REVOLVING CREDIT AND GUARANTY AGREEMENT

EXHIBIT 10.1

REVOLVING

CREDIT AND GUARANTY AGREEMENT

dated as of May 2, 2005

(as amended by Amendment No. 3 dated as of January 30, 2007)

among

NEWPAGE CORPORATION,

NEWPAGE HOLDING CORPORATION,

CERTAIN SUBSIDIARIES OF NEWPAGE CORPORATION,

as Guarantors,

VARIOUS LENDERS,

GOLDMAN SACHS CREDIT PARTNERS L.P.,

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

Agent,

UBS SECURITIES LLC,

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

WACHOVIA CAPITAL MARKETS, LLC,

as Co-Syndication Agent,

BANK OF AMERICA, N.A.,

as Documentation Agent

and

JPMORGAN CHASE BANK

as Collateral Agent

$250,000,000 Senior Secured Revolving Loan Credit Facilities

TABLE OF CONTENTS

 

 

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REVOLVING CREDIT AND GUARANTY AGREEMENT

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

RECITALS:

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

WHEREAS , Lenders have agreed to extend certain credit facilities to NewPageCo, in an aggregate principal amount not to exceed $250,000,000 of Revolving Loans, the proceeds of which will be used (i) to fund the Paper Business Acquisition, (ii) to pay related transaction costs, fees, commissions and expenses, (iii) to fund permitted capital expenditures and permitted acquisitions, (iv) to fund certain interest and commodities hedging arrangements, (v) to provide for the ongoing working capital requirements of the Paper Business, and (vi) for general corporate purposes of NewPageCo;

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

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

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

SECTION 1. DEFINITIONS AND INTERPRETATION

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

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

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

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

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

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

 

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“Administrative Agent” as defined in the preamble hereto.

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

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

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

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

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

“Aggregate Amounts Due” as defined in Section 2.17.

“Aggregate Payments” as defined in Section 7.2.

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

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

 

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“Applicable Margin” means (i) with respect to Revolving Loans that are Eurodollar Rate Loans, (a) from the Third Amendment Closing Date until the date of delivery of the Compliance Certificate and the financial statements for the period ending on the last day of the second full Fiscal Quarter ending after the Third Amendment Closing Date, an amount equal to 1.75% per annum, and (b) thereafter, (1) prior to the occurrence of any IPO, a percentage, per annum, determined by reference to the Total Leverage Ratio in effect from time to time as set forth below:

 

and (2) from and after the occurrence of an IPO, 1.50%, and (ii) with respect to Swing Line Loans and Revolving Loans that are Base Rate Loans, an amount equal to (a) the Applicable Margin for Eurodollar Rate Loans as set forth in clause (i)(a) or (i)(b) above, as applicable, minus (b) 1.00% per annum. Each change in the Applicable Margin shall become effective three Business Days after the date on which Administrative Agent shall have received the applicable financial statements and a Compliance Certificate pursuant to Section 5.1(d) calculating the Total Leverage Ratio as at the end of the Fiscal Quarter to which such Compliance Certificate relates. At any time prior to the occurrence of any IPO that NewPageCo has not submitted to Administrative Agent the applicable information as and when required under Section 5.1(d), the Applicable Margin shall be determined for the period from the date such information was required to have been delivered under Section 5.1(d) until three Business Days after the actual delivery thereof as if the Total Leverage Ratio were in excess of 3.50:1.00 for such period. Prior to the occurrence of any IPO, within one Business Day of receipt of the applicable information under Section 5.1(d), Administrative Agent shall give each Lender telefacsimile or telephonic notice (confirmed in writing) of the Applicable Margin in effect from such date.

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

 

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

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

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

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

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

 

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“ Banking Services ” means treasury management services (including, without limitation, controlled disbursement, automated clearinghouse transactions, return items, overdrafts and interstate depository network services) provided to any Credit Party by any Banking Services Provider; provided , however , that for obligations with respect to any of the foregoing to be included as a “Banking Services Obligation” the applicable Banking Services Provider and the Company must have previously provided written notice to the Administrative Agent and the Collateral Agent of (i) the provision of such Banking Services, and (ii) the maximum dollar amount of obligations arising thereunder to be included as Banking Services Obligations (the “ Banking Services Amount ”). No Banking Services Amount may be established or increased at any time that a Default or an Event of Default shall have occurred and be continuing, and in no event shall the aggregate amount of all Banking Services Amounts exceed $10 million (and no additional Banking Services Amounts may be included as Banking Services Obligations at any time that the then existing Banking Services Amounts equals $10 million). Subject to the foregoing limitations, the Banking Services Amount of any Banking Services Provider may be increased or decreased from time to time by notice from such Banking Services Provider and the Company to the Administrative Agent and the Collateral Agent.

“ Banking Services Obligations ” means any and all obligations of NewPageHoldCo, NewPageCo or any Guarantor Subsidiary, whether absolute or contingent and howsoever and whensoever created, arising, evidenced or acquired (including all renewals, extensions and modifications thereof and substitutions therefore) owing to any Banking Services Provider in connection with Banking Services.

“ Banking Services Provider ” means each Lender or any Affiliate of any Lender providing Banking Services to any Credit Party (including any Person who is a Lender (and any Affiliate thereof) as of the Closing Date but subsequently, whether before or after entering into any agreement to provide such Banking Services, ceases to be a Lender), including, without limitation, each such Affiliate that enters into a joinder agreement with the Collateral Agent appointing the Collateral Agent as its agent for purposes of receiving the benefits of the Collateral as set forth in the Pledge and Security Agreement. As of the Third Amendment Closing Date JPMorgan Chase Bank, N.A. and its Affiliates shall constitute the sole Banking Services Providers as of such date with a Banking Services Amount equal to $10 million.

“ Banking Services Reserves ” means all Reserves which the Collateral Agent from time to time establishes in its Permitted Discretion for Banking Services then provided or outstanding.

 

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

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

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

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

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

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

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

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

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

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

 

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

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

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

“Canadian Dollars” means the lawful money of Canada.

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

“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.

 

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

“Cash Dominion Trigger Event” shall mean the occurrence of any one of the following events: (i) at any time after the Third Amendment Closing Date, Excess Availability shall be less than $25.0 million for any period of ten (10) consecutive Business Days or (ii) an Event of Default shall occur and be continuing; provided , that , to the extent that the Cash Dominion Trigger Event has occurred due to clause (i) of this definition, if Excess Availability shall be equal to or greater than $25.0 million for at least sixty (60) consecutive days, the Cash Dominion Trigger Event shall be deemed to be over. At any time that a Cash Dominion Trigger Event shall be deemed to be over or otherwise cease to exist, the Agents shall take such actions, including delivering such notices and directions to depositary institutions at which Blocked Accounts are established, to terminate the cash sweeps and other transfers existing pursuant to Section 9.01(e) as a result of any Activation Notice or other notices or directions given by any Agent during the existence of such Cash Dominion Trigger Event.

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

 

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

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

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

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

“Closing Date” means May 2, 2005.

 

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

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

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

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

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

“Collateral Agent” as defined in the preamble hereto.

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

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

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

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

 

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

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

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

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

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

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

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

(5) nonrecurring costs, charges or expenses made or incurred in connection with any Permitted Acquisition, any production continuation, remediation, relocation, severance and benefits continuation costs in connection with plant closings, and costs and reduction charges directly related to the permanent shutdown of machinery and equipment (and not a transfer of manufacturing or other capacity to another plant or facility), 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

 

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(6) non-cash items increasing such Consolidated Net Income for such period, other than the accrual of revenue in the ordinary course of business, in each case, on a consolidated basis and determined in accordance with GAAP; provided that for each Fiscal Quarter during 2004 and for the first Fiscal Quarter of 2005, the Consolidated Adjusted EBITDA of NewPageCo will be deemed to be $85.0 million and for the portion of the second Fiscal Quarter of 2005 occurring prior to the Closing Date the Consolidated Adjusted EBITDA of NewPageCo will be deemed to be the Consolidated Adjusted EBITDA of the Paper Business for such portion of such Fiscal Quarter.

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

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

“Consolidated 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 (as such term is defined in the NewPageCo First Lien Term Loan Agreement), 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 except to the extent the Revolving Commitments are permanently reduced in connection with such repayments), (b) Consolidated Capital Expenditures (net of any proceeds of (y) any permitted 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.

 

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

 

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

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

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

(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; and

(7) to the extent deducted in determining Net Income, transaction costs incurred in connection with an IPO, in an aggregate amount not to exceed an amount approved in writing by the Administrative Agent in its reasonable discretion, will be added back to determine Consolidated Net Income.

“Consolidated Senior Debt” means, as at any date of determination, Consolidated Total Debt less Senor Secured Fixed Rate Notes Indebtedness, Senior Secured Floating Rate Notes Indebtedness, 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.

 

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

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

“Contributing Guarantors” as defined in Section 7.2.

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

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

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

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

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

“Credit Agreement Obligations” means the Obligations described in clause (i) of the definition thereof.

 

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

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

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

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

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

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

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

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

 

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“Defaulted Loan” as defined in Section 2.22.

“Defaulting Lender” as defined in Section 2.22.

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

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

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

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

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

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

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

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

 

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

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

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

 

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which might constitute grounds under ERISA for the termination of, or the appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefore, or the receipt by NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or omission which could give rise to the imposition on NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA Affiliates of material fines, penalties, taxes or related charges under Chapter 43 of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against NewPageHoldCo, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

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

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

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

 

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“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.

“ 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.

 

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

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

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

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

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

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

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

“Funding Default” as defined in Section 2.22.

“Funding Guarantors” as defined in Section 7.2.

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

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

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

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

 

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

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

“Guaranteed Obligations” as defined in Section 7.1.

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

“Guarantor Subsidiary” means each Guarantor other than NewPageHoldCo.

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

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

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

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

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

“Historical Financial Statements” means as of the Closing Date, (i) the audited financial statements of the Coated and Carbonless Papers Group for the 11-month period ended

 

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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 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

 

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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 any kind or nature whatsoever (including the reasonable fees and disbursements of counsel for Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened by any Person, whether or not any such Indemnitee shall be designated as a party or a potential party thereto, and any fees or expenses incurred by Indemnitees in enforcing this indemnity), whether direct, indirect or consequential and whether based on any federal, state or foreign laws, statutes, rules or regulations (including securities and commercial laws, statutes, rules or regulations and Environmental Laws), on common law or equitable cause or on contract or otherwise, in each case other than Taxes, that may be imposed on, incurred by, or asserted against any such Indemnitee, in any manner relating to or arising out of (i) this Agreement or the other Credit Documents or the transactions contemplated hereby or thereby (including the Lenders’ agreement to make Credit Extensions or the use or intended use of the proceeds thereof, or any enforcement of any of the Credit Documents (including any sale of, collection from, or other realization upon any of the Collateral or the enforcement of the

 

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Guaranty)); or (ii) any Environmental Claim or any Hazardous Materials Activity relating to or arising from, directly or indirectly, any past or present activity, operation, land ownership, or practice of NewPageHoldCo or any of its Subsidiaries.

“Indemnitee” as defined in Section 11.3.

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

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

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

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

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

 

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

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

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

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

“Investment” means (i) any direct or indirect purchase or other acquisition by NewPageHoldCo or any of its Subsidiaries of, or of a beneficial interest in, any of the Securities of any other Person (other than NewPageCo or a Guarantor Subsidiary); (ii) any direct or indirect purchase or other acquisition for value, by any Subsidiary of NewPageHoldCo from any Person (other than NewPageHoldCo, NewPageCo or any Guarantor Subsidiary), of any Capital Stock of such Person; and (iii) any direct or indirect loan, advance (other than advances to officers and 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 $200,000,000.

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

 

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“Issuing Bank” means means (i) JP Morgan Chase Bank, N.A., with respect to any Letter of Credit issued hereunder by JP Morgan Chase Bank, N.A. and (ii) Wachovia Bank, National Association, with respect to any Letter of Credit issued hereunder by Wachovia Bank, National Association, in each case together with its respective successors and assigns in such capacity. References to the “Issuing Bank” under this Agreement or any other Credit Document shall mean either or both of JP Morgan Chase Bank, N.A. and Wachovia Bank, National Association, as applicable.

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

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

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

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

“Lender” means each financial institution listed on the signature pages hereto as a Lender, or, in the case of Lenders on and after the Refinancing Date, on Schedule A to the Third Amendment and any other Person that becomes a party hereto pursuant to an Assignment Agreement.

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

“Letter of Credit Sublimit” means the lesser of (i) $100,000,000 and (ii) the aggregate unused amount of the Revolving Commitments then in effect.

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

“Lien” means (i) any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any agreement to give any of the foregoing, any

 

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conditional sale or other title retention agreement, and any lease in the nature thereof) and any option, trust or other preferential arrangement having the practical effect of any of the foregoing and (ii) in the case of Securities, any purchase option, call or similar right of a third party with respect to such Securities.

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

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

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

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

“MeadWestvaco” means MeadWestvaco Corporation, a Delaware corporation.

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

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

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

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

 

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

“ 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

 

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

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

“NewPageCo” as defined in the preamble hereto.

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

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

“NewPageCo First Lien Term Loan Documents” means the NewPageCo First Lien Term Loan Agreement, the notes issues pursuant thereto and each other document executed in connection therewith, and any documents executed in connection with any refinancings or replacements thereof to the extent permitted under Section 6.1, as each such document may be amended, restated, supplemented or otherwise modified from time to time.

“NewPageHoldCo” as defined in the preamble hereto.

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

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

 

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

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

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

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

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

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

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

“Obligations” means (i) all obligations of every nature of each Credit Party from time to time owed to the Agents (including former Agents), the Lenders or any of them under any Credit Document, whether for principal, interest (including interest which, but for the filing of a petition in bankruptcy with respect to such Credit Party, would have accrued on any Obligation, whether or not a claim is allowed against such Credit Party for such interest in the related bankruptcy proceeding), reimbursement of amounts drawn under Letters of Credit, fees, expenses, indemnification or otherwise, (ii) the due and punctual payment and performance of all obligations (not to exceed $1,500,000 in the aggregate for all such obligations) in respect of any purchasing card or similar program owed to any Lender, any Affiliate of any Lender, the Administrative Agent or the Collateral Agent by NewPageCo or any Guarantor, and (iii) the due and punctual payment and performance of all Banking Services Obligations (not to exceed $10,000,000 in the aggregate for all such Banking Services Obligations).

“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

 

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

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

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

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

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

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

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

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

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

 

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

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

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

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

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

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

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

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

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

 

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

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

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

“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

 

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requested by the Administrative Agent, USEPA’s currently applicable standards for “All Appropriate Inquiry”, and (ii) was conducted no more than six months prior to the date such report is required to be delivered hereunder by one or more environmental consulting firms reasonably satisfactory to Administrative Agent.

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

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

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

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

“Projections” as defined in Section 4.8.

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

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

 

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

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

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

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

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

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

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

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

“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.

 

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“Replacement Lender” as defined in Section 2.23.

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

“Requisite Lenders” means one or more Lenders having or holding Revolving Exposure and representing more than 50% of the aggregate Revolving Exposure of all Lenders. For purposes of this definition, the amount of the Revolving Exposure (“Voting Power Determinants”) shall be determined by excluding all Voting Power Determinants held or beneficially owned by a Sponsor Affiliated Lender but including all Voting Power Determinants held or beneficially owned by Sponsor Affiliated Institutional Lenders so long as the aggregate Voting Power Determinants held or beneficially owned by all Sponsor Affiliated Institutional Lenders does not exceed 30% of all Voting Power Determinants. If the aggregate Voting Power Determinants held or beneficially owned by all Sponsor Affiliated Institutional Lenders exceed more than 30%, then, for purposes solely of this definition, (x) the Voting Power Determinants held or beneficially owned by Sponsor Affiliated Institutional Lenders shall be ratably reduced so as to equal, in the aggregate, 30% of the aggregate Voting Power Determinants and (y) the Voting Power Determinants held or beneficially owned by Lenders other than Sponsor Affiliated Institutional Lenders shall be ratably increased so as to equal, in the aggregate, 70% of the aggregate Voting Power Determinants.

“ Reserves” shall mean reserves established against the Borrowing Base that the Collateral Agent may, in its Permitted Discretion, establish from time to time, including, without limitation, any Banking Services Reserves.

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

 

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“Revolving Commitment” means the commitment of a Lender to make or otherwise fund any Revolving Loan and to acquire participations in Letters of Credit and Swing Line Loans hereunder and “Revolving Commitments” means such commitments of all Lenders in the aggregate. The amount of each Lender’s Revolving Commitment, if any, is set forth on Appendix A or in the applicable Assignment Agreement, subject to any adjustment or reduction pursuant to the terms and conditions hereof. The aggregate amount of the Revolving Commitments as of the Third Amendment Closing Date is $250,000,000.

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

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

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

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

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

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

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

 

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“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).

“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 be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.15.

“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 and any documents executed in connection with any refinancings and 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 to the extent permitted under Section 6.15.

 

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

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

“ 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 be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.15.

“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 to the extent permitted under Section 6.15.

“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 be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.16.

 

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“Senior Subordinated Notes Documents” means the Senior Subordinated Notes Indenture, the Senior Subordinated Notes and each other document executed in connection with the Notes, as each such document may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.16.

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

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

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

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

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

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

“Sponsor Affiliated Institutional Lender” means a bank, insurance company, investment bank, commercial finance company or other institutional lender that is an Affiliate of NewPageCo as a result of common direct or indirect ownership by Sponsor, so long as (i)

 

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Sponsor owns directly or indirectly less than all of the Capital Stock of such Lender, and (ii) Sponsor does not directly appoint any Person with responsibility for reviewing or approving credit decisions with respect to the transactions contemplated by the Loan Documents; provided that such Person shall agree in the applicable Assignment and Acceptance (or in its Lender Addendum, as applicable) that it will not provide any information obtained by such Sponsor Affiliated Institutional Lender in its capacity as a Lender to Sponsor or any Affiliate of Sponsor.

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

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

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

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

 

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

“Swing Line Lender” means Wachovia Bank, National Association, in its capacity as Swing Line Lender hereunder, together with its permitted successors and assigns in such capacity.

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

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

“Swing Line Sublimit” means the lesser of (i) $25,000,000, and (ii) the aggregate unused amount of Revolving Commitments then in effect.

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

“Terminated Lender” as defined in Section 2.23.

“ Third Amendment Closing Date ” means January 30, 2007

“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.

 

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

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

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

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

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

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

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

“ Transition Services Agreement ” means (i) the Transition Services Agreement between MeadWestvaco Corporation and NewPageCo, (ii) the Information Technology Transition Services Agreement between MeadWestvaco Corporation and NewPageCo, (iii) the Human Resources Transition Services Agreement between MeadWestvaco Corporation and NewPageCo, (iv) the Wickliffe Services Agreement between MeadWestvaco Corporation and NewPageCo, (v) the Chillicothe Services Agreement between MeadWestvaco Corporation and Chillicothe Paper, Inc., and (vi) the Lease and Services Agreement between MeadWestvaco

 

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Corporation and Chillicothe Paper, Inc, each dated as of April 30, 2005, as the same may be amended, restated, supplemented or otherwise modified from time to time to the extent permitted under Section 6.15.

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

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

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

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

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

 

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

SECTION 2. LOANS AND LETTERS OF CREDIT

2.1. [Reserved] .

2.2. Revolving Loans .

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

(b) Borrowing Mechanics for Revolving Loans .

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

(ii) Whenever NewPageCo desires that Lenders make Revolving Loans, NewPageCo shall deliver to Administrative Agent a fully executed Funding Notice no

 

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later than 10:00 a.m. (New York City time) at least three Business Days in advance of the proposed Credit Date in the case of a Eurodollar Rate Loan, and at least one Business Day in advance of the proposed Credit Date in the case of a Revolving Loan that is a Base Rate Loan. Except as otherwise provided herein, a Funding Notice for a Revolving Loan that is a Eurodollar Rate Loan shall be irrevocable on and after the related Interest Rate Determination Date, and NewPageCo shall be bound to make a borrowing in accordance therewith.

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

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

2.3. Swing Line Loans .

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

 

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(b) Borrowing Mechanics for Swing Line Loans .

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

(ii) Whenever NewPageCo desires that Swing Line Lender make a Swing Line Loan, NewPageCo shall deliver to Swing Line Lender and Administrative Agent a Funding Notice no later than 12:00 p.m. (New York City time) on the proposed Credit Date. Unless Swing Line Lender has received notice from the Administrative Agent to the contrary, Swing Line Lender shall be entitled to rely on any certification from NewPageCo contained in any Funding Notice to the effect that the conditions precedent to the issuance of any requested Swing Line Loan have been satisfied in full, including, without limitation, that after giving effect to the making of such Swing Line Loan, the Total Utilization of Revolving Commitments would not exceed the lesser of (1) the Revolving Commitments then in effect and (2) the Borrowing Base then in effect.

(iii) Unless Swing Line Lender has received notice from Administrative Agent that the conditions precedent to the making of any requested Swing Line Loan have not been satisfied in full, then Swing Line Lender shall make the amount of its Swing Line Loan available to Administrative Agent by no later than 2:00 p.m. (New York City time) on the applicable Credit Date by wire transfer of same day funds in Dollars, at Administrative Agent’s Principal Office. Except as provided herein, upon satisfaction or waiver of the conditions precedent specified herein, Administrative Agent shall make the proceeds of such Swing Line Loans available to NewPageCo on the applicable Credit Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Swing Line Loans received by Administrative Agent from Swing Line Lender to be credited to the account of NewPageCo at Administrative Agent’s Principal Office, or to such other account as may be designated in writing to Administrative Agent by NewPageCo.

(iv) With respect to any Swing Line Loans which have not been voluntarily prepaid by NewPageCo pursuant to Section 2.13, Swing Line Lender may at any time in its sole and absolute discretion (but no less frequently than weekly), deliver to Administrative Agent (with a copy to NewPageCo), no later than 11:00 a.m. (New York City time) at least one Business Day in advance of the proposed Credit Date, a notice (which shall be deemed to be a Funding Notice given by NewPageCo) requesting that each Lender holding a Revolving Commitment make Revolving Loans that are Base Rate Loans to NewPageCo on such Credit Date in an amount equal to the amount of such Swing Line Loans (the “Refunded Swing Line Loans” ) outstanding on the date such notice is given which Swing Line Lender requests Lenders to prepay. Anything contained in this Agreement to the contrary notwithstanding, (1) the proceeds of such

 

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Revolving Loans made by the Lenders other than Swing Line Lender shall be immediately delivered by Administrative Agent to Swing Line Lender (and not to NewPageCo) and applied to repay a corresponding portion of the Refunded Swing Line Loans and (2) on the day such Revolving Loans are made, Swing Line Lender’s Pro Rata Share of the Refunded Swing Line Loans shall be deemed to be paid with the proceeds of a Revolving Loan made by Swing Line Lender to NewPageCo, and such portion of the Swing Line Loans deemed to be so paid shall no longer be outstanding as Swing Line Loans and shall no longer be due under the Swing Line Note of Swing Line Lender but shall instead constitute part of Swing Line Lender’s outstanding Revolving Loans to NewPageCo and shall be due under the Revolving Loan Note issued by NewPageCo to Swing Line Lender. NewPageCo hereby authorizes Administrative Agent and Swing Line Lender to charge NewPageCo’s accounts with Administrative Agent and Swing Line Lender (up to the amount available in each such account) in order to immediately pay Swing Line Lender the amount of the Refunded Swing Line Loans to the extent of the proceeds of such Revolving Loans made by Lenders, including the Revolving Loans deemed to be made by Swing Line Lender, are not sufficient to repay in full the Refunded Swing Line Loans. If any portion of any such amount paid (or deemed to be paid) to Swing Line Lender should be recovered by or on behalf of NewPageCo from Swing Line Lender in bankruptcy, by assignment for the benefit of creditors or otherwise, the loss of the amount so recovered shall be ratably shared among all Lenders in the manner contemplated by Section 2.17.

(v) If for any reason Revolving Loans are not made pursuant to Section 2.3(b)(iv) in an amount sufficient to repay any amounts owed to Swing Line Lender in respect of any outstanding Swing Line Loans on or before the third Business Day after demand for payment thereof by Swing Line Lender, each Lender holding a Revolving Commitment shall be deemed to, and hereby agrees to, have purchased a participation in such outstanding Swing Line Loans, and in an amount equal to its Pro Rata Share of the applicable unpaid amount together with accrued interest thereon. Upon one Business Day’s notice from Swing Line Lender, each Lender holding a Revolving Commitment shall deliver to Swing Line Lender an amount equal to its respective participation in the applicable unpaid amount in same day funds at the Principal Office of Swing Line Lender. In order to evidence such participation each Lender holding a Revolving Commitment agrees to enter into a participation agreement at the request of Swing Line Lender in form and substance reasonably satisfactory to Swing Line Lender. In the event any Lender holding a Revolving Commitment fails to make available to Swing Line Lender the amount of such Lender’s participation as provided in this paragraph, Swing Line Lender shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by Swing Line Lender for the correction of errors among banks and thereafter at the Base Rate, as applicable.

 

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

(vii) Upon the request by Swing Line Lender to have a Revolving Loan made for the purpose of repaying any Refunded Swing Line Loan pursuant to the preceding paragraph (iv) or the request by Swing Line Lender to have Lender purchase a participation in any unpaid Swing Line Loans pursuant to the preceding paragraph (v), unless Swing Line Lender has received notice from the Administrative Agent that the conditions precedent under Section 3.2 were not satisfied in full at the time that the Swing Line Loan was made to NewPageCo to which such Refunded Swing Line Loan relates or to which such participation in any unpaid Swing Line Loans relates, Swing Line Lender shall be deemed to have satisfied the condition of possessing a good faith belief that all conditions precedent under Section 3.2 have been satisfied for purposes of the immediately preceding paragraph (vi).

 

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

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

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

 

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Issuing Bank’s standard operating procedures. Upon the issuance of any Letter of Credit or amendment or modification to a Letter of Credit, Issuing Bank shall promptly notify each Lender of such issuance, which notice shall be accompanied by a copy of such Letter of Credit or amendment or modification to a Letter of Credit and the amount of such Lender’s respective participation in such Letter of Credit pursuant to Section 2.4(e). In the event there shall be any conflict between the terms contained in any Issuance Notice and this Agreement, the terms of this Agreement shall govern. Unless the Issuing Bank has received notice from the Administrative Agent to the contrary, the Issuing Bank shall be entitled to rely on any certification from NewPageCo contained in any Issuance Notice to the effect that the conditions precedent to the issuance of any requested Letter of Credit have been satisfied in full, including, without limitation, that after giving effect to such issuance, the Total Utilization of Revolving Commitments would not exceed the lesser of (1) the Revolving Commitments then in effect and (2) the Borrowing Base then in effect.

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

 

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certificates delivered thereunder, if taken or omitted in good faith, shall not give rise to any liability on the part of Issuing Bank to NewPageCo. Notwithstanding anything to the contrary contained in this Section 2.4(c), NewPageCo shall retain any and all rights it may have against Issuing Bank for any liability arising solely out of the gross negligence, willful misconduct or bad faith of Issuing Bank.

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

(e) Lenders’ Purchase of Participations in Letters of Credit . Immediately upon the issuance of each Letter of Credit, each Lender having a Revolving Commitment shall be deemed to have purchased, and hereby agrees to irrevocably purchase, from Issuing Bank a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Lender’s Pro Rata Share (with respect to the Revolving Commitments) of the maximum amount which is or at any time may become available to be drawn thereunder. In the event that NewPageCo shall fail for any reason to reimburse Issuing Bank as provided in Section 2.4(d), Issuing Bank shall promptly notify each Lender of the unreimbursed amount of such honored drawing and of such Lender’s respective participation therein based on such Lender’s Pro Rata

 

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Share of the Revolving Commitments. Each Lender shall make available to Issuing Bank an amount equal to its respective participation, in Dollars and in same day funds, at the office of Issuing Bank specified in such notice, not later than 12:00 p.m. (New York City time) on the first business day (under the laws of the jurisdiction in which such office of Issuing Bank is located) after the date notified by Issuing Bank. In the event that any Lender fails to make available to Issuing Bank on such business day the amount of such Lender’s participation in such Letter of Credit as provided in this Section 2.4(e), Issuing Bank shall be entitled to recover such amount on demand from such Lender together with interest thereon for three Business Days at the rate customarily used by Issuing Bank for the correction of errors among banks and thereafter at the Base Rate. Nothing in this Section 2.4(e) shall be deemed to prejudice the right of any Lender to recover from Issuing Bank any amounts made available by such Lender to Issuing Bank pursuant to this Section in the event that it is determined that the payment with respect to a Letter of Credit in respect of which payment was made by such Lender constituted gross negligence, willful misconduct or bad faith on the part of Issuing Bank. In the event Issuing Bank shall have been reimbursed by other Lenders pursuant to this Section 2.4(e) for all or any portion of any drawing honored by Issuing Bank under a Letter of Credit, such Issuing Bank shall distribute to each Lender which has paid all amounts payable by it under this Section 2.4(e) with respect to such honored drawing such Lender’s Pro Rata Share of all payments subsequently received by Issuing Bank from NewPageCo in reimbursement of such honored drawing when such payments are received. Any such distribution shall be made to a Lender at its primary address set forth below its name on Appendix B or at such other address as such Lender may request.

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

 

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Credit Document by any party thereto; (vii) any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or (viii) the fact that an Event of Default or a Default shall have occurred and be continuing; provided , with respect to such obligations to such Issuing Bank, that payment by Issuing Bank under the applicable Letter of Credit shall not have constituted gross negligence, willful misconduct or bad faith of Issuing Bank under the circumstances in question.

(g) Indemnification . Without duplication of any obligation of NewPageCo under Section 11.2 or 11.3, in addition to amounts payable as provided herein, NewPageCo hereby agrees to protect, indemnify, pay and save harmless Issuing Bank from and against any and all claims, demands, liabilities, damages, losses, costs, charges and expenses (including reasonable fees, expenses and disbursements of counsel and allocated costs of internal counsel) which Issuing Bank may incur or be subject to as a consequence, direct or indirect, of (i) the issuance of any Letter of Credit by Issuing Bank, other than as a result of (1) the gross negligence, willful misconduct or bad faith of Issuing Bank or (2) the wrongful dishonor by Issuing Bank of a proper demand for payment made under any Letter of Credit issued by it, or (ii) the failure of Issuing Bank to honor a drawing under any such Letter of Credit as a result of any Governmental Act.

2.5. Pro Rata Shares; Availability of Funds

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

(b) Availability of Funds . Unless Administrative Agent shall have been notified by any Lender prior to the applicable Credit Date that such Lender does not intend to make available to Administrative Agent the amount of such Lender’s Loan requested on such Credit Date, Administrative Agent may assume that such Lender has made such amount available to Administrative Agent on such Credit Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to NewPageCo a corresponding amount on such Credit Date. If such corresponding amount is not in fact made available to Administrative Agent by such Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Lender together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate. If such Lender does not pay such corresponding amount forthwith

 

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upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify NewPageCo and NewPageCo shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Credit Date until the date such amount is paid to Administrative Agent, at the rate payable hereunder for Base Rate Loans. Nothing in this Section 2.5(b) shall be deemed to relieve any Lender from its obligation to fulfill its Revolving Commitments hereunder or to prejudice any rights that NewPageCo may have against any Lender as a result of any default by such Lender hereunder.

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

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

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

(b) Register . Administrative Agent (or its agent or sub-agent appointed by it) shall maintain at the Principal Office a register for the recordation of the names and addresses of Lenders and the Revolving Commitments and Loans of each Lender from time to time (the “Register” ). The Register shall be available for inspection by NewPageCo, any Lender or any Issuing Bank (with respect to any entry relating to such Lender’s or Issuing Bank’s Loans) at any reasonable time and from time to time upon reasonable prior notice. Administrative Agent shall record, or shall cause to be recorded, in the Register the Revolving Commitments and the Loans in accordance with the provisions of Section 11.6, and each repayment or prepayment in respect of the principal amount of the Loans, and any such recordation shall be conclusive and binding on NewPageCo and each Lender, absent manifest error; provided , failure to make any such recordation, or any error in such recordation, shall not affect any Lender’s Revolving

 

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Commitments or NewPageCo’s Obligations in respect of any Loan. NewPageCo hereby designates GSCP to serve as NewPageCo’s agent solely for purposes of maintaining the Register as provided in this Section 2.7, and NewPageCo hereby agrees that, to the extent GSCP serves in such capacity, GSCP and its officers, directors, employees, agents, sub-agents and Affiliates shall constitute “Indemnitees.”

(c) Notes . If so requested by any Lender by written notice to NewPageCo (with a copy to Administrative Agent) at least two Business Days prior to the Closing Date, or at any time thereafter, NewPageCo shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to Section 11.6) on the Closing Date (or, if such notice is delivered after the Closing Date, promptly after NewPageCo’s receipt of such notice) a Note or Notes to evidence such Lender’s Revolving Loan or Swing Line Loan, as the case may be.

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

2.8. Interest on Loans.

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

(i) in the case of Revolving Loans,

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

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

 

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

(b) The basis for determining the rate of interest with respect to any Loan (except a Swing Line Loan which can be made and maintained as Base Rate Loans only), and the Interest Period with respect to any Eurodollar Rate Loan, shall be selected by NewPageCo and notified to Administrative Agent and Lenders pursuant to the applicable Funding Notice or Conversion/Continuation Notice, as the case may be. If on any day a Loan is outstanding with respect to which a Funding Notice or Conversion/Continuation Notice has not been delivered to Administrative Agent in accordance with the terms hereof specifying the applicable basis for determining the rate of interest, then for that day such Loan shall be a Base Rate Loan.

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

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

 

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

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

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

 

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2.9. Conversion/Continuation

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

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

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

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

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

 

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2.11. Fees.

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

(i) commitment fees equal to (1) the average of the daily difference between (a) the Revolving Commitments, and (b) the Total Utilization of Revolving Commitments, times (2) 0.375% per annum; and

(ii) letter of credit fees equal to (1) the Applicable Margin for Revolving Loans that are Eurodollar Rate Loans, times (2) the average aggregate daily maximum amount available to be drawn under all such Letters of Credit (regardless of whether any conditions for drawing could then be met and determined as of the close of business on any date of determination).

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

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

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

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

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

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

 

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2.12. [Reserved].

2.13. Voluntary Prepayments/Commitment Reductions.

(a) Voluntary Prepayments .

(i) Any time and from time to time:

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

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

with respect to Swing Line Loans, NewPageCo may prepay any such Loans without penalty or premium on any Business Day in whole or in part in an aggregate minimum amount of $1,000,000, and in integral multiples of $500,000 in excess of that amount.

(ii) All such prepayments shall be made:

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

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

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

 

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(b) Voluntary Commitment Reductions .

(i) NewPageCo may, upon not less than three Business Days’ prior written or telephonic notice confirmed in writing to Administrative Agent (which original written or telephonic notice Administrative Agent will promptly transmit by telefacsimile or telephone to each applicable Lender), at any time and from time to time terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Commitments in an amount up to the amount by which the Revolving Commitments exceed the Total Utilization of Revolving Commitments at the time of such proposed termination or reduction; provided , any such partial reduction of the Revolving Commitments shall be in an aggregate minimum amount of $5,000,000 and integral multiples of $1,000,000 in excess of that amount.

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

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

2.15. Application of Prepayments .

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

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

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

 

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

2.16. General Provisions Regarding Payments.

(a) All payments by NewPageCo of principal, interest, fees and other Credit Agreement 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 Loan (other than voluntary prepayments of Revolving Loans) shall be accompanied by payment of accrued interest on the principal amount being repaid or prepaid.

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

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

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

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

 

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(g) Administrative Agent shall deem any payment by or on behalf of NewPageCo hereunder that is not made in same day funds prior to 12:00 p.m. (New York City time) to be a non-conforming payment. Any such payment shall not be deemed to have been received by Administrative Agent until the later of (i) the time such funds become available funds, and (ii) the applicable next Business Day. Administrative Agent shall give prompt telephonic notice to NewPageCo and each applicable Lender (confirmed in writing) if any payment is non-conforming. Any non-conforming payment may constitute or become a Default or Event of Default in accordance with the terms of Section 8.1(a). Interest shall continue to accrue on any principal as to which a non-conforming payment is made until such funds become 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 Credit Agreement Obligations shall have been accelerated pursuant to Section 8.1, all payments or proceeds received by Agents hereunder in respect of any of the Obligations, shall be applied in accordance with the application arrangements described in Section 7.2 of the Pledge and Security Agreement.

2.17. Ratable Sharing. Lenders hereby agree among themselves that, except as otherwise provided in the Collateral Documents with respect to amounts realized from the exercise of rights with respect to Liens on the Collateral, if any of them shall, whether by voluntary payment (other than a voluntary prepayment of Loans made and applied in accordance with the terms hereof), through the exercise of any right of set-off or banker’s lien, by counterclaim or cross action or by the enforcement of any right under the Credit Documents or otherwise, or as adequate protection of a deposit treated as cash collateral under the Bankruptcy Code, receive payment or reduction of a proportion of the aggregate amount of principal, interest, amounts payable in respect of Letters of Credit, fees and other amounts then due and owing to such Lender hereunder or under the other Credit Documents (collectively, the “Aggregate Amounts Due” to such Lender) which is greater than the proportion received by any other Lender in respect of the Aggregate Amounts Due to such other Lender, then the Lender receiving such proportionately greater payment shall (a) notify Administrative Agent and each other Lender of the receipt of such payment and (b) apply a portion of such payment to purchase participations (which it shall be deemed to have purchased from each seller of a participation simultaneously upon the receipt by such seller of its portion of such payment) in the Aggregate Amounts Due to the other Lenders so that all such recoveries of Aggregate Amounts Due shall be shared by all Lenders in proportion to the Aggregate Amounts Due to them; provided , if all or part of such proportionately greater payment received by such purchasing

 

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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.

2.18. Making or Maintaining Eurodollar Rate Loans.

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

(b) Illegality or Impracticability of Eurodollar Rate Loans . In the event that on any date any Lender shall have determined (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto but shall be made only after consultation with NewPageCo and Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans (i) has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order (or would conflict with any such treaty, governmental rule, regulation, guideline or order not having the force of law even though the failure to comply therewith could not be unlawful), or (ii) has become impracticable, as a result of contingencies occurring after the date hereof which materially and adversely affect the London interbank market or the position of such Lender in that market, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to NewPageCo and Administrative Agent of such determination (which notice Administrative Agent shall promptly transmit to each other Lender). Thereafter (1) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (2) to the extent such determination by the Affected Lender relates to a

 

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Eurodollar Rate Loan then being requested by NewPageCo pursuant to a Funding Notice or a Conversion/Continuation Notice, the Affected Lender shall make such Loan as (or continue such Loan as or convert such Loan to, as the case may be) a Base Rate Loan, (3) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans” ) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (4) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination. Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then being requested by NewPageCo pursuant to a Funding Notice or a Conversion/Continuation Notice, NewPageCo shall have the option, subject to the provisions of Section 2.18(c), to rescind such Funding Notice or Conversion/Continuation Notice as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above (which notice of rescission Administrative Agent shall promptly transmit to each other Lender). Except as provided in the immediately preceding sentence, nothing in this Section 2.18(b) shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms hereof.

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

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

(e) Assumptions Concerning Funding of Eurodollar Rate Loans . Calculation of all amounts payable to a Lender under this Section 2.18 and under Section 2.19 shall be made as

 

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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.

2.19. Increased Costs; Capital Adequacy.

(a) Compensation For Increased Costs and Taxes . Subject to the provisions of Section 2.20 (which shall be controlling with respect to the matters covered thereby), in the event that any Lender (which term shall include Issuing Bank for purposes of this Section 2.19(a)) shall determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any law, treaty or governmental rule, regulation or order, or any change therein or in the interpretation, administration or application thereof (including the introduction of any new law, treaty or governmental rule, regulation or order), or any determination of a court or governmental authority, in each case that becomes effective after the date hereof, or compliance by such Lender with any guideline, request or directive issued or made after the date hereof by any central bank or other governmental or quasi-governmental authority (whether or not having the force of law): (i) subjects such Lender (or its applicable lending office) to any additional Tax (other than any Tax covered by Section 2.20, regardless of whether any Credit Party is required to indemnify or pay any additional amount in respect of such Tax) with respect to this Agreement or any of the other Credit Documents or any of its obligations hereunder or thereunder or any payments to such Lender (or its applicable lending office) of p