Document:

Exhibit 10.8

 

 

EXECUTION COPY

 

TERM
LOAN

 

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,

 

and

 

UBS SECURITIES LLC,

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

 

 

$750,000,000
Senior Secured Term Loan Credit Facilities

 

 

 

TABLE
OF CONTENTS

 

	
  SECTION
  1. DEFINITIONS AND INTERPRETATION

  	
   

  
	
  1.1.
  Definitions

  	
   

  
	
  1.2. Accounting Terms

  	
   

  
	
  1.3. Interpretation, etc.

  	
   

  
	
  SECTION
  2. TERM LOANS

  	
   

  
	
  2.1. Term Loans

  	
   

  
	
  2.2. [Reserved]

  	
   

  
	
  2.3. [Reserved]

  	
   

  
	
  2.4. [Reserved]

  	
   

  
	
  2.5. Pro
  Rata Shares; Availability of Funds

  	
   

  
	
  2.6. Use of Proceeds

  	
   

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

  	
   

  
	
  2.8. Interest on Term
  Loans

  	
   

  
	
  2.9.
  Conversion/Continuation

  	
   

  
	
  2.10. Default Interest

  	
   

  
	
  2.11. Fees

  	
   

  
	
  2.12. Scheduled Payments

  	
   

  
	
  2.13. Voluntary
  Prepayments

  	
   

  
	
  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. [Reserved]

  	
   

  
	
  2.23.
  Removal or Replacement of a Lender

  	
   

  
	
  SECTION 3.
  CONDITIONS PRECEDENT

  	
   

  
	
  3.1. Closing Date.

  	
   

  
	
  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

  	
   

  
	
  4.5. Governmental Consents

  	
   

  
	
  4.6. Binding Obligation

  	
   

  

 

ii

 

	
  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. Collateral
  Documents

  	
   

  
	
  4.28. NewPageHoldCo

  	
   

  
	
  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

  	
   

  
	
  5.11.
  Additional Material Real Estate Assets

  	
   

  
	
  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

  	
   

  

 

iii

 

	
  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

  	
   

  
	
  SECTION 8. EVENTS
  OF DEFAULT

  	
   

  
	
  8.1. Events of Default

  	
   

  
	
  SECTION 9. AGENTS

  	
   

  
	
  9.1. Appointment of Agents

  	
   

  
	
  9.2. Powers and Duties

  	
   

  
	
  9.3. General Immunity

  	
   

  
	
  9.4. Agents
  Entitled to Act as Lender

  	
   

  

 

iv

 

	
  9.5.
  Lenders’ Representations, Warranties and Acknowledgment

  	
   

  
	
  9.6. Right to Indemnity

  	
   

  
	
  9.7. Successor
  Administrative Agent.

  	
   

  
	
  9.8.
  Collateral Documents and Guaranty

  	
   

  
	
  9.9. Withholding Tax

  	
   

  
	
  SECTION 10.
  MISCELLANEOUS

  	
   

  
	
  10.1. Notices

  	
   

  
	
  10.2. Expenses

  	
   

  
	
  10.3. Indemnity

  	
   

  
	
  10.4. Set-Off

  	
   

  
	
  10.5. Amendments and
  Waivers

  	
   

  
	
  10.6.
  Successors and Assigns; Participations

  	
   

  
	
  10.7. Independence of
  Covenants

  	
   

  
	
  10.8. Survival of
  Representations, Warranties and Agreements

  	
   

  
	
  10.9. No Waiver; Remedies
  Cumulative

  	
   

  
	
  10.10.
  Marshalling; Payments Set Aside

  	
   

  
	
  10.11. Severability

  	
   

  
	
  10.12. Obligations
  Several; Independent Nature of Lenders’ Rights

  	
   

  
	
  10.13. Headings

  	
   

  
	
  10.14. APPLICABLE LAW

  	
   

  
	
  10.15. CONSENT TO
  JURISDICTION

  	
   

  
	
  10.16. WAIVER OF JURY
  TRIAL

  	
   

  
	
  10.17. Confidentiality

  	
   

  
	
  10.18. Usury Savings
  Clause

  	
   

  
	
  10.19. Counterparts

  	
   

  
	
  10.20. Effectiveness

  	
   

  
	
  10.21. Patriot Act

  	
   

  
	
  10.22.
  Electronic Execution of Assignments

  	
   

  

 

v

 

	
  APPENDICES:

  	
   

  	
  A

  	
   

  	
  Term Loan
  Commitments

  
	
   

  	
   

  	
  B

  	
   

  	
  Notice Addresses

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  	
  3.1(i)

  	
   

  	
  Closing Date
  Mortgaged Properties; Local Counsel

  
	
   

  	
   

  	
  3.1(k)

  	
   

  	
  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

  
	
   

  	
   

  	
  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

  
	
   

  	
   

  	
  B

  	
   

  	
  Term Loan 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

  	
   

  	
  Mortgage

  
	
   

  	
   

  	
  K

  	
   

  	
  Landlord Waiver and Consent Agreement

  
	
   

  	
   

  	
  L

  	
   

  	
  Intercreditor Agreement

  
	
   

  	
   

  	
  M

  	
   

  	
  Collateral Trust
  Agreement

  
	
   

  	
   

  	
  N-1

  	
   

  	
  Perfection Certificate

  
	
   

  	
   

  	
  N-2

  	
   

  	
  Perfection Certificate
  Supplement

  
	
   

  	
   

  	
  O

  	
   

  	
  Access
  Grant and Easement Agreement

  

 

vi

 

TERM
LOAN CREDIT AND GUARANTY AGREEMENT

 

This TERM LOAN CREDIT AND GUARANTY AGREEMENT,
dated as of May 2, 2005 is entered into by and among NEWPAGE
CORPORATION, a Delaware corporation (“NewPageCo”), NEWPAGE HOLDING
CORPORATION, a Delaware corporation (“NewPageHoldCo”), 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
Administrative Agent (together with its permitted successors in such capacity, “Administrative Agent”), and UBS SECURITIES LLC (“UBSS”) as
Joint Lead Arranger, Joint Bookrunner, and as Co-Syndication Agent (in such
capacity, “Co-Syndication 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 term loan credit facilities
to NewPageCo in an aggregate principal amount not to exceed $750,000,000, the
proceeds of which will be used (i) to fund the Paper Business Acquisition
and (ii) to pay related transaction costs, fees and expenses;

 

WHEREAS, NewPageCo
has agreed to secure all of its Obligations by granting to Collateral Trustee,
for the benefit of Secured Parties, (i) a First Priority Lien on
substantially all of its assets (other than the Cash, deposit accounts,
accounts receivable, and inventory of NewPageCo) including, without limitation,
a pledge of all of the Capital Stock of each of its Domestic Subsidiaries and
65% of all the Capital Stock of each of its directly owned Foreign Subsidiaries
and (ii) a Second 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 Trustee, for the benefit
of Secured Parties, (i) a First Priority Lien on substantially all of
their respective assets (other than the Cash, deposit accounts, accounts
receivable, and inventory of the Guarantors) including, without limitation, a
pledge of all of the Capital Stock of each of their respective Domestic
Subsidiaries (including NewPageCo) and 65% of all the Capital Stock of each of
their respective directly owned Foreign Subsidiaries and (ii) a Second
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.

 

“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 Term 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 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,

 

2

 

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 and Administrative Agent.

 

“Aggregate Amounts Due”
as defined in Section 2.17.

 

“Aggregate Payments”
as defined in Section 7.2.

 

“Agreement” means
this Term Loan 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.

 

“Applicable
Margin’’ means (i) with respect to Term Loans that are
Eurodollar Rate Loans, an amount equal to 3.00% per annum and (ii) with
respect to Term Loans that are Base Rate Loans, an amount equal to 2.00% per
annum.

 

“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

 

3

 

maintained by such member
banks with respect to (i) any category of liabilities which includes deposits
by reference to which the applicable Adjusted Eurodollar Rate of a Term 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’s 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 Trustee 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 10.6(b).

 

4

 

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

 

“Beneficiary” means
each Agent, Lender and Lender Counterparty.

 

“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.

 

“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.

 

“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.

 

5

 

“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 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 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 under the Revolving Credit Agreement, 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

 

6

 

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 NewPageCo or NewPageHoldCo cease to be occupied by Persons who either (a) were
members of the board of directors of NewPageCo or NewPageHoldCo, as applicable
on the Closing Date or (b) were nominated for election by the board of
directors of NewPageCo or NewPageHoldCo, 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, the
Revolving Credit Agreement Documents, the Senior Secured Floating Rate Note
Documents, the Senior Secured Fixed Rate Note Documents or the Senior
Subordinated Note Documents shall occur.

 

“Closing Date”
means the date on which the Term Loans are made.

 

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

 

“Closing Date Mortgaged Property”
as defined in Section 3.1(i).

 

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

 

7

 

“Collateral” means,
collectively, all of the real, personal and mixed property (including Capital
Stock) in which Liens are granted pursuant to the Collateral Documents as
security for the Obligations.

 

“Collateral Documents”
means (a) the Pledge and Security Agreement, the Intercreditor Agreement,
the Collateral Trust Agreement, the Mortgages, 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 Trustee, 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, and the
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.

 

“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, guaranty 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

 

8

 

(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 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

 

9

 

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 Current Assets”
means, as at any date of determination, the total assets of NewPageHoldCo and
its Subsidiaries on a consolidated basis that may properly be classified as
current assets in conformity with GAAP, excluding Cash and Cash Equivalents.

 

“Consolidated Current Liabilities”
means, as at any date of determination, the total liabilities of NewPageHoldCo
and its Subsidiaries on a consolidated basis that may properly be classified as
current liabilities in conformity with GAAP, excluding the current portion of
long term debt.

 

“Consolidated Excess Cash Flow”
means, for any period, an amount (if positive) equal to: (i) the sum,
without duplication, of the amounts for such period of (a) Consolidated
Adjusted EBITDA, plus (b) the Consolidated Working Capital Adjustment, minus
(ii) the sum, without duplication, of the amounts for such period of (a) voluntary
and scheduled repayments of Consolidated Total Debt (excluding repayments of
Revolving Loans or Swing Line Loans (as such terms are defined in the Revolving
Credit Agreement) except to the extent the Revolving Commitments (as such term
is defined in the Revolving Credit Agreement) are permanently reduced in
connection with such repayments), (b) Consolidated Capital Expenditures
(net of any proceeds of (y) any related financings with respect to such
expenditures and (z) any sales of assets used to finance such expenditures), (c) Consolidated
Cash Interest Expense, and (d) provisions for current taxes based on
income of NewPageHoldCo and its Subsidiaries and payable in cash with respect
to such period.

 

“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

 

10

 

Expense which shall be
calculated as set forth in the definition thereof, all other amounts 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;

 

11

 

(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 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.

 

“Consolidated Working Capital”
means, as at any date of determination, the excess of Consolidated Current
Assets over Consolidated Current Liabilities.

 

“Consolidated Working Capital
Adjustment” means, for any period on a consolidated basis,
the amount (which may be a negative number) by which Consolidated Working
Capital as of the beginning of such period exceeds (or is less than)
Consolidated Working Capital as of the end of such period.

 

12

 

“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.

 

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

 

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

 

“Credit Party”
means each Person (other than any Agent 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’s 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.

 

“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.

 

13

 

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

 

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

 

“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

 

14

 

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 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

 

15

 

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 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 Term 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.

 

“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 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.

 

16

 

“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 (i) Second Priority Liens that are
subject to the Intercreditor Agreement and the Collateral Trust Agreement and (ii) 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.

 

“Flood Hazard Property”
means any Real Estate Asset subject to a mortgage in favor of Collateral
Trustee, for the benefit of the Lenders, and located in an area designated by
the Federal Emergency Management Agency as having special flood or mud slide
hazards.

 

“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.

 

“Funding Guarantors”
as defined in Section 7.2.

 

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

 

17

 

“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, such
Subsidiary Guarantors shall include NewPage Energy Services LLC, Upland
Resources Inc., Rumford Cogeneration Inc., Rumford Falls Power Company,
Chillicothe Paper, Inc., Escanaba Paper Company, Luke Paper Company, Rumford
Paper Company, and Wickliffe Paper 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.

 

“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 with a Lender Counterparty in

 

18

 

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 with a Lender Counterparty 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 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

 

19

 

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.

 

“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 

 

20

 

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 Term Loans 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 10.3.

 

“Installment” as
defined in Section 2.12.

 

“Installment Date”
as defined in Section 2.12.

 

“Intercreditor Agreement” means the Intercreditor Agreement
substantially in the form of Exhibit L, dated as of the date hereof, among
NewPageCo, the Guarantors, the Collateral Trustee, and JPMorgan Chase Bank,
N.A., in its capacity as the Collateral Agent under the NewPageCo Revolving
Credit Agreement, 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 each April 1, July 1, October 1 and January 1 of each
year, commencing on the first of such dates to occur after the Closing Date
through the final maturity date of such Term Loan.

 

“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
Closing Date or Conversion/Continuation Date thereof, as the case may be; and (ii) thereafter,
commencing on

 

21

 

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 shall extend beyond the Term Loan Maturity 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’s 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.

 

“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 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.

 

22

 

“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 Consent and Estoppel”
means, with respect to any Material Leasehold Interest, a letter, certificate
or other instrument in writing from the lessor under the related lease,
pursuant to which, among other things, the landlord consents to the granting of
a Mortgage on such Leasehold Property by the Credit Party tenant, such Landlord
Consent and Estoppel to be in form and substance acceptable to Collateral
Trustee in its reasonable discretion, but in any event sufficient for
Collateral Trustee to obtain a Title Policy with respect to such Mortgage.

 

“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 Trustee.

 

“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.

 

“Lender Counterparty”
means each Lender or any Affiliate of a Lender counterparty to a Hedge
Agreement (including any Person who is a Lender (and any Affiliate thereof) as
of the Closing Date but subsequently, whether before or after entering into a
Hedge Agreement, ceases to be a Lender) including, without limitation, each
such Affiliate that enters into a joinder agreement with Collateral Trustee.

 

“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.

 

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

 

23

 

“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.

 

“Material Leasehold Interest”
means any Leasehold Property held by a Credit Party which, if not held by such
party, would have a Material Adverse Effect.

 

“Material Real Estate Asset’’
means (i) any fee-owned Real Estate Asset having a fair market value in
excess of $500,000 as of the date of the acquisition thereof or (ii) any
Real Estate Asset that the Requisite Lenders have determined is material to the
business, operations, properties, assets or condition (financial or otherwise)
of NewPageHoldCo or any Subsidiary thereof, including NewPageCo.

 

“MeadWestvaco”
means MeadWestvaco Corporation, a Delaware corporation.

 

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

 

“Mortgage” means a
Mortgage or Deed of Trust substantially in the form of Exhibit J, as it
may be amended, supplemented or otherwise modified from time to time.

 

“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

 

24

 

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 Term 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.

 

“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

 

25

 

(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 Insurance/Condemnation Proceeds”
means an amount equal to:  (i) any
Cash payments or proceeds received by NewPageHoldCo or any of its Subsidiaries (a) under
any casualty insurance policy in respect of a covered loss thereunder or (b) as
a result of the taking of any assets of NewPageHoldCo or any of its
Subsidiaries by any Person pursuant to the power of eminent domain,
condemnation or otherwise, or pursuant to a sale of any such assets to a
purchaser with such power under threat of such a taking, minus (ii) (a) any
actual and reasonable costs incurred by NewPageHoldCo or any of its
Subsidiaries in connection with the adjustment or settlement of any claims of
NewPageHoldCo or such Subsidiary in respect thereof, including, without
limitation, payment of the outstanding principal amount of, premium or penalty,
if any, and interest on any Indebtedness (other than the Term Loans) that is
secured by a Lien on the assets in question and that is required to be repaid
under the terms thereof as a result of such loss, eminent domain, condemnation
or otherwise or such sale, and (b) any bona fide direct costs incurred in connection
with any sale of such assets as referred to in clause (i)(b) of this
definition, including income taxes payable as a result of any gain recognized
in connection therewith and any transfer, documentary or other taxes payable in
connection therewith and legal fees, costs and expenses, and other customary
fees, costs and expenses actually incurred.

 

“NewPageCo” as
defined in the preamble hereto.

 

“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.

 

“NewPageHoldCo 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 Note Indenture 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.

 

26

 

“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).

 

“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, the Senior
Secured Floating Rate Notes and the Senior Subordinated Notes.

 

“Notice” means the
Funding Notice or a Conversion/Continuation Notice.

 

“Obligations” means
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 and Lender
Counterparties, under any Credit Document or Hedge Agreement (including,
without limitation, with respect to a Hedge Agreement, obligations owed
thereunder to any person who was a Lender or an Affiliate of a Lender at the
time such Hedge Agreement was entered into), 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 related
bankruptcy proceeding), payments for early termination of Hedge Agreements,
fees, expenses, indemnification or otherwise.

 

“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

 

27

 

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.

 

“Perfection
Certificate” shall mean a certificate in the form of Exhibit N-1
or any other form approved by the Administrative 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
Administrative 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

 

28

 

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; and

 

(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 (i) in the case of Collateral
not constituting a Real Property Asset, the Liens described in clauses (a),
(b), (c), (d) with respect to Liens on cash and cash deposits, equipment
and fixtures only, (g), (i), (j), (k), (n) and (p) of Section 6.2 and (ii) in
the case of Collateral constituting a Real Property Asset, the Liens described
in clauses (a), (b), (c), (d), (e),  (f),
(j), (k), (l), (m), (n), (s) and (t) 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
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.

 

29

 

“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.

 

“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 the Administrative Agent’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.

 

“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 the percentage obtained by dividing (a) the Term Loan Exposure of
any Lender by (b) the aggregate Term Loan Exposure of all Lenders.

 

30

 

“Purchase Agreement” means that certain Equity and Asset Purchase
Agreement dated as of January 14, 2005 by and between 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.

 

“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 Purchase Agreement, the Revolving Credit Agreement,
the NewPageHoldCo PIK Note 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, and the Transition Services
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.

 

“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.

 

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

 

31

 

“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 Revolving Credit
Agreement, any Senior Secured Floating Rate Notes, the Senior Secured Fixed
Rate Notes or the Senior Subordinated Notes.

 

“Revolving Credit Agreement”
means that certain Revolving 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, and JPMorgan Chase Bank, N.A., as Collateral 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.

 

“Revolving Credit Agreement Documents”
means the Revolving Credit Agreement, the notes issues pursuant thereto 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.

 

“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).

 

“Second Priority” means, with respect to any Lien purported to
be created on any Collateral pursuant to any Collateral Document, that such
Lien is the only Lien to which

 

32

 

such Collateral is subject,
other than (i) First Priority Liens to secure the Indebtedness under the
Revolving Credit Agreement or any refinancing Indebtedness with respect thereto
permitted under Section 6.1, in either case that are subject to the
Intercreditor Agreement and (ii) Permitted Collateral Liens.

 

“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.

 

33

 

“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.

 

“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.

 

34

 

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

 

“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.

 

“Settlement Confirmation” as
defined in Section 10.6(b).

 

“Settlement Service” as defined
in Section 10.6(d).

 

“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

 

35

 

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 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.

 

“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.

 

“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).

 

“Term Loan” means a
Term Loan made by a Lender to NewPageCo pursuant to Section 2.1(a).

 

“Term Loan Commitment”
means the commitment of a Lender to make or otherwise fund a Term Loan and “Term Loan Commitments” means such
commitments of all Lenders in the aggregate. 
The amount of each Lender’s Term Loan Commitment, if any, is set

 

36

 

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 Term Loan Commitments as of the Closing Date is $750,000,000.

 

“Term Loan Exposure”
means, with respect to any Lender, as of any date of determination, the outstanding
principal amount of the Term Loans of such Lender; provided, at any time
prior to the making of the Term Loans, the Term Loan Exposure of any Lender
shall be equal to such Lender’s Term Loan Commitment.

 

“Term Loan Maturity Date”
means the earlier of (i) the 6th anniversary of the Closing Date, and (ii) the
date that all Term Loans shall become due and payable in full hereunder,
whether by acceleration or otherwise.

 

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

 

“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).

 

37

 

“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.

 

“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 a Base Rate Loan or a Eurodollar 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 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

 

38

 

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.   TERM
LOANS

 

2.1.   Term Loans.

 

(a)   Term Loan Commitments.  Subject to the terms and conditions hereof,
each Lender severally agrees to make, on the Closing Date, a Term Loan to
NewPageCo in an amount equal to such Lender’s Term Loan Commitment. NewPageCo
may make only one borrowing under the Term Loan Commitment which shall be on
the Closing Date.  Any amount borrowed
under this Section 2.1(a) and subsequently repaid or prepaid may not
be reborrowed.  Subject to Sections 2.13
and 2.14, all amounts owed hereunder with respect to the Term Loans shall be
paid in full no later than the Term Loan Maturity Date.  Each Lender’s Term Loan Commitment shall
terminate immediately and without further action on the Closing Date after
giving effect to the funding of such Lender’s Term Loan Commitment on such
date.

 

39

 

(b)   Borrowing Mechanics for Term Loans.

 

(i)   NewPageCo shall deliver to Administrative
Agent a fully executed Funding Notice no later than one (1) Business Day
prior to the Closing Date for Base Rate Loans and no later than three (3) Business
Days prior to the Closing Date for Eurodollar Rate Loans.  Promptly upon receipt by Administrative Agent
of such Certificate, Administrative Agent shall notify each Lender of the
proposed borrowing.

 

(ii)   Each Lender shall make its Term Loan
available to Administrative Agent not later than 12:00 p.m. (New York City
time) on the Closing Date, by wire transfer of same day funds in Dollars, at
the Principal Office designated by Administrative Agent.  Upon satisfaction or waiver of the conditions
precedent specified herein, Administrative Agent shall make the proceeds of the
Term Loans available to NewPageCo on the Closing Date by causing an amount of
same day funds in Dollars equal to the proceeds of all such Term Loans received
by Administrative Agent from Lenders to be credited to the account of NewPageCo
at the Principal Office designated by Administrative Agent or to such other
account as may be designated in writing to Administrative Agent by NewPageCo.

 

2.2.   [Reserved].

 

2.3.   [Reserved].

 

2.4.   [Reserved].

 

2.5.   Pro Rata Shares; Availability of Funds.

 

(a)   Pro Rata Shares.  All Term 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 Term Loan requested hereunder or purchase a participation
required hereby nor shall any Term Loan 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 Term 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 Closing Date that such Lender does not
intend to make available to Administrative Agent the amount of such Lender’s
Term Loan requested on the Closing Date, Administrative Agent may assume that
such Lender has made such amount available to Administrative Agent on the
Closing Date and Administrative Agent may, in its sole discretion, but shall
not be obligated to, make available to NewPageCo a corresponding amount on the

 

40

 

Closing 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 the Closing 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 the Closing 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 Term Loan
Commitments hereunder or to prejudice any rights that NewPageCo may have
against any Lender as a result of any default by such Lender hereunder.

 

2.6.   Use of Proceeds. 
The proceeds of the Term Loans 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, and (iii) to
fund the Commodities Hedge Agreement.  No
portion of the proceeds of any Term Loan shall be used in any manner that
causes or might cause such Term Loan 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; Term Loan 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 Term 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 NewPageCo’s Obligations in respect
of any applicable Term 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 Term 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 Term
Loans in accordance with the provisions of Section 10.6, and each
repayment

 

41

 

or prepayment in respect of the principal amount of the Term
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 NewPageCo’s
Obligations in respect of any Term 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)   Term Loan 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 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 10.6)
on the Closing Date (or, if such notice is delivered after the Closing Date,
promptly after NewPageCo’s receipt of such notice) a Term Loan Note or Term
Loan Notes to evidence such Lender’s Term Loan.

 

2.8.   Interest on Term Loans.

 

(a)   Except as otherwise set forth herein, each
Term 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) if
a Base Rate Loan, at the Base Rate plus the Applicable Margin; or

 

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

 

(b)   The basis for determining the rate of
interest with respect to any Term Loan, and the Interest Period with respect to
any Eurodollar Rate Loan, shall be selected by NewPageCo and 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 Term 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 Term 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

 

42

 

Conversion/Continuation Notice, such Term 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
Term 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 Term Loan, the
date of the making of such Term Loan or the first day of an Interest Period
applicable to such Loan or, with respect to a Term Loan, the last Interest
Payment Date with respect to such Term 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 Term Loan or the expiration date of
an Interest Period applicable to such Term 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 Term Loan is repaid on the same day on which it
is made, one day’s interest shall be paid on that Term Loan.

 

(e)   Except as otherwise set forth herein,
interest on each Term Loan (i) shall accrue on a daily basis on and to the
March 31st, June 30th, September 30th
and December 31st most recently ended prior to such payment
date and shall be payable in arrears on each Interest Payment Date; (iii) shall
accrue on a daily basis and shall be payable in arrears upon any prepayment of
that Term Loan, whether voluntary or mandatory, to the extent accrued on the
amount being prepaid; and (iv) shall accrue on a daily basis and shall be
payable in arrears at maturity of the Term Loans, including final maturity of
the Term Loans; provided, however, with respect to any voluntary
prepayment of a Base Rate Loan, accrued interest shall instead be payable on
the applicable Interest Payment Date. Notwithstanding anything to the contrary
contained in this Section 2.8(e) or any other provision of this
Agreement, during any period that the Settlement Service is utilized for
assignments pursuant to Section 10.06(d), interest on each Term Loan shall
only be payable in arrears on each Interest Payment Date and upon any
prepayment of that Term Loan, whether voluntary or mandatory.

 

43

 

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
Term 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

 

(ii)   upon the expiration of any Interest Period
applicable to any Eurodollar Rate Loan, to continue all or any portion of such
Term 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 Term Loans
outstanding and, to the extent permitted by applicable law, any interest
payments on the Term 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 Term 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

 

44

 

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.  NewPageCo agrees to pay to Agents such fees
in the amounts and at the times separately agreed upon.

 

2.12.   Scheduled Payments. 
The principal amounts of the Term Loans shall be repaid in consecutive
quarterly installments (each, an “Installment”)
in the aggregate amounts set forth below on the four quarterly scheduled
Interest Payment Dates applicable to Term Loans (each, an “Installment Date”), commencing October 1,
2005:

 

	
  Date

  	
   

  	
  Installment

  	
   

  
	
  October 1,
  2005

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  January 1,
  2006

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  April 1,
  2006

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  July 1,
  2006

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  October 1,
  2006

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  January 1,
  2007

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  April 1,
  2007

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  July 1,
  2007

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  October 1,
  2007

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  January 1,
  2008

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  April 1,
  2008

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  July 1,
  2008

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  October 1,
  2008

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  January 1,
  2009

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  April 1,
  2009

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  July 1,
  2009

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  October 1,
  2009

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  January 1,
  2010

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  April 1,
  2010

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  July 1,
  2010

  	
   

  	
  $

  	
  1,875,000.00

  	
   

  
	
  October 1,
  2010

  	
   

  	
  $

  	
  178,125,000.00

  	
   

  
	
  January 1,
  2011

  	
   

  	
  $

  	
  178,125,000.00

  	
   

  
	
  April 1,
  2011

  	
   

  	
  $

  	
  178,125,000.00

  	
   

  
	
  Term Loan
  Maturity Date

  	
   

  	
  $

  	
  178,125,000.00

  	
   

  

 

45

 

Notwithstanding the foregoing, (x) such Installments
shall be reduced in connection with any voluntary or mandatory prepayments of
the Term Loans in accordance with Sections 2.13, 2.14 and 2.15, as
applicable; and (y) the Term Loans, together with all other amounts owed
hereunder with respect thereto, shall, in any event, be paid in full no later
than the Term Loan Maturity Date.

 

2.13.   Voluntary Prepayments.

 

(a)                                  Any time
and from time to time:

 

(i)                                     with respect
to Base Rate Loans, NewPageCo may prepay any such Term Loans without premium or
penalty 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

 

(ii)                                  with respect
to Eurodollar Rate Loans, NewPageCo may prepay any such Term Loans without
premium or penalty 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.

 

(b)                                 All such
prepayments shall be made:

 

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

 

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

 

in each case given to Administrative Agent 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

 

46

 

Administrative Agent will promptly transmit such
telephonic or original notice for Term Loans by telefacsimile or telephone to
each Lender).  Upon the giving of any
such notice, the principal amount of the Term 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).

 

2.14.   Mandatory Prepayments.

 

(a)   Asset Sales.  No later than the second Business Day
following the date of receipt by NewPageHoldCo or any of its Subsidiaries of
any Net Asset Sale Proceeds (other than Net Asset Sale Proceeds arising from or
allocated to the sale of any Revolving Credit Collateral as defined in the
Intercreditor Agreement), NewPageCo shall prepay the Term Loans as set forth in
Section 2.15 in an aggregate amount equal to such Net Asset Sale Proceeds;
provided, so long as no Default or Event of Default shall have occurred
and be continuing, NewPageCo shall have the option, directly or through one or
more of its Subsidiaries, to invest, or enter into binding commitments to
invest, Net Asset Sale Proceeds within one hundred eighty days of receipt
thereof in other assets of the general type used or useful in the Permitted
Businesses; provided further, all such Net Asset Sale
Proceeds committed to be invested within one hundred eighty days of receipt
thereof (but not yet invested at such time) shall be so invested within 360
days of receipt thereof; provided further, that any such Net
Asset Sale Proceeds not so committed to be reinvested within such 180 day
period or not actually reinvested within such 360 day period shall be applied
to prepay the Term Loans in accordance with Section 2.15.

 

(b)   Insurance/Condemnation Proceeds.  No later than the first Business Day following
the date of receipt by NewPageHoldCo, or Administrative Agent as loss payee, of
any Net Insurance/Condemnation Proceeds (other than Net Insurance/Condemnation
Proceeds arising from or with respect to any Revolving Credit Collateral as
defined in the Intercreditor Agreement), NewPageCo shall prepay the Term Loans
as set forth in Section 2.15 in an aggregate amount equal to such Net
Insurance/Condemnation Proceeds; provided, so long as no Default or
Event of Default shall have occurred and be continuing NewPageCo shall have the
option, directly or through one or more of its Subsidiaries to invest, or enter
into binding commitments to invest,  such
Net Insurance/Condemnation Proceeds within one hundred eighty days of receipt
thereof in other assets of the general type used or useful in the Permitted
Businesses, which investment may include the repair, restoration or replacement
of the applicable assets thereof; provided further, all such
Net Insurance/Condemnation Proceeds shall be so invested within 360 days of
receipt thereof.

 

(c)   Issuance of Equity Securities.  No later than the second Business Day
following the date of receipt by NewPageHoldCo of any Cash proceeds from a
capital contribution to, or the issuance of any Capital Stock of, NewPageHoldCo
or any of its Subsidiaries (other than pursuant to any employee stock or stock
option compensation plan),

 

47

 

NewPageCo shall prepay the Term Loans as set forth in Section 2.15
in an aggregate amount equal to 50% of such proceeds, net of underwriting
discounts and commissions and other reasonable costs and expenses associated
therewith, including reasonable legal fees and expenses; provided, that
so long as no Default or Event of Default shall have occurred and be
continuing, no such prepayments shall be required pursuant to this clause (c) with
any proceeds (other than proceeds of Permitted Cure Securities, which in any
event shall be used to prepay Term Loans) 
to the extent that any such proceeds are required to be used (and are
used) to prepay or redeem any of the NewPageHoldCo PIK Notes pursuant to the
terms of the NewPageHoldCo PIK Note Documents. 

 

(d)   Issuance of Debt.  No later than the first Business Day
following the date of receipt by NewPageHoldCo or any of its Subsidiaries of
any Cash proceeds from the incurrence of any Indebtedness of NewPageHoldCo or
any of its Subsidiaries (other than with respect to any Indebtedness permitted
to be incurred pursuant to Section 6.1), NewPageCo shall prepay the Term
Loans as set forth in Section 2.15 in an aggregate amount equal to 100% of
such proceeds, net of underwriting discounts and commissions and other
reasonable costs and expenses associated therewith, including reasonable legal
fees and expenses.

 

(e)   Consolidated Excess Cash Flow.  In the event that there shall be Consolidated
Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year ending December 31,
2005), NewPageCo shall, no later than ninety days after the end of such Fiscal
Year, prepay the Term Loans as set forth in Section 2.15 in an aggregate
amount equal to the percentage of such Consolidated Excess Cash Flow as
determined by reference to the Total Leverage Ratio in effect for such period
determined from the most recent Compliance Certificate delivered pursuant to Section 5.1(d) calculating
Total Leverage Ratio:

 

	
  Leverage Ratio

  	
   

  	
  Prepayment%

  
	
  >3.75:1.00

  	
   

  	
  75 %

  
	
   

  	
   

  	
   

  	
   

  
	
  <3.75:1.00

  and

  >3.25:1.00

  	
   

  	
  50 %

  
	
   

  	
   

  	
   

  	
   

  
	
  <3.25:1.00

  and

  >2.50:1.00

  	
   

  	
  25 %

  
	
   

  	
   

  	
   

  	
   

  
	
  <2.50:1.00

  	
   

  	
  0 %

  

 

48

 

Consolidated Excess Cash Flow for
the Fiscal Year ending December 31, 2005 shall be calculated for the
period commencing on the Closing Date and ending December 31, 2005.

 

(f)   Prepayment Certificate.  Concurrently with any prepayment of the Term
Loans pursuant to Sections 2.14(a) through 2.14(e), NewPageCo shall
deliver to Administrative Agent a certificate of an Authorized Officer
demonstrating the calculation of the amount of the applicable net proceeds or
Consolidated Excess Cash Flow, as the case may be.  In the event that NewPageCo shall
subsequently determine that the actual amount received exceeded the amount set
forth in such certificate, NewPageCo shall promptly make an additional prepayment
of the Term Loans in an amount equal to such excess, and NewPageCo shall
concurrently therewith deliver to Administrative Agent a certificate of an
Authorized Officer demonstrating the derivation of such excess.

 

2.15.   Application of Prepayments.

 

(a)   Application of Prepayments.  Any voluntary prepayments of any Term Loan
pursuant to Section 2.13 shall be applied at NewPageCo’s option, either (i) first,
to such scheduled prepayments with respect thereto due on the Installment Dates
occurring within the 12 months following such prepayment and, second, on a pro
rata basis to reduce the scheduled remaining Installments of principal on such
Term Loan or (ii) on a pro rata basis to reduce the schedule remaining
Installments of principal on such Term Loan. 
Any mandatory prepayments of any Term Loan pursuant to Section 2.14
shall be applied to prepay the Term Loans (in accordance with the respective
outstanding principal amounts thereof) on a pro rata basis to reduce the
scheduled remaining Installments of principal on such Term Loan.

 

(b)   Application of Prepayments of Term Loans
to Base Rate Loans and Eurodollar Rate Loans.  Any prepayment of any Term 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).

 

49

 

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 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 Term Loan 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”, whenever any payment to be made hereunder with
respect to any Term 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; provided however that such
extension of time shall not be included in the computation of the payment of
interest 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 noon (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

 

50

 

accrue on any principal as to which a non-conforming payment
is made until such funds become 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 Term 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, 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.

 

51

 

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 Term 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 Term 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 Term
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 Term Loans as, or to convert Term 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 Term 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

 

52

 

to the provisions of 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 Term
Loans as, or to convert Term 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 Term 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.

 

53

 

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 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 Term 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 shall have
determined that the adoption, effectiveness, phase-in or applicability after
the Closing Date of

 

54

 

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 Term Loans, or
participations therein or other obligations hereunder with respect to the Loans
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 this 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 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.

 

(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 under any of the Credit

 

55

 

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 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

 

56

 

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.

 

(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

 

57

 

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 agrees that, as
promptly as practicable after the officer of such Lender responsible for
administering its Term Loans 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 Term
Loans, 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 Term Loans through such
other office or in accordance with such other measures, as the case may be,
would not otherwise adversely affect such Term Loans or the interests of such
Lender; 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.

 

58

 

2.22.   [Reserved].

 

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) in connection with any
proposed amendment, modification, termination, waiver or consent with respect
to any of the provisions hereof as contemplated by Section 10.5(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 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 in full to one or more
Eligible Assignees (each a “Replacement Lender”)
in accordance with the provisions of Section 10.6 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 Term Loans of the
Terminated Lender, (B) an amount equal to all unreimbursed drawings 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.  Upon the prepayment of all
amounts owing to any Terminated Lender such Terminated Lender shall no longer
constitute a “Lender” for purposes hereof; provided, any rights of such
Terminated Lender to indemnification hereunder shall survive as to such
Terminated Lender.

 

SECTION 3.   CONDITIONS
PRECEDENT

 

3.1.   Closing Date.  The obligation of any Lender to make a Term
Loan on the Closing Date is subject to the satisfaction, or waiver in
accordance with Section 10.5, of the following conditions on or before the
Closing Date:

 

59

 

(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 Revolving Credit Agreement in an aggregate amount in
cash not less than $350,000,000;

 

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

 

(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

 

60

 

(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) the 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); and

 

(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) repaid in full all Existing Indebtedness, (ii) terminated
any commitments to 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.

 

61

 

(g)   Transaction Costs.  On or prior to the Closing Date, NewPageCo
shall have delivered to Administrative Agent NewPageCo’s reasonable best
estimate of the Transactions 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)   Real Estate Assets.  In order to create in favor of Collateral
Trustee, for the benefit of Secured Parties, a valid and, subject to any filing
and/or recording referred to herein, perfected First Priority security interest
in certain Real Estate Assets, Collateral Trustee shall have received from
NewPageCo and each applicable Guarantor:

 

(i)   A fully executed and notarized Mortgage, in
proper form for recording in all appropriate places in all applicable
jurisdictions, encumbering each Real Estate Asset listed in Schedule 3.1(i) (each,
a “Closing Date Mortgaged Property’’);

 

(ii)   an opinion of counsel (which counsel shall be
reasonably satisfactory to Administrative Agent, it being agreed that the
counsel listed in Schedule 3.1(i) are deemed satisfactory) in each
state in which a Closing Date Mortgaged Property identified on Schedule 3.1(i) as
being covered by an opinion is located with respect to the enforceability of
the form(s) of Mortgages to be recorded in such state (subject to, among other
things, laws applicable to creditors’ rights and equitable principles), and
such other matters as Administrative Agent may reasonably request, in each case
in form and substance reasonably satisfactory to Administrative Agent;

 

(iii)   (a) ALTA mortgagee title insurance
policies or unconditional commitments therefor (or, if an Individual Property
is in a State which does not permit the issuance of such ALTA policy, such form
as shall be permitted in such State and acceptable to Administrative Agent)
issued by one or both of First American Title Insurance Company and Fidelity
National Title Insurance Company of New York with

 

62

 

respect to each Closing Date Mortgaged Property (each, a “Title
Policy”) identified as being covered by a title policy on Schedule 3.1(i) hereto,
as set forth in Schedule 3.1(i), in amounts not less than the fair market
value of each Closing Date Mortgaged Property, together with a title report
issued by a title company with respect thereto, dated not more than thirty days
prior to the Closing Date and copies of all recorded documents listed as
exceptions to title or otherwise referred to therein, each in form and
substance reasonably satisfactory to Administrative Agent and (B) evidence
satisfactory to Administrative Agent that such Credit Party has paid to the
title company or to the appropriate governmental authorities all expenses and
premiums of the title company and all other sums required in connection with
the issuance of each Title Policy and all recording and stamp taxes (including
mortgage recording and intangible taxes) payable in connection with recording
the Mortgages for each Closing Date Mortgaged Property in the appropriate real
estate records;

 

(iv)   evidence of flood insurance with respect to
each Flood Hazard Property with respect to which the improvements thereon are
located in a community that participates in the National Flood Insurance
Program, in each case in compliance with any applicable regulations of the
Board of Governors of the Federal Reserve System, in form and substance
reasonably satisfactory to Administrative Agent; and

 

(v)   so called “Express Maps”, to the extent
required to be delivered to NewPageHoldCo or any of its Affiliates as a
condition the closing under the Purchase Agreement covering all Closing Date
Mortgaged Properties which are identified as being covered by Express Maps on Schedule 3.1(i) and
are not Leasehold Properties, dated on or prior to the Closing Date.

 

(j)   Personal Property Collateral.  In order to create in favor of Collateral
Trustee, for the benefit of Secured Parties, a valid, perfected First Priority
security interest or Second Priority security interest, as the case may be, in
the personal property Collateral, Collateral Trustee shall have received:

 

(i)   evidence satisfactory to Administrative 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 Administrative Agent,
of all effective UCC financing statements (or

 

63

 

equivalent filings) made with respect to any personal or
mixed property of any Credit Party in the 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 Administrative Agent) with respect to the creation
and perfection of the security interests in favor of Collateral Trustee in such
Collateral and such other matters governed by the laws of each jurisdiction in
which any Credit Party is organized as Administrative Agent may reasonably request,
in each case in form and substance reasonably satisfactory to Administrative
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 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 (iii) 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
Administrative Agent or Collateral Trustee.

 

(k)   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(k), hereto, each of
which is reasonably satisfactory for purposes of this condition.

 

(l)   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

 

64

 

financial statements of the Coated
and Carbonless Papers Group showing pro forma 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.

 

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

 

(n)   Opinion 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).

 

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

 

(p)   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.

 

(q)   Closing Date.  Lenders shall have made the Term Loans to
NewPageCo on or before June 30, 2005.

 

(r)   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

 

65

 

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.

 

(s)   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.

 

(t)   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.

 

(u)   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.

 

(v)   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

 

(w)   Funding Notice.  Administrative Agent shall have received a
fully executed and delivered Funding Notice.

 

(x)   Representations and Warranties.  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 Closing 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

 

66

 

“materiality” or “Material Adverse Effect” shall be true and
correct in all respects subject to such qualification.

 

(y)   No Events of Default. No event shall
have occurred and be continuing or would result from the consummation of the
Term Loans that would constitute an Event of Default or a Default.

 

(z)   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, or conversion/continuation, 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 or continuation/conversion. 
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 Term 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 to enter into this
Agreement and to make the Term Loans to be made thereby, each Credit Party
represents and warrants to each Lender, on the Closing 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

 

67

 

or in good standing has not had, and could not be reasonably expected
to have, a Material Adverse Effect.

 

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.

 

68

 

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 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 Administrative Agent or
Collateral Trustee 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 of 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.

 

69

 

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.

 

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) valid, insurable
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
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

 

70

 

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 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

 

71

 

consequences, direct or indirect, of such default or defaults, if any,
could not reasonably be expected to have a Material Adverse Effect.

 

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 Term 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.

 

72

 

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 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.

 

73

 

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.

 

4.23.   Related Agreements.

 

(a)   Delivery.  NewPageHoldCo and NewPageCo have delivered to
Syndication Agent and Administrative Agent complete and correct copies of each
Related Agreement and of all exhibits and schedules thereto as of 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

 

74

 

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, 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 Term 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.   Collateral Documents.

 

(a)   The Pledge and Security Agreement is
effective to create in favor of the Collateral Trustee 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 4.1 to the
Perfection Certificate and (ii) upon the taking of possession or control
by the Collateral Trustee of the Collateral with

 

75

 

respect to which a security interest may be perfected only by
possession or control (which possession or control shall be given to the
Collateral Trustee to the extent possession or control by the Collateral
Trustee 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 (A) the Intellectual
Property (as defined in the Pledge and Security Agreement) and (B) such
Collateral in which a security interest cannot be perfected under the UCC as in
effect at the relevant time in the relevant jurisdiction), in each case subject
to no Liens other than Permitted Collateral Liens.

 

(b)   When the actions set forth in subsection (a)(i) above
are taken, and when the Pledge and Security Agreement or a short form thereof
is properly filed or recorded in the United States Patent and Trademark Office
and the United States Copyright Office, the Lien created by such Pledge and
Security Agreement shall constitute a fully perfected First Priority Lien
(subject in the case of priority only to Permitted Collateral Liens) on, and
security interest in, all right, title and interest of the grantors thereunder
in the Intellectual Property (as defined in such Pledge and Security
Agreement), in each case subject to no Liens other than Permitted Collateral
Liens.

 

(c)   Each Mortgage executed and delivered as of
the Closing Date is, or, to the extent any Mortgage is duly executed and
delivered thereafter by the relevant Credit Party, will be, effective to
create, in favor of the Collateral Agent, for its benefit and the benefit of
the Secured Parties, a legal, valid and enforceable First Priority Lien on and
security interest in all of the Credit Parties’ right, title and interest in
and to the Closing Date Mortgaged Properties thereunder and the proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule 3.1(i),
(or, in the case of any Mortgage executed and delivered after the date thereof
in accordance with the provisions of Sections 5.11 and 5.13, when such Mortgage
is filed in the offices specified in the local counsel opinion, if any,
delivered with respect thereto in accordance with the provisions of Sections
5.11 and 5.13) the Mortgages shall constitute fully perfected Liens on, and
security interests in, all right, title and interest of the Credit Parties in
the Closing Date Mortgaged Properties and the proceeds thereof, in each case
prior and superior in right to any other Person (except as contemplated by the
Intercreditor Agreement), subject to Permitted Collateral Liens and other than
Liens reasonably acceptable to Administrative Agent.

 

(d)   Each Collateral Document delivered pursuant
to Section 5.13 will, upon execution and delivery thereof, be effective to
create in favor of the Collateral Trustee, for the benefit of the Secured
Parties, a legal, valid and enforceable security interest in and 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 Liens.

 

76

 

4.28.   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 Trustee 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 Revolving Credit Agreement) in an aggregate
amount that exceeds $25,000.

 

SECTION 5.   AFFIRMATIVE COVENANTS

 

Each Credit Party covenants and agrees that so long as
any Term Loan Commitment is in effect and until payment in full of all
Obligations, 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 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

 

77

 

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;

 

(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 

 

78

 

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
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;

 

79

 

(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 Term 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 Years, (iii) forecasts demonstrating
the projected compliance with the requirements of Section 6.8 for the
current and immediately succeeding Fiscal Years and (iv) forecasts
demonstrating the liquidity of NewPageHoldCo and its Subsidiaries for the
current and immediately succeeding Fiscal Years 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 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 quarterly
financial statements pursuant to Section 5.1(b) and the annual
financial statements pursuant to 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 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

 

80

 

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
Administrative Agent and Collateral Trustee 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 Trustee 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 Administrative Agent and
Collateral Trustee 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 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

 

81

 

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).

 

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

 

82

 

Party or 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.  Without
limiting the generality of the foregoing, NewPageHoldCo will maintain or cause
to be maintained (a) flood insurance with respect to each Flood Hazard
Property with respect to which the improvements thereon (if any) are located in
a flood zone as identified in the National Flood Insurance Program, in each
case in compliance with any applicable regulations of the Board of Governors of
the Federal Reserve System, and (b) replacement value casualty insurance
on the Collateral under such policies of insurance, with such insurance
companies, in such amounts, with such deductibles, and covering such risks as
are at all times carried or maintained under similar circumstances by Persons
of established reputation engaged in similar businesses.  Each such policy of insurance shall (i) name
the Collateral Trustee 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 the Collateral Trustee, that names the Collateral Trustee as the
loss payee thereunder and provides for at least thirty days’ prior written
notice to the Collateral Trustee of any modification or cancellation of such
policy (or 10 days in the event of
cancellation for non-payment of the applicable premium) and waiver of
subordination in favor of the Collateral Trustee of any claim of 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 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

 

83

 

extracts from its and their financial and accounting records, and to
discuss its and 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;

 

84

 

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

 

85

 

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 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

 

86

 

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 relevant
Governmental Authorities regarding the results of any site visit, observation,
testing 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)   Privileged Documents.  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 Trustee 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), 3.1(m) and
3.1(n).  In the event that any Person
becomes a Foreign Subsidiary of NewPageCo, and the ownership interests of such
Foreign Subsidiary are owned by NewPageCo or by any Domestic Subsidiary
thereof, NewPageCo shall, or shall cause such Domestic Subsidiary to, deliver,
all such documents, instruments, agreements, and certificates as are similar to
those described in Sections 3.1(b), and NewPageCo shall take, or shall cause
such Domestic Subsidiary to take, all of the actions referred to in Section 3.1(j)(i) necessary
to grant and to perfect a First Priority Lien in favor of Collateral Trustee,
for the benefit of Secured Parties, under the Pledge and Security Agreement in
65% of such ownership interests.  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.   Additional Material Real Estate Assets.  In the event that
after the Closing Date any Credit Party acquires a Material Real Estate Asset
or a Material Leasehold Interest or real

 

87

 

property owned or leased by any Credit Party on the Closing Date
becomes a Material Real Estate Asset or a Material Leasehold Interest and such
interest has not otherwise been made subject to the Lien of the Collateral
Documents in favor of Collateral Trustee, for the benefit of Secured Parties,
then such Credit Party, promptly but in any event not more than 60 days after
acquiring such Material Real Estate Asset or, if requested by the
Administrative Agent or the Collateral Trustee, such Material Leasehold
Interest, shall take all such actions and execute and deliver, or cause to be
executed and delivered, all such mortgages, documents, instruments, agreements,
opinions and certificates similar to those described in Sections 3.1(i), 3.1(j)
and 3.1(k) with respect to each such Material Real Estate Asset or such
Material Leasehold Interest, together with a Landlord Consent and Estoppel
Certificate in the case of a Material Leasehold Interest, that the
Administrative Agent or the Collateral Trustee shall reasonably request to
create in favor of Collateral Trustee, for the benefit of Secured Parties, a
valid and, subject to any filing and/or recording referred to herein, perfected
First Priority Lien in such Material Real Estate Asset or Material Leasehold
Interest.  In addition to the foregoing,
NewPageCo shall, at the request of Requisite Lenders, deliver, from time to
time, to Administrative Agent such appraisals as are required by law or
regulation of Real Estate Assets or Material Leasehold Interests with respect
to which Collateral Trustee has been granted a Lien.

 

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.

 

5.13.   Security Interests; Further Assurances. 
Promptly, upon the reasonable request of the Administrative Agent, the
Collateral Trustee 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 Trustee 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 Trustee from time to time such other
documentation, consents, authorizations, 

 

88

 

approvals and orders in form and substance reasonably satisfactory to
the Administrative Agent and the Collateral Trustee as the Administrative Agent
and the Collateral Trustee 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 Trustee 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 Trustee or
the Lenders may be so required to obtain. 
If the Administrative Agent, the Collateral Trustee or the Requisite Lenders determine that they
are required by law or regulation to have appraisals prepared in respect of any
Real Estate Asset of any Credit Party constituting Collateral, NewPageCo shall
provide to the Administrative Agent and Collateral Trustee appraisals that
satisfy the applicable requirements of the Real Estate Appraisal Reform
Amendments of FIRREA and are otherwise in form and substance satisfactory to
the Administrative Agent and the Collateral Trustee.

 

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 its Subsidiaries 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.

 

5.15.   Information Regarding Collateral.

 

(a)   Furnish to the Administrative Agent and the
Collateral Trustee 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
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

 

89

 

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.

 

SECTION 6.   NEGATIVE
COVENANTS

 

Each Credit Party
covenants and agrees that, so long as any Term Loan Commitment is in effect and
until payment in full of all Obligations, 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:

 

90

 

(a)   the Obligations and the Indebtedness under
the Revolving Credit Agreement in an amount not to exceed a principal amount
equal to $350,000,000 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 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 Trustee, 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)   (i) 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 (ii) 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;

 

91

 

(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 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

 

92

 

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;

 

(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; and

 

(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

 

93

 

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 Trustee
for the benefit of Secured Parties granted pursuant to any Credit Document, (ii) Liens
granted pursuant to the Revolving Credit 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, mechanics, repairmen, workmen, suppliers 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

 

94

 

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;

 

(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;

 

95

 

(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 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.

 

96

 

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 Revolving Credit Agreement, the
NewPageHoldCo PIK Note Indenture, the Senior Secured Floating Rate Notes and
the Senior Secured Fixed Rate Notes, in each case, as in effect on the date
hereof and (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 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, and NewPageCo may make repayments and prepayments required or
permitted pursuant to the terms of the Revolving Credit Agreement and (ii) 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;

 

97

 

(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 of 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);

 

98

 

(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 Revolving Credit Agreement, the NewPageHoldCo PIK Notes, the 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; and

 

 (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 Revolving Credit Agreement, the
NewPageHoldCo PIK Note Documents, the Senior Secured Floating Rate Notes
Documents, the Senior Secured Fixed Rate Notes Documents, and 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 sale agreements, joint
venture agreements

 

99

 

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 or Capital Stock of a Person acquired by
NewPageHoldCo or 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) in agreements set forth
on Schedule 6.6, (x) arising under applicable laws, rules, regulations or
orders, and (xi) 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;

 

100

 

(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;

 

101

 

(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; and

 

(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.  NewPageHoldCo shall not permit the Interest
Coverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending September 30, 2005, to be less than the correlative
ratio indicated:

 

	
  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.  NewPageHoldCo shall not permit the Fixed
Charge Coverage Ratio as of the last day of any Fiscal Quarter, beginning with
the Fiscal Quarter ending September 30, 2005, to be less than 1.00:1.00.

 

(c)   Total Leverage Ratio.  NewPageHoldCo shall not permit the Total
Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending September 30, 2005, to exceed the correlative ratio
indicated: 

 

102

 

	
  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.  NewPageHoldCo shall not permit the Senior
Leverage Ratio as of the last day of any Fiscal Quarter, beginning with the
Fiscal Quarter ending September 30, 2005, to exceed the correlative ratio
indicated: 

 

103

 

	
  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

  	
   

  

 

104

 

(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 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, 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

 

105

 

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
of the applicable measurement period prior to the relevant acquisition at the
weighted average of the interest rates applicable to outstanding Term 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.

 

106

 

(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 NewPageHoldCo’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
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;

 

107

 

(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

 

(f)   prior to receipt of notice from the
Administrative Agent or the Collateral Trustee 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)

 

108

 

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.

 

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
Agreement, 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

 

109

 

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 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 the NewPageHoldCo PIK Note Indebtedness (or
a trustee or other representative on their behalf) 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

 

110

 

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 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.

 

111

 

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 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,

 

112

 

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 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 or the applicable Hedge Agreement and any applicable security
agreement, 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 or the Hedge Agreements; 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 or the Hedge Agreements, 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, any of the Hedge Agreements 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, such Hedge Agreement
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 any of the Hedge Agreements 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

 

113

 

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 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, the Hedge Agreements 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.

 

114

 

7.6.   Guarantors’ Rights of Subrogation,
Contribution, etc.  Until the
Guaranteed Obligations shall have been indefeasibly paid in full, 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
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, 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

 

115

 

obligated to the Borrower or any Contributing Guarantor on any account
or other Indebtedness of NewPageCo or any Guarantor and the Collateral Trustee
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 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.  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 Term Loan may be made to NewPageCo or continued from time to time,
and any Hedge Agreements may be entered into from time to time, in each case
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 or at the time such Hedge Agreement is entered into, as the case
may be.  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 the Hedge Agreements, 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.

 

116

 

(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 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 Term Loan, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment or
otherwise; or (ii) any interest on any Term Loan or any fee or any other
amount due hereunder within five days after the date due; or

 

117

 

(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 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

 

118

 

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 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

 

119

 

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 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 Trustee 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

 

120

 

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

 

(m)   Subordinated 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) 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 Term Loans,  and (II) all other Obligations; and (B) Administrative
Agent may cause Collateral Trustee to enforce any and all Liens and security
interests created pursuant to Collateral Documents.

 

SECTION 9.   AGENTS

 

9.1.   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. Each Agent
hereby agrees to act upon the express conditions contained herein and the other
Credit Documents, as applicable.  The
provisions of this Section 9 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 9.

 

121

 

9.2.   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 Trustee to execute and deliver the
Intercreditor Agreement and to take such action, and to exercise the powers,
rights and remedies granted to the Collateral Trustee thereunder and with
respect thereto. Each Lender irrevocably authorizes the Collateral Trustee to
execute and deliver the Collateral Trust Agreement, 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 Trustee thereunder and with respect
thereto.

 

9.3.   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 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 or
any person providing the Settlement Service 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 Term 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 Term Loans 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

 

122

 

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 10.5) 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, including any Settlement Confirmation or
other communication issues by any Settlement Service, 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 10.5).

 

(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 9.3 and of Section 9.6
shall apply to any the Affiliates of 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 9.3
and of Section 9.6 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

 

123

 

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.

 

9.4.   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 Term Loans, 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.

 

9.5.   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 Term Loans
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 of the Term 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 Term 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.

 

9.6.   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

 

124

 

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.

 

9.7.   Successor Administrative Agent.  Administrative Agent may resign at any time
by giving thirty days’ prior written notice thereof to Lenders and NewPageCo,
and Administrative Agent may be removed at any time with or without cause by an
instrument or concurrent instruments in writing delivered to NewPageCo and
Administrative Agent 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; 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 hereunder by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent and the retiring or removed
Administrative Agent shall promptly (i) transfer to such successor
Administrative Agent 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 under the Credit Documents, and (ii) execute
and deliver to such successor Administrative Agent 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 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 resignation or removal hereunder as
Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent hereunder.

 

125

 

9.8.   Collateral Documents and Guaranty.

 

(a)   Collateral Trustee and Agents under
Collateral Documents and Guaranty. 
Each Lender hereby authorizes the Administrative Agent to appoint the
Collateral Trustee under the Collateral Trust Agreement to act on behalf of the
Lenders.  Each Lender hereby further
authorizes Administrative Agent or Collateral Trustee, 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 10.5,
without further written consent or authorization from Lenders, Administrative
Agent or Collateral Trustee, 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 give such consent under Section 10.5) 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 10.5) 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 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
Trustee, and (ii) in the event of a foreclosure by Collateral Trustee on
any of the Collateral pursuant to a public or private sale, Collateral Trustee
or any Lender may be the purchaser of any or all of such Collateral at any such
sale and Collateral Trustee, 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 Trustee at such sale.

 

9.9.   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

 

126

 

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 10.   MISCELLANEOUS

 

10.1.   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, or
Administrative Agent 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, 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 9.3(c) hereto
as designated by the Administrative Agent from time to time.

 

10.2.   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 matters requested by NewPageCo; (d) all the actual and
reasonable costs and expenses of creating and perfecting Liens in favor of
Collateral Trustee, 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; (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 Trustee 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

 

127

 

Term Loans and Term Loan 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.

 

10.3.   Indemnity.

 

(a)   In addition to the payment of expenses
pursuant to Section 10.2, 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 officers,
partners, directors, trustees, employees, agents, sub-agents and Affiliates of
each Agent and each Lender (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
defend, indemnify, pay and hold harmless set forth in this Section 10.3
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 Term 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.

 

128

 

10.4.   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 and
under the other Credit Documents, including all claims of any nature or
description arising out of or connected hereto 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 Term
Loans 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 Trustee or any Lender.

 

10.5.   Amendments and Waivers.

 

(a)   Requisite Lenders’ Consent.  Subject to Section 10.5(b) and
10.5(c), 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.

 

(b)   Affected Lenders’ Consent.  Without the written consent of each Lender
(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
Term Loan or Term Loan Note;

 

(ii)   waive, reduce or postpone any scheduled
repayment (but not prepayment);

 

(iii)   reduce the rate of interest on any Term Loan
(other than any waiver of any increase in the interest rate applicable to any
Term Loan pursuant to Section 2.10) or any fee payable hereunder;

 

129

 

(iv)   extend the time for payment of any such
interest or fees;

 

(v)   reduce or forgive the principal amount of any
Term Loan;

 

(vi)   amend, modify, terminate or waive any
provision of Section 2.16(c), Section 2.17, this Section 10.5(b) or
Section 10.5(c) or Section 7.2 of the Pledge and Security
Agreement;

 

(vii)   amend the definition of “Requisite
Lenders” or “Pro Rata Share”; provided, with the
consent of Requisite Lenders, additional extensions of credit pursuant hereto
may be included in the determination of “Requisite Lenders” or “Pro
Rata Share” on substantially the same basis as the Term Loan
Commitments and the Term Loans are included on the Closing Date;

 

(viii)   release all or substantially all of the
Collateral or all or substantially all of the Guarantors from the Guaranty except
as expressly provided in the Credit Documents; or

 

(ix)   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 amend, modify, terminate or waive any
provision of Section 9 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 10.5 shall be binding upon each Lender at the
time outstanding, each future Lender and, if signed by a Credit Party, on such
Credit Party.

 

(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

 

130

 

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.

 

10.6.   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 Term Loan Commitments and Term Loans
listed therein for all purposes hereof, and no assignment or transfer of any
such Term Loan Commitment or Term Loan shall be effective, in each case, unless
and until recorded in the Register following receipt of (x) a written or
electronic confirmation of an assignment issued by a Settlement Service
pursuant to Section 10.6(d) (a “Settlement Confirmation”) or (y)
an Assignment Agreement effecting the assignment or transfer thereof, in each
case, as provided in Section 10.6(d). 
Each assignment shall be recorded in the Register on the Business Day
the Settlement Confirmation or 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 or Settlement
Confirmation shall be maintained, as applicable.  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 Term Loan
Commitments or Term Loans.

 

(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

 

131

 

limitation, all or a portion of its Term Loan Commitment or
Term 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 Term Loan and any
related Term Loan 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” upon the giving of notice to
NewPageCo and Administrative Agent; provided, further each such
assignment pursuant to this Section 10.6(c)(ii) shall be in an
aggregate amount of not less than $1,000,000 (or such lesser amount as may be
agreed to by NewPageCo and Administrative Agent or as shall constitute the
aggregate amount of the Term Loan of the assigning Lender) with respect to the
assignment of Term Loans.

 

(d)   Mechanics.  Assignments of Term Loans by Lenders may be
made via an electronic settlement system acceptable to Administrative Agent as
designated in writing from time to time to the Lenders by Administrative Agent
(the “Settlement Service”).  Each such assignment shall be effected by the
assigning Lender and proposed assignee pursuant to the procedures then in
effect under the Settlement Service, which procedures shall be consistent with
the other provisions of this Section 10.6. 
Each assignor Lender and proposed assignee shall comply with the
requirements of the Settlement Service in connection with effecting any
transfer of Term Loans pursuant to the Settlement Service.  Administrative Agent’s and NewPageCo’s consent
shall be deemed to have been granted pursuant to Section 10.6(c) (ii) with
respect to any transfer effected through the Settlement Service.  Subject to the other requirements of this Section 10.6,
assignments and assumptions of Term Loans may also be effected by manual
execution delivery to the Administrative Agent of an Assignment Agreement with
the prior written consent of 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).  Initially,
assignments and assumptions of Term Loans shall be effected by such manual
execution until Administrative Agent notifies Lenders to the contrary.    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). 
Notwithstanding anything herein or in any Assignment Agreement to the
contrary and (i) unless notice to the contrary is delivered to the Lenders
from the Administrative Agent or (ii) so long as no Default or Event of
Default has occurred and is continuing, payment to the assignor by the assignee
in

 

132

 

respect of the settlement of an assignment of any Term Loan
shall include such compensation to the assignor as may be agreed upon by the
assignor and the assignee with respect to all unpaid interest which has accrued
on such Term Loan to but excluding the Assignment Effective Date.  On and after the applicable Assignment
Effective Date, the applicable assignee shall be entitled to receive all
interest paid or payable with respect to the assigned Term Loan, whether such
interest accrued before or after the applicable Assignment Effective Date.

 

(e)   Representations and Warranties of Assignee.  Each Lender, upon execution and delivery
hereof or upon succeeding to an interest in the Term Loan Commitments and Term
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 making of or investing in commitments or
loans such as the applicable Term Loan Commitments or Term Loans, as the case
may be; and (iii) it will make or invest in, as the case may be, its Term
Loan Commitments or Term Loans for its own account in the ordinary course of
its business and without a view to distribution of such Term Loan Commitments
or Term 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 10.6, the disposition of such Term 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 10.6,
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 Term Loans and Term Loan 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 10.8)
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, 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 Term Loan
Commitments shall be modified to reflect the Term Loan Commitment of such
assignee; and (iv) if any such assignment occurs after the issuance of any
Term Loan Note hereunder, the assigning Lender shall, upon the effectiveness of
such assignment or as promptly thereafter as practicable, surrender its
applicable Term Loan Notes to Administrative Agent for cancellation, and
thereupon NewPageCo shall issue and deliver new Term Loan 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
outstanding Term Loans of the assignee and/or the assigning Lender.

 

133

 

(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 Term
Loan Commitments, Term 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 maturity of any Term Loan, or Term Loan Note 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
Term Loan Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Term Loan Commitment or Term 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 Term 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 10.4 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 10.6, any Lender may, without the consent of
NewPageCo or the Administrative Agent, assign and/or pledge all or any portion
of its Term Loans, the other Obligations owed by or to such Lender, and its
Term Loan 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

 

134

 

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 10.6
regarding assignments.

 

10.7.   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.

 

10.8.   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 Term Loan.  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, 10.2, 10.3 and 10.4 and
the agreements of Lenders set forth in Sections 2.17, 9.3(b) and 9.6
shall survive the payment of the Term Loans and the termination hereof.

 

10.9.   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 or any of
the Hedge Agreements.  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.

 

10.10.   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

 

135

 

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.

 

10.11.   Severability.  In case any provision in or obligation
hereunder or any Term Loan 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.

 

10.12.   Obligations Several; Independent Nature of
Lenders’ Rights.  The obligations of Lenders hereunder are
several and no Lender shall be responsible for the obligations or Term Loan 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 9.8(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.

 

10.13.   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.

 

10.14.   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.

 

10.15.   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

 

136

 

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 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.

 

10.16.   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 TERM 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 TERM LOANS MADE HEREUNDER.  IN THE EVENT OF LITIGATION, THIS

 

137

 

AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.

 

10.17.   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 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 10.17), (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 Term Loans or any participations therein
or by any direct or indirect contractual counterparties (or the professional
advisors thereto) in Hedge Agreements (provided, such counterparties and
advisors are advised of and agree to be bound by the provisions of this Section 10.17),
(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.

 

10.18.   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 Term 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 Term 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

 

138

 

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 Term Loans made hereunder or be
refunded to NewPageCo.

 

10.19.   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.

 

10.20.   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.

 

10.21.   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.

 

10.22.   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.

 

[Remainder of page intentionally
left blank]

 

139

 

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.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Linda M. Sheffield

  	
   

  
	
   

  	
   

  	
  Name:
  Linda M. Sheffield

  	
   

  
	
   

  	
   

  	
  Title:   Treasurer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ESCANABA PAPER COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name:
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Title:   President

  	
   

  

 

 

	
   

  	
  MEADWESTVACO MARYLAND, INC.

  (to be named LUKE PAPER COMPANY)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name:
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Title:   President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEADWESTVACO OXFORD

  CORPORATION

  (to be named RUMFORD PAPER

  COMPANY)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name:
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Title:   President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  MEADWESTVACO ENERGY

  SERVICES LLC

  (to be named NEWPAGE ENERGY

  SERVICES LLC)

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name:
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Title:   President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  RUMFORD COGENERATION, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name:
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  	
   

  

 

 

	
   

  	
  RUMFORD FALLS POWER COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name:
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Title:   Chief Executive Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  UPLAND RESOURCES, INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Name:
  Peter H. Vogel

  	
   

  
	
   

  	
   

  	
  Title:   President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  WICKLIFFE PAPER COMPANY

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Linda M. Sheffield

  	
   

  
	
   

  	
   

  	
  Name:
  Linda M. Sheffield

  	
   

  
	
   

  	
   

  	
  Title:   Treasurer

  	
   

  

 

 

	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.,

  
	
   

  	
  as
  Administrative Agent, Joint Lead Arranger,

  Co-Syndication Agent and a Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  William W. Archer

  	
   

  
	
   

  	
   

  	
  Authorized Signatory

  	
   

  

 

 

	
   

  	
  UBS SECURITIES LLC,

  as Joint Lead Arranger, Joint Bookrunner, and

  as Co-Syndication Agent

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric
  H. Coombs

  	
   

  
	
   

  	
   

  	
  Name:
  Eric H. Coombs

  	
   

  
	
   

  	
   

  	
  Title:   Managing Director

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Oliver
  O. Trumbo II

  	
   

  
	
   

  	
   

  	
  Name:
  Oliver O. Trumbo II

  	
   

  
	
   

  	
   

  	
  Title:   DirectorExhibit 10.9

 

 

EXECUTION COPY

 

 

PRIORITY LIEN DEBT

 

PLEDGE AND SECURITY AGREEMENT

 

 

dated as of
May 2, 2005

 

 

between

 

 

EACH OF THE GRANTORS PARTY HERETO

 

 

and

 

THE BANK OF NEW YORK

 

as Priority
Lien Collateral Trustee

 

 

TABLE OF CONTENTS

 

	
  SECTION
  1. DEFINITIONS; GRANT OF SECURITY

  	
   

  
	
  1.1

  	
  General Definitions

  	
   

  
	
  1.2

  	
  Definitions; Interpretation

  	
   

  
	
   

  
	
  SECTION
  2. GRANT OF SECURITY

  	
   

  
	
  2.1

  	
  Grant of Security

  	
   

  
	
  2.2

  	
  Certain Limited Exclusions

  	
   

  
	
  2.3

  	
  Intercreditor Agreement

  	
   

  
	
   

  
	
  SECTION
  3. SECURITY FOR OBLIGATIONS; GRANTORS REMAIN LIABLE

  	
   

  
	
  3.1

  	
  Security for Obligations

  	
   

  
	
  3.2

  	
  Continuing Liability Under Collateral

  	
   

  
	
   

  
	
  SECTION
  4. REPRESENTATIONS AND WARRANTIES AND COVENANTS

  	
   

  
	
  4.1

  	
  Generally

  	
   

  
	
  4.2

  	
  Equipment and Inventory

  	
   

  
	
  4.3

  	
  Receivables

  	
   

  
	
  4.4

  	
  Investment Related Property

  	
   

  
	
  4.5

  	
  Material Contracts

  	
   

  
	
  4.6

  	
  Letter of Credit Rights

  	
   

  
	
  4.7

  	
  Intellectual
  Property

  	
   

  
	
  4.8

  	
  Commercial Tort Claims

  	
   

  
	
   

  
	
  SECTION
  5. ACCESS; RIGHT OF INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS

  	
   

  
	
  5.1

  	
  Access; Right of Inspection

  	
   

  
	
  5.2

  	
  Further Assurances

  	
   

  
	
  5.3

  	
  Additional Grantors

  	
   

  
	
   

  
	
  SECTION
  6. COLLATERAL TRUSTEE APPOINTED ATTORNEY-IN-FACT

  	
   

  
	
  6.1

  	
  Power of Attorney

  	
   

  
	
  6.2

  	
  No Duty on the Part of Priority Lien
  Collateral Trustee or Secured Parties

  	
   

  
	
   

  
	
  SECTION
  7. REMEDIES

  	
   

  
	
  7.1

  	
  Generally

  	
   

  
	
  7.2

  	
  Application of Proceeds

  	
   

  
	
  7.3

  	
  Sales on Credit

  	
   

  
	
  7.4

  	
  Deposit Accounts

  	
   

  
	
  7.5

  	
  Investment
  Related Property

  	
   

  
	
  7.6

  	
  Intellectual
  Property

  	
   

  
	
   

  
	
  SECTION
  8. COLLATERAL TRUSTEE

  	
   

  
	
   

  
	
  SECTION
  9. CONTINUING SECURITY INTEREST; TRANSFER OF LOANS

  	
   

  
	
   

  
	
  SECTION
  10. STANDARD OF CARE; COLLATERAL TRUSTEE MAY PERFORM

  	
   

  

 

i

 

	
  SECTION
  11. MISCELLANEOUS

  	
   

  
	
   

  
	
  SCHEDULE 4.1 — GENERAL INFORMATION

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 4.2 — LOCATION OF EQUIPMENT AND INVENTORY

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 4.4 — INVESTMENT RELATED PROPERTY

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 4.5 — MATERIAL CONTRACTS

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 4.6 — DESCRIPTION OF LETTERS OF CREDIT

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 4.7 — INTELLECTUAL PROPERTY - EXCEPTIONS

  	
   

  
	
   

  	
   

  
	
  SCHEDULE 4.8 — COMMERCIAL TORT CLAIMS

  	
   

  
	
   

  	
   

  
	
  EXHIBIT A — PLEDGE SUPPLEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT B — UNCERTIFICATED SECURITIES CONTROL AGREEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT C — SECURITIES ACCOUNT CONTROL AGREEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT D — DEPOSIT ACCOUNT CONTROL AGREEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT E — TRADEMARK SECURITY AGREEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT F — COPYRIGHT SECURITY AGREEMENT

  	
   

  
	
   

  	
   

  
	
  EXHIBIT G — PATENT SECURITY AGREEMENT

  	
   

  

 

ii

 

This PRIORITY LIEN DEBT  PLEDGE
AND SECURITY AGREEMENT, dated as of May 2, 2005 (this “Agreement”), between EACH OF THE UNDERSIGNED, whether as an
original signatory hereto or as an Additional Grantor (as herein defined)
(each, a “Grantor”), and THE BANK OF NEW YORK, a New York banking corporation, as
collateral trustee for the Secured Parties (as herein defined) (in such
capacity as collateral trustee, the “Priority
Lien Collateral Trustee”).

 

RECITALS:

 

WHEREAS,
reference is made to that certain Term Loan Credit and Guaranty Agreement,
dated as of the date hereof (as it may be amended, restated, supplemented or
otherwise modified from time to time, the “Credit
Agreement”), by and among NEWPAGE
CORPORATION, a Delaware
corporation, as Borrower (“NewPageCo”), NEWPAGE HOLDING CORPORATION, a Delaware corporation, and
CERTAIN SUBSIDIARIES OF NEWPAGECO,
as Guarantors, the various
lenders party thereto from time to time (the “Lenders”),
GOLDMAN SACHS CREDIT PARTNERS, L.P.,
as Joint Lead Arranger, Joint
Bookrunner and Co-Syndication Agent, GOLDMAN
SACHS CREDIT PARTNERS L.P., as Administrative Agent, and UBS
SECURITIES LLC, as Joint Lead Arranger, Joint Bookrunner and
Co-Syndication Agent;

 

WHEREAS,
subject to the terms and conditions of the Credit Agreement, certain Grantors
may enter into one or more Hedge Agreements with one or more Lender
Counterparties;

 

WHEREAS,
in consideration of the extensions of credit and other accommodations of
Lenders and Lender Counterparties as set forth in the Credit Agreement and the
Hedge Agreements, respectively, each Grantor has agreed to secure such Grantor’s
obligations under the Credit Documents and the Hedge Agreements as set forth
herein;

 

WHEREAS,
reference is made to that certain Collateral Trust Agreement (the “Collateral Trust Agreement”) dated as of May 2, 2005 by and
among The Bank of New York, as Collateral Trustee, the Revolving Credit
Collateral Agent, the Senior Secured Floating Rate Notes Trustee under the
Senior Secured Floating Rate Notes, the Senior Secured Fixed Rate Notes Trustee
under the Senior Secured Fixed Rate Notes, and the Administrative Agent under
the Credit Agreement; and

 

WHEREAS,
in addition to the obligations under the Credit Agreement and the Hedge
Agreements referred to above, the Grantors may incur additional “Priority Lien Obligations” (as defined in the Collateral
Trust Agreement) and each Grantor has agreed to secure such Grantor’s Priority
Lien Obligations as set forth herein.

 

NOW,
THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, each Grantor and the
Priority Lien Collateral Trustee agree as follows:

 

SECTION 1.   DEFINITIONS; GRANT OF
SECURITY.

 

1.1          General Definitions.  In this Agreement, the following terms shall
have the following meanings:

 

 

“Account Debtor”
shall mean each Person who is obligated on a Receivable or any Supporting
Obligation related thereto.

 

“Accounts”
shall mean all “accounts” as defined in Article 9 of the UCC, including
Health-Care Insurance Receivables.

 

“Additional Grantors”
shall have the meaning assigned in Section 5.3.

 

“Agreement”
shall have the meaning set forth in the preamble.

 

“Assigned Agreements”
shall mean, as to each Grantor, all agreements and contracts to which such
Grantor is a party as of the date hereof, or to which such Grantor becomes a
party after the date hereof, including, without limitation, each Material
Contract, as each such agreement may be amended, supplemented or otherwise
modified from time to time.

 

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

 

“Cash Proceeds”
shall have the meaning assigned in Section 7.7.

 

“Chattel Paper”
shall mean all “chattel paper” as defined in Article 9 of the UCC, including,
without limitation, “electronic chattel paper” or “tangible chattel paper”, as
each term is defined in Article 9 of the UCC.

 

“Closing Date” shall
mean the date of this Agreement.

 

“Collateral”
shall have the meaning assigned in Section 2.1.

 

“Collateral Account”
shall mean any account established by the Priority Lien Collateral Trustee.

 

“Collateral Trust Agreement” shall have the
meaning set forth in the recitals.

 

“Collateral Records”
shall mean books, records, ledger cards, files, correspondence, customer lists,
blueprints, technical specifications, manuals, computer software, computer
printouts, tapes, disks and related data processing software and similar items
that at any time evidence or contain information relating to any of the
Collateral or are otherwise necessary or helpful in the collection thereof or
realization thereupon.

 

“Collateral Support”
shall mean all property (real or personal) assigned, hypothecated or otherwise
securing any Collateral and shall include any security agreement or other
agreement granting a lien or security interest in such real or personal
property.

 

“Commercial Tort
Claims” shall mean all “commercial tort claims” as
defined in Article 9 of the UCC, including, without limitation, all commercial
tort claims listed on Schedule 4.8 (as such schedule may be amended or
supplemented from time to time).

 

“Commodities Accounts”
(i) shall mean all “commodity accounts” as defined in Article 9 of the UCC and
(ii) shall include, without limitation, all of the accounts listed on Schedule
4.4 under the heading “Commodities
Accounts” (as such schedule may be amended or supplemented from time to
time).

 

2

 

“Controlled Foreign
Corporation” shall mean “controlled foreign
corporation” as defined in the Tax Code.

 

“Copyright Licenses”
shall mean any and all written agreements containing the express grant of any
right in or to Copyrights (whether such Grantor is licensee or licensor
thereunder) including, without limitation, each agreement referred to in
Schedule 4.7(B) (as such schedule may be amended or supplemented from time to
time).

 

“Copyrights” shall mean all
United States, and foreign copyrights (including European Union Community
designs), including but not limited to copyrights in software and databases,
whether registered or unregistered, and, with respect to any and all of the
foregoing: (i) all registrations and applications therefor including, without
limitation, the registrations and applications referred to in Schedule 4.7(A)
(as such schedule may be amended or supplemented from time to time), (ii) all
extensions and renewals thereof, (iii) all rights corresponding thereto
throughout the world, (iv) all rights to sue for past, present and future infringements
thereof, and (v) all Proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages and proceeds of suit.

 

“Credit Agreement”
shall have the meaning set forth in the recitals.

 

“Deposit Account Control
Agreement”
shall have the meaning assigned in Section 4.4.4(c).

 

“Deposit Accounts”
(i) shall mean all “deposit accounts” as defined in Article 9 of the UCC and
(ii) shall include, without limitation, all of the accounts listed on Schedule
4.4 under the heading “Deposit Accounts” (as such schedule may be amended or
supplemented from time to time).

 

“Discharge of Priority Lien Obligations”
shall have the meaning set forth in the Collateral Trust Agreement.

 

“Documents”
shall mean all “documents” as defined in Article 9 of the UCC.

 

“Equipment”
shall mean:  (i) all “equipment” as
defined in Article 9 of the UCC, (ii) all machinery, manufacturing equipment,
data processing equipment, computers, office equipment, furnishings, furniture,
appliances, fixtures and tools (in each case, regardless of whether
characterized as equipment under the UCC) and (iii) all accessions or additions
thereto, all parts thereof, whether or not at any time of determination
incorporated or installed therein or attached thereto, and all replacements
therefor, wherever located, now or hereafter existing, including any fixtures.

 

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

 

“Event of Default”
means an “Event of Default” as defined in the Credit Agreement or any other
Priority Lien Documents which is no longer subject to any cure or notice
period.

 

“General Intangibles”
(i) shall mean all “general intangibles” as defined in Article 9 of the UCC,
including “payment intangibles” also as defined in Article 9 of the UCC and
(ii) shall include, without limitation, all interest rate or currency
protection or hedging

 

3

 

arrangements, all tax refunds, all licenses,
permits, concessions and authorizations, all Assigned Agreements and all
Intellectual Property (in each case, regardless of whether characterized as
general intangibles under the UCC).

 

“Goods”
(i) shall mean all “goods” as defined in Article 9 of the UCC and (ii) shall
include, without limitation, all Inventory and Equipment (in each case,
regardless of whether characterized as goods under the UCC).

 

“Grantors”
shall have the meaning set forth in the preamble.

 

“Health-Care
Insurance Receivable” shall mean all “health-care-insurance
receivable” as defined in Article 9 of the UCC.

 

“Instruments”
shall mean all “instruments” as defined in Article 9 of the UCC.

 

“Insurance”
shall mean (i) all insurance policies covering any or all of the Collateral
(regardless of whether the Priority Lien Collateral Trustee is the loss payee
thereof) and (ii) any key man life insurance policies.

 

“Intellectual
Property” shall mean, collectively, the Copyrights,
the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the
Trademark Licenses, the Trade Secrets, and the Trade Secret Licenses.

 

“Intercreditor Agreement”
means the Intercreditor Agreement dated as of the date hereof, among NewPageCo,
the Guarantors thereunder, the Collateral Agent, and The Bank of New York, as
Collateral Trustee, as it may be amended, supplemented or otherwise modified
from time to time.

 

“Inventory”
shall mean (i) all “inventory” as defined in Article 9 of the UCC and (ii) all
goods held for sale or lease or to be furnished under contracts of service or
so leased or furnished, all raw materials, work in process, finished goods, and
materials used or consumed in the manufacture, packing, shipping, advertising,
selling, leasing, furnishing or production of such inventory or otherwise used
or consumed in any Grantor’s business; all such goods in which any Grantor has
an interest in mass or a joint or other interest or right of any kind; and all
such goods which are returned to or repossessed by any Grantor, all computer
programs embedded in any such goods and all accessions thereto and products
thereof (in each case, regardless of whether characterized as inventory under
the UCC).

 

“Investment Accounts”
shall mean the Collateral Account, Securities Accounts, Commodities Accounts and Deposit Accounts.

 

“Investment Related
Property” shall mean: 
(i) all “investment property” (as such term is defined in Article 9 of
the UCC) and (ii) all of the following (regardless of whether classified as
investment property under the UCC): all Pledged Equity Interests, Pledged Debt,
the Investment Accounts and certificates of deposit.

 

“Lenders”
shall have the meaning set forth in the recitals.

 

“Letter of Credit”
shall mean “letter of credit” as defined in Article 9 of the UCC.

 

4

 

“Letter of Credit
Rights” shall mean “letter-of-credit right” as defined
in Article 9 of the UCC.

 

“Money”
shall mean “money” as defined in the UCC.

 

“NewPageCo” shall
have the meaning set forth in the recitals.

 

“Non-Assignable Contract”
shall mean any agreement, contract or license to which any Grantor is a party
that by its terms purports to restrict or prevent the assignment or granting of
a security interest therein (either by its terms or by any federal or state
statutory prohibition or otherwise irrespective of whether such prohibition or
restriction is enforceable under Sections 9-406 through 409 of the UCC).

 

“Patent Licenses”
shall mean all written agreements containing the express grant of any right in
or to Patents (whether such Grantor is licensee or licensor thereunder)
including, without limitation, each agreement referred to in Schedule 4.7(D)
(as such schedule may be amended or supplemented from time to time).

 

“Patents” shall mean all United States and foreign
patents and certificates of invention, or similar industrial property rights,
and applications for any of the foregoing, including, but not limited to: (i)
each patent and patent application referred to in Schedule 4.7(C) hereto (as
such schedule may be amended or supplemented from time to time), (ii) all
reissues, divisions, continuations, continuations-in-part, extensions,
renewals, and reexaminations thereof, (iii) all rights corresponding thereto
throughout the world, (iv) all inventions and improvements described therein,
(v) all rights to sue for past, present and future infringements thereof, (vi)
all licenses, claims, damages, and proceeds of suit arising therefrom, and
(vii) all Proceeds of the foregoing, including, without limitation, licenses,
royalties, income, payments, claims, damages, and proceeds of suit.

 

 “Person” shall mean and include 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.

 

“Pledge Supplement”
shall mean any supplement to this agreement in substantially the form of
Exhibit A.

 

“Pledged Debt”
shall mean all Indebtedness owed to such Grantor, including, without
limitation, all Indebtedness described on Schedule 4.4(A) under the heading “Pledged
Debt” (as such schedule may be amended or supplemented from time to time),
issued by the obligors named therein, the instruments evidencing such
Indebtedness, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Indebtedness.

 

“Pledged Equity
Interests” shall mean all Pledged Stock, Pledged LLC
Interests, Pledged Partnership Interests and Pledged Trust Interests.

 

“Pledged LLC
Interests” shall mean all interests in any limited
liability company including, without limitation, all limited liability company
interests listed on Schedule 4.4(A) under the heading “Pledged LLC Interests”
(as such schedule may be amended or

 

5

 

supplemented from time to time) and the
certificates, if any, representing such limited liability company interests and
any interest of such Grantor on the books and records of such limited liability
company or on the books and records of any securities intermediary pertaining
to such interest and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such limited liability company interests.

 

“Pledged Partnership
Interests” shall mean all interests in any general
partnership, limited partnership, limited liability partnership or other
partnership including, without limitation, all partnership interests listed on
Schedule 4.4(A) under the heading “Pledged Partnership Interests” (as such
schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such partnership interests and any interest
of such Grantor on the books and records of such partnership or on the books
and records of any securities intermediary pertaining to such interest and all
dividends, distributions, cash, warrants, rights, options, instruments,
securities and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such partnership interests.

 

“Pledged Stock”
shall mean all shares of capital stock owned by such Grantor, including,
without limitation, all shares of capital stock described on Schedule 4.4(A)
under the heading “Pledged Stock” (as such schedule may be amended or
supplemented from time to time), and the certificates, if any, representing
such shares and any interest of such Grantor in the entries on the books of the
issuer of such shares or on the books of any securities intermediary pertaining
to such shares, and all dividends, distributions, cash, warrants, rights,
options, instruments, securities and other property or proceeds from time to
time received, receivable or otherwise distributed in respect of or in exchange
for any or all of such shares.

 

“Pledged Trust
Interests” shall mean all interests in a Delaware
business trust or other trust including, without limitation, all trust
interests listed on Schedule 4.4(A) under the heading “Pledged Trust Interests”
(as such schedule may be amended or supplemented from time to time) and the
certificates, if any, representing such trust interests and any interest of
such Grantor on the books and records of such trust or on the books and records
of any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such trust
interests.

 

“Priority Lien
Collateral Trustee” shall have the meaning set forth
in the preamble.

 

“Priority Lien Documents”
shall have the meaning set forth in the Intercreditor Agreement.

 

“Priority Lien Obligations”
shall mean, without duplication, (i) all Priority Lien Obligations (as defined
in the Collateral Trust Agreement), and (ii) all Obligations (as defined in the
Credit Agreement).

 

“Priority Lien Representative”
shall have the meaning set forth in the Collateral Trust Agreement.

 

6

 

“Proceeds”
shall mean:  (i) all “proceeds” as
defined in Article 9 of the UCC, (ii) payments or distributions made with
respect to any Investment Related Property and (iii) whatever is receivable or
received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.

 

“Receivables”
shall mean all rights to payment, whether or not earned by performance, for
goods or other property sold, leased, licensed, assigned or otherwise disposed
of, or services rendered or to be rendered, including, without limitation all
such rights constituting or evidenced by any Account, Chattel Paper,
Instrument, General Intangible or Investment Related Property, together with
all of Grantor’s rights, if any, in any goods or other property giving rise to
such right to payment and all Collateral Support and Supporting Obligations
related thereto and all Receivables Records.

 

“Receivables Records”
shall mean (i) all original copies of all documents, instruments or other
writings or electronic records or other Records evidencing the Receivables,
(ii) all books, correspondence, credit or other files, Records, ledger sheets
or cards, invoices, and other papers relating to Receivables, including,
without limitation, all tapes, cards, computer tapes, computer discs, computer
runs, record keeping systems and other papers and documents relating to the Receivables,
whether in the possession or under the control of Grantor or any computer
bureau or agent from time to time acting for Grantor or otherwise, (iii) all
evidences of the filing of financing statements and the registration of other
instruments in connection therewith, and amendments, supplements or other
modifications thereto, notices to other creditors or secured parties, and
certificates, acknowledgments, or other writings, including, without
limitation, lien search reports, from filing or other registration officers,
(iv) all credit information, reports and memoranda relating thereto and (v) all
other written or nonwritten forms of information related in any way to the
foregoing or any Receivable.

 

“Record”
shall have the meaning specified in Article 9 of the UCC.

 

“Secured Obligations”
shall have the meaning assigned in Section 3.1.

 

“Secured Parties”
shall mean each holder of a Priority Lien Obligations, including, without
limitation, Priority Lien Representatives, the Agents, Lenders and the Lender
Counterparties and shall include, without limitation, all former Agents,
Lenders and Lender Counterparties to the extent that any Priority Lien
Obligations owing to such Persons were incurred while such Persons were Agents,
Lenders or Lender Counterparties and such Priority Lien Obligations have not
been paid or satisfied in full.

 

“Securities”
shall mean 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 Accounts”
(i) shall mean all “securities accounts” as defined in Article 8 of the UCC and
(ii) shall include, without limitation, all of the accounts listed on Schedule
4.4(A) under the heading “Securities Accounts” (as such schedule may be amended
or supplemented from time to time).

 

7

 

“Supporting
Obligation” shall mean all “supporting obligations” as
defined in Article 9 of the UCC.

 

“Tax Code”
shall mean the United States Internal Revenue Code of 1986, as amended from
time to time.

 

“Trademark Licenses”
shall mean any and all written agreements containing express grant of any right
in or to Trademarks (whether such Grantor is licensee or licensor thereunder)
including, without limitation, each agreement referred to in Schedule 4.7(F)
(as such schedule may be amended or supplemented from time to time).

 

“Trademarks”
shall mean all United States, and foreign trademarks, trade names, corporate
names, company names, business names, fictitious business names, Internet
domain names, service marks, certification marks, collective marks, logos, other
source or business identifiers, designs and general intangibles of a like
nature, all registrations and applications for any of the foregoing including,
but not limited to: (i) the registrations and applications referred to in
Schedule 4.7(E) (as such schedule may be amended or supplemented from time to
time), (ii) all extensions or renewals of any of the foregoing, (iii) all of
the goodwill of the business connected with the use of and symbolized by the
foregoing, (iv) the right to sue for past, present and future infringement or
dilution of any of the foregoing or for any injury to goodwill, and (v) all
Proceeds of the foregoing, including, without limitation, licenses, royalties,
income, payments, claims, damages, and proceeds of suit.

 

“Trade Secret
Licenses” shall mean any and all written agreements
containing the express grant of any right in or to Trade Secrets (whether such
Grantor is licensee or licensor thereunder) including, without limitation, each
agreement referred to in Schedule 4.7(G) (as such schedule may be amended or
supplemented from time to time).

 

“Trade Secrets”
shall mean all trade secrets and all other confidential or proprietary
information and know-how whether or not such trade secret has been reduced to a
writing or other tangible form, including all documents and things embodying,
incorporating, or referring in any way to such trade secret, including but not
limited to: (i) the right to sue for past, present and future misappropriation
or other violation of any Trade Secret, and (ii) all Proceeds of the foregoing,
including, without limitation, licenses, royalties, income, payments, claims,
damages, and proceeds of suit.

 

“UCC”
shall mean the Uniform Commercial Code as in effect from time to time in the
State of New York or, when the context implies, the Uniform Commercial Code as
in effect from time to time in any other applicable jurisdiction.

 

“United States”
shall mean the United States of America.

 

1.2          Definitions;
Interpretation.  All capitalized terms used herein (including
the preamble and recitals hereto) and not otherwise defined herein shall have
the meanings ascribed thereto in the Credit Agreement as in effect on the date
hereof without giving effect to any amendments or modifications thereto or, if
not defined therein, in the UCC. 
References to “Sections,” “Exhibits” and “Schedules” shall be to
Sections, Exhibits and Schedules, as the case may be, of this Agreement unless
otherwise specifically provided.  Section
headings in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other purpose or
be given any substantive effect.  Any of
the terms defined herein may, unless the context otherwise requires, be used in
the singular or the plural,

 

8

 

depending on the reference.  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
nonlimiting 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.  If any conflict or inconsistency exists
between this Agreement and any Priority Lien Document, with respect to the
parties thereto only, the Priority Lien Document shall govern.  All references herein to provisions of the
UCC shall include all successor provisions under any subsequent version or
amendment to any Article of the UCC.

 

SECTION 2.   GRANT OF SECURITY.

 

2.1          Grant of Security.  Each Grantor hereby
grants to the Priority Lien Collateral Trustee a security interest in and
continuing lien on all of such Grantor’s right, title and interest in, to and
under all personal property of such Grantor, subject to the limitations set
forth in Section 2.2, including, but not limited to the following, in each case
whether now owned or existing or hereafter acquired or arising and wherever
located (all of which being hereinafter collectively referred to as the “Collateral”):

 

(a)           Accounts;

 

(b)           Chattel Paper;

 

(c)           Documents;

 

(d)           General Intangibles;

 

(e)           Goods;

 

(f)            Instruments;

 

(g)           Insurance;

 

(h)           Intellectual Property;

 

(i)            Investment Related Property;

 

(j)            Letters of Credit and Letter of Credit Rights;

 

(k)           Money;

 

(l)            Receivables and Receivable Records;

 

(m)          Commercial Tort Claims;

 

(n)           to the extent not otherwise included above, all
Collateral Records, Collateral Support and Supporting Obligations relating to
any of the foregoing; and

 

(o)           to the extent not otherwise included above, all
Proceeds, products, accessions, rents and profits of or in respect of any of
the foregoing.

 

9

 

Notwithstanding
anything herein to the contrary, in no event shall any Priority Lien Obligations
that constitutes a “security” for purposes of the Securities Act of 1933, as
amended, be secured by any Separate Collateral.

 

2.2          Certain Limited
Exclusions.  Notwithstanding anything herein to the
contrary, in no event shall the Collateral include or the security interest
granted under Section 2.1 hereof attach to (a) any lease, license, contract,
Intellectual Property, property rights or agreement to which any Grantor is a
party or any of its rights or interests thereunder if and for so long as the
grant of such security interest shall constitute or result in (i) the
abandonment, invalidation or unenforceability of any right, title or interest
of any Grantor therein or (ii) in a breach or termination pursuant to the terms
of, or a default under, any such lease, license, contract, property rights or
agreement (other than to the extent that any such term would be rendered
ineffective pursuant to Sections 9-406, 9-407, 9-408 or 9-409 of the UCC (or
any successor provision or provisions) of any relevant jurisdiction or any
other applicable law (including the Bankruptcy Code) or principles of equity),
provided however that the Collateral shall include and such security interest
shall attach immediately at such time as the condition causing such abandonment,
invalidation or unenforceability shall be remedied and to the extent severable,
shall attach immediately to any portion of such lease, license, contract,
property rights or agreement that does not result in any of the consequences
specified in (i) or (ii) above; or (b) any of the outstanding capital stock of
a Controlled Foreign Corporation in
excess of 65% of the voting power of all classes of capital stock of such
Controlled Foreign Corporation entitled to vote; provided that
immediately upon the amendment of the Tax Code to allow the pledge of a greater
percentage of the voting power of capital stock in a Controlled Foreign
Corporation without adverse tax consequences, the Collateral shall include, and
the security interest granted by each Grantor shall attach to, such greater
percentage of capital stock of each Controlled Foreign Corporation.

 

2.3          Intercreditor Agreement. 
Notwithstanding anything herein to the contrary, the lien and security
interest granted to the Priority Lien Collateral Trustee pursuant to this
Agreement and the exercise of any right or remedy by the Priority Lien
Collateral Trustee hereunder are subject to the provisions of the Intercreditor
Agreement.  In the event of any conflict
between the terms of the Intercreditor Agreement and this Agreement, the terms
of the Intercreditor Agreement shall govern and control.  Any reference in this Agreement to a “first
priority lien” or words of similar effect in describing the security interests
created hereunder shall be understood to refer to such priority as set forth in
the Intercreditor Agreement.  All
representations, warranties and covenants in this Agreement shall be subject to
the provisions and qualifications set forth in this Section 2.3

 

SECTION 3.   SECURITY FOR OBLIGATIONS; GRANTORS REMAIN
LIABLE.

 

3.1          Security for
Obligations.  This Agreement secures, and the Collateral is
collateral security for, the prompt and complete payment or performance in full
when due, whether at stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including the payment of 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) (and any successor provision thereof)), of
all Priority Lien Obligations with respect to every Grantor (the “Secured Obligations”).

 

3.2          Continuing
Liability Under Collateral.  Notwithstanding
anything herein to the contrary, (i) each Grantor
shall remain liable for all obligations under the Collateral and nothing contained
herein is intended or shall be a delegation of duties to the Priority Lien
Collateral

 

10

 

Trustee or any
Secured Party, (ii) each Grantor shall remain liable under each of the
agreements included in the Collateral, including, without limitation, any
agreements relating to Pledged Partnership Interests or Pledged LLC Interests,
to perform all of the obligations undertaken by it thereunder all in accordance
with and pursuant to the terms and provisions thereof and neither the Priority
Lien Collateral Trustee nor any Secured Party shall have any obligation or
liability under any of such agreements by reason of or arising out of this
Agreement or any other document related thereto nor shall the Priority Lien
Collateral Trustee nor any Secured Party have any obligation to make any
inquiry as to the nature or sufficiency of any payment received by it or have
any obligation to take any action to collect or enforce any rights under any
agreement included in the Collateral, including, without limitation, any
agreements relating to Pledged Partnership Interests or Pledged LLC Interests,
and (iii) the exercise by the Priority Lien Collateral Trustee of any of its
rights hereunder shall not release any Grantor from any of its duties or
obligations under the contracts and agreements included in the Collateral.

 

SECTION 4.   REPRESENTATIONS AND
WARRANTIES AND COVENANTS.

 

4.1          Generally.

 

(a)           Representations and Warranties. 
Each Grantor hereby represents and warrants, on the Closing Date, that:

 

(i)            it owns the Collateral purported to be owned by it or
otherwise has the rights it purports to have in each item of Collateral free
and clear of any and all Liens, rights or claims of all other Persons other
than Permitted Liens;

 

(ii)           it has indicated on Schedule 4.1(A)(as
such schedule may be amended or supplemented from time to time): (w) the type
of organization of such Grantor, (x) the jurisdiction of organization of such
Grantor, (y) its organizational identification number and (z) the jurisdiction
where the chief executive office or its sole place of business is, and for the
one-year period preceding the date hereof has been, located.

 

(iii)          the full legal name of such Grantor is as set forth on
Schedule 4.1(A) and it has not done in the last five (5) years, and does not
do, business under any other name (including any trade-name or fictitious
business name) except for those names set forth on Schedule 4.1(B) (as such
schedule may be amended or supplemented from time to time);

 

(iv)          except as provided on Schedule 4.1(C), it has not
changed its name, jurisdiction of organization, chief executive office or sole
place of business (or principal residence if such Grantor is a natural person)
or its corporate structure in any way (e.g., by merger, consolidation, change
in corporate form or otherwise) within the past five (5) years;

 

(v)           other than in connection with Permitted Liens, it has
not within the last five (5) years become bound (whether as a result of merger
or otherwise) as debtor under a security agreement entered into by another
Person, which has not heretofore been terminated other than the agreements
identified on Schedule 4.1(D) hereof (as such schedule may be amended or
supplemented from time to time);

 

11

 

(vi)          with respect to each agreement
identified on Schedule 4.1(D), it has indicated on Schedule 4.1 (A) and
Schedule 4.1(B) the information required pursuant to Section 4.1(a)(ii), (iii)
and (iv) with respect to the debtor under each such agreement;

 

(vii)         (u) upon the filing of all UCC financing statements
naming each Grantor as “debtor” and the Priority Lien Collateral Trustee as “secured
party” and describing the Collateral in the filing offices set forth opposite such
Grantor’s name on Schedule 4.1(E) hereof (as such schedule may be amended or
supplemented from time to time) and other filings delivered by each Grantor,
(v) upon delivery of all Instruments, Chattel Paper and certificated Pledged
Equity Interests and Pledged Debt, (w) upon sufficient identification of
Commercial Tort Claims, (x) upon execution of a control agreement establishing
the Priority Lien Collateral Trustee’s “control” (within the meaning of Section
8-106, 9-106 or 9-104 of the UCC, as applicable) with respect to any Investment
Account, (y) upon consent of the issuer with respect to Letter of Credit
Rights, and (z) to the extent not solely subject to Article 9 of the UCC, upon
recordation of the security interests granted hereunder in Patents, Trademarks
and registered Copyrights in the applicable intellectual property registries,
including but not limited to the United States Patent and Trademark Office and
the United States Copyright Office, the security interests granted to the
Priority Lien Collateral Trustee hereunder constitute valid and perfected first
priority Liens (subject in the case of priority only to Permitted Liens and to
the rights of the United States government (including any agency or department
thereof) with respect to United States government Receivables) on all of the
Collateral;

 

(viii)        after giving effect to the actions described in
subsection (vii) above, except as may be required, in connection with the
disposition of any Investment Related Property, by laws generally affecting the
offering and sale of Securities, all actions and consents, including all
filings, notices, registrations and recordings necessary or desirable for the
exercise by the Priority Lien Collateral Trustee of the voting or other rights
provided for in this Agreement or the exercise of remedies in respect of the
Collateral have been made or obtained;

 

(ix)           other than the financing statements filed in favor of
the Priority Lien Collateral Trustee, no effective UCC financing statement,
fixture filing or other instrument similar in effect under any applicable law
covering all or any part of the Collateral is on file in any filing or
recording office except for (x) financing statements for which proper
termination statements have been delivered to the Priority Lien Collateral
Trustee for filing and (y) financing statements filed in connection with
Permitted Liens;

 

(x)            no authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority or regulatory body (other
than those which have been obtained) is required for either (i) the pledge or
grant by any Grantor of the Liens purported to be created in favor of the
Priority Lien Collateral Trustee hereunder or (ii) the exercise by Priority
Lien Collateral Trustee of any rights or remedies in respect of any Collateral
(whether specifically granted or created hereunder or created or provided for
by applicable law), except (A) for the filings contemplated by clause (vii)
above and (B) as may be required, in connection with the disposition of any
Investment Related Property, by laws generally affecting the offering and sale
of Securities;

 

12

 

(xi)           all written information supplied by any
Grantor with respect to any of the Collateral (in each case taken as a whole
with respect to any particular Collateral) is accurate and complete in all
material respects;

 

(xii)          none of the Collateral constitutes, or
is the Proceeds of, “farm products” (as defined in the UCC);

 

(xiii)         it does not own any “As-extracted collateral” (as
defined in the UCC) or any timber to be cut other than the “As-extracted
collateral” and the timber located on the Real Property as described on
Schedule 4.1(F) hereof;

 

(xiv)        except as described on Schedule 4.1(D), such Grantor has not become bound as a
debtor, either by contract or by operation of law, by a security agreement
previously entered into by another Person; and

 

(xv)         such Grantor has been duly organized as an entity of
the type as set forth opposite such Grantor’s name on Schedule 4.1(A) solely
under the laws of the jurisdiction as set forth opposite such Grantor’s name on
Schedule 4.1(A) and remains duly existing as such.  Such Grantor has not filed any certificates
of domestication, transfer or continuance in any other jurisdiction.

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees that:

 

(i)            except for the security interest created by this
Agreement, it shall not create or suffer to exist any Lien upon or with respect
to any of the Collateral, except Permitted Liens, and such Grantor shall defend
the Collateral against all Persons at any time claiming any interest therein;

 

(ii)           it shall not produce, use or permit any Collateral to
be used unlawfully or in violation of any provision of this Agreement or any
applicable statute, regulation or ordinance or any policy of insurance covering
the Collateral if such violation could reasonably be expected to have a
Material Adverse Effect;

 

(iii)          it shall not change such Grantor’s name, identity,
corporate structure (e.g., by merger, consolidation, change in corporate form
or otherwise), sole place of business, chief executive office, type of
organization or jurisdiction of organization or establish any trade names
unless it shall have (a) notified the Priority Lien Collateral Trustee in
writing, by executing and delivering to the Priority Lien Collateral Trustee a
completed Pledge Supplement, substantially in the form of Exhibit A attached
hereto, together with all Supplements to Schedules thereto, at least fifteen
(15) days prior to any such change or establishment, identifying such new
proposed name, identity, corporate structure, sole place of business, chief
executive office or jurisdiction of organization or trade name and providing
such other information in connection therewith as the Priority Lien Collateral
Trustee may reasonably request and (b) taken all actions necessary or advisable
to maintain the continuous validity, perfection and the same or better priority
of the Priority Lien Collateral Trustee’s security interest in the Collateral
intended to be granted and agreed to hereby;

 

(iv)          if the Priority Lien Collateral Trustee or any other
Secured Party gives value to enable Grantor to acquire rights in or the use of
any Collateral, it

 

13

 

shall
use such value for such purposes and such Grantor further agrees that repayment
of any Obligation shall apply on a “first-in, first-out” basis so that the
portion of the value used to acquire rights in any Collateral shall be paid in
the chronological order such Grantor acquired rights therein;

 

(v)           it shall pay promptly when due all property and other
taxes, assessments and governmental charges or levies imposed upon, and all
claims (including claims for labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof is being contested in
good faith and as otherwise provided in the Priority Lien Documents; provided,
such Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five (5) days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment entered or filed against such
Grantor or any of the Collateral as a result of the failure to make such payment;

 

(vi)          upon such Grantor or any Senior Officer of such
Grantor obtaining actual knowledge thereof, it shall promptly notify the
Priority Lien Collateral Trustee in writing of any event that would reasonably
be expected to have a Material Adverse Effect on the value of the Collateral or
any material portion thereof, the ability of any Grantor or the Priority Lien
Collateral Trustee to dispose of the Collateral or any material portion
thereof, or the rights and remedies of the Priority Lien Collateral Trustee in
relation thereto, including, without limitation, the levy of any legal process
against the Collateral or any portion thereof;

 

(vii)         it shall not take or permit any action
which would reasonably be expected to materially impair the Priority Lien Collateral
Trustee’s rights in the Collateral; and

 

(viii)        it shall not sell, transfer or assign
(by operation of law or otherwise) any Collateral except as otherwise permitted
in accordance with each of the Priority Lien Documents.

 

4.2          Equipment
and Inventory.

 

(a)           Representations and Warranties. 
Each Grantor represents and warrants, on the Closing Date, that:

 

(i)            all of the Equipment and Inventory (other than
Equipment and Inventory in transit) included in the Collateral is kept for the
past four (4) years only at the locations specified in Schedule 4.2 (as
such schedule may be amended or supplemented from time to time);

 

(ii)           any Goods now or hereafter produced by any Grantor
included in the Collateral have been and will be produced in compliance with
the requirements of the Fair Labor Standards Act, as amended; and

 

(iii)          except as set forth in Schedule 4.2, none
of the Inventory or Equipment is in the possession of an issuer of a negotiable
document (as defined in Section 7-104 of the UCC) therefor or otherwise in the
possession of a bailee or a warehouseman.

 

14

 

(b)           Covenants and Agreements. 
Each Grantor covenants and agrees that:

 

(i)            other than Inventory and Equipment in transit or sold
to customers in the ordinary course of business, it shall keep the Equipment,
Inventory and any Documents evidencing any Equipment and Inventory in the
locations specified on Schedule 4.2 (as such schedule may be amended or
supplemented from time to time) unless, with respect to any location at which
Equipment or Inventory having a value in excess of $500,000 is located, it
shall have (a) notified the Priority Lien Collateral Trustee in writing, by
executing and delivering to the Priority Lien Collateral Trustee an Officer’s
Certificate, and a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules thereto,
at least fifteen (15) days prior to any change in locations, identifying such
change in the location of and the new location of such Collateral, and
providing such other information in connection therewith as the Priority Lien
Collateral Trustee may reasonably request and (b) taken all actions necessary
or advisable to maintain the continuous validity, perfection and the same or
better priority of the Priority Lien Collateral Trustee’s security interest in
the Collateral intended to be granted and agreed to hereby, or to enable the
Priority Lien Collateral Trustee to exercise and enforce its rights and remedies
hereunder, with respect to such Equipment and Inventory;

 

(ii)           it shall keep correct and accurate records of the
Inventory, as is customarily maintained under similar circumstances by Persons
of established reputation engaged in a similar business, and in any event in
conformity with GAAP;

 

(iii)          it shall not deliver any Document evidencing any
Equipment and Inventory to any Person other than the issuer of such Document
(or to a shipper or freight forwarder acting on such Grantor’s behalf in the ordinary
course of business) to claim the Goods evidenced therefor or the Priority Lien
Collateral Trustee;

 

(iv)          if any Equipment or Inventory having a value in excess
of $500,000 in the aggregate is in possession or control of any third party
(other than Equipment and Inventory in transit and customers purchasing
inventory in the ordinary course of business), each Grantor shall join with the
Priority Lien Collateral Trustee in notifying the third party of the Priority
Lien Collateral Trustee’s security interest and obtaining an acknowledgment
from the third party that it is holding the Equipment and Inventory for the
benefit of the Priority Lien Collateral Trustee; and

 

(v)           with respect to any item of Equipment having a value
in excess of $100,000 individually or any items of Equipment having a value in
excess of $500,000 in the aggregate, which is covered by a certificate of title
under a statute of any jurisdiction under the law of which indication of a
security interest on such certificate is required as a condition of perfection
thereof, upon the reasonable request of the Priority Lien Collateral Trustee,
(A) provide information with respect to any such Equipment, (B) execute and
file with the registrar of motor vehicles or other appropriate authority in such
jurisdiction an application or other document requesting the notation or other
indication of the security interest created hereunder on such certificate of
title, and (C) deliver to the Priority Lien Collateral Trustee copies of
all such applications or other documents filed during such calendar quarter and
copies of all such certificates of title issued during such calendar quarter
indicating the security interest created hereunder in the items of Equipment
covered thereby.

 

15

 

4.3          Receivables.

 

(a)           Representations and Warranties. 
Each Grantor represents and warrants, on the Closing Date, that:

 

(i)            each Receivable (a) is the legal, valid and binding
obligation of the Account Debtor in respect thereof, representing an
unsatisfied obligation of such Account Debtor, (b) is enforceable in accordance
with its terms except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws, (c) is not subject to any
setoffs, defenses, taxes or counterclaims that have not been disclosed to the
Priority Lien Collateral Trustee (except with respect to refunds, returns and
allowances in the ordinary course of business) and (d) is in compliance in all
material respects with all applicable laws, whether federal, state, local or
foreign;

 

(ii)           none of the Account Debtors in respect of any
Receivable in excess of $500,000 individually or $1,000,000 in the aggregate is
the government of the United States, any agency or instrumentality thereof, any
state or municipality or any foreign sovereign; and

 

(iii)          no Receivable is evidenced by, or
constitutes, an Instrument or Chattel Paper which has not been delivered to, or
otherwise subjected to the control of, the Priority Lien Collateral Trustee to
the extent required by, and in accordance with Section 4.3(c).

 

(b)           Covenants and Agreements: 
Each Grantor hereby covenants and agrees that:

 

(i)            it shall keep and maintain at its own cost and expense
satisfactory and complete records of the Receivables, including, but not
limited to, the originals of all documentation with respect to all Receivables
and records of all payments received and all credits granted on the
Receivables, all merchandise returned and all other dealings therewith;

 

(ii)           it shall mark conspicuously, in form
and manner reasonably satisfactory to the Priority Lien Collateral Trustee, all
Chattel Paper and Instruments (other than any delivered to the Priority Lien
Collateral Trustee as provided herein), as well as the Receivables Records with
an appropriate reference to the fact that the Priority Lien Collateral Trustee
has a security interest therein;

 

(iii)          it shall perform in all material respects all of its
obligations with respect to the Receivables, except to the extent being
contested in good faith, so long as adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP, shall have been made
therefor;

 

(iv)          other than in the ordinary course of business as
generally conducted by it on and prior to the date hereof, and except as
otherwise provided in subsection (v) below, following an Event of Default, such
Grantor shall not (w) grant any extension or renewal of the time of payment of
any Receivable, (x) compromise or settle any dispute, claim or legal proceeding
with respect to any Receivable for less than the total unpaid balance thereof,
(y) release, wholly or partially, any Person liable for the payment thereof, or
(z) allow any credit or discount thereon;

 

16

 

(v)           except as otherwise provided in this subsection, each
Grantor shall continue to collect all amounts due or to become due to such
Grantor under the Receivables and any Supporting Obligation and diligently
exercise each material right it may have under any Receivable any Supporting
Obligation or Collateral Support, in each case, at its own expense, and in
connection with such collections and exercise, such Grantor shall take such
action as such Grantor may deem necessary or advisable.  Notwithstanding the foregoing, the Priority
Lien Collateral Trustee shall have the right following an Event of Default to
notify, or require any Grantor to notify, any Account Debtor of the Priority
Lien Collateral Trustee’s security interest in the Receivables and any
Supporting Obligation and, in addition, at any time following the occurrence
and during the continuation of an Event of Default, the Priority Lien
Collateral Trustee may:  (1) direct the
Account Debtors under any Receivables to make payment of all amounts due or to
become due to such Grantor thereunder directly to the Priority Lien Collateral
Trustee; (2) notify, or require any Grantor to notify, each Person maintaining
a lockbox or similar arrangement to which Account Debtors under any Receivables
have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to the Priority Lien
Collateral Trustee; and (3) enforce, at the expense of such Grantor, collection
of any such Receivables and to adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such Grantor
might have done.  If the Priority Lien
Collateral Trustee notifies any Grantor that it has elected to collect the
Receivables in accordance with the preceding sentence, any payments of
Receivables received by such Grantor shall be forthwith (and in any event
within two (2) Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Priority Lien Collateral Trustee
if required, in the Collateral Account maintained under the sole dominion and
control of the Priority Lien Collateral Trustee, and until so turned over, all
amounts and proceeds (including checks and other instruments) received by such
Grantor in respect of the Receivables, any Supporting Obligation or Collateral
Support shall be received in trust for the benefit of the Priority Lien
Collateral Trustee hereunder and shall be segregated from other funds of such
Grantor and such Grantor shall not adjust, settle or compromise the amount or
payment of any Receivable, or release wholly or partly any Account Debtor or
obligor thereof, or allow any credit or discount thereon; and

 

(vi)          it shall use its best efforts to keep
in full force and effect any Supporting Obligation or Collateral Support
relating to any Receivable.

 

(c)           Delivery and Control of Receivables. 
With respect to any Receivables in excess of $100,000 individually or
$500,000 in the aggregate that is evidenced by, or constitutes, Chattel Paper
or Instruments, each Grantor shall cause each originally executed copy thereof
to be delivered to the Priority Lien Collateral Trustee (or its agent or
designee) appropriately indorsed to the Priority Lien Collateral Trustee or
indorsed in blank:  (i) with respect to
any such Receivables in existence on the date hereof, on or prior to the date
hereof and (ii) with respect to any such Receivables hereafter arising, within
ten (10) days of such Grantor acquiring rights therein.  With respect to any Receivables in excess of
$100,000 individually or $500,000 in the aggregate which would constitute “electronic
chattel paper” under Article 9 of the UCC, each Grantor shall take all steps
necessary to give the Priority Lien Collateral Trustee control over such
Receivables (within the meaning of Section 9-105 of the UCC):  (i) with respect to any such Receivables in
existence on the date hereof, on or prior to the date hereof and (ii) with
respect to any such Receivables hereafter arising, within ten (10) days of
such Grantor acquiring rights therein. 
Any Receivable not otherwise required to be delivered or subjected to
the control of the

 

17

 

Priority Lien Collateral Trustee in
accordance with this subsection (c) shall be delivered or subjected to such
control upon request of the Priority Lien Collateral Trustee.

 

4.4          Investment Related
Property.

 

4.4.1       Investment Related Property Generally

 

(a)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees that:

 

(i)            in the event it acquires rights in any Investment
Related Property after the date hereof, it shall deliver to the Priority Lien
Collateral Trustee a completed Pledge Supplement, substantially in the form of
Exhibit A attached hereto, together with all Supplements to Schedules thereto,
reflecting such new Investment Related Property and all other Investment
Related Property.  Notwithstanding the
foregoing, it is understood and agreed that the security interest of the
Priority Lien Collateral Trustee shall attach to all Investment Related
Property immediately upon any Grantor’s acquisition of rights therein and shall
not be affected by the failure of any Grantor to deliver a supplement to
Schedule 4.4 as required hereby;

 

(ii)           except as provided in the next sentence, in the event
such Grantor receives any dividends, interest or distributions on any
Investment Related Property, or any securities or other property upon the
merger, consolidation, liquidation or dissolution of any issuer of any
Investment Related Property, then (a) such dividends, interest or distributions
and securities or other property shall be included in the definition of
Collateral without further action and (b) such Grantor shall immediately take
all steps, if any, necessary or advisable to ensure the validity, perfection,
priority and, if applicable, control of the Priority Lien Collateral Trustee
over such Investment Related Property (including, without limitation, delivery
thereof to the Priority Lien Collateral Trustee) and pending any such action
such Grantor shall be deemed to hold such dividends, interest, distributions,
securities or other property in trust for the benefit of the Priority Lien
Collateral Trustee and shall segregate such dividends, distributions,
Securities or other property from all other property of such Grantor.  Notwithstanding the foregoing, so long as no
Event of Default shall have occurred and be continuing, the Priority Lien
Collateral Trustee authorizes each Grantor to retain all ordinary cash
dividends and distributions paid by the issuer and all scheduled payments of
interest and principal; and

 

(iii)          each Grantor consents to the grant by
each other Grantor of a Security Interest in all Investment Related Property to
the Priority Lien Collateral Trustee.

 

(b)           Delivery and Control.

 

(i)            Unless prohibited by the Organizational Documents of
the Issuer of any Investment Related Property with respect to a joint venture
of such Grantor, each Grantor agrees that with respect to any Investment
Related Property in which it currently has rights it shall comply with the
provisions of this Section 4.4.1(b) on or before the Closing Date and with
respect to any Investment Related Property hereafter acquired by such Grantor
it shall comply with the provisions of this Section 4.4.1(b) promptly upon
acquiring rights therein, in each case in form and substance satisfactory to
the Priority Lien Collateral Trustee. 
With respect to any Investment Related Property in

 

18

 

a
principal amount in excess of $5,000 individually that is represented by a
certificate or that is an “instrument” (other than any Investment Related
Property credited to a Securities Account), subject to the terms of the
Intercreditor Agreement, it shall cause such certificate or instrument to be
delivered to the Priority Lien Collateral Trustee, indorsed in blank by an “effective
indorsement” (as defined in Section 8-107 of the UCC), regardless of
whether such certificate constitutes a “certificated security” for purposes of
the UCC.  With respect to any Investment
Related Property that is an “uncertificated security” for purposes of the UCC
(other than any “uncertificated securities” credited to a Securities Account),
it shall cause the issuer of such uncertificated security to either, subject to
the terms of the Intercreditor Agreement, (i) register the Priority Lien
Collateral Trustee as the registered owner thereof on the books and records of
the issuer or (ii) execute an agreement substantially in the form of Exhibit B
hereto, pursuant to which such issuer agrees to comply with the Priority Lien
Collateral Trustee’s instructions with respect to such uncertificated security
without further consent by such Grantor.

 

(c)           Voting and Distributions.

 

(i)            So long as no Event of Default shall have occurred and
be continuing:

 

(1)                                  except as otherwise provided under
the covenants and agreements relating to Investment Related Property in this
Agreement or elsewhere herein or in the Priority Lien Documents, each Grantor
shall be entitled to exercise or refrain from exercising any and all voting and
other consensual rights pertaining to the Investment Related Property or any
part thereof for any purpose not inconsistent with the terms of this Agreement
or the Priority Lien Documents; provided, no Grantor shall exercise or refrain
from exercising any such right if the Priority Lien Collateral Trustee shall
have notified such Grantor that, in the Priority Lien Collateral Trustee’s
reasonable judgment, such action would have a Material Adverse Effect on the
value of the Investment Related Property or any part thereof; and provided
further, such Grantor shall give the Priority Lien Collateral Trustee at least
five (5) Business Days prior written notice of the manner in which it intends
to exercise, or the reasons for refraining from exercising, any such right; it
being understood, however, that neither the voting by such Grantor of any Pledged
Stock for, or such Grantor’s consent to, the election of directors (or similar
governing body) at a regularly scheduled annual or other meeting of
stockholders or with respect to routine matters at any such meeting, nor such
Grantor’s consent to or approval of any action otherwise permitted under this
Agreement and the Priority Lien Documents, shall be deemed inconsistent with
the terms of this Agreement or the Priority Lien Documents within the meaning
of this Section 4.4(c)(i)(1), and no notice of any such voting or consent need
be given to the Priority Lien Collateral Trustee; and

 

(2)                                  the Priority Lien Collateral Trustee
shall promptly execute and deliver (or cause to be executed and delivered) to
each Grantor all proxies, and other instruments as such Grantor may from time
to time reasonably request for the purpose of enabling such Grantor to exercise
the voting and other consensual rights when and to the extent which it is
entitled to exercise pursuant to clause (1) above;

 

19

 

(3)                                  Upon the occurrence and during the
continuation of an Event of Default and any Grantors’ receipt of notice of
exercise by the Priority Lien Collateral Trustee of any powers, rights,
privileges and remedies available upon the occurrence and during the
continuance of an Event of Default, subject to the terms of the Intercreditor
Agreement:

 

(A)                              all
rights of each Grantor to exercise or refrain from exercising the voting and
other consensual rights which it would otherwise be entitled to exercise
pursuant hereto shall cease and all such rights shall thereupon become vested
in the Priority Lien Collateral Trustee who shall thereupon have the sole right
to exercise such voting and other consensual rights; and

 

(B)                                in
order to permit the Priority Lien Collateral Trustee to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto
and to receive all dividends and other distributions which it may be entitled
to receive hereunder: (1) each Grantor shall promptly execute and deliver (or
cause to be executed and delivered) to the Priority Lien Collateral Trustee all
proxies, dividend payment orders and other instruments as the Priority Lien
Collateral Trustee may from time to time reasonably request and (2) each
Grantor acknowledges that the Priority Lien Collateral Trustee may utilize the
power of attorney set forth in Section 6.1.

 

4.4.2       Pledged Equity Interests

 

(a)           Representations and Warranties. 
Each Grantor hereby represents and warrants, on the Closing Date and
after giving effect to the Paper Business Acquisitions, and on each Credit
Date, that:

 

(i)            Schedule 4.4(A) (as such schedule may be amended or
supplemented from time to time) sets forth under the headings “Pledged Stock, “Pledged
LLC Interests,” “Pledged Partnership Interests” and “Pledged Trust Interests,”
respectively, all of the Pledged Stock, Pledged LLC Interests, Pledged
Partnership Interests and Pledged Trust Interests owned by any Grantor and such
Pledged Equity Interests constitute the percentage of issued and outstanding
shares of stock, percentage of membership interests, percentage of partnership
interests or percentage of beneficial interest of the respective issuers
thereof indicated on such Schedule;

 

(ii)           except as set forth on Schedule 4.4(B), it
has not acquired any equity interests of another entity or substantially all
the assets of another entity within the past five (5) years;

 

(iii)          it is the record and beneficial owner of the Pledged
Equity Interests free of all Liens, rights or claims of other Persons other
than Permitted Liens and there are no outstanding warrants, options or other
rights to purchase, or shareholder, voting trust or similar agreements
outstanding with respect to, or property that is convertible into, or that
requires the issuance or sale of, any Pledged Equity Interests;

 

20

 

(iv)          without limiting the generality of Section 4.1(a)(v),
no consent of any Person including any other general or limited partner, any
other member of a limited liability company, any other shareholder or any other
trust beneficiary is necessary or desirable in connection with the creation,
perfection or first priority status of the security interest of the Priority
Lien Collateral Trustee in any Pledged Equity Interests or the exercise by the
Priority Lien Collateral Trustee of the voting or other rights provided for in
this Agreement or the exercise of remedies in respect thereof;

 

(v)           none of the Pledged LLC Interests nor
Pledged Partnership Interests are or represent interests in issuers that: (a)
are registered as investment companies or (b) are dealt in or traded on
securities exchanges or markets; and

 

(vi)          except as otherwise set forth on Schedule
4.4(C), all of the Pledged LLC Interests and Pledged Partnership Interests are
or represent interests in issuers that have opted to be treated as securities
under the uniform commercial code of any jurisdiction.

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees that:

 

(i)            without the prior written consent of the Priority Lien
Collateral Trustee, it shall not vote to enable or take any other action to:
(a) amend or terminate any partnership agreement, limited liability company
agreement, certificate of incorporation, by-laws or other organizational
documents in any way that materially changes the rights of such Grantor with
respect to any Investment Related Property or adversely affects the validity,
perfection or priority of the Priority Lien Collateral Trustee’s security
interest, (b) permit any issuer of any Pledged Equity Interest to issue any
additional stock, partnership interests, limited liability company interests or
other equity interests of any nature or to issue securities convertible into or
granting the right of purchase or exchange for any stock or other equity
interest of any nature of such issuer, except to another Grantor who has caused
such property to become subjected to a perfected Lien thereon in favor of the
Priority Lien Collateral Trustee, and except as otherwise permitted under the
Priority Lien Documents, (c) other than as permitted under the Priority Lien
Documents, permit any issuer of any Pledged Equity Interest to dispose of all
or a material portion of their assets, (d) waive any default under or breach of
any terms of organizational document relating to the issuer of any Pledged
Equity Interest or the terms of any Pledged Debt, or (e) cause any issuer of
any Pledged Partnership Interests or Pledged LLC Interests which are not
securities (for purposes of the UCC) on the date hereof to elect or otherwise
take any action to cause such Pledged Partnership Interests or Pledged LLC
Interests to be treated as securities for purposes of the UCC; provided,
however, notwithstanding the foregoing, if any issuer of any Pledged
Partnership Interests or Pledged LLC Interests takes any such action in
violation of the foregoing in this clause (e), such Grantor shall promptly
notify the Priority Lien Collateral Trustee in writing of any such election or action
and, in such event, shall take all steps necessary or advisable to establish
the Priority Lien Collateral Trustee’s “control” thereof;

 

(ii)           it shall comply with all of its obligations under any
partnership agreement or limited liability company agreement relating to
Pledged Partnership Interests or Pledged LLC Interests except to the extent
being contested in good faith, so long as adequate reserve or other appropriate
provision, as shall be required

 

21

 

in GAAP, shall have been made
therefore, and shall enforce all of its material rights with respect to any
Investment Related Property;

 

(iii)          unless otherwise permitted under the Priority Lien
Documents, without the prior written consent of the Priority Lien Collateral
Trustee, it shall not permit any issuer of any Pledged Equity Interest to merge
or consolidate unless (i) such issuer creates a security interest that is
perfected by a filed financing statement (that is not effective solely under
section 9-508 of the UCC) in collateral in which such new debtor has or
acquires rights, and (ii) all the outstanding Capital Stock or other equity
interests of the surviving or resulting corporation, limited liability company,
partnership or other entity owned by a Grantor is, upon such merger or
consolidation, pledged hereunder and no cash, securities or other property is
distributed in respect of the outstanding equity interests of any other
constituent Grantor; provided that if the surviving or resulting issuer upon
any such merger or consolidation is a Controlled Foreign Corporation, then such
Grantor shall only be required to pledge equity interests in accordance with
Section 2.2; and

 

(iv)          each Grantor consents to the grant by each other
Grantor of a security interest in all Investment Related Property to the
Priority Lien Collateral Trustee and, without limiting the foregoing, consents
to the transfer of any Pledged Partnership Interest and any Pledged LLC
Interest to the Priority Lien Collateral Trustee or its nominee following an
Event of Default and to the substitution of the Priority Lien Collateral
Trustee or its nominee as a partner in any partnership or as a member in any
limited liability company with all the rights and powers related thereto.

 

4.4.3       Pledged Debt

 

(a)           Representations and Warranties. 
Each Grantor hereby represents and warrants, on the date of this
Agreement, that Schedule 4.4 (as such schedule may be amended or supplemented
from time to time) sets forth under the heading “Pledged Debt” all of the
Pledged Debt owned by any Grantor (other than Pledged Debt owned by another
Grantor or one of its Subsidiaries), all of such Pledged Debt has been duly
authorized, authenticated or issued, and delivered and is the legal, valid and
binding obligation of the issuers thereof and is not in default;

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees that it shall notify the
Priority Lien Collateral Trustee of any default under any Pledged Debt that has
caused, either in any individual case or in the aggregate, a Material Adverse
Effect.

 

4.4.4       Investment Accounts

 

(a)           Representations and Warranties. Each Grantor hereby represents and
warrants, on the Closing Date, that:

 

(i)            Schedule 4.4 hereto (as such schedule may be amended
or supplemented from time to time) sets forth under the headings “Securities
Accounts” and “Commodities Accounts,” respectively, all of the Securities
Accounts and Commodities Accounts in which each Grantor has an interest.  Each Grantor is the sole entitlement holder
of each such Securities Account and Commodity Account on Schedule 4.4,
and such Grantor has not consented to, and is not otherwise aware of, any
Person (other than the Priority Lien Collateral Trustee pursuant hereto or the
Revolving Credit Collateral Agent) having “control” (within the meanings of
Sections 8-106 and 9-106 of the UCC)

 

22

 

over, or any other interest in, any such
Securities Account or Commodity Account or securities or other property
credited thereto;

 

(ii)           Schedule 4.4 hereto (as such schedule may be amended
or supplemented from time to time) sets forth under the heading “Deposit
Accounts” all of the Deposit Accounts in which each Grantor has an
interest.  Each Grantor is the sole account
holder of each such Deposit Account on Schedule 4.4 and such Grantor has
not consented to, and is not otherwise aware of, any Person (other than the
Priority Lien Collateral Trustee pursuant hereto or the Revolving Credit
Collateral Agent) having either sole dominion and control (within the meaning
of common law) or “control” (within the meanings of Section 9-104 of the UCC)
over, or any other interest in, any such Deposit Account or any money or other
property deposited therein; and

 

(iii)          Each Grantor has taken all actions necessary or
desirable, including those specified in Section 4.4.4(c), to: (a) establish
Priority Lien Collateral Trustee’s “control” (within the meanings of Sections
8-106 and 9-106 of the UCC) over any portion of the Investment Related Property
constituting Certificated Securities, Uncertificated Securities, Securities
Accounts, Securities Entitlements or Commodities Accounts (each as defined in
the UCC); (b) establish the Priority Lien Collateral Trustee’s “control”
(within the meaning of Section 9-104 of the UCC) over all Deposit Accounts
(other than those Deposit Accounts not subject to such requirement under
Section 4.4.4(c)); and (c) deliver all Instruments to the Priority Lien
Collateral Trustee.

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees with the Priority Lien
Collateral Trustee and each other Secured Party that it shall not close or
terminate any Investment Account without prior notice to the Priority Lien
Collateral Trustee or establish any additional Investment Accounts unless a
control agreement has been entered into by the appropriate Grantor, Priority
Lien Collateral Trustee and securities intermediary or depository institution
at which such additional account is to be maintained in accordance with the
provisions of Section 4.4.4(c).

 

(c)           Delivery and Control

 

(i)            With respect to any Investment Related Property
consisting of Securities Accounts or Securities Entitlements, it shall cause
the securities intermediary maintaining such Securities Account or Securities
Entitlement to enter into an agreement substantially in the form of Exhibit C
hereto (or otherwise reasonably acceptable to the Priority Lien Collateral
Trustee) pursuant to which it shall agree to comply with the Priority Lien Collateral
Trustee’s “entitlement orders” without further consent by such Grantor.  With respect to any Investment Related
Property that is a “Deposit Account,” it shall cause the depositary institution
maintaining such account to enter into an agreement substantially in the form
of Exhibit D hereto (or otherwise reasonably acceptable to the Priority Lien
Collateral Trustee) (a “Deposit Account Control
Agreement”), pursuant to which the Priority Lien Collateral Trustee
shall have both sole dominion and control over such Deposit Account (within the
meaning of the common law), subject to the terms of the Intercreditor
Agreement, and “control” (within the meaning of Section 9-104 of the UCC)
over such Deposit Account; provided that the Grantors shall not be required to
comply with this sentence with respect to Deposit Accounts that (A) are used
exclusively to fund payroll or (B) have an aggregate balance for all such
Deposit Accounts of $2,500,000 or less. 
Subject to the proviso to the immediately preceding sentence, each
Grantor shall have entered into such control

 

23

 

agreement
or agreements with respect to: (i) any Securities Accounts, Securities
Entitlements or Deposit Accounts that exist on the Closing Date, as of or prior
to the Closing Date and (ii) any Securities Accounts, Securities Entitlements
or Deposit Accounts that are created or acquired after the Closing Date, as of
or prior to the deposit or transfer of any such Securities Entitlements or
funds, whether constituting moneys or investments, into such Securities
Accounts or Deposit Accounts.  If any
Grantor fails to comply with this covenant with respect to Deposit Accounts,
such Grantor shall have ten (10) days to either (x) transfer funds in an amount
sufficient to bring such Grantor into compliance with this covenant from
Deposit Accounts not covered by Deposit Account Control Agreements to Deposit
Accounts covered by Deposit Account Control Agreements or (y) enter into one or
more Deposit Account Control Agreements with the Priority Lien Collateral
Trustee and the depository institutions at which such Deposit Accounts are not
covered by Deposit Account Control Agreements maintained in accordance with the
provisions of this Section 4.4.4(c) such that Grantors will then be in
compliance with this covenant.  Failure
to comply within such ten (10) day period shall constitute an Event of Default.

 

(ii)           In addition to the foregoing, if any issuer of any
Investment Related Property is located in a jurisdiction outside of the United
States, each Grantor shall take such additional actions, including, without
limitation, causing the issuer to register the pledge on its books and records
or making such filings or recordings, in each case as may be necessary or advisable,
under the laws of such issuer’s jurisdiction to insure the validity, perfection
and priority of the security interest of the Priority Lien Collateral Trustee,
unless the Priority Lien Collateral Trustee, in its reasonable judgment,
determines that the cost of such actions is excessive relative to the value of
such Investment Related Property or that such actions would materially
interfere with the Grantor’s ability to use a Securities Account or Deposit
Account in the ordinary course of business. 
Upon the occurrence and during the continuation of an Event of Default,
the Priority Lien Collateral Trustee shall have the right, without notice to
any Grantor, to transfer all or any portion of the Investment Related Property
to its name or the name of its nominee or agent.  In addition, the Priority Lien Collateral
Trustee shall have the right at any time, without notice to any Grantor, to
exchange any certificates or instruments representing any Investment Related
Property for certificates or instruments of smaller or larger denominations.

 

4.5          Material
Contracts.

 

(a)           Representations and Warranties. 
Each Grantor hereby represents and warrants, on the Closing Date, that:

 

(i)            Schedule 4.5 (as such schedule may be amended or
supplemented from time to time) sets forth all of the Material Contracts to
which such Grantor has rights;

 

(ii)           the Material Contracts, true and complete copies
(including any amendments or supplements thereof) of which have been furnished
to the Priority Lien Collateral Trustee, have been duly authorized, executed
and delivered by Grantors and all other parties thereto, are in full force and
effect and are binding upon and enforceable against all parties thereto in
accordance with their respective terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or

 

24

 

other similar laws.  There exists no material default under any
Material Contract by any Grantor or any other party thereto and neither such
Grantor, nor to its knowledge, any other Person party thereto is likely to
become in default thereunder and no Person party thereto has any defenses,
counterclaims or right of set-off with respect to any Material Contract; and

 

(iii)          no Material Contract prohibits assignment or requires
consent of or notice to any Person in connection with the assignment to the
Priority Lien Collateral Trustee hereunder, except such as has been given or
made or which such Grantor is using its
commercially reasonable efforts to obtain.

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees that:

 

(i)            After the occurrence and during the continuance of an
Event of Default, in addition to any rights under the Section of this Agreement
relating to Receivables, the Priority Lien Collateral Trustee may at any time
notify, or require any Grantor to so notify, the counterparty on any Material
Contract of the security interest of the Priority Lien Collateral Trustee
therein and may upon written notice to the applicable Grantor, notify, or
require any Grantor to notify, the counterparty to make all payments under the
Material Contracts directly to the Priority Lien Collateral Trustee;

 

(ii)           each Grantor shall deliver promptly to the Priority
Lien Collateral Trustee a copy of each material demand or notice received by it
relating in any way to any Material Contract which involves any claim, event or
other circumstance the consequences of which could reasonably be expected to
have a Material Adverse Effect;

 

(iii)          each Grantor shall deliver promptly to the Priority
Lien Collateral Trustee, after (1) any Material Contract of such Grantor is
terminated or amended in a manner that is materially adverse to such Grantor or
(2) any new Material Contract is entered into by such Grantor, notice thereof
as required by Section 5.1 of the Credit Agreement;

 

(iv)          it shall perform in all material respects all of its
obligations with respect to the Material Contracts except to the extent
contested in good faith, so long as adequate reserve or other appropriate
provision, as shall be required in conformity with GAAP, shall have been made
therefor;

 

(v)           it shall promptly and diligently exercise each
material right it may have under any Material Contract, any Supporting
Obligation or Collateral Support, in each case, at its own expense, and in
connection with such collections and exercise, such Grantor shall take such
action as such Grantor may deem necessary or advisable; and

 

(vi)          it shall use its best efforts to keep
in full force and effect any Supporting Obligation or Collateral Support
relating to any Material Contract, except where, in its business judgment, it
concludes that loss or relinquishment will not have a Material Adverse Effect.

 

25

 

4.6          Letter of
Credit Rights.

 

(a)           Representations and Warranties. 
Each Grantor hereby represents and warrants, on the Closing Date, that:

 

(i)            all material letters of credit to which such Grantor
has rights are listed on Schedule 4.6 (as such schedule may be amended or
supplemented from time to time) hereto; and

 

(ii)           it has obtained the consent of each
issuer of any letter of credit in an undrawn face amount of $250,000 or more in
the aggregate to the assignment of the proceeds of the letter of credit to the
Priority Lien Collateral Trustee.

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees that with respect to any letter
of credit hereafter arising in an undrawn face amount of $250,000 or more in
the aggregate it shall obtain the consent of the issuer thereof to the
assignment of the proceeds of the letter of credit to the Priority Lien
Collateral Trustee and shall deliver to the Priority Lien Collateral Trustee a
completed Pledge Supplement, substantially in the form of Exhibit A attached
hereto, together with all Supplements to Schedules thereto.

 

4.7          Intellectual
Property.

 

(a)           Representations and Warranties. 
Except as disclosed in Schedule 4.7(H) (as such schedule may be amended
or supplemented from time to time), each Grantor hereby represents and
warrants, on the Closing Date, that:

 

(i)            Schedule 4.7 (as such schedule may be amended or
supplemented from time to time) sets forth a true and complete list of (i) all
United States, state and foreign registrations of and applications for Patents,
Trademarks, and Copyrights owned by each Grantor and (ii) all Patent Licenses,
Trademark Licenses, Trade Secret Licenses and Copyright Licenses material to
the business of such Grantor;

 

(ii)           it is the sole and exclusive owner of the entire right,
title, and interest in and to all Intellectual Property listed on Schedule
4.7(a)(i) (as such schedule may be amended or supplemented from time to time),
and owns or has the valid right to use all other Intellectual Property
necessary to conduct its business, free and clear of all Liens, claims,
encumbrances and licenses, except for Permitted Liens and the licenses set
forth on Schedule 4.7(B), (D), (F) and (G) (as each may be amended or
supplemented from time to time);

 

(iii)          all Intellectual Property that is material to the
conduct of the business of any Grantor is subsisting and has not been adjudged
invalid or unenforceable, in whole or in part, and each Grantor has performed
all acts and has paid all renewal, maintenance, and other fees and taxes
required to maintain each and every registration and application of Copyrights,
Patents and Trademarks in full force and effect;

 

(iv)          to the best of Grantor’s knowledge, all Intellectual
Property that is material to the conduct of the business of any Grantor is
valid and enforceable; no holding, decision, or judgment has been rendered in
any action or proceeding to which a Grantor is a party before any court or
administrative authority challenging the validity of, such Grantor’s right to
register, or such Grantor’s rights to own or use, any such Intellectual
Property and no such action or proceeding is pending or, to the best of such
Grantor’s knowledge, threatened in writing;

 

26

 

(v)           as of the execution of this Agreement, the
registrations and applications for the Copyrights, Patents and Trademarks that
are material to the conduct of the business of any Grantor are standing in the
name of the party listed on Schedule 4.7(a)(i) as the record owner thereof, and
none of the Trademarks, Patents, Copyrights or Trade Secrets owned by or
licensed to a Grantor has been licensed by any Grantor to any Affiliate or
third party, except as disclosed in Schedule 4.7(B), (D), (F), or (G) (as each
may be amended or supplemented from time to time);

 

(vi)          except as could not reasonably be expected to have a
Material Adverse Effect, each Grantor has been using appropriate statutory
notice of registration in connection with its use of registered Trademarks,
proper marking practices in connection with the use of Patents, and appropriate
notice of copyright in connection with the publication of Copyrights material
to the business of such Grantor;

 

(vii)         each Grantor uses adequate standards of quality in the
manufacture, distribution, and sale of all products sold and in the provision
of all services rendered under or in connection with all Trademark Collateral
and has taken all commercially reasonable action necessary to insure that all
licensees of the Trademark Collateral owned by such Grantor use such adequate
standards of quality;

 

(viii)        to the best of each Grantor’s knowledge, the conduct
of such Grantor’s business does not infringe upon or otherwise violate in any
material respect any trademark, patent, copyright, trade secret or other
intellectual property right owned or controlled by a third party; no written
claim has been received by a Grantor asserting that the use of any Intellectual
Property owned or used by Grantor (or any of its respective licensees) violates
the asserted rights of any third party;

 

(ix)           to the best of each Grantor’s knowledge, no third
party is infringing upon or otherwise violating any rights in any material
Intellectual Property owned or used by such Grantor, or any of its respective
licensees in any material respect;

 

(x)            no settlement or consents, covenants not to sue,
nonassertion assurances, or releases have been entered into by Grantor or to
which Grantor is bound that adversely affect Grantor’s rights to own or use any
material Intellectual Property; and

 

(xi)           no Grantor has made a previous
assignment, sale, transfer or agreement constituting a present or future
assignment, sale or transfer of any Intellectual Property that has not been
terminated or released.  There is no effective
financing statement or other document or instrument now executed, or on file or
recorded in any public office, granting a security interest in or otherwise
encumbering any part of the Intellectual Property, other than in favor of the
Priority Lien Collateral Trustee.

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees as follows:

 

(i)            it shall (a) within thirty (30) days of the Closing
Date, file with the United States Patent and Trademark Office, the United
States Copyright Office and the Canadian counterpart of such offices documents
sufficient to ensure that all U.S. and Canadian registrations and applications
for Copyrights, Patents and Trademarks listed on Schedule 4.7(a)(i) stand in
the name of a Grantor and shall immediately provide the Priority Lien
Collateral Trustee with copies of such filings; and (b) within one

 

27

 

hundred
eight (180) days of the Closing Date, file with all other foreign counterparts
to the United States Patent and Trademark Office and the United States
Copyright Office documents sufficient to ensure that all other foreign
registrations and applications for Copyrights, Patents and Trademarks listed on
Schedule 4.7(a)(i) stand in the name of a Grantor and
shall immediately provide Priority Lien Collateral Trustee with copies of such
filings;

 

(ii)           it shall not do any act or omit to do any act whereby
any Intellectual Property owned by a Grantor which is material to the business
of a Grantor could reasonably be expected to lapse, or become abandoned,
dedicated to the public, or unenforceable, or which would adversely affect the
validity, grant, or enforceability of the security interest granted therein;

 

(iii)          it shall not, with respect to any Trademarks owned by
or licensed to a Grantor which are material to the business of any Grantor,
cease the use of any of such Trademarks or fail to maintain the level of the
quality of products sold and services rendered under any of such Trademark at a
level at least substantially consistent with the quality of such products and
services as of the date hereof, and each Grantor shall take such commercially
reasonable steps as are necessary to insure that licensees of such Trademarks
use the standards of quality set by such Grantor;

 

(iv)          within thirty (30) days of the date hereof with
respect to any Copyrights set forth on Schedule 4.7(i) that were not standing
in the name of any Grantor upon the effectiveness of the Closing Date and, in
all other cases, within sixty (60) days of the creation or acquisition by a
Grantor of any Copyrightable work which is material to the business of Grantor,
apply to register the Copyright in the United States Copyright Office and
record therein all documents necessary to effectuate such acquisition;

 

(v)           it shall promptly notify the Priority Lien Collateral
Trustee if it knows or has reason to know that any item of Intellectual
Property owned by or licensed to a Grantor that is material to the business of
any Grantor may become (a) abandoned or dedicated to the public or placed in
the public domain, (b) invalid or unenforceable, or (c) subject to any adverse
determination or development (including the institution of proceedings) in any
action or proceeding in the United States Patent and Trademark Office, the United
States Copyright Office, any state registry, any foreign counterpart of the
foregoing, or any court;

 

(vi)          it shall take commercially reasonable steps in the
United States Patent and Trademark Office, the United States Copyright Office,
any state registry or any foreign counterpart of the foregoing, to pursue any
application and maintain any registration of each Trademark, Patent, and
Copyright owned by any Grantor and material to its business which is now or
shall become included in the Intellectual Property including, but not limited
to, those items on Schedule 4.7(A), (C) and (E) (as each may be amended or
supplemented from time to time);

 

(vii)         in the event that any material Intellectual Property
owned by or exclusively licensed to any Grantor is infringed, or
misappropriated by a third party and Grantor becomes aware of such infringement
or misappropriation, such Grantor shall promptly take all commercially
reasonable actions to stop such infringement or misappropriation and protect
its rights in such Intellectual Property including, but not limited to, the
initiation of a suit for injunctive relief and to recover damages;

 

28

 

(viii)        it shall promptly (but in no event more than thirty
(30) days after any Grantor obtains knowledge thereof) report to the Priority
Lien Collateral Trustee the filing by or on behalf of a Grantor of any
application to register any Intellectual Property with the United States Patent
and Trademark Office, the United States Copyright Office, or any state registry
or foreign counterpart of the foregoing (whether such application is filed by
such Grantor or through any agent, employee, licensee, or designee thereof);

 

(ix)           it shall promptly (but in no event more than thirty
(30) days after any Grantor obtains knowledge thereof) report to the Priority
Lien Collateral Trustee the registration by or on behalf of a Grantor of any
Intellectual Property by any such office, in each case by executing and
delivering to the Priority Lien Collateral Trustee a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto,
together with all Supplements to Schedules thereto;

 

(x)            it shall, promptly upon the reasonable request of the
Priority Lien Collateral Trustee, execute and deliver to the Priority Lien
Collateral Trustee any document required to acknowledge, confirm, register,
record, or perfect the Priority Lien Collateral Trustee’s interest in any part
of the Intellectual Property, whether now owned or hereafter acquired;

 

(xi)           except with the prior consent of the Priority Lien
Collateral Trustee or as permitted under the each of the Priority Lien
Documents, each Grantor shall not execute, and there will not be on file in any
public office, any financing statement or other document or instruments, except
financing statements or other documents or instruments filed or to be filed in
favor of the Priority Lien Collateral Trustee and each Grantor shall not sell,
assign, transfer, license, grant any option, or create or suffer to exist any
Lien upon or with respect to the Intellectual Property, except for the Lien
created by and under this Agreement and the other Credit Documents and
Permitted Liens;

 

(xii)          it shall hereafter use reasonable best efforts so as
not to permit the inclusion in any contract to which it hereafter becomes a
party of any provision that could or might in any way materially impair or
prevent the creation of a security interest in, or the assignment of, such
Grantor’s rights and interests in any property included within the definitions
of any Intellectual Property acquired under such contracts;

 

(xiii)         it shall take commercially reasonable
steps to protect the secrecy of all Trade Secrets;

 

(xiv)        it shall use proper statutory notice
in connection with its use of any of the material Intellectual Property owned
by a Grantor; and

 

(xv)         it shall continue to collect, at its
own expense, all amounts due or to become due to such Grantor in respect of the
Intellectual Property owned by a Grantor or any portion thereof.  In connection with such collections, each
Grantor may take (and, at the Priority Lien Collateral Trustee’s reasonable
direction, shall take) such action as such Grantor or the Collection Agent may
deem reasonably necessary or advisable to enforce collection of such
amounts.  Notwithstanding the foregoing,
the Priority Lien Collateral Trustee shall have the right at any time after an
Event of Default

 

29

 

has
occurred and is continuing, to notify, or require any Grantor to notify, any
obligors with respect to any such amounts of the existence of the security
interest created hereby, and following and during the continuation of an Event
of Default, may take such action as the Priority Lien Collateral Trustee may
deem reasonably necessary to enforce collection of such amounts.

 

(c)           Certain Limited Exclusions. 
Notwithstanding anything herein to the contrary, so long as no Event of
Default has occurred and is continuing, no Grantor shall have an obligation to
use or to maintain any Trademark, Patent or Copyright (A) that relates
solely to any product, brand or work that in such Grantor’s reasonable business
judgment has been, or is in the process of being, discontinued, abandoned or
terminated, (B) that is being replaced with a Trademark, Patent or Copyright
substantially similar to the Trademark, Patent or Copyright that may be
abandoned or otherwise become invalid, so long as the failure to use or
maintain such Trademark, Patent or Copyright does not materially adversely
affect the validity of such replacement Trademark, Patent or Copyright, and so
long as such replacement Trademark, Patent or Copyright, is subject to the Lien
and security interest created by this Agreement, (C) that is substantially the
same as another Trademark, Patent or Copyright, that is in full force, so long
as the failure to use or maintain such Trademark, Patent or Copyright does not
materially adversely affect the validity of such other Trademark, Patent or
Copyright, and so long as such other Trademark, Patent or Copyright is subject
to the Lien and security interest created by this Agreement or (D) that is
or becomes the subject of any formal or informal dispute and/or any
administrative or legal proceeding (whether ex parte or inter partes) or other
circumstances such that the Grantors, using good faith business judgment,
reasonably determine it to be imprudent to maintain or continue use of such
Trademark, Patent or Copyright.

 

4.8          Commercial Tort
Claims

 

(a)           Representations and Warranties. 
Each Grantor hereby represents and warrants, on the Closing Date, that
Schedule 4.8 (as such schedule may be amended or supplemented from time to
time) sets forth all Commercial Tort Claims of each Grantor in excess of
$500,000 in the aggregate; and

 

(b)           Covenants and Agreements. 
Each Grantor hereby covenants and agrees that with respect to any
Commercial Tort Claim in excess of $500,000 in the aggregate hereafter arising
it shall deliver to the Priority Lien Collateral Trustee a completed Pledge
Supplement, substantially in the form of Exhibit A attached hereto, together
with all Supplements to Schedules thereto, identifying such new Commercial Tort
Claims.

 

30

 

SECTION 5.   ACCESS; RIGHT OF
INSPECTION AND FURTHER ASSURANCES; ADDITIONAL GRANTORS.

 

5.1          Access; Right of
Inspection.  The Priority Lien Collateral Trustee shall at
all times have full and free access during normal business hours and upon
reasonable prior notice to all the books, correspondence and records of each
Grantor, and the Priority Lien Collateral Trustee and its representatives may
examine the same, take extracts therefrom and make photocopies thereof, and
each Grantor agrees to render to the Priority Lien Collateral Trustee, at such
Grantor’s cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. 
The Priority Lien Collateral Trustee and its representatives shall at
all times also have the right to enter any premises of each Grantor during
normal business hours and upon reasonable prior notice and inspect any property
of each Grantor where any of the Collateral of such Grantor granted pursuant to
this Agreement is located for the purpose of inspecting the same, observing its
use or otherwise protecting its interests therein.

 

5.2          Further
Assurances.

 

(a)           Each Grantor agrees that from time to time, at the
expense of such Grantor, that it shall promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary,
or that the Priority Lien Collateral Trustee may reasonably request, in order
to create and/or maintain the validity, perfection or priority of and protect
any security interest granted hereby or to enable the Priority Lien Collateral Trustee
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral. Without limiting the generality of the foregoing, each Grantor
shall:

 

(i)            file such financing or continuation statements, or
amendments thereto, and execute and deliver such other agreements, instruments,
endorsements, powers of attorney or notices, as may be necessary, or as the
Priority Lien Collateral Trustee may reasonably request, in order to perfect
and preserve the security interests granted or purported to be granted hereby;

 

(ii)           take all actions necessary to ensure the recordation
of appropriate evidence of the liens and security interest granted hereunder in
the Intellectual Property with any intellectual property registry in which said
Intellectual Property is registered or in which an application for registration
is pending including, without limitation, the United States Patent and
Trademark Office, the United States Copyright Office, the various Secretaries
of State, and the foreign counterparts on any of the foregoing;

 

(iii)          at any reasonable time, upon prior written notice and
upon request by the Priority Lien Collateral Trustee, and subject to Sections
5.6 and 9.2 of the Credit Agreement, allow inspection of the Collateral by the
Priority Lien Collateral Trustee, or persons designated by the Priority Lien
Collateral Trustee; and

 

(iv)          at the Priority Lien Collateral
Trustee’s reasonable request, appear in and defend any action or proceeding
that may affect such Grantor’s title to or the Priority Lien Collateral Trustee’s
security interest in all or any part of the Collateral.

 

(b)           Each Grantor hereby authorizes the Priority Lien
Collateral Trustee to file a Record or Records, including, without limitation,
financing or continuation statements, and amendments thereto, in any
jurisdictions and with any filing offices as the Priority Lien Collateral

 

31

 

Trustee may determine, in its sole
discretion, are necessary or advisable to perfect the security interest granted
to the Priority Lien Collateral Trustee herein. 
Such financing statements may describe the Collateral in the same manner
as described herein or may contain an indication or description of collateral that
describes such property in any other manner as the Priority Lien Collateral
Trustee may determine, in its sole discretion, is necessary, advisable or
customary to ensure the perfection of the security interest in the Collateral
granted to the Priority Lien Collateral Trustee herein, including, without
limitation, describing such property as “all assets” or “all personal property,
whether now owned or hereafter acquired.” 
Each Grantor shall furnish to the Priority Lien Collateral Trustee from
time to time the statements and schedules further identifying and describing
the Collateral and the other reports in connection with the Collateral as are
provided in Section 5.17 of the Credit Agreement.

 

(c)           Each Grantor hereby authorizes the Priority Lien
Collateral Trustee to modify this Agreement after obtaining such Grantor’s
approval of or signature to such modification by amending Schedule 4.7 (as such
schedule may be amended or supplemented from time to time) to include reference
to any right, title or interest in any existing Intellectual Property or any
Intellectual Property acquired or developed by any Grantor after the execution
hereof or to delete any reference to any right, title or interest in any
Intellectual Property in which any Grantor no longer has or claims any right,
title or interest.

 

5.3          Additional Grantors.  From time to time
subsequent to the date hereof, additional Persons may become parties hereto as
additional Grantors (each, an “Additional Grantor”), by executing a Counterpart
Agreement.  Upon delivery of any such
counterpart agreement to the Priority Lien Collateral Trustee, notice of which
is hereby waived by Grantors, each Additional Grantor shall be a Grantor and
shall be as fully a party hereto as if the Additional Grantor were an original
signatory hereto.  Each Grantor expressly
agrees that its obligations arising hereunder shall not be affected or
diminished by the addition or release of any other Grantor hereunder, nor by
any election of Priority Lien Collateral Trustee not to cause any Subsidiary of
NewPageCo to become an Additional Grantor hereunder.  This Agreement shall be fully effective as to
any Grantor that is or becomes a party hereto regardless of whether any other
Person becomes or fails to become or ceases to be a Grantor hereunder.

 

SECTION 6.   COLLATERAL TRUSTEE APPOINTED
ATTORNEY-IN-FACT.

 

6.1          Power of Attorney.  Each Grantor hereby
irrevocably appoints the Priority Lien Collateral Trustee (such appointment
being coupled with an interest) as such Grantor’s attorney-in-fact, with full
authority in the place and stead of such Grantor and in the name of such
Grantor, the Priority Lien Collateral Trustee or otherwise, from time to time
in the Priority Lien Collateral Trustee’s discretion to take any action and to
execute any instrument that the Priority Lien Collateral Trustee may deem
reasonably necessary or advisable to accomplish the purposes of this Agreement,
including, without limitation, the following:

 

(a)           upon the occurrence and during the
continuance of any Event of Default, to obtain and adjust insurance required to
be maintained by such Grantor or paid to the Priority Lien Collateral Trustee
pursuant to the Priority Lien Documents;

 

(b)           upon the occurrence and during the continuance of any
Event of Default, to ask for, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due
under or in respect of any of the Collateral;

 

32

 

(c)           upon the occurrence and during the continuance of any
Event of Default, to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clause (b) above;

 

(d)           upon the occurrence and during the continuance of any
Event of Default, to file any claims or take any action or institute any
proceedings that the Priority Lien Collateral Trustee may deem necessary or
desirable for the collection of any of the Collateral or otherwise to enforce
the rights of the Priority Lien Collateral Trustee with respect to any of the
Collateral;

 

(e)           to prepare and file any UCC financing
statements against such Grantor as debtor;

 

(f)            to prepare, sign, and file for recordation in any
intellectual property registry, appropriate evidence of the lien and security
interest granted herein in the Intellectual Property in the name of such
Grantor as debtor;

 

(g)           to take or cause to be taken all actions necessary to
perform or comply or cause performance or compliance with the terms of this
Agreement, including, without limitation, access to pay or discharge taxes or
Liens (other than Permitted Liens) levied or placed upon or threatened against
the Collateral, and which the applicable Grantor has not paid or discharged
when required hereunder, the legality or validity thereof and the amounts
necessary to discharge the same to be determined by the Priority Lien
Collateral Trustee in its sole discretion, any such payments made by the
Priority Lien Collateral Trustee to become obligations of such Grantor to the
Priority Lien Collateral Trustee, due and payable immediately without demand;
and

 

(h)           upon the occurrence and during the continuance of an
Event of Default, generally to sell, transfer, pledge, make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Priority Lien Collateral Trustee were the absolute owner thereof
for all purposes, and to do, at the Priority Lien Collateral Trustee’s option
and such Grantor’s expense, all acts and things that the Priority Lien
Collateral Trustee deems reasonably necessary to protect, preserve or realize
upon the Collateral and the Priority Lien Collateral Trustee’s security
interest therein in order to effect the intent of this Agreement, all as fully
and effectively as such Grantor might do.

 

6.2          No Duty on the Part
of Priority Lien Collateral Trustee or Secured Parties.  The powers
conferred on the Priority Lien Collateral Trustee hereunder are solely to
protect the interests of the Secured Parties in the Collateral and shall not
impose any duty upon the Priority Lien Collateral Trustee or any Secured Party
to exercise any such powers.  The
Priority Lien Collateral Trustee and the Secured Parties shall be accountable
only for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to any Grantor for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.

 

SECTION 7.   REMEDIES.

 

7.1          Generally.

 

(a)           If any Event of Default shall have occurred and be
continuing, the Priority Lien Collateral Trustee may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it at law or in equity, all the rights and remedies of
the Priority Lien Collateral Trustee on default under the UCC (whether or

 

33

 

not the UCC applies to the affected
Collateral) to collect, enforce or satisfy any Secured Obligations then owing,
whether by acceleration or otherwise, and also may pursue any of the following
separately, successively or simultaneously:

 

(i)            require any Grantor to, and each Grantor hereby agrees
that it shall at its expense and promptly upon request of the Priority Lien
Collateral Trustee forthwith, assemble all or part of the Collateral as
directed by the Priority Lien Collateral Trustee and make it available to the
Priority Lien Collateral Trustee at a place to be designated by the Priority
Lien Collateral Trustee that is reasonably convenient to both parties;

 

(ii)           enter onto the property where any
Collateral is located and take possession thereof with or without judicial
process;

 

(iii)          prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent the Priority Lien
Collateral Trustee deems appropriate; and

 

(iv)          without notice except as specified below or under the
UCC, sell, assign, lease, license (on an exclusive or nonexclusive basis) or
otherwise dispose of the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Priority Lien Collateral Trustee’s
offices or elsewhere, for cash, on credit or for future delivery, at such time
or times and at such price or prices and upon such other terms as the Priority
Lien Collateral Trustee may deem commercially reasonable.

 

(b)           The Priority Lien Collateral Trustee or any Secured
Party may be the purchaser of any or all of the Collateral at any public or
private (to the extent to the portion of the Collateral being privately sold is
of a kind that is customarily sold on a recognized market or the subject of
widely distributed standard price quotations) sale in accordance with the UCC
and the Priority Lien Collateral Trustee, as collateral trustee for and
representative of the Secured Parties, 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 sale made in accordance with the
UCC, to use and apply any of the Secured Obligations as a credit on account of
the purchase price for any Collateral payable by the Priority Lien Collateral
Trustee at such sale.  Each purchaser at
any such sale shall hold the property sold absolutely free from any claim or
right on the part of any Grantor, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or appraisal
which it now has or may at any time in the future have under any rule of law or
statute now existing or hereafter enacted. 
Each Grantor agrees that, to the extent notice of sale shall be required
by law, at least ten (10) days notice to such Grantor of the time and place of
any public sale or the time after which any private sale is to be made shall
constitute reasonable notification.  The
Priority Lien Collateral Trustee shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given.  The Priority Lien Collateral Trustee may
adjourn any public or private sale from time to time by announcement at the
time and place fixed therefor, and such sale may, without further notice, be
made at the time and place to which it was so adjourned.  Each Grantor agrees that it would not be
commercially unreasonable for the Priority Lien Collateral Trustee to dispose
of the Collateral or any portion thereof by using internet sites that provide
for the auction of assets of the types included in the Collateral or that have
the reasonable capability of doing so, or that match buyers and sellers of
assets.  Each Grantor hereby waives any
claims against the Priority Lien Collateral Trustee and each Secured Party arising
by reason of the fact that the price at which any Collateral may have been sold
at such a private sale was less than the price which might have been obtained
at a

 

34

 

public sale, even if the Priority Lien
Collateral Trustee accepts the first offer received and does not offer such
Collateral to more than one offeree.  If
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantors shall be liable for
the deficiency and the fees of any attorneys employed by the Priority Lien
Collateral Trustee to collect such deficiency. 
Each Grantor further agrees that a breach of any of the covenants
contained in this Section will cause irreparable injury to the Priority Lien
Collateral Trustee, that the Priority Lien Collateral Trustee has no adequate
remedy at law in respect of such breach and, as a consequence, that each and
every covenant contained in this Section shall be specifically enforceable
against such Grantor, and such Grantor hereby waives and agrees not to assert
any defenses against an action for specific performance of such covenants
except for a defense that no default has occurred giving rise to the Secured
Obligations becoming due and payable prior to their stated maturities.  Nothing in this Section shall in any way
alter the rights of the Priority Lien Collateral Trustee hereunder.

 

(c)           The Priority Lien Collateral Trustee may sell the
Collateral without giving any warranties as to the Collateral.  The Priority Lien Collateral Trustee may
specifically disclaim or modify any warranties of title or the like.  This procedure will not be considered to
adversely affect the commercial reasonableness of any sale of the Collateral.

 

(d)           The Priority Lien Collateral Trustee shall have no
obligation to marshal any of the Collateral.

 

7.2          Application of
Proceeds.  Except as expressly provided elsewhere in
this Agreement, all proceeds received by the Priority Lien Collateral Trustee
in respect of any sale, any collection from, or other realization upon all or
any part of the Collateral shall be applied in full or in part by the Priority
Lien Collateral Trustee as provided in the Collateral Trust Agreement.

 

7.3          Sales on Credit.  If Priority Lien
Collateral Trustee sells any of the Collateral upon credit, Grantor will be
credited only with payments actually made by purchaser and received by Priority
Lien Collateral Trustee and applied to indebtedness of the purchaser.  In the event the purchaser fails to pay for
the Collateral, Priority Lien Collateral Trustee may resell the Collateral and
Grantor shall be credited with proceeds of the sale.

 

7.4          Deposit Accounts.

 

If any Event
of Default shall have occurred and be continuing, the Priority Lien Collateral
Trustee may apply the balance from any Deposit Account or instruct the bank at
which any Deposit Account is maintained to pay the balance of any Deposit
Account to or for the benefit of the Priority Lien Collateral Trustee.

 

7.5          Investment Related
Property.

 

Each Grantor
recognizes that, by reason of certain prohibitions contained in the Securities
Act and applicable state securities laws, the Priority Lien Collateral Trustee
may be compelled, with respect to any sale of all or any part of the Investment
Related Property conducted without prior registration or qualification of such
Investment Related Property under the Securities Act and/or such state
securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Investment Related Property for their own account, for
investment and not with a view to the distribution or resale thereof.  Each Grantor acknowledges that any such
private sale may be at prices and on terms less favorable than those obtainable
through a public sale without

 

35

 

such restrictions (including a
public offering made pursuant to a registration statement under the Securities
Act) and, notwithstanding such circumstances, each Grantor agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that the Priority Lien Collateral Trustee shall have no obligation
to engage in public sales and no obligation to delay the sale of any Investment
Related Property for the period of time necessary to permit the issuer thereof
to register it for a form of public sale requiring registration under the
Securities Act or under applicable state securities laws, even if such issuer
would, or should, agree to so register it. 
If the Priority Lien Collateral Trustee determines to exercise its right
to sell any or all of the Investment Related Property, upon written request,
each Grantor shall and shall cause each issuer of any Pledged Stock to be sold
hereunder, each partnership and each limited liability company from time to
time to furnish to the Priority Lien Collateral Trustee all such information as
the Priority Lien Collateral Trustee may request in order to determine the
number and nature of interest, shares or other instruments included in the
Investment Related Property which may be sold by the Priority Lien Collateral
Trustee in exempt transactions under the Securities Act and the rules and
regulations of the Securities and Exchange Commission thereunder, as the same
are from time to time in effect.

 

7.6          Intellectual
Property.

 

(a)           Anything contained herein to the contrary
notwithstanding, upon the occurrence and during the continuation of an Event of
Default:

 

(i)            the Priority Lien Collateral Trustee shall have the
right (but not the obligation) to bring suit or otherwise commence any action
or proceeding in the name of any Grantor, the Priority Lien Collateral Trustee
or otherwise, in the Priority Lien Collateral Trustee’s sole discretion, to
enforce any Intellectual Property owned by a Grantor, in which event such Grantor
shall, at the request of the Priority Lien Collateral Trustee, do any and all
lawful acts and execute any and all documents required by the Priority Lien
Collateral Trustee in aid of such enforcement and such Grantor shall promptly,
upon demand, reimburse and indemnify the Priority Lien Collateral Trustee as
provided in the Collateral Trust Agreement or in the Priority Lien Documents,
as applicable, in connection with the exercise of its rights under this
Section, and, to the extent that the Priority Lien Collateral Trustee shall
elect not to bring suit to enforce any Intellectual Property owned by a Grantor
as provided in this Section, each Grantor agrees to use commercially reasonable
measures, whether by action, suit, proceeding or otherwise, to prevent the
infringement or other violation of any of such Grantor’s rights in the
Intellectual Property by others and for that purpose agrees to diligently
maintain any action, suit or proceeding against any Person so infringing as
shall be necessary to prevent such infringement or violation;

 

(ii)           upon written demand from the Priority Lien Collateral
Trustee, each Grantor shall grant, assign, convey or otherwise transfer to the
Priority Lien Collateral Trustee or such Priority Lien Collateral Trustee’s
designee all of such Grantor’s right, title and interest in and to the
Intellectual Property and shall execute and deliver to the Priority Lien
Collateral Trustee such documents as are reasonably necessary to carry out the
intent and purposes of this Agreement;

 

(iii)          each Grantor agrees that such an
assignment and/or recording shall be applied to reduce the Secured Obligations
outstanding only to the extent that the Priority Lien Collateral Trustee (or
any Secured Party) receives cash proceeds in respect of the sale of, or other
realization upon, the Intellectual Property;

 

36

 

(iv)          within five (5) Business Days after written notice
from the Priority Lien Collateral Trustee, each Grantor shall make available to
the Priority Lien Collateral Trustee, to the extent within such Grantor’s power
and authority, such personnel in such Grantor’s employ on the date of such
Event of Default as the Priority Lien Collateral Trustee may reasonably
designate, by name, title or job responsibility, to permit such Grantor to
continue, directly or indirectly, to produce, advertise and sell the products
and services sold or delivered by such Grantor under or in connection with the
Trademarks and Trademark Licenses owned or entered into by a Grantor, such
persons to be available to perform their prior functions on the Priority Lien
Collateral Trustee’s behalf and to be compensated by the Priority Lien
Collateral Trustee at such Grantor’s expense on a per diem, pro-rata basis
consistent with the salary and benefit structure applicable to each as of the
date of such Event of Default; and

 

(v)           the Priority Lien Collateral Trustee shall have the
right to notify, or require each Grantor to notify, any obligors with respect
to amounts due or to become due to such Grantor in respect of the Intellectual
Property owned by a Grantor, of the existence of the security interest created
herein, to direct such obligors to make payment of all such amounts directly to
the Priority Lien Collateral Trustee, and, upon such notification and at the
expense of such Grantor, to enforce collection of any such amounts and to
adjust, settle or compromise the amount or payment thereof, in the same manner
and to the same extent as such Grantor might have done;

 

(1)                                  all amounts and proceeds (including
checks and other instruments) received by Grantor in respect of amounts due to
such Grantor in respect of the Collateral or any portion thereof shall be
received in trust for the benefit of the Priority Lien Collateral Trustee
hereunder, shall be segregated from other funds of such Grantor and shall be
forthwith paid over or delivered to the Priority Lien Collateral Trustee in the
same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 7.7 hereof; and

 

(2)                                  Grantor shall not adjust, settle or
compromise the amount or payment of any such amount or release wholly or partly
any obligor with respect thereto or allow any credit or discount thereon.

 

(b)           If (i) an Event of Default shall have occurred and, by
reason of cure, waiver, modification, amendment or otherwise, no longer be
continuing, (ii) no other Event of Default shall have occurred and be
continuing, (iii) an assignment or other transfer to the Priority Lien
Collateral Trustee of any rights, title and interests in and to the
Intellectual Property shall have been previously made and shall have become
absolute and effective, and (iv) the Secured Obligations shall not have become
immediately due and payable, upon the written request of any Grantor, the
Priority Lien Collateral Trustee shall promptly execute and deliver to such
Grantor, at such Grantor’s sole cost and expense, such assignments or other
transfer as may be necessary to reassign to such Grantor any such rights, title
and interests as may have been assigned to the Priority Lien Collateral Trustee
as aforesaid, subject to any disposition thereof that may have been made by the
Priority Lien Collateral Trustee; provided, after giving effect to such reassignment,
the Priority Lien Collateral Trustee’s security interest granted pursuant
hereto, as well as all other rights and remedies of the Priority Lien
Collateral Trustee granted hereunder, shall continue to be in full force and
effect; and provided further, the rights, title and interests so reassigned
shall be free and clear of any other Liens granted by or on behalf of the
Priority Lien Collateral Trustee and the Secured Parties.

 

37

 

(c)           For the purpose of enabling the Priority Lien
Collateral Trustee, during the continuance of an Event of Default, to exercise
rights and remedies herein at such time as the Priority Lien Collateral Trustee
shall be lawfully entitled to exercise such rights and remedies, and for no
other purpose, each Grantor hereby grants to the Priority Lien Collateral
Trustee, to the extent assignable, an irrevocable, non-exclusive license
(exercisable without payment of royalty or other compensation to such Grantor)
to use, assign, license or sublicense any of the Intellectual Property
Collateral now owned or hereafter acquired by such Grantor, wherever the same
may be located, including in such license access to all media in which any of
the licensed items may be recorded or stored and to all computer programs used
for the compilation or printout thereof.

 

SECTION 8.   COLLATERAL TRUSTEE.

 

The Priority
Lien Collateral Trustee has been appointed to act as Priority Lien Collateral
Trustee hereunder by each Priority Lien Representative and, by their acceptance
of the benefits hereof, the other Secured Parties. The Priority Lien Collateral
Trustee shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights,
and to take or refrain from taking any action (including, without limitation,
the release or substitution of Collateral), solely in accordance with this
Agreement and the Collateral Trust Agreement; provided, the Priority Lien
Collateral Trustee shall, exercise, or refrain from exercising, any
remedies provided for herein in accordance with the terms of the Collateral
Trust Agreement and the Intercreditor Agreement.  In furtherance of the foregoing provisions of
this Section, each Secured Party, by its acceptance of the benefits hereof,
agrees that it shall have no right individually to realize upon any of the
Collateral hereunder, it being understood and agreed by such Secured Party that
all rights and remedies hereunder may be exercised solely by the Priority Lien
Collateral Trustee for the benefit of Secured Parties in accordance with the
terms of this Section.  The rights,
privileges, protections and immunities in the Collateral Trust Agreement for
the benefit of the Collateral Trustee are hereby incorporated herein for the
benefit of the Priority Lien Collateral Trustee.  Priority Lien Collateral Trustee may resign
at any time by giving thirty (30) days’ prior written notice thereof to each
Priority Lien Representative and the Grantors, and Priority Lien Collateral
Trustee may be removed at any time with or without cause by an instrument or
concurrent instruments in writing delivered to the Grantors and Priority Lien
Collateral Trustee and approved pursuant to the terms of the Collateral Trust
Agreement.  Upon any such notice of
resignation or any such removal, a successor Priority Lien Collateral Trustee
shall be appointed as provided in the Collateral Trust Agreement.  Upon the acceptance of any appointment as
Priority Lien Collateral Trustee hereunder by a successor Priority Lien
Collateral Trustee, that successor Priority Lien Collateral Trustee shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring or removed Priority Lien Collateral Trustee under
this Agreement, and the retiring or removed Priority Lien Collateral Trustee
under this Agreement, upon payment of its charges, shall promptly
(i) transfer to such successor Priority Lien Collateral Trustee all sums,
Securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Priority Lien Collateral Trustee
under this Agreement, and (ii) execute and deliver to such successor Priority
Lien Collateral Trustee or otherwise authorize the filing of such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor Priority Lien
Collateral Trustee of the security interests created hereunder, whereupon such
retiring or removed Priority Lien Collateral Trustee shall be discharged from
its duties and obligations under this Agreement.  After any retiring or removed Priority Lien
Collateral Trustee’s resignation or removal hereunder as the Priority Lien
Collateral Trustee, the provisions of this Agreement shall inure to its benefit
as to any actions taken or

 

38

 

omitted
to be taken by it under this Agreement while it was the Priority Lien
Collateral Trustee hereunder.

 

SECTION 9.   CONTINUING SECURITY
INTEREST; TRANSFER OF LOANS.

 

This Agreement
shall create a continuing security interest in the Collateral and shall remain
in full force and effect until the Discharge of Priority Lien Obligations, be
binding upon each Grantor, its successors and assigns, and inure, together with
the rights and remedies of the Priority Lien Collateral Trustee hereunder, to
the benefit of the Priority Lien Collateral Trustee and its successors,
transferees and assigns.  Upon the
Discharge of Priority Lien Obligations, the security interest granted hereby
shall terminate hereunder and of record and all rights to the Collateral shall
revert to Grantors.  Upon any such
termination the Priority Lien Collateral Trustee shall, at Grantors’ expense,
execute and deliver to Grantors or otherwise authorize the filing of such
documents as Grantors shall reasonably request, including financing statement
amendments to evidence such termination.

 

SECTION 10.   STANDARD OF CARE; COLLATERAL TRUSTEE MAY
PERFORM.

 

The powers
conferred on the Priority Lien Collateral Trustee hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers.  Except for the
exercise of reasonable care in the custody of any Collateral in its possession
and the accounting for moneys actually received by it hereunder, the Priority
Lien Collateral Trustee shall have no duty as to any Collateral or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. 
The Priority Lien Collateral Trustee shall be deemed to have exercised
reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which the
Priority Lien Collateral Trustee accords its own property.  Neither the Priority Lien Collateral Trustee
nor any of its directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon all or any part of the Collateral or
for any delay in doing so or shall be under any obligation to sell or otherwise
dispose of any Collateral upon the request of any Grantor or otherwise.  If any Grantor fails to perform any agreement
contained herein, the Priority Lien Collateral Trustee may, but shall not be
required to, itself perform, or cause performance of, such agreement, and the
expenses of the Priority Lien Collateral Trustee incurred in connection
therewith shall be payable by each Grantor under the Collateral Trust
Agreement.

 

SECTION 11.   MISCELLANEOUS.

 

Any notice
required or permitted to be given under this Agreement shall be given in
accordance with the Collateral Trust Agreement. 
No failure or delay on the part of the Priority Lien Collateral Trustee
in the exercise of any power, right or privilege hereunder or under the
Collateral Trust Agreement 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.  All rights and remedies existing under this
Agreement and the Collateral Trust Agreement are cumulative to, and not
exclusive of, any rights or remedies otherwise available.  In case any provision in or obligation under
this Agreement 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.  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

 

39

 

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. 
This Agreement shall be binding upon and inure to the benefit of the
Priority Lien Collateral Trustee and Grantors and their respective successors
and assigns.  No Grantor shall, without
the prior written consent of the Priority Lien Collateral Trustee given in
accordance with the Collateral Trust Agreement, assign any right, duty or
obligation hereunder.  This Agreement and
the Collateral Trust Agreement embody the entire agreement and understanding
between Grantors and the Priority Lien Collateral Trustee and supersede all
prior agreements and understandings between such parties relating to the
subject matter hereof and thereof. 
Accordingly, the Collateral Trust Agreement may not be contradicted by
evidence of prior, contemporaneous or subsequent oral agreements of the
parties.  There are no unwritten oral
agreements between the parties.  This
Agreement may be executed in one or more counterparts and by different parties
hereto in separate 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; signature pages may be detached
from multiple separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same document.

 

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 ITS CONFLICTS OF LAW PROVISIONS
(OTHER THAN SECTION 5-1401 AND SECTION 5-1402 OF THE NEW YORK GENERAL
OBLIGATION LAWS).

 

Each party to
this Agreement waives its rights to a jury trial of any claim or cause of
action based upon or arising under this Agreement or any of the other Security
Documents or any dealings between them relating to the subject matter of this
Agreement or the intents and purposes of the other Security Documents.  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 Agreement and the other Security
Documents, including contract claims, tort claims, breach of duty claims and
all other common law and statutory claims. 
Each party to this Agreement acknowledges that this waiver is a material
inducement to enter into a business relationship, that each party hereto has
already relied on this waiver in entering into this Agreement, and that each
party hereto 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 11 and executed by each of
the parties hereto), and this waiver will apply to any subsequent amendments,
renewals, supplements or modifications of or to this Agreement or any of the
other Security Documents or to any other documents or agreements relating thereto.  In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.

 

In no event
shall the Collateral Trustee be responsible or liable for any failure or delay
in the performance of its obligations hereunder arising out of or caused by,
directly or indirectly, forces beyond its control, including, without
limitation, strikes, work stoppages, accidents, acts of war or terrorism, civil
or military disturbances, nuclear or natural catastrophes or acts of God, and
interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; it being understood that the Collateral
Trustee shall use

 

40

 

reasonable
efforts which are consistent with accepted practices in the banking industry to
resume performance as soon as practicable under the circumstances.

 

41

 

IN WITNESS
WHEREOF, each Grantor and the Priority Lien Collateral Trustee 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.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda M. Sheffield

  
	
   

  	
   

  	
  Name:

  	
  Linda M. Sheffield

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ESCANABA PAPER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  
	
   

  	
   

  	
  Name:

  	
  Peter H. Vogel

  
	
   

  	
   

  	
  Title:

  	
  President

  

 

 

	
   

  	
  MEADWESTVACO MARYLAND, INC.

  
	
   

  	
  (to be named LUKE PAPER COMPANY)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  
	
   

  	
   

  	
  Name:

  	
  Peter H. Vogel

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MEADWESTVACO OXFORD

  CORPORATION

  
	
   

  	
  (to be named RUMFORD PAPER

  COMPANY)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  
	
   

  	
   

  	
  Name:

  	
  Peter H. Vogel

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MEADWESTVACO ENERGY

  SERVICES LLC

  
	
   

  	
  (to be named NEWPAGE ENERGY

  SERVICES LLC)

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  
	
   

  	
   

  	
  Name:

  	
  Peter H. Vogel

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  RUMFORD COGENERATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  
	
   

  	
   

  	
  Name:

  	
  Peter H. Vogel

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  

 

 

	
   

  	
  RUMFORD FALLS POWER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  
	
   

  	
   

  	
  Name:

  	
  Peter H. Vogel

  
	
   

  	
   

  	
  Title:

  	
  Chief Executive Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  UPLAND RESOURCES, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter H. Vogel

  
	
   

  	
   

  	
  Name:

  	
  Peter H. Vogel

  
	
   

  	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  WICKLIFFE PAPER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Linda M. Sheffield

  
	
   

  	
   

  	
  Name:

  	
  Linda M. Sheffield

  
	
   

  	
   

  	
  Title:

  	
  Treasurer

  

 

 

	
   

  	
  THE BANK OF NEW YORK,

  
	
   

  	
  as the Priority Lien Collateral Trustee

  
	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Patricia Gallagher

  
	
   

  	
   

  	
  Name:

  	
  Patricia Gallagher

  
	
   

  	
   

  	
  Title:

  	
  Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00086-of-00352.parquet"}]]