


 


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


 


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


 


upon written or telephonic notice on the date of prepayment,
in the case of Swing Line Loans;


 


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


 


(b)   Voluntary Commitment Reductions.


 


(i)   NewPageCo may, upon not less than three
Business Days’ prior written or telephonic notice confirmed in writing to
Administrative Agent (which original written or telephonic notice Administrative
Agent will promptly transmit by telefacsimile or telephone to each applicable
Lender), at any time and from time to time terminate in whole or permanently
reduce in part, without premium or penalty, the Revolving


 


60





















 


Commitments in an
amount up to the amount by which the Revolving Commitments exceed the Total
Utilization of Revolving Commitments at the time of such proposed termination
or reduction; provided, any such partial reduction of the Revolving
Commitments shall be in an aggregate minimum amount of $5,000,000 and integral
multiples of $1,000,000 in excess of that amount.


 


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


 


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


 


2.15.   Application
of Prepayments.


 


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


 


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


 


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


 


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


 


2.16.   General
Provisions Regarding Payments.


 


(a)   All payments by NewPageCo of principal,
interest, fees and other Obligations shall be made in Dollars in same day
funds, without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Administrative Agent not later than 12:00


 


61





















 


noon (New York
City time) on the date due at the Principal Office designated by Administrative
Agent for the account of Lenders; for purposes of computing interest and fees,
funds received by Administrative Agent after that time on such due date shall
be deemed to have been paid by NewPageCo on the next succeeding Business Day.


 


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


 


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


 


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


 


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


 


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


 


(g)   Administrative Agent shall deem any payment
by or on behalf of NewPageCo hereunder that is not made in same day funds prior
to 12:00 p.m. (New York City time) to be a non-conforming payment.  Any such payment shall not be deemed to have
been received by Administrative Agent until the later of (i) the time such
funds become available funds, and (ii) the applicable next Business
Day.  Administrative Agent shall give
prompt telephonic notice to NewPageCo and each applicable Lender (confirmed in
writing) if any payment is non-conforming. 
Any non-conforming payment may constitute or become a Default or Event
of Default in accordance with the terms of Section 8.1(a).  Interest shall continue to accrue on any
principal as to which a non-conforming payment is made until such funds become


 


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available
funds (but in no event less than the period from the date of such payment to
the next succeeding applicable Business Day) at the rate determined pursuant to
Section 2.10 from the date such amount was due and payable until the date
such amount is paid in full.


 


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


 


2.17.   Ratable Sharing.  Lenders hereby agree among themselves that,
except as otherwise provided in the Collateral Documents with respect to
amounts realized from the exercise of rights with respect to Liens on the
Collateral, if any of them shall, whether by voluntary payment (other than a
voluntary prepayment of Loans made and applied in accordance with the terms
hereof), through the exercise of any right of set-off or banker’s lien, by
counterclaim or cross action or by the enforcement of any right under the
Credit Documents or otherwise, or as adequate protection of a deposit treated
as cash collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to such
Lender hereunder or under the other Credit Documents (collectively, the “Aggregate
Amounts Due” to such Lender) which is greater than the
proportion received by any other Lender in respect of the Aggregate Amounts Due
to such other Lender, then the Lender receiving such proportionately greater
payment shall (a) notify Administrative Agent and each other Lender of the
receipt of such payment and (b) apply a portion of such payment to
purchase participations (which it shall be deemed to have purchased from each
seller of a participation simultaneously upon the receipt by such seller of its
portion of such payment) in the Aggregate Amounts Due to the other Lenders so
that all such recoveries of Aggregate Amounts Due shall be shared by all
Lenders in proportion to the Aggregate Amounts Due to them; provided, if
all or part of such proportionately greater payment received by such purchasing
Lender is thereafter recovered from such Lender upon the bankruptcy or
reorganization of NewPageCo or otherwise, those purchases shall be rescinded
and the purchase prices paid for such participations shall be returned to such
purchasing Lender ratably to the extent of such recovery, but without
interest.  NewPageCo expressly consents
to the foregoing arrangement and agrees that, to the extent permitted by law,
any holder of a participation so purchased may exercise any and all rights of
banker’s lien, set-off or counterclaim with respect to any and all monies owing
by NewPageCo to that holder with respect thereto as fully as if that holder
were owed the amount of the participation held by that holder.


 


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2.18.   Making
or Maintaining Eurodollar Rate Loans.


 


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


 


(b)   Illegality or Impracticability of
Eurodollar Rate Loans.  In the event
that on any date any Lender shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto but shall be made only after consultation with NewPageCo and
Administrative Agent) that the making, maintaining or continuation of its
Eurodollar Rate Loans (i) has become unlawful as a result of compliance by
such Lender in good faith with any law, treaty, governmental rule, regulation,
guideline or order (or would conflict with any such treaty, governmental rule,
regulation, guideline or order not having the force of law even though the
failure to comply therewith could not be unlawful), or (ii) has become
impracticable, as a result of contingencies occurring after the date hereof
which materially and adversely affect the London interbank market or the
position of such Lender in that market, then, and in any such event, such
Lender shall be an “Affected Lender” and it shall on that day give notice (by
telefacsimile or by telephone confirmed in writing) to NewPageCo and
Administrative Agent of such determination (which notice Administrative Agent
shall promptly transmit to each other Lender). 
Thereafter (1) the obligation of the Affected Lender to make Loans
as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (2) to the extent such
determination by the Affected Lender relates to a Eurodollar Rate Loan then
being requested by NewPageCo pursuant to a Funding Notice or a
Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or
continue such Loan as or convert such Loan to, as the case may be) a Base Rate
Loan, (3) the Affected Lender’s obligation to maintain its outstanding
Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the Affected
Loans or when required by law, and (4) the Affected Loans shall
automatically convert into Base Rate Loans on the date of such
termination.  Notwithstanding the
foregoing, to the extent a determination by an Affected Lender as described
above relates to a Eurodollar Rate Loan then being requested by NewPageCo
pursuant to a Funding Notice or a Conversion/Continuation Notice, NewPageCo
shall have the option, subject to the provisions of


 


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Section 2.18(c),
to rescind such Funding Notice or Conversion/Continuation Notice as to all
Lenders by giving notice (by telefacsimile or by telephone confirmed in
writing) to Administrative Agent of such rescission on the date on which the
Affected Lender gives notice of its determination as described above (which
notice of rescission Administrative Agent shall promptly transmit to each other
Lender).  Except as provided in the
immediately preceding sentence, nothing in this Section 2.18(b) shall
affect the obligation of any Lender other than an Affected Lender to make or
maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance
with the terms hereof.


 


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


 


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


 


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


 


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2.19.   Increased
Costs; Capital Adequacy.


 


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


 


(b)   Capital Adequacy Adjustment.  In the event that any Lender (which term
shall include Issuing Bank for purposes of this Section 2.19(b)) shall
have determined that the


 


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


 


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


 


2.20.   Taxes; Withholding, etc.


 


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


 


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


 


(c)   Evidence of Exemption From U.S.
Withholding Tax.  Each Lender that is
not a United States Person (as such term is defined in Section 7701(a)(30)
of the Internal Revenue Code) for U.S. federal income tax purposes (a “Non-US Lender”) shall deliver to Administrative
Agent for transmission to NewPageCo, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages hereof on the Closing
Date) or on or prior to the date of the Assignment Agreement pursuant to which
it becomes a Lender (in the case of each other Lender), and at such other times
as may be necessary in the determination of NewPageCo or Administrative Agent
(each in the reasonable exercise of its discretion), (i) two original
copies of Internal Revenue Service Form W-8BEN and/or Form W-8IMY,
as applicable (claiming the benefits under an applicable treaty) or W-8ECI
(or, in each case, any successor forms), properly completed and duly executed
by such Lender, and such other documentation


 


68





















 


required under
the Internal Revenue Code and reasonably requested by NewPageCo to establish
that such Lender is not subject to deduction or withholding of United States
federal income tax with respect to any payments to such Lender of principal,
interest, fees or other amounts payable under any of the Credit Documents, or (ii) if
such Lender is not a “bank” or other Person described in Section 881(c)(3) of
the Internal Revenue Code and cannot deliver either Internal Revenue Service Form W-8ECI
pursuant to clause (i) above, a Certificate re Non-Bank Status together
with two original copies of Internal Revenue Service Form W-8BEN
and/or Form W-8IMY, as applicable (or, in each case, any successor
form), properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by NewPageCo to establish that such Lender is not subject to deduction or
withholding of United States federal income tax with respect to any payments to
such Lender of interest payable under any of the Credit Documents.  Each Lender required to deliver any forms,
certificates or other evidence with respect to United States federal income tax
withholding matters pursuant to this Section 2.20(c) hereby agrees,
from time to time after the initial delivery by such Lender of such forms,
certificates or other evidence, whenever a lapse in time or change in
circumstances renders such forms, certificates or other evidence obsolete or
inaccurate in any material respect, that such Lender shall promptly deliver to
Administrative Agent for transmission to NewPageCo two new original copies of
Internal Revenue Service Form W-8BEN and/or Form W-8IMY,
as applicable or W-8ECI, or a Certificate re Non-Bank Status and two original
copies of Internal Revenue Service Form W-8BEN and/or Form W-8IMY,
as applicable (or, in each case, any successor form), as the case may be,
properly completed and duly executed by such Lender, and such other
documentation required under the Internal Revenue Code and reasonably requested
by NewPageCo to confirm or establish that such Lender is not subject to
deduction or withholding of United States federal income tax with respect to
payments to such Lender under the Credit Documents, or notify Administrative
Agent and NewPageCo of its inability to deliver any such forms, certificates or
other evidence.  NewPageCo shall not be
required to pay any additional amount to any Non-US Lender under Section 2.20(b)(iii) if
such Lender shall have failed (1) to deliver the forms, certificates or
other evidence referred to in the second sentence of this Section 2.20(c),
or (2) to notify Administrative Agent and NewPageCo of its inability to
deliver any such forms, certificates or other evidence, as the case may be; provided,
if such Lender shall have satisfied the requirements of the first sentence of
this Section 2.20(c) on the Closing Date or on the date of the
Assignment Agreement pursuant to which it became a Lender, as applicable,
nothing in this last sentence of Section 2.20(c) shall relieve
NewPageCo of its obligation to pay any additional amounts pursuant this Section 2.20
in the event that, as a result of any change in any applicable law, treaty or
governmental rule, regulation or order, or any change in the interpretation,
administration or application thereof, such Lender is no longer properly
entitled to deliver forms, certificates or other evidence at a subsequent date
establishing the fact that such Lender is not subject to withholding as
described herein.


 


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


 


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


 


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


 


2.21.   Obligation to Mitigate.  Each Lender (which term
shall include Issuing Bank for purposes of this Section 2.21)agrees that,
as promptly as practicable after the officer of such Lender responsible for
administering its Loans or Letters of Credit, as the case may be, becomes aware
of the occurrence of an event or the existence of a condition that would cause
such Lender to become an Affected Lender or that would entitle such Lender to
receive payments under Section 2.18, 2.19 or 2.20, it will, to the extent
not inconsistent with the internal policies of such Lender and any applicable
legal or regulatory restrictions, use reasonable efforts to (a) make,
issue, fund or maintain its Credit Extensions, including any Affected Loans,
through another office of such Lender, or (b) take such other measures as
such Lender may deem reasonable, if as a result thereof the circumstances which
would cause such Lender to be an Affected Lender would cease to exist or the
additional amounts which would otherwise be required to be paid to such Lender
pursuant to Section 2.18, 2.19 or 2.20 would be materially reduced and if,
as determined by such Lender in its sole discretion, the making, issuing,
funding or maintaining of such Revolving Commitments, Loans or Letters of
Credit through such other office or in accordance with such other measures, as
the case may be, would not otherwise adversely affect such Revolving
Commitments, Loans or Letters of Credit or the interests of such Lender;


 


70





















 


provided, such Lender will not be obligated to utilize such
other office pursuant to this Section 2.21 unless NewPageCo agrees to pay
all incremental expenses incurred by such
Lender as a result of utilizing such other office as described in clause (i) above.  A certificate as to the amount of any such
expenses payable by NewPageCo pursuant to this Section 2.21 (setting forth
in reasonable detail the basis for requesting such amount) submitted by such
Lender to NewPageCo (with a copy to Administrative Agent) shall be conclusive
absent manifest error.


 


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


 


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Lender with respect to any Funding Default and which Administrative
Agent or any Lender may have against such Defaulting Lender with respect to any
Funding Default.


 


2.23.   Removal
or Replacement of a Lender.  Anything contained herein to the contrary
notwithstanding, in the event that: (a) (i) any Lender (an “Increased-Cost Lender”) shall give notice
to NewPageCo that such Lender is an Affected Lender or that such Lender is
entitled to receive payments under Section 2.18, 2.19 or 2.20, (ii) the
circumstances which have caused such Lender to be an Affected Lender or which
entitle such Lender to receive such payments shall remain in effect, and (iii) such
Lender shall fail to withdraw such notice within five Business Days after
NewPageCo’s request for such withdrawal; or (b) (i) any Lender shall
become a Defaulting Lender, (ii) the Default Period for such Defaulting
Lender shall remain in effect, and (iii) such Defaulting Lender shall fail
to cure the default as a result of which it has become a Defaulting Lender
within five Business Days after NewPageCo’s request that it cure such default;
or (c) in connection with any proposed amendment, modification,
termination, waiver or consent with respect to any of the provisions hereof as
contemplated by Section 11.5(b), the consent of Requisite Lenders shall
have been obtained but the consent of one or more of such other Lenders (each a
“Non-Consenting Lender”) whose
consent is required shall not have been obtained; then, with respect to each
such Increased-Cost Lender, Defaulting Lender or Non-Consenting Lender (the “Terminated Lender”), NewPageCo may, by
giving written notice to Administrative Agent and any Terminated Lender of its
election to do so, elect to cause such Terminated Lender (and such Terminated
Lender hereby irrevocably agrees) to assign its outstanding Loans and its
Revolving Commitments, if any, in full to one or more Eligible Assignees (each
a “Replacement Lender”) in
accordance with the provisions of Section 11.6 and Terminated Lender shall
pay any fees payable thereunder in connection with such assignment; provided,
(1) on the date of such assignment, the Replacement Lender shall pay to
Terminated Lender an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings of
Letters of Credit that have been funded by such Terminated Lender, together
with all then unpaid interest with respect thereto at such time and (C) an
amount equal to all accrued, but theretofore unpaid fees owing to such
Terminated Lender pursuant to Section 2.11; (2) on the date of such
assignment, NewPageCo shall pay any amounts payable to such Terminated Lender
pursuant to Section 2.18(c), 2.19 or 2.20; and (3) in the event such
Terminated Lender is a Non-Consenting Lender, each Replacement Lender shall
consent, at the time of such assignment, to each matter in respect of which
such Terminated Lender was a Non-Consenting Lender; provided, NewPageCo
may not make such election with respect to any Terminated Lender that is also
an Issuing Bank unless, prior to or simultaneously with the effectiveness of
such election, NewPageCo shall have caused each outstanding Letter of Credit
issued thereby to be cancelled.  Upon the
prepayment of all amounts owing to any Terminated Lender and the termination of
such Terminated Lender’s Revolving Commitments, if any, such Terminated Lender
shall no longer constitute a “Lender” for purposes hereof; provided, any


 


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rights of such Terminated Lender to indemnification hereunder shall
survive as to such Terminated Lender.


 


2.24.   Determination of Borrowing Base


 


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


 


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


 


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


 


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


 


(iv)   any Account that is payable in any currency
other than Dollars or with respect to any Account Debtor domiciled in Canada or
organized under the laws of Canada or any political subdivision thereof,
Canadian Dollars, unless such Account is supported by an irrevocable letter of
credit in form and substance satisfactory to the Collateral Agent, issued by a
financial institution satisfactory to the Collateral Agent and which has been
duly transferred to the Collateral Agent (together with sufficient
documentation to permit direct draws by the Collateral Agent thereon);


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(ii)    (a) is stored at a location not owned
by NewPageCo or a Borrowing Base Guarantor where the aggregate value of
Inventory exceeds $750,000 unless the Collateral Agent has given its prior
consent thereto and unless either (x) a reasonably satisfactory Landlord Waiver
and Consent Agreement has been delivered to the Collateral Agent, or (y)
Reserves reasonably satisfactory to the Collateral Agent but in no event to
exceed the aggregate of three (3) months’ rent with respect to each such
location have been established with respect thereto or (b) is stored with
a bailee or warehouseman where the aggregate value of Inventory exceeds
$750,000 unless either (x) a reasonably satisfactory, acknowledged bailee
waiver letter has been received by the Collateral Agent or (y) Reserves
reasonably satisfactory to the Collateral Agent but in no event to exceed the
aggregate of three (3) months’ rent with respect to each such location
have been established with respect thereto, or (c) is located at an owned
location subject to a mortgage in favor of a lender other than the Collateral
Agent where the aggregate value of Inventory exceeds $750,000 unless either (x)
a reasonably satisfactory mortgagee


 


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waiver has been
delivered to the Collateral Agent or (y) Reserves reasonably satisfactory to
the Collateral Agent have been established with respect thereto;


 


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


 


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


 


(v)   is to be returned to suppliers;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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SECTION 3.   CONDITIONS PRECEDENT


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(ii)   Co-Syndication Agents and Administrative
Agent shall each have received a fully executed or conformed copy of each
Related Agreement and any documents executed in connection therewith, together
with copies of each of the opinions of counsel, if any, delivered to the
parties under the Related Agreements, accompanied by a letter from each such
counsel (to the extent not inconsistent with such counsel’s established
internal policies) authorizing Lenders to rely upon such opinion to the same
extent as though it were addressed to Lenders. 
Each Related Agreement shall be in full force and effect, shall include
terms and provisions reasonably satisfactory to Administrative Agent and
Co-Syndication Agents and no provision thereof shall have been modified or
waived in any respect determined by Co-Syndication Agents or Administrative
Agent to be material, in each case without the consent of Co-Syndication Agents
and Administrative Agent.


 


(f)   Existing Indebtedness.  On the Closing Date, NewPageHoldCo and its
Subsidiaries shall have (i) after giving effect to the initial Credit
Extension and application of the proceeds thereof, repaid in full all Existing
Indebtedness, (ii) terminated any commitments to


 


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lend or make
other extensions of credit thereunder, (iii) delivered to Co-Syndication
Agents and Administrative Agent all binding documents or instruments necessary
to release all Liens securing Existing Indebtedness or other obligations of
NewPageHoldCo and its Subsidiaries thereunder being repaid on the Closing Date,
and (iv) made arrangements satisfactory to Co-Syndication Agents and
Administrative Agent with respect to the cancellation of any letters of credit
outstanding thereunder.


 


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


 


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


 


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


 


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


 


(ii)   A completed Perfection Certificate dated the
Closing Date and executed by an Authorized Officer of each Credit Party,
together with all attachments contemplated thereby, including (A) the
results of a recent search, by a Person satisfactory to Collateral Agent, of
all effective UCC financing statements (or equivalent filings) made with
respect to any personal or mixed property of any Credit Party in the


 


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jurisdictions
specified in the Perfection Certificate, as applicable, together with copies of
all such filings disclosed by such search, and (B) UCC termination
statements (or similar documents) duly executed by all applicable Persons for
filing in all applicable jurisdictions as may be necessary to terminate any
effective UCC financing statements (or equivalent filings) disclosed in such
search (other than any such financing statements in respect of Permitted
Liens);


 


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


 


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


 


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


 


(k)   Financial Statements; Projections.  Lenders shall have received from
NewPageHoldCo (i) the Historical Financial Statements, (ii) pro forma
consolidated balance sheets of NewPageHoldCo and its Subsidiaries as at the
Closing Date, and reflecting the consummation of the Paper Business
Acquisition, the related financings and the other transactions contemplated by
the Credit Documents to occur on or prior to the Closing Date, which pro forma
financial statements shall be in form and substance reasonably satisfactory to
Administrative Agent and Syndication Agent, (iii) the Projections, and (iv) the
pro forma financial statements of the Coated and Carbonless Papers
Group showing pro forma


 


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Consolidated
Adjusted EBITDA of at least $174,000,000 for the Coated
and Carbonless Papers Group for the twelve-month period ended December 31,
2004 and for the latest twelve-month period for which internal financial
statements are available (without giving effect to the deemed amount of
Consolidated Adjusted EBITDA set forth in the proviso of such definition, but
giving effect to such pro forma adjustments as are acceptable to the
Administrative Agent), and, if the Closing Date occurs after April 30,
2005, $60,000,000 for the latest three-month period for which internal
financial statements are available.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(v)   Cash Management.  The Collateral Agent and the Administrative
Agent shall have reviewed and approved the Companies’ cash management system
and shall have received executed blocked account agreements (from all of the
financial institutions where the Credit Parties maintain bank accounts)
evidencing Collateral Agent’s security interest in such accounts and all funds
from time to time contained therein (and upon the occurrence and during the
continuance of a Cash Dominion Trigger Event enabling the Collateral Agent to
obtain complete dominion and control over such funds (except with respect to (i) payroll
account, (ii) trust


 


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accounts and (iii) local
cash accounts which do not at any time contain funds in excess of $2,500,000 in
the aggregate).


 


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


 


3.2.   Conditions
to Each Credit Extension.


 


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


 


(i)   Administrative Agent shall have received a
fully executed and delivered Funding Notice or Issuance Notice, as the case may
be;


 


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


 


(iii)   as of such Credit Date, the representations
and warranties contained herein and in the other Credit Documents shall be true
and correct in all material respects on and as of that Credit Date to the same
extent as though made on and as of that date, except to the extent such
representations and warranties specifically relate to an earlier date, in which
case such representations and warranties shall have been true and correct in
all material respects on and as of such earlier date and any representation and
warranty that is qualified as to “materiality” or “Material Adverse Effect”
shall be true and correct in all respects subject to such qualification;


 


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


 


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


 


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


 


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


 


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


 


SECTION 4.   REPRESENTATIONS AND WARRANTIES


 


In order to induce
Lenders and Issuing Bank to enter into this Agreement and to make each Credit
Extension to be made thereby, each Credit Party represents and warrants to each
Lender and Issuing Bank, on the Closing Date and on each Credit Date, that the
following statements are true and correct (it being understood and agreed that
the representations and warranties made on the Closing Date are deemed to be
made concurrently with the consummation of the Paper Business Acquisition):


 


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


 


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


 


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


 


4.4.   No Conflict.  The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not
and will not (a) violate any provision of any law or any governmental rule or
regulation applicable to NewPageHoldCo or any of its Subsidiaries, any of the
Organizational Documents of NewPageHoldCo or any of its Subsidiaries, or any
order, judgment or decree of any court or other agency of government binding on
NewPageHoldCo or any of its Subsidiaries; except to the extent such violation
could not reasonably be expected to have a Material Adverse Effect; (b) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any Contractual Obligation of NewPageHoldCo or any of its
Subsidiaries, except to the extent such conflict, breach or default could not
reasonably be expected to have a Material Adverse Effect; (c) result in or
require the creation or imposition of any Lien upon any of the properties or
assets of NewPageHoldCo or any of its Subsidiaries (other than any Liens
created under any of the Credit Documents in favor of Collateral Agent, on
behalf of Secured Parties); or (d) require any approval of stockholders,
members or partners or any approval or consent of any Person under any
Contractual Obligation of NewPageHoldCo or any of its Subsidiaries, except for
any such approval or consent (i) which will be obtained on or before the
Closing Date and disclosed in writing to Lenders or (ii) where the failure
to obtain such approval or consent could not be reasonably expected to have a
Material Adverse Effect.


 


4.5.   Governmental Consents.  The execution, delivery and performance by
Credit Parties of the Credit Documents to which they are parties and the
consummation of the transactions contemplated by the Credit Documents do not
and will not require any registration


 


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with, consent or approval of, or notice to, or other action to, with or
by, any Governmental Authority except as otherwise set forth in the Related
Agreements, and except when the failure of which to be so made or delivered
could not reasonably be expected to have a Material Adverse Effect and except
for when filings and recordings with respect to the Collateral to be made, or
otherwise delivered to Collateral Agent for filing and/or recordation, as of
the Closing Date.


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


4.13.   Properties.


 


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


 


(b)   Real Estate.  As of the Closing Date, Schedule 4.13
contains a true, accurate and complete list of (i) all Real Estate Assets,
and (ii) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
with respect to any real property of any Credit Party which provides for
monthly rental payments after the date of this Agreement of more than $10,000
or is otherwise material to the business or operations of such Credit Party,
regardless of whether such Credit Party is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment.  Each agreement listed in
clause (ii) of the immediately preceding


 


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sentence is in
full force and effect and NewPageHoldCo does not have knowledge of any default
that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Credit
Party, enforceable against such Credit Party in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors’ rights generally
or by equitable principles.


 


4.14.   Environmental Matters.  Except as set forth in Schedule 4.14,
and except to the extent, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:  (i) NewPageHoldCo and each of its
Subsidiaries is in compliance with all applicable Environmental Laws, including
any permits or licenses issued pursuant thereto, and, to NewPageHoldCo’s and
its Subsidiaries’ knowledge, NewPageHoldCo and each of its Subsidiaries will be
capable of maintaining compliance with applicable Environmental Laws, including
any reasonably foreseeable future requirements of existing environmental
regulations or regulations that have been formally proposed but have not yet
been adopted; (ii) neither NewPageHoldCo nor any of its Subsidiaries nor
any of their respective Facilities or operations are subject either to (a) any
Environmental Claim or (b) any settlement agreement with any Person
relating to any Environmental Claim; (iii) neither NewPageHoldCo nor any
of its Subsidiaries has received any letter or written request for
information under Section 104(e) of the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C. § 9601, et seq.) or
any comparable state law; (iv) to NewPageHoldCo’s and its Subsidiaries’
knowledge, there are and have been no conditions, occurrences, or Hazardous
Materials Activities that could reasonably be expected to form the basis of an
Environmental Claim against NewPageHoldCo or any of its Subsidiaries or that
could require Remedial Action at any Facility or could require Remedial Action
by NewPageHoldCo or any of its Subsidiaries at any other location; or (v) neither
NewPageHoldCo nor any of its Subsidiaries nor, to either NewPageHoldCo’s and
its Subsidiaries’ knowledge, any predecessor of NewPageHoldCo or its
Subsidiaries, has been issued or been required to obtain a permit for the
treatment, storage or disposal of hazardous waste for any of its Facilities
pursuant to the federal Resource Conservation and Recovery Act, 42 U.S.C. § 6901,
et. seq. (“RCRA”), or any
comparable state law, nor are any such Facilities regulated as “interim status”
facilities required to undergo corrective action pursuant to RCRA or any
comparable state law.


 


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


 


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


 


4.17.   Governmental Regulation.  Neither NewPageHoldCo nor any of its
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act or the Investment Company Act of 1940 or
under any other federal or state statute or regulation which may limit its
ability to incur Indebtedness or which may otherwise render all or any portion
of the Obligations unenforceable. 
Neither NewPageHoldCo nor any of its Subsidiaries is a “registered
investment company” or a company “controlled” by a “registered investment
company” or a “principal underwriter” of a “registered investment company” as
such terms are defined in the Investment Company Act of 1940.


 


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


 


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


 


4.20.   Employee Benefit Plans.  NewPageHoldCo and each of its Subsidiaries and
each of their respective ERISA Affiliates are in substantial compliance with
all applicable provisions and requirements of ERISA and the Internal Revenue
Code and the regulations and published


 


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interpretations thereunder with respect to each Employee Benefit Plan,
and have performed all their obligations under each Employee Benefit Plan in
all material respects.  Each Employee
Benefit Plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code has received a favorable determination letter from the
Internal Revenue Service or NewPageHoldCo or its Subsidiaries shall submit an
application to the Internal Revenue Service to receive such a letter,
indicating that such Employee Benefit Plan is so qualified and nothing has
occurred subsequent to the issuance of such determination letter which would
cause such Employee Benefit Plan to lose its qualified status.  No liability to the PBGC (other than required
premium payments), the Internal Revenue Service, any Employee Benefit Plan or
any trust established under Title IV of ERISA has been or is expected to be
incurred by NewPageHoldCo, any of its Subsidiaries or any of their ERISA
Affiliates.  No ERISA Event has occurred
or is reasonably expected to occur. 
Except to the extent required under Section 4980B of the Internal
Revenue Code or similar state laws and except as set forth on Schedule 4.20,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for any retired or former employee of
NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA
Affiliates.  The present value of the
aggregate benefit liabilities under each Pension Plan sponsored, maintained or
contributed to by NewPageHoldCo, any of its Subsidiaries or any of their ERISA
Affiliates, (determined on the basis of the actuarial assumptions specified for
funding purposes in the most recent actuarial valuation for such Pension Plan),
did not exceed the aggregate current value of the assets of such Pension Plan in
an amount that would reasonably be expected to have a Material Adverse
Effect.  As of the most recent valuation
date for each Multiemployer Plan occurring on or prior to the date hereof for
which the actuarial report is available, the potential liability of
NewPageHoldCo, its Subsidiaries and their respective ERISA Affiliates for a
complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203
of ERISA), when aggregated with such potential liability for a complete
withdrawal from all Multiemployer Plans, based on information available upon
request pursuant to Section 4221(e) of ERISA is zero.  NewPageHoldCo, each of its Subsidiaries and
each of their ERISA Affiliates have complied with the requirements of Section 515
of ERISA with respect to each Multiemployer Plan and are not in material “default”
(as defined in Section 4219(c)(5) of ERISA) with respect to payments
to a Multiemployer Plan.


 


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


 


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


 


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4.23.   Related Agreements.


 


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


 


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


 


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


 


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


 


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


 


4.25.   Disclosure.  No representation or warranty of any Credit
Party contained in any Credit Document (including the Notes Offering
Memorandum) or in any other documents,


 


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


 


4.26.   Patriot Act.  To the extent applicable,
each Credit Party is in compliance, in all material respects, with the (i) Trading
with the Enemy Act, as amended, and each of the foreign assets control
regulations of the Untied States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other enabling legislation or executive order
relating thereto, and (ii) Uniting and Strengthening America by Providing
Appropriate Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act
of 2001) (the “Act”).  No part of the proceeds of the Loans will be
used, directly or indirectly, for any payments to any governmental official or
employee, political party, official of a political party, candidate for
political office, or anyone else acting in an official capacity, in order to
obtain, retain or direct business or obtain any improper advantage, in
violation of the United States Foreign Corrupt Practices Act of 1977, as
amended.


 


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


 


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


 


4.29.   Post-Audit Asset Dispositions.  As of the Closing Date, NewPageCo and it’s the
other Credit Parties have not disposed of assets (other than Inventory sold in
the ordinary course


 


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of their business) which are set forth in the Inventory Appraisal and
which have an aggregate fair market value of more than $250,000.


 


4.30.   Collateral Documents.


 


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


 


(b)   Each Collateral Document delivered pursuant
to Section 5.13 will, upon execution and delivery thereof, be effective to
create in favor of the Collateral Agent, for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in and First Priority
Lien on all of the Credit Parties’ right, title and interest in and to the
Collateral thereunder, and when all appropriate filings or recordings are made
in the appropriate offices as may be required under applicable law, such
Collateral Document will constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Credit Parties in such Collateral,
in each case subject to no Liens other than the applicable Permitted Collateral
Liens.


 


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


 


4.32.   Common Enterprise.  NewPageHoldCo is the direct or indirect and
beneficial owner and holder of all of the issued and outstanding shares of
stock or other Equity Interests in NewPageCo and the other Borrowing Base
Guarantors.  NewPageCo and the Borrowing
Base Guarantors make up a related organization of various entities constituting
a single economic and business enterprise so that NewPageCo and the Borrowing
Base Guarantors share a substantial identity of interests such that any benefit
received by any one of them benefits the others.  NewPageCo and certain Borrowing Base
Guarantors render services to or for the benefit of NewPageCo and/or the other
Borrowing Base Guarantors, as the case may be, purchase or sell


 


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and supply
goods to or from or for the benefit of the others, make loans, advances and
provide other financial accommodations to or for the benefit of NewPageCo and
the Borrowing Base Guarantors (including, inter alia, the
payment by NewPageCo and the Borrowing Base Guarantors of creditors of
NewPageCo and the Borrowing Base Guarantors and guarantees by NewPageCo and the
Borrowing Base Guarantors of indebtedness of NewPageCo and the Borrowing Base
Guarantors and provide administrative, marketing, payroll and management
services to or for the benefit of NewPageCo and the Borrowing Base
Guarantors).  NewPageCo and the Borrowing
Base Guarantors have centralized accounting, common officers and directors and
are in certain circumstances identified to creditors as a single economic and
business enterprise.


 


SECTION 5.   AFFIRMATIVE COVENANTS


 


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


 


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


 


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


 


(b)   Quarterly Financial Statements.  As soon as available, and in any event within
45 days (or 60 days in the case of the Fiscal Quarter ending June 30,
2005) or such shorter period in which NewPageHoldCo or NewPageCo shall have
filed its Quarterly Reports on Form 10-Q after the end of each of
the first three Fiscal Quarters of each Fiscal Year, the consolidated and
(beginning with the Fiscal Quarter ending June 30, 2005) consolidating
balance sheets of NewPageHoldCo and its Subsidiaries (or of the Coated and
Carbonless Paper Group in the case of the Fiscal Quarters ended March 31,
2005) as at the end of such Fiscal Quarter the related consolidated (and with
respect to statements of income, beginning with the Fiscal Quarter ending


 


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June 30,
2005, consolidating) statements of income, stockholders’ equity and cash flows
of NewPageHoldCo and its Subsidiaries (or of the Coated and Carbonless Paper
Group in the case of the Fiscal Quarters ended March 31, 2005) for such
Fiscal Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, setting forth in each case (beginning
with the Fiscal Quarter ending June 30, 2006) in comparative form the
corresponding figures for the corresponding periods of the previous Fiscal Year
and the corresponding figures from the Financial Plan for the current Fiscal
Year, all in reasonable detail, together with a Financial Officer Certification
and a Narrative Report with respect thereto.


 


(c)    Annual Financial Statements.  As soon as available, and in any event within
90 days or such shorter period in which NewPageHoldCo or NewPageCo shall have
filed its Annual Reports on Form 10-K after the end of each Fiscal
Year, (i) the consolidated and consolidating balance sheets of
NewPageHoldCo and its Subsidiaries as at the end of such Fiscal Year and the
related consolidated (and with respect to statements of income, consolidating)
statements of income, stockholders’ equity and cash flows of NewPageHoldCo and
its Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal Year and the
corresponding figures from the Financial Plan for the Fiscal Year covered by
such financial statements, in reasonable detail, together with a Financial Officer
Certification and a Narrative Report with respect thereto; and (ii) with
respect to such consolidated financial statements a report thereon of
PricewaterhouseCoopers LLP or other independent certified public accountants of
recognized national standing selected by NewPageHoldCo, and reasonably
satisfactory to Administrative Agent (which report shall be unqualified as to
going concern and scope of audit, and shall state that such consolidated
financial statements fairly present, in all material respects, the consolidated
financial position of NewPageHoldCo and its Subsidiaries as at the dates
indicated and the results of their operations and their cash flows for the
periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except as otherwise disclosed in such financial statements) and
that the examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards) together with a written statement by such independent
certified public accountants stating (1) that their audit examination has
included a review of the terms of Section 6.8 and (2) whether, in
connection with their audit examination, any condition or event that
constitutes a Default or an Event of Default under Section 6.8 has come to
their attention and, if such a condition or event has come to their attention,
specifying the nature and period of existence thereof;


 


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


 


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


 


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


 


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


 


(h)   ERISA. 
(i) Promptly upon becoming aware of the occurrence of or
forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action NewPageHoldCo, any of its Subsidiaries or any of
their respective ERISA Affiliates has taken, is taking or proposes to take with
respect thereto and, when known, any action taken or threatened by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto; and (ii) with
reasonable promptness after receipt of a written request from the


 


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Administrative
Agent, copies of (1) each Schedule B (Actuarial Information) to the
annual report (Form 5500 Series) filed by NewPageHoldCo, any of its
Subsidiaries or any of their respective ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan; (2) all notices
received by NewPageHoldCo, any of its Subsidiaries or any of their respective
ERISA Affiliates from a Multiemployer Plan sponsor concerning an ERISA Event;
and (3) copies of such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Administrative Agent shall reasonably
request;


 


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


 


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


 


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


 


(l)   Notice Regarding Material Contracts.  Together with the delivery of the financial
statements pursuant to Section 5.1(b) and 5.1(c) notice of (i) any
Material Contract of NewPageHoldCo or any of its Subsidiaries that is
terminated or amended in a manner that could reasonably be expected to have a
Material Adverse Effect, or (ii) any new Material Contract is entered
into, a written statement describing such event, with copies of such material
amendments or new contracts, delivered to Administrative Agent (to the extent
such delivery is permitted by the terms of any such Material Contract,
provided, no such prohibition on delivery shall be


 


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effective if
it were bargained for by NewPageHoldCo or its applicable Subsidiary with the
intent of avoiding compliance with this Section 5.1(l)), and an
explanation of any actions being taken with respect thereto;


 


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


 


(n)   Information Regarding Collateral.  (a)  NewPageCo will furnish to
Collateral Agent prompt written notice of any change (i) in any Credit
Party’s corporate name, (ii) in any Credit Party’s identity, corporate
structure or jurisdiction of formation or (iii) in any Credit Party’s
Federal Taxpayer Identification Number. 
NewPageCo agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under the Uniform
Commercial Code or otherwise that are required in order for Collateral Agent to
continue at all times following such change to have a valid, legal and
perfected security interest in all the Collateral as contemplated in the
Collateral Documents.  NewPageCo also
agrees promptly to notify Collateral Agent if any material portion of the
Collateral is damaged or destroyed;


 


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


 


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


 


(q)
Delivery of Information. 
Documents required to be delivered pursuant to Sections 5.1(a), 5.1(b),
5.1(c), 5.1(e) or 5.1(i) may be delivered electronically, and if so


 


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


 


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


 


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


 


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


 


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


 


5.6.   Maintaining
Records; Access to Properties and Inspections.  Each Credit Party will keep proper books of
record and account in which full, true and correct entries in conformity (in
all material respects) with GAAP and all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all Governmental
Authorities are made of all dealings and transactions in relation to its
business and activities.  Each Credit
Party will keep proper records of intercompany accounts (including, without
limitation, the Borrowing Base Guarantor Intercompany Loan Account) with full,
true and correct entries reflecting all payments received and paid (including,
without limitation, funds received by NewPageCo from swept deposit accounts of
the other Credit Parties).  Each Credit
Party will, and will cause each of its Subsidiaries to, permit any authorized
representatives designated by any Lender to visit and inspect any of the
properties of any Credit Party and any of its respective Subsidiaries, to
inspect, copy and take extracts from its and their financial and accounting
records, and to discuss its and


 


101





















 


their affairs, finances and accounts with its and their officers and
independent public accountants, all upon reasonable notice and at such
reasonable times during normal business hours and as often as may reasonably be
requested.  The Credit Parties shall have
no obligation to disclose materials that are protected by attorney-client privilege
and materials the disclosure of which would violate confidentiality obligations
of such Credit Party.


 


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


 


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


 


5.9.   Environmental.


 


(a)   Environmental Disclosure.


 


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


 


(ii)   NewPageHoldCo shall submit
to the Administrative Agents semi-annually at the time of the delivery of the
quarterly financial statements delivered


 


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


 


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


 


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


 


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


 


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of its Subsidiaries and discharge any obligations it may have to any
Person thereunder where failure to do so could reasonably be expected to have,
individually or in the aggregate, a Material Adverse Effect.


 


(c)   Right of Access and
Inspection.


 


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


 


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


 


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relevant Governmental
Authorities regarding the results of any site visit, observation or
investigation by the Administrative Agent and that such reporting requirements
are site and fact-specific, and are to be evaluated by NewPageHoldCo without
advice or assistance from the Administrative Agent.


 


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


 


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


 


5.11.   [Reserved.]


 


5.12.   Interest Rate Protection.  No later than 60 days following the Closing
Date and at all times thereafter, NewPageCo shall maintain, or caused to be
maintained, in effect one or more Interest Rate Agreements for a term of not
less than 3 years and otherwise in form and substance reasonably satisfactory
to Administrative Agent, which Interest Rate Agreements shall effectively limit
the Unadjusted Eurodollar Rate Component of the interest costs to NewPageCo
with respect to an aggregate notional principal amount such that not less than
50% of the aggregate principal amount of the Indebtedness for borrowed money of
NewPageHoldCo and its Subsidiaries outstanding as of the Closing Date
(exclusive of the NewPageHoldCo PIK Notes) is either (i) subject to such
Interest Rate Agreements or (ii) fixed rate Indebtedness, in each case for
a period of not less than three years.


 


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


 


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


 


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


 


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


 


5.15.   Information
Regarding Collateral.


 


(a)   Furnish to the Administrative Agent and the
Collateral Agent 15 days prior written notice (in the form of an officer’s certificate),
clearly describing any of the following changes (i) in any Credit Party’s
corporate name or in any trade name used to identify it in the


 


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


 


(b)   Each year, at the time of delivery of annual
financial statements with respect to the preceding Fiscal Year pursuant to
paragraph (a) of Section 5.1, deliver to the Administrative Agent and
the Collateral Agent a certificate of the chief financial officer of NewPageCo (i) setting
forth any changes to the information required pursuant to the Perfection
Certificate Supplement or confirming that there has been no change in such
information since the date of the Perfection Certificate delivered on the
Closing Date or the date of the most recent certificate delivered pursuant to this
Section 5.15(b) and (ii) certifying that NewPageCo and its
Subsidiaries have not taken any actions (and are not aware of any actions so
taken) to terminate any UCC Financing Statements (including fixture filings, as
applicable) or other appropriate filings, recordings or registrations,
including all refilings, rerecordings and reregistrations, containing a
description of the Collateral have been filed of record in each governmental,
municipal or other appropriate office in each jurisdiction identified pursuant
to clause (i) above to the extent necessary to protect and perfect
the security interests and Liens under the Collateral Documents for a period of
not less than 18 months after the date of such certificate (except as noted
therein with respect to any continuation statements to be filed within such
period).


 


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


 


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


 


(a)   in no event less frequently than 15 days
after the end of each month for the month most recently ended (or in the event
that a Cash Dominion Trigger Event shall have occurred and be continuing, no
less frequently than two (2) Business Days after the end of each


 


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week), a
Borrowing Base Certificate from NewPageCo accompanied by such supporting detail
and documentation as shall be requested by the Collateral Agent in its
Permitted Discretion;


 


(b)   upon request by the Collateral Agent, and in
no event less frequently than 15 days after the end of (i) each month, a
monthly trial balance showing Accounts outstanding aged from statement date as
follows:  1 to 30 days, 31 to 60 days, 61
to 90 days and 91 days or more, accompanied by a comparison to the prior month’s
trial balance and such supporting detail and documentation as shall be
requested by the Collateral Agent in its Permitted Discretion and (ii) each
month, a summary of Inventory by location and type accompanied by such
supporting detail and documentation as shall be requested by the Collateral
Agent in its Permitted Discretion (in each case, together with a copy of all or
any part of such delivery requested by any Lender in writing after the Closing
Date);


 


(c)   on the date any Borrowing Base Certificate is
delivered pursuant to Section 5.17(a) or at such more frequent
intervals in the event there shall exist an Event of Default or Excess
Availability shall be less than $40,000,000 on any day thirty (30) days prior
to the date of such request, (i) a copy of the ledger registering the
Borrowing Base Guarantor Intercompany Loan Account as of the date of the
Borrowing Base Certificate and (ii) a collateral report with respect to
the Credit Parties, including all additions and reductions (cash and non-cash)
with respect to intercompany loan accounts of NewPageCo and Borrowing Base
Guarantors, accompanied by such supporting detail and documentation as shall be
requested by the Collateral Agent in its Permitted Discretion;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


SECTION 6.   NEGATIVE COVENANTS


 


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


 


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


 


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


 


(b)   (i) Indebtedness of any Guarantor
Subsidiary to NewPageCo or to any other Guarantor Subsidiary, or of NewPageCo
to any Guarantor Subsidiary; (ii) Indebtedness of any Subsidiary of
NewPageCo that is not a Guarantor to NewPageHoldCo or NewPageCo or any
Subsidiary of NewPageHoldCo in aggregate principal amount that, together with
Indebtedness


 


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


 


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


 


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


 


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


 


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


 


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


 


(h)   guaranties by NewPageCo of Indebtedness of a
Guarantor Subsidiary or guaranties by a Subsidiary of NewPageCo of Indebtedness
of NewPageCo or a Subsidiary with respect, in each case, to Indebtedness
otherwise permitted to be incurred pursuant to this Section


 


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6.1; provided,
that the aggregate amount of Indebtedness of Subsidiaries of NewPageHoldCo that
are not Guarantors which has been guaranteed by NewPageHoldCo and the Guarantor
Subsidiaries, together with Indebtedness under clause (b)(ii) and
Investments permitted by Section 6.7(b)(iii), shall not exceed $5,000,000
at any time;


 


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


 


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


 


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


 


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


 


(m)   unsecured Indebtedness under the Commodities
Hedge Agreement;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(a)   (i) Liens in favor of Collateral Agent
for the benefit of Secured Parties granted pursuant to any Credit Document, (ii) Liens
granted pursuant to the NewPageCo First


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(p)   customary rights of set off, bankers’ lien,
refund or charge back under deposit agreements, the UCC or common law of banks
or other financial institutions where NewPageCo


 


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or any of its
Subsidiaries maintains deposits (other than deposits intended as cash
collateral) in the ordinary course of business;


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


6.4.   No Further Negative Pledges.  Except with respect to (a) specific
property encumbered to secure payment of particular Indebtedness or to be sold
pursuant to an executed agreement with respect to a permitted Asset Sale, (b) each
of the NewPageHoldCo PIK Note Indenture, NewPageCo First Lien Term Loan
Agreement, the Senior Secured Floating Rate Notes and the Senior Secured Fixed
Rate Notes, in each case, as in effect on the date hereof and


 


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(c) restrictions by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses and
similar agreements entered into in the ordinary course of business (provided
that such restrictions are limited to the property or assets secured by such
Liens or the property or assets subject to such leases, licenses or similar agreements,
as the case may be) no Credit Party nor any of its Subsidiaries shall enter
into any agreement prohibiting the creation or assumption of any Lien upon any
of its properties or assets, whether now owned or hereafter acquired.


 


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


 


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


 


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


 


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


 


116


















 


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


 


(e)
so long as no Default or Event of Default shall have occurred and be continuing
or shall be caused thereby, NewPageCo may make Restricted Junior Payments to
NewPageHoldCo to the extent necessary to permit NewPageHoldCo to (i)
repurchase, redeem or otherwise acquire or retire shares of, or options or
warrants to purchase shares of, Capital Stock of NewPageHoldCo from current or
former employees, consultants, officers or directors of NewPageHoldCo,
NewPageCo or any Subsidiaries thereof or their respective estates, spouses,
former spouses, family members or other permitted transferees, in an aggregate
amount not to exceed $5,000,000 in any calendar year provided, that
NewPageCo may carry over and make in subsequent calendar years, in addition to
the amounts permitted for such calendar year, the amount of such purchases,
redemptions or other acquisitions or retirements for value permitted to have
been made but not made in any preceding calendar year up to a maximum of
$15,000,000 million in any calendar year; provided further
that such amount in any calendar year may be increased by an amount not to
exceed (A) the net cash proceeds from the sale of equity or other beneficial
ownership interests of NewPageCo (or NewPageHoldCo or a direct or indirect
parent or NewPageHoldCo to the extent such net cash proceeds are contributed to
the common equity of NewPageCo) to employees, officers, directors or
consultants of NewPageHoldCo, NewPageCo and the Subsidiaries or NewPageHoldCo
that occurs after the date of this Agreement (to the extent the cash proceeds
from the sale of such equity or other beneficial ownership interests have not
otherwise been applied to the payment of Restricted Junior Payments) plus (B) the cash proceeds of key man life
insurance policies received by NewPageCo and its Subsidiaries after the date of
this Agreement less any amounts previously applied to the payment of Restricted
Junior Payments pursuant to this clause (e);


 


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


 


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


 


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


 


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


 


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


 


6.6.   Restrictions
on Subsidiary Distributions.  Except as provided herein, no Credit Party
shall, nor shall it permit any of its Subsidiaries to, create or otherwise
cause or suffer to exist or become effective any consensual encumbrance or
restriction of any kind on the ability of any Subsidiary of NewPageCo to (a)
pay dividends or make any other distributions on any of such Subsidiary’s
Capital Stock owned by NewPageCo or any other Subsidiary of NewPageCo,
(b) repay or prepay any Indebtedness owed by such Subsidiary to NewPageCo
or any other Subsidiary of NewPageCo, (c) make loans or advances to
NewPageCo or any other Subsidiary of NewPageCo, or (d) transfer any of its
property or assets to NewPageCo or any other Subsidiary of NewPageCo, other
than restrictions (i) existing under this Agreement, (ii) in the NewPageHoldCo
PIK Note Documents, the NewPageCo First Lien Term Loan Documents, the Senior
Secured Floating Rate Notes Documents, the Senior Secured Fixed Rate Notes
Documents, the Senior Subordinated Notes Documents as in effect on the Closing
Date or as modified in accordance with this Agreement, (iii) in agreements
evidencing Indebtedness permitted by Section 6.1(j) that impose restrictions on
the property so acquired, (iv) in agreements evidencing Indebtedness permitted
by Section 6.1(p) that impose restrictions on the Foreign Subsidiary obligated
on such Indebtedness, (v) by reason of customary provisions restricting
assignments, subletting or other transfers contained in leases, licenses, asset
or stock


 


118





















 


sale agreements, joint venture agreements and
similar agreements otherwise permitted hereunder, entered into in the ordinary
course of business, (vi) in agreements or instruments that prohibit the payment
of dividends or the making of other distributions with respect to any Capital
Stock of a Person other than on a pro rata basis,
(vii) that are or were created by virtue of any transfer of, agreement to
transfer or option or right with respect to any property, assets or Capital
Stock not otherwise prohibited under this Agreement, (viii) in any instrument
governing Indebtedness of Capital Stock of a Person acquired by NewPageHoldCo
of one of its Subsidiaries as in effect at the time of such acquisition (except
to the extent such Indebtedness or Capital Stock was incurred or issued in
connection with or in contemplation of such acquisition), so long as the
encumbrance or restriction thereunder is not applicable to any Person, or the
properties or assets of any Person, other than the Person or property or assets
of the Person so acquired, (ix) arising under applicable laws, rules,
regulations or orders, and (x) any encumbrance or restriction imposed by any
amendments, modifications, restatements, increases, supplements, refundings,
replacements, or refinancings of the contracts, instruments or obligations
referred to in clauses (ii) through (ix) above; provided that the encumbrances
or restrictions in such amendments, modifications, restatements, renewals,
increases, supplements, refundings, replacements or refinancings are not
materially more restrictive, in the good faith judgment of the Board of
Directors of NewPageCo, taken as a whole, than the encumbrances or restrictions
prior to such amendment, modification, restatement, renewal, increase,
supplement, refunding, replacement or refinancing


 


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


 


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


 


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


 


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


 


119





















 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


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


 


(l)   Investments consisting of loans by NewPageCo
to NewPageHoldCo for purposes otherwise permitted under Section 6.5 to be
distributed to NewPageHoldCo;


 


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


 


120





















 


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


 


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


 


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


 


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


 


6.8.   Financial
Covenants.


 


(a)   Interest Coverage Ratio.  For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $40,000,000, then NewPageHoldCo shall not permit the
Interest Coverage Ratio as of the last day of such Fiscal Quarter, to be less
than the correlative ratio indicated:  


 


121





















 


	
  Fiscal Quarter

  	
   

  	
  Interest

  Coverage Ratio

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2005 through and including 4th Fiscal Quarter 2006

  	
   

  	
  2.00:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2007 through and including 3rd Fiscal Quarter 2008

  	
   

  	
  2.25:1.00

  
	
   

  	
   

  	
   

  
	
  4th Fiscal
  Quarter 2008 and each Fiscal Quarter thereafter

  	
   

  	
  2.50:1.00

  



 


(b)   Fixed Charge Coverage Ratio.  For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $40,000,000, then NewPageHoldCo shall not permit the
Fixed Charge Coverage Ratio as of the last day of such Fiscal Quarter, to be
less than 1.00:1.


 


(c)   Total Leverage Ratio.  For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $40,000,000, then NewPageHoldCo shall not permit the
Total Leverage Ratio as of the last day of such Fiscal Quarter, to exceed the
correlative ratio indicated:


 


122





















 


	
  Fiscal Quarter

  	
   

  	
  Total Leverage Ratio

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2005

  	
   

  	
  6.00:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2005

  	
   

  	
  6.00:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2006

  	
   

  	
  6.00:1.00

  
	
   

  	
   

  	
   

  
	
  2nd
  Fiscal Quarter 2006

  	
   

  	
  5.75:1.00

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2006

  	
   

  	
  5.50:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2006

  	
   

  	
  5.00:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2007

  	
   

  	
  5.00:1.00

  
	
   

  	
   

  	
   

  
	
  2nd
  Fiscal Quarter 2007

  	
   

  	
  5.00:1.00

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2007

  	
   

  	
  5.00:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2007

  	
   

  	
  4.75:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2008

  	
   

  	
  4.75:1.00

  
	
   

  	
   

  	
   

  
	
  2nd
  Fiscal Quarter 2008

  	
   

  	
  4.75:1.00

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2008

  	
   

  	
  4.75:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2008

  	
   

  	
  4.50:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2009

  	
   

  	
  4.50:1.00

  
	
   

  	
   

  	
   

  
	
  2nd
  Fiscal Quarter 2009

  	
   

  	
  4.50:1.00

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2009 and each Fiscal Quarter thereafter

  	
   

  	
  4.25:1.00

  



 


(d)   Senior Leverage Ratio.  For any Fiscal Quarter during which Excess
Availability during any ten (10) consecutive Business Days in such Fiscal
Quarter shall be less than $40,000,000, then NewPageHoldCo shall not permit the
Senior Leverage Ratio as of the last day of such Fiscal Quarter, to exceed the
correlative ratio indicated:


 


123





















 


	
  Fiscal Quarter

  	
   

  	
  Senior Leverage Ratio

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2005

  	
   

  	
  3.00:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2005

  	
   

  	
  3.00:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2006

  	
   

  	
  3.00:1.00

  
	
   

  	
   

  	
   

  
	
  2nd
  Fiscal Quarter 2006

  	
   

  	
  2.75:1.00

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2006

  	
   

  	
  2.75:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2006

  	
   

  	
  2.50:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2007

  	
   

  	
  2.50:1.00

  
	
   

  	
   

  	
   

  
	
  2nd
  Fiscal Quarter 2007

  	
   

  	
  2.25:1.00

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2007

  	
   

  	
  2.25:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2007

  	
   

  	
  2.00:1.00

  
	
   

  	
   

  	
   

  
	
  1st
  Fiscal Quarter 2008

  	
   

  	
  2.00:1.00

  
	
   

  	
   

  	
   

  
	
  2nd
  Fiscal Quarter 2008

  	
   

  	
  2.00:1.00

  
	
   

  	
   

  	
   

  
	
  3rd
  Fiscal Quarter 2008

  	
   

  	
  2.00:1.00

  
	
   

  	
   

  	
   

  
	
  4th
  Fiscal Quarter 2008 and each Fiscal Quarter thereafter

  	
   

  	
  1.75:1.00

  



 


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


 


124





















 


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


 


	
  Fiscal Year

  	
   

  	
  Consolidated

  Capital Expenditures

  
	
   

  	
   

  	
   

  
	
  2005

  	
   

  	
  $

  	
  140,000,000

  
	
   

  	
   

  	
   

  
	
  2006

  	
   

  	
  $

  	
  175,000,000

  
	
   

  	
   

  	
   

  
	
  2007

  	
   

  	
  $

  	
  225,000,000

  
	
   

  	
   

  	
   

  
	
  2008 and each
  Fiscal Year thereafter

  	
   

  	
  $

  	
  150,000,000

  



 


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


 


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


 


125





















 


of the
applicable measurement period prior to the relevant acquisition at the weighted
average of the interest rates applicable to outstanding Loans incurred during
such period).


 


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


 


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


 


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


 


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


 


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


 


6.9.   Fundamental
Changes; Disposition of Assets; Acquisitions.  No Credit Party shall, nor shall it permit any
of its Subsidiaries to, enter into any transaction of merger or


 


126





















 


consolidation, or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or
sublessor), exchange, transfer or otherwise dispose of, in one transaction or a
series of transactions, all or any part of its business, assets or property of
any kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, whether now owned or hereafter acquired, or acquire by purchase or
otherwise (other than purchases or other acquisitions of inventory, supplies,
intellectual property, materials and equipment and Capital Expenditures in the
ordinary course of business) the business, or all or substantially all of the
property or fixed assets of, or stock or other evidence of beneficial ownership
of, any Person or any division or line of business or other business unit of
any Person, except:


 


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


 


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


 


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


 


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


 


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


 


127





















 


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


 


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


 


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


 


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


 


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


 


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


 


6.15.   Amendments
or Waivers of Certain Related Agreements.  Except as otherwise provided in the
Intercreditor Agreement, no Credit Party shall nor shall it permit any of its
Subsidiaries to, agree to any material amendment, restatement, supplement or
other modification to, or waiver of, any of its material rights under any
Related Agreement after the Closing Date if the effect of such amendment,
restatement, supplement, modification or waiver would be adverse to any Credit
Party or Lender (or in the case of the Purchase Agreement or Fiber Supply
Agreements, materially adverse to any Credit Party or Lender) without in each
case obtaining the prior written consent of Requisite Lenders to such
amendment, restatement, supplement or other modification or waiver.


 


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


 


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amendments or changes made, is to increase materially the obligations
of the obligor thereunder or to confer any additional rights on the holders of
such Senior Subordinated Notes Indebtedness (or a trustee or other
representative on their behalf) or the NewPageHoldCo PIK Note Indebtedness
which would be adverse to any Credit Party or Lenders.


 


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


 


SECTION 7.  
GUARANTY


 


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


 


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


 


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


 


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


 


7.4.   Liability
of Guarantors Absolute.  Each Guarantor agrees that its obligations
hereunder are irrevocable, absolute, independent and unconditional and shall
not be affected by any circumstance which constitutes a legal or equitable
discharge of a guarantor or surety other


 


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than payment in full of the Guaranteed Obligations.  In furtherance of the foregoing and without
limiting the generality thereof, each Guarantor agrees as follows:


 


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


 


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


 


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


 


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


 


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


 


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the benefit of
such Beneficiary in respect hereof or the Guaranteed Obligations and direct the
order or manner of sale thereof, or exercise any other right or remedy that
such Beneficiary may have against any such security, in each case as such
Beneficiary in its discretion may determine consistent herewith, including
foreclosure on any such security pursuant to one or more judicial or
nonjudicial sales, whether or not every aspect of any such sale is commercially
reasonable, and even though such action operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of any Guarantor
against NewPageCo or any security for the Guaranteed Obligations; and
(vi) exercise any other rights available to it under the Credit Documents;
and


 


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


 


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manner or to
any extent vary the risk of any Guarantor as an obligor in respect of the
Guaranteed Obligations.


 


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


 


7.6.   Guarantors’
Rights of Subrogation, Contribution, etc.  Until the Guaranteed
Obligations shall have been indefeasibly paid in full and the Revolving
Commitments shall have terminated and all Letters of Credit shall have expired
or been cancelled, each Guarantor hereby waives any claim, right or remedy,
direct or indirect, that such Guarantor now has or may hereafter have against
NewPageCo or any other Guarantor or any of its assets in connection with this
Guaranty or the performance by such Guarantor of its obligations hereunder, in
each case


 


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


 


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


 


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to the amount of its payment, notwithstanding the fact that such
intercompany Indebtedness may represent Collateral hereunder.


 


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


 


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


 


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


 


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


 


(b)   Each Guarantor acknowledges and agrees that
any interest on any portion of the Guaranteed Obligations which accrues after
the commencement of any case or proceeding referred to in clause (a) above
(or, if interest on any portion of the Guaranteed Obligations ceases


 


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to accrue by
operation of law by reason of the commencement of such case or proceeding, such
interest as would have accrued on such portion of the Guaranteed Obligations if
such case or proceeding had not been commenced) shall be included in the
Guaranteed Obligations because it is the intention of Guarantors and
Beneficiaries that the Guaranteed Obligations which are guaranteed by
Guarantors pursuant hereto should be determined without regard to any rule of
law or order which may relieve NewPageCo of any portion of such Guaranteed
Obligations.  Guarantors will permit any
trustee in bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Administrative Agent, or allow the claim
of Administrative Agent in respect of, any such interest accruing after the
date on which such case or proceeding is commenced.


 


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


 


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


 


SECTION 8.  
EVENTS OF DEFAULT


 


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


 


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


 


(b)   Default in Other Agreements.  (i) Failure of any Credit Party or any of
their respective Subsidiaries to pay when due any principal of or interest on
or any other amount payable in respect of one or more items of Indebtedness
(other than Indebtedness referred to in


 


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Section
8.1(a)) with an aggregate principal amount of $10,000,000 or more, in each case
beyond the grace period, if any, provided therefor; or (ii) breach or default
by any Credit Party with respect to any other material term of (1) one or more
items of Indebtedness in the individual or aggregate principal amounts referred
to in clause (i) above or (2) any loan agreement, mortgage, indenture or
other agreement relating to such item(s) of Indebtedness, in each case beyond
the grace period, if any, provided therefor, if the effect of such breach or
default is to cause, or to permit the holder or holders of that Indebtedness
(or a trustee on behalf of such holder or holders), to cause, that Indebtedness
to become or be declared due and payable (or redeemable) prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or


 


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


 


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


 


(e)   Other Defaults Under Credit Documents.  Any Credit Party shall default in the
performance of or compliance with any term contained herein or any of the other
Credit Documents, other than any such term referred to in any other Section of
this Section 8.1, and such default shall not have been remedied or waived
within thirty days after the earlier of (i) a Senior Officer having knowledge
of such default or (ii) receipt by NewPageCo of notice from Administrative Agent
or the Requisite Lenders of such default; 
provided, however, that such


 


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thirty day
cure period shall be extended by an additional 10 days, for a total of 40 days,
if (A) such default cannot be cured by the payment of money and (B) such Credit
Party promptly takes action reasonably designed to achieve a cure within the
initial thirty days and thereafter diligently and continuously pursues such
cure (it being agreed and understood that during such cure period any such
default shall not constitute an Event of Default); or


 


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


 


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


 


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unable, or
shall fail generally, or shall admit in writing its inability, to pay its debts
as such debts become due; or the Board of Directors (or similar governing body)
of NewPageHoldCo or any Significant Subsidiary of NewPageHoldCo or any group of
Subsidiaries constituting a Significant Subsidiary of NewPageHoldCo (or any
committee thereof) shall adopt any resolution or otherwise authorize any action
to approve any of the actions referred to herein or in Section 8.1(f); or


 


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


 


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


 


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


 


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


 


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


 


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has any
further liability, including with respect to future advances by Lenders, under
any Credit Document to which it is a party; or


 


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


 


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


 


SECTION 9.  
COLLATERAL ACCOUNT; APPLICATION OF COLLATERAL PROCEEDS


 


9.1.   Accounts and Account Collections.


 


(a)   NewPageCo and each Borrowing Base Guarantor
shall notify Collateral Agent promptly of: 
(i) any material delay in the performance by NewPageCo or any
Borrowing Base Guarantor of any of their material obligations to any Account
Debtor or the assertion of any material claims, offsets, defenses or
counterclaims by any Account Debtor, or any material disputes with Account
Debtors, or any settlement, adjustment or compromise thereof, (ii) all
material adverse information known to any Credit Party relating to the financial
condition of any Account Debtor and (iii) any event or circumstance which,
to any Credit Party’s knowledge, would result in any Account no longer
constituting an Eligible Account, in each of the foregoing


 


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cases to the
extent the outstanding amount of the Accounts affected thereby exceeds $500,000
in the aggregate.  NewPageCo and each
Borrowing Base Guarantor hereby agree not to grant, or permit its Subsidiaries
to grant, to any Account Debtor any credit, discount, allowance or extension,
or to enter into any agreement for any of the foregoing, without Collateral
Agent’s consent, not to be unreasonably withheld or delayed, except in the
ordinary course of business in accordance with practices and policies
previously disclosed in writing to Collateral Agent.  So long as no Event of Default exists or has
occurred and is continuing, NewPageCo and its Subsidiaries and each Borrowing
Base Guarantor may settle, adjust or compromise any claim, offset, counterclaim
or dispute with any Account Debtor.  At
any time that an Event of Default exists or has occurred and is continuing,
Collateral Agent shall, at its option, have the exclusive right to settle,
adjust or compromise any claim, offset, counterclaim or dispute with Account
Debtors of any Credit Party or grant any credits, discounts or allowances.


 


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


 


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


 


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


 


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


 


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


 


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


 


(ii)   With respect to the Blocked Accounts of such
Guarantors as the Collateral Agent shall determine in its sole discretion, the
applicable bank maintaining such Blocked Accounts shall agree, from and after
the receipt of an Activation Notice 


 


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from the Collateral
Agent (which Activation Notice may be given by Collateral Agent at any time
after the occurrence and during the continuance of a Cash Dominion Trigger
Event), to forward all amounts in each Blocked Account to the applicable
Collection Account and to commence the process of daily sweeps from such
Blocked Account into the Collection Account;


 


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


 


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


 


(g)   NewPageCo and its directors, employees,
agents and other Affiliates and Borrowing Base Guarantors shall, acting as
trustee for Collateral Agent, receive, as the property of Collateral Agent, any
monies, checks, notes, drafts or any other payment relating to and/or


 


144





















 


proceeds of Accounts,
Inventory or other Collateral which come into their possession or under their
control and immediately upon receipt thereof, shall deposit or cause the same
to be deposited in the Blocked Accounts, or remit the same or cause the same to
be remitted, in kind, to Collateral Agent. 
In no event shall the same be commingled with NewPageCo’s own
funds.  NewPageCo agrees to reimburse
Collateral Agent on demand for any amounts owed or paid to any bank at which a
Blocked Account is established or any other bank or Person involved in the
transfer of funds to or from the Blocked Accounts arising out of Collateral
Agent’s payments to or indemnification of such bank or Person.


 


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


 


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SECTION 10.  
AGENTS


 


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


 


10.2.   Powers and Duties.  Each Lender irrevocably authorizes each Agent
to take such action on such Lender’s behalf and to exercise such powers, rights
and remedies hereunder and under the other Credit Documents as are specifically
delegated or granted to such Agent by the terms hereof and thereof, together
with such powers, rights and remedies as are reasonably incidental
thereto.  Each Agent shall have only
those duties and responsibilities that are expressly specified herein and the
other Credit Documents.  Each Agent may
exercise such powers, rights and remedies and perform such duties by or through
its agents or employees.  No Agent shall
have, by reason hereof or any of the other Credit Documents, a fiduciary
relationship in respect of any Lender; and nothing herein or any of the other
Credit Documents, expressed or implied, is intended to or shall be so construed
as to impose upon any Agent any obligations in respect hereof or any of the
other Credit Documents except as expressly set forth herein or therein.  Each Lender irrevocably authorizes the
Collateral Agent to execute and deliver the Intercreditor Agreement and the
Cash Management Intercreditor Agreement and to take such action, and to
exercise the powers, rights and remedies granted to the Collateral Agent
thereunder and with respect thereto.


 


10.3.   General
Immunity.


 


(a)   No Responsibility for Certain Matters.  No Agent shall be responsible to any Lender
for the execution, effectiveness, genuineness, validity, enforceability,
collectability or sufficiency hereof or any other Credit Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statements or in any financial


 


146


















 


or other
statements, instruments, reports or certificates or any other documents
furnished or made by any Agent to Lenders or by or on behalf of any Credit
Party, and Lender to any Agent or any Lender in connection with the Credit
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of any Credit Party or any other Person liable
for the payment of any Obligations, nor shall any Agent be required to
ascertain or inquire as to the performance or observance of any of the terms,
conditions, provisions, covenants or agreements contained in any of the Credit
Documents or as to the use of the proceeds of the Loans or as to the existence
or possible existence of any Event of Default or Default or to make any disclosures
with respect to the foregoing.  Anything
contained herein to the contrary notwithstanding, Administrative Agent shall
not have any liability arising from confirmations of the amount of outstanding
Loans or the Letter of Credit Usage or the component amounts thereof.


 


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


 


(c)  Delegation of Duties.
Administrative Agent may perform any and all of its duties and exercise its
rights and powers under this Agreement or under any other Credit Document by or
through any one or more sub-agents appointed by Administrative Agent.
Administrative Agent and any such sub-agent may perform any and all of its
duties and exercise its rights and powers by or through their respective
Affiliates. The exculpatory, indemnification and other provisions of this Section 10.3
and of Section 10.6 shall apply to any the Affiliates of


 


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Administrative
Agent and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.  All of the
rights, benefits, and privileges (including the exculpatory and indemnification
provisions) of this Section 10.3 and of Section 10.6 shall apply to
any such sub-agent and to the Affiliates of any such sub-agent, and shall apply
to their respective activities as sub-agent as if such sub-agent and Affiliates
were named herein.  Notwithstanding
anything herein to the contrary, with respect to each sub-agent appointed by
the Administrative Agent, (i) such sub-agent shall be a third party
beneficiary under this Agreement with respect to all such rights, benefits and
privileges (including exculpatory rights and rights to indemnification) and
shall have all of the rights and benefits of a third party beneficiary,
including an independent right of action to enforce such rights, benefits and
privileges (including exculpatory rights and rights to indemnification)
directly, without the consent or joinder of any other Person, against any or
all of the Credit Parties and the Lenders, (ii) such rights, benefits and
privileges (including exculpatory rights and rights to indemnification) shall
not be modified or amended without the consent of such sub-agent, and (iii) such
sub-agent shall only have obligations to Administrative Agent and not to any
Credit Party, Lender or any other Person and no Credit Party, Lender or any
other Person shall have any rights, directly or indirectly, as a third party
beneficiary or otherwise, against such sub-agent.


 


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


 


10.5.   Lenders’
Representations, Warranties and Acknowledgment.


 


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


 


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of the Loans
or at any time or times thereafter, and no Agent shall have any responsibility
with respect to the accuracy of or the completeness of any information provided
to Lenders.


 


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


 


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


 


10.7.   Successor
Administrative Agent and Swing Line Lender.  Administrative Agent and Collateral Agent (or
either of them) may resign at any time by giving thirty days’ prior written
notice thereof to Lenders and NewPageCo, and Administrative Agent and
Collateral Agent (or either of them) may be removed at any time with or without
cause by an instrument or concurrent instruments in writing delivered to
NewPageCo and Administrative Agent or Collateral Agent, as applicable, and
signed by Requisite Lenders.  Upon any
such notice of resignation or any such removal, Requisite Lenders shall have
the right, upon five Business Days’ notice to NewPageCo, to appoint a successor
Administrative Agent and/or Collateral Agent, provided that so long as
no Event of Default then exists such successor shall have been approved in
writing by NewPageCo which approval shall not be unreasonably withheld or
delayed.  Upon the acceptance of any
appointment as Administrative Agent or Collateral Agent, as applicable,
hereunder by a successor Administrative Agent or Collateral Agent, as
applicable,


 


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that successor Administrative Agent or Collateral Agent, as applicable,
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Administrative Agent or
Collateral Agent, as applicable, and the retiring or removed Administrative
Agent or Collateral Agent, as applicable, shall promptly (i) transfer to
such successor Administrative Agent or Collateral Agent, as applicable, all
sums, Securities and other items of Collateral held under the Collateral
Documents, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Administrative Agent or Collateral Agent, as applicable, under the Credit
Documents, and (ii) execute and deliver to such successor Administrative
Agent or Collateral Agent, as applicable, such amendments to financing
statements, and take such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Administrative Agent or
Collateral Agent, as applicable, of the security interests created under the
Collateral Documents, whereupon such retiring or removed Administrative Agent
shall be discharged from its duties and obligations hereunder.  After any retiring or removed Administrative
Agent’s or Collateral Agent’s resignation or removal hereunder as
Administrative Agent or Collateral Agent, as applicable, the provisions of this
Section 10 shall inure to its benefit as to any actions taken or omitted
to be taken by it while it was Administrative Agent or Collateral Agent
hereunder hereunder.  Any resignation or
removal of GSCP or its successor as Administrative Agent pursuant to this Section shall
also constitute the resignation or removal of GSCP or its successor as Swing
Line Lender, and any successor Administrative Agent appointed pursuant to this Section shall,
upon its acceptance of such appointment, become the successor Swing Line Lender
for all purposes hereunder.  In such
event (a) NewPageCo shall prepay any outstanding Swing Line Loans made by
the retiring or removed Administrative Agent in its capacity as Swing Line
Lender, (b) upon such prepayment, the retiring or removed Administrative
Agent and Swing Line Lender shall surrender any Swing Line Note held by it to
NewPageCo for cancellation, and (c) NewPageCo shall issue, if so requested
by successor Administrative Agent and Swing Line Loan Lender, a new Swing Line
Note to the successor Administrative Agent and Swing Line Lender, in the
principal amount of the Swing Line Loan Sublimit then in effect and with other
appropriate insertions.


 


10.8.   Collateral Documents and Guaranty.


 


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


 


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give such
consent under Section 11.5) have otherwise consented or (ii) release
any Guarantor from the Guaranty pursuant to Section 7.12 or with respect
to which Requisite Lenders (or such other Lenders as may be required to give
such consent under Section 11.5) have otherwise consented.


 


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


 


10.9.   Overadvances.  Administrative Agent shall not make (and
shall prohibit the Issuing Bank and Swing Line Lender, as applicable, from
making) any Revolving Loans or provide any Letters of Credit to NewPageCo on
behalf of Lenders intentionally and with actual knowledge that such Revolving
Loans, Swing Line Loans, or Letters of Credit would cause the aggregate amount
of the Revolving Exposure to exceed the Borrowing Base, without the prior
consent of all Lenders (other than Sponsor Affiliated Lenders), except, that,
Administrative Agent may make (or cause to be made) such additional Revolving
Loans or Swing Line Loans or provide such additional Letters of Credit on
behalf of Lenders (each an “Overadvance” and collectively, the “Overadvances”),
intentionally and with actual knowledge that such Loans or Letters of Credit
will cause the total outstanding Revolving Exposure to exceed the Borrowing
Base, as Administrative Agent may deem necessary or advisable in its
discretion, provided, that: (a) the total principal amount of the
Overadvances to NewPageCo which Administrative Agent may make or provide (or
cause to be made or provided) after obtaining such actual knowledge that the
Revolving Exposure equals or exceeds the Borrowing Base shall not exceed the
amount equal to $15,000,000 million outstanding at any time less the then
outstanding amount of any Special Agent Advances and shall not cause the
Revolving Exposure to exceed the Revolving Commitments of all of the Lenders or
the Revolving Exposure of a Lender to exceed such Lender’s Revolving
Commitment, (b) without the consent of all Lenders (other than Sponsor Affiliated
Lenders), (i) no Overadvance shall be outstanding for more than sixty (60) days and


 


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(ii) after all Overadvances have been repaid, Administrative Agent
shall not make any additional Overadvance unless sixty (60) days or more have
elapsed since the last date on which any Overadvance was outstanding and (c) Administrative
Agent shall be entitled to recover such funds, on demand from NewPageCo
together with interest thereon for each day from the date such payment was due
until the date such amount is paid to Administrative Agent at the interest rate
provided for in Section 2.10.  Each
Lender shall be obligated to pay Administrative Agent the amount of its Pro
Rata Share of any such Overadvance provided, that Administrative Agent is acting
in accordance with the terms of this Section 10.9.  All Overadvances shall be secured by
Collateral.


 


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


 


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provided for in Section 2.8(a). 
Special Agent Advances shall bear interest at the rate applicable to
Base Rate Loans.


 


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


 


SECTION 11.   MISCELLANEOUS


 


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


 


11.2.   Expenses.  Whether or not the transactions contemplated
hereby shall be consummated, NewPageCo agrees to pay promptly (a) all the
actual and reasonable costs and expenses of preparation of the Credit Documents
and any consents, amendments, waivers or other modifications thereto; (b) all
the costs of furnishing all opinions by counsel for NewPageCo and the other
Credit Parties; (c) the reasonable fees, expenses and disbursements of
counsel to Agents (in each case including allocated costs of internal counsel)
in connection with the negotiation, preparation, execution and administration
of the Credit Documents and any consents, amendments, waivers or other
modifications thereto and any other documents or


 


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


 


11.3.   Indemnity.


 


(a)   In addition to the payment of expenses
pursuant to Section 11.2, whether or not the transactions contemplated
hereby shall be consummated, each Credit Party agrees to defend (if requested
by the Indemnitees and subject to Indemnitees’ selection of counsel),
indemnify, pay and hold harmless, each Agent and Lender and the Issuing Bank
and the officers, partners, directors, trustees, employees, agents, sub-agents
and Affiliates of each Agent and each Lender and the Issuing Bank (each, an “Indemnitee”), from and against any and all
Indemnified Liabilities; provided, no Credit Party shall have any
obligation to any Indemnitee hereunder with respect to any Indemnified
Liabilities to the extent such Indemnified Liabilities arise from the gross
negligence or willful misconduct of that Indemnitee.  To the extent that the undertakings to


 


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defend,
indemnify, pay and hold harmless set forth in this Section 11.3 may be
unenforceable in whole or in part because they are violative of any law or
public policy, the applicable Credit Party shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by Indemnitees or any of
them.


 


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


 


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


 


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11.5.   Amendments
and Waivers.


 


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


 


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


 


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


 


(ii)   waive, reduce or postpone any scheduled
repayment (but not prepayment);


 


(iii)   extend the stated expiration date of any
Letter of Credit beyond the Revolving Commitment Termination Date;


 


(iv)   reduce the rate of interest on any Loan
(other than any waiver of any increase in the interest rate applicable to any
Loan pursuant to Section 2.10) or any fee payable hereunder;


 


(v)   extend the time for payment of any such
interest or fees;


 


(vi)   reduce or forgive the principal amount of any
Loan or any reimbursement obligations in respect of any Letter of Credit;


 


(vii)   amend, modify, terminate or waive any
provision of Section 2.16(c), 2.17, this Section 11.5(b) or Section 11.5(c) or
Section 7.2 of the Pledge and Security Agreement;


 


(viii)   amend the definition of “Requisite Lenders” “Supermajority
Lenders” or “Pro Rata Share”; provided, with the consent of Supermajority
Lenders, additional extensions of credit pursuant hereto may be included in the
determination of “Requisite Lenders”, “Supermajority Lenders” or “Pro Rata Share” on substantially


 


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the same basis as the
Revolving Commitments and the Revolving Loans are included on the Closing Date;


 


(ix)   release, or subordinate the Collateral Agent’s
lien in, all or substantially all of the Collateral or release all or
substantially all of the Guarantors from the Guaranty, except in each case as
expressly provided in the Credit Documents; or


 


(x)   consent to the assignment or transfer by any
Credit Party of any of its rights and obligations under any Credit Document
except as otherwise provided herein.


 


(c)   Other Consents.  No amendment, modification, termination or
waiver of any provision of the Credit Documents, or consent to any departure by
any Credit Party therefrom, shall:


 


(i)   increase any Revolving Commitment of any
Lender over the amount thereof then in effect without the consent of such
Lender; provided, no amendment, modification or waiver of any condition
precedent, covenant, Default or Event of Default shall constitute an increase
in any Revolving Commitment of any Lender;


 


(ii)   amend, modify, terminate or waive any
provision hereof relating to the Swing Line Sublimit or the Swing Line Loans
without the consent of Swing Line Lender;


 


(iii)   amend, modify, terminate or waive any
obligation of Lenders relating to the purchase of participations in Letters of
Credit as provided in Section 2.4(e) without the written consent of
Administrative Agent and of Issuing Bank; or


 


(iv)   amend, modify, terminate or waive any
provision of Section 11 as the same applies to any Agent, or any other
provision hereof as the same applies to the rights or obligations of any Agent,
in each case without the consent of such Agent.


 


(d)   Execution of Amendments, etc.  Administrative Agent may, but shall have no
obligation to, with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of such Lender.  Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was
given.  No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances.  Any amendment, modification, termination,
waiver or consent effected in accordance with this Section 11.5 shall be
binding upon each Lender at the time outstanding, each future Lender and, if
signed by a Credit Party, on such Credit Party.


 


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(e)   Sponsor Affiliated Lender.
Notwithstanding anything to the contrary contained in this Agreement or any
other Credit Document, in no event shall any Sponsor Affiliated Lender be
entitled: (i) to consent to any amendment, modification, waiver, consent
or other such action with respect to any of the terms of this Agreement or any
other Credit Document, (ii) to require any Agent or other Lender to
undertake any action (or refrain from taking any action) with respect to this
Agreement or any other Credit Document, (iii) otherwise vote on any matter
related to this Agreement or any other Credit Document, (iv) attend any
meeting with any Agent or Lender or receive any information from any Agent or
Lender or (v) make or bring any claim, in its capacity as Lender, against
the Agent with respect to the fiduciary duties of the any Agent or Lender and
the other duties and obligations of the Administrative Agent hereunder; provided,
however, no amendment, modifications or waiver shall deprive any Sponsor
Affiliate Lender of its Pro Rata Share of any payments to which the Lenders are
entitled to share on a pro rata basis hereunder.


 


11.6.   Successors and Assigns; Participations.


 


(a)   Generally.  This Agreement shall be binding upon the
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of
Lenders.  No Credit Party’s rights or
obligations hereunder nor any interest therein may be assigned or delegated by
any Credit Party without the prior written consent of all Lenders (other than
Sponsor Affiliated Lenders).  Nothing in
this Agreement, expressed or implied, shall be construed to confer upon any
Person (other than the parties hereto, their respective successors and assigns
permitted hereby and, to the extent expressly contemplated hereby, Affiliates
of each of the Agents and Lenders) any legal or equitable right, remedy or
claim under or by reason of this Agreement.


 


(b)   Register.  NewPageCo, Administrative Agent and Lenders
shall deem and treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Revolving Commitments and Loans listed
therein for all purposes hereof, and no assignment or transfer of any such
Revolving Commitment or Loan shall be effective, in each case, unless and until
recorded in the Register following receipt of an Assignment Agreement effecting
the assignment or transfer thereof as provided in Section 11.6(d).  Each assignment shall be recorded in the
Register on the Business Day the Assignment Agreement is received by the
Administrative Agent, if received by 12:00 noon New York City time, and on the
following Business Day if received after such time, prompt notice thereof shall
be provided to NewPageCo and a copy of such Assignment Agreement shall be
maintained.  The date of such recordation
of a transfer shall be referred to herein as the “Assignment Effective Date.” 
Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is listed in the
Register as a Lender shall be conclusive and binding on any subsequent holder,
assignee or transferee of the corresponding Revolving Commitments or Loans.


 


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(c)   Right to Assign.  Each Lender shall have the right at any time
to sell, assign or transfer all or a portion of its rights and obligations
under this Agreement, including, without limitation, all or a portion of its
Revolving Commitment or Loans owing to it or other Obligations owing to it (provided,
however, that each such assignment shall be of a uniform, and not
varying, percentage of all rights and obligations under and in respect of any
Loan and any related Revolving Commitments):


 


(i)   to any Person meeting the criteria of clause (i) of
the definition of the term of “Eligible Assignee” upon the giving of notice to
NewPageCo and Administrative Agent; and


 


(ii)   to any Person meeting the criteria of clause (ii) of
the definition of the term of “Eligible Assignee” and, in the case of
assignments of Revolving Loans or Revolving Commitments to any such Person
(except in the case of assignments made by or to GSCP), consented to by each of
NewPageCo and Administrative Agent (such consent not to be (x) unreasonably
withheld or delayed or, (y) in the case of NewPageCo, required at any time an
Event of Default shall have occurred and then be continuing); provided,
further each such assignment pursuant to this Section 11.6(c)(ii) shall
be in an aggregate amount of not less than $5,000,000 (or such lesser amount as
may be agreed to by NewPageCo and Administrative Agent or as shall constitute
the aggregate amount of the Revolving Commitments and Revolving Loans of the
assigning Lender) with respect to the assignment of Revolving Commitments and
Revolving Loans.


 


In
addition to the consents, if any, required by the preceding provisions of this Section 11.6(c),
each assignment by a Lender of all or a portion of its Revolving Commitment
shall require the consent of the Issuing Bank (such consent not to be
unreasonably withheld or delayed).


 


(d)   Mechanics.  Assignments and assumptions of Revolving
Loans and Revolving Commitments shall only be effected by manual execution and
delivery to the Administrative Agent of an Assignment Agreement. Assignments
made pursuant to the foregoing provision shall be effective as of the
Assignment Effective Date.  In connection
with all assignments there shall be delivered to Administrative Agent such forms,
certificates or other evidence, if any, with respect to United States federal
income tax withholding matters as the assignee under such Assignment Agreement
may be required to deliver pursuant to Section 2.20(c).


 


(e)   Representations and Warranties of Assignee.  Each Lender, upon execution and delivery
hereof or upon succeeding to an interest in the Revolving Commitments and
Loans, as the case may be, represents and warrants as of the Closing Date or as
of the Assignment Effective Date that (i) it is an Eligible Assignee; (ii) it
has experience and expertise in the


 


159





















 


making of or
investing in commitments or loans such as the applicable Revolving Commitments
or Loans, as the case may be; and (iii) it will make or invest in, as the
case may be, its Revolving Commitments or Loans for its own account in the
ordinary course of its business and without a view to distribution of such
Revolving Commitments or Loans within the meaning of the Securities Act or the
Exchange Act or other federal securities laws (it being understood that,
subject to the provisions of this Section 11.6, the disposition of such
Revolving Commitments Loans or any interests therein shall at all times remain
within its exclusive control).


 


(f)   Effect of Assignment.  Subject to the terms and conditions of this Section 11.6,
as of the “Assignment Effective Date” (i) the assignee thereunder shall
have the rights and obligations of a “Lender” hereunder to the extent of its
interest in the Loans and Revolving Commitments as reflected in the Register
and shall thereafter be a party hereto and a “Lender” for all purposes hereof; (ii) the
assigning Lender thereunder shall, to the extent that rights and obligations
hereunder have been assigned to the assignee, relinquish its rights (other than
any rights which survive the termination hereof under Section 11.8) and be
released from its obligations hereunder (and, in the case of an assignment
covering all or the remaining portion of an assigning Lender’s rights and
obligations hereunder, such Lender shall cease to be a party hereto on the
Assignment Effective Date; provided, anything contained in any of the
Credit Documents to the contrary notwithstanding,, (y) Issuing Bank shall
continue to have all rights and obligations thereof with respect to such
Letters of Credit until the cancellation or expiration of such Letters of
Credit and the reimbursement of any amounts drawn thereunder and (z)such
assigning Lender shall continue to be entitled to the benefit of all
indemnities hereunder as specified herein with respect to matters arising out
of the prior involvement of such assigning Lender as a Lender hereunder); (iii) the
Revolving Commitments shall be modified to reflect the Revolving Commitment of
such assignee and any Revolving Commitment of such assigning Lender, if any;
and (iv) if any such assignment occurs after the issuance of any Note
hereunder, the assigning Lender shall, upon the effectiveness of such
assignment or as promptly thereafter as practicable, surrender its applicable Notes
to Administrative Agent for cancellation, and thereupon NewPageCo shall issue
and deliver new Notes, if so requested by the assignee and/or assigning Lender,
to such assignee and/or to such assigning Lender, with appropriate insertions,
to reflect the new Revolving Commitment and/or outstanding Loans of the
assignee and/or the assigning Lender.


 


(g)   Participations.  Each Lender shall have the right at any time
to sell one or more participations to any Person (other than NewPageHoldCo, any
of its Subsidiaries or any of its Affiliates) in all or any part of its
Revolving Commitments, Loans or in any other Obligation.  The holder of any such participation, other
than an Affiliate of the Lender granting such participation, shall not be
entitled to require such Lender to take or omit to take any action hereunder,
or to consent to any action to be taken or omitted hereunder by such Lender,
except with respect to any amendment, modification or waiver that would (i) extend
the final scheduled


 


160





















 


maturity of
any Loan, Note or Letter of Credit (unless such Letter of Credit is not
extended beyond the Revolving Commitment Termination Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant’s
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory reduction in the
Revolving Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Revolving Commitment or Loan shall
be permitted without the consent of any participant if the participant’s
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by any Credit Party of any of its rights and obligations
under this Agreement (except as otherwise expressly permitted by a Credit
Document) or (iii) release all or substantially all of the Collateral
under the Collateral Documents (except as expressly provided in the Credit
Documents) supporting the Loans hereunder in which such participant is
participating.  NewPageCo agrees that
each participant shall be entitled to the benefits of Sections 2.18(c), 2.19
and 2.20 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (c) of this Section; provided,
(i) a participant shall not be entitled to receive any greater payment
under Section 2.19 or 2.20 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such participant,
unless the sale of the participation to such participant is made with NewPageCo’s
prior written consent and (ii) a participant that would be a Non-US Lender
if it were a Lender shall not be entitled to the benefits of Section 2.20
unless NewPageCo is notified of the participation sold to such participant and
such participant agrees, for the benefit of NewPageCo, to comply with Section 2.20
as though it were a Lender and Section 2.20 is applied to such Participant
as if such Participant were a Lender.  To
the extent permitted by law, each participant also shall be entitled to the
benefits of Section 11.4 as though it were a Lender, provided such
Participant agrees to be subject to Section 2.17 as though it were a
Lender.


 


(h)   Certain Other Assignments.  In addition to any other assignment permitted
pursuant to this Section 11.6, any Lender may, without the consent of
NewPageCo or the Administrative Agent, assign and/or pledge all or any portion
of its Loans, the other Obligations owed by or to such Lender, and its Notes,
if any, to secure obligations of such Lender including, without limitation, any
Federal Reserve Bank as collateral security pursuant to Regulation A of
the Board of Governors of the Federal Reserve System and any operating circular
issued by such Federal Reserve Bank; provided, no Lender, as between
NewPageCo and such Lender, shall be relieved of any of its obligations
hereunder as a result of any such assignment and pledge, and provided  further,
in no event shall the applicable Federal Reserve Bank, pledgee or trustee be
considered to be a “Lender” or be entitled to require the assigning Lender to
take or omit to take any action hereunder, until such time as such Federal
Reserve Bank, pledgee or trustee has complied with the provisions of this Section 11.6
regarding assignments.


 


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11.7.   Independence of Covenants.  All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.


 


11.8.   Survival
of Representations, Warranties and Agreements.  All representations, warranties and
agreements made herein shall survive the execution and delivery hereof and the
making of any Credit Extension. 
Notwithstanding anything herein or implied by law to the contrary, the
agreements of each Credit Party set forth in Sections 2.18(c), 2.19, 2.20,
11.2, 11.3 and 11.4 and the agreements of Lenders set forth in
Sections 2.17, 10.3(b) and 10.6 shall survive the payment of the
Loans, the cancellation or expiration of the Letters of Credit and the
reimbursement of any amounts drawn thereunder, and the termination hereof.


 


11.9.   No
Waiver; Remedies Cumulative.  No failure or
delay on the part of any Agent or any Lender in the exercise of any power,
right or privilege hereunder or under any other Credit Document shall impair
such power, right or privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any such
power, right or privilege preclude other or further exercise thereof or of any
other power, right or privilege.  The
rights, powers and remedies given to each Agent and each Lender hereby are
cumulative and shall be in addition to and independent of all rights, powers
and remedies existing by virtue of any statute or rule of law or in any of
the other Credit Documents.  Any
forbearance or failure to exercise, and any delay in exercising, any right,
power or remedy hereunder shall not impair any such right, power or remedy or
be construed to be a waiver thereof, nor shall it preclude the further exercise
of any such right, power or remedy.


 


11.10.   Marshalling;
Payments Set Aside.  Neither any Agent nor any Lender shall be
under any obligation to marshal any assets in favor of any Credit Party or any
other Person or against or in payment of any or all of the Obligations.  To the extent that any Credit Party makes a
payment or payments to Administrative Agent or Lenders (or to Administrative
Agent, on behalf of Lenders), or Administrative Agent or Lenders enforce any
security interests or exercise their rights of setoff, and such payment or
payments or the proceeds of such enforcement or setoff or any part thereof are
subsequently invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party under
any bankruptcy law, any other state or federal law, common law or any equitable
cause, then, to the extent of such recovery, the obligation or part thereof
originally intended to be satisfied, and all Liens, rights and remedies
therefor or related thereto, shall be revived and continued in full force and
effect as if such payment or payments had not been made or such enforcement or
setoff had not occurred.


 


162





















 


11.11.   Severability.  In case any provision in or obligation
hereunder or any Note shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.


 


11.12.   Obligations
Several; Independent Nature of Lenders’ Rights.  The obligations of Lenders hereunder are
several and no Lender shall be responsible for the obligations or Revolving
Commitment of any other Lender hereunder. 
Nothing contained herein or in any other Credit Document, and no action
taken by Lenders pursuant hereto or thereto, shall be deemed to constitute Lenders
as a partnership, an association, a joint venture or any other kind of entity.
The amounts payable at any time hereunder to each Lender shall be a separate
and independent debt, and, subject to the final paragraph of Section 8 and
Section 10.8(b) or as otherwise expressly provided in this Agreement,
each Lender shall be entitled to protect and enforce its rights arising
hereunder and it shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.


 


11.13.   Headings.  Section headings herein are included
herein for convenience of reference only and shall not constitute a part hereof
for any other purpose or be given any substantive effect.


 


11.14.   APPLICABLE LAW.  THIS
AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES THEREOF.


 


11.15.   CONSENT TO
JURISDICTION.  ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING HERETO OR TO ANY OTHER
CREDIT DOCUMENT, OR TO ANY OF THE OBLIGATIONS, MAY BE BROUGHT IN ANY STATE
OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, AND COUNTY OF NEW
YORK.  BY EXECUTING AND DELIVERING THIS
AGREEMENT, EACH CREDIT PARTY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS; (c) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING
IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO THE APPLICABLE CREDIT PARTY AT ITS ADDRESS PROVIDED IN
ACCORDANCE WITH SECTION 10.1; (d) AGREES THAT SERVICE AS PROVIDED IN
CLAUSE (c) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE
APPLICABLE


 


163





















 


CREDIT PARTY IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND (e) AGREES
AGENTS AND LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST ANY CREDIT PARTY IN THE COURTS
OF ANY OTHER JURISDICTION.


 


11.16.   WAIVER OF JURY
TRIAL.  EACH OF THE PARTIES HERETO HEREBY
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING HEREUNDER OR UNDER ANY OF THE OTHER CREDIT
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
LOAN TRANSACTION OR THE LENDER/COMPANY RELATIONSHIP THAT IS BEING
ESTABLISHED.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED
IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION,
INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER
COMMON LAW AND STATUTORY CLAIMS.  EACH
PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER
INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS WAIVER IN
ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON THIS
WAIVER IN ITS RELATED FUTURE DEALINGS. 
EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES
ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL.  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT
BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 10.16 AND EXECUTED BY EACH OF THE
PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS HERETO OR ANY OF THE OTHER CREDIT
DOCUMENTS OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE
HEREUNDER.  IN THE EVENT OF LITIGATION,
THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.


 


11.17.   Confidentiality.  Each Lender shall hold all non-public
information regarding NewPageCo and its Subsidiaries and their businesses
identified as such by NewPageCo and obtained by such Lender pursuant to the
requirements hereof in accordance with such Lender’s customary procedures for
handling confidential information of such nature, it being understood


 


164





















 


and agreed by NewPageCo
that, in any event, a Lender may make (i) disclosures of such information
to Affiliates of such Lender and to their agents and advisors (and to other
persons authorized by a Lender or Agent to organize, present or disseminate
such information in connection with disclosures otherwise made in accordance
with this Section 11.17), (ii) disclosures of such information
reasonably required by any bona fide or potential assignee, transferee or
participant in connection with the contemplated assignment, transfer or
participation by such Lender of any Loans or any participations therein
(provided, such advisors are advised of and agree to be bound by the provisions
of this Section 11.17), (iii) disclosure to any rating agency when
required by it, provided that, prior to any disclosure, such rating
agency shall undertake in writing to preserve the confidentiality of any
confidential information relating to the Credit Parties received by it from any
of the Agents or any Lender, and (iv) disclosures required or requested by
any governmental agency or representative thereof or by the NAIC or pursuant to
legal or judicial process; provided, unless specifically prohibited by
applicable law or court order, each Lender shall make reasonable efforts to
notify NewPageCo of any request by any governmental agency or representative
thereof (other than any such request in connection with any examination of the
financial condition or other routine examination of such Lender by such
governmental agency) for disclosure of any such non-public information prior to
disclosure of such information.


 


11.18.   Usury Savings Clause.  Notwithstanding any other provision herein,
the aggregate interest rate charged with respect to any of the Obligations,
including all charges or fees in connection therewith deemed in the nature of
interest under applicable law shall not exceed the Highest Lawful Rate.  If the rate of interest (determined without regard
to the preceding sentence) under this Agreement at any time exceeds the Highest
Lawful Rate, the outstanding amount of the Loans made hereunder shall bear
interest at the Highest Lawful Rate until the total amount of interest due
hereunder equals the amount of interest which would have been due hereunder if
the stated rates of interest set forth in this Agreement had at all times been
in effect.  In addition, if when the
Loans made hereunder are repaid in full the total interest due hereunder
(taking into account the increase provided for above) is less than the total
amount of interest which would have been due hereunder if the stated rates of
interest set forth in this Agreement had at all times been in effect, then to
the extent permitted by law, NewPageCo shall pay to Administrative Agent an
amount equal to the difference between the amount of interest paid and the
amount of interest which would have been paid if the Highest Lawful Rate had at
all times been in effect. 
Notwithstanding the foregoing, it is the intention of Lenders and NewPageCo
to conform strictly to any applicable usury laws.  Accordingly, if any Lender contracts for,
charges, or receives any consideration which constitutes interest in excess of
the Highest Lawful Rate, then any such excess shall be cancelled automatically
and, if previously paid, shall at such Lender’s option be applied to the
outstanding amount of the Loans made hereunder or be refunded to NewPageCo.


 


165





















 


11.19.   Counterparts.  This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall be deemed
an original, but all such counterparts together shall constitute but one and
the same instrument.


 


11.20.   Effectiveness.  This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
NewPageCo and Administrative Agent of written or telephonic notification of
such execution and authorization of delivery thereof.


 


11.21.   Patriot Act.  Each Lender and Administrative Agent (for
itself and not on behalf of any Lender) hereby notifies NewPageCo that pursuant
to the requirements of the Act, it is required to obtain, verify and record
information that identifies NewPageCo, which information includes the name and
address of NewPageCo and other information that will allow such Lender or
Administrative Agent, as applicable, to identify NewPageCo in accordance with
the Act.


 


11.22.   Electronic
Execution of Assignments.  The words “execution,” “signed,” signature,”
and words of like import in any Assignment Agreement shall be deemed to include
electronic signatures or the keeping of records in electronic form, each of
which shall be of the same legal effect, validity or enforceability as a
manually executed signature or the use of a paper-based recordkeeping system,
as the case may be, to the extent and as provided for in any applicable law,
including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.


 


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166





















 


IN
WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.


 


 


	
   

  	
  NEWPAGE CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda M. Sheffield

  	
   

  
	
   

  	
   

  	
  Name: Linda M. Sheffield

  
	
   

  	
   

  	
  Title:  
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  NEWPAGE HOLDING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda M. Sheffield

  	
   

  
	
   

  	
   

  	
  Name: Linda M. Sheffield

  
	
   

  	
   

  	
  Title:  
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CHILLICOTHE PAPER, INC.

  
	
   

  	
   

  
	
   

  	
  WICKLIFFE PAPER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda M. Sheffield

  	
   

  
	
   

  	
   

  	
  Name: Linda M. Sheffield

  
	
   

  	
   

  	
  Title:  
  Treasurer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ESCANABA PAPER COMPANY

  
	
   

  	
   

  
	
   

  	
  MEADWESTVACO MARYLAND, INC. (to be

  named LUKE PAPER COMPANY)

  
	
   

  	
  MEADWESTVACO OXFORD

  CORPORATION (to be named RUMFORD

  PAPER COMPANY)

  



 





















 


	
   

  	
  MEADWESTVACO ENERGY SERVICES LLC

  (to be named NEWPAGE ENERGY SERVICES

  LLC)

  
	
   

  	
   

  
	
   

  	
  UPLAND RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name: Peter H. Vogel

  
	
   

  	
   

  	
  Title:   President

  
	
   

  	
   

  
	
   

  	
  RUMFORD COGENERATION INC.

  
	
   

  	
  RUMFORD FALLS POWER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name: Peter H. Vogel

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  



 





















 


	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.,

  
	
   

  	
  as Administrative Agent, Joint Lead Arranger,
  Co-Syndication Agent, Swing Line Lender and a

  Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/William W. Archer

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  



 





















 


	
   

  	
  UBS SECURITIES LLC,

  
	
   

  	
  as Co-Syndication Agent and Joint Lead Arranger

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Eric H. Coombs

  	
   

  
	
   

  	
   

  	
  Name: Eric H.
  Coombs

  
	
   

  	
   

  	
  Title:   Managing Director

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Olivero O. Trumbo II

  	
   

  
	
   

  	
   

  	
  Name: Olivero O.
  Trumbo II

  
	
   

  	
   

  	
  Title:   Director

  



 





















 


	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
  as Collateral Agent, Issuing Bank and a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Peter S. Predun

  	
   

  
	
   

  	
   

  	
  Name: Peter S.
  Predun

  
	
   

  	
   

  	
  Title:  Vice President

  



 





















 


	
   

  	
  WACHOVIA CAPITAL MARKETS, LLC

  
	
   

  	
  as Co-Syndication Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [illegible]

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:   
  Director

  



 





















 


	
   

  	
  UBS LOAN FINANCE LLC,

  
	
   

  	
  as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Wilfred V. Saint

  	
   

  
	
   

  	
   

  	
  Name:  Wilfred V. Saint

  
	
   

  	
   

  	
  Title: Director
  Banking Products Services, US

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Richard L. Tavrow

  	
   

  
	
   

  	
   

  	
  Name:  Richard L. Tavrow

  
	
   

  	
   

  	
  Title: Director
  Banking Products Services, US

  
					



 





















 


	
   

  	
  WACHOVIA BANK, NATIONAL

  ASSOCIATION,

  
	
   

  	
  as Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ [illegible]

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:   
  Director

  



 





















 


	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
  As Documentation Agent and as a Lender

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jang S. Kim

  	
   

  
	
   

  	
   

  	
  Name: Jang S. Kim

  
	
   

  	
   

  	
  Title:   Vice
  President