PANOLAM INDUSTRIES INTERNATIONAL,
INC.
THIRD AMENDMENT TO CREDIT AGREEMENT AND LIMITED
WAIVER
This THIRD
AMENDMENT TO CREDIT AGREEMENT AND LIMITED WAIVER (this
“ Amendment ”) is dated as of March 30, 2007 and
entered into by and among Panolam Industries International, Inc., a
Delaware corporation, as successor by merger to PIH Acquisition Co.
(“ Company ”), Panolam Holdings II Co., a
Delaware corporation (“ Holdings ”), Credit
Suisse, Cayman Islands Branch, as administrative agent for Lenders
(“ Administrative Agent ”), and, solely
for purposes of Section 5 hereof, the Credit Support Parties (as
defined in Section 5 hereof) listed on the signature pages hereof,
and is made with reference to that certain Credit Agreement dated
as of September 30, 2005 by and among Company, Holdings, Lenders,
Jefferies & Company, Inc., as syndication agent for Lenders and
Administrative Agent, as amended by that certain First Amendment to
Credit Agreement and Waiver dated February 27, 2006, as further
amended by that certain Second Amendment to Credit Agreement dated
March 1, 2006 (as so amended, the “ Credit
Agreement ”). Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the
Credit Agreement.
RECITALS
WHEREAS Company and Requisite Lenders desire
to amend the Credit Agreement as follows;
NOW, THEREFORE,
in consideration of the
premises and the agreements, provisions and covenants herein
contained, the parties hereto agree as follows:
Section 1.
AMENDMENTS TO THE CREDIT
AGREEMENT
A.
Subsection 6.1(iii) of the
Credit Agreement is hereby amended by deleting such subsection in
its entirety and substituting the following therefor:
“(iii) Year-End
Financials : (a) (I) as soon as available and in any
event within 120 days after the end of Fiscal Year 2005, within 180
days after the end of Fiscal Year 2006 and within 90 days after the
end of each other Fiscal Year thereafter, the unaudited
consolidated balance sheet of Company and its Subsidiaries as at
the end of such Fiscal Year and the related unaudited consolidated
statements of income, stockholders’ equity and cash flows of
Company and its Subsidiaries for such Fiscal Year, setting forth in
each case in comparative form the corresponding figures for the
previous Fiscal Year and the corresponding figures from the
Financial Plan for the Fiscal Year covered by such financial
statements, all in reasonable detail and certified by a Financial
Officer of Company that they fairly present, in all material
respects, the financial condition of Company 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, provided that the deliveries under
this clause (I) shall not be required if the deliveries in clause
(II) are made within 90 days after the end of the relevant Fiscal
Year, and (II) as soon as available and in any event within 180
days after the end of Fiscal Year 2006
and 120 days after the
end of each other Fiscal Year thereafter, or such earlier date as
may be required by the Securities Exchange Commission or any other
Government Authority, the audited consolidated balance sheet of
Company and its Subsidiaries as at the end of such Fiscal Year and
the related audited consolidated statements of income,
stockholders’ equity and cash flows of Company and its
Subsidiaries for such Fiscal Year, setting forth in each case in
comparative form the corresponding figures for the previous Fiscal
Year and the corresponding figures from the Financial Plan for the
Fiscal Year covered by such financial statements, all in reasonable
detail and certified by a Financial Officer of Company that they
fairly present, in all material respects, the financial condition
of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods
indicated, and (b) as soon as available and in any event
within 180 days after the end of Fiscal Year 2006 and 120 days
after the end of each other Fiscal Year thereafter, or such earlier
date as may be required by the Securities Exchange Commission or
any other Government Authority, in the case of such audited
consolidated financial statements, a report thereon of Deloitte
& Touche LLP or other independent certified public accountants
of recognized national standing selected by Company and reasonably
satisfactory to Administrative Agent, which report shall not be
subject to any “going concern” or like qualification or
exception, and shall state that such consolidated financial
statements fairly present, in all material respects, the
consolidated financial position of Company and its Subsidiaries as
at the dates indicated and the results of their operations and
their cash flows for the periods indicated in conformity with GAAP
applied on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the examination by
such accountants in connection with such consolidated financial
statements has been made in accordance with generally accepted
auditing standards;”.
B.
Subsection 6.1(iv) of the
Credit Agreement is hereby amended by deleting the reference to
clause “(iii)” in the first phrase thereof and
substituting a reference to clause “(iii)(a)(II)”
therefor.
C.
Subsection 6.1(vi) of the Credit Agreement is hereby amended by
deleting the reference to clause “(iii)” in the first
phrase thereof and substituting a reference to clause
“(iii)(a)(II)” therefor.
Section 2.
LIMITED WAIVER
The undersigned
Lenders, constituting Requisite Lenders under the Credit Agreement,
hereby waive the delivery of (a) quarterly consolidated financial
statements of the Company and its Subsidiaries for the first Fiscal
Quarter of Fiscal Year 2007 pursuant to subsection 6.1(ii) of the
Credit Agreement within 45 days after the end of such Fiscal
Quarter, and the certificates and documents required to be
delivered in connection therewith pursuant to subsection 6.1(iv) of
the Credit Agreement, and (b) annual consolidated financial
statements of the Company and its Subsidiaries for Fiscal Year 2006
pursuant to subsection 6.1(iii) of the Credit Agreement within 90
days after the end of such Fiscal Year, and the certificates and
documents, including auditor’s reports, required to be
delivered in connection therewith pursuant to subsections 6.1(iv)
and 6.1(vi) of the Credit Agreement; provided that Company
shall deliver all such quarterly and annual consolidated financial
statements referred to in this paragraph and the related
certificates and other documents otherwise
2
required to have
been delivered pursuant to subsections 6.1(ii), 6.1(iii), 6.1(iv)
and 6.1(vi) of the Credit Agreement, as applicable, no later than
June 30, 2007.
Without limiting
the generality of the provisions of subsection 10.6 of the Credit
Agreement, the waiver set forth herein shall be limited precisely
as written and relates solely to noncompliance by Company with the
provisions of subsections 6.1(ii), 6.1(iii), 6.1(iv) and 6.1(vi) of
the Credit Agreement with respect to the timing of delivery of
financial statements for Fiscal Year 2006 and the first Fiscal
Quarter of Fiscal Year 2007 in the manner and to the extent
described above, and nothing in this Limited Waiver
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