10-Q

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

or

o TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD from                      to                     

For the quarterly period ended June 30, 2010

Commission file number 1-3560

P. H. Glatfelter Company

(Exact name of registrant as specified in its charter)

Pennsylvania	23-0628360
(State or other jurisdiction of incorporation or organization)	(IRS Employer Identification No.)
96 South George Street, Suite 500 York, Pennsylvania 17401	(717) 225-4711
(Address of principal executive offices)	(Registrant’s telephone number, including area code)

N/A

(Former name or former address, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the past 90 days. Yes þ No o.

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o.

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of “accelerated filer and large accelerated filer” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o Accelerated filer þ
Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act) Yes o  No þ.

As of July 31, 2010, P. H. Glatfelter Company had 45,823,776 shares of common stock outstanding.

P. H. GLATFELTER COMPANY
REPORT ON FORM 10-Q
For the QUARTERLY PERIOD ENDED

JUNE 30, 2010

Table of Contents

		Page
PART I — FINANCIAL INFORMATION
Item 1	Financial Statements
	Condensed Consolidated Statements of Income for the three months and six months ended June 30, 2010 and 2009 (unaudited)		2
	Condensed Consolidated Balance Sheets as of June 30, 2010 and December 31, 2009 (unaudited)		3
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2010 and 2009 (unaudited)		4
	Notes to Condensed Consolidated Financial Statements (unaudited)		5
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations		23
Item 3	Quantitative and Qualitative Disclosures About Market Risks		31
Item 4	Controls and Procedures		31
PART II — OTHER INFORMATION
Item 6	Exhibits		32
SIGNATURES			33
EX-10.1
EX-10.2
EX-10.3.(A)
EX-10.3.(B)
EX-10.3.(C)
EX-10.3.(D)
EX-10.4
EX-10.4.(A)
EX-10.5
EX-10.6.(A)
EX-10.6.(B)
EX-10.6.(C)
EX-10.6.(D)
EX-31.1
EX-31.2
EX-32.1
EX-32.2

PART I

Item 1 — Financial Statements

P. H. GLATFELTER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(unaudited)

	Three months ended						Six months ended
	June 30						June 30
In thousands, except per share	2010			2009			2010			2009
Net sales	$	362,781		$	278,979		$	700,056		$	570,531
Energy and related sales — net		1,915			2,131			5,522			4,062
Total revenues		364,696			281,110			705,578			574,593
Costs of products sold		329,236			222,109			625,902			472,278
Gross profit		35,460			59,001			79,676			102,315
Selling, general and administrative expenses		28,847			26,548			63,517			51,061
(Gains) losses on dispositions of plant, equipment and timberlands, net		(168	)		27			(168	)		(672	)
Operating income		6,781			32,426			16,327			51,926
Non-operating income (expense)
Interest expense		(6,817	)		(5,144	)		(12,480	)		(10,270	)
Interest income		168			557			338			1,265
Other — net		366			(135	)		(3,617	)		(118	)
Total other income (expense)		(6,283	)		(4,722	)		(15,759	)		(9,123	)
Income before income taxes		498			27,704			568			42,803
Income tax provision		395			7,834			839			11,395
Net income (loss)	$	103		$	19,870		$	(271	)	$	31,408
Earnings (loss) per share	$	0.00		$	0.44		$	(0.01	)	$	0.69
Basic		0.00			0.43			(0.01	)		0.69
Diluted
Cash dividends declared per common share	$	0.09		$	0.09		$	0.18		$	0.18
Weighted average shares outstanding
Basic		45,908			45,658			45,872			45,624
Diluted		46,313			45,698			45,872			45,654

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GLATFELTER

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P. H. GLATFELTER COMPANY
CONDENSED CONSOLIDATED BALANCE SHEETS
(unaudited)

	June 30			December 31
In thousands	2010			2009
Assets
Current assets
Cash and cash equivalents	$	42,627		$	135,420
Accounts receivable — net		154,661			119,319
Inventories		188,364			168,370
Prepaid expenses and other current assets		52,457			96,947
Total current assets		438,109			520,056
Plant, equipment and timberlands — net		604,116			470,632
Other assets		222,909			199,606
Total assets	$	1,265,134		$	1,190,294
Liabilities and Shareholders’ Equity
Current liabilities
Current portion of long-term debt	$	—		$	13,759
Short-term debt		5,875			3,888
Accounts payable		101,007			63,604
Dividends payable		4,190			4,170
Environmental liabilities		432			440
Other current liabilities		94,374			100,249
Total current liabilities		205,878			186,110
Long-term debt		331,896			236,936
Deferred income taxes		90,096			96,668
Other long-term liabilities		161,859			159,876
Total liabilities		789,729			679,590
Commitments and contingencies		—			—
Shareholders’ equity
Common stock		544			544
Capital in excess of par value		48,181			46,746
Retained earnings		703,187			711,765
Accumulated other comprehensive loss		(149,607	)		(119,885	)
		602,305			639,170
Less cost of common stock in treasury		(126,900	)		(128,466	)
Total shareholders’ equity		475,405			510,704
Total liabilities and shareholders’ equity	$	1,265,134		$	1,190,294

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GLATFELTER

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P. H. GLATFELTER COMPANY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)

	Six months ended
	June 30
In thousands	2010			2009
Operating activities
Net income	$	(271	)	$	31,408
Adjustments to reconcile to net cash provided by operations:
Depreciation, depletion and amortization		32,166			29,050
Pension expense, net of unfunded benefits paid		4,397			3,359
Deferred income tax provision (benefit)		(5,776	)		(11,393	)
Gains on dispositions of plant, equipment and timberlands, net		(168	)		(672	)
Share-based compensation		2,963			2,294
Change in operating assets and liabilities
Accounts receivable		(17,522	)		7,007
Inventories		(343	)		18,391
Prepaid and other current assets		49,388			33
Accounts payable		27,988			(2,230	)
Environmental matters		24			(7,217	)
Accruals and other current liabilities		(12,559	)		(6,769	)
Other		2,388			1,606
Net cash provided by operating activities		82,675			64,867
Investing activities
Expenditures for purchases of plant, equipment and timberlands		(15,445	)		(11,475	)
Proceeds from disposals of plant, equipment and timberlands, net		182			728
Proceeds from timberland installment sale note receivable		—			37,850
Acquisition of Concert Industries Corp., net of cash acquired		(229,080	)		—
Net cash (used) provided by investing activities		(244,343	)		27,103
Financing activities
Proceeds from $100 million 7⅛% note offering, net of original issue discount		95,000			—
Payments of note offering and credit facility costs		(4,530	)		—
Net borrowings of revolving credit facility		—			4,606
Net borrowings (repayments) of short term debt		2,016			(2,191	)
Principal repayments — 2011 Term Loan		(14,000	)		(8,000	)
Payments of dividends		(8,360	)		(8,272	)
Proceeds from stock options exercised and other		110			—
Net cash provided (used) by financing activities		70,236			(47,857	)
Effect of exchange rate changes on cash		(1,361	)		1,857
Net decrease in cash and cash equivalents		(92,793	)		45,970
Cash and cash equivalents at the beginning of period		135,420			32,234
Cash and cash equivalents at the end of period	$	42,627		$	78,204
Supplemental cash flow information
Cash paid (received) for
Interest	$	11,530		$	9,266
Income taxes		(45,509	)		13,046

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

GLATFELTER

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P. H. GLATFELTER COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)

1. ORGANIZATION

     P. H. Glatfelter Company and subsidiaries (“Glatfelter”) is a manufacturer of specialty papers and fiber-based engineered products. Headquartered in York, Pennsylvania, our manufacturing facilities are located in Spring Grove, Pennsylvania; Chillicothe and Freemont, Ohio; Gatineau, Quebec, Canada; Gloucestershire (Lydney), England; Caerphilly, Wales; Gernsbach and Falkenhagen, Germany; Scaër, France; and the Philippines. Our products are marketed throughout the United States and in over 85 other countries, either through wholesale paper merchants, brokers and agents or directly to customers.

2. ACCOUNTING POLICIES

     Basis of Presentation The unaudited condensed consolidated financial statements (“financial statements”) include the accounts of Glatfelter and its wholly owned subsidiaries. All intercompany balances and transactions have been eliminated.

     We prepared these financial statements in accordance with accounting principles generally accepted in the United States of America (“generally accepted accounting principles” or “GAAP”). In our opinion, the financial statements reflect all normal, recurring adjustments needed to present fairly our results for the interim periods. When preparing these financial statements, we have assumed that you have read the audited consolidated financial statements included in our 2009 Annual Report on Form 10-K (“2009 Form 10-K”).

     Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingencies as of the balance sheet date and the reported amounts of revenues and expenses during the reporting period. Management believes the estimates and assumptions used in the preparation of these financial statements are reasonable, based upon currently available facts and known circumstances, but recognizes that actual results may differ from those estimates and assumptions.

3. ACQUISITION

     On February 12, 2010, we completed the acquisition of all of the issued and outstanding stock of Concert Industries Corp. (“Concert”), a leading supplier of airlaid non-woven fabric-like material, for cash totaling $231.9 million based on the currency exchange rates on the closing date, and net of a post-closing working capital adjustment. Concert, with approximately 590 employees, has operations located in Gatineau, Quebec, Canada and Falkenhagen, Brandenburg, Germany. Annual revenues totaled $203.0 million in 2009.

     Concert manufactures highly absorbent cellulose based airlaid non-woven materials used in products such as feminine hygiene and adult incontinence products, pre-moistened cleaning wipes, food pads, napkins and tablecloths, and baby wipes. The acquisition of Concert affords us the opportunity to grow with the industry leaders in feminine hygiene and adult incontinence products. We believe that our acquisition of Concert provides us with an industry-leading global business that sells highly specialized, engineered fiber-based products to niche markets with substantial barriers to entry.

     The share purchase agreement provides for, among other terms, i) an adjustment to the purchase price based on final working capital as of the closing balance sheet, which has yet to be fully agreed to; and ii) indemnification provisions for claims that may arise, including among others, uncertain tax positions and other third party claims.

     During the second quarter of 2010, we and the sellers reached agreement on certain working capital related adjustments that reduced the purchase price by $3.9 million. In addition, as a result of further evaluation of asset appraisals, contingencies and other factors, in accordance with FASB ASC 805, Business Combinations, we have determined that certain retrospective adjustments to the February 12, 2010 provisional allocation of the purchase price to assets acquired and liabilities assumed were required.

     The following summarizes the impact of the adjustments recorded in the second quarter of 2010 and retrospectively reflected in the financial statements. This provisional purchase price

GLATFELTER

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the allocation is based on information currently available to management:

In thousands	As previously presented		Adjustment			Adjusted
Assets
Cash	$	2,792	$	—		$	2,792
Accounts receivable		24,703		—			24,703
Inventory		28,034		—			28,034
Prepaid and other current assets		5,941		(1,327	)		4,614
Plant and equipment		177,253		5,987			183,240
Intangible assets		3,138		—			3,138
Deferred tax assets		20,738		(3,436	)		17,302
Total		262,599		1,224			263,823
Liabilities
Accounts payable and accrued expenses		25,322		591			25,913
Deferred tax liabilities		1,267		1,923			3,190
Other long term liabilities		212		2,636			2,848
Total		26,801		5,150			31,951
Total purchase price	$	235,798	$	(3,926	)	$	231,872

     The adjustments set forth above did not impact previously reported results of operations, earnings per share, or cash flows for the three months ended March 31, 2010.

     We are in the process of finalizing potential additional working capital adjustments and final valuations of assets acquired, including plant and equipment and intangible assets, certain contingencies and the impact on taxes of any final adjustments to such valuations, all necessary to account for the Concert transaction in accordance with the acquisition method of accounting set forth in FASB ASC 805. Accordingly, the provisional purchase price allocation set forth above is based on all information available to us at the present time and is subject to change, and such changes could be material.

     For purposes of allocating the total purchase price, assets acquired and liabilities assumed are recorded at their estimated fair market value. The allocation set forth above is based on management’s estimate of the fair value using valuation techniques such as discounted cash flow models, appraisals and similar methodologies. The amount allocated to intangible assets represents the estimated value of customer sales contracts and relationships. Deferred tax assets reflect the estimated value of future tax deductions acquired in the transaction.

     Acquired property plant and equipment are being depreciated on a straight-line basis with estimated remaining lives ranging from 5 years to 40 years. Intangible assets are being amortized on a straight-line basis over an estimated remaining life of 11 to 20 years reflecting the expected future value.

     During the first six months of 2010, we incurred legal, professional and advisory costs directly related to the Concert acquisition totaling $7.1 million. All such costs are presented under the caption “Selling, general and administrative expenses” in the accompanying condensed consolidated statements of income. Deferred financing fees incurred in connection with issuing debt related to the acquisition totaled $3.0 million through June 30, 2010. The unamortized fees are recorded in the accompanying consolidated balance sheet under the caption “Other assets”.

     In addition, in connection with the Concert acquisition, we entered into a series of forward foreign currency contracts to hedge the acquisition’s Canadian dollar purchase price. All contracts were settled for cash during the first quarter of 2010 and resulted in a $3.4 million loss, net of realized currency translation gains, which is presented under the caption “Other-net” in the accompanying condensed consolidated statements of income for the six months ended June 30, 2010.

     Our results of operations for the first six months of 2010 include the results of Concert prospectively since the acquisition was completed on February 12, 2010. All such results are reported herein as the Advanced Airlaid Materials business unit, a new reportable segment. Net sales and operating income of Concert included in our consolidated results of operations totaled $52.0 million and $1.9 million, respectively, for the second quarter of 2010. Net sales and operating income were $80.1 million and $2.2 million, respectively, for the first six months of 2010.

GLATFELTER

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     The table below summarizes pro forma financial information as if the acquisition and related financing transaction occurred as of January 1, 2009:

	Three months ended
	June 30
In thousands, except per share	2010		2009
Pro forma
Net sales	$	362,781	$	328,235
Net income		1,018		21,070
Earnings per share		0.02		0.46
	Six months ended
	June 30
In thousands, except per share	2010		2009
Pro forma
Net sales	$	725,705	$	667,175
Net income		10,849		33,475
Earnings per share		0.23		0.73

     For purposes of presenting the above pro forma financial information, non-recurring legal, professional and transaction costs directly related to the acquisition have been eliminated. This unaudited pro forma financial information above is not necessarily indicative of what the operating results would have been had the acquisition been completed at the beginning of the respective period nor is it indicative of future results.

4. GAINS (LOSSES) ON DISPOSITIONS OF PLANT, EQUIPMENT AND TIMBERLANDS

     Sales of timberlands in the first six months of 2010 and 2009 are summarized in the following table:

Dollars in thousands	Acres		Proceeds		Gain (loss)
2010
Timberlands		71	$	182	$	168
2009
Timberlands		189	$	728	$	699
Other		n/a		—		(27	)
			$	728	$	672

5. EARNINGS PER SHARE

     The following table sets forth the details of basic and diluted earnings (loss) per share (EPS):

	Three months ended
	June 30
In thousands, except per share	2010			2009
Net income (loss)	$	103		$	19,870
Weighted average common shares outstanding used in basic EPS		45,908			45,658
Common shares issuable upon exercise of dilutive stock options and restricted stock awards		405			40
Weighted average common shares outstanding and common share equivalents used in diluted EPS		46,313			45,698
Earnings (loss) per share
Basic	$	0.00		$	0.44
Diluted		0.00			0.43
	Six months ended
	June 30
In thousands, except per share	2010			2009
Net income (loss)	$	(271	)	$	31,408
Weighted average common shares outstanding used in basic EPS		45,872			45,624
Common shares issuable upon exercise of dilutive stock options and restricted stock awards		—			30
Weighted average common shares outstanding and common share equivalents used in diluted EPS		45,872			45,654
Earnings (loss) per share
Basic	$	(0.01	)	$	0.69
Diluted		(0.01	)		0.69

     The following table sets forth the number of potential common shares that have been excluded from the computation of diluted earnings per share for the indicated period due to their anti-dilutive nature.

	2010		2009
Three months ended June 30		1,519,175		2,287,620
Six months ended June 30		1,441,850		2,287,620

6. INCOME TAXES

     Income taxes are recognized for the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in our consolidated financial statements or tax returns. The effects of income taxes are measured based on enacted tax laws and rates.

GLATFELTER

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     As of June 30, 2010 and December 31, 2009, we had $42.8 million, including acquisition accounting adjustments, and $40.1 million, respectively, of gross unrecognized tax benefits. As of June 30, 2010, if such benefits were to be recognized, approximately $38.9 million would be recorded as a component of income tax expense, thereby affecting our effective tax rate.

     We, or one of our subsidiaries, file income tax returns with the United States Internal Revenue Service, as well as various state and foreign authorities. The following table summarizes tax years that remain subject to examination by major jurisdiction:

	Open Tax Year
	Examination in		Examination not yet
Jurisdiction	progress		initiated
United States
Federal		N/A		2007 — 2009
State		2004		2004 — 2009
Canada (1)		N/A		2005 — 2009
Germany (1)		2003 — 2007		2007 — 2009
France		N/A		2006 — 2009
United Kingdom		N/A		2006 — 2009
Philippines		2007 — 2009		N/A

(1) — includes provincial or similar local jurisdictions, as applicable

     The amount of income taxes we pay is subject to ongoing audits by federal, state and foreign tax authorities, which often result in proposed assessments. Management performs a comprehensive review of its global tax positions on a quarterly basis and accrues amounts for uncertain tax positions. Based on these reviews and the result of discussions and resolutions of matters with certain tax authorities and the closure of tax years subject to tax audit, reserves are adjusted as necessary. However, future results may include favorable or unfavorable adjustments to our estimated tax liabilities in the period the assessments are determined or resolved or as such statutes are closed. Due to potential for resolution of federal, state, and foreign examinations, and the expiration of various statutes of limitation, it is reasonably possible our gross unrecognized tax benefits balance may change within the next twelve months by as much as $11.4 million. Substantially all of this range relates to tax positions taken in the Germany and the United Kingdom.

     We recognize interest and penalties related to uncertain tax positions as income tax expense. Interest expense recognized in the second quarter of 2010 totaled $0.4 million and $0.3 million in the second quarter of 2009. The comparable amounts for the first six months of 2010 and 2009 were $0.6 million and $0.6 million, respectively As of June 30, 2010, accrued interest payable was $4.6 million, including acquisition accounting adjustments, and as of December 31, 2009, accrued interest payable was $3.8 million. We did not record any penalties associated with uncertain tax positions during the second quarters of 2010 or 2009.

7. STOCK-BASED COMPENSATION

     The P. H. Glatfelter Amended and Restated Long Term Incentive Plan (the “LTIP”) provides for the issuance of up to 5,500,000 shares of Glatfelter common stock to eligible participants in the form of restricted stock units, restricted stock awards, non-qualified stock options, performance shares, incentive stock options and performance units.

     Restricted Stock Units (“RSU”) Awards of RSUs are made under our LTIP. The RSUs vest based solely on the passage of time on a graded scale over a three, four, and five-year period. The following table summarizes RSU activity during the first six months of the indicated periods:

Units	2010			2009
Beginning balance		564,037			486,988
Granted		198,259			205,360
Forfeited		(8,820	)		(4,800	)
Restriction lapsed/shares delivered		(31,323	)		(5,747	)
Ending balance		722,153			681,801

     The following table sets forth RSU compensation expense for the periods indicated:

	June 30
In thousands	2010		2009
Three months ended	$	432	$	387
Six months ended		837		727

GLATFELTER

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     Stock Only Stock Appreciation Rights (SOSARs) Under terms of the SOSAR, the recipients receive the right to a payment in the form of shares of common stock equal to the difference, if any, in the fair market value of one share of common stock at the time of exercising the SOSAR and the strike price. The SOSARs vest ratably over a three year period and have a term of ten years.

     The following table sets forth information related to outstanding SOSARS.

	2010					2009
				Wtd Avg					Wtd Avg
				Exercise					Exercise
SOSARS	Shares			Price		Shares			Price
Outstanding at Jan. 1,		1,762,020		$	11.84		718,810		$	14.63
Granted		423,450			13.95		1,043,210			9.91
Exercised		—					—			—
Canceled/forfeited		(64,420	)				—			—
Outstanding at Jun 30,		2,121,050		$	12.27		1,762,020		$	11.84
SOSAR Grants
Weighted average grant date fair value per share	$	4.72				$	2.83
Aggregate grant date fair value (in thousands)	$	1,998				$	2,957
Black-Scholes Assumptions
Dividend yield		2.58	%				3.63	%
Risk free rate of return		2.54					2.26
Volatility		42.31					40.59
Expected life	6 yrs					6 yrs

     The following table sets forth SOSAR compensation expense for the periods indicated:

	June 30
In thousands	2010		2009
Three months ended	$	576	$	458
Six months ended		1,185		697

8. RETIREMENT PLANS AND OTHER POST-RETIREMENT BENEFITS

     The following table provides information with respect to the net periodic costs of our pension and post retirement medical benefit plans.

	Three months ended
	June 30
In thousands	2010			2009
Pension Benefits
Service cost	$	2,270		$	2,067
Interest cost		6,045			5,973
Expected return on plan assets		(10,083	)		(9,936	)
Amortization of prior service cost		614			537
Amortization of unrecognized loss		3,505			3,382
Net periodic benefit cost	$	2,351		$	2,023
Other Benefits
Service cost	$	698		$	653
Interest cost		805			882
Expected return on plan assets		(134	)		(122	)
Amortization of prior service cost		(306	)		(309	)
Amortization of unrecognized loss		316			509
Net periodic benefit cost	$	1,379		$	1,613
	Six months ended
	June 30
In thousands	2010			2009
Pension Benefits
Service cost	$	4,692		$	4,317
Interest cost		12,053			11,721
Expected return on plan assets		(20,143	)		(19,780	)
Amortization of prior service cost		1,231			1,074
Amortization of unrecognized loss		6,904			6,373
Net periodic benefit cost	$	4,737		$	3,705
Other Benefits
Service cost	$	1,459		$	1,309
Interest cost		1,685			1,756
Expected return on plan assets		(269	)		(244	)
Amortization of prior service cost		(612	)		(617	)
Amortization of unrecognized loss		769			1,037
Net periodic benefit cost	$	3,032		$	3,241

	June 30,		Dec. 31,
In millions	2010		2009
Pension Plan Assets
Fair value of plan assets at end of period	$	460.3	$	485.7

GLATFELTER

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9. COMPREHENSIVE INCOME

     The following table sets forth comprehensive income and its components:

	Three months ended
	June 30
In thousands	2010			2009
Net income (loss)	$	103		$	19,870
Foreign currency translation adjustments		(15,276	)		19,522
Amortization of unrecognized retirement obligations, net of tax		2,488			2,320
Comprehensive income (loss)	$	(12,685	)	$	41,712
	Six months ended
	June 30
In thousands	2010			2009
Net income (loss)	$	(271	)	$	31,408
Foreign currency translation adjustments		(34,809	)		8,053
Amortization of unrecognized retirement obligations, net of tax		5,087			4,612
Comprehensive income (loss)	$	(29,993	)	$	44,073

10. INVENTORIES

     Inventories, net of reserves, were as follows:

	June 30,		Dec. 31,
In thousands	2010		2009
Raw materials	$	51,518	$	44,150
In-process and finished		84,793		78,340
Supplies		52,053		45,880
Total	$	188,364	$	168,370

11. LONG-TERM DEBT

     Long-term debt is summarized as follows:

	June 30,		Dec. 31,
In thousands	2010		2009
Revolving credit facility, due April 2011	$	—	$	—
Term Loan, due April 2011		—		14,000
7⅛% Notes, due May 2016		200,000		200,000
7⅛% Notes, due May 2016 - net of original issue discount		95,201		—
Term Loan, due January 2013		36,695		36,695
Total long-term debt		331,896		250,695
Less current portion		—		(13,759	)
Long-term debt, net of current portion	$	331,896	$	236,936

     On April 28, 2006 we completed an offering of $200.0 million aggregate principal amount of our 7⅛% Senior Notes due 2016 (“7⅛% Notes”). Net proceeds from this offering totaled approximately $196.4 million, after deducting the commissions and other fees and expenses relating to the offering. The proceeds were primarily used to redeem $150.0 million aggregate principal amount of our then outstanding 6⅞% notes due July 2007, plus the payment of applicable redemption premium and accrued interest.

     On February 5, 2010, we issued an additional $100 million in aggregate principal amount of 7⅛% Notes due 2016 (together with the April 28, 2006 offering, the “Senior Notes”). The notes were issued at 95.0% of the principal amount. Net proceeds from this offering, which were used to fund, in part, the Concert acquisition, totaled $92.2 million, after deducting offering fees and expenses. The original issue discount is being accreted as a charge to income on the effective interest method.

     Interest on the Senior Notes accrues at the rate of 7⅛% per annum and is payable semiannually in arrears on May 1 and November 1.

     On April 29, 2010, we entered into a new four-year, $225 million, multi-currency, revolving credit agreement with a consortium of banks. The new agreement replaced our existing bank credit agreement and matures May 31, 2014.

     For all US dollar denominated borrowings under the new agreement, the interest rate is either, at our option, (a) the bank’s base rate plus an applicable margin (the base rate is the greater of the bank’s prime rate, the federal funds rate plus 50 basis points, or the daily LIBOR rate plus 100 basis points); or (b) daily LIBOR rate plus an applicable margin ranging from 175 basis points to 275 basis points according to our corporate credit rating determined by S&P and Moody’s. For non-US dollar denominated borrowings, interest is based on (b) above.

     The credit agreement contains a number of customary covenants for financings of this type that, among other things, restrict our ability to dispose of or create liens on assets, incur additional indebtedness, repay other indebtedness, limits certain intercompany financing arrangements, make acquisitions and engage in mergers or consolidations. We are also required to comply with specified financial tests and ratios, each as defined in the credit agreement, including: i) maximum net debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”) ratio; and ii) a consolidated EBITDA to interest expense ratio. A breach of these requirements would give rise to certain remedies under the credit agreement, among which are the termination of the agreement and accelerated repayment of the outstanding borrowings plus accrued and unpaid interest under the credit facility.

     The Senior Notes contain cross default provisions that could result in all such notes becoming due and payable in the event of a failure to repay debt outstanding under the credit agreement at maturity or a default under the credit agreement that accelerates the debt outstanding thereunder. As of June 30, 2010, we were not aware of any violations of our debt covenants.

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     In November 2007, we sold approximately 26,000 acres of timberland. In connection with that transaction, we formed GPW Virginia Timberlands LLC (“GPW Virginia”) as an indirect, wholly owned and bankruptcy-remote subsidiary of ours. GPW Virginia received as consideration for the timberland sold in that transaction a $43.2 million, interest-bearing note that matures in 2027 from the buyer, Glawson Investments Corp. (“Glawson”), a Georgia corporation, and GIC Investments LLC, a Delaware limited liability company owned by Glawson. The Glawson note receivable is fully secured by a letter of credit issued by The Royal Bank of Scotland plc. In January 2008, GPW Virginia monetized the Glawson note receivable by entering into a $36.7 million term loan agreement (the “2008 Term Loan”) with a financial institution. The 2008 Term Loan is secured by all of the assets of GPW Virginia, including the Glawson note receivable, the related letter of credit and additional notes with an aggregate principal amount of $9.2 million that we issued in favor of GPW Virginia (the “Company Note”). The 2008 Term Loan bears interest at a six month reserve adjusted LIBOR rate plus a margin rate of 1.20% per annum. Interest on the 2008 Term Loan is payable semiannually. The principal amount of the 2008 Term Loan is due on January 15, 2013, but GPW Virginia may prepay the 2008 Term Loan at any time, in whole or in part, without premium or penalty. During the first six months of 2010, GPW Virginia received aggregate interest payments of $0.5 million under the Glawson note receivable and the Company Note and, in turn, made interest payments of $0.3 million under the 2008 Term Loan.

     Under terms of the above transaction, minimum credit ratings must be maintained by the letter of credit issuing bank. An “event of default” is deemed to have occurred under the debt instrument governing the Note Payable unless actions are taken to cure such default within 60 days from the date such credit rating falls below the specified minimum. Potential remedial actions include: (i) amending the terms of the applicable debt instrument; (ii) a replacement of the letter of credit with an appropriately rated institution; or (iii) repaying the Note Payable.

     P. H. Glatfelter Company guarantees debt obligations of all its subsidiaries. All such obligations are recorded in these consolidated financial statements.

     As of June 30, 2010 and December 31, 2009, we had $6.7 million and $5.7 million, respectively, of letters of credit issued to us by certain financial institutions. Such letters of credit reduce amounts available under our revolving credit facility. The letters of credit outstanding as of June 30, 2010, primarily provide financial assurances for the benefit of certain state workers

compensation insurance agencies in conjunction with our self-insurance program. We bear the credit risk on this amount to the extent that we do not comply with the provisions of certain agreements. No amounts are outstanding under the letters of credit.

12. ASSET RETIREMENT OBLIGATION

     During 2008, we recorded $11.5 million, net present value, of asset retirement obligations related to the legal requirement to close several lagoons at the Spring Grove, PA facility. Historically, lagoons were used to dispose of residual waste material. Closure of the lagoons will be accomplished by filling the lagoons, installing a non-permeable liner which will be covered with soil to construct the required cap over the lagoons. The amount referred to above, in addition to an upward revision in 2009, was accrued with a corresponding increase in the carrying value of the property, equipment and timberlands caption on the consolidated balance sheet. The amount capitalized is being depreciated as a charge to operations on the straight-line basis in relation to the expected closure period. Following is a summary of activity recorded during the first six months of 2010 and 2009:

In thousands	2010			2009
Balance at January 1,	$	11,292		$	11,606
Accretion		311			161
Payments		(511	)		(20	)
Balance at June 30,	$	11,092		$	11,747

     Of the total liability at June 30, 2010, $2.4 million is recorded in the accompanying consolidated balance sheet, under the caption “Other current liabilities” and $8.7 million is recorded under the caption “Other long-term liabilities.”

13. FAIR VALUE OF FINANCIAL INSTRUMENTS

     The amounts reported on the condensed consolidated balance sheets for cash and cash equivalents, accounts receivable and short-term debt approximate fair value. The following table sets forth carrying value and fair value of long-term debt:

	June 30, 2010				December 31, 2009
	Carrying		Fair		Carrying		Fair
In thousands	Value		Value		Value		Value
Fixed-rate bonds	$	295,201	$	291,750	$	200,000	$	196,750
Variable rate debt		36,695		38,245		50,695		51,209
Total	$	331,896	$	329,995	$	250,695	$	247,959

     As of June 30, 2010, we had $300.0 million of 7⅛% fixed rate debt, $100.0 million of which is recorded net of unamortized original issue discount and $200.0 million of which is publicly registered, but is thinly traded, and therefore, market prices are not readily available.

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Accordingly, the values set forth above are based on debt instruments with similar characteristics, or Level 2. The fair value of the remaining debt instruments was estimated using discounted cash flow models based on interest rates obtained from readily available, independent sources, or Level 3.

14. COMMITMENTS, CONTINGENCIES AND LEGAL PROCEEDINGS

     Fox River — Neenah, Wisconsin

     Background We have significant uncertainties associated with environmental claims arising out of the presence of polychlorinated biphenyls (“PCBs”) in sediments in the lower Fox River and in the Bay of Green Bay Wisconsin (“Site”). As part of the 1979 acquisition of the Bergstrom Paper Company we acquired a facility located at the Site (the “Neenah Facility”). In part, the Neenah Facility used wastepaper as a source of fiber. At no time did the Neenah Facility utilize PCBs in the pulp and paper making process, but discharges to the lower Fox River from the Neenah Facility which may have contained PCBs from wastepaper may have occurred from 1954 to the late 1970s. Any PCBs that our Neenah Facility discharged into the lower Fox River resulted from the presence of PCBs in NCR^®-brand carbonless copy paper in the wastepaper that was recycled at the Neenah Facility. We closed the Neenah Facility in June 2006.

     The United States, the State of Wisconsin and various state and federal governmental agencies (collectively, the “Governments”), as well as private parties, have found PCBs in sediments in the bed of the Fox River, apparently from a number of sources at municipal and industrial facilities along the upstream and downstream portions of the Site. The Governments have identified manufacturing and recycling of NCR^®-brand carbonless copy paper as the principal source of that contamination.

     The United States Environmental Protection Agency (“EPA”) has divided the lower Fox River and the Bay of Green Bay site into five “operable units” numbered from the most upstream (“OU1”) to the most downstream (“OU5”). OU1 is the reach from primarily Lake Winnebago to the dam at Appleton, and is comprised of Little Lake Butte des Morts. Our Neenah Facility discharged its wastewater into OU1. OU2 extends from the dam at Appleton to the dam at Little Rapids, OU3 from the dam at Little Rapids to the dam at De Pere, OU4 from the dam at De Pere to the mouth of the river, and OU5 from the mouth into the lower portion of Green Bay. The river extends 39 miles from the upstream end of OU1 to the downstream end of OU4.

     Our liabilities, if any, for this contamination primarily arise under the federal Comprehensive Environmental, Response, Compensation and Liability Act (“CERCLA” or “Superfund”). The Governments have sought to recover “response actions” or “response costs,” which are the costs of studying and cleaning up contamination, from various “responsible parties.” In addition, various natural resource trustee agencies of the United States, the States of Wisconsin and Michigan, and several Indian Tribes (the “Natural Resources Trustees” or “Trustees”) have sought to recover natural resource damages (“NRDs”), including natural resource damage assessment costs. Parties that have incurred response costs or NRDs either voluntarily or in response to the governments’ and Trustees’ demands may have an opportunity to seek contribution or other recovery of some or all of those costs from other parties who are jointly and severally responsible under Superfund for those costs. Therefore, as we incur costs, we also acquire a claim against other parties who may not have paid their equitable share of those costs. As others incur costs, they acquire a claim against us to the extent that they claim that we have not paid our equitable share of the total. Any party that resolves its liability to the United States or a state in a judicially or administratively approved settlement agreement obtains protection from contribution claims for matters addressed in the settlement.

     For these reasons, all of the parties who are potentially responsible (“PRPs”) under CERCLA for response costs or NRDs have exposure to liability for: (a) the cost of past response actions taken by anyone else, (b) the cost of past NRD payments or restoration projects incurred by anyone else, (c) the cost of response actions to be taken in the future, and (d) NRDs. All of this exposure is subject to substantial defenses, including, for example, that the PRP is not liable or not jointly and severally liable for any particular cost or damage, that the cost or damage is not recoverable under CERCLA or any other law, or that the recovery is barred by the passage of time. In addition, a party that has incurred or committed to incur costs or has paid NRDs may be able to claim credit for that cost or payment in any equitable allocation of response costs or NRDs in any action for reallocation of costs.

     As is discussed more fully below in this Note 14, the current state of our exposure to liability for contamination at the Site is as follows:

     (a) EPA has ordered us and other parties, including Appleton Papers Inc. (“API”) and NCR Corporation (“NCR”) to implement the remedy in OU2-5;

     (b) a federal district court has ruled that neither API nor NCR may recover contribution from either us or any other of the paper recyclers ordered by EPA to clean up

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the Site any costs of response or any NRDs that either of them incur or pay in connection with the Site. NCR and API have state their intention to appeal this ruling;

     (c) we have substantially completed the remedy in OU1 in conjunction with WTM I Company (“WTM I”) and with some financial contribution from Menasha Corporation (“Menasha”) and API/NCR; we have also made payments toward NRDs and other costs of response at the site;

     (d) the same federal district court is currently considering whether we and Menasha have a right to recover those response costs and payments of NRDs described in subsection (c) above from NCR and API; and

     (e) the United States and the NRD Trustees have notified us that, due to an approaching statute of limitations deadline and another deadline established by a series of court orders, they are considering commencing litigation against us and others later in 2010 to obtain an injunction requiring work or to recover any amounts that they have not recovered through other means.

     Cleanup Decisions. Our liability exposure depends importantly on the decisions made by EPA and the Wisconsin Department of Natural Resources (“WDNR”) as to how the Site will be cleaned up, and consequently the costs and timing of those response actions. The nature of the response actions has been highly controversial. EPA issued a record of decision (“ROD”) selecting response actions for OU1 and OU2 in December 2002. EPA issued a separate ROD selecting response actions for OU3, OU4, and OU5 in March 2004 and in June 2007.

     EPA amended the RODs for OUs 2-5 in June 2007 to require less dredging and more capping and covering of sediments containing PCBs. The governments have concluded that these methods will result in a reduction in the costs for this portion of the cleanup. Others disagree. Likewise, in June 2008, EPA also amended the ROD for OU1.

     NRD Assessment. The Natural Resources Trustees have engaged in work to assess NRDs at and arising from the Site. However, they have not completed a required NRD Assessment under the pertinent regulations. The Trustees’ 2009 estimate of NRDs and associated costs ranges from $287 million to $423 million, some of which has already been satisfied. With specific respect to NRD claims, we and others contended that the Trustees’ claims are barred by the applicable 3 year statute of limitations.

     Past Costs Demand. By letter dated January 15, 2009, EPA demanded that we and six other parties reimburse EPA for approximately $17.6 million in costs that EPA claims it incurred as necessary costs of response

not subject to any other agreement in this matter. In response, we and the other parties which were contacted notified the EPA that the supporting documentation provided by EPA did not allow us to fully evaluate this demand and we requested that the EPA provide additional supporting information for the claimed costs. EPA has not yet responded to this request. Accordingly we are unable to reasonably estimate our potential liability for these costs.

     Work Under Agreements, Orders, and Decrees. As we mention above, our exposure to liability depends on the amount of work done, costs incurred, and damages paid both by us and by others. The procedural context of any work done, costs incurred, and damages paid also impact our ultimate exposure.

     Since 1991, the Governments and various groups of potentially responsible parties, including us, have entered into a series of agreements, orders, and decrees under which we and others have performed work, incurred costs, or paid damages in connection with the Site. As a result, some parties have contributed or performed substantial work at the Site and at least one party, Fort Howard Corporation (whose successor is either the Fort James Operating Company or Georgia Pacific Corporation) has resolved its NRD liability at the Site.

     Notably, in April 2004, the United States District Court for the Eastern District of Wisconsin entered a consent decree (“OU1 Consent Decree”) in United States v. P.H. Glatfelter Co., No. 2:03-cv-949, under which we and WTM I Corp. have been implementing the remedy in OU1, dividing costs evenly in addition to a $7 million contribution from Menasha Corp. and a $10 million contribution that the United States contributed from a separate settlement in United States v. Appleton Papers Inc., No. 2:01-cv-816, obligating NCR and Appleton Papers to contribute to certain NRD projects. In June 2008, the parties entered into an amendment to the OU1 Consent Decree (“Amended OU1 Consent Decree”). This amendment allowed for implementation of the amended remedy for OU1 and committed us and WTM I to implement that remedy without a cost limitation on that commitment. We and WTM I have substantially completed the amended remedy for OU1other than monitoring and maintenance.

     Further, in November 2007, EPA issued an administrative order for remedial action (“UAO”) to Appleton Papers Inc., CBC Coating, Inc. (formerly known as Riverside Paper Corporation), Georgia-Pacific Consumer Products, L.P. (formerly known as Fort James Operating Company), Menasha Corporation, NCR Corporation, us, U.S. Paper Mills Corp., and WTM I Company directing those respondents to implement the amended remedy in OU2-5. Shortly following issuance of

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the UAO, Appleton Papers Inc. and NCR Corp. commenced litigation against us and others, as described below. Accordingly, we have no vehicle for complying with the UAO’s overall requirements other than answering a judgment in the litigation, and we have so informed EPA. However, in February 2009, the EPA sent a demand to each of the respondents on the UAO other than WTM I seeking payment of the government’s oversight costs under the UAO for the period from November 2007 through August 2008. In February 2009, we notified the EPA that we believed that its demand could prove distracting to litigation commenced by Appleton Papers and NCR against the other UAO respondents. In order to remove this distraction, and in the spirit of cooperation, we stated that we would satisfy the EPA’s demand, an amount which was insignificant, in full. We paid this amount.

     Cost estimates. Estimates of the Site remediation change over time as we, or others, gain additional data and experience at the Site. In addition, disagreement exists over the likely costs for some of this work. On February 26, 2010, EPA issued an “explanation of Significant Differences”—a document explaining changes to a remedy, including changes in cost, that are significant but which do not require the issuance of a new Record of Decision. In that ESD, EPA estimated the cost for the OU 2-5 remedy to be $701 million. EPA estimates costs as a range, in this case from $491 million to $1.05 billion. This estimate is slightly different than, but not inconsistent with, an estimate of the total cost for remediation of the Site that the Governments prepared for purposes of justifying a recent “de minimis” settlement with certain parties whose liability at the Site the United States and the Governments believe to be insignificant. That settlement was approved by the federal court in Green Bay on December 16, 2009. In their brief in support of that settlement, the Governments estimated the total past costs incurred at the Site — including the OU1 project — to be $200 million. In addition, they estimated the cost of implementing the remedy set forth in the amended ROD for OU2-5 (the downstream portions of the Site) to total between $600 million and $700 million exclusive of amounts already spent. For purposes of the settlement, the Governments took the high end of that range and applied a 50% contingency to arrive at a cost estimate for future cleanup work of $1.05 billion. Based upon independent estimates commissioned by various potentially responsible parties, we have no reason to disagree with the Governments’ assertion that future costs to implement the amended remedy for OU2-5 are likely to fall between $700 million and $1.05 billion.

     NRDs. The Trustees claimed that we were jointly and severally responsible for NRDs with a value between $176 million and $333 million. In their recently filed brief, they further claim that this range should be inflated

to 2009 dollars and then certain unreimbursed past assessment costs should be added, so that the range of their claim would be $287 million to $423 million. We deny (a) liability for most of these NRDs, (b) that if anyone is liable, that we are jointly and severally liable for the full amount; and (c) that the Trustees can pursue this claim at this late date as the limitations period for NRD claims is three years from discovery.

     Allocation. Since 1991, various potentially responsible parties have, without success, attempted to agree on a binding, final, allocation of costs and damages among themselves. All costs that they have incurred to date have been incurred individually, or under interim, nonbinding allocations. However, the consent decree in United States v. P. H. Glatfelter Co. affords us and WTM I contribution protection for claims seeking to reallocate costs of implementing the OU1 remedy, and Fort James Operating Co. (now Georgia-Pacific) has certain rights under its consent decree. Otherwise, the parties have not litigated their internal allocation with us except as described below.

     NCR and Appleton Papers Inc. commenced litigation in the United States District Court for the Eastern District of Wisconsin captioned Appleton Papers Inc. v. George A. Whiting Paper Co., No. 2:08-cv-16, seeking to reallocate costs and damages allegedly incurred or paid or to be incurred or paid by NCR or Appleton Papers (the “Whiting Litigation”). They have to date joined a number of defendants, dismissed some of those, filed a parallel action, and consolidated the two cases. At present, the case involves allocation claims among the two plaintiffs and 28 defendants: us, George A. Whiting Paper Co., Menasha Corporation, Green Bay Packaging Inc., International Paper Company, Leicht Transfer & Storage Company, Neenah Foundry Company, Newpage Wisconsin System Inc., The Procter & Gamble Paper Products Company, Wisconsin Public Service Corp., the Cities of Appleton, De Pere, and Green Bay, Brown County, Green Bay Metropolitan Sewerage District, Heart of the Valley Metropolitan Sewerage District, Neenah-Menasha Sewerage Commission, WTM I Company, U.S. Paper Mills Corporation, Georgia-Pacific Consumer Products LP, Georgia-Pacific LLC, Fort James Operating Company, CBC Coating Company, Inc., Fort James Corporation, Kimberly-Clark Corporation, LaFarge North America Inc., Union Pacific Railroad Company, and the United States Army Corps of Engineers. As the result of certain third-party claims, federal agencies other than the Corps of Engineers are also involved in this allocation.

     On December 16, 2009, the Court granted motions for summary judgment in our favor on the contribution claims brought by NCR and Appleton Papers Inc. in the Whiting litigation. The Court held that neither NCR nor Appleton Papers may seek contribution from us or other

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recyclers under CERCLA. The Court made no ruling as to any other allocation, the liability of NCR or Appleton Papers to us for costs we have incurred, or our liability to the governments or Trustees. NCR and Appleton Papers have stated their intention to appeal but an appeal is not yet timely because the Court has not entered a final judgment.

     As described above, we have counterclaims against NCR and Appleton Papers Inc. to recover the costs we have incurred and may later incur and the damages we have paid and may later pay in connection with the Fox River site. Other defendants have similar claims. On January 20, 2010, the Court issued an order inviting submissions from the parties as to whether the counterclaims of the defendants, as well as certain additional claims, could be resolved without a trial within approximately six months. On April 3, 2010, we and others, including NCR and Appleton Papers Inc., filed separate motions for summary judgment on the counterclaims of the defendants. In the aggregate, the defendants’ motions seek a declaration that NCR and Appleton Papers, Inc. are liable to them for any future costs defendants may come to pay and seek recovery of just less than $210 million in past costs, plus interest on some of the recovery. Our summary judgment motion sought recovery of $58.6 million in past costs and the declaration.

     As noted above, on December 16, 2009, the Court approved a de minimis party consent decree (“Consent Decree”) settlement among the United States, the State of Wisconsin, and eleven defendants resolving those defendants’ liability for this site. The eleven settling defendants are: George A. Whiting Paper Co.; Green Bay Metropolitan Sewerage District; Green Bay Packaging, Inc.; Heart of the Valley Metropolitan Sewerage District; International Paper Co.; LaFarge North America Inc.; Leicht Transfer and Storage Co.; Neenah Foundry Co.; Procter & Gamble Paper Products Co.; Union Pacific Railroad Co.; and Wisconsin Public Service Corp. (collectively, the “Eleven Settling Defendants”). The Consent Decree reflects the conclusion by the United States and the State of Wisconsin that each of the Eleven Settling Defendants qualifies for treatment as a de minimis party under CERCLA. The Consent Decree requires the Settling Defendants to make a collective payment of $1,875,000. Those Eleven Settling Defendants have moved for judgment in the Whiting Litigation based upon the protections in the Consent Decree. In addition, the Governments on September 25, 2009, lodged a separate consent decree in the same case that would, if entered, resolve the liabilities of the City of De Pere. Under that consent decree, the City of De Pere would pay $210,000 to resolve its liability at the Site. That Consent Decree has since been approved and entered. API and NCR have appealed those two Consent

Decrees to the Court of Appeals for the Seventh Circuit at Docket No. 10-2480.

     We contend that we are not jointly and severally liable for costs or damages arising from the presence of PCBs downstream of OU1. In addition, we contend that NCR or other sources of NCR^®-brand carbonless copy paper that our Neenah Mill recycled bear most of the responsibility for costs and damages arising from the presence of PCBs in OU1. Other parties disagree. Our counterclaims for a re-allocation of costs we have incurred or may incur remain pending.

     Reserves for the Fox River Site. As of June 30, 2010, our reserve for our claimed liability at the Fox River, including our remediation and ongoing monitoring obligations at OU1, our claimed liability for the remediation of OU2-5, our claimed liability for NRDs associated with PCB contamination at the Site and all pending, threatened or asserted and unasserted claims against us relating to PCB contamination at the Site totaled $17.2 million. No additional amounts were accrued during the first half of 2010 or 2009. Of our total reserve for the Fox River, $0.5 million is recorded in the accompanying consolidated balance sheets under the caption “Environmental liabilities” and the remaining is recorded under the caption “Other long term liabilities.”

     Under the OU1 Consent Decree which was signed in 2004, we contributed $27.0 million to past and future costs and NRDs. Since the initial funding, we contributed an additional total of $15.5 million pursuant to various supplements or amendments to the OU1 Consent Decree. No payments were required to be made since January 2009. WTM I has contributed parallel amounts. These funds were placed into an escrow account from which we and WTM I pay for work on the project. As required by the Amended Consent Decree, in a quarterly report submitted to EPA in November 2009, we and WTM I concluded that the amounts in the escrow account would be sufficient to pay for the estimated cost of the work at OU1, including operation, maintenance, and other post-construction expenses. However, there can be no assurance that these amounts will in fact suffice. WTM I has filed a bankruptcy petition in the Bankruptcy Court in Richmond. There can be no assurance should additional amounts be required to complete the project that WTM I will be able to fulfill its obligation to pay half the additional cost.

     We believe that we have strong defenses to liability for remediation of OU2-5 including the existence of ample data that indicate that PCBs did not leave OU1 in concentrations that could have caused or contributed to the need for cleanup in OU2-5. Others, including the EPA and other PRPs, disagree with us and, as a result, the EPA has issued a UAO to us and to others to perform the OU2-5 work. NCR and Appleton Papers commenced the Whiting

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Litigation and joined us and others as defendants, but did not prevail. Additional litigation associated with the remediation of the Site is likely.

     Even if we are not successful in establishing that we are not liable for the remediation of OU2-5, we do not believe that we would be allocated a significant percentage share of liability in any equitable allocation of the remediation costs and other potential damages associated with OU2—5. The accompanying consolidated financial statements do not include reserves for defense costs for the Whiting Litigation or any future defense costs related to our involvement at the Fox River which could be significant.

     In setting our reserve for the Fox River, we have assessed our legal defenses, including our successful defenses to the allegations made in the Whiting Litigation, and assumed that we will not bear the entire cost of remediation and damages to the exclusion of other known PRPs at the Site who are also potentially jointly and severally liable. The existence and ability of other PRPs to participate has also been taken into account in setting our reserve, and is generally based on our evaluation of recent publicly available financial information on each PRP, and any known insurance, indemnity or cost sharing agreements between PRPs and third parties. In addition, our assessment is based upon the magnitude, nature, location and circumstances associated with the various discharges of PCBs to the river and the relationship of those discharges to identified contamination. We will continue to evaluate our exposure and the level of our reserves, including, but not limited to, our potential share of the costs and NRDs, if any, associated with the Fox River site.

     Other than with respect to the Amended OU1 Consent Decree, the amount and timing of future expenditures for environmental compliance, cleanup, remediation and personal injury, NRDs and property damage liabilities cannot be ascertained with any certainty due to, among other things, the unknown extent and nature of any contamination, the response actions that may ultimately be required, the availability of remediation equipment, and landfill space, and the number and financial resources of any other PRPs.

     Other Information. Based in part upon the Court’s December 16, 2009 ruling and the Court’s January 10, 2010 order in the Whiting Litigation, we continue to believe that a volumetric allocation would not constitute an equitable allocation of the potential liability for the contamination at the Fox River. We contend that other factors, such as the location of contamination, the location of discharge, and a party’s role in causing discharge, must be considered in order for the allocation to be equitable.

     The Wisconsin DNR and FWS have each published studies, the latter in draft form, estimating the amount of PCBs discharged by each identified PRP’s facility to the lower Fox River and the Bay of Green Bay. These reports estimate the Neenah Facility’s share of the volumetric discharge to be as high as 27%. We do not believe the volumetric estimates used in these studies are accurate because (a) the studies themselves disclose that they are not accurate and (b) the volumetric estimates contained in the studies are based on assumptions that are unsupported by existing data on the Site. We believe that the Neenah Facility’s volumetric contribution is significantly lower than the estimates set forth in these studies.

     We previously entered into interim cost-sharing agreements with four of the other PRPs, which provided for those PRPs to share certain costs relating to scientific studies of PCBs discharged at the Site (“Interim Cost Sharing Agreements”). These interim cost-sharing agreements do not establish the final allocation of remediation costs incurred at the Site. Based upon our evaluation of the Court’s December 16, 2009 ruling in the Whiting Litigation as well as the volume, nature and location of the various discharges of PCBs at the Site and the relationship of those discharges to identified contamination, we believe our allocable share of liability at the Site is less than our share of costs under the Interim Cost Sharing Agreements.

     While the Amended OU1 Consent Decree provides a negotiated framework for resolving both our and WTM I’s liability for the remediation of OU1, it does not resolve our exposure at the Site. The OU1 Consent Decree does not address response costs necessary to remediate the remainder of the Site and only addresses NRDs and claims for reimbursement of government expenses to a limited extent. Because CERCLA imposes strict and often joint and several liability, uncertainty persists regarding our exposure with respect to the remainder of the Fox River site. In addition, as mentioned previously, EPA has issued a UAO to us and others calling for further work in OU2-5, and Appleton Papers and NCR have commenced the Whiting Litigation that may become more complicated and involve additional parties. We cannot predict the ultimate outcome of the Whiting Litigation or any other litigation or regulatory actions related to this matter.

     Range of Reasonably Possible Outcomes. Our analysis of the range of reasonably possible outcomes is derived from all available information, including but not limited to official documents such as RODs, discussions with the United States and other PRPs, as well as legal counsel and engineering consultants. Based on our analysis of the current RODs and cost estimates for work to be performed at the Site, we believe that it is reasonably possible that our costs associated with the Fox

GLATFELTER

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River matter may exceed our cost estimates and the aggregate amounts accrued for the Fox River matter by amounts that are insignificant or that could range up to $265 million over a period that is currently undeterminable but that could range beyond 15 years. We believe that the likelihood of an outcome in the upper end of the monetary range is significantly less than other possible outcomes within the range and that the possibility of an outcome in excess of the upper end of the monetary range is remote. The summary judgment in our favor in the Whiting Litigation, if sustained on appeal, suggests that outcomes in the upper end of the monetary range have become somewhat less probable, while increases in cost estimates for some of the work may militate in the opposite direction.

     Summary. Our current assessment is that we will be able to manage this environmental matter without a long-term, material adverse impact on the Company. This matter could, however, at any particular time or for any particular year or years, have a material adverse effect on our consolidated financial position, liquidity and/or

results of operations or could result in a default under our loan covenants. Moreover, there can be no assurance that our reserves will be adequate to provide for future obligations related to this matter, that our share of costs and/or damages will not exceed our available resources, or that such obligations will not have a long-term, material adverse effect on our consolidated financial position, liquidity or results of operations. If we are not successful in obtaining acknowledgment that the remedial work at OU1 has been substantially completed and/or should the United States seek to enforce the UAO for OU2-5 against us which requires us either to perform directly or to contribute significant amounts towards the performance of that work, those developments could have a material adverse effect on our consolidated financial position, liquidity and results of operations and might result in a default under our loan covenants.

GLATFELTER

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15. SEGMENT INFORMATION

     The following table sets forth financial and other information by business unit for the periods indicated:

	Three months ended June 30
In millions	Specialty Papers					Composite Fibers				Advanced Airlaid Materials				Other and Unallocated						Total
	2010		2009			2010		2009		2010		2009		2010			2009			2010			2009
Net sales	$	208.7	$	184.4		$	102.0	$	94.6	$	52.0	$	—	$	—		$	—		$	362.8		$	279.0
Energy and related sales, net		1.9		2.1			—		—		—		—		—			—			1.9			2.1
Total revenue		210.6		186.5			102.0		94.6		52.0		—		—			—			364.7			281.1
Cost of products sold		194.9		178.8			84.1		82.7		48.5		—		1.8			(39.4	)		329.2			222.1
Gross profit		15.7		7.7			17.9		11.9		3.6		—		(1.8	)		39.4			35.5			59.0
SG&A		13.0		14.1			9.0		8.3		1.6		—		5.2			4.2			28.8			26.5
Gains on dispositions of plant, equipment and timberlands		—		—			—		—		—		—		(0.2	)		—			(0.2	)		—
Total operating income (loss)		2.7		(6.4	)		8.9		3.6		1.9		—		(6.8	)		35.2			6.8			32.4
Non-operating income (expense)		—		—			—		—		—		—		(6.3	)		(4.7	)		(6.3	)		(4.7	)
Income (loss) before income taxes	$	2.7	$	(6.4	)	$	8.9	$	3.6	$	1.9	$	—	$	(13.1	)	$	30.5		$	0.5		$	27.7
Supplementary Data
Net tons sold		187.8		171.3			23.0		20.1		20.1		—		—			—			230.9			191.4
Depreciation, depletion and amortization	$	8.7	$	8.9		$	5.8	$	5.7	$	1.9	$	—	$	—		$	—		$	16.4		$	14.6
Capital expenditures		5.7		3.4			1.7		2.7		1.9		—		—			0.1			9.3			6.2
	Six months ended June 30
In millions	Specialty Papers					Composite Fibers				Advanced Airlaid Materials				Other and Unallocated						Total
	2010		2009			2010		2009		2010		2009		2010			2009			2010			2009
Net sales	$	416.4	$	384.0		$	203.5	$	186.6	$	80.1	$	—	$	—		$	—		$	700.1		$	570.5
Energy and related sales, net		5.5		4.1			—		—		—		—		—			—			5.5			4.1
Total revenue		422.0		388.0			203.5		186.6		80.1		—		—			—			705.6			574.6
Cost of products sold		376.6		350.1			170.2		160.4		75.4		—		3.8			(38.2	)		625.9			472.3
Gross profit		45.4		37.9			33.3		26.2		4.7		—		(3.8	)		38.2			79.7			102.3
SG&A		26.7		25.9			18.1		17.1		2.6		—		16.1			8.0			63.5			51.1
Gains on dispositions of plant, equipment and timberlands		—		—			—		—		—		—		(0.2	)		(0.7	)		(0.2	)		(0.7	)
Total operating income (loss)		18.7		12.0			15.2		9.1		2.2		—		(19.7	)		30.9			16.3			51.9
Non-operating income (expense)		—		—			—		—		—		—		(15.8	)		(9.1	)		(15.8	)		(9.1	)
Income (loss) before income taxes	$	18.7	$	12.0		$	15.2	$	9.1	$	2.2	$	—	$	(35.5	)	$	21.8		$	0.6		$	42.8
Supplementary Data
Net tons sold		381.0		356.4			44.3		39.3		31.2		—		—			—			456.5			395.6
Depreciation, depletion and amortization	$	17.3	$	17.8		$	11.9	$	11.3	$	3.0	$	—	$	—		$	—		$	32.2		$	29.1
Capital expenditures		8.7		7.0			3.2		4.4		3.5		—		—			0.1			15.4			11.5

The mathematical accuracy of certain amounts set forth above may be impacted by the rounding of the individual line items.

     Results of individual business units are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to accounting principles generally accepted in the United States of America; therefore, the financial results of individual business units are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the business units. Methodologies are refined from time to time as management accounting practices are enhanced and businesses change. The costs incurred by support areas not directly aligned with the business unit are primarily allocated based on an estimated utilization of support area services or are included in “Other and Unallocated” in the table above.

     Management evaluates results of operations of the business units before non-cash net pension income or expense, acquisition and integration related charges, unusual items, certain corporate level costs, and the effects of asset dispositions. Management believes that this is a more meaningful representation of the operating performance of its core businesses, the profitability of business units and the extent of cash flow generated from these core operations. Such amounts are presented under the caption “Other and Unallocated.” This presentation is aligned with the management and operating structure of our company. It is also on this basis that our performance is evaluated internally and by our Board of Directors.

GLATFELTER

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16. GUARANTOR FINANCIAL STATEMENTS

     Our 7⅛% Notes have been fully and unconditionally guaranteed, on a joint and several basis, by certain of our 100%-owned domestic subsidiaries: PHG Tea Leaves, Inc., Mollanvick, Inc., The Glatfelter Pulp Wood Company, and Glatfelter Holdings, LLC.

     The following presents our condensed consolidating statements of income and cash flow, and our condensed consolidating balance sheets. These financial statements reflect P. H. Glatfelter Company (the parent), the guarantor subsidiaries (on a combined basis), the non-guarantor subsidiaries (on a combined basis) and elimination entries necessary to combine such entities on a consolidated basis.

Condensed Consolidating Statement of Income for the
three months ended June 30, 2010

	Parent						Non			Adjustments/
In thousand	Company			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	208,740		$	11,750		$	154,041		$	(11,750	)	$	362,781
Energy and related sales — net		1,915			—			—			—			1,915
Total revenues		210,655			11,750			154,041			(11,750	)		364,696
Costs of products sold		198,062			10,283			132,620			(11,729	)		329,236
Gross profit		12,593			1,467			21,421			(21	)		35,460
Selling, general and administrative expenses		17,034			627			11,186			—			28,847
Gains on dispositions of plant, equipment and timberlands, net		—			(168	)		—			—			(168	)
Operating income		(4,441	)		1,008			10,235			(21	)		6,781
Non-operating income (expense)
Interest expense		(6,474	)		—			(343	)		—			(6,817	)
Interest income		(551	)		1,929			(1,210	)		—			168
Other income (expense) — net		8,395			(835	)		1,183			(8,377	)		366
Total other income (expense)		1,370			1,094			(370	)		(8,377	)		(6,283	)
Income (loss) before income taxes		(3,071	)		2,102			9,865			(8,398	)		498
Income tax provision (benefit)		(3,174	)		390			3,187			(8	)		395
Net income (loss)	$	103		$	1,712		$	6,678		$	(8,390	)	$	103

Condensed Consolidating Statement of Income for the
three months ended June 30, 2009

	Parent					Non			Adjustments/
In thousands	Company			Guarantors		Guarantors			Eliminations			Consolidated
Net sales	$	184,364		$	10,766	$	94,615		$	(10,766	)	$	278,979
Energy and related sales — net		2,131			—		—			—			2,131
Total revenues		186,495			10,766		94,615			(10,766	)		281,110
Costs of products sold		140,350			9,733		82,789			(10,763	)		222,109
Gross profit		46,145			1,033		11,826			(3	)		59,001
Selling, general and administrative expenses		17,495			529		8,524			—			26,548
Gains on dispositions of plant, equipment and timberlands, net		27			—		—			—			27
Operating income		28,623			504		3,302			(3	)		32,426
Non-operating income (expense)
Interest expense		(4,384	)		—		(760	)		—			(5,144	)
Interest income		(263	)		1,298		(28	)		(450	)		557
Other income (expense) — net		(1,852	)		1,403		(234	)		548			(135	)
Total other income (expense)		(6,499	)		2,701		(1,022	)		98			(4,722	)
Income (loss) before income taxes		22,124			3,205		2,280			95			27,704
Income tax provision (benefit)		2,254			1,215		4,535			(170	)		7,834
Net income (loss)	$	19,870		$	1,990	$	(2,255	)	$	265		$	19,870

GLATFELTER

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Condensed Consolidating Statement of Income for the
six months ended June 30, 2010

	Parent						Non			Adjustments/
In thousand	Company			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	416,443		$	24,353		$	283,613		$	(24,353	)	$	700,056
Energy and related sales — net		5,522			—			—			—			5,522
Total revenues		421,965			24,353			283,613			(24,353	)		705,578
Costs of products sold		383,690			20,693			245,711			(24,192	)		625,902
Gross profit		38,275			3,660			37,902			(161	)		79,676
Selling, general and administrative expenses		39,582			1,168			22,767			—			63,517
Gains on dispositions of plant, equipment and timberlands, net		—			(168	)		—			—			(168	)
Operating income		(1,307	)		2,660			15,135			(161	)		16,327
Non-operating income (expense)
Interest expense		(11,805	)		—			(675	)		—			(12,480	)
Interest income		(725	)		3,420			(2,057	)		(300	)		338
Other income (expense) — net		7,673			(1,317	)		3,212			(13,185	)		(3,617	)
Total other income (expense)		(4,857	)		2,103			480			(13,485	)		(15,759	)
Income (loss) before income taxes		(6,164	)		4,763			15,615			(13,646	)		568
Income tax provision (benefit)		(5,893	)		1,554			5,359			(181	)		839
Net income (loss)	$	(271	)	$	3,209		$	10,256		$	(13,465	)	$	(271	)

Condensed Consolidating Statement of Income for the
six months ended June 30, 2009

	Parent						Non			Adjustments/
In thousands	Company			Guarantors			Guarantors			Eliminations			Consolidated
Net sales	$	383,971		$	22,489		$	186,560		$	(22,489	)	$	570,531
Energy and related sales — net		4,062			—			—			—			4,062
Total revenues		388,033			22,489			186,560			(22,489	)		574,593
Costs of products sold		313,984			20,448			160,493			(22,647	)		472,278
Gross profit		74,049			2,041			26,067			158			102,315
Selling, general and administrative expenses		32,324			1,073			17,664			—			51,061
Gains on dispositions of plant, equipment and timberlands, net		28			(700	)		—			—			(672	)
Operating income		41,697			1,668			8,403			158			51,926
Non-operating income (expense)
Interest expense		(8,719	)		(6	)		(1,545	)		—			(10,270	)
Interest income		(485	)		2,908			(108	)		(1,050	)		1,265
Other income (expense) — net		7,125			1,230			(179	)		(8,294	)		(118	)
Total other income (expense)		(2,079	)		4,132			(1,832	)		(9,344	)		(9,123	)
Income (loss) before income taxes		39,618			5,800			6,571			(9,186	)		42,803
Income tax provision (benefit)		8,210			2,239			1,279			(333	)		11,395
Net income (loss)	$	31,408		$	3,561		$	5,292		$	(8,853	)	$	31,408

GLATFELTER

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Condensed Consolidating Balance Sheet as of June 30, 2010

	Parent				Non		Adjustments/
In thousands	Company		Guarantors		Guarantors		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	20,353	$	572	$	21,702	$	—		$	42,627
Other current assets		244,824		422,077		207,779		(479,198	)		395,482
Plant, equipment and timberlands — net		248,319		6,937		348,860		—			604,116
Other assets		759,198		157,724		104,865		(798,878	)		222,909
Total assets	$	1,272,694	$	587,310	$	683,206	$	(1,278,076	)	$	1,265,134
Liabilities and Shareholders’ Equity
Current liabilities	$	307,117	$	26,840	$	348,411	$	(476,490	)	$	205,878
Long-term debt		295,201		—		36,695		—			331,896
Deferred income taxes		71,035		10,658		40,988		(32,585	)		90,096
Other long-term liabilities		123,936		13,618		11,179		13,126			161,859
Total liabilities		797,289		51,116		437,273		(495,949	)		789,729
Shareholders’ equity		475,405		536,194		245,933		(782,127	)		475,405
Total liabilities and shareholders’ equity	$	1,272,694	$	587,310	$	683,206	$	(1,278,076	)	$	1,265,134

Condensed Consolidating Balance Sheet as of December 31, 2009

	Parent				Non		Adjustments/
In thousands	Company		Guarantors		Guarantors		Eliminations			Consolidated
Assets
Current assets
Cash and cash equivalents	$	76,970	$	985	$	57,465	$	—		$	135,420
Other current assets		275,490		260,834		148,090		(299,778	)		384,636
Plant, equipment and timberlands — net		255,886		6,921		207,825		—			470,632
Other assets		600,116		145,304		75,731		(621,545	)		199,606
Total assets	$	1,208,462	$	414,044	$	489,111	$	(921,323	)	$	1,190,294
Liabilities and Shareholders’ Equity
Current liabilities	$	301,908	$	1,357	$	179,273	$	(296,428	)	$	186,110
Long-term debt		200,241		—		36,695		—			236,936
Deferred income taxes		71,035		15,347		26,284		(15,998	)		96,668
Other long-term liabilities		124,574		13,531		9,654		12,117			159,876
Total liabilities		697,758		30,235		251,906		(300,309	)		679,590
Shareholders’ equity		510,704		383,809		237,205		(621,014	)		510,704
Total liabilities and shareholders’ equity	$	1,208,462	$	414,044	$	489,111	$	(921,323	)	$	1,190,294

GLATFELTER

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Condensed Consolidating Statement of Cash Flows for
the six months ended June 30, 2010

	Parent						Non			Adjustments/
In thousands	Company			Guarantors			Guarantors			Eliminations			Consolidated
Net cash provided (used) by
Operating activities	$	(90,129	)	$	132,713		$	40,391		$	(300	)	$	82,675
Investing activities
Purchase of plant, equipment and timberlands		(8,404	)		(301	)		(6,740	)					(15,445	)
Proceeds from disposals of plant, equipment and timberlands		—			182			—			—			182
Acquisition of Concert Industries Corp., net of cash acquired		—			—			(229,080	)		—			(229,080	)
Repayments from (advances of) intercompany loans, net		(1,676	)		(132,507	)		4,806			129,377			—
Total investing activities		(10,080	)		(132,626	)		(231,014	)		129,377			(244,343	)
Financing activities
Net proceeds from indebtedness		76,470			—			2,016			—			78,486
Payment of dividends to shareholders		(8,360	)		—			—			—			(8,360	)
(Repayments) borrowings of intercompany loans, net		(24,628	)		—			154,205			(129,577	)		—
Payment of intercompany dividends		—			(500	)		—			500			—
Proceeds from stock options exercised and other		110			—			—			—			110
Total financing activities		43,592			(500	)		156,221			(129,077	)		70,236
Effect of exchange rate on cash		—			—			(1,361	)		—			(1,361	)
Net increase (decrease) in cash		(56,617	)		(413	)		(35,763	)		—			(92,793	)
Cash at the beginning of period		76,970			985			57,465			—			135,420
Cash at the end of period	$	20,353		$	572		$	21,702		$	—		$	42,627

Condensed Consolidating Statement of Cash Flows for
the six months ended June 30, 2009

	Parent						Non			Adjustments/
In thousands	Company			Guarantors			Guarantors			Eliminations			Consolidated
Net cash provided (used) by
Operating activities	$	57,559		$	3,131		$	5,227		$	(1,050	)	$	64,867
Investing activities
Purchase of plant, equipment and timberlands		(7,063	)		(55	)		(4,357	)		—			(11,475	)
Proceeds from disposal plant, equipment and timberlands		—			728			—			—			728
Proceeds from installment note receivable		—			—			37,850			—			37,850
Repayments from (advances of) intercompany loans, net		1,109			1,000			—			(2,109	)		—
Total investing activities		(5,954	)		1,673			33,493			(2,109	)		27,103
Financing activities
Net (repayments of) proceeds from indebtedness		(8,829	)		—			(30,756	)		—			(39,585	)
Payment of dividends to shareholders		(8,272	)		—			—			—			(8,272	)
(Repayments) borrowings of intercompany loans, net		—			(4,225	)		2,116			—			—
Payment of intercompany dividends		—			(1,050	)		—			1,050			—
Total financing activities		(17,101	)		(5,275	)		(28,640	)		3,159			(47,857	)
Effect of exchange rate on cash		—			—			1,857			—			1,857
Net increase (decrease) in cash		34,504			(471	)		11,937			—			45,970
Cash at the beginning of period		8,860			736			22,618			—			32,234
Cash at the end of period	$	43,364		$	285		$	34,555		$	—		$	78,204

GLATFELTER

-22-

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with the information in the unaudited condensed consolidated financial statements and notes thereto included herein and Glatfelter’s Financial Statements and Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our 2009 Annual Report on Form 10-K.

     Forward-Looking Statements This Quarterly Report on Form 10-Q includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact, including statements regarding industry prospects and future consolidated financial position or results of operations, made in this Report on Form 10-Q are forward looking. We use words such as “anticipates”, “believes”, “expects”, “future”, “intends” and similar expressions to identify forward-looking statements. Forward-looking statements reflect management’s current expectations and are inherently uncertain. Our actual results may differ significantly from such expectations. The following discussion includes forward-looking statements regarding expectations of, among others, net sales, costs of products sold, environmental costs, capital expenditures and liquidity, all of which are inherently difficult to predict. Although we make such statements based on assumptions that we believe to be reasonable, there can be no assurance that actual results will not differ materially from our expectations. Accordingly, we identify the following important factors, among others, which could cause our results to differ from any results that might be projected, forecasted or estimated in any such forward-looking statements:

i.	variations in demand for our products including the impact of any unplanned market-related downtime, or variations in product pricing;
ii.	changes in the cost or availability of raw materials we use, in particular pulpwood, market pulp, pulp substitutes, caustic soda and abaca fiber;
iii.	changes in energy-related costs and commodity raw materials with an energy component;
iv.	our ability to develop new, high value-added Specialty Papers, Composite Fibers and Advanced Airlaid Material products;
v.	the impact of exposure to volatile market-based pricing for sales of excess electricity;
vi.	the impact of competition, changes in industry production capacity, including the construction of new mills, the closing of mills and incremental changes due to capital expenditures or productivity increases;

vii.	the impairment of financial institutions and any resulting impact on us, our customers or our vendors;
viii.	the gain or loss of significant customers and/or on-going viability of such customers;
ix.	cost and other effects of environmental compliance, cleanup, damages, remediation or restoration, or personal injury or property damages related thereto, such as the costs of natural resource restoration or damages related to the presence of polychlorinated biphenyls (“PCBs”) in the lower Fox River on which our former Neenah mill was located;
x.	risks associated with our international operations, including local economic and political environments and fluctuations in currency exchange rates;
xi.	geopolitical events, including war and terrorism;
xii.	disruptions in production and/or increased costs due to labor disputes;
xiii.	the impact of unfavorable outcomes of audits by various state, federal or international tax authorities;
xiv.	enactment of adverse state, federal or foreign tax or other legislation or changes in government policy or regulation;
xv.	adverse results in litigation; and
xvi.	our ability to finance, consummate and integrate current or future acquisitions.

     Introduction We manufacture, both domestically and internationally, a wide array of specialty papers and fiber-based engineered products. We manage our business along three business units: i) Specialty Papers with revenues earned from the sale of carbonless papers and forms, book publishing, envelope & converting, and engineered products; ii) Composite Fibers with revenue from the sale of food & beverage filtration papers, metallized papers, composite laminates used for decorative furniture and flooring applications, and technical specialties; and iii) Advanced Airlaid Materials with revenue from the sale of airlaid non-woven fabric like materials used in feminine hygiene products, adult incontinence products, cleaning pads and wipes, food pads, napkins and tablecloths, and baby wipes.

GLATFELTER

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     Overview Our reported results of operations for the first six months of 2010 when compared with the same period of 2009 are lower primarily due to the benefit in 2009 from alternative fuel mixture credits totaling $30.4 million, after-tax. Our results for the first six months of 2010 also reflect an aggregate of $10.0 million, after-tax, of acquisition and integration costs, together with a loss on forward foreign currency contracts that hedged the Canadian dollar purchase price, of the February 12, 2010 acquisition of Concert Industries Corp. (“Concert”).

     Operationally, our results were favorably affected by higher volumes shipped associated with improving demand in many of the markets served by our businesses and the inclusion of Concert. Higher average selling prices offset the adverse affect of rising input costs, particularly purchased pulp. Our results for the first six months of 2009 were adversely impacted by market related downtime in both the Specialty Papers and Composite Fibers business units related to the weak economic environment. During 2010, demand for our products improved and, as a results, we did not incur market related downtime.

RESULTS OF OPERATIONS

Six months ended June 30, 2010 versus the
Six months ended June 30, 2009

     The following table sets forth summarized results of operations:

	Six months ended June 30
In thousands, except per share	2010			2009
Net sales	$	700,056		$	570,531
Gross profit		79,676			102,315
Operating income		16,327			51,926
Net income (loss)		(271	)		31,408
Earnings (loss) per share		(0.01	)		0.69

     The consolidated results of operations for the six months ended June 30, 2010 and 2009 include the following significant items:

In thousands, except per share	After-tax Gain (loss)			Diluted EPS
2010
Acquisition and integration costs	$	(8,321	)	$	(0.18	)
Foreign currency hedge on acquisition price		(1,673	)		(0.04	)
2009
Alternative fuel mixture credit	$	30,418		$	0.67

     The above items reduced earnings by $10.0 million, or $0.22 per diluted share, in first six months of 2010 and increased earnings by $30.4 million, or $0.67 per diluted share, in the first half of 2009.

Business Units	Six months ended June 30
In millions	Specialty Papers				Composite Fibers				Advanced Airlaid Materials				Other and Unallocated						Total
	2010		2009		2010		2009		2010		2009		2010			2009			2010			2009
Net sales	$	416.4	$	384.0	$	203.5	$	186.6	$	80.1	$	—	$	—		$	—		$	700.1		$	570.5
Energy and related sales, net		5.5		4.1		—		—		—		—		—			—			5.5			4.1
Total revenue		422.0		388.0		203.5		186.6		80.1		—		—			—			705.6			574.6
Cost of products sold		376.6		350.1		170.2		160.4		75.4		—		3.8			(38.2	)		625.9			472.3
Gross profit		45.4		37.9		33.3		26.2		4.7		—		(3.8	)		38.2			79.7			102.3
SG&A		26.7		25.9		18.1		17.1		2.6		—		16.1			8.0			63.5			51.1
Gains on dispositions of plant, equipment and timberlands		—		—		—		—		—		—		(0.2	)		(0.7	)		(0.2	)		(0.7	)
Total operating income (loss)		18.7		12.0		15.2		9.1		2.2		—		(19.7	)		30.9			16.3			51.9
Non-operating income (expense)		—		—		—		—		—		—		(15.8	)		(9.1	)		(15.8	)		(9.1	)
Income (loss) before income taxes	$	18.7	$	12.0	$	15.2	$	9.1	$	2.2	$	—	$	(35.5	)	$	21.8		$	0.6		$	42.8
Supplementary Data
Net tons sold		381.0		356.4		44.3		39.3		31.2		—		—			—			456.5			395.6
Depreciation, depletion and amortization	$	17.3	$	17.8	$	11.9	$	11.3	$	3.0	$	—	$	—		$	—		$	32.2		$	29.1
Capital expenditures		8.7		7.0		3.2		4.4		3.5		—		—			0.1			15.4			11.5

The mathematical accuracy of certain amounts set forth above may be impacted by the rounding of the individual line items.

GLATFELTER

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     Business Units Results of individual business units are presented based on our management accounting practices and management structure. There is no comprehensive, authoritative body of guidance for management accounting equivalent to accounting principles generally accepted in the United States of America; therefore, the financial results of individual business units are not necessarily comparable with similar information for any other company. The management accounting process uses assumptions and allocations to measure performance of the business units. Methodologies are refined from time to time as management accounting practices are enhanced and businesses change. The costs incurred by support areas not directly aligned with the business unit are allocated primarily based on an estimated utilization of support area services or are included in “Other and Unallocated” in the table above.

     Management evaluates results of operations of the business units before non-cash net pension income or expense, acquisition and integration related charges, unusual items, certain corporate level costs, and the effects of asset dispositions. Management believes that this is a more meaningful representation of the operating performance of its core businesses, the profitability of business units and the extent of cash flow generated from these core operations. Such amounts are presented under the caption “Other and Unallocated.” This presentation is aligned with the management and operating structure of our company. It is also on this basis that our performance is evaluated internally and by our Board of Directors.

     Sales and Costs of Products Sold

	Six months ended June 30
In thousands	2010			2009			Change
Net sales	$	700,056		$	570,531		$	129,525
Energy and related sales — net		5,522			4,062			1,460
Total revenues		705,578			574,593			130,985
Costs of products sold		625,902			472,278	(1)		153,624
Gross profit	$	79,676		$	102,315		$	(22,639	)
Gross profit as a percent of Net sales		11.4	%		17.9	%

(1) Includes $40.8 million of alternative fuel mixture credits.

     The following table sets forth the contribution to consolidated net sales by each business unit:

	Six months ended June 30
Percent of Total	2010			2009
Business Unit
Specialty Papers		59.5	%		68.5	%
Composite Fibers		29.1			31.5
Advanced Airlaid Material		11.4			—
Total		100.0	%		100.0	%

     Net sales for the first six months of 2010 were $700.1 million, a 22.7% increase compared with $570.5 million for the same period of 2009, reflecting improved demand and the inclusion of Concert, now operated and reported as Advanced Airlaid Materials business unit.

     In the Specialty Papers business unit, net sales for the first half of 2010 increased $32.4 million, or 8.4%, to $416.4 million. The increase was primarily due to higher volumes shipped. Higher average selling prices favorably impacted net sales by $2.9 million in the period-over-period comparison.

     Specialty Papers’ operating profit in the first half of 2010 improved by $6.7 million compared with the same period of 2009 primarily due to a 6.9% increase in volumes shipped and the lack of market related downtime. These favorable factors were partially offset by higher maintenance costs primarily associated with the annual mill outages.

     We sell excess power generated by the Spring Grove, PA facility. In addition, two of our facilities are registered generators of renewable energy credits (“RECs”). The following table summarizes this activity for the first six months of 2010 and 2009:

In thousands	2010			2009			Change
Energy sales	$	7,670		$	10,142		$	(2,472	)
Costs to produce		(5,261	)		(6,080	)		819
Net		2,409			4,062			(1,653	)
Renewable energy credits		3,113			—			3,113
Total	$	5,522		$	4,062		$	1,460

     Prior to March 31, 2010, all energy sales were made pursuant to a long-term contract that expired at the end of the first quarter 2010. We continue to sell power but at market rates, the forward pricing for which is 30% below the expired contract rate. We expect increased volatility and lower overall profitability.

     RECs represent sales of certified credits earned related to burning renewable sources of energy such as black liquor and wood waste. We sell RECs into an emerging and somewhat illiquid market. The extent and value of future revenues from REC sales is dependent on many factors outside of management’s control. Therefore, we may not be able to generate consistent additional sales of RECs in future periods.

GLATFELTER

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     In Composite Fibers, net sales for the first six months of 2010 were $203.5 million, an increase of $16.9 million, or 9.1%, from the same period of 2009. The improvement in Composite Fibers’ net sales reflects strengthening demand in each of its product lines. On a constant currency basis, average selling prices were lower by $1.1 million, and the translation of foreign currencies favorably affected net sales by approximately $0.3 million.

     Lower raw material and energy costs, primarily natural gas, favorably affected this business unit’s profitability by $4.4 million. In addition, improving market conditions and business development increased production volumes eliminating market-driven down time. On a net basis, Composite Fibers’ operating profit increased $6.1 million, or 67.0%, in the period-to-period comparison.

     Results for Advanced Airlaid Materials are included from February 12, 2010, the date of the Concert acquisition. Reported results were adversely impacted by $1.4 million as a result of charging cost of products sold for the write-up of acquired inventory to fair value.

     Pension Expense The following table summarizes the amounts of pension expense recognized for the periods indicated:

	Six months ended
	June 30
In thousands	2010		2009		Change
Recorded as:
Costs of products sold	$	3,591	$	2,502	$	1,089
SG&A expense		1,146		1,203		(57	)
Total	$	4,737	$	3,705	$	1,032

     The amount of pension expense or income recognized each year is determined using various actuarial assumptions and certain other factors, including the fair value of our pension assets as of the beginning of the year.

     Selling, general and administrative (“SG&A”) expenses totaled $63.6 million, a $12.6 million increase primarily due to acquisition and integration related costs associated with the Concert transaction. For the remainder of 2010, integration costs are expected to approximate $1.0 million.

     Income taxes For the first six months of 2010, we recorded a provision for income taxes of $0.8 million on $0.6 million of pretax income. The comparable amounts in the same period of 2009 were income tax expense of $11.4 million on $42.8 million of pretax income. The lower tax provision in 2010 was primarily due to $13.8 million of acquisition and integration costs incurred in the first half of 2010. There were no such costs in the same period of 2009. The higher tax provision in 2009 was primarily due to the $40.8 million of alternative fuel mixture credit earned in that period.

     Foreign Currency We own and operate facilities in Canada, Germany, France, the United Kingdom and the Philippines. The functional currency of our Canadian operations is the U.S. dollar. However, in Germany and France it is the Euro, in the UK it is the British Pound Sterling, and in the Philippines the currency is the Peso. During the first six months of 2010, Euro functional currency operations generated approximately 24.3% of our sales and 22.8% of operating expenses and British Pound Sterling operations represented 9.0% of net sales and 8.8% of operating expenses. The translation of the results from these international operations into U.S. dollars is subject to changes in foreign currency exchange rates.

     The table below summarizes the effect from foreign currency translation on the first six months of 2010 reported results compared to the first six months 2009:

	Six months
In thousands	ended June 30
	Favorable
	(unfavorable)
Net sales	$	292
Costs of products sold		(978	)
SG&A expenses		(91	)
Income taxes and other		70
Net income	$	(707	)

     The above table only presents the financial reporting impact of foreign currency translations. It does not present the impact of certain competitive advantages or disadvantages of operating or competing in multi-currency markets.

GLATFELTER

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Three months ended June 30, 2010 versus the Three months ended June 30, 2009

     The following table sets forth summarized results of operations:

	Three months ended June 30
In thousands, except per share	2010		2009
Net sales	$	362,781	$	278,979
Gross profit		35,460		59,001
Operating income		6,781		32,426
Net income (loss)		103		19,870
Earnings (loss) per share		0.00		0.43

     The consolidated results of operations for the three months ended June 30, 2010 and 2009 include the following significant items:

	After-tax			Diluted EPS
In thousands, except per share	Gain (loss)
2010
Acquisition and integration costs	$	(1,318	)	$	(0.03	)
Foreign currency hedge on acquisition price		403			0.01
Timberland sales		99			—
2009
Alternative fuel mixture credits		30,418			0.67
Timberland sales and related transaction costs		441			0.01

     The above items reduced earnings by $0.8 million, or $0.02 per diluted share, in second quarter of 2010 and increased earnings by $30.9 million, or $0.68 per diluted share, in the second quarter of 2009.

Business Units	Three months ended June 30
In millions	Specialty Papers					Composite Fibers				Advanced Airlaid Materials				Other and Unallocated						Total
	2010		2009			2010		2009		2010		2009		2010			2009			2010			2009
Net sales	$	208.7	$	184.4		$	102.0	$	94.6	$	52.0	$	—	$	—		$	—		$	362.8		$	279.0
Energy and related sales, net		1.9		2.1			—		—		—		—		—			—			1.9			2.1
Total revenue		210.6		186.5			102.0		94.6		52.0		—		—			—			364.7			281.1
Cost of products sold		194.9		178.8			84.1		82.7		48.5		—		1.8			(39.4	)		329.2			222.1
Gross profit		15.7		7.7			17.9		11.9		3.6		—		(1.8	)		39.4			35.5			59.0
SG&A		13.0		14.1			9.0		8.3		1.6		—		5.2			4.2			28.8			26.5
Gains on dispositions of plant, equipment and timberlands		—		—			—		—		—		—		(0.2	)		—			(0.2	)		—
Total operating income (loss)		2.7		(6.4	)		8.9		3.6		1.9		—		(6.8	)		35.2			6.8			32.4
Non-operating income (expense)		—		—			—		—		—		—		(6.3	)		(4.7	)		(6.3	)		(4.7	)
Income (loss) before income taxes	$	2.7	$	(6.4	)	$	8.9	$	3.6	$	1.9	$	—	$	(13.1	)	$	30.5		$	0.5		$	27.7
Supplementary Data
Net tons sold		187.8		171.3			23.0		20.1		20.1		—		—			—			230.9			191.4
Depreciation, depletion and amortization	$	8.7	$	8.9		$	5.8	$	5.7	$	1.9	$	—	$	—		$	—		$	16.4		$	14.6
Capital expenditures		5.7		3.4			1.7		2.7		1.9		—		—			0.1			9.3			6.2

     The mathematical accuracy of certain amounts set forth above may be impacted by the rounding of the individual line items.

GLATFELTER

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     Sales and Costs of Products Sold

	Three months
	ended June 30
In thousands	2010			2009			Change
Net sales	$	362,781		$	278,979		$	83,802
Energy and related sales — net		1,915			2,131			(216	)
Total revenues		364,696			281,110			83,586
Costs of products sold		329,236			222,109	(1)		107,127
Gross profit	$	35,460		$	59,001		$	(23,541	)
Gross profit as a percent of Net sales		9.8	%		21.1	%

(1) Includes $40.8 million of alternative fuel mixture credits.

     The following table sets forth the contribution to consolidated net sales by each business unit:

	Three months ended
	June 30
Percent of Total	2010			2009
Business Unit
Specialty Papers		57.5	%		66.1	%
Composite Fibers		28.1			33.9
Advanced Airlaid Material		14.4			—
Total		100.0			100.0	%

     Net sales for the second quarter of 2010 were $362.8 million, a 30.0% increase compared with $279.0 million for the second quarter of 2009, reflecting the February 2010 Concert Industries acquisition, and strong demand in the Specialty Papers and Composite Fibers business units.

     In the Specialty Papers business unit, 2010 second quarter net sales increased $24.3 million, or 13.3%, to $208.7 million. The increase was primarily due to a 9.7% increase in volumes shipped, an improved mix and a $4.9 million benefit from higher average selling prices in the quarter-over-quarter comparison.

     During the second quarters of 2010 and 2009, we completed the annually scheduled maintenance outages at our Chillicothe, OH and Spring Grove, PA facilities. The maintenance outages adversely impacted gross profit by $19.6 million in the second quarter of 2010, compared with $16.1 million in the same quarter a year ago. These required outages result in increased maintenance spending, reduced production volumes, and lower product sales all negatively affecting the second-quarter results when compared with other quarters.

     Specialty Papers’ 2010 second quarter-operating profit increased $9.1 million compared with the prior-year quarter primarily due to the benefits of higher volumes shipped, improved mix, operating efficiencies and the lack of market-related downtime during the 2010 second quarter. In the quarter-to-quarter comparison, the adverse impact of higher raw material costs was offset by the benefit of higher average selling prices.

     The following table summarizes sales of excess power and related items for the second quarters of 2010 and 2009:

In thousands	2010			2009			Change
Energy sales	$	3,067		$	5,294		$	(2,227	)
Costs to produce		(2,649	)		(3,163	)		514
Net		418			2,131			(1,713	)
Renewable energy credits		1,497			—			1,497
Total	$	1,915		$	2,131		$	(216	)

     In Composite Fibers, 2010 second quarter net sales were $101.9 million, an increase of $7.4 million, or 7.8%, from the second quarter of 2009. The improvement in Composite Fibers’ net sales reflects strengthening demand in all of its product lines as volumes shipped increased 14.4%. Net sales increased despite a $0.2 million adverse impact from lower average selling prices and a $5.4 million adverse impact from the translation of foreign currencies.

     Composite Fibers’ operating profit increased $5.3 million in the quarter-to-quarter comparison. Improving market conditions and business development increased production volumes eliminating market-driven down time to benefit operating profit by $3.9 million. In addition, operating efficiencies and the lower cost of energy offset the negative impact of higher wood pulp prices.

     Advanced Airlaid Materials’ volumes shipped were adversely impacted by greater than anticipated quarter-end inventory management by customers. Operating income was negatively impacted by an increase in pulp costs and a lag in related cost pass through arrangements. Operating income was also adversely impacted by $0.2 million as a result of charging cost of products sold for the write-up of acquired inventory to fair value.

     Pension Expense The following table summarizes the amounts of pension expense recognized for the periods indicated:

	Three months ended
	June 30
In thousands	2010		2009		Change
Recorded as:
Costs of products sold	$	1,698	$	1,314	$	384
SG&A expense		653		709		(56	)
Total	$	2,351	$	2,023	$	328

     The amount of pension expense or income recognized each year is determined using various actuarial assumptions and certain other factors, including the fair value of our pension assets as of the beginning of the year.

GLATFELTER

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     Selling, general and administrative (“SG&A”) expenses totaled $28.8 million, a $2.3 million increase primarily due to acquisition and integration related costs associated with the Concert acquisition and to the inclusion of this acquired entity’s operating expenses for the quarter. For the remainder of 2010, integration costs are expected to approximate $1.0 million.

     Income taxes For the second quarter of 2010, we recorded a provision for income taxes of $0.4 million on $0.5 million of pretax income. The comparable amounts in the second quarter of 2009 were income tax expense of $7.8 million on $27.7 million of pretax income. The 2010 second quarter tax provision was negatively impacted an increase in the German trade tax rate in 2010 and the impact on the 2010 rate of the expiration of the research and development tax credit at the end of 2009. The higher tax provision in 2009 was primarily due to the $40.8 million of alternative fuel mixture credit earned in that period.

     Foreign Currency We own and operate facilities in Canada, Germany, France, the United Kingdom and the Philippines. The functional currency of our Canadian operations is the U.S. dollar. However, in Germany and France it is the Euro, in the UK it is the British Pound Sterling, and in the Philippines the currency is the Peso. During the second quarter of 2010, Euro functional currency operations generated approximately 24.7% of our sales and 23.0% of operating expenses and British Pound Sterling operations represented 9.4% of net sales and 8.7% of operating expenses. The translation of the results from these international operations into U.S. dollars is subject to changes in foreign currency exchange rates.

     The table below summarizes the effect from foreign currency translation on second quarter 2010 reported results compared to the second quarter 2009:

	Three months
In thousands	ended June 30
	Favorable
	(unfavorable)
Net sales	$	(5,428	)
Costs of products sold		4,293
SG&A expenses		415
Income taxes and other		100
Net income	$	(620	)

     The above table only presents the financial reporting impact of foreign currency translations. It does not present the impact of certain competitive advantages or disadvantages of operating or competing in multi-currency markets.

LIQUIDITY AND CAPITAL RESOURCES

     Our business is capital intensive and requires significant expenditures for new or enhanced equipment, for environmental compliance matters, to support our research and development efforts and for our business strategy. The following table summarizes cash flow information for each of the years presented:

	Six months ended
	June 30
In thousands	2010			2009
Cash and cash equivalents at beginning of period	$	135,420		$	32,234
Cash provided by (used for)
Operating activities		82,675			64,867
Investing activities		(244,343	)		27,103
Financing activities		70,236			(47,857	)
Effect of exchange rate changes on cash		(1,361	)		1,857
Net cash used		(92,793	)		45,970
Cash and cash equivalents at end of period	$	42,627		$	78,204

     As of June 30, 2010, we had $42.6 million in cash and cash equivalents and $218.3 million available under our revolving credit agreement.

     Operating cash flow improved by $17.8 million in the first half of 2010 compared to the same period of 2009. While net income in 2010 was lower than the prior-year period as a result of acquisition related costs in 2010 and the benefit in 2009 of alternative fuel mixture credits, operating cash flow in the first half of 2010 benefited from the collection of a $54.9 million tax refund related to alternative fuel mixture credits. In addition, in 2009 we funded an environmental payments associated with the Fox River matter using $6.5 million in cash.

     Net cash used by investing activities totaled $244.3 million in the first six months of 2010 reflecting the Concert acquisition. Capital expenditures totaled $15.4 million and $11.5 million in the first six months of 2010 and 2009, respectively.

     Net cash provided by financing activities totaled $70.2 million in the first six months of 2010, reflecting increased borrowings to fund the Concert acquisition including the proceeds, net of debt issue costs and original issue discount, from the issuance of $100.0 million of senior notes, at 95% of par.

     During the first six months of 2010 and 2009 cash dividends paid on common stock totaled $8.4 million and $8.3 million, respectively. Our Board of Directors determines what, if any, dividends will be paid to our shareholders. Dividend payment decisions are based upon then-existing factors and conditions and, therefore,

GLATFELTER

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historical trends of dividend payments are not necessarily indicative of future payments.

     The following table sets forth our outstanding long-term indebtedness:

	June 30,		Dec. 31,
In thousands	2010		2009
Revolving credit facility, due April 2011	$	—	$	—
Term Loan, due April 2011		—		14,000
7⅛% Notes, due May 2016		200,000		200,000
7⅛% Notes, due May 2016 - net of original issue discount		95,201		—
Term Loan, due January 2013		36,695		36,695
Total long-term debt		331,896		250,695
Less current portion		—		(13,759	)
Long-term debt, net of current portion	$	331,896	$	236,936

     The significant terms of the debt obligations are set forth in Item 1 — Financial Statements — Note 11. Although we do not have immediate intentions to make use of our credit facility, we believe this agreement, and the banks that are party to it, provides us with ready access to liquidity should we need it.

     We are subject to loss contingencies resulting from regulation by various federal, state, local and foreign governmental authorities with respect to the environmental impact of mills we operate, or have operated. To comply with environmental laws and regulations, we have incurred substantial capital and operating expenditures in past years. We anticipate that environmental regulation of our operations will continue to become more burdensome and that capital and operating expenditures necessary to comply with environmental regulations will continue, and perhaps increase, in the future. In addition, we may incur obligations to remove or mitigate any adverse effects on the environment resulting from our operations, including the restoration of natural resources and liability for personal injury and for damages to property and natural resources. See Item 1 — Financial Statements — Note 14 for a summary of significant environmental matters.

     We expect to meet all of our near- and longer-term cash needs from a combination of operating cash flow, cash and cash equivalents, our credit facility or other bank lines of credit and other long-term debt. However, as discussed in Item 1 — Financial Statements — Note 14, an unfavorable outcome of various environmental matters could have a material adverse impact on our consolidated financial position, liquidity and/or results of operations.

     Our credit agreement contains a number of customary compliance covenants. A breach of these requirements would give rise to certain remedies under the credit agreement as amended, among which are the termination of the agreement and accelerated repayment of the outstanding borrowings plus accrued and unpaid interest under the credit facility. In addition, the 7⅛% Notes contain cross default provisions that could result in all such notes becoming due and payable in the event of a failure to repay debt outstanding under the credit agreement at maturity or a default under the credit agreement, that accelerates the debt outstanding thereunder. As of June 30, 2010, we were not aware of any breach of any such requirements.

     Off-Balance-Sheet Arrangements As of June 30, 2010 and December 31, 2009, we had not entered into any off-balance-sheet arrangements. Financial derivative instruments, to which we are a party, and guarantees of indebtedness, which solely consist of obligations of subsidiaries and a partnership, are reflected in the condensed consolidated balance sheets included herein in Item 1 — Financial Statements.

     Outlook For Specialty Papers, we expect shipping volumes in the third quarter of 2010 to be approximately 8% ahead of the second quarter of 2010 levels and selling prices are expected to increase in the same comparison. In addition, input costs are expected to in line with second quarter 2010 levels.

     For Composite Fibers, we anticipate shipping volumes, selling prices and input costs in the third quarter of 2010 to be relatively in line with the second quarter of 2010.

     Shipping volumes for the Advanced Airlaid Materials business unit in the third quarter of 2010 are expected to increase by approximately 10% compared with the second quarter. Operating income is also expected to increase by approximately $1.2 million from the pass through to customers of past raw material cost increases. We continue to expect the acquisition will be modestly accretive to 2010 earnings, excluding acquisition and integration costs. For the remainder of 2010, integration costs are expected to approximate $1.0 million.

GLATFELTER

-30-

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

	Year Ended December 31															At June 30, 2010
Dollars in thousands	2010			2011			2012			2013			2014			Carrying Value		Fair Value
Long-term debt
Average principal outstanding
At fixed interest rates — Bond	$	300,000		$	300,000		$	300,000		$	300,000		$	300,000		$	295,201	$	291,750
At variable interest rates		36,695			36,695			36,695			1,407			—			36,695		38,245
																$	331,896	$	329,995
Weighted-average interest rate
On fixed rate debt — Bond		7.13	%		7.13	%		7.13	%		7.13	%		7.13	%
On variable rate debt		1.66			1.66			1.66			1.66			—

     The table above presents average principal outstanding and related interest rates for the next five years. The amounts set forth above for fixed rate bonds represent the coupon rate. Such amounts include $100.0 million of bonds issued at a 5% original issue discount resulting in an 8.16% yield. Fair values included herein have been determined based upon rates currently available to us for debt with similar terms and remaining maturities. Our market risk exposure primarily results from changes in interest rates and currency exchange rates. At June 30, 2010, we had long-term debt outstanding of $331.9 million, of which $36.7 million or 11.0% was at a variable interest rate.

     Variable-rate debt outstanding represents a cash collateralized borrowing incurred in connection with the 2007 installment timberland sale that accrues interest based on 6 month LIBOR plus a margin. At June 30, 2010, the interest rate paid on variable rate debt was 1.66%. A hypothetical 100 basis point increase or decrease in the interest rate on variable rate debt would increase or decrease annual interest expense by $0.4 million.

     We are subject to certain risks associated with changes in foreign currency exchange rates to the extent our operations are conducted in currencies other than the U.S. Dollar. During the first six months of 2010, Euro functional currency operations generated approximately 24.3% of our sales and 22.8% of operating expenses and British Pound Sterling operations represented 9.0% of net sales and 8.8% of operating expenses.

ITEM 4. CONTROLS AND PROCEDURES

     Evaluation of Disclosure Controls and Procedures Our chief executive officer and our principal financial officer, after evaluating the effectiveness of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) as of June 30, 2010, have concluded that, as of the evaluation date, our disclosure controls and procedures are effective.

     Changes in Internal Controls On February 12, 2010, we completed the acquisition of Concert Industries Corp. We are in the process of incorporating Concert’s internal controls into our control structure. We consider the ongoing integration of Concert a material change in our internal control over financial reporting. There were no other changes in our internal control over financial reporting during the three months ended June 30, 2010, that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.

GLATFELTER

-31-

PART II

     ITEM 6.     EXHIBITS

     The following exhibits are filed herewith or incorporated by reference as indicated.

     The following exhibits (10.1 through 10.4) are being re-filed with the Securities and Exchange Commission to include appendices that were previously omitted from the original filing.

10.1	Credit Agreement, dated as of April 29, 2010, by and among the Company, certain of the Company’s subsidiaries as borrowers, certain of the Company’s subsidiaries as guarantors, the banks party thereto, PNC Bank, National Association, as agent for the banks under the Credit Agreement, PNC Capital Markets LLC and Citizens Bank of Pennsylvania, as joint arrangers and bookrunners, Citizens Bank of Pennsylvania, as syndication agent.
10.2	Term Loan Agreement dated January 15, 2008, among GPW Virginia Timberlands LLC, certain lenders party thereto and SunTrust Bank, in its capacity as agent for such lenders
10.3(a)	Consent Decree for Remedial Design and Remedial Action at Operable Unit 1 of the Lower Fox River and Green Bay site by and among the United States of America and the State of Wisconsin v. P. H. Glatfelter Company and WTMI Company (f/k/a Wisconsin Tissue Mills, Inc.)
10.3(b)	Agreed Supplement to Consent Decree between United States of America and the State of Wisconsin vs. P.H. Glatfelter Company and WTM I Company (f/k/a Wisconsin Tissue Mills Inc.)
10.3(c)	Second Agreed Supplement to Consent Decree between United States of America and the State of Wisconsin vs. P.H. Glatfelter Company and WTM I Company (f/k/a Wisconsin Tissue Mills Inc.)
10.3(d)	Amended Consent Decree for Remedial Design and Remedial Action at Operable Unit 1 of the Lower Fox River and Green Bay Site by and among the United States of America and the State of Wisconsin v. P. H. Glatfelter and WTM I Company (f/k/a Wisconsin Tissue Mills Inc.), certain Appendices have been intentionally omitted, copies of which can be obtained free of charge from the Registrant)
10.4	Contract for the Purchase and Bargain Sale of Property, dated as of December 16, 2002, by and among Glatfelter Pulp Wood Company (a wholly owned subsidiary of the Registrant), the Conservation Fund and Fidelity National Title Insurance Company
10.4(a)	First Amendment, dated as of February 10, 2003 — to the Contract for the Purchase and Bargain Sale of Property, dated December 16, 2002 by and among Glatfelter Pulp Wood Company (a wholly owned subsidiary of the Registrant), the Conservation Fund and Fidelity National Title Insurance Company
10.5	Separation Agreement and General Release entered into between Jeffrey J. Norton and P. H. Glatfelter Company dated as of October 25, 2008

     The following exhibits (10.6(a) through 10.6(d)) are being re-filed with the Securities and Exchange Commission to include appendices that were previously omitted from the original filing. As reported in our Current Report on Form 8-K dated May 3, 2010, the credit agreement to which these appendices relate was terminated in connection with us entering our new credit agreement re-filed herewith as Exhibit 10.1.

10.6(a)	Credit Agreement, dated as of April 3, 2006, by and among the Company, certain of the Company’s subsidiaries as guarantors, the banks party thereto, PNC Bank, National Association, as agent for the banks under the Credit Agreement, PNC Capital Markets LLC and Credit Suisse Securities (USA) LLC, as joint arrangers and bookrunners, and Credit Suisse Securities (USA) LLC, as syndication agent
10.6(b)	First Amendment to Credit Agreement among the Company, certain of the Company’s subsidiaries, certain lenders party thereto and PNC Bank, National Association, in its capacity as agent for such lenders, dated April 25, 2006
10.6(c)	Second Amendment to Credit Agreement among the Company, certain of the Company’s subsidiaries, certain lenders party thereto and PNC Bank, National Association, in its capacity as agent for such lenders, dated December 22, 2006
10.6(d)	Third Amendment to Credit Agreement among the Company, certain of the Company’s subsidiaries, certain lenders party thereto and PNC Bank, National Association, in its capacity as agent for such lenders, dated June 8, 2007*
	*   Confidential treatment has been granted for certain portions thereof pursuant to a confidential treatment request filed with the Commission on August 7, 2007. Such provisions have been filed separately with the Commission.
31.1	Certification of George H. Glatfelter II, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2	Certification of John P. Jacunski, Senior Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1	Certification of George H. Glatfelter II, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2	Certification of John P. Jacunski, Senior Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

GLATFELTER

-32-

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	P. H. GLATFELTER COMPANY (Registrant)
August 6, 2010	By	/s/ David C. Elder
		David C. Elder
		Corporate Controller

GLATFELTER

-33-

EXHIBIT INDEX

     The following exhibits (10.1 through 10.4) are being re-filed with the Securities and Exchange Commission to include appendices that were previously omitted from the original filing.

10.1	Credit Agreement, dated as of April 29, 2010, by and among the Company, certain of the Company’s subsidiaries as borrowers, certain of the Company’s subsidiaries as guarantors, the banks party thereto, PNC Bank, National Association, as agent for the banks under the Credit Agreement, PNC Capital Markets LLC and Citizens Bank of Pennsylvania, as joint arrangers and bookrunners, Citizens Bank of Pennsylvania, as syndication agent.
10.2	Term Loan Agreement dated January 15, 2008, among GPW Virginia Timberlands LLC, certain lenders party thereto and SunTrust Bank, in its capacity as agent for such lenders
10.3(a)	Consent Decree for Remedial Design and Remedial Action at Operable Unit 1 of the Lower Fox River and Green Bay site by and among the United States of America and the State of Wisconsin v. P. H. Glatfelter Company and WTMI Company (f/k/a Wisconsin Tissue Mills, Inc.)
10.3(b)	Agreed Supplement to Consent Decree between United States of America and the State of Wisconsin vs. P.H. Glatfelter Company and WTM I Company (f/k/a Wisconsin Tissue Mills Inc.)
10.3(c)	Second Agreed Supplement to Consent Decree between United States of America and the State of Wisconsin vs. P.H. Glatfelter Company and WTM I Company (f/k/a Wisconsin Tissue Mills Inc.)
10.3(d)	Amended Consent Decree for Remedial Design and Remedial Action at Operable Unit 1 of the Lower Fox River and Green Bay Site by and among the United States of America and the State of Wisconsin v. P. H. Glatfelter and WTM I Company (f/k/a Wisconsin Tissue Mills Inc.), certain Appendices have been intentionally omitted, copies of which can be obtained free of charge from the Registrant)
10.4	Contract for the Purchase and Bargain Sale of Property, dated as of December 16, 2002, by and among Glatfelter Pulp Wood Company (a wholly owned subsidiary of the Registrant), the Conservation Fund and Fidelity National Title Insurance Company
10.4(a)	First Amendment, dated as of February 10, 2003 — to the Contract for the Purchase and Bargain Sale of Property, dated December 16, 2002 by and among Glatfelter Pulp Wood Company (a wholly owned subsidiary of the Registrant), the Conservation Fund and Fidelity National Title Insurance Company
10.5	Separation Agreement and General Release entered into between Jeffrey J. Norton and P. H. Glatfelter Company dated as of October 25, 2008

     The following exhibits (10.6(a) through 10.6(d)) are being re-filed with the Securities and Exchange Commission to include appendices that were previously omitted from the original filing. As reported in our Current Report on Form 8-K dated May 3, 2010, the credit agreement to which these appendices relate was terminated in connection with us entering our new credit agreement re-filed herewith as Exhibit 10.1.

10.6(a)	Credit Agreement, dated as of April 3, 2006, by and among the Company, certain of the Company’s subsidiaries as guarantors, the banks party thereto, PNC Bank, National Association, as agent for the banks under the Credit Agreement, PNC Capital Markets LLC and Credit Suisse Securities (USA) LLC, as joint arrangers and bookrunners, and Credit Suisse Securities (USA) LLC, as syndication agent
10.6(b)	First Amendment to Credit Agreement among the Company, certain of the Company’s subsidiaries, certain lenders party thereto and PNC Bank, National Association, in its capacity as agent for such lenders, dated April 25, 2006
10.6(c)	Second Amendment to Credit Agreement among the Company, certain of the Company’s subsidiaries, certain lenders party thereto and PNC Bank, National Association, in its capacity as agent for such lenders, dated December 22, 2006
10.6(d)	Third Amendment to Credit Agreement among the Company, certain of the Company’s subsidiaries, certain lenders party thereto and PNC Bank, National Association, in its capacity as agent for such lenders, dated June 8, 2007*
	*   Confidential treatment has been granted for certain portions thereof pursuant to a confidential treatment request filed with the Commission on August 7, 2007. Such provisions have been filed separately with the Commission.

31.1	Certification of George H. Glatfelter II, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
31.2	Certification of John P. Jacunski, Senior Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 302(a) of the Sarbanes-Oxley Act of 2002.
32.1	Certification of George H. Glatfelter II, Chairman and Chief Executive Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.
32.2	Certification of John P. Jacunski, Senior Vice President and Chief Financial Officer of Glatfelter, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350.

GLATFELTER

-34-

EX-10.1

                                                                  EXECUTION COPY

                    $225,000,000.00 REVOLVING CREDIT FACILITY

                                CREDIT AGREEMENT

                                  by and among

                             P.H. GLATFELTER COMPANY

                                       and

                    Certain of its Subsidiaries, as Borrowers

                                       and

                       THE BANKS PARTY HERETO, as Lenders

                                       and

             PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent

                                      with

           PNC CAPITAL MARKETS LLC and CITIZENS BANK OF PENNSYLVANIA,

                  as Joint Lead Arrangers and Joint Bookrunners

                                       and

               CITIZENS BANK OF PENNSYLVANIA, as Syndication Agent

                           Dated as of April 29, 2010



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
1.  CERTAIN DEFINITIONS..................................................      1
    1.1   Certain Definitions............................................      1
    1.2   Construction...................................................     28
          1.2.1   Number; Inclusion......................................     28
          1.2.2   Determination..........................................     28
          1.2.3   Administrative Agent's Discretion and Consent..........     28
          1.2.4   Documents Taken as a Whole.............................     28
          1.2.5   Headings...............................................     29
          1.2.6   Implied References to this Agreement...................     29
          1.2.7   Persons................................................     29
          1.2.8   Modifications to Documents.............................     29
          1.2.9   From, To and Through...................................     29
          1.2.10  Shall; Will............................................     29
          1.2.11  Quebec Matters.........................................     29
    1.3   Accounting Principles..........................................     30
2.  REVOLVING CREDIT AND SWING LOAN FACILITIES...........................     31
    2.1   Revolving Credit Commitments...................................     31
          2.1.1   Revolving Credit Loans.................................     31
          2.1.2   Swing Loan Commitment..................................     33
    2.2   Nature of Lenders' Obligations with Respect to Revolving Credit
          Loans..........................................................     33
    2.3   Commitment Fees................................................     33
    2.4   Revolving Credit Loan Requests.................................     34
          2.4.1   Revolving Credit Loan Requests.........................     34
          2.4.2   Swing Loan Requests....................................     34
    2.5   Making Revolving Credit Loans and Swing Loans; Revolving Credit
          Notes and Swing Notes..........................................     35
          2.5.1   Making Revolving Credit Loans..........................     35
          2.5.2   Making Swing Loans.....................................     35
    2.6   Revolving Credit Notes.........................................     35
    2.7   Swing Loan Note................................................     35
    2.8   Borrowings to Repay Swing Loans................................     36
    2.9   Utilization of Commitments in Optional Currencies..............     36
          2.9.1   Periodic Computations of Dollar Equivalent Amounts of
                  Revolving Credit Loans and Letters of Credit
                  Outstanding............................................     36
          2.9.2   Notices From Lenders That Optional Currencies Are
                  Unavailable to Fund New Loans..........................     36
          2.9.3   Notices From Lenders That Optional Currencies Are
                  Unavailable to Fund Renewals of the Euro-Rate Option...     37
          2.9.4   European Monetary Union................................     37



                                       -i-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
          2.9.5   Requests for Additional Optional Currencies............     38
    2.10  Use of Proceeds................................................     38
    2.11  Letter of Credit Subfacility...................................     38
          2.11.1  Issuance of Letters of Credit..........................     38
          2.11.2  Letter of Credit Fees..................................     39
          2.11.3  Disbursements, Reimbursement...........................     39
          2.11.4  Repayment of Participation Advances....................     41
          2.11.5  Documentation..........................................     41
          2.11.6  Determinations to Honor Drawing Requests...............     42
          2.11.7  Nature of Participation and Reimbursement Obligations..     42
          2.11.8  Indemnity..............................................     44
          2.11.9  Liability for Acts and Omissions.......................     44
    2.12  Currency Repayments............................................     46
    2.13  Optional Currency Amounts......................................     46
    2.14  Reduction of Commitment........................................     46
3.  INTEREST RATES.......................................................     47
    3.1   Interest Rate Options..........................................     47
          3.1.1   Interest Rate Options..................................     47
          3.1.2   Rate Quotations........................................     47
    3.2   Interest Periods...............................................     48
          3.2.1   Amount of Borrowing Tranche............................     48
          3.2.2   Renewals...............................................     48
    3.3   Interest After Default.........................................     48
          3.3.1   Letter of Credit Fees, Interest Rate...................     48
          3.3.2   Other Obligations......................................     48
          3.3.3   Acknowledgment.........................................     48
    3.4   Euro-Rate Unascertainable; Illegality; Increased Costs;
          Deposits Not Available.........................................     49
          3.4.1   Unascertainable........................................     49
          3.4.2   Illegality; Increased Costs; Deposits Not Available....     49
          3.4.3   Administrative Agent's and Lender's Rights.............     49
    3.5   Selection of Interest Rate Options.............................     50
    3.6   Canadian Interest Act Disclosure...............................     50
    3.7   Canadian Usury Provision.......................................     50
4.  PAYMENTS.............................................................     51
    4.1   Payments.......................................................     51
    4.2   Pro Rata Treatment of Lenders..................................     52
    4.3   Interest Payment Dates.........................................     52
    4.4   Voluntary Prepayments..........................................     52



                                      -ii-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
          4.4.1   Right to Prepay........................................     52
          4.4.2   Replacement of a Lender................................     53
          4.4.3   Change of Lending Office...............................     54
    4.5   Mandatory Prepayments..........................................     54
          4.5.1   Currency Fluctuations..................................     54
          4.5.2   Application Among Interest Rate Options................     55
    4.6   Additional Compensation in Certain Circumstances...............     55
          4.6.1   Increased Costs or Reduced Return Resulting from Taxes,
                  Reserves, Capital Adequacy Requirements, Expenses,
                  Etc....................................................     55
          4.6.2   Indemnity..............................................     56
    4.7   Interbank Market Presumption...................................     56
    4.8   Taxes..........................................................     57
          4.8.1   No Deductions..........................................     57
          4.8.2   Stamp Taxes............................................     57
          4.8.3   Indemnification for Taxes Paid by a Lender.............     57
          4.8.4   Certificate............................................     57
          4.8.5   Exclusions, etc........................................     58
          4.8.6   Change of Lending Office, etc..........................     58
          4.8.7   Survival...............................................     58
    4.9   Judgment Currency..............................................     58
          4.9.1   Currency Conversion Procedures for Judgments...........     58
          4.9.2   Indemnity in Certain Events............................     59
    4.10  Notes..........................................................     59
    4.11  Settlement Date Procedures.....................................     59
    4.12  Borrowers' Agent...............................................     60
5.  REPRESENTATIONS AND WARRANTIES.......................................     60
    5.1   Representations and Warranties.................................     60
          5.1.1   Organization and Qualification.........................     60
          5.1.2   Subsidiaries...........................................     60
          5.1.3   Power and Authority....................................     61
          5.1.4   Validity and Binding Effect............................     61
          5.1.5   No Conflict............................................     61
          5.1.6   Litigation.............................................     62
          5.1.7   Title to Properties....................................     62
          5.1.8   Financial Statements...................................     62
          5.1.9   Use of Proceeds; Margin Stock..........................     63
          5.1.10  Full Disclosure........................................     63
          5.1.11  Taxes..................................................     63
          5.1.12  Consents and Approvals.................................     64
          5.1.13  No Event of Default; Compliance with Instruments.......     64



                                      -iii-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
          5.1.14  Patents, Trademarks, Copyrights, Licenses, Etc.........     64
          5.1.15  Insurance..............................................     64
          5.1.16  Compliance with Laws...................................     65
          5.1.17  Material Contracts; Burdensome Restrictions............     65
          5.1.18  Investment Companies; Regulated Entities...............     65
          5.1.19  Plans and Benefit Arrangements.........................     65
          5.1.20  Employment Matters.....................................     66
          5.1.21  Environmental Matters..................................     67
          5.1.22  Senior Debt Status.....................................     68
          5.1.23  Anti-Terrorism Laws....................................     68
    5.2   Continuation of Representations................................     70
    5.3   Updates to Schedules...........................................     70
6.  CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT..............     70
    6.1   First Loans and Letters of Credit..............................     70
          6.1.1   Officer's Certificate..................................     70
          6.1.2   Secretary's Certificate................................     71
          6.1.3   Delivery of Loan Documents.............................     71
          6.1.4   Opinion of Counsel.....................................     71
          6.1.5   Legal Details..........................................     72
          6.1.6   Payment of Fees........................................     72
          6.1.7   Consents...............................................     72
          6.1.8   Officer's Certificate Regarding MACs...................     72
          6.1.9   No Violation of Laws...................................     72
          6.1.10  No Actions or Proceedings; No Material Litigation......     72
          6.1.11  Other Requirements.....................................     73
    6.2   Each Additional Loan or Letter of Credit.......................     73
    6.3   Loans to Fund Acquisitions.....................................     73
7.  COVENANTS............................................................     73
    7.1   Affirmative Covenants..........................................     73
          7.1.1   Preservation of Existence, Etc.........................     73
          7.1.2   Payment of Liabilities, Including Taxes, Etc...........     74
          7.1.3   Maintenance of Insurance...............................     74
          7.1.4   Maintenance of Properties and Leases...................     74
          7.1.5   Maintenance of Patents, Trademarks, Etc................     74
          7.1.6   Visitation Rights......................................     75
          7.1.7   Keeping of Records and Books of Account................     75
          7.1.8   Plans and Benefit Arrangements.........................     75
          7.1.9   Compliance with Laws...................................     75
          7.1.10  Joinder of Guarantors and Borrowers....................     76



                                      -iv-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
          7.1.11  Anti-Terrorism Laws....................................     76
          7.1.12  German and English Borrowers...........................     77
    7.2   Negative Covenants.............................................     78
          7.2.1   Indebtedness...........................................     78
          7.2.2   Liens..................................................     80
          7.2.3   Guaranties.............................................     80
          7.2.4   Loans and Investments..................................     80
          7.2.5   Dividends and Related Distributions....................     82
          7.2.6   Liquidations, Mergers, Consolidations, Acquisitions....     82
          7.2.7   Dispositions of Assets or Subsidiaries.................     84
          7.2.8   Affiliate Transactions.................................     85
          7.2.9   Subsidiaries...........................................     85
          7.2.10  Continuation of or Change in Business..................     86
          7.2.11  Plans and Benefit Arrangements.........................     86
          7.2.12  Fiscal Year............................................     86
          7.2.13  Issuance of Stock......................................     86
          7.2.14  Changes in Organizational Documents....................     86
          7.2.15  Maximum Leverage Ratio.................................     87
          7.2.16  Minimum Interest Coverage Ratio........................     87
          7.2.17  Receivables Entities and Timberland Note Monetization
                  Entities...............................................     87
    7.3   Reporting Requirements.........................................     88
          7.3.1   Quarterly Financial Statements.........................     88
          7.3.2   Annual Financial Statements............................     88
          7.3.3   Certificate of the Borrower............................     89
          7.3.4   Notice of Default......................................     89
          7.3.5   Notice of Litigation...................................     89
          7.3.6   Notice of Change in Debt Rating........................     89
          7.3.7   Certain Events.........................................     90
          7.3.8   Budgets, Forecasts, Other Reports and Information......     90
          7.3.9   Notices Regarding Plans and Benefit Arrangements.......     91
8.  DEFAULT..............................................................     92
    8.1   Events of Default..............................................     92
          8.1.1   Payments Under Loan Documents..........................     92
          8.1.2   Breach of Warranty.....................................     92
          8.1.3   Breach of Negative Covenants and Certain Affirmative
                  Covenants..............................................     92
          8.1.4   Breach of Other Covenants..............................     93
          8.1.5   Defaults in Other Agreements or Indebtedness...........     93
          8.1.6   Final Judgments or Orders..............................     93
          8.1.7   Loan Document Unenforceable............................     93



                                       -v-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
          8.1.8   Proceedings Against Assets.............................     93
          8.1.9   Notice of Lien or Assessment...........................     94
          8.1.10  Insolvency.............................................     94
          8.1.11  Events Relating to Plans and Benefit Arrangements......     94
          8.1.12  Cessation of Business..................................     94
          8.1.13  Change of Control......................................     95
          8.1.14  Involuntary Proceedings................................     95
          8.1.15  Voluntary Proceedings..................................     95
    8.2   Consequences of Event of Default...............................     96
          8.2.1   Events of Default Other Than Bankruptcy, Insolvency or
                  Reorganization Proceedings.............................     96
          8.2.2   Bankruptcy, Insolvency or Reorganization Proceedings...     96
          8.2.3   Set-off................................................     96
          8.2.4   Suits, Actions, Proceedings............................     97
          8.2.5   Application of Proceeds................................     97
9.  THE AGENT............................................................     98
    9.1   Appointment....................................................     98
    9.2   Delegation of Duties...........................................     98
    9.3   Nature of Duties; Independent Credit Investigation.............     98
    9.4   Actions in Discretion of Administrative Agent; Instructions
          From the Lenders...............................................     99
    9.5   Reimbursement and Indemnification of Administrative Agent by
          the Borrower...................................................     99
    9.6   Exculpatory Provisions; Limitation of Liability................    100
    9.7   Reimbursement and Indemnification of Administrative Agent by
          Lenders........................................................    101
    9.8   Reliance by Administrative Agent...............................    101
    9.9   Notice of Default..............................................    102
    9.10  Notices........................................................    102
    9.11  Lenders in Their Individual Capacities; Administrative Agent in
          its Individual Capacity........................................    102
    9.12  Holders of Notes...............................................    102
    9.13  Sharing of Payments............................................    103
    9.14  Successor Administrative Agent.................................    103
    9.15  Administrative Agent's Fee.....................................    104
    9.16  Availability of Funds..........................................    104
    9.17  Calculations...................................................    104
    9.18  No Reliance on Administrative Agent's Customer Identification
          Program........................................................    105
    9.19  Beneficiaries..................................................    105



                                      -vi-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
10. MISCELLANEOUS........................................................    105
    10.1  Modifications, Amendments or Waivers...........................    105
          10.1.1  Increase of Commitment.................................    105
          10.1.2  Extension of Payment; Reduction of Principal Interest
                  or Fees................................................    106
          10.1.3  Release a Guarantor....................................    106
          10.1.4  Miscellaneous..........................................    106
    10.2  No Implied Waivers; Cumulative Remedies; Writing Required......    106
    10.3  Reimbursement and Indemnification of Lenders by the Borrower...    107
    10.4  Holidays.......................................................    107
    10.5  Funding by Branch, Subsidiary or Affiliate.....................    108
          10.5.1  Notional Funding.......................................    108
          10.5.2  Actual Funding.........................................    108
    10.6  Notices; Lending Offices.......................................    108
    10.7  Severability...................................................    109
    10.8  Governing Law..................................................    110
    10.9  Prior Understanding............................................    110
    10.10 Duration; Survival.............................................    110
    10.11 Successors and Assigns.........................................    110
    10.12 Confidentiality................................................    112
          10.12.1 General................................................    112
          10.12.2 Sharing Information With Affiliates of the Lenders.....    112
    10.13 Counterparts...................................................    113
    10.14 Administrative Agent's or Lender's Consent.....................    113
    10.15 Exceptions.....................................................    113
    10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.........................    113
    10.17 Certifications From Lenders and Participants...................    114
          10.17.1 Tax Withholding........................................    114
          10.17.2 USA Patriot Act........................................    115
    10.18 Nature of Foreign Borrower Obligations.........................    115
    10.19 Pledge of Foreign Loan Party Loans.............................    116



                                      -vii-



                         LIST OF SCHEDULES AND EXHIBITS

SCHEDULES
SCHEDULE 1.1(A)   - PRICING GRID
SCHEDULE 1.1(B)   - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(E)   - EXISTING LETTERS OF CREDIT
SCHEDULE 1.1(M)   - MATERIAL SUBSIDIARIES
SCHEDULE 1.1(P)   - PERMITTED LIENS
SCHEDULE 5.1.1    - DOMESTIC QUALIFICATIONS TO DO BUSINESS
SCHEDULE 5.1.2    - SUBSIDIARIES
SCHEDULE 5.1.6    - LITIGATION
SCHEDULE 5.1.12   - CONSENTS AND APPROVALS
SCHEDULE 5.1.14   - PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
SCHEDULE 7.2.1    - PERMITTED INDEBTEDNESS
SCHEDULE 7.2.4    - EXISTING INVESTMENTS

EXHIBITS
EXHIBIT 1.1(A)    - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(B)    - BORROWER JOINDER
EXHIBIT 1.1(G)(1) - GUARANTOR JOINDER
EXHIBIT 1.1(G)(2) - GUARANTY AGREEMENT
EXHIBIT 1.1(R)    - REVOLVING CREDIT NOTE
EXHIBIT 1.1(S)    - SWING LOAN NOTE
EXHIBIT 2.4       - LOAN REQUEST
EXHIBIT 6.1.4     - OPINION OF COUNSEL
EXHIBIT 7.2.6     - ACQUISITION COMPLIANCE CERTIFICATE
EXHIBIT 7.3.3     - QUARTERLY COMPLIANCE CERTIFICATE


                                     -viii-



                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT is dated as of April 29, 2010, and is made by and
among P.H. GLATFELTER COMPANY, a Pennsylvania corporation ( the "COMPANY") and
certain of its subsidiaries identified on the signature pages hereto (each a
"BORROWER" and collectively, the "BORROWERS"), each of the GUARANTORS (as
hereinafter defined), the LENDERS (as hereinafter defined), PNC BANK, NATIONAL
ASSOCIATION, in its capacity as agent for the Lenders under this Agreement
(hereinafter referred to in such capacity as the "ADMINISTRATIVE AGENT"), and,
for the limited purpose of public identification in trade tables, PNC CAPITAL
MARKETS LLC and CITIZENS BANK OF PENNSYLVANIA, as joint arrangers and joint
bookrunners, and CITIZENS BANK OF PENNSYLVANIA, as syndication agent.

                                   WITNESSETH:

     WHEREAS, the Borrowers have requested the Lenders to provide a revolving
credit facility to the Borrowers in an aggregate principal amount not to exceed
$225,000,000; and

     WHEREAS, proceeds of the revolving credit facility shall be used for (1)
refinancing existing Indebtedness, and (2) general corporate purposes; and

     WHEREAS, the Lenders are willing to provide such credit upon the terms and
conditions hereinafter set forth;

     NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:

                             1. CERTAIN DEFINITIONS

          1.1 CERTAIN DEFINITIONS.

          In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:

               2006 SENIOR NOTES shall mean the Company's 7 ?% senior notes,
issued in 2006 and due May 1, 2016, in the aggregate principal amount of
$200,000,000, guarantied by certain of the Loan Parties.

               2010 SENIOR NOTES shall mean the Company's 7 ?% senior notes,
issued in 2010 and due May 1, 2016, in the aggregate principal amount of
$100,000,000, guarantied by certain of the Loan Parties.

               ACCOUNTS RECEIVABLE FACILITY DOCUMENTS means all documentation
entered into by the Company and its Subsidiaries, including, without limitation,
the Receivables Entity, in connection with the sale or other transfer of
accounts receivable and other related assets pursuant to a Permitted Accounts
Receivable Program, as such documentation may be



amended, restated, supplemented or otherwise modified from time to time in
accordance with the terms hereof and thereof.

               ADMINISTRATIVE AGENT shall have the meaning given to such term in
the introductory paragraph hereof.

               ADMINISTRATIVE AGENT'S FEE shall have the meaning assigned to
that term in Section 9.15.

               ADMINISTRATIVE AGENT'S LETTER shall have the meaning assigned to
that term in Section 9.15.

               AFFILIATE as to any Person shall mean any other Person (i) which,
directly or indirectly controls, is controlled by, or is under common control
with such Person. For purposes of this definition, "control" (including, with
correlative meanings, the term "controlled by" and "under common control with")
shall mean the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person whether through the ownership of voting securities or by contract
or otherwise, including the power to elect a majority of the directors of a
corporation.

               AGREEMENT shall mean this Credit Agreement, as the same may be
extended, renewed, amended, supplemented or restated from time to time,
including all schedules and exhibits.

               ANTI-TERRORISM LAWS shall mean any Laws relating to terrorism or
money laundering, including Executive Order No. 13224, the USA Patriot Act, the
Laws comprising or implementing the Bank Secrecy Act, and the Laws administered
by the United States Treasury Department's Office of Foreign Asset Control (as
any of the foregoing Laws may from time to time be amended, renewed, extended,
or replaced).

               APPLICABLE COMMITMENT FEE RATE shall mean the percentage rate per
annum at the indicated level of Debt Rating in the pricing grid on SCHEDULE
1.1(A) next to the line titled "Commitment Fee." The Applicable Commitment Fee
Rate shall be computed in accordance with the parameters set forth on SCHEDULE
1.1(A).

               APPLICABLE MARGIN shall mean the percentage spread to be added to
Euro-Rate under the Euro-Rate Option or to the Base Rate under the Base Rate
Option at the indicated level of Debt Rating in the pricing grid on SCHEDULE
1.1(A) next to the line titled "Euro-Rate Spread" or "Base Rate Spread." The
Applicable Margin shall be computed in accordance with the parameters set forth
on SCHEDULE 1.1(A).

               ASSIGNMENT AND ASSUMPTION AGREEMENT shall mean an Assignment and
Assumption Agreement by and among a Purchasing Lender, a Transferor Lender and
the Administrative Agent, as Administrative Agent and on behalf of the remaining
Lenders, substantially in the form of EXHIBIT 1.1(A).


                                       2



               AUGMENTING LENDER shall have the meaning assigned to such term in
Section 2.1.1.2.

               AUTHORIZED OFFICER shall mean those individuals, designated by
written notice to the Administrative Agent from the Company, on behalf of all
the Loan Parties, authorized to execute notices, reports and other documents on
behalf of the Loan Parties required hereunder. The Company, on behalf of all the
Loan Parties, may amend such list of individuals from time to time by giving
written notice of such amendment to the Administrative Agent.

               BASE RATE shall mean the greater of (i) the interest rate per
annum announced from time to time by the Administrative Agent at its Principal
Office as its then prime rate, which rate may not be the lowest rate then being
charged to commercial borrowers by the Administrative Agent, (ii) the Federal
Funds Open Rate plus 0.5% per annum, or (iii) the Daily Euro-Rate plus 1.00% per
annum.

               BASE RATE OPTION shall mean the option of the Borrowers to have
Loans bear interest at the rate and under the terms and conditions set forth in
Section 3.1.1(i).

               BENEFIT ARRANGEMENT shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.

               BLOCKED PERSON shall have the meaning assigned to such term in
Section 5.1.23.2.

               BORROWER shall have the meaning given to such term in the
introductory paragraph hereto and shall include any Person required to join this
Agreement pursuant to Section 7.2.9 or which elects to join this agreement as a
Borrower and, in each case, executes a Borrower Joinder.

               BORROWER JOINDER shall mean a joinder by a Person as a Borrower
under this Agreement and the other Loan Documents in substantially the form of
EXHIBIT 1.1(B).

               BORROWING DATE shall mean, with respect to any Loan, the date for
the making thereof or the renewal or conversion thereof at the same or a
different Interest Rate Option, which shall be a Business Day.

               BORROWING TRANCHE shall mean specified portions of Loans
outstanding as follows: (i) any Loans to which a Euro-Rate Option applies which
become subject to the same Interest Rate Option under the same Loan Request by
the Borrowers and which have the same Interest Period and which are denominated
either in Dollars or in the same Optional Currency shall constitute one
Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one Borrowing Tranche.


                                       3


               BUSINESS DAY shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania and (i) if the applicable
Business Day relates to any Loan to which the Euro-Rate Option applies, such day
must also be a day on which dealings are carried on in the Relevant Interbank
Market, (ii) with respect to advances or payments of Loans or any other matters
relating to Loans denominated in an Optional Currency, such day also shall be a
day on which dealings in deposits in the relevant Optional Currency are carried
on in the Relevant Interbank Market, and (iii) with respect to advances or
payments of Loans denominated in an Optional Currency other than the Euro, such
day shall also be a day on which all applicable banks into which Loan proceeds
may be deposited are open for business and foreign exchange markets are open for
business in the principal financial center of the country of such currency and
in respect of Loans denominated in Euro shall be a TARGET Day.

               CANADIAN BORROWER shall mean any Borrower incorporated or
otherwise organized under the laws of Canada or any province or territory
thereof.

               CIP REGULATIONS shall have the meaning assigned to that term in
Section 9.18.

               CLOSING DATE shall mean the Business Day on which the first Loan
shall be made, which shall be April ___, 2010 or, if all the conditions
specified in Section 6 have not been satisfied or waived by such date, not later
than April 30, 2010, as designated by the Company, on behalf of all Loan
Parties, by at least five (5) Business Days' advance notice to the
Administrative Agent at its Principal Office, or such other date as the parties
agree. The closing shall take place at 10 a.m., Pittsburgh time, on the Closing
Date at the offices of Buchanan Ingersoll & Rooney PC, Princeton, New Jersey, or
at such other time and place as the parties agree.

               COMMERCIAL LETTER OF CREDIT shall mean any letter of credit which
is a commercial letter of credit issued in respect of the purchase of goods or
services by one or more of the Loan Parties in the ordinary course of their
business.

               COMMITMENT shall mean as to any Lender the aggregate of its
Revolving Credit Commitment and, in the case of PNC Bank, its Swing Loan
Commitment, and Commitments shall mean collectively, the Revolving Credit
Commitments of all the Lenders and the Swing Loan Commitment of PNC Bank.

               COMMITMENT FEE shall have the meaning assigned to that term in
Section 2.3.

               COMMITMENT INCREASE AMOUNT shall have the meaning assigned to
that term in Section 2.1.1.2.

               COMPANY shall have the meaning given to such term in the
introductory paragraph hereto.


                                       4



               COMPLIANCE CERTIFICATE shall have the meaning assigned to such
term in Section 7.3.3.

               COMPUTATION DATE shall have the meaning assigned to such term in
Section 2.9.1.

               CONCERT ACQUISITION shall mean the acquisition by the Company of
Glatfelter Falkenhagen GmbH (f/k/a Concert GmbH), Glatfelter Falkenhagen Holding
GmbH (f/k/a Concert Europe GmbH), and Glatfelter Gatineau Ltee (f/k/a Concert
Airlaid Ltd.) pursuant to the Share Purchase Agreement, dated as of January 4,
2010, among Brookfield Special Situations Management Limited (f/k/a Tricap
Management Limited), the Company and Glatfelter Canada Inc.

               CONSIDERATION shall mean with respect to any Permitted
Acquisition, the aggregate of (i) any cash paid by any of the Loan Parties,
directly or indirectly, to the seller in connection therewith, (ii) the
Indebtedness incurred or assumed by any of the Loan Parties, whether in favor of
the seller or otherwise and whether fixed or contingent, including without
limitation any Guaranty given or incurred by any Loan Party in connection
therewith, and (iii) any other consideration given or obligation incurred by any
of the Loan Parties in connection therewith.

               CONSOLIDATED ADJUSTED EBITDA shall mean, for any period,
Consolidated EBITDA adjusted to include (without duplication) the pro forma
effects of acquisitions and divestitures (not including timberland property
sales) made during such period, excluding the EBITDA of divested Persons, but
including historical EBITDA of acquired Persons to the extent the acquired
EBITDA (i) has been audited by a nationally recognized independent certified
public accountant, or another independent certified public accountant reasonably
satisfactory to the Administrative Agent, (ii) is supported by a third party due
diligence report delivered by a nationally recognized firm or otherwise in form
and substance satisfactory to the Administrative Agent, (iii) is less than 15%
of Consolidated EBITDA as determined as of the last day of the fiscal quarter
immediately preceding the consummation of the acquisition (the "MOST RECENT
QUARTER") (or the quarter immediately preceding the Most Recent Quarter if the
applicable financial statements are not available for the Most Recent Quarter),
or (iv) is approved by the Required Lenders. Any such adjustment to Consolidated
EBITDA shall be made for four (4) fiscal quarters, starting with the fiscal
quarter in which the transaction giving rise to such adjustment was consummated;
provided that historical EBITDA of Persons acquired in connection with the
Concert Acquisition shall be in the aggregate amount of $25,000,000.00,
allocated $6,250,000.00 per fiscal quarter of the Company and its Subsidiaries,
for four (4) fiscal quarters, starting with the fiscal quarter in which the
Concert Acquisition was consummated.

               CONSOLIDATED EBITDA shall mean as of the end of any fiscal
quarter: (i) EBITDA of the Company and its Subsidiaries on a consolidated basis
for the immediately preceding four fiscal quarters, plus (without duplication)
(ii) the aggregate gain on sale of timberland properties, as determined in
accordance with GAAP, made within the four


                                       5



immediately preceding fiscal quarters, net of any losses on such sales, provided
that the amount of the net gain on sale of timberland properties included in the
calculation of Consolidated EBITDA under this clause (ii) may not exceed 30% of
the Consolidated EBITDA of the Company and its Subsidiaries for the immediately
preceding four fiscal quarters (prior to including any gains from the sale of
timberland properties), provided, further, that Consolidated EBITDA shall
exclude non-recurring third party transaction costs relating to a Permitted
Acquisition such as (x) legal expenses, third party due diligence costs,
transaction advisory services, hedging costs and financing fees, if applicable,
for the fiscal quarters during which the transactions giving rise to such
non-recurring costs are consummated and (y) third party project management and
integration management costs in an aggregate amount up to $5,000,000 incurred
within one year of consummation of the transactions giving rise to such
non-recurring costs, for the fiscal quarters during which such costs are
incurred. The Company shall provide supporting invoices for the exclusions from
Consolidated EBITDA described in the preceding clauses (x) and (y) upon request
by the Administrative Agent.

               CONSOLIDATED TOTAL ASSETS shall mean, at any time, the total
consolidated assets of the Company and its Subsidiaries measured as of the last
day of the fiscal year ending on or prior to the date of determination, as
determined in accordance with GAAP.

               CONSOLIDATED TOTAL DEBT shall mean all long and short term
Indebtedness (but excluding Permitted Timberland Indebtedness and Permitted
Additional Timberland Indebtedness to the extent such Indebtedness is structured
similarly to Permitted Timberland Indebtedness as structured as of the Closing
Date).

               CONSOLIDATED TOTAL NET DEBT shall mean Consolidated Total Debt
less U.S. domestic cash and cash equivalents in excess of $25,000,000 of U.S.
domestic cash maintained or managed by a domestic branch of either a Lender or
an Affiliate of a Lender, provided that for the purposes of calculating the
Leverage Ratio, the maximum amount of U.S. domestic cash to be used to reduce
Consolidated Total Debt shall be limited to $50,000,000.

               CONTAMINATION shall mean the presence or release or threat of
release of Regulated Substances in, on, under or emanating to or from the
Property, which pursuant to Environmental Laws requires notification or
reporting to an Official Body, or which pursuant to Environmental Laws requires
the investigation, cleanup, removal, remediation, containment, abatement of or
other response action or which otherwise constitutes a violation of
Environmental Laws.

               DAILY EURO-RATE means for any day, the rate per annum determined
by the Administrative Agent by dividing (a) the Published Rate by (b) a number
equal to 1.00 minus the Euro-Rate Reserve Percentage on such day.

               DEBT RATING shall mean the corporate credit rating of Standard &
Poor's and the Issuer Rating of Moody's, in each case, of the Company.


                                       6



               DECLINED SHARE shall have the meaning assigned to that term in
Section 2.1.1.2.

               DEFAULTING LENDER shall have the meaning assigned to that term in
Section 4.4.2.

               DESIGNATED CREDIT PARTIES means the Company and those
Subsidiaries that are from time to time party to the Accounts Receivable
Facility Documents.

               DOLLAR, DOLLARS, U.S. DOLLARS and the symbol $ shall mean lawful
money of the United States of America.

               DOLLAR EQUIVALENT shall mean, with respect to any amount of any
currency, the Equivalent Amount of such currency expressed in Dollars.

               DOLLAR EQUIVALENT REVOLVING FACILITY USAGE shall mean, at any
time, the sum of the Dollar Equivalent of the principal amount of Revolving
Credit Loans then outstanding and the principal amount of Swing Loans then
outstanding and the Dollar Equivalent amount of Letters of Credit Outstanding.

               DOMESTIC GUARANTOR shall mean those Guarantors which are
organized under the laws of the United States.

               DRAWING DATE shall have the meaning assigned to that term in
Section 2.11.3.2.

               EBITDA shall mean, for any period and any Person, net income
(excluding gains and losses on sales of assets (with the exception of sales of
timberland property noted in the definition of Consolidated EBITDA)) and
non-cash pension income and non-cash pension expenses) plus income tax expense,
interest expense (excluding Timberland Installment Sale Interest Expense),
depreciation, amortization expense and any Permitted EBITDA Add Backs (if
Consolidated EBITDA is being computed for the Company) of such Person.

               ENGLISH BORROWER shall mean any Borrower organized under the Laws
of England and Wales.

               ENVIRONMENTAL COMPLAINT shall mean any written complaint by any
Person or Official Body setting forth a cause of action for personal injury or
property damage, natural resource damage, contribution or indemnity for response
costs, civil or administrative penalties, criminal fines or penalties, or
declaratory or equitable relief arising under any Environmental Laws or any
order, notice of violation, citation, subpoena, request for information or other
written notice or demand of any type issued by an Official Body pursuant to any
Environmental Laws.

               ENVIRONMENTAL LAWS shall mean all applicable federal, state,
local and foreign Laws and any legally binding consent decrees, settlement
agreements, judgments, orders


                                       7



or directives issued by or entered into with an Official Body pertaining or
relating to: (i) pollution or pollution control; (ii) protection of human health
or the environment; (iii) employee safety in the workplace as related to
exposure to Regulated Substances; (iv) the presence, use, management,
generation, manufacture, processing, extraction, treatment, recycling, refining,
reclamation, labeling, transport, storage, collection, distribution, disposal or
release or threat of release of Regulated Substances; (v) the presence of
Contamination; (vi) the protection of endangered or threatened species; and
(vii) the protection of Environmentally Sensitive Areas.

               ENVIRONMENTALLY SENSITIVE AREA shall mean (i) any wetland as
defined by applicable Laws; (ii) any area designated as a coastal zone pursuant
to applicable Laws; (iii) any area of historic or archeological significance or
scenic area as defined or designated by applicable Laws; (iv) habitats of
endangered species or threatened species as designated by applicable Laws; or
(v) a floodplain or other flood hazard area as defined pursuant to any
applicable Laws.

               EQUIVALENT AMOUNT shall mean, at any time, as determined by
Administrative Agent (which determination shall be conclusive absent manifest
error), with respect to an amount of any currency (the "REFERENCE CURRENCY")
which is to be computed as an equivalent amount of another currency (the
"EQUIVALENT Currency"), the amount of such Equivalent Currency converted from
such Reference Currency at Administrative Agent's spot selling rate (based on
the market rates then prevailing and available to Administrative Agent) for the
sale of such Equivalent Currency for such Reference Currency at a time
determined by Administrative Agent on the second Business Day immediately
preceding the event for which such calculation is made.

               EQUIVALENT CURRENCY shall have the meaning assigned to such term
in the definition of Equivalent Amount.

               ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.

               ERISA GROUP shall mean, at any time, the Loan Parties and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Loan Parties, are treated as a single employer under Section
414 of the Internal Revenue Code.

               EURO shall refer to the lawful currency of the Participating
Member States.

               EUROPEAN INTERBANK MARKET shall mean the European interbank
market for Euro operating in Participating Member States.


                                       8



               EURO-RATE shall mean, the following:

               (A) with respect to Dollar Loans comprising any Borrowing Tranche
to which the Euro-Rate Option applies for any Interest Period, the interest rate
per annum determined by the Administrative Agent by dividing (the resulting
quotient rounded upwards, if necessary, to the nearest 1/100th of 1% per annum)
(i) the rate which appears on the Bloomberg Page BBAM1 (or on such other
substitute Bloomberg page that displays rates at which Dollar deposits are
offered by leading banks in the London interbank deposit market), or the rate
which is quoted by another source selected by the Administrative Agent which has
been approved by the British Bankers' Association as an authorized information
vendor for the purpose of displaying rates at which US Dollar deposits are
offered by leading banks in the London interbank deposit market (an "ALTERNATE
SOURCE"), at approximately 11:00 a.m., London time, two (2) Business Days prior
to the commencement of such Interest Period as the London interbank offered rate
for Dollars for an amount comparable to the principal amount of such Borrowing
Tranche and having a borrowing date and a maturity comparable to such Interest
Period (or if there shall at any time, for any reason, no longer exist a
Bloomberg Page BBAM1 (or any substitute page) or any Alternate Source, a
comparable replacement rate determined by the Administrative Agent at such time
(which determination shall be conclusive absent manifest error)), by (ii) a
number equal to 1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate with
respect to Dollar Loans may also be expressed by the following formula:

                                        London interbank offered rate quoted by
                                        Bloomberg or appropriate successor as
                                        shown on

                            Euro-Rate = Bloomberg Page BBAM1
                                        ----------------------------------------
                                        1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate
Option applies that is outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrowers of the Euro-Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error.

               (B) with respect to Optional Currency Loans in currency other
than Euro comprising any Borrowing Tranche to which the Euro-Rate Option applies
for any Interest Period, the interest rate per annum determined by
Administrative Agent by dividing (i) the rate which appears on the Bloomberg
Page BBAM1 (or on such other substitute Bloomberg page that displays rates at
which deposits in the relevant Optional Currency are offered by leading banks in
the Relevant Interbank Market), or the rate which is quoted by an Alternate
Source, at approximately 11:00 a.m., London time, two (2) Business Days prior to
the commencement of such Interest Period as the Relevant Interbank Market
offered rate for deposits in the relevant Optional Currency for an amount
comparable to the principal amount of such Borrowing Tranche and having a
borrowing date and a maturity comparable to such Interest Period (or if there
shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or
any substitute page) or any Alternate Source, a comparable replacement rate
determined by the


                                       9



Administrative Agent at such time (which determination shall be conclusive
absent manifest error)), by (ii) a number equal to 1.00 minus the Euro-Rate
Reserve Percentage. Such Euro-Rate may also be expressed by the following
formula:

                                        Relevant InterbankMarket offered rate
                                        quoted by Bloomberg or appropriate
                                        successor as shown on

                            Euro-Rate = Bloomberg Page BBAM1
                                        ----------------------------------------
                                        1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate
Option applies that is outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrowers of the Euro-Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error. The Euro-Rate for any Loans shall be based upon the Euro-Rate
for the currency in which such Loans are requested.

               (C) with respect to Optional Currency Loans denominated in Euro
comprising any Borrowing Tranche to which the Euro-Rate Option applies for any
Interest Period, the interest rate per annum determined by Administrative Agent
by dividing (i) the rate which appears on the Bloomberg Page BBAM1 (or on such
other substitute Bloomberg page that displays rates at which deposits in Euro
are offered by leading banks in the Relevant Interbank Market) or the rate which
is quoted by an Alternate Source, at approximately 11:00 a.m., Brussels time,
two (2) TARGET Days prior to the commencement of such Interest Period as the
Relevant Interbank Market offered rate for deposits in Euro for an amount
comparable to the principal amount of such Borrowing Tranche and having a
borrowing date and a maturity comparable to such Interest Period (or if there
shall at any time, for any reason, no longer exist a Bloomberg Page BBAM1 (or
any substitute page) or any Alternate Source, a comparable replacement rate
determined by the Administrative Agent at such time (which determination shall
be conclusive absent manifest error)), by (ii) a number equal to 1.00 minus the
Euro-Rate Reserve Percentage. Such Euro-Rate may also be expressed by the
following formula:

                                        London interbank offered rate quoted by
                                        Bloomberg or appropriate successor as
                                        shown on

                            Euro-Rate = Bloomberg Page BBAM1
                                        ----------------------------------------
                                        1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate
Option applies that is outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Administrative Agent
shall give prompt notice to the Borrowers of the Euro-Rate as determined or
adjusted in accordance herewith, which determination shall be conclusive absent
manifest error. The Euro-Rate for any Loans shall be based upon the Euro-Rate
for the currency in which such Loans are requested.


                                       10



               EURO-RATE OPTION shall mean the option of the Borrowers to have
Loans bear interest at the rate and under the terms and conditions set forth in
Section 3.1.1(ii).

               EURO-RATE RESERVE PERCENTAGE shall mean as of any day the maximum
percentage in effect on such day, (i) as prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for determining the reserve
requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"EUROCURRENCY LIABILITIES"); and (ii) to be maintained by a Lender as required
for reserve liquidity, special deposit, or similar purpose by any governmental
or monetary authority of any country or political subdivision thereof (including
any central bank), against (A) any category of liabilities that includes
deposits by reference to which a Euro-Rate is to be determined, or (B) any
category of extension of credit or other assets that includes Loans or Borrowing
Tranches to which a Euro-Rate applies.

               EVENT OF DEFAULT shall mean any of the events described in
Section 8.1 and referred to therein as an "Event of Default."

               EXECUTIVE ORDER NO. 13224 shall mean the Executive Order No.
13224 on Terrorist Financing, effective September 24, 2001, as the same has
been, or shall hereafter be, renewed, extended, amended or replaced.

               EXISTING LETTERS OF CREDIT shall mean those letters of credit
issued by PNC Bank or another Lender prior to the Closing Date as described on
SCHEDULE 1.1(E) attached hereto; provided that the Loan Parties will cause those
letters of credit issued by Lenders other than PNC Bank, as they expire, to be
replaced by letters of credit issued by PNC Bank under Section 2.11.

               EXPIRATION DATE shall mean, with respect to the Revolving Credit
Commitments, May 31, 2014.

               FACILITY SHARE shall mean for any Lender, the Revolving Credit
Commitment of such Lender.

               FEDERAL FUNDS EFFECTIVE RATE for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.

               FEDERAL FUNDS OPEN RATE for any day shall mean the rate per annum
(based on a year of 360 days and the actual days elapsed) which is the daily
federal funds open


                                       11



rate as quoted by ICAP North America, Inc. (or any successor) as set forth on
the Bloomberg Screen BTMM for that date opposite the caption "OPEN" (or such
other substitute Bloomberg Screen that displays such rate), or as set forth on
such other recognized electronic source used for the purpose of displaying such
rate as selected by the Administrative Agent (an "ALTERNATIVE SOURCE") (or if
such rate for such day does not appear on the Bloomberg Screen BTMM (or any
substitute screen) or on any Alternate Source, or if there shall at any time,
for any reason, no longer exist a Bloomberg Screen BTMM (or any substitute
screen) or any Alternate Source, a comparable replacement rate determined by the
Administrative Agent at such time (which determination shall be conclusive
absent manifest error); provided, however, that if such day is not a Business
Day, the Federal Funds Open Rate for such day shall be the "open" rate on the
immediately preceding Business Day. If and when the Federal Funds Open Rate
changes, the rate of interest for any advance to which the Federal Funds Open
Rate applies will change automatically without notice to the Borrower, effective
on the date of any such change.

               FOREIGN BORROWER shall mean those Borrowers which are organized
under the laws of a jurisdiction other than the United States (or a political
subdivision thereof).

               FOREIGN LOAN PARTY shall mean a Loan Party which is organized
under the laws of a jurisdiction other than the United States (or a political
subdivision thereof).

               FOREIGN SUBSIDIARY shall mean any Subsidiary which is organized
under the laws of a jurisdiction other than the United States (or a political
subdivision thereof).

               FOX RIVER OU3-5 ENVIRONMENTAL CHARGES EVENT shall mean the date
on which both the following events shall have occurred:

          (i) the Loan Parties incur any charge described in the definition of
"Permitted EBITDA Add Backs" related to the Fox River site, Wisconsin, OU3-5 (if
the Loan Parties incur more than one such charge, this clause (i) refers only to
the first such charge), and

          (ii) the Loan Parties incur Indebtedness to finance the payment of the
charge referred to in clause (i) of this definition (if the Loan Parties incur
Indebtedness on more than one occasion to finance such payment, this clause (ii)
refers only to the first such incurrence).

               FOX RIVER OU3-5 RELATED DEBT shall mean the amount of
Indebtedness referred to in clause (ii) of the definition of Fox River OU3-5
Environmental Charges Event.

               GAAP shall mean generally accepted accounting principles as are
in effect in the United States from time to time, subject to the provisions of
Section 1.3, and applied on a consistent basis both as to classification of
items and amounts.

               GERMAN BORROWER shall mean any Borrower organized under the Laws
of Germany.


                                       12



               GLAWSON NOTE shall mean a timberland installment sale note
payable by GIC Investments LLC to GPW VA Timberlands (by contribution from Pulp
Wood) in the principal amount of $43,170,000.00.

               GOVERNMENTAL ACTS shall have the meaning assigned to that term in
Section 2.11.8.

               GPW VA TIMBERLANDS shall mean GPW Virginia Timberlands LLC, a
Delaware limited liability company, a Non-Loan Party Subsidiary.

               GUARANTOR shall mean each of the parties to this Agreement which
is designated as a "Guarantor" on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof pursuant
to Section 7.1.10 and executes a Guarantor Joinder.

               GUARANTOR JOINDER shall mean a joinder by a Person as a Guarantor
under this Agreement, the Guaranty Agreement and the other Loan Documents in
substantially the form of EXHIBIT 1.1(G)(1).

               GUARANTY of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless any other Person, any performance bond or other
suretyship arrangement and any other form of assurance against loss, except
endorsement of negotiable or other instruments for deposit or collection in the
ordinary course of business.

               GUARANTY AGREEMENT shall mean the Guaranty and Suretyship
Agreement in substantially the form of EXHIBIT 1.1(G)(2) executed and delivered
by each of the Guarantors.

               HEDGE LIABILITIES shall have the meaning given to such term in
the definition of "Lender Provided Interest Rate Hedge".

               HISTORICAL STATEMENTS shall have the meaning assigned to that
term in Section 5.1.8.1.

               INCREASING LENDER shall have the meaning assigned to that term in
Section 2.1.1.2.

               INDEBTEDNESS shall mean, without duplication, as to any Person at
any time, any and all indebtedness, obligations or liabilities (whether matured
or unmatured, liquidated or unliquidated, direct or indirect, absolute or
contingent, or joint or several) of such Person for or in respect of: (i)
borrowed money, (ii) amounts raised under or liabilities in respect of any note
purchase or acceptance credit facility, (iii) net reimbursement obligations
(contingent or otherwise) under any letter of credit, currency swap agreement,
interest rate swap, cap, collar or floor agreement or other interest rate
management device, (iv) any other transaction (including


                                       13



forward sale or purchase agreements, capitalized leases and conditional sales
agreements) having the commercial effect of a borrowing of money entered into by
such Person to finance its operations or capital requirements (but not including
trade payables and accrued expenses incurred in the ordinary course of business
which are not represented by a promissory note or other evidence of indebtedness
and which are not more than sixty (60) days past due), (v) the outstanding
amount of any Permitted Accounts Receivable Program, or (vi) any Guaranty of
Indebtedness referred to in clauses (i) through (v) above.

               INSOLVENCY PROCEEDING shall mean, with respect to any Person, (i)
a case, action or proceeding with respect to such Person (A) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (B) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or otherwise relating to the
liquidation, dissolution, winding-up or relief of such Person, or (ii) any
general assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of such Person's
creditors generally or any substantial portion of its creditors; undertaken
under any Law.

               INTERCOMPANY SUBORDINATION AGREEMENT shall mean the Intercompany
Subordination Agreement dated as of even date herewith by the Loan Parties in
favor of the Administrative Agent for the benefit of the Lenders.

               INTEREST PERIOD shall mean the period of time selected by the
Company, on behalf of all the Borrowers, in connection with (and to apply to)
any election permitted hereunder by the Borrowers to have Loans bear interest
under the Euro-Rate Option. Subject to the last sentence of this definition,
such period shall be (A) one, two, three or six Months if the Borrowers select
the Euro-Rate Option, and (B) one or two Months with respect to any Loans made
in any Optional Currency. Such Interest Period shall commence on the effective
date of such Interest Rate Option, which shall be (i) the Borrowing Date if the
Borrowers are requesting new Loans, or (ii) the date of renewal of or conversion
to the Euro-Rate Option if the Borrowers are renewing or converting to the
Euro-Rate Option applicable to outstanding Loans. Notwithstanding the second
sentence hereof: (A) any Interest Period which would otherwise end on a date
which is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day, and (B) the
Borrowers shall not select, convert to or renew an Interest Period for any
portion of the Loans that would end after the Expiration Date.

               INTEREST RATE, CURRENCY AND COMMODITY HEDGE shall mean (i) an
interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable
strike corridor or similar agreement, or (ii) a foreign exchange contract,
currency swap agreement, futures contract, option contract, commodity hedge,
synthetic cap or similar arrangement, in each case entered into by the Loan
Parties or their Subsidiaries in order to provide protection to, or minimize the
impact upon, the Borrowers, the Guarantor and/or their Subsidiaries of
increasing floating rates of interest applicable to Indebtedness and
fluctuations in currency values and commodity prices, as the case may be, and
not for speculative purposes.


                                       14



               INTEREST RATE OPTION shall mean any Euro-Rate Option or Base Rate
Option.

               INTERNAL REVENUE CODE shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.

               ISSUING LENDER shall have the meaning assigned to that term in
Section 2.11.3.2.

               LABOR CONTRACTS shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.

               LAW shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, legally enforceable opinion or
release, ruling, order, injunction, writ, decree, bond, judgment, authorization
or approval, lien or award by or settlement agreement with any Official Body.

               LENDER-PROVIDED INTEREST RATE HEDGE shall mean an Interest Rate
Hedge which is provided by any Lender and meets the following requirements: such
Interest Rate Hedge (i) is documented in a standard International Swap Dealer
Association Agreement, using a reasonable and customary method of calculating
the reimbursable amount of the provider's credit exposure, and (ii) is entered
into for hedging (rather than speculative) purposes. The liabilities of the Loan
Parties to the provider of any Lender-Provided Interest Rate Hedge (the "HEDGE
LIABILITIES") shall be "Obligations" hereunder, guaranteed obligations under the
Guaranty Agreement and otherwise treated as Obligations for purposes of each of
the other Loan Documents.

               LENDERS shall mean the financial institutions named on SCHEDULE
1.1(B), their respective successors and assigns as permitted hereunder and each
Augmenting Lender joining this Agreement in accordance with the terms of Section
2.1.1.2 hereof, each of which is referred to herein as a Lender.

               LENDING OFFICE shall mean the office designated as such by a
Lender on Schedule 1.1(B).

               LETTER OF CREDIT shall have the meaning assigned to that term in
Section 2.11.1.

               LETTER OF CREDIT BORROWING shall have the meaning assigned to
such term in Section 2.11.3.4.

               LETTER OF CREDIT FEE shall have the meaning assigned to that term
in Section 2.11.2.


                                       15



               LETTERS OF CREDIT OUTSTANDING shall mean at any time the sum of
(i) the aggregate undrawn face amount of outstanding Letters of Credit and (ii)
the aggregate amount of all unpaid and outstanding Reimbursement Obligations and
Letter of Credit Borrowings.

               LEVERAGE RATIO shall mean, as of the end of any fiscal quarter,
an amount equal to Consolidated Total Net Debt on such day divided by
Consolidated Adjusted EBITDA for the four fiscal quarters ending on such date of
determination.

               LIEN shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).

               LLC INTERESTS shall have the meaning given to such term in
Section 5.1.2.

               LOAN DOCUMENTS shall mean this Agreement, the Notes, the
Administrative Agent's Letter, the Guaranty Agreement, the Intercompany
Subordination Agreement and any other instruments, certificates or documents
delivered or contemplated to be delivered hereunder or thereunder or in
connection herewith or therewith, as the same may be supplemented or amended
from time to time in accordance herewith or therewith, and LOAN DOCUMENT shall
mean any of the Loan Documents.

               LOAN PARTIES shall mean the Borrowers and the Guarantors.

               LOAN REQUEST shall have the meaning given to such term in Section
2.4.1.

               LOANS shall mean, collectively, and LOAN shall mean, separately,
all Revolving Credit Loans and Swing Loans, or any Revolving Credit Loan or
Swing Loan.

               MATERIAL ADVERSE CHANGE shall mean any set of circumstances or
events which (a) is or could reasonably be expected to be material and adverse
to the business, properties, assets, financial condition or results of
operations of the Loan Parties taken as a whole, (b) impairs materially or could
reasonably be expected to impair materially the ability of the Loan Parties,
taken as a whole, to duly and punctually pay or perform their Indebtedness, or
(c) impairs materially the ability of the Administrative Agent or any of the
Lenders, to the extent permitted, to enforce their legal remedies pursuant to
this Agreement or any other Loan Document.

               MATERIAL EVENT OF DEFAULT shall mean any Event of Default
described in any of the following Sections: 8.1.1 (provided that a Material
Event of Default shall be deemed to occur upon any failure to pay principal,
interest or Commitment Fees without regard to the grace period provided for in
such Section 8.1.1), 8.1.3 (if such Event of Default arises because of a breach
of Section 7.2.15 or 7.2.16), 8.1.4 (if such Event of Default arises because of
a breach of Sections 7.3.1, 7.3.2 or 7.3.3), 8.1.10, 8.1.14, or 8.1.15.


                                       16



               MATERIAL SUBSIDIARY means each Subsidiary of the Company which is
identified on Schedule 1.1(M) as a "Material Subsidiary," and each other
Subsidiary of the Company that has assets at such time, or revenues during the
most recently ended fiscal year, comprising 5% or more of the consolidated
assets of the Company and its Subsidiaries at such time, or of the consolidated
revenues of the Company and its Subsidiaries during such Fiscal Year, as the
case may be; provided, however, that notwithstanding the foregoing, "Material
Subsidiary" shall exclude GPW VA Timberlands and each Monetization Entity so
long as it remains in compliance with Section 7.2.17.

               MONETIZATION ENTITY shall have the meaning assigned to that term
in Section 7.2.17.

               MONTH, with respect to an Interest Period under the Euro-Rate
Option, shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any
Euro-Rate Interest Period begins on a day of a calendar month for which there is
no numerically corresponding day in the month in which such Interest Period is
to end, the final month of such Interest Period shall be deemed to end on the
last Business Day of such final month.

               MOODY'S shall mean Moody's Investors Service, Inc. and its
successors.

               MULTIPLE EMPLOYER PLAN shall mean a Plan which has two or more
contributing sponsors (including the Loan Parties or any member of the ERISA
Group) at least two of whom are not under common control, as such a plan is
described in Sections 4063 and 4064 of ERISA.

               MULTIEMPLOYER PLAN shall mean any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Loan Parties or any member of the ERISA Group is then making or
accruing an obligation to make contributions or, within the preceding five Plan
years, has made or had an obligation to make such contributions.

               NON-CONSENTING LENDER shall have the meaning assigned to that
term in Section 10.1.

               NON-LOAN PARTY SUBSIDIARY shall mean a Subsidiary of the Company
which is not required to be a Guarantor and has not opted to become a Borrower
pursuant to Section 7.2.9.

               NOTES shall mean the Revolving Credit Notes and the Swing Note.

               NOTICES shall have the meaning assigned to that term in Section
10.6.

               OBLIGATION shall mean any obligation or liability of any of the
Loan Parties to the Administrative Agent or any of the Lenders, howsoever
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or


                                       17



to become due, under or in connection with this Agreement, the Notes, the
Letters of Credit, the Administrative Agent's Letter or any other Loan Document.
Obligations shall include the liabilities to any Lender under any
Lender-Provided Interest Rate Hedge but shall not include the liabilities to
other Persons under any other Interest Rate Hedge.

               OFFICIAL BODY shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, board,
bureau, central bank, commission, department or instrumentality of either, or
any court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.

               OPTIONAL CURRENCY shall mean (i) the following lawful currencies:
Canadian dollars, British pounds sterling and the Euro, and (ii) any other
currency approved by Administrative Agent and all of the Lenders pursuant to
Section 2.9.5.

               ORDER shall have the meaning assigned to such term in Section
2.11.9.

               ORIGINAL CURRENCY shall have the meaning assigned to such term in
Section 4.9.1.

               OTHER CURRENCY shall have the meaning assigned to such term in
Section 4.9.1.

               OTHER TAXES shall have the meaning assigned to such term in
Section 4.8.2.

               OVERNIGHT RATE shall mean for any day with respect to any Loans
in an Optional Currency, the rate of interest per annum as determined by the
Administrative Agent at which overnight deposits in such currency, in an amount
approximately equal to the amount with respect to which such rate is being
determined, would be offered for such day in the Relevant Interbank Market.

               PARTICIPATING MEMBER STATE shall mean any member State of the
European Communities that adopts or has adopted the euro as its lawful currency
in accordance with legislation of the European Community relating to Economic
and Monetary Union.

               PARTICIPATION ADVANCE shall mean, with respect to any Lender,
such Lender's payment in respect of its participation in a Letter of Credit
Borrowing according to its Ratable Share pursuant to Section 2.11.3.4.

               PARTNERSHIP INTERESTS shall have the meaning given to such term
in Section 5.1.2.

               PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.


                                       18



               PERMITTED ACCOUNTS RECEIVABLE PROGRAM means an accounts
receivables securitization program concluded pursuant to the Accounts Receivable
Facility Documents and provided that (i) the aggregate principal amount thereof
does not exceed $100,000,000, (ii) on the effective date of such program and
after giving effect to such program and related transactions, there shall exist
no Events of Default or Potential Defaults, and (iii) the Company shall have
delivered to the Administrative Agent a certificate from a Responsible Officer
certifying that the foregoing conditions have been met.

               PERMITTED ACQUISITIONS shall have the meaning assigned to such
term in Section 7.2.6.

               PERMITTED ADDITIONAL TIMBERLAND INDEBTEDNESS shall mean
Indebtedness incurred by GPW VA Timberlands or a Monetization Entity after the
Closing Date in connection with its monetization of notes (other than the
Glawson Note) received in connection with a Permitted Timberland Installment
Sale, together with any refinancings, refundings, renewals or extensions thereof
permitted under Section 7.2.1(xvi)(B).

               PERMITTED ADDITIONAL TIMBERLAND INTERCOMPANY INDEBTEDNESS shall
mean intercompany Indebtedness incurred after the Closing Date in the form of
debt securities issued by the Company to GPW VA Timberlands or another
Monetization Entity (whether by contribution from Pulp Wood or through a
comparable intercompany transaction), together with any refinancings,
refundings, renewals or extensions thereof permitted under Section
7.2.1(xvi)(B).

               PERMITTED EBITDA ADD BACK shall mean, to the extent such charges
are deducted in the computation of net income of the Loan Parties in their
computation of EBITDA during the period specified, with appropriate adjustments
for the tax effects of such add-backs, charges incurred by the Loan Parties in
connection with environmental response and remediation, the presence of
contamination, natural resource damages or reimbursement of the EPA for incurred
costs at the Fox River site, Wisconsin, OU3-5, provided that the total amount of
such charges incurred during the term of this Agreement may not exceed
$20,000,000.00.

               PERMITTED INVESTMENTS shall mean:

                    (i) direct obligations of the United States of America or
any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in twelve (12) months or
less from the date of acquisition;

                    (ii) shares of any money market mutual fund rated at least
AAA by Standard & Poor's or at least Aaa by Moody's;

                    (iii) commercial paper maturing in 180 days or less rated
not lower than A-1, by Standard & Poor's or P-1 by Moody's on the date of
acquisition;


                                       19



                    (iv) demand deposits or time deposits maturing within one
year from the date of creation, certificates of deposit and eurodollar time
deposits with maturities of one year or less from the date of acquisition,
bankers' acceptances with maturities not exceeding one year and overnight bank
deposits, in each case, with any Lender or with any domestic commercial bank
whose obligations are rated A-1, A or the equivalent or better by Standard &
Poor's, or P-1 or the equivalent or better by Moody's, on the date of
acquisition;

                    (v) repurchase obligations with a term of not more than
thirty (30) days for underlying securities of the types described in clauses
(iii) and (iv) above entered into with any financial institution meeting the
qualifications specified in clause (iv) above;

                    (vi) in the case of any Foreign Borrower, (a) direct
obligations of the sovereign nation (or any agency thereof) in which such
Borrower is organized and is conducting business or in obligations fully and
unconditionally guaranteed by such sovereign nation (or any agency thereof), (b)
investments of the type and maturity described in clauses (i) through (v) above
of foreign obligors, which investments or obligors (or the parents of such
obligors) have ratings described in such clauses or equivalent ratings from
comparable foreign rating agencies and (c) investments of the type and maturity
described in clauses (i) through (v) above of foreign obligors (or the parents
of such obligors), which investments of obligors (or the parents of such
obligors) are not rated as provided in such clauses or in clause (b) above but
which are, in the reasonable judgment of the Company and the Borrowers,
comparable in investment quality to such investments and obligors (or the
parents of such obligors);

                    (vii) Interest Rate Hedges otherwise permitted hereunder;
and

                    (viii) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business.

               PERMITTED LIENS shall mean:

                    (i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;

                    (ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with workmen's compensation, unemployment insurance, old-age
pensions or other social security programs;

                    (iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;


                                       20



                    (iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;

                    (v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;

                    (vi) Liens, security interests and mortgages in favor of the
Administrative Agent, for the benefit of the Lenders, securing the Obligations
including liabilities under any Lender-Provided Interest Rate Hedge;

                    (vii) Liens on property leased by any Loan Party or
Subsidiary of a Loan Party under capital and operating leases permitted in
Section 7.2.1 securing obligations of such Loan Party or Subsidiary to the
lessor under such leases;

                    (viii) Any Lien existing on the date of this Agreement and
described on SCHEDULE 1.1(P), provided that no additional assets become subject
to such Lien and the Indebtedness, if any, secured thereby is permitted under
Section 7.2.1;

                    (ix) Liens on tangible property (or any improvement thereon)
acquired or constructed by the Company or any Subsidiary after the Closing Date
to secure Indebtedness of the Company or such Subsidiary incurred in connection
with such improvement, acquisition or construction; provided that:

                         (1) no such Lien shall extend to or cover any Property
other than the property (or improvement thereon) being acquired or constructed;
and

                         (2) the principal amount of the Indebtedness secured by
any such Lien, together with the aggregate principal amount of all other
Indebtedness secured by Liens on such Property, shall not exceed the lesser of
(A) an amount equal to the fair market value of such property so improved,
acquired or constructed and (B) the cost to the Company or such Subsidiary of
such property (or improvement thereon) so acquired or constructed.

                    (x) Purchase Money Security Interests;

                    (xi) The following, (A) if the validity or amount thereof is
being contested in good faith by appropriate and lawful proceedings diligently
conducted so long as levy and execution thereon have been stayed and continue to
be stayed or (B) if a final judgment is entered and such judgment is discharged
within thirty (30) days of entry, and in either case they do not materially
impair the ability of any Loan Party to perform its Obligations hereunder or
under the other Loan Documents:


                                       21



               (1) Claims or Liens for taxes, assessments or charges due and
          payable and subject to interest or penalty, provided that the
          applicable Loan Party maintains such reserves or other appropriate
          provisions as shall be required by GAAP;

               (2) Claims, Liens or encumbrances upon, and defects of title to,
          real or personal property, including any attachment of personal or
          real property or other legal process prior to adjudication of a
          dispute on the merits;

               (3) Claims or Liens of mechanics, materialmen, warehousemen,
          carriers, or other statutory nonconsensual Liens; and

               (4) Liens resulting from final judgments or orders described in
          Section 8.1.6;

                    (xii) Any Liens that arise or are deemed to arise under a
Permitted Accounts Receivable Program, so long as they comply with Section
7.2.17;

                    (xiii) Bankers' Liens, rights of setoff and other similar
Liens existing solely with respect to cash and cash equivalents on deposits in
one or more accounts maintained by any Loan Party arising in the ordinary course
of business from netting services, overdraft protection, cash management
obligations and otherwise in connection with the maintenance of deposit,
securities and commodities accounts;

                    (xiv) Liens securing Indebtedness (including Indebtedness in
connection with or to finance a Permitted Acquisition, to the extent such
Indebtedness is permitted under Section 7.2.1) and securing other obligations in
an aggregate amount outstanding not to exceed $30,000,000.00 at any time; and

                    (xv) Liens on assets of GPW VA Timberlands or a Monetization
Entity securing Permitted Timberland Indebtedness, as contemplated in Section
7.2.1(ix), or Permitted Additional Timberland Indebtedness, as applicable, as
contemplated in Section 7.2.1(x), in each case complying with Section 7.2.17.

               PERMITTED TIMBERLAND INSTALLMENT SALE shall have the meaning
assigned to such term in Section 7.2.7(vii).

               PERMITTED TIMBERLAND INDEBTEDNESS shall mean Indebtedness
incurred by GPW VA Timberlands in connection with its monetization of the
Glawson Note, which Indebtedness as of the Closing Date is in the form of a term
loan from SunTrust Bank in the original principal amount of $36,700,000.00
secured by (a) the Glawson Note, (b) a letter of credit issued by Royal Bank of
Scotland plc (or a replacement issuer of comparable credit quality), in the face
amount of the Glawson Note plus assumed interest thereon, which letter of credit
is collateralized from assets of the issuer of the Glawson Note and/or its
affiliates (and not from assets of the Company or any of its Subsidiaries), (c)
the Permitted Timberland Intercompany Indebtedness, and


                                       22



(d) all or substantially all of the other assets of GPW VA Timberlands, together
with any refinancings, refundings, renewals or extensions thereof permitted
under Section 7.2.1(xvi)(B).

               PERMITTED TIMBERLAND INTERCOMPANY INDEBTEDNESS shall mean
intercompany Indebtedness incurred prior to the Closing Date in the form of debt
securities issued by the Company to GPW VA Timberlands (by contribution from
Pulp Wood), together with any refinancings, refundings, renewals or extensions
thereof permitted under Section 7.2.1(xvi)(B).

               PERSON shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.

               PLAN shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.

               PLEDGED COLLATERAL shall have the meaning given to such term in
Section 10.19.

               PLEDGED LOAN shall have the meaning given to such term in Section
10.19.

               PNC BANK shall mean PNC Bank, National Association, its
successors and assigns.

               POTENTIAL DEFAULT shall mean any event or condition which with
notice, passage of time, or both, would (unless cured or waived) constitute an
Event of Default.

               PRINCIPAL OFFICE shall mean the main banking office of the
Administrative Agent in Pittsburgh, Pennsylvania.

               PRIOR SENIOR CREDIT FACILITY shall mean the credit facilities
provided to the Borrowers pursuant to the terms of a Credit Agreement among the
Borrowers, PNC Bank, National Association, as Administrative Agent, the
Affiliates of Borrowers party thereto as guarantors, and various lending
institutions party thereto, dated as of April 3, 2006, the Borrowers'
obligations with respect to which are intended to be satisfied in full on the
Closing Date with advances of Loans hereunder.


                                       23



               PROHIBITED TRANSACTION shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.

               PROPERTY shall mean all real property, both owned and leased, of
any Loan Party or Subsidiary of a Loan Party.

               PUBLISHED RATE means the rate of interest published each Business
Day in The Wall Street Journal "Money Rates" listing under the caption "London
Interbank Offered Rates" for a one month period (or, if no such rate is
published therein for any reason, then the Published Rate shall be the rate at
which Dollar deposits are offered by leading banks in the London interbank
market for a one month period as published by another publication selected by
the Administrative Agent).

               PULP WOOD means Glatfelter Pulp Wood Company, a Subsidiary of the
Company that is a Guarantor.

               PURCHASE MONEY SECURITY INTEREST shall mean Liens upon tangible
personal property securing loans to any Loan Party or Subsidiary of a Loan Party
or deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property, provided that such security interest does not
encumber any asset not thereby purchased, and provided further that such
security interest does not secure obligations in excess of such purchase price
or deferred payments.

               PURCHASING LENDER shall mean a Lender which becomes a party to
this Agreement by executing an Assignment and Assumption Agreement.

               RECEIVABLES ENTITY shall have the meaning assigned to such term
in Section 7.2.17.

               REFERENCE CURRENCY shall have the meaning assigned to such term
in the definition of Equivalent Amount.

               REGULATED SUBSTANCES shall mean, without limitation, any
substance, material or waste, regardless of its form or nature, defined under
Environmental Laws as a "hazardous substance," "pollutant," "pollution,"
"contaminant," "hazardous or toxic substance," "extremely hazardous substance,"
"toxic chemical," "toxic substance," "toxic waste," "hazardous waste," "special
handling waste," "industrial waste," "residual waste," "solid waste," "municipal
waste," "mixed waste," "infectious waste," "chemotherapeutic waste," "medical
waste," or "regulated substance" or any other material, substance or waste,
regardless of its form or nature, which otherwise is regulated by Environmental
Laws.

               REGULATION U shall mean Regulation U, T, G or X as promulgated by
the Board of Governors of the Federal Reserve System, as amended from time to
time.


                                       24



               REIMBURSEMENT OBLIGATION shall have the meaning assigned to such
term in Section 2.11.3.2.

               RELEVANT INTERBANK MARKET shall mean in relation to Euro, the
European Interbank Market and, in relation to any other currency, the London
interbank market.

               REPORTABLE EVENT shall mean a reportable event described in
Section 4043 of ERISA and regulations thereunder with respect to a Plan (unless
the 30-day notice requirement has been waived by the PBGC).

               REQUIRED LENDERS shall mean

               (i) prior to termination of the Revolving Credit Commitments,
Lenders whose Facility Share aggregate at least 51% of the aggregate Facility
Shares of all of the Lenders; and

               (ii) after termination of the Revolving Credit Commitments, any
group of Lenders if the sum of the Loans, Reimbursement Obligations and Letter
of Credit Borrowings of such Lenders then outstanding aggregates at least 51% of
the total principal amount of all of the Loans, Reimbursement Obligations and
Letter of Credit Borrowings then outstanding. Reimbursement Obligations and
Letter of Credit Borrowings shall be deemed, for purposes of this definition, to
be in favor of the Administrative Agent and not a participating Lender if such
Lender has not made its Participation Advance in respect thereof and shall be
deemed to be in favor of such Lender to the extent of its Participation Advance
if it has made its Participation Advance in respect thereof.

               REQUIRED ENVIRONMENTAL NOTICES shall mean all notices, reports,
plans, forms or other filings which pursuant to Environmental Laws, Required
Environmental Permits or at the request or direction of an Official Body either
must be submitted to an Official Body or which otherwise must be maintained.

               REQUIRED ENVIRONMENTAL PERMITS shall mean all permits, licenses,
bonds, consents, programs, approvals or authorizations required under
Environmental Laws to own, occupy or maintain the Property or which otherwise
are required for the operations and business activities of the Borrowers or
Guarantors.

               REQUIRED SHARE shall have the meaning assigned to such term in
Section 4.11.

               RESPONSIBLE OFFICER with respect to any Person, the chief
executive officer, president, treasurer, or the chief or principal financial
officer of such Person. Unless otherwise qualified, all references to
"Responsible Officer" in this Agreement shall refer to a "Responsible Officer"
of a Loan Party.

               RESTRICTED PAYMENT shall mean (i) any dividend or distribution by
a Loan Party on or in respect of its capital stock or to the direct or indirect
holders of its capital stock


                                       25



(except dividends or distributions payable solely in such capital stock or in
options, warrants or other rights to purchase such capital stock and except
dividends or distributions payable to the Company or another Loan Party) or (ii)
purchase, redemption or other acquisition or retirement for value of any capital
stock of the Company or (iii) any payment on, purchase, defeasance, redemption,
prepayment, decrease or other acquisition or retirement for value, prior to any
scheduled final maturity (other than regularly scheduled or required payments of
principal), of any other Indebtedness that is subordinate or junior in right of
payment to the Obligations.

               REVOLVING CREDIT COMMITMENT shall mean, as to each Lender at any
time, the amounts initially set forth opposite its name on SCHEDULE 1.1(B) in
the column labeled "Amount of Commitment for Revolving Credit Loans," and,
thereafter, as such amounts may be amended, whether pursuant to Assignment and
Assumption Agreements, increases or reductions in Revolving Credit Commitments
provided for under the terms of the Agreement or otherwise, and REVOLVING CREDIT
COMMITMENTS shall mean the aggregate Revolving Credit Commitments of all of the
Lenders.

               REVOLVING CREDIT LOANS shall mean, collectively, and REVOLVING
CREDIT LOAN shall mean, separately, all Revolving Credit Loans or any Revolving
Credit Loan made by the Lenders or one of the Lenders to the Borrowers pursuant
to Section 2.1 or 2.11.3.

               REVOLVING CREDIT NOTES shall mean collectively and REVOLVING
CREDIT NOTE shall mean separately all the Revolving Credit Notes of the
Borrowers in substantially the form of EXHIBIT 1.1(R) evidencing the Revolving
Credit Loans together with all amendments, extensions, renewals, replacements,
refinancings or refundings thereof in whole or in part.

               REVOLVING CREDIT RATABLE SHARE shall mean the proportion that a
Lender's Revolving Credit Commitment bears to the Revolving Credit Commitments
of all of the Lenders.

               SEC shall mean the Securities and Exchange Commission or any
governmental agencies substituted therefor.

               SETTLEMENT DATE shall mean any Business Day on which the
Administrative Agent elects to effect settlement pursuant to Section 4.11.

               STANDARD & POOR'S shall mean Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc., and its successors.

               STANDARD SECURITIZATION UNDERTAKINGS means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary thereof in connection with the Permitted Accounts Receivable Program
which are reasonably customary in an accounts receivable securitization
transaction at the time of consummation of such transaction.

               STANDBY LETTER OF CREDIT shall mean a Letter of Credit issued to
support obligations of one or more of the Loan Parties, contingent or otherwise,
which finance the


                                       26



working capital and business needs of the Loan Parties incurred in the ordinary
course of business, but excluding any Letter of Credit under which the stated
amount of such Letter of Credit increases automatically over time.

               SUBSIDIARY of any Person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, (ii) any partnership of which such Person is
a general partner or of which 50% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, (iii) any limited liability company of which such Person is a
manager or of which 50% or more of the limited liability company interests is at
the time directly or indirectly owned by such Person or one or more of such
Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled by such Person or one or
more of such Person's Subsidiaries.

               SUBSIDIARY SHARES shall have the meaning assigned to that term in
Section 5.1.2.

               SWING LOAN COMMITMENT shall mean PNC Bank's commitment to make
Swing Loans to the Borrowers pursuant to Section 2.1.2 hereof in an aggregate
principal amount up to $20,000,000.00.

               SWING LOAN NOTE shall mean the Swing Loan Note of the Borrowers
in substantially the form of EXHIBIT 1.1(S) evidencing the Swing Loans, together
with all amendments, extensions, renewals, replacements, refinancings or
refundings thereof in whole or in part.

               SWING LOAN REQUEST shall mean a request for Swing Loans made in
accordance with Section 2.4.2 hereof.

               SWING LOANS shall mean collectively and SWING LOAN shall mean
separately all Swing Loans or any Swing Loan made by PNC Bank to the Borrowers
pursuant to Section 2.1.2 hereof.

               TARGET2 shall mean the Trans-European Automated Real-time Gross
Settlement Express Transfer payment system which utilizes a single shared
platform and which was launched on 19 November 2007.

               TARGET DAY shall mean any day on which TARGET2 is open for the
settlement of payment in Euro.

               TAXES shall have the meaning assigned to such term in Section
4.8.1.


                                       27



               TIMBERLAND INSTALLMENT SALE INTEREST EXPENSE shall mean, for any
period of the Company and its Subsidiaries, interest expense arising pursuant to
Permitted Timberland Indebtedness or Permitted Additional Timberland
Indebtedness (as determined and consolidated in accordance with GAAP).

               TRANSFEROR LENDER shall mean the selling Lender pursuant to an
Assignment and Assumption Agreement.

               USA PATRIOT ACT shall mean the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, Public Law 107-56, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced.

               WEBSITE POSTING shall have the meaning assigned to that term in
Section 10.6.

          1.2 CONSTRUCTION.

               Unless the context of this Agreement otherwise clearly requires,
the following rules of construction shall apply to this Agreement and each of
the other Loan Documents:

               1.2.1 NUMBER; INCLUSION.

               References to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";

               1.2.2 DETERMINATION.

               References to "determination" of or by the Administrative Agent
or the Lenders shall be deemed to include good-faith estimates by the
Administrative Agent or the Lenders (in the case of quantitative determinations)
and good-faith judgment by the Administrative Agent or the Lenders (in the case
of qualitative determinations) and such determination shall be conclusive absent
manifest error;

               1.2.3 ADMINISTRATIVE AGENT'S DISCRETION AND CONSENT.

               Whenever the Administrative Agent or the Lenders are granted the
right herein to act in its or their sole discretion or to grant or withhold
consent such right shall be exercised in good faith;

               1.2.4 DOCUMENTS TAKEN AS A WHOLE.

               The words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan


                                       28



Document as a whole and not to any particular provision of this Agreement or
such other Loan Document;

               1.2.5 HEADINGS.

               The section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any), preceding this
Agreement or such other Loan Document are for reference purposes only and shall
not control or affect the construction of this Agreement or such other Loan
Document or the interpretation thereof in any respect;

               1.2.6 IMPLIED REFERENCES TO THIS AGREEMENT.

               Article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be,
unless otherwise specified;

               1.2.7 PERSONS.

               Reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement or such other Loan Document, as the case may be, and reference to
a Person in a particular capacity excludes such Person in any other capacity;

               1.2.8 MODIFICATIONS TO DOCUMENTS.

               Reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;

               1.2.9 FROM, TO AND THROUGH.

               Relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding," and "through" means
"through and including";

               1.2.10 SHALL; WILL.

               References to "shall" and "will" are intended to have the same
meaning; and

               1.2.11 QUEBEC MATTERS.

               For purposes of any assets, liabilities or entities located in
the Province of Quebec and for all other purposes pursuant to which the
interpretation or construction of this Agreement may be subject to the laws of
the Province of Quebec or a court or tribunal exercising jurisdiction in the
Province of Quebec, (a) "personal property" shall include "movable property",
(b) "real property" or "real estate" shall include "immovable property", (c)
"tangible property" shall include "corporeal property", (d) "intangible
property" shall include "incorporeal


                                       29


property", (e) "security interest", "mortgage" and "lien" shall include a
"hypothec", "right of retention", "prior claim" and a resolutory clause, (f) all
references to filing, perfection, priority, remedies, registering or recording
under the Uniform Commercial Code or a Personal Property Security Act shall
include publication under the Civil Code of Quebec, (g) all references to
"perfection" of or "perfected" liens or security interest shall include a
reference to an "opposable" or "set up" lien or security interest as against
third parties, (h) any "right of offset", "right of setoff" or similar
expression shall include a "right of compensation", (i) "goods" shall include
"corporeal movable property" other than chattel paper, documents of title,
instruments, money and securities, (j) an "agent" shall include a "mandatary",
(k) "construction liens" shall include "legal hypothecs"; (l) "joint and
several" shall include "solidary"; (m) "gross negligence or willful misconduct"
shall be deemed to be "intentional or gross fault"; (n) "beneficial ownership"
shall include "ownership on behalf of another as mandatary"; (o) "easement"
shall include "servitude"; (p) "priority" shall include "prior claim"; (q)
"survey" shall include "certificate of location and plan"; (r) "state" shall
include "province"; (s) "fee simple title" shall include "absolute ownership";
(t) "accounts" shall include "claims". The parties hereto confirm that it is
their wish that this Agreement and any other document executed in connection
with the transactions contemplated herein be drawn up in the English language
only and that all other documents contemplated thereunder or relating thereto,
including notices, may also be drawn up in the English language only. Les
parties aux presentes confirment que c'est leur volonte que cette convention et
les autres documents de credit soient rediges en langue anglaise seulement et
que tous les documents, y compris tous avis, envisages par cette convention et
les autres documents peuvent etre rediges en langue anglaise seulement.

          1.3 ACCOUNTING PRINCIPLES.

               Except as otherwise provided in this Agreement, all computations
and determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP; provided, however, that all accounting terms
used in Sections 7.2.15 and 7.2.16 (and all defined terms used in the definition
of any accounting term used in Sections 7.2.15 and 7.2.16 shall have the meaning
given to such terms (and defined terms) under GAAP as in effect on the date
hereof applied on a basis consistent with those used in preparing the Annual
Statements referred to in Section 7.3.2. If the Company notifies the
Administrative Agent and the Lenders in writing ("NOTICE OF CHANGE IN GAAP")
that the Company requests an amendment to any financial or accounting provision
hereof to eliminate the effect of, or give effect to, any change occurring after
the Closing Date to GAAP or in the application thereof on the operation of such
financial or accounting provision, unless the Administrative Agent (on its
behalf or as directed in writing by the Required Lenders) shall have objected
("GAAP OBJECTION NOTICE") to such request within 15 Business Days after receipt
of such Notice of Change in GAAP, the relevant financial and accounting
provisions shall be calculated in accordance with GAAP as in effect on the date
of such Notice of Change in GAAP to the Administrative Agent and the Lenders and
each Lender and the Administrative Agent hereby specifically consents to the
implementation of such change hereunder upon the foregoing


                                       30


terms. In the event the Administrative Agent shall have delivered a GAAP
Objection Notice to the Company, the parties hereto agree to endeavor, in good
faith, to agree upon an amendment to this Agreement that would adjust such
financial or accounting provision in a manner that would give effect to such
change hereunder determined in accordance with the Company's financial
statements at that time; provided, further, that for purposes of the calculation
of the financial covenants in Sections 7.2.15 and 7.2.16, the adjustments to
income and expense of the Loan Parties (and any other adjustments) resulting
from the promulgation of Statement of Financial Accounting Standards ("SFAS")
No. 158 shall be disregarded.

                  2. REVOLVING CREDIT AND SWING LOAN FACILITIES

          2.1 REVOLVING CREDIT COMMITMENTS.

               2.1.1 REVOLVING CREDIT LOANS.

                    2.1.1.1 COMMITMENT.

               Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Lender holding any
Revolving Credit Commitment severally agrees to make Revolving Credit Loans in
either Dollars or one or more Optional Currencies to the Borrowers at any time
or from time to time on or after the date hereof to the Expiration Date,
provided that (i) after giving effect to each such Loan the aggregate Dollar
Equivalent amount of Revolving Credit Loans from such Lender shall not exceed
such Lender's Revolving Credit Commitment minus such Lender's Revolving Credit
Ratable Share of the Dollar Equivalent amount of Letters of Credit Outstanding,
and (ii) no Revolving Credit Loan to which the Base Rate Option applies shall be
made in an Optional Currency. Within such limits of time and amount and subject
to the other provisions of this Agreement, the Borrowers may borrow, repay and
reborrow pursuant to this Section 2.1. The Borrowers, jointly and severally,
subject to Section 10.18 (if applicable), shall repay in full the outstanding
principal amount of the Revolving Credit Loans, together with all accrued
interest thereon and all fees and other amounts owing under any of the Loan
Documents relating thereto on the Expiration Date or earlier termination of the
Revolving Credit Commitments in connection with the terms hereof.

                    2.1.1.2 DISCRETIONARY COMMITMENT INCREASE.

               Provided that no Event of Default or Potential Default is then
occurring or would be caused thereby, at any time prior to the Expiration Date
and subsequent to the Closing Date, the Borrowers may request from time to time
in writing to the Administrative Agent that the Revolving Credit Commitments be
increased, by an amount being an integral multiple of $5,000,000.00 and in an
aggregate amount not greater than $75,000,000.00, according to the following
procedures:

                         (i) The Borrowers shall offer for a period of fifteen
(15) Business Days the existing Lenders the opportunity to participate in any
such increased amount of the Revolving Credit Commitments (such increased amount
being referred to as the


                                       31



"COMMITMENT INCREASE AMOUNT") in accordance with each Lender's Revolving Credit
Ratable Share (each participating Lender being referred to as an "INCREASING
LENDER"). The existing Lenders shall be under no obligation to participate in
any such Commitment Increase Amounts and any agreement by any Lender to so
participate will be in the sole discretion of such Lender.

                         (ii) If any Lender declines to commit to its Revolving
Credit Ratable Share of any such Commitment Increase Amount (such declined
portion of the Commitment Increase Amount being referred to as a "DECLINED
SHARE"), then the Administrative Agent may join a new bank(s) or financial
institution(s) to this Agreement, which shall be acceptable to the Borrowers, or
the Borrowers may propose a new bank(s) or financial institution(s) which shall
be approved by the Administrative Agent in its reasonable discretion without
unreasonable delay (each such bank or financial institution, an "AUGMENTING
LENDER"), or permit an Increasing Lender which has already agreed to commit to
its Revolving Credit Ratable Share of any such Commitment Increase Amount, to
commit to the Declined Share or portion thereof, with respect to any Augmenting
Lender, in an amount of at least $5,000,000. Each Augmenting Lender committing
to a Declined Share, or a portion thereof, shall join this Agreement as a Lender
by entering into a bank joinder and assumption agreement in form and substance
reasonably satisfactory to the Administrative Agent, setting forth the Revolving
Credit Commitment of such Augmenting Lender, pursuant to which such Augmenting
Lender will become a Lender as of the effective date thereof.

                         (iii) On the effective date of any increase in the
Revolving Credit Commitments as contemplated herein (A) each Increasing Lender
and new Augmenting Lender shall make available to the Administrative Agent, for
the benefit of the other Lenders, such amounts, in immediately available funds,
as the Administrative Agent shall determine as being required in order to cause,
after giving effect to such increase and the use of such amounts to make
payments to such other Lenders, each Lender's portion of the outstanding
Revolving Credit Loans of all the Lenders to equal its Revolving Credit Ratable
Share of the Revolving Credit Commitments (after giving effect to the increase
in the Revolving Credit Commitments occasioned by the addition of the Increasing
Lender(s) or Augmenting Lender(s), or both, as the case may be) and (B) the
Borrowers shall be deemed to have repaid and reborrowed all outstanding
Revolving Loans as of the date of any increase in the Revolving Credit
Commitments (with such reborrowing to consist of Revolving Credit Loans subject
to the same interest rate options provided herein, with related Interest Periods
if applicable, specified in a notice delivered by the Borrowers in accordance
with the requirements of Section 3.2). The deemed payments made pursuant to
clause (B) of the immediately preceding sentence in respect of each Revolving
Credit Loan to which a Euro-Rate Option applies shall be subject to
indemnification by the Borrowers pursuant to the provisions of Section 4.6.2 if
the deemed payment occurs other than on the last day of the related Interest
Periods. Upon the request of the Administrative Agent, the Borrowers shall
execute and deliver to the Administrative Agent for the benefit of the Lenders
any and all Notes and other documents, instruments, and agreements necessary or
advisable in the reasonable judgment of the Administrative Agent to evidence or
document the increase in the Revolving Credit Commitments, including any
amendments hereto, and each of the Lenders and each of the Loan Parties hereby
provides its consent hereto and thereto, and each Lender hereby authorizes the
Administrative Agent, and each Loan Party


                                       32



hereby authorizes the Company, to execute any such documents, instruments, and
agreements consistent with the terms of this Section on its behalf without the
necessity of any further consent of any Lender or Loan Party.

               2.1.2 SWING LOAN COMMITMENT.

               Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, and in order to facilitate
loans and repayments between Settlement Dates, PNC Bank may, at its option,
cancelable at any time for any reason whatsoever, make swing loans (the "SWING
LOANS") to the Borrowers at any time or from time to time after the date hereof
to, but not including, the Expiration Date, in an aggregate principal amount up
to but not in excess of $20,000,000.00 (the "SWING LOAN COMMITMENT"), provided
that the aggregate principal amount of PNC Bank's Swing Loans and the Revolving
Credit Loans of all the Lenders at any one time outstanding shall not exceed the
Revolving Credit Commitments of all the Lenders. Within such limits of time and
amount and subject to the other provisions of this Agreement, the Borrowers may
borrow, repay and reborrow pursuant to this Section 2.1.2.

          2.2 NATURE OF LENDERS' OBLIGATIONS WITH RESPECT TO REVOLVING CREDIT
LOANS.

               Each Lender shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.4 in accordance with its Revolving
Credit Ratable Share. The aggregate Dollar Equivalent amount of each Lender's
Revolving Credit Loans outstanding hereunder to the Borrowers at any time shall
never exceed its Revolving Credit Commitment minus its Revolving Credit Ratable
Share of the Dollar Equivalent amount of Letters of Credit Outstanding. The
obligations of each Lender hereunder are several. The failure of any Lender to
perform its obligations hereunder shall not affect the Obligations of the
Borrowers to any other party nor shall any other party be liable for the failure
of such Lender to perform its obligations hereunder. The Lenders shall have no
obligation to make Revolving Credit Loans hereunder on or after the Expiration
Date.

          2.3 COMMITMENT FEES.

               Accruing from the date hereof until the Expiration Date, the
Borrowers agree to pay to the Administrative Agent in Dollars for the account of
each Lender, as consideration for such Lender's Revolving Credit Commitment
hereunder, a nonrefundable commitment fee (the "COMMITMENT FEE") equal to the
Applicable Commitment Fee Rate (computed on the basis of a year of 360 days, and
actual days elapsed) on the average daily difference between the amount of (i)
such Lender's Revolving Credit Commitment as the same may be constituted from
time to time (for purposes of this computation, PNC Bank's Swing Loans shall be
deemed to be borrowed amounts under its Revolving Credit Commitment) and (ii)
the sum of the Dollar Equivalent amount of such Lender's Revolving Credit Loans
outstanding plus its Revolving Credit Ratable Share of the Dollar Equivalent
amount of Letters of Credit Outstanding, in each case as determined during the
preceding fiscal quarter (or shorter period commencing with the Closing Date or
ending on the Expiration Date). All Commitment


                                       33



Fees shall be payable quarterly in arrears on the first day of each July,
October, January and April after the date hereof and on the Expiration Date or
upon acceleration of the Loan.

          2.4 REVOLVING CREDIT LOAN REQUESTS.

               2.4.1 REVOLVING CREDIT LOAN REQUESTS.

               Except as otherwise provided herein, the Borrowers may from time
to time prior to the Expiration Date request the Lenders to make Revolving
Credit Loans, or renew or convert the Interest Rate Option applicable to
existing Revolving Credit Loans pursuant to Section 3.2, by delivering to the
Administrative Agent, not later than 10:30 a.m., Pittsburgh time, (i) three (3)
Business Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans in Dollars to which the Euro-Rate Option applies or the
conversion to or the renewal of the Euro-Rate Option for any such Loans and four
(4) Business Days prior to the proposed Borrowing Date with respect to the
making of Revolving Credit Loans in an Optional Currency or the date of
conversion to or renewal of the Euro-Rate Option for Revolving Credit Loans in
an Optional Currency and (ii) on either the proposed Borrowing Date (which shall
be a Business Day) with respect to the making of a Revolving Credit Loan to
which the Base Rate Option applies or the last day of the preceding Interest
Period with respect to the conversion to the Base Rate Option for any Loan, of a
duly completed request therefor substantially in the form of EXHIBIT 2.4 or a
request by telephone immediately confirmed in writing by letter, facsimile or
telex in such form (each, a "LOAN REQUEST"), it being understood that the
Administrative Agent may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Loans
(expressed in the currency in which such Loans shall be funded) comprising each
Borrowing Tranche, the Dollar Equivalent amount of which shall be in integral
multiples of $100,000.00 and not less than $2,000,000.00 for each Borrowing
Tranche to which the Euro-Rate Option applies and not less than the lesser of
$2,000,000.00 and the maximum amount available for Borrowing Tranches to which
the Base Rate Option applies; (iii) whether the Euro-Rate Option or Base Rate
Option shall apply to the proposed Revolving Credit Loans comprising the
applicable Borrowing Tranche; (iv) the currency in which such Loans shall be
funded if the Borrower is electing the Euro-Rate Option; and (v) in the case of
a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate
Interest Period for the Loans comprising such Borrowing Tranche.

               2.4.2 SWING LOAN REQUESTS.

               Except as otherwise provided herein, the Borrowers may from time
to time prior to the Expiration Date request PNC Bank to make Swing Loans by
delivery to PNC Bank not later than 10:30 a.m. Pittsburgh time on the proposed
Borrowing Date of a duly completed request therefor substantially in the form of
EXHIBIT 2.4 hereto or a request by telephone immediately confirmed in writing by
letter, facsimile or telex (each, a "SWING LOAN REQUEST"), it being understood
that PNC Bank may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation.


                                       34



Each Swing Loan Request shall be irrevocable and shall specify the proposed
Borrowing Date and the principal amount of such Swing Loan, which shall be not
less than $500,000.00.

          2.5 MAKING REVOLVING CREDIT LOANS AND SWING LOANS; REVOLVING CREDIT
NOTES AND SWING NOTES.

               2.5.1 MAKING REVOLVING CREDIT LOANS.

               Promptly after receipt by the Administrative Agent of a Loan
Request pursuant to Section 2.4, the Administrative Agent shall notify the
Lenders of its receipt of such Loan Request specifying: (i) the proposed
Borrowing Date and the time and method of disbursement of the Revolving Credit
Loans requested thereby; (ii) the amount and type of each such Revolving Credit
Loan and the applicable Interest Period (if any); (iii) the apportionment among
the Lenders of such Revolving Credit Loans as determined by the Administrative
Agent in accordance with Section 2.2; and (iv) the currency in which Revolving
Credit Loan is requested. Each Lender shall remit the principal amount of each
Revolving Credit Loan in the requested currency to the Administrative Agent such
that the Administrative Agent is able to, and the Administrative Agent shall, to
the extent the Lenders have made funds available to it for such purpose and
subject to Section 6.2, fund such Revolving Credit Loans to the Borrowers in
U.S. Dollars and immediately available funds at the Principal Office prior to
2:00 p.m., Pittsburgh time, on the applicable Borrowing Date, provided that if
any Lender fails to remit such funds to the Administrative Agent in a timely
manner, the Administrative Agent may elect, in its sole discretion, to fund with
its own funds the Revolving Credit Loans of such Lender on such Borrowing Date,
and such Lender shall be subject to the repayment obligation in Section 9.16.

               2.5.2 MAKING SWING LOANS.

               So long as PNC Bank elects to make Swing Loans, PNC Bank shall,
after receipt by it of a Swing Loan Request pursuant to Section 2.4.2, fund such
Swing Loan to the Borrowers in Dollars and immediately available funds at the
Principal Office prior to three (3) o'clock p.m. Pittsburgh time on the
Borrowing Date.

          2.6 REVOLVING CREDIT NOTES.

               The obligation of the Borrowers to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Lender,
together with interest thereon, shall be evidenced by a Revolving Credit Note
dated the Closing Date payable to the order of such Lender in a face amount
equal to the Revolving Credit Commitment of such Lender.

          2.7 SWING LOAN NOTE.

               The obligation of the Borrowers to repay the unpaid principal
amount of the Swing Loans made to it by PNC Bank together with interest thereon
shall be evidenced by the Swing Loan Note payable to the order of PNC Bank in a
face amount equal to the Swing Loan Commitment.


                                       35



          2.8 BORROWINGS TO REPAY SWING LOANS.

               PNC Bank may, at its option, exercisable at any time for any
reason whatsoever, demand repayment of the Swing Loans, and each Lender shall
make a Revolving Credit Loan in an amount equal to such Lender's Revolving
Credit Ratable Share of the aggregate principal amount of the outstanding Swing
Loans, plus, if PNC Bank so requests, accrued interest thereon, provided that no
Lender shall be obligated in any event to make any Revolving Credit Loan if
after giving effect thereto, the sum of the Dollar Equivalent amount of its
Revolving Credit Loans plus such Lender's Revolving Credit Ratable Share of the
Dollar Equivalent amount of Letters of Credit Outstanding exceeds its Revolving
Credit Commitment. Revolving Credit Loans made pursuant to the preceding
sentence shall bear interest at the Base Rate Option and shall be deemed to have
been properly requested in accordance with Section 2.4.1 without regard to any
of the requirements of that provision. PNC Bank shall provide notice to the
Lenders (which may be telephonic or written notice by letter, facsimile or
telex) that such Revolving Credit Loans are to be made under this Section 2.8
and of the apportionment among the Lenders, and the Lenders shall be
unconditionally obligated to fund such Revolving Credit Loans (whether or not
the conditions specified in Section 6.2 are then satisfied) by the time PNC Bank
so requests, which shall not be earlier than 3:00 p.m. Pittsburgh time on the
next Business Day after the date the Lenders receive such notice from PNC Bank.

          2.9 UTILIZATION OF COMMITMENTS IN OPTIONAL CURRENCIES.

               2.9.1 PERIODIC COMPUTATIONS OF DOLLAR EQUIVALENT AMOUNTS OF
REVOLVING CREDIT LOANS AND LETTERS OF CREDIT OUTSTANDING.

               The Administrative Agent will determine the Dollar Equivalent
amount of (i) proposed Letters of Credit to be denominated in an Optional
Currency as of the requested Borrowing Date or date of issuance, as the case may
be, (ii) Letters of Credit Outstanding denominated in an Optional Currency as of
the last Business Day of each month, and (iii) outstanding Revolving Credit
Loans denominated in an Optional Currency as of the end of each Interest Period
(each such date under clauses (i) through (iii), a "COMPUTATION DATE").

               2.9.2 NOTICES FROM LENDERS THAT OPTIONAL CURRENCIES ARE
UNAVAILABLE TO FUND NEW LOANS.

               The Lenders shall be under no obligation to make the Revolving
Credit Loans requested by the Borrowers which are denominated in an Optional
Currency if any Lender notifies the Administrative Agent by 5:00 p.m.
(Pittsburgh time) four (4) Business Days prior to the Borrowing Date for such
Revolving Credit Loans that such Lender cannot provide its Revolving Credit
Ratable Share of such Revolving Credit Loans in such Optional Currency. In the
event the Administrative Agent timely receives a notice from a Lender pursuant
to the preceding sentence, the Administrative Agent will notify the Borrowers no
later than 12:00 noon (Pittsburgh time) three (3) Business Days prior to the
Borrowing Date for such Revolving Credit Loans that the Optional Currency is not
then available for such Revolving Credit Loans, and the Administrative Agent
shall promptly thereafter notify the Lenders of the same and the Lenders


                                       36



shall not make such Revolving Credit Loans requested by the Borrowers under
their Loan Request.

               2.9.3 NOTICES FROM LENDERS THAT OPTIONAL CURRENCIES ARE
UNAVAILABLE TO FUND RENEWALS OF THE EURO-RATE OPTION.

               If the Borrowers deliver a Loan Request requesting that the
Lenders renew the Euro-Rate Option with respect to an outstanding Borrowing
Tranche of Revolving Credit Loans denominated in an Optional Currency, the
Lenders shall be under no obligation to renew such Euro-Rate Option if any
Lender delivers to the Administrative Agent a notice by 5:00 p.m. (Pittsburgh
time) four (4) Business Days prior to the effective date of such renewal that
such Lender cannot continue to provide Revolving Credit Loans in such Optional
Currency. In the event the Administrative Agent timely receives a notice from a
Lender pursuant to the preceding sentence, the Administrative Agent will notify
the Borrowers no later than 12:00 noon (Pittsburgh time) three (3) Business Days
prior to the renewal date that the renewal of such Revolving Credit Loans in
such Optional Currency is not then available, and the Administrative Agent shall
promptly thereafter notify the Lenders of the same. If the Administrative Agent
shall have so notified the Borrowers that any such continuation of such
Revolving Credit Loans in such Optional Currency is not then available, any
notice of renewal with respect thereto shall be deemed withdrawn, and such Loans
shall be redenominated into Loans in Dollars at the Base Rate Option or
Euro-Rate Option, at the Company's option on behalf of the Borrowers (subject,
in the case of the Euro-Rate Option, to compliance with Section 2.4.), with
effect from the last day of the Interest Period with respect to any such Loans.
The Administrative Agent will promptly notify the Borrowers and the Lenders of
any such redenomination, and in such notice, the Administrative Agent will state
the aggregate Dollar Equivalent amount of the redenominated Revolving Credit
Loans in an Optional Currency as of the applicable Computation Date with respect
thereto and such Lender's Revolving Credit Ratable Share thereof.

               2.9.4 EUROPEAN MONETARY UNION.

                    2.9.4.1 PAYMENTS IN EUROS UNDER CERTAIN CIRCUMSTANCES.

               If (i) any Optional Currency ceases to be lawful currency of the
nation issuing the same and is replaced by the Euro or (ii) any Optional
Currency and the Euro are at the same time recognized by any governmental
authority of the nation issuing such currency as lawful currency of such nation
and the Administrative Agent or the Required Lenders shall so request in a
notice delivered to the Borrowers, then any amount payable hereunder by any
party hereto in such Optional Currency shall instead by payable in the Euro and
the amount so payable shall be determined by translating the amount payable in
such Optional Currency to the Euro at the exchange rate established by that
nation for the purpose of implementing the replacement of the relevant Optional
Currency by the Euro (and the provisions governing payments in Optional
Currencies in this Agreement shall apply to such payment in the Euro as if such
payment in the Euro were a payment in an Optional Currency). Prior to the
occurrence of the event or events described in clause (i) or (ii) of the
preceding sentence, each amount payable hereunder in any


                                       37



Optional Currency will, except as otherwise provided herein, continue to be
payable only in that currency.

                    2.9.4.2 ADDITIONAL COMPENSATION UNDER CERTAIN CIRCUMSTANCES.

               The Borrowers agree, at the request of any Lender, to compensate
such Lender for any loss, cost, expense or reduction in return that such Lender
shall reasonably determine shall be incurred or sustained by such Lender as a
result of the replacement of any Optional Currency by the Euro and that would
not have been incurred or sustained but for the transactions provided for
herein. A certificate of any Lender setting forth such Lender's determination of
the amount or amounts necessary to compensate such Lender shall be delivered to
the Borrowers and shall be conclusive absent manifest error so long as such
determination is made on a reasonable basis. The Borrowers shall pay such Lender
the amount shown as due on any such certificate within ten (10) days after
receipt thereof.

               2.9.5 REQUESTS FOR ADDITIONAL OPTIONAL CURRENCIES.

               The Borrowers may deliver to the Administrative Agent a written
request that Revolving Credit Loans hereunder also be permitted to be made in
any other lawful currency (other than Dollars), in addition to the currencies
specified in the definition of "Optional Currency" herein provided that such
currency must be freely traded in the offshore interbank foreign exchange
markets, freely transferable, freely convertible into Dollars and available to
the Lenders in the Relevant Interbank Market. The Administrative Agent will
promptly notify the Lenders of any such request promptly after the
Administrative Agent receives such request. The Administrative Agent and each
Lender may grant or accept such request in their sole discretion. The
Administrative Agent will promptly notify the Borrowers of the acceptance or
rejection by the Administrative Agent and each of the Lenders of the Borrowers'
request. The requested currency shall be approved as an Optional Currency
hereunder only if the Administrative Agent and all of the Lenders approve of the
Borrowers' request.

          2.10 USE OF PROCEEDS.

               The proceeds of the Revolving Credit Loans shall be used for (i)
refinancing amounts outstanding under the Prior Senior Credit Facility, and (ii)
general corporate purposes, including financing working capital and Permitted
Acquisitions.

          2.11 LETTER OF CREDIT SUBFACILITY.

               2.11.1 ISSUANCE OF LETTERS OF CREDIT.

               The Borrowers may request the issuance of a letter of credit
(each such letter of credit and each Existing Letter of Credit, a "LETTER OF
CREDIT") on behalf of itself, another Loan Party or any of their respective
Subsidiaries (provided that a Loan Party shall be the obligor with respect
thereto) by delivering or having such other Loan Party deliver to the


                                       38



Administrative Agent a completed application and agreement for letters of credit
in such form as the Administrative Agent may specify from time to time by no
later than 10:00 a.m., Pittsburgh time, at least four (4) Business Days, or such
shorter period as may be agreed to by the Administrative Agent, in advance of
the proposed date of issuance. Each Letter of Credit shall be a Standby Letter
of Credit or Commercial Letter of Credit and may be denominated in either
Dollars or an Optional Currency. Subject to the terms and conditions hereof and
in reliance on the agreements of the other Lenders set forth in this Section
2.11, the Administrative Agent or any of the Administrative Agent's Affiliates
will issue a Letter of Credit provided that each Letter of Credit shall (A) have
a maximum maturity of twelve (12) months from the date of issuance, and (B) in
no event expire later than five (5) Business Days prior to the Expiration Date
and providing that in no event shall (i) the Dollar Equivalent amount of Letters
of Credit Outstanding exceed, at any one time, $20,000,000.00, or (ii) the
Dollar Equivalent Revolving Facility Usage exceed, at any one time, the
Revolving Credit Commitments. The Existing Letters of Credit shall be deemed to
have been issued hereunder.

               2.11.2 LETTER OF CREDIT FEES.

               The Borrowers shall pay in Dollars (i) to the Administrative
Agent for the ratable account of the Lenders a fee (the "LETTER OF CREDIT FEE")
equal to the Applicable Margin then in effect for Revolving Credit Loans subject
to the Euro-Rate Option, per annum, and (ii) to the Administrative Agent, for
its own account or the account of any applicable Issuing Lender, a fronting fee
equal to 0.125% per annum (each computed on the basis of a year of 360 days and
actual days elapsed), which fees shall be computed on the daily average Dollar
Equivalent amount of Letters of Credit Outstanding during the preceding fiscal
quarter (or shorter period commencing with the Closing Date or ending with the
Expiration Date) and shall be payable quarterly in arrears commencing with the
first day of each July, October, January and April following issuance of each
Letter of Credit and on the Expiration Date. The Borrowers shall also pay to the
Administrative Agent in Dollars for the Administrative Agent's sole account the
Administrative Agent's then in effect customary fees and administrative expenses
payable with respect to the Letters of Credit as the Administrative Agent may
generally charge or incur from time to time in connection with the issuance,
maintenance, modification (if any), assignment or transfer (if any),
negotiation, and administration of Letters of Credit.

               2.11.3 DISBURSEMENTS, REIMBURSEMENT.

                    2.11.3.1 Immediately upon the issuance of each Letter of
Credit (and with respect to the Existing Letters of Credit, on the Closing
Date), each Lender shall be deemed to, and hereby irrevocably and
unconditionally agrees to, purchase from the Administrative Agent a
participation in such Letter of Credit and each drawing thereunder in an amount
equal to such Lender's Revolving Credit Ratable Share of the maximum amount
available to be drawn under such Letter of Credit and the amount of such
drawing, respectively.

                    2.11.3.2 In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the Administrative
Agent will promptly notify the Borrowers. Provided that it shall have received
such notice, the Borrowers shall reimburse (such obligation to reimburse the
Administrative Agent, for its benefit or the benefit


                                       39



of a Lender who has issued an Existing Letter of Credit (an "ISSUING LENDER"),
as applicable, shall sometimes be referred to as a "REIMBURSEMENT OBLIGATION")
the Administrative Agent in Dollars prior to 12:00 noon, Pittsburgh time on each
date that an amount is paid by the Administrative Agent under any Letter of
Credit (each such date, a "DRAWING DATE") in an amount equal to the Dollar
Equivalent amount so paid by the Administrative Agent or the applicable Issuing
Lender. In the event the Borrowers fail to reimburse the Administrative Agent or
the applicable Issuing Lender for the full Dollar Equivalent amount of any
drawing under any Letter of Credit by 12:00 noon, Pittsburgh time, on the
Drawing Date, the Administrative Agent will promptly notify each Lender thereof,
and the Borrowers shall be deemed to have requested that Revolving Credit Loans
be made by the Lenders in Dollars under the Base Rate Option in an amount equal
to the Dollar Equivalent amount of such drawing to be disbursed on the Drawing
Date under such Letter of Credit, subject to the amount of the unutilized
portion of the Revolving Credit Commitment and subject to the conditions set
forth in Section 6.2 other than any notice requirements. Any notice given by the
Administrative Agent pursuant to this Section 2.11.3.2 may be oral if
immediately confirmed in writing; provided that the lack of such an immediate
confirmation shall not affect the conclusiveness or binding effect of such
notice.

                    2.11.3.3 Each Lender shall upon any notice pursuant to
Section 2.11.3.2 make available to the Administrative Agent, for its benefit or
the benefit of the applicable Issuing Lender, an amount in Dollars in
immediately available funds equal to its Revolving Credit Ratable Share of the
Dollar Equivalent amount of the drawing (whether or not the conditions set forth
in Section 6.2 shall have been satisfied), whereupon the participating Lenders
shall (subject to Section 2.11.3.4) each be deemed to have made a Revolving
Credit Loan in Dollars under the Base Rate Option to the Borrowers in that
amount. If any Lender so notified fails to make available in Dollars to the
Administrative Agent for the account of the Administrative Agent or the
applicable Issuing Lender the amount of such Lender's Revolving Credit Ratable
Share of such Dollar Equivalent amount by no later than 2:00 p.m., Pittsburgh
time on the Drawing Date, then interest shall accrue on such Lender's obligation
to make such payment, from the Drawing Date to the date on which such Lender
makes such payment (i) at a rate per annum equal to the Federal Funds Effective
Rate during the first three (3) days following the Drawing Date and (ii) at a
rate per annum equal to the rate applicable to Loans under the Base Rate Option
on and after the fourth day following the Drawing Date. The Administrative Agent
will promptly give notice of the occurrence of the Drawing Date, but failure of
the Administrative Agent to give any such notice on the Drawing Date or in
sufficient time to enable any Lender to effect such payment on such date shall
not relieve such Lender from its obligation under this Section 2.11.3.3.

                    2.11.3.4 With respect to any unreimbursed drawing that is
not converted into Revolving Credit Loans under the Base Rate Option to the
Borrowers in whole or in part as contemplated by Section 2.11.3.2, because of
the Borrowers' failure to satisfy the conditions set forth in Section 6.2 other
than any notice requirements or for any other reason, the Borrowers shall be
deemed to have incurred from the Administrative Agent or the applicable Issuing
Lender a borrowing (each a "LETTER OF CREDIT BORROWING") in Dollars in the
Dollar Equivalent amount of such drawing. Such Letter of Credit Borrowing shall
be due and payable


                                       40



on demand (together with interest) and shall bear interest at the rate per annum
applicable to the Revolving Credit Loans under the Base Rate Option. Each
Lender's payment to the Administrative Agent pursuant to Section 2.11.3.3 shall
be deemed to be a payment in respect of its participation in such Letter of
Credit Borrowing and shall constitute a "PARTICIPATION ADVANCE" from such Lender
in satisfaction of its participation obligation under this Section 2.11.3.

               2.11.4 REPAYMENT OF PARTICIPATION ADVANCES.

                    2.11.4.1 Upon (and only upon) receipt by the Administrative
Agent or the applicable Issuing Lender for its account (as applicable) of
immediately available funds from the Borrowers (i) in payment of any Letter of
Credit Borrowing made by the Administrative Agent or the applicable Issuing
Lender under the Letter of Credit with respect to which any Lender has made a
Participation Advance to the Administrative Agent, or (ii) in payment of
interest on such a payment made by the Administrative Agent or the applicable
Issuing Lender under such a Letter of Credit, the Administrative Agent or the
applicable Issuing Lender will pay to each Lender, in the same funds as those
received by the Administrative Agent or the applicable Issuing Lender, the
amount of such Lender's Revolving Credit Ratable Share of such funds, except the
Administrative Agent or the applicable Issuing Lender shall retain the amount of
the Revolving Credit Ratable Share of such funds of any Lender that did not make
a Participation Advance in respect of such payment by Administrative Agent.

                    2.11.4.2 If the Administrative Agent or any Issuing Lender
is required at any time to return to any Loan Party, or to a trustee, receiver,
liquidator, custodian, or any official in any Insolvency Proceeding, any portion
of the payments made by any Loan Party to the Administrative Agent or such
Issuing Lender pursuant to Section 2.11.4.1 in reimbursement of a payment made
under the Letter of Credit or interest or fee thereon, each Lender shall, on
demand of the Administrative Agent, forthwith return to the Administrative
Agent, for its account or the account of such Issuing Lender (as applicable),
the amount of its Revolving Credit Ratable Share of any amounts so returned by
the Administrative Agent or such Issuing Lender (as applicable) plus interest
thereon from the date such demand is made to the date such amounts are returned
by such Lender to the Administrative Agent or such Issuing Lender, at a rate per
annum equal to the Federal Funds Effective Rate in effect from time to time.

               2.11.5 DOCUMENTATION.

               Each Loan Party agrees to be bound by the terms of the
Administrative Agent's and each Issuing Lender's application and agreement for
letters of credit and the Administrative Agent's and each Issuing Lender's
written regulations and customary practices relating to letters of credit,
though such interpretation may be different from such Loan Party's own. In the
event of a conflict between such application or agreement and this Agreement,
this Agreement shall govern. It is understood and agreed that, except in the
case of its own gross negligence or willful misconduct, the Administrative Agent
and each Issuing Lender shall not be liable for any error, negligence and/or
mistakes, whether of omission or commission, in


                                       41



following any Loan Party's instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.

               2.11.6 DETERMINATIONS TO HONOR DRAWING REQUESTS.

               In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the Administrative Agent and each
Issuing Lender shall be responsible only to determine that the documents and
certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.

               2.11.7 NATURE OF PARTICIPATION AND REIMBURSEMENT OBLIGATIONS.

               Each Lender's obligation in accordance with this Agreement to
make the Revolving Credit Loans or Participation Advances, as contemplated by
Section 2.11.3, as a result of a drawing under a Letter of Credit, and the
Obligations of the Borrowers to reimburse the Administrative Agent or any
Issuing Lender (as applicable) upon a draw under a Letter of Credit, subject to
Section 10.18 for the avoidance of doubt (if applicable), shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Section 2.11 under all circumstances, including the
following circumstances:

                    (i) any set-off, counterclaim, recoupment, defense or other
right which such Lender may have against the Administrative Agent or any of its
Affiliates, the Borrowers or any other Person for any reason whatsoever;

                    (ii) the failure of any Loan Party or any other Person to
comply, in connection with a Letter of Credit Borrowing, with the conditions set
forth in Sections 2.1, 2.4, 2.5 or 6.2 or as otherwise set forth in this
Agreement for the making of a Revolving Credit Loan, it being acknowledged that
such conditions are not required for the making of a Letter of Credit Borrowing
and the obligation of the Lenders to make Participation Advances under Section
2.11.3;

                    (iii) any lack of validity or enforceability of any Letter
of Credit;

                    (iv) any claim of breach of warranty that might be made by
any Loan Party or any Lender against any beneficiary of a Letter of Credit, or
the existence of any claim, set-off, recoupment, counterclaim, crossclaim,
defense or other right which any Loan Party or any Lender may have at any time
against a beneficiary, successor beneficiary any transferee or assignee of any
Letter of Credit or the proceeds thereof (or any Persons for whom any such
transferee may be acting), the Administrative Agent or its Affiliates, any
Issuing Lender or its Affiliates, or any Lender or any other Person or, whether
in connection with this Agreement, the transactions contemplated herein or any
unrelated transaction (including any underlying transaction between any Loan
Party or Subsidiaries of a Loan Party and the beneficiary for which any Letter
of Credit was procured);


                                       42



                    (v) the lack of power or authority of any signer of (or any
defect in or forgery of any signature or endorsement on) or the form of or lack
of validity, sufficiency, accuracy, enforceability or genuineness of any draft,
demand, instrument, certificate or other document presented under or in
connection with any Letter of Credit, or any fraud or alleged fraud in
connection with any Letter of Credit, or the transport of any property or
provisions of services relating to a Letter of Credit, in each case even if the
Administrative Agent or any of the Administrative Agent's Affiliates or any
Issuing Lender or any of an Issuing Lender's Affiliates has been notified
thereof;

                    (vi) payment by the Administrative Agent or any of its
Affiliates or any Issuing Lender or any of its Affiliates under any Letter of
Credit against presentation of a demand, draft or certificate or other document
which does not comply with the terms of such Letter of Credit;

                    (vii) the solvency of, or any acts of omissions by, any
beneficiary of any Letter of Credit, or any other Person having a role in any
transaction or obligation relating to a Letter of Credit, or the existence,
nature, quality, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;

                    (viii) any failure by the Administrative Agent or any of
Administrative Agent's Affiliates or any Issuing Lender or any of an Issuing
Lender's Affiliates to issue any Letter of Credit in substantially the form
requested by any Loan Party, unless the Administrative Agent or such Issuing
Lender (as applicable) has received written notice from such Loan Party of such
failure within three Business Days after the Administrative Agent or such
Issuing Lender (as applicable) shall have furnished such Loan Party a copy of
such Letter of Credit and such error is material and no drawing has been made
thereon prior to receipt of such notice;

                    (ix) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;

                    (x) any breach of this Agreement or any other Loan Document
by any party thereto;

                    (xi) the occurrence or continuance of an Insolvency
Proceeding with respect to any Loan Party;

                    (xii) the fact that an Event of Default or a Potential
Default shall have occurred and be continuing;

                    (xiii) the fact that the Expiration Date shall have passed
or this Agreement or the Commitments hereunder shall have been terminated; and

                    (xiv) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.


                                       43



               2.11.8 INDEMNITY.

               In addition to amounts payable as provided in Section 9.5, the
Borrowers hereby agree (subject to Section 10.18 for the avoidance of doubt, if
applicable) to protect, indemnify, pay and save harmless the Administrative
Agent and any of Administrative Agent's Affiliates and each Issuing Lender and
any of the Issuing Lenders' respective Affiliates (collectively, the "LETTER OF
CREDIT PARTIES"), that has issued a Letter of Credit from and against any and
all claims, demands, liabilities, damages, taxes, penalties, interest,
judgments, losses, costs, charges and expenses (including reasonable fees,
expenses and disbursements of counsel and allocated costs of internal counsel)
which any of the Letter of Credit Parties may incur or be subject to as a
consequence, direct or indirect, of the issuance of any Letter of Credit, other
than as a sole result of (i) the gross negligence or willful misconduct of any
of the Letter of Credit Parties as determined by a final judgment of a court of
competent jurisdiction or (ii) the wrongful dishonor by any of the Letter of
Credit Parties of a proper demand for payment made under any Letter of Credit,
except if such dishonor resulted from any act or omission, whether rightful or
wrongful, of any present or future de jure or de facto government or
governmental authority (all such acts or omissions herein called "GOVERNMENTAL
ACTS").

               2.11.9 LIABILITY FOR ACTS AND OMISSIONS.

               As between any Loan Party and the Administrative Agent, or the
Administrative Agent's Affiliates, and between any Loan Party and an Issuing
Lender, or such Issuing Lender's Affiliates, such Loan Party assumes all risks
of the acts and omissions of, or misuse of the Letters of Credit by, the
respective beneficiaries of such Letters of Credit. In furtherance and not in
limitation of the foregoing, the Administrative Agent and each Issuing Lender
shall not be responsible for any of the following including any losses or
damages to any Loan Party or other Person or property relating therefrom: (i)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
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
(even if the Administrative Agent or the Administrative Agent's Affiliates, or
the applicable Issuing Lender or such Issuing Lender's Affiliates, shall have
been notified thereof); (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) the
failure of the beneficiary of any such Letter of Credit, or any other party to
which such Letter of Credit may be transferred, to comply fully with any
conditions required in order to draw upon such Letter of Credit or any other
claim of any Loan Party against any beneficiary of such Letter of Credit, or any
such transferee, or any dispute between or among any Loan Party and any
beneficiary of any Letter of Credit or any such transferee; (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


                                       44



from causes beyond the control of the Administrative Agent or the Administrative
Agent's Affiliates, or the applicable Issuing Lender or such Issuing Lender's
Affiliates, as applicable, including any Governmental Acts, and none of the
above shall affect or impair, or prevent the vesting of, any of the
Administrative Agent's or the Administrative Agent's Affiliates, or the
applicable Issuing Lender or such Issuing Lender's Affiliates, rights or powers
hereunder. Nothing in the preceding sentence shall relieve the Administrative
Agent or any Issuing Lender from liability for the Administrative Agent's or
such Issuing Lender's gross negligence or willful misconduct in connection with
actions or omissions described in such clauses (i) through (viii) of such
sentence. In no event shall the Administrative Agent or the Administrative
Agent's Affiliates, or the applicable Issuing Lender or such Issuing Lender's
Affiliates, be liable to any Loan Party for any indirect, consequential,
incidental, punitive, exemplary or special damages or expenses (including
without limitation attorneys' fees), or for any damages resulting from any
change in the value of any property relating to a Letter of Credit.

               Without limiting the generality of the foregoing, the
Administrative Agent, each Issuing Lender and each of their respective
Affiliates (i) may rely on any oral or other communication believed in good
faith by the Administrative Agent, such Issuing Lender or such Affiliate to have
been authorized or given by or on behalf of the applicant for a Letter of
Credit, (ii) may honor any presentation if the documents presented appear on
their face substantially to comply with the terms and conditions of the relevant
Letter of Credit; (iii) may honor a previously dishonored presentation under a
Letter of Credit, whether such dishonor was pursuant to a court order, to settle
or compromise any claim of wrongful dishonor, or otherwise, and shall be
entitled to reimbursement to the same extent as if such presentation had
initially been honored, together with any interest paid by the Administrative
Agent, such Issuing Lender or such Affiliate; (iv) may honor any drawing that is
payable upon presentation of a statement advising negotiation or payment, upon
receipt of such statement (even if such statement indicates that a draft or
other document is being delivered separately), and shall not be liable for any
failure of any such draft or other document to arrive, or to conform in any way
with the relevant Letter of Credit; (v) may pay any paying or negotiating bank
claiming that it rightfully honored under the laws or practices of the place
where such bank is located; and (vi) may settle or adjust any claim or demand
made on the Administrative Agent, such Issuing Lender or such Affiliate in any
way related to any order issued at the applicant's request to an air carrier, a
letter of guarantee or of indemnity issued to a carrier or any similar document
(each an "ORDER") and honor any drawing in connection with any Letter of Credit
that is the subject to such Order, notwithstanding that any drafts or other
documents presented in connection with such Letter of Credit fail to conform in
any way with such Letter of Credit.

               In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the
Administrative Agent or the Administrative Agent's Affiliates, or the applicable
Issuing Lender or such Issuing Lender's Affiliates, under or in connection with
the Letters of Credit issued by it or any documents and certificates delivered
thereunder, if taken or omitted in good faith, shall not put the Administrative
Agent or the Administrative Agent's Affiliates, or the applicable Issuing Lender
or such Issuing Lender's Affiliates, under any resulting liability to the
Borrowers or any Lender.


                                       45



          2.12 CURRENCY REPAYMENTS.

               Notwithstanding anything contained herein to the contrary, the
entire amount of principal of and interest on any Revolving Credit Loan made in
an Optional Currency shall be repaid in the same Optional Currency in which such
Loan was made, provided, however, that if it is impossible or illegal for the
Borrowers to effect payment of a Revolving Credit Loan in the Optional Currency
in which such Loan was made, or if the Borrowers default in their obligations to
do so, the Required Lenders may at their option permit such payment to be made
(i) at and to a different location, subsidiary, affiliate or correspondent of
Administrative Agent, (ii) in the Equivalent Amount of Dollars or (iii) in an
Equivalent Amount of such other currency (freely convertible into Dollars) as
the Required Lenders may solely at their option designate. Upon any events
described in (i) through (iii) of the preceding sentence, the Borrowers shall
make such payment, and the Borrowers agree to hold each Lender harmless from and
against any loss incurred by any Lender arising from the cost to such Lender of
any premium, any costs of exchange, the cost of hedging and covering the
Optional Currency in which such Loan was originally made, and from any change in
the value of Dollars, or such other currency, in relation to the Optional
Currency that was due and owing. Such loss shall be calculated for the period
commencing with the first day of the Interest Period for such Loan and
continuing through the date of payment thereof. Without prejudice to the
survival of any other agreement of the Borrowers hereunder, the Borrowers'
obligations under this Section 2.12 shall survive termination of this Agreement.

          2.13 OPTIONAL CURRENCY AMOUNTS.

               Notwithstanding anything contained herein to the contrary, the
Administrative Agent may, with respect to notices by the Borrowers for Revolving
Credit Loans in an Optional Currency or voluntary prepayments of less than the
full amount of an Optional Currency Borrowing Tranche, engage in reasonable
rounding of the Optional Currency amounts requested to be loaned or repaid; and,
in such event, the Administrative Agent shall promptly notify the Borrowers and
the Lenders of such rounded amounts and the Borrowers' request or notice shall
thereby be deemed to reflect such rounded amounts.

          2.14 REDUCTION OF COMMITMENT.

               The Company, on behalf of all Borrowers, shall have the right at
any time and from time to time upon five (5) Business Days' prior written notice
to the Administrative Agent to permanently reduce, in whole multiples of
$5,000,000 of principal, or terminate the Revolving Credit Commitments without
penalty or premium, except as hereinafter set forth, provided that any such
reduction or termination shall be accompanied by (a) the payment in full of any
Commitment Fee then accrued on the amount of such reduction or termination and
(b) prepayment of the Revolving Credit Notes, together with the full amount of
interest accrued on the principal sum to be prepaid (and all amounts referred to
in Section 4.6 hereof), to the extent that the Dollar Equivalent Revolving
Facility Usage then outstanding exceeds the Revolving Credit Commitments as so
reduced or terminated. From the effective date of any such reduction or
termination the obligations of the Borrowers to pay the Commitment Fee pursuant
to Section 2.3 shall correspondingly be reduced or cease.


                                       46



                                3. INTEREST RATES

          3.1 INTEREST RATE OPTIONS.

               The Borrowers shall pay interest in respect of the outstanding
unpaid principal amount of the Loans as selected by it from the Base Rate Option
or Euro-Rate Option set forth below applicable to the Loans, it being understood
that, subject to the provisions of this Agreement, the Borrowers may select
different Interest Rate Options and different Interest Periods to apply
simultaneously to the Loans comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or any
portion of the Loans comprising any Borrowing Tranche, provided that there shall
not be at any one time outstanding more than eight (8) Borrowing Tranches in the
aggregate among all of the Loans. If at any time the designated rate applicable
to any Loan made by any Lender exceeds such Lender's highest lawful rate, the
rate of interest on such Lender's Loan shall be limited to such Lender's highest
lawful rate. Interest on the principal amount of each Loan made in an Optional
Currency shall be paid by the Borrowers in such Optional Currency. Swing Loans
shall bear interest at a rate to be agreed upon by the Administrative Agent and
the Company, on behalf of all Borrowers.

               3.1.1 INTEREST RATE OPTIONS.

               The Borrowers shall have the right to select from the following
Interest Rate Options applicable to the Loans (subject to the provisions above
regarding Swing Loans), except that no Loan to which a Base Rate shall apply may
be made in an Optional Currency:

                    (i) Base Rate Option. A fluctuating rate per annum (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate plus the Applicable Margin, such interest rate
to change automatically from time to time effective as of the effective date of
each change in the Base Rate; or

                    (ii) Euro-Rate Option. A rate per annum (computed on the
basis of a year of 360 days, as the case may be, and actual days elapsed),
provided that, for Revolving Credit Loans made in an Optional Currency for which
a 365-day basis is the only market practice available to the Administrative
Agent, such rate shall be calculated on the basis of a year of 365 days for the
actual days elapsed) equal to the Euro-Rate plus the Applicable Margin.

               3.1.2 RATE QUOTATIONS.

               The Borrowers may call the Administrative Agent on or before the
date on which a Loan Request is to be delivered to receive an indication of the
interest rates and the applicable currency exchange rates then in effect, but it
is acknowledged that such projection shall not be binding on the Administrative
Agent or the Lenders nor affect the rate of interest or


                                       47



the calculation of Equivalent Amounts which thereafter are actually in effect
when the election is made.

          3.2 INTEREST PERIODS.

               At any time when the Borrowers shall select, convert to or renew
a Euro-Rate Option, the Borrowers shall notify the Administrative Agent thereof
by delivering a Loan Request at least four (4) Business Days prior to the
effective date of such Interest Rate Option, with respect to an Optional
Currency Loan, and three (3) Business Days prior to the effective date of such
Interest Rate Option, with respect to a Loan denominated in Dollars. The notice
shall specify an Interest Period during which such Interest Rate Option shall
apply. Notwithstanding the preceding sentence, the following provisions shall
apply to any selection of, renewal of, or conversion to a Euro-Rate Option:

               3.2.1 AMOUNT OF BORROWING TRANCHE.

               The Dollar Equivalent amount of each Borrowing Tranche of
Euro-Rate Loans shall be in integral multiples of $100,000.00 and not less than
$2,000,000.00; and

               3.2.2 RENEWALS.

               In the case of the renewal of a Euro-Rate Option at the end of an
Interest Period, the first day of the new Interest Period shall be the last day
of the preceding Interest Period, without duplication in payment of interest for
such day.

          3.3 INTEREST AFTER DEFAULT.

               To the extent permitted by Law, upon the occurrence of an Event
of Default and until such time such Event of Default shall have been cured or
waived:

               3.3.1 LETTER OF CREDIT FEES, INTEREST RATE.

               The Letter of Credit Fees and the rate of interest for each Loan
otherwise applicable pursuant to Section 2.11.2 or Section 3.1, respectively,
shall at the request of the Administrative Agent be increased, by 2.0% per
annum; and

               3.3.2 OTHER OBLIGATIONS.

               Each other Obligation hereunder if not paid when due shall at the
request of the Administrative Agent bear interest at a rate per annum equal to
the sum of the rate of interest applicable under the Base Rate Option plus an
additional 2.0% per annum from the time such Obligation becomes due and payable
and until it is paid in full.

               3.3.3 ACKNOWLEDGMENT.

               The Borrowers acknowledges that the increase in rates referred to
in this Section 3.3 reflects, among other things, the fact that such Loans or
other amounts have become


                                       48



a substantially greater risk given their default status and that the Lenders are
entitled to additional compensation for such risk; and all such interest shall
be payable by the Borrowers upon demand by the Administrative Agent.

          3.4 EURO-RATE UNASCERTAINABLE; ILLEGALITY; INCREASED COSTS; DEPOSITS
NOT AVAILABLE.

               3.4.1 UNASCERTAINABLE.

               If on any date on which a Euro-Rate would otherwise be
determined, the Administrative Agent shall have determined that:

                    (i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or

                    (ii) a contingency has occurred affecting the interbank
eurodollar market relating to the Euro-Rate and reasonable and adequate means do
not exist for ascertaining the Euro-Rate for such Interest Period, the
Administrative Agent and Borrowers shall have the rights specified in Sections
3.4.3 and 4.4.2 (as applicable).

               3.4.2 ILLEGALITY; INCREASED COSTS; DEPOSITS NOT AVAILABLE.

               If at any time any Lender shall have determined that:

                    (i) the making, maintenance or funding of any Loan to which
a Euro-Rate Option applies has been made impracticable or unlawful by compliance
by such Lender in good faith with any Law or any interpretation or application
thereof by any Official Body or with any request or directive of any such
Official Body (whether or not having the force of Law), or

                    (ii) such Euro-Rate Option will not adequately and fairly
reflect the cost to such Lender of the establishment or maintenance of any such
Loan, or

                    (iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars or in the Optional Currency (as applicable) for the
relevant Interest Period for a Loan, or to banks generally, to which a Euro-Rate
Option applies, respectively, are not available to such Lender with respect to
such Loan, or to banks generally, in the interbank eurodollar market, then the
Administrative Agent and Borrowers shall have the rights specified in Sections
3.4.3 and 4.4.2 (as applicable).

               3.4.3 ADMINISTRATIVE AGENT'S AND LENDER'S RIGHTS.

               In the case of any event specified in Section 3.4.1 above, the
Administrative Agent shall promptly so notify the Lenders and the Borrowers
thereof, and in the case of an event specified in Section 3.4.2 above, such
Lender shall promptly so notify the Administrative Agent and endorse a
certificate to such notice as to the specific circumstances of such notice, and
the Administrative Agent shall promptly send copies of such notice and


                                       49



certificate to the other Lenders and the Borrowers. Upon such date as shall be
specified in such notice (which shall not be earlier than the date such notice
is given), the obligation of (A) the Lenders, in the case of such notice given
by the Administrative Agent, or (B) such Lender, in the case of such notice
given by such Lender, to allow the Borrowers to select, convert to or renew a
Euro-Rate Option or select an Optional Currency (as applicable) shall be
suspended until the Administrative Agent shall have later notified the
Borrowers, or such Lender shall have later notified the Administrative Agent, of
the Administrative Agent's or such Lender's, as the case may be, determination
that the circumstances giving rise to such previous determination no longer
exist. If at any time the Administrative Agent makes a determination under
Section 3.4.1 and the Borrowers have previously notified the Administrative
Agent of its selection of, conversion to or renewal of a Euro-Rate Option and
such Interest Rate Option has not yet gone into effect, such notification shall
be deemed to provide for selection of, conversion to or renewal of the Base Rate
Option otherwise available with respect to such Loans. If any Lender notifies
the Administrative Agent of a determination under Section 3.4.2, the Borrowers
shall, subject to the Borrowers' indemnification Obligations under Section
4.6.2, as to any Loan of the Lender to which a Euro-Rate Option applies, on the
date specified in such notice either (i) as applicable, convert such Loan to the
Base Rate Option otherwise available with respect to such Loan or select a
different Optional Currency or Dollars, or (ii) prepay such Loan in accordance
with Section 4.4. Absent due notice from the Borrowers of conversion or
prepayment, such Loan shall automatically be converted to the Base Rate Option
otherwise available with respect to such Loan upon such specified date.

          3.5 SELECTION OF INTEREST RATE OPTIONS.

               If the Borrowers fail to select a new Interest Period or Optional
Currency to apply to any Borrowing Tranche of Loans under the Euro-Rate Option
at the expiration of an existing Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 3.2, the Borrowers shall be
deemed to have converted or continued, as applicable, such Borrowing Tranche of
Loans under the Euro-Rate Option for an Interest Period of one (1) month and, if
required by the Administrative Agent, converted such Borrowing Tranche to a Loan
in Dollars, as applicable, commencing upon the last day of the existing Interest
Period.

          3.6 CANADIAN INTEREST ACT DISCLOSURE.

               For the purposes of the Interest Act (Canada) and disclosure
thereunder, whenever any interest or any fee to be paid hereunder or in
connection herewith is to be calculated on the basis of a 360-day or 365-day
year, the yearly rate of interest to which the rate used in such calculation is
equivalent is the rate so used multiplied by the actual number of days in the
calendar year in which the same is to be ascertained and divided by 360 or 365,
as applicable. The rates of interest under this Agreement are nominal rates, and
not effective rates or yields. The principle of deemed reinvestment of interest
does not apply to any interest calculation under this Agreement.

          3.7 CANADIAN USURY PROVISION.


                                       50



               If any provision of this Agreement would oblige a Canadian
Borrower to make any payment of interest or other amount payable to any Lender
in an amount or calculated at a rate which would be prohibited by law or would
result in a receipt by that Lender of "interest" at a "criminal rate" (as such
terms are construed under the Criminal Code (Canada)), then, notwithstanding
such provision, such amount or rate shall be deemed to have been adjusted with
retroactive effect to the maximum amount or rate of interest, as the case may
be, as would not be so prohibited by applicable law or so result in a receipt by
that Lender of "interest" at a "criminal rate", such adjustment to be effected,
to the extent necessary (but only to the extent necessary), as follows:

     (i) first, by reducing the amount or rate of interest; and

     (ii) thereafter, by reducing any fees, commissions, costs, expenses,
premiums and other amounts required to be paid which would constitute interest
for purposes of section 347 of the Criminal Code (Canada).

                                   4. PAYMENTS

          4.1 PAYMENTS.

               All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Administrative Agent's Fee or
other fees or amounts due from the Borrowers hereunder shall be payable prior to
11:00 a.m., Pittsburgh time, on the date when due without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrowers, and without set-off, counterclaim or other deduction of any nature,
and an action therefor shall immediately accrue. Such payments shall be made to
the Administrative Agent at the Principal Office for the account of PNC Bank
with respect to the Swing Loans and for the ratable accounts of the Lenders with
respect to the Revolving Loans in Dollars except that payments of principal or
interest shall be made in the currency in which such Loan was made, and in
immediately available funds, and the Administrative Agent shall promptly
distribute such amounts to the Lenders in immediately available funds, provided
that in the event payments are received by 11:00 a.m., Pittsburgh time, by the
Administrative Agent with respect to the Loans and such payments are not
distributed to the Lenders on the same day received by the Administrative Agent,
the Administrative Agent shall pay the Lenders the Federal Funds Effective Rate
in the case of Loans or other amounts due in Dollars, or the Overnight Rate in
the case of Loans or other amounts due in an Optional Currency, with respect to
the amount of such payments for each day held by the Administrative Agent and
not distributed to the Lenders. The Administrative Agent's and each Lender's
statement of account, ledger or other relevant record shall, in the absence of
manifest error, be conclusive as the statement of the amount of principal of and
interest on the Loans and other amounts owing under this Agreement (including
the Equivalent Amounts of the applicable currencies where such computations are
required) and shall be deemed an "account stated."


                                       51



          4.2 PRO RATA TREATMENT OF LENDERS.

               Each borrowing of Revolving Credit Loans shall be allocated to
each Lender according to its Revolving Credit Ratable Share, and each selection
of, conversion to or renewal of any Interest Rate Option and each payment or
prepayment by the Borrowers with respect to principal, interest, Commitment
Fees, Letter of Credit Fees, or other fees (except for the Administrative
Agent's Fee and the fronting fee for Letters of Credit referred to in Section
2.11.2(ii)) or amounts due from the Borrowers hereunder to the Lenders with
respect to the Loans, shall (except as provided in Section 3.4.3 in the case of
an event specified in Sections 3.4, 4.4.2 or 4.6) be made in proportion to the
applicable Loans outstanding from each Lender and, if no such Loans are then
outstanding, in proportion to the Revolving Credit Ratable Share, as applicable
of each Lender. Notwithstanding any of the foregoing, each borrowing or payment
or prepayment by the Borrowers of principal, interest, fees or other amounts
from the Borrowers with respect to Swing Loans shall be made by or to PNC Bank.

          4.3 INTEREST PAYMENT DATES.

               Interest on Loans to which the Base Rate Option applies shall be
due and payable in arrears on the first day of each July, October, January and
April after the date hereof and on the Expiration Date or upon acceleration of
the Notes. Interest on Loans to which the Euro-Rate Option applies shall be due
and payable in the currency in which such Loan was made on the last day of each
Interest Period for those Loans and, if such Interest Period is longer than
three (3) Months, also on the 90th day of such Interest Period. Interest on
mandatory prepayments of principal under Section 4.5 shall be made in the
currency in which such Loan was made and shall be due on the date such mandatory
prepayment is due. Interest on the principal amount of each Loan or other
monetary Obligation shall be due and payable in the currency in which such Loan
was made on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated maturity date, upon acceleration
or otherwise).

          4.4 VOLUNTARY PREPAYMENTS.

               4.4.1 RIGHT TO PREPAY.

               The Borrowers shall have the right, at their option, from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 4.4.2 below or in Section 4.6) in the currency in which such
Loan was made:

                    (i) at any time with respect to any Loan to which the Base
Rate Option applies,

                    (ii) at any time with respect to any Loan in any Optional
Currency, subject to Section 4.6.2,

                    (iii) at any time with respect to Loans to which a Euro-Rate
Option applies, subject to Section 4.6.2, or


                                       52



                    (iv) on the date specified in a notice by any Lender
pursuant to Section 3.4 with respect to any Loan to which a Euro-Rate Option
applies.

               Whenever the Borrowers desire to prepay any part of the Loans,
the Company, on behalf of all Borrowers, shall provide a prepayment notice to
the Administrative Agent by 1:00 p.m. Pittsburgh time: (i) at least one (1)
Business Day prior to the date of prepayment of the Revolving Credit Loans made
in Dollars and (ii) at least four (4) Business Days prior to the date of
prepayment of any Loans in an Optional Currency, and (iii) on the date of
prepayment of Swing Loans, in each case setting forth the following information:

               (x) the date, which shall be a Business Day, on which the
          proposed prepayment is to be made;

               (y) the Borrowing Tranche designated for prepayment, if
          applicable; and

               (z) the total principal amount and currency of such prepayment,
          the Dollar Equivalent amount of which shall not be less than
          $500,000.00 for any Swing Loan or $1,000,000.00 for any Revolving
          Credit Loan or such lesser amount as may be outstanding.

               All prepayment notices shall be irrevocable. The principal amount
of the Loans for which a prepayment notice is given, together with interest on
such principal amount except with respect to Loans to which the Base Rate Option
applies, shall be due and payable on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made in the
currency in which such Loans was made. Except as provided in Section 3.4.3, if
the Borrowers prepay a Loan but fails to specify the applicable Borrowing
Tranche which the Borrowers are prepaying, the prepayment shall be applied first
to Loans to which the Base Rate Option applies, then to Loans to which the
Euro-Rate Option applies, and then to Optional Currency Loans. Any prepayment
hereunder shall be subject to the Borrowers' Obligation to indemnify the Lenders
under Section 4.6.2. Revolving Credit Loan prepayments shall not result in an
reduction of the Revolving Credit Commitments unless the Borrowers have elected
to reduce such Revolving Credit Commitments pursuant to Section 2.14.

               4.4.2 REPLACEMENT OF A LENDER.

               In the event any Lender (any such Lender, a "DEFAULTING LENDER")
(i) gives notice under Section 2.9, 3.4 or 4.6.1, (ii) does not fund Revolving
Credit Loans or otherwise fails to pay over to the Administrative Agent or any
other Lender any other amount required to be paid by it hereunder within one
Business Day of the date when due (unless the subject of a good faith dispute or
unless such failure has been cured and all interest accruing as a result of such
failure has been fully paid in accordance with the terms hereof), (iii) becomes
subject to the control of an Official Body (other than normal and customary
supervision), deemed insolvent by an Official Body or the subject of a
bankruptcy, receivership, conservatorship or insolvency proceeding, or (iv)
becomes a Non-Consenting Lender pursuant to Section 10.1, then the Borrowers
shall have the right at its option to prepay the Loans of such


                                       53



Lender in whole, together with all interest accrued thereon, and terminate such
Lender's Commitment within ninety (90) days after (x) receipt of such Lender's
notice under Section 2.9, 3.4 or 4.6.1, (y) the date such Lender has failed to
fund Revolving Credit Loans or otherwise failed to pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within one Business Day of the date when due as contemplated in
clause (ii) above, or (z) the date such Lender became subject to the control of
an Official Body or any other event contemplated in clause (iii) or (iv) above
occurs, as applicable; provided that the Borrowers shall also pay to such Lender
at the time of such prepayment any amounts required under Section 4.6 and any
accrued interest due on such amount and any related fees (except if a Lender is
a Defaulting Lender as a result of the operation of clause (ii) or (iii) above,
in which event such Lender shall be entitled to receive accrued interest only
and not entitled to receive payment of any fees); provided, however, that the
Revolving Credit Commitment of such Lender shall be provided by one or more of
the remaining Lenders or a replacement financial institution acceptable to the
Administrative Agent; provided, further, the remaining Lenders shall have no
obligation hereunder to increase their Commitments. Notwithstanding the
foregoing, the Administrative Agent may only be replaced subject to the
requirements of Section 9.14 and provided that all Letters of Credit have
expired or been terminated or replaced.

               4.4.3 CHANGE OF LENDING OFFICE.

               Each Lender agrees that upon the occurrence of any event giving
rise to increased costs or other special payments under Section 3.4.2 or 4.6.1
with respect to such Lender, it will if requested by the Borrowers, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another Lending Office for any Loans or Letters of Credit affected by
such event, provided that such designation is made on such terms that such
Lender and its Lending Office suffer no economic, legal or regulatory
disadvantage, with the object of avoiding the consequence of the event giving
rise to the operation of such Section. Nothing in this Section 4.4.3 shall
affect or postpone any of the Obligations of the Borrowers or any other Loan
Party or the rights of the Administrative Agent or any Lender provided in this
Agreement.

          4.5 MANDATORY PREPAYMENTS.

               4.5.1 CURRENCY FLUCTUATIONS.

               If on any Computation Date the sum of the Dollar Equivalent
Revolving Facility Usage is greater than the Revolving Credit Commitments as a
result of a change in exchange rates between one (1) or more Optional Currencies
and Dollars, then the Administrative Agent shall notify the Borrowers of the
same. The Borrowers shall pay or prepay the Revolving Credit Loans (subject to
Borrowers' indemnity obligations contained in this Agreement, including, without
limitation, under Section 4.6.2) or Swing Loans within three (3) Business Days
after receiving such notice such that the sum of the Dollar Equivalent Revolving
Facility Usage no longer exceeds the aggregate Revolving Credit Commitments.


                                       54



               4.5.2 APPLICATION AMONG INTEREST RATE OPTIONS.

               All prepayments required pursuant to this Section 4.5 shall first
be applied among the Interest Rate Options to the principal amount of the
applicable Loans subject to the Base Rate Option, then to Dollar Loans
denominated in Dollars and subject to a Euro-Rate Option and then to Loans of
Optional Currencies subject to the Euro-Rate Option, and the Borrowers will be
subject to the indemnity obligation set forth in Section 4.6.2.

          4.6 ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES.

               4.6.1 INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES,
RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC.

               If any change in any Law or guideline or in any interpretation or
application thereof by any Official Body charged with the interpretation or
administration thereof or compliance with any request or directive (whether or
not having the force of Law) of any central bank or other Official Body:

                    (i) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Lender or any Lending
Office of any Lender, or

                    (ii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Lender, or (B) otherwise applicable to the obligations of any Lender or any
Lending Office of any Lender under this Agreement,

and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Lender or its Lending Office with respect to this Agreement, the Notes or the
making, maintenance or funding of any part of the Loans (or, in the case of any
capital adequacy or similar requirement, to have the effect of reducing the rate
of return on any Lender's capital, taking into consideration such Lender's
customary policies with respect to capital adequacy) by an amount which such
Lender in its sole discretion deems to be material, such Lender shall from time
to time notify the Borrowers and the Administrative Agent of the amount
determined in good faith (using any averaging and attribution methods employed
in good faith) by such Lender to be necessary to compensate such Lender for such
increase in cost, reduction of income, additional expense or reduced rate of
return. Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrowers to such
Lender ten (10) Business Days after such notice is given.


                                       55



               4.6.2 INDEMNITY.

               In addition to the compensation required by Section 4.6.1, the
Borrowers shall indemnify each Lender against all liabilities, losses or
expenses (including loss of margin, any loss or expense incurred in liquidating
or employing deposits from third parties and any loss or expense incurred in
connection with funds acquired by a Lender to fund or maintain Loans subject to
a Euro-Rate Option) which such Lender sustains or incurs as a consequence of
any:

                    (i) payment, prepayment, conversion or renewal of any Loan
to which a Euro-Rate Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or prepayment is
mandatory, voluntary or automatic and whether or not such payment or prepayment
is then due),

                    (ii) attempt by the Borrowers to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Requests under
Section 2.4 or Section 3.2 or notice relating to prepayments under Section 4.4,
or

                    (iii) default by the Borrowers in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including any failure of the Borrowers to pay when due (by
acceleration or otherwise) any principal, interest, Commitment Fee or any other
amount due hereunder.

               If any Lender sustains or incurs any such loss or expense, it
shall from time to time notify the Borrowers of the amount determined in good
faith by such Lender (which determination may include such assumptions,
allocations of costs and expenses and averaging or attribution methods as such
Lender shall deem reasonable) to be necessary to indemnify such Lender for such
loss or expense. Such notice shall set forth in reasonable detail the basis for
such determination. Such amount shall be due and payable by the Borrowers to
such Lender ten (10) Business Days after such notice is given.

          4.7 INTERBANK MARKET PRESUMPTION.

               For all purposes of this Agreement and each Note with respect to
any aspects of the Euro-Rate, any Loan under the Euro-Rate Option or any
Optional Currency, each Lender and Administrative Agent shall be presumed to
have obtained rates, funding, currencies, deposits, and the like in the Relevant
Interbank Market regardless of whether it did so or not; and, each Lender's and
Administrative Agent's determination of amounts payable under, and actions
required or authorized by, Section 4.6.2 shall be calculated, at each Lender's
and Administrative Agent's option, as though each Lender and Administrative
Agent funded each Borrowing Tranche of Loans under the Euro-Rate Option through
the purchase of deposits of the types and maturities corresponding to the
deposits used as a reference in accordance with the terms hereof in determining
the Euro-Rate applicable to such Loans, whether in fact that is the case.


                                       56



          4.8 TAXES.

               4.8.1 NO DEDUCTIONS.

               All payments made to the Lenders and/or Administrative Agent by
the Borrowers hereunder and under each Note shall be made free and clear of and
without deduction for any present or future taxes, levies, imposts, deductions,
charges, or withholdings, and all liabilities with respect thereto, excluding
taxes imposed on the net income of any Lender and all income and franchise taxes
that would not have been imposed but for such Lender having a past or present
connection with a jurisdiction imposing such taxes other than entering into this
Agreement and performing its obligations and enforcing its rights thereunder(all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings, and
liabilities being hereinafter referred to as "TAXES") unless such deduction is
required by Law (and then subject to the following sentence). If the Borrowers
shall be required by Law to deduct any Taxes from or in respect of any sum
payable hereunder or under any Note, (i) the sum payable under such Note shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
4.8.1) each Lender receives an amount equal to the sum it would have received
had no such deductions been made, (ii) the Borrowers shall make such deductions
and (iii) the Borrowers shall timely pay the full amount deducted to the
relevant tax authority or other authority in accordance with applicable Law.

               4.8.2 STAMP TAXES.

               In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes or similar
levies which arise from any payment made hereunder or from the execution,
delivery, or registration of, or otherwise with respect to, this Agreement or
any Note (hereinafter referred to as "OTHER TAXES").

               4.8.3 INDEMNIFICATION FOR TAXES PAID BY A LENDER.

               The Borrowers shall indemnify each Lender for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 4.8.3) paid by
any Lender and any liability (including penalties, interest, and expenses)
arising therefrom or with respect thereto. This indemnification shall be made
within 30 days from the date a Lender makes written demand therefor, but in no
event shall such indemnification be required to be made more than ten (10)
Business Days before the date such Taxes or Other Taxes are due to the relevant
taxing authority.

               4.8.4 CERTIFICATE.

               Within 30 days after the date of any payment of any Taxes by the
Borrowers pursuant to Section 4.8, the Borrowers shall notify the Lenders
thereof, and thereafter, if so requested by any Lender, furnish to each Lender,
at its address referred to herein, the original or a certified copy of a receipt
evidencing payment thereof, if available, or, if not


                                       57



available, another reasonable form of confirmation of such payment if it is
requested by any Lender.

               4.8.5 EXCLUSIONS, ETC.

               Notwithstanding any other provision of this Agreement, if the
forms provided pursuant to Section 10.17 by a Lender, assignee or participant at
the time such Person first becomes a party to this Agreement indicate a United
States interest withholding tax rate in excess of zero, withholding tax at such
rate shall be considered excluded from Taxes unless and until such Person
provides the appropriate forms certifying that a lesser rate applies, whereupon
withholding tax at such lesser rate only shall be considered excluded from Taxes
for periods governed by such forms; provided, however, that the term Taxes shall
include United States withholding tax, if any, applicable with respect to an
assignee or participant of a Lender only to the extent that, at the effective
date of the agreement or other transaction pursuant to which such assignee or
participant becomes a party to this Agreement, such Lender was entitled to
payments under Section 4.8.1 in respect of United States withholding tax with
respect to interest paid at such date. For any period with respect to which a
Lender or assignee or participant of a Lender (or a financial institution
through which such Lender, assignee or participant has directed any payment to
be made) has failed to comply with Section 10.17, such Lender, assignee or
participant shall not be entitled to indemnification under this Section 4.8 with
respect to any Taxes imposed by reason of such failure.

               4.8.6 CHANGE OF LENDING OFFICE, ETC.

               Any Person claiming any additional amounts payable pursuant to
this Section 4.8 agrees to use reasonable efforts (consistent with any legal and
regulatory restrictions) to file any document or certificate reasonably
requested by a Borrower or change the jurisdiction of its Lending Office with
respect to this Agreement, if the filing of such document or certificate, or the
making of such a change, would avoid the need for, or reduce the amount of, any
such additional amounts pursuant to this Section 4.8 that may thereafter accrue.

               4.8.7 SURVIVAL.

               Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in Sections 4.8.1 through 4.8.4 shall survive the payment in full of principal
and interest hereunder and under any instrument delivered hereunder.

          4.9 JUDGMENT CURRENCY.

               4.9.1 CURRENCY CONVERSION PROCEDURES FOR JUDGMENTS.

               If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under a Note in any currency (the
"ORIGINAL CURRENCY") into another currency (the "OTHER CURRENCY"), the parties
hereby agree, to the fullest extent permitted by Law, that the rate of exchange
used shall be that at which in accordance with


                                       58



normal banking procedures each Lender could purchase the Original Currency with
the Other Currency after any premium and costs of exchange on the Business Day
preceding that on which final judgment is given.

               4.9.2 INDEMNITY IN CERTAIN EVENTS.

               The obligation of the Borrowers in respect of any sum due from
the Borrowers to any Lender hereunder shall, notwithstanding any judgment in an
Other Currency, whether pursuant to a judgment or otherwise, be discharged only
to the extent that, on the Business Day following receipt by any Lender of any
sum adjudged to be so due in such Other Currency, such Lender may in accordance
with normal banking procedures purchase the Original Currency with such Other
Currency. If the amount of the Original Currency so purchased is less than the
sum originally due to such Lender in the Original Currency, the Borrowers agree,
as a separate obligation and notwithstanding any such judgment or payment, to
indemnify such Lender against such loss. If the amount of the Original Currency
so purchased is greater than the sum originally due to such Lender in the
Original Currency, such Lender agrees to return the amount of any excess to the
Borrowers (or to any other Person who may be entitled thereto under applicable
Law).

          4.10 NOTES.

               Upon the request of any Lender, the Loans made by such Lender may
be evidenced by a Note (or Notes).

          4.11 SETTLEMENT DATE PROCEDURES.

               In order to minimize the transfer of funds between the Lenders
and the Administrative Agent, the Borrowers may borrow, repay and reborrow Swing
Loans and PNC Bank may make Swing Loans as provided in Section 2.4.2 hereof
during the period between Settlement Dates. Not later than 11:00 a.m.,
Pittsburgh time, on any Settlement Date, the Administrative Agent shall notify
each Lender of its Ratable Share of the total of the Revolving Credit Loans and
the Swing Loans (each a "REQUIRED SHARE") as of such date. Prior to 1:00 p.m.,
Pittsburgh time, on such Settlement Date, each Lender shall pay to the
Administrative Agent the amount equal to the difference between its Required
Share and its Revolving Credit Loans, and the Administrative Agent shall pay to
each Lender its Ratable Share of all payments made by the Borrowers to the
Administrative Agent with respect to the Revolving Credit Loans. The
Administrative Agent may at its option effect settlement on any Business Day.
These settlement procedures are established solely as a matter of administrative
convenience, and nothing contained in this Section 4.11 shall relieve the
Lenders of their obligations to fund Revolving Credit Loans on dates other than
a Settlement Date. The Administrative Agent may, at any time at its option, for
any reason whatsoever require each Lender to pay immediately to the
Administrative Agent such Lender's Ratable Share of the outstanding Revolving
Credit Loans and, each Lender may at any time require the Administrative Agent
to pay immediately to such Lender its Ratable Share of all payments made by the
Borrowers to the Administrative Agent with respect to the Revolving Credit
Loans.


                                       59



          4.12 BORROWERS' AGENT.

               Each Borrower hereby designates the Company as its representative
and agent (in such capacity, the "BORROWER AGENT") under the Loan Documents,
including for requests for Loans and Letters of Credit, designation of interest
rates, delivery or receipt of communications, preparation and delivery of
financial reports, and requests for waivers. The Borrower Agent hereby accepts
such appointment. The Administrative Agent and the Lenders may give any notice
or communication with a Borrower hereunder to the Borrower Agent on behalf of
such Borrower. Each Borrower agrees that any notice, election, communication,
representation, agreement or undertaking made on its behalf by the Borrower
Agent shall be binding upon and enforceable against it.

                        5. REPRESENTATIONS AND WARRANTIES

          5.1 REPRESENTATIONS AND WARRANTIES.

               The Loan Parties, jointly and severally, represent and warrant to
the Administrative Agent and each of the Lenders as follows:

               5.1.1 ORGANIZATION AND QUALIFICATION.

               Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
power to own or lease its properties necessary for its business and to engage in
the business it presently conducts or as of the Closing Date proposes to
conduct. Each Loan Party and each Subsidiary of each Loan Party is duly licensed
or qualified and in good standing in each domestic jurisdiction listed on
SCHEDULE 5.1.1 as of the Closing Date or, if applicable, such later date as to
which a version of such Schedule is updated in accordance with Section 5.3, and
in all other jurisdictions where the property owned or leased by it or the
nature of the business transacted by it or both makes such licensing or
qualification necessary except where the failure to do so would result in a
Material Adverse Change.

               5.1.2 SUBSIDIARIES.

               SCHEDULE 5.1.2 states as of the Closing Date or, if applicable,
such later date as to which a version of such Schedule is updated in accordance
with Section 5.3, the name of each of the Company's Subsidiaries, its
jurisdiction of incorporation, its authorized capital stock, the issued and
outstanding shares (referred to herein as the "SUBSIDIARY SHARES") and the
owners thereof if it is a corporation, its outstanding partnership interests
(the "PARTNERSHIP INTERESTS") if it is a partnership and its outstanding limited
liability company interests, interests assigned to managers thereof and the
voting rights associated therewith (the "LLC INTERESTS") if it is a limited
liability company. The Borrowers and each Subsidiary of the Borrowers have good
and marketable title to all of the Subsidiary Shares, Partnership Interests and
LLC Interests it purports to own, free and clear, in each case, of any Lien
except for Permitted Liens which attach to the assets of such Person generally.
All Subsidiary Shares, Partnership Interests and


                                       60



LLC Interests have been validly issued, and all Subsidiary Shares are fully paid
and nonassessable. All capital contributions and other consideration required to
be made or paid in connection with the issuance of the Partnership Interests and
LLC Interests have been made or paid, as the case may be. There are no options,
warrants or other rights outstanding to purchase any such Subsidiary Shares,
Partnership Interests or LLC Interests except as indicated as of the Closing
Date on SCHEDULE 5.1.2 or, if applicable, such later date as to which a version
of such Schedule is updated in accordance with Section 5.3. As of the Closing
Date each of the Material Subsidiaries of the Company is either a Borrower or a
Guarantor.

               5.1.3 POWER AND AUTHORITY.

               Each Loan Party has full power to enter into, execute, deliver
and carry out this Agreement and the other Loan Documents to which it is a
party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.

               5.1.4 VALIDITY AND BINDING EFFECT.

               This Agreement has been duly and validly executed and delivered
by each Loan Party, and each other Loan Document which any Loan Party is
required to execute and deliver on or after the date hereof will have been duly
executed and delivered by such Loan Party on the required date of delivery of
such Loan Document. This Agreement and each other Loan Document constitutes, or
will constitute, legal, valid and binding obligations of each Loan Party which
is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium or other
similar laws affecting the enforceability of creditors' rights generally,
general principles of equity (regardless of whether considered in a proceeding
in equity or at law) or limiting the right of specific performance.

               5.1.5 NO CONFLICT.

               Neither the execution and delivery of this Agreement or the other
Loan Documents by any Loan Party nor the consummation of the transactions herein
or therein contemplated or compliance with the terms and provisions hereof or
thereof by any of them will conflict with, constitute a default under or result
in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents of such Loan Party, (ii) any applicable Law, in
any material respect, or (iii) any agreement or instrument relating to
Indebtedness which would result in a Material Adverse Change or any other
material agreement or instrument or material order, writ, judgment, injunction
or decree to which such Loan Party or any of its Subsidiaries is a party or by
which it or any of its Subsidiaries is bound or to which it is subject, or
result in the creation or enforcement of any Lien, charge or encumbrance
whatsoever upon any property (now or hereafter acquired) of such


                                       61



Loan Party or any of its Subsidiaries (other than Liens, if any, granted under
the Loan Documents and Permitted Liens).

               5.1.6 LITIGATION.

               Except as disclosed as of the Closing Date on SCHEDULE 5.1.6 or,
if applicable, such later date as to which a version of such Schedule is updated
in accordance with Section 5.3, there are no actions, suits, proceedings or
investigations pending or, to the knowledge of any Loan Party, overtly
threatened against any Loan Party or any Subsidiary of such Loan Party at law or
equity before any Official Body which individually or in the aggregate would
result in any Material Adverse Change. None of the Loan Parties or any
Subsidiaries of any Loan Party is in violation of any order, writ, injunction or
any decree of any Official Body which would result in any Material Adverse
Change.

               5.1.7 TITLE TO PROPERTIES.

               Each Loan Party and each Subsidiary of each Loan Party has good
and marketable title to or valid leasehold interest in all properties, assets
and other rights which it purports to own or lease or which are reflected as
owned or leased on its books and records, free and clear of all Liens and
encumbrances except Permitted Liens, and subject to the terms and conditions of
the applicable leases.

               5.1.8 FINANCIAL STATEMENTS.

                    5.1.8.1 HISTORICAL STATEMENTS.

                    The Company has delivered to the Administrative Agent copies
of its audited consolidated year-end financial statements for and as of December
31, 2007, 2008 and 2009 (collectively, "HISTORICAL STATEMENTS"). The Historical
Statements were compiled from the books and records maintained by the Borrowers'
management, are correct and complete in all material respects and fairly
represent the consolidated financial condition of the Company and its
Subsidiaries as of their dates and the results of operations for the fiscal
periods then ended and have been prepared in accordance with GAAP consistently
applied.

                    5.1.8.2 ACCURACY OF FINANCIAL STATEMENTS.

                    As of the Closing Date, neither the Borrowers nor any
Subsidiary of the Borrowers have any material liabilities that are not disclosed
in the Historical Statements or in the notes thereto which would cause a
Material Adverse Change. Since December 31, 2009, no Material Adverse Change has
occurred.


                                       62



               5.1.9 USE OF PROCEEDS; MARGIN STOCK.

                    5.1.9.1 GENERAL.

                    The Loan Parties intend to use Letters of Credit and the
proceeds of the Loans in accordance with Section 2.10.

                    5.1.9.2 MARGIN STOCK.

                    None of the Loan Parties or their Subsidiaries engages or
intends to engage principally, or as one of its important activities, in the
business of extending credit for the purpose, immediately, incidentally or
ultimately, of purchasing or carrying margin stock (within the meaning of
Regulation U, T or X as promulgated by the Board of Governors of the United
States Federal Reserve System). No part of the proceeds of any Loan has been or
will be used, immediately, incidentally or ultimately, to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock or which is inconsistent with the provisions of the
regulations of the Board of Governors of the United States Federal Reserve
System. Following application of the proceeds of each Loan or drawing under each
Letter of Credit (if applicable), none of the Loan Parties or their Subsidiaries
holds or intends to hold margin stock in such amounts that more than 25% of the
reasonable value of the assets of the Loan Parties and their Subsidiaries on a
consolidated basis are or will be represented by margin stock.

               5.1.10 FULL DISCLOSURE.

               Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished in writing to the
Administrative Agent or any Lender in connection herewith or therewith, contains
any material misstatement of fact or omits to state any material fact necessary
to make the statements contained herein and therein, in light of the
circumstances under which they were made, not materially misleading; provided
that with respect to projected financial information or any information
concerning future proposed and intended activities of the Company and its
Subsidiaries, the Loan Parties represent only that such information was prepared
in good faith based upon assumptions believed to be reasonable at the time (it
being understood that such projections and information are forward looking
statements which by their nature are subject to significant uncertainties and
contingencies, many of which are beyond the Loan Parties' control, and that
actual results may differ, perhaps materially, from those expressed or implied
in such forward looking statements, and no assurance can be given that the
projections will be realized).

               5.1.11 TAXES.

               All federal income tax returns and all other material federal,
state, local and other material tax returns required to have been filed with
respect to each Loan Party and each Subsidiary of each Loan Party have been
filed, and payment or adequate provision has been made for the payment of all
taxes, fees, assessments and other governmental charges which have or may become
due pursuant to said returns or to assessments received, except to the extent
that


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such taxes, fees, assessments and other charges are being contested in good
faith by appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as shall be required by GAAP
shall have been made.

               5.1.12 CONSENTS AND APPROVALS.

               No consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Loan Documents by any Loan Party,
except as listed as of the Closing Date on SCHEDULE 5.1.12 or, if applicable,
such later date as to which a version of such Schedule is updated in accordance
with Section 5.3, all of which shall have been obtained or made on or prior to
the Closing Date except as otherwise indicated on SCHEDULE 5.1.12.

               5.1.13 NO EVENT OF DEFAULT; COMPLIANCE WITH INSTRUMENTS.

               No event has occurred and is continuing and no condition exists
or will exist after giving effect to the borrowings or other extensions of
credit to be made on the Closing Date under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of any term of its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents where such violation would
constitute a Material Adverse Change.

               5.1.14 PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.

               Each Loan Party and each Subsidiary of each Loan Party owns or
possesses, or has the right to use, all the material patents, trademarks,
service marks, trade names, copyrights, licenses, registrations, franchises,
permits and rights necessary to own and operate its properties and to carry on
its business as presently conducted and planned to be conducted by such Loan
Party or Subsidiary as of the Closing Date, without known possible, alleged or
actual conflict with the rights of others. All patents, trademarks, service
marks, trade names and copyrights of each Loan Party and each Subsidiary of each
Loan Party the absence of which, individually or collectively, would result in a
Material Adverse Change are listed and described on SCHEDULE 5.1.14.

               5.1.15 INSURANCE.

               The Loan Parties maintain insurance with reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each Loan Party and each Subsidiary of each Loan Party in accordance with
prudent business practice in the industry of the Loan Parties and their
Subsidiaries.


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               5.1.16 COMPLIANCE WITH LAWS.

               The Loan Parties and their Subsidiaries are in compliance in all
material respects with all applicable Laws (other than Environmental Laws which
are specifically addressed in Section 5.1.21) in all jurisdictions in which any
Loan Party or Subsidiary of any Loan Party is presently, or intends as of the
Closing Date to be, doing business except where the failure to do so would not
constitute a Material Adverse Change.

               5.1.17 MATERIAL CONTRACTS; BURDENSOME RESTRICTIONS.

               No default exists, in any material respect, on the part of any
Loan Party, with respect to any of the material contracts filed or incorporated
by reference in the Company's Annual Report on form 10-K for the fiscal year
ended December 31, 2009. None of the Loan Parties or their Subsidiaries is bound
by any contractual obligation, or subject to any restriction in any organization
document, or any requirement of Law which would result in a Material Adverse
Change.

               5.1.18 INVESTMENT COMPANIES; REGULATED ENTITIES.

               None of the Loan Parties or any Subsidiaries of any Loan Party is
an "investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control." None of the Loan
Parties or any Subsidiaries of any Loan Party is subject to any other Federal or
state statute or regulation limiting its ability to incur Indebtedness for
borrowed money.

               5.1.19 PLANS AND BENEFIT ARRANGEMENTS.

               Except to the extent that a Material Adverse Change would not
result therefrom:

                    (i) The Loan Parties are in compliance in all respects with
any applicable provisions of ERISA with respect to all Benefit Arrangements,
Plans and Multiemployer Plans. There has been no Prohibited Transaction with
respect to any Benefit Arrangement or any Plan or, to the best knowledge of the
Loan Parties, with respect to any Multiemployer Plan or Multiple Employer Plan,
which could result in any liability of the Loan Parties. The Loan Parties and
all other members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each Plan
and Multiemployer Plan, the Loan Parties and each other member of the ERISA
Group (i) have fulfilled their obligations under the minimum funding standards
of ERISA, (ii) have not incurred any liability to the PBGC (other than the
payment of premiums due in the ordinary course of business), and (iii) have not
had asserted against them any penalty for failure to fulfill the minimum funding
requirements of ERISA. All Plans, Benefit Arrangements and Multiemployer Plans
have been administered in accordance with their terms and applicable Law.


                                       65



                    (ii) To the best of the Loan Parties' knowledge, each
Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
when due.

                    (iii) Neither the Loan Parties nor any other member of the
ERISA Group has instituted or intends to institute proceedings to terminate any
Plan.

                    (iv) No event requiring notice to the PBGC under Section
303(k)(4) of ERISA has occurred or is reasonably expected to occur with respect
to any Plan.

                    (v) The present value of all accumulated benefit obligations
under each Plan (based on the assumptions used for purposes of Statement of
Financial Accounting Standards No. 87) did not, as of the date of the most
recent financial statements reflecting such amounts, exceed the fair market
value of the assets of such Plan as reflected on such financial statements.

                    (vi) Neither the Loan Parties nor any other member of the
ERISA Group has incurred or reasonably expects to incur any withdrawal liability
under ERISA to any Multiemployer Plan or Multiple Employer Plan. Neither the
Loan Parties nor any other member of the ERISA Group has been notified by any
Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan or
Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of the Loan Parties, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.

                    (vii) To the extent that any Benefit Arrangement is insured,
the Loan Parties have paid when due all premiums required to be paid for all
periods through the Closing Date. To the extent that any Benefit Arrangement is
funded other than with insurance, the Loan Parties have made when due all
contributions required to be paid for all periods through the Closing Date.

                    (viii) All Plans, Benefit Arrangements and Multiemployer
Plans have been administered in accordance with their terms and applicable Law.

               5.1.20 EMPLOYMENT MATTERS.

               Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state and local
labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations, minimum wage, overtime,
child labor, medical insurance continuation, worker adjustment and relocation
notices, immigration controls and worker and unemployment compensation, except
where the failure to comply would not constitute a Material Adverse Change.
There are no outstanding grievances, arbitration awards or appeals therefrom
arising out of the Labor Contracts or current or, to the knowledge of any Loan
Party, threatened strikes, picketing, handbilling or other work stoppages or
slowdowns at facilities of any of the Loan Parties or any of their Subsidiaries
which in any case would constitute a Material Adverse Change. The


                                       66



Borrowers have delivered to the Administrative Agent true and correct copies of
each of the Labor Contracts (excluding individual employment contracts with
individual employees).

               5.1.21 ENVIRONMENTAL MATTERS.

               Except (i) as disclosed in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2009, including Note 21 to the
Consolidated Financial Statements, to the extent that reserves have been set
aside as set forth in such statements, and provided that such matters would not
result in a Material Adverse Change, or (ii) except to the extent that a
Material Adverse Change would not result therefrom:

                    (i) None of the Loan Parties has received, or has been
overtly threatened with, any Environmental Complaint, whether directed or issued
to such Loan Party or relating or pertaining to any prior owner, operator or
occupant of the Property.

                    (ii) No activity of any Loan Party at the Property is being
or has been conducted in violation of any Environmental Law or Required
Environmental Permit and to the knowledge of any Loan Party, no activity of any
prior owner, operator or occupant of the Property was conducted in violation of
any Environmental Law.

                    (iii) To the knowledge of the Loan Parties, there are no
Regulated Substances present on, in, under, or emanating from, or to any Loan
Party's knowledge emanating to, the Property or any portion thereof which result
in Contamination.

                    (iv) Each Loan Party has all Required Environmental Permits
and all such Required Environmental Permits are in full force and effect.

                    (v) Each Loan Party has submitted to an Official Body and/or
maintains, as appropriate, all Required Environmental Notices.

                    (vi) No structures, improvements, equipment, fixtures,
impoundments, pits, lagoons or aboveground or underground storage tanks located
on the Property contain or use, except in compliance with Environmental Laws and
Required Environmental Permits, Regulated Substances or otherwise are operated
or maintained except in compliance with Environmental Laws and Required
Environmental Permits.

                    (vii) No portion of the Property is identified or to the
knowledge of any Loan Party, proposed to be identified on any list of
contaminated properties or other properties which pursuant to Environmental Laws
are the subject of an investigation or remediation action by an Official Body,
nor to the knowledge of any Loan Party is any portion of any property adjoining
or in the near proximity of such portion of the Property identified or proposed
to be identified on any such list.

                    (viii) No lien or other encumbrance authorized by
Environmental Laws exists against the Property and the Loan Parties have no
reason to believe that such a lien or encumbrance will be imposed.


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               5.1.22 SENIOR DEBT STATUS.

               The Obligations of each Loan Party under this Agreement, the
Notes, the Guaranty Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of payment with
all other Indebtedness of such Loan Party. There is no Lien upon or with respect
to any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures Indebtedness or other obligations of any Person except for
Permitted Liens.

               5.1.23 ANTI-TERRORISM LAWS.

                    5.1.23.1 GENERAL.

                    None of the Loan Parties nor or any Subsidiaries of any Loan
Party (or to its knowledge any Affiliate of any Loan Party), is in violation of
any Anti-Terrorism Law or engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

                    5.1.23.2 ANTI-MONEY LAUNDERING.

                    (i) The Loan Parties acknowledge that, pursuant to the
Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Canada) and
other applicable anti-money laundering, anti-terrorist financing, government
sanction and "know your client" Laws, whether within Canada or elsewhere
(collectively, including any guidelines or orders thereunder, "AML
LEGISLATION"), the Lenders and the Administrative Agent may be required to
obtain, verify and record information regarding the Loan Parties, their
respective directors, authorized signing officers, direct or indirect
shareholders or other Persons in control of the Loan Parties, and the
transactions contemplated hereby. The Loan Parties shall promptly provide all
such information, including supporting documentation and other evidence, as may
be reasonably requested by any Lender or the Administrative Agent, or any
prospective assign or participant of a Lender or the Administrative Agent, in
order to comply with any applicable AML Legislation, whether now or hereafter in
existence.

                    (ii) If the Administrative Agent has ascertained the
identity of the Loan Parties or any authorized signatories of the Loan Parties
for the purposes of applicable AML Legislation, then the Administrative Agent:

               (a) shall be deemed to have done so as an agent for each Lender,
               and this Agreement shall constitute a "written agreement" in such
               regard between each Lender and the Administrative Agent within
               the meaning of applicable AML Legislation; and

               (b) shall provide to each Lender copies of all information
               obtained in such regard without any representation or warranty as
               to its accuracy or completeness.


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                    Notwithstanding the preceding sentence and except as may
otherwise be agreed in writing, each of the Lenders agrees that the
Administrative Agent has no obligation to ascertain the identity of the Loan
Parties or any authorized signatories of the Loan Parties on behalf of any
Lender, or to confirm the completeness or accuracy of any information it obtains
from the Loan Parties or any such authorized signatory in doing so.

                    5.1.23.3 EXECUTIVE ORDER NO. 13224.

                    None of the Loan Parties, nor or any Subsidiaries of any
Loan Party (or to its knowledge any Affiliate of any Loan Party or, to the
knowledge of any Loan Party, their respective agents acting or benefiting in any
capacity in connection with the Loans, Letters of Credit or other transactions
hereunder), is any of the following (each a "BLOCKED PERSON"):

                    (i) a Person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order No. 13224;

                    (ii) a Person owned or controlled by, or acting for or on
behalf of, any Person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order No. 13224;

                    (iii) a Person or entity with which any Lender is prohibited
from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;

                    (iv) a Person or entity that commits, threatens or conspires
to commit or supports "terrorism" as defined in the Executive Order No. 13224;

                    (v) a Person or entity that is named as a "specially
designated national" on the most current list published by the U.S. Treasury
Department Office of Foreign Asset Control at its official website or any
replacement website or other replacement official publication of such list, or

                    (vi) a person or entity who is affiliated or associated with
a person or entity listed above.

                    No Loan Party or, to the knowledge of any Loan Party, any of
its agents acting in any capacity in connection with the Loans, Letters of
Credit or other transactions hereunder (i) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order No. 13224.


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          5.2 CONTINUATION OF REPRESENTATIONS.

               The Loan Parties make the representations and warranties in this
Section 5 on the date hereof and on the Closing Date and each date thereafter on
which a Loan is made or a Letter of Credit is issued as provided in and subject
to Sections 2 and 6.

          5.3 UPDATES TO SCHEDULES.

               The Company, on behalf of all Loan Parties, shall, at the time of
delivery of the financial statements required pursuant to Section 7.3.2 and the
related Compliance Certificate of the Company, provide to the Administrative
Agent in writing such revisions or updates to the Schedules attached hereto
pursuant to Section 5 as may be necessary or appropriate to update or correct
same; provided that, in the case the Company reasonably determines that any such
Schedule is incorrect in any respect which is material (whether material to the
Schedule itself, taken as a whole and in the context of the related
representations and warranties, or otherwise material), the Company, on behalf
of all Loan Parties, shall promptly revise or update same in advance of delivery
of such financial statements and Compliance Certificate; and provided further
that no such Schedule shall be deemed to have been amended, modified or
superseded by any such correction or update, nor shall any breach of warranty or
representation resulting from the inaccuracy or incompleteness of any such
Schedule be deemed to have been cured thereby, unless and until the Required
Lenders shall have accepted in writing such revisions or updates to such
Schedule. References to a particular Schedule in this Agreement shall be deemed
to refer to the most recent updated version of such Schedule, once so accepted.

           6. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

               The obligation of each Lender to make Loans and of the
Administrative Agent to issue Letters of Credit hereunder is subject to the
satisfaction of the following conditions:

          6.1 FIRST LOANS AND LETTERS OF CREDIT.

               On the Closing Date:

               6.1.1 OFFICER'S CERTIFICATE.

               The representations and warranties of each of the Loan Parties
contained in Section 5 and in each of the other Loan Documents shall be true and
accurate on and as of the Closing Date in all material respects with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which relate solely to an
earlier date or time, which representations and warranties shall be true and
correct on and as of the specific dates or times referred to therein); no Event
of Default or Potential Default shall have occurred and be continuing or shall
exist; and there shall be delivered to the Administrative Agent for the benefit
of each Lender a certificate of the Company


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on behalf of each of the Loan Parties (other than the German Borrowers which
shall comply with Section 7.1.12), dated the Closing Date and signed by a
Responsible Officer of the Company on behalf of each of the Loan Parties, to
each such effect.

               6.1.2 SECRETARY'S CERTIFICATE.

               There shall be delivered to the Administrative Agent for the
benefit of each Lender a certificate dated the Closing Date and signed by the
Secretary or an Assistant Secretary of each of the Loan Parties (other than the
German Borrowers and the English Borrowers, which shall comply with Section
7.1.12), certifying as appropriate as to:

                    (i) the names of the officer or officers authorized to sign
this Agreement and the other Loan Documents and the true signatures of such
officer or officers and specifying the Authorized Officers permitted to act on
behalf of each Loan Party for purposes of this Agreement and the true signatures
of such officers, on which the Administrative Agent and each Lender may
conclusively rely;

                    (ii) copies of resolutions of the board of directors or
comparable managing body approving and adopting the Loan Documents, the
transactions contemplated therein and authorizing the execution, delivery and
performance thereof, certified by the Secretary (or equivalent) and, as to the
authority of such Secretary (or equivalent), an Authorized Officer, of each Loan
Party as of the Closing Date to be true and correct as of such date; and

                    (iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date certified by the appropriate state
official where such documents are filed in a state office (to the extent such
documents are filed in a state office) together with certificates from the
appropriate state officials as to the continued existence and good standing of
each Loan Party in each state where organized or qualified to do business.

               6.1.3 DELIVERY OF LOAN DOCUMENTS.

               The Guaranty Agreement shall have been duly executed and
delivered to the Administrative Agent for the benefit of the Lenders.

               6.1.4 OPINION OF COUNSEL.

                    (i) There shall be delivered to the Administrative Agent for
the benefit of each Lender a written opinion of counsel to each of the Loan
Parties (other than counsel for the German Borrowers and the English Borrowers;
opinions of such counsel shall be delivered in accordance with Section 7.1.12),
including Shearman & Sterling LLP, dated the Closing Date and in form and
substance reasonably satisfactory to the Administrative Agent and its counsel as
to the matters set forth in EXHIBIT 6.1.4.


                                       71



               6.1.5 LEGAL DETAILS.

               All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Administrative Agent and counsel
for the Administrative Agent, and the Administrative Agent shall have received
all such other counterpart originals or certified or other copies of such
documents and proceedings in connection with such transactions, in form and
substance satisfactory to the Administrative Agent and said counsel, as the
Administrative Agent or said counsel may reasonably request.

               6.1.6 PAYMENT OF FEES.

               The Borrowers shall have paid or caused to be paid to the
Administrative Agent for itself and for the account of the Lenders, as
appropriate, to the extent not previously paid all commitment and other fees
accrued through the Closing Date and the costs and expenses for which the
Administrative Agent and the Lenders are entitled to be reimbursed.

               6.1.7 CONSENTS.

               All material consents required to effectuate the transactions
contemplated hereby as set forth on SCHEDULE 5.1.12 shall have been obtained.

               6.1.8 OFFICER'S CERTIFICATE REGARDING MACS.

               Since December 31, 2009, no Material Adverse Change shall have
occurred; and there shall have been delivered to the Administrative Agent for
the benefit of each Lender a certificate dated the Closing Date and signed by a
Responsible Officer of the Company to such effect.

               6.1.9 NO VIOLATION OF LAWS.

               The making of the Loans and the issuance of the Letters of Credit
shall not contravene any material Law applicable to any Loan Party.

               6.1.10 NO ACTIONS OR PROCEEDINGS; NO MATERIAL LITIGATION.

               No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby. No litigation,
which if adversely decided would reasonably be expected to result in a Material
Adverse Change, shall have been instituted or overtly threatened against any of
the Loan Parties, except for unresolved environmental matters disclosed in the
Company's Annual Report Form 10-K for the fiscal year ended December 31, 2009,
including Note 21 to the Consolidated Financial Statements.


                                       72



               6.1.11 OTHER REQUIREMENTS.

               The Loan Parties shall have delivered evidence of insurance
complying with Section 7.1.3, the Administrative Agent shall be satisfied as to
the amount and nature of all tax, ERISA, employee retirement benefit and other
contingent liabilities to which the Loan Parties may be subject, and the Prior
Senior Credit Facility shall have been terminated and satisfied in form and
substance reasonably satisfactory to the Administrative Agent.

          6.2 EACH ADDITIONAL LOAN OR LETTER OF CREDIT.

               At the time of making any Loans or issuing any Letters of Credit
other than Loans made or Letters of Credit issued on the Closing Date and after
giving effect to the proposed extensions of credit: the representations and
warranties of the Loan Parties contained in Section 5 and in the other Loan
Documents shall be true in all material respects on and as of the date of such
additional Loan or Letter of Credit with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which expressly relate solely to an earlier date
or time, which representations and warranties shall be true and correct on and
as of the specific dates or times referred to therein); no Event of Default or
Potential Default shall have occurred and be continuing or shall exist; and the
Borrowers shall have delivered to the Administrative Agent a duly executed and
completed Loan Request or application for a Letter of Credit as the case may be.

          6.3 LOANS TO FUND ACQUISITIONS.

               In connection with the making of any Loan or issuance of any
Letter of Credit to finance any Permitted Acquisition, the Company shall comply
with Section 7.2.6 and, if applicable, deliver any updates to disclosure
schedules required by Section 5.3.

                                  7. COVENANTS

          7.1 AFFIRMATIVE COVENANTS.

               The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings, and interest thereon, expiration or termination of all
Letters of Credit, satisfaction of all of the Loan Parties' other Obligations
(other than non-assessed contingent reimbursement obligations) under the Loan
Documents and termination of the Commitments, the Loan Parties shall comply at
all times with the following affirmative covenants:

               7.1.1 PRESERVATION OF EXISTENCE, ETC.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain its legal existence as a corporation, limited partnership or
limited liability company and its license or qualification and good standing in
each jurisdiction in which its ownership or lease of property or the nature of
its business makes such license or qualification necessary, except (i) as


                                       73



otherwise expressly permitted in Section 7.2.6 or (ii) except to the extent the
failure to do so would not be reasonably expected to result in a Material
Adverse Change.

               7.1.2 PAYMENT OF LIABILITIES, INCLUDING TAXES, ETC.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, duly pay and discharge all material liabilities to which it is subject or
which are asserted against it, promptly as and when the same shall become due
and payable, including all material taxes, assessments and governmental charges
upon it or any of its properties, assets, income or profits, prior to the date
on which penalties attach thereto, except to the extent that such material
liabilities, including taxes, assessments or charges, are being contested in
good faith and by appropriate and lawful proceedings diligently conducted and
for which such reserve or other appropriate provisions, if any, as shall be
required by GAAP shall have been made, but only to the extent that failure to
discharge any such material liabilities would result in a Material Adverse
Change, provided that the Loan Parties and their Subsidiaries will pay all such
material liabilities forthwith upon the commencement of proceedings to foreclose
any Lien which may have attached as security therefor.

               7.1.3 MAINTENANCE OF INSURANCE.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, insure its properties and assets against loss or damage by fire and such
other insurable hazards as such assets are commonly insured (including fire,
extended coverage, property damage, workers' compensation, public liability and
business interruption insurance) and against other risks (including errors and
omissions) in such amounts as similar properties and assets are insured by
prudent companies in similar circumstances carrying on similar businesses, and
with reputable and financially sound insurers, including self-insurance to the
extent customary.

               7.1.4 MAINTENANCE OF PROPERTIES AND LEASES.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in good repair, working order and condition (ordinary wear and tear
excepted) in accordance with the general practice of other businesses of similar
character and size, all of those properties useful or necessary to its business,
and from time to time, such Loan Party will make or cause to be made all
appropriate repairs, renewals or replacements thereof, except, in each case,
where the failure to do so would not reasonably be expected to result in a
Material Adverse Change.

               7.1.5 MAINTENANCE OF PATENTS, TRADEMARKS, ETC.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in full force and effect all patents, trademarks, service marks,
trade names, copyrights, licenses, franchises, permits and other authorizations
deemed necessary by such Loan Party for the ownership and operation of its
properties and business if the failure so to maintain the same would constitute
a Material Adverse Change.


                                       74



               7.1.6 VISITATION RIGHTS.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, permit any of the officers or authorized employees or representatives of the
Administrative Agent, or any of the Lenders through the Administrative Agent, to
visit and inspect any of its properties and to examine and make excerpts from
its books and records and discuss its business affairs, finances and accounts
with its officers, all in such detail and at such times during normal business
hours and as often as any of the Lenders may reasonably request, provided that
the Administrative Agent or the applicable Lender, through the Administrative
Agent, shall provide the Borrowers with reasonable notice prior to any visit or
inspection, and provided further that if no Event of Default or Potential
Default has occurred and is continuing, such visits and inspections shall be
limited to no more frequently than once per fiscal year. In the event any Lender
desires to visit and inspect the properties of any Loan Party as provided in
this Section, such Lender shall make reasonable efforts to ensure that such
visit and inspection is conducted contemporaneously with any visit and
inspection to be performed by the Administrative Agent.

               7.1.7 KEEPING OF RECORDS AND BOOKS OF ACCOUNT.

               The Borrowers shall, and shall cause each Subsidiary of the
Borrowers to, maintain and keep proper books of record and account which enable
the Borrowers and their Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrowers or any Subsidiary of the Borrowers, and
in which full, true and correct entries shall be made in all material respects
of all its dealings and business and financial affairs.

               7.1.8 PLANS AND BENEFIT ARRANGEMENTS.

               The Loan Parties shall, and shall cause each other member of the
ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Loan Parties shall cause all of their Plans and all Plans maintained by any
member of the ERISA Group to be funded in accordance with the minimum funding
requirements of ERISA and shall make, and cause each member of the ERISA Group
to make, in a timely manner, all contributions due to Plans, Benefit
Arrangements and Multiemployer Plans.

               7.1.9 COMPLIANCE WITH LAWS.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, comply with all applicable Laws, including all Environmental Laws, in all
respects, provided that it shall not be deemed to be a violation of this Section
7.1.9 if any failure to comply with any Law would not result in fines,
penalties, remediation costs, other similar liabilities or injunctive relief
which in the aggregate would constitute a Material Adverse Change.


                                       75



               7.1.10 JOINDER OF GUARANTORS AND BORROWERS.

               Any Material Subsidiary of the Borrowers which is required to
join this Agreement as a Guarantor or any Subsidiary which elects to join this
Agreement as a Borrower pursuant to Section 7.2.9 shall execute and deliver to
the Administrative Agent (i) a Guarantor Joinder or Borrower Joinder, as
applicable, pursuant to which it shall join as a Guarantor or Borrower each of
the Loan Documents to which the Guarantors or Borrowers are parties; and (ii)
documents in substantially the forms described in Sections 6.1.1 through 6.1.4
and 6.1.7 (or, in the case of an English Borrowers, Sections 6.1.1 through
6.1.3, 7.1.12 and 6.1.7; or, in the case of a German Borrower, Sections 7.1.12
and 6.1.7), modified as appropriate to relate to such Material Subsidiary. The
Loan Parties shall deliver such items referred to in the preceding clauses (i)
and (ii) to the Administrative Agent (a) in connection with the formation of a
domestic Material Subsidiary, within ten (10) Business Days after the date of
the filing of such Subsidiary's articles of incorporation if the Subsidiary is a
corporation, the date of the filing of its certificate of limited partnership if
it is a limited partnership or the date of its organization if it is an entity
other than a limited partnership or corporation, (b) in connection with the
formation of a Material Subsidiary that is a Foreign Subsidiary, within twenty
(20) Business Days after the date of the filing of such Subsidiary's articles of
incorporation if the Subsidiary is a corporation, the date of the filing of its
certificate of limited partnership if it is a limited partnership or the date of
its organization if it is an entity other than a limited partnership or
corporation, (c) in connection with the acquisition of a domestic Material
Subsidiary, within ten (10) Business Days of consummation of the acquisition
transaction, (d) in connection with the acquisition of a Material Subsidiary
that is a Foreign Subsidiary, within twenty (20) Business Days of consummation
of the acquisition transaction, or (e) in the event of any other occurrence or
circumstance resulting in the existence of a Material Subsidiary of the
Borrowers, within ten (10) Business Days of such Person becoming a Material
Subsidiary of the Borrowers in the case of a domestic Material Subsidiary and
twenty (20) Business Days of such Person becoming a Material Subsidiary in the
case of a Material Subsidiary that is a Foreign Subsidiary, provided that in
each case the Administrative Agent may permit additional time, not to exceed
five (5) Business Days, for a Material Subsidiary to comply with this Section
7.1.10.

               7.1.11 ANTI-TERRORISM LAWS.

               The Loan Parties shall not knowingly (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order No. 13224; or (iii) engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law.
The Company (or, if required by applicable Law, the Borrowers) shall deliver to
Lenders any certification or other evidence requested from time to time by any
Lender in its sole discretion, confirming Borrowers' compliance with this
Section 7.1.11.


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               7.1.12 GERMAN AND ENGLISH BORROWERS.

               On or before the Closing Date, and such other times as may be
required pursuant to the provisions of this Agreement, the applicable Loan
Parties shall complete all of the following actions:

                    (1) German Borrowers:

                         (i) Authorization. The German Borrowers shall take all
appropriate corporate action required to authorize and ratify the execution and
delivery of the Loan Documents by the German Borrowers and the consummation of
the transactions thereunder by such German Borrowers.

                         (ii) Officer's Certificate. Each of the German
Borrowers shall deliver to the Administrative Agent an officer's certificate in
relation to each such German Borrower in the form described in Sections 6.1.1
and 6.1.2 as conformed to German market standard and containing the attachments
listed in clauses (i), (ii) and (iii) of Section 6.1.2, which in relating to
clauses (i) and (iii) thereof shall consist of: (a) an up-to-date extract from
the commercial register (Handelsregisterausdruck); (b) a copy of the current
articles of association (Satzung) certified by the commercial register, or a
copy of the current partnership agreement (Gesellschaftsvertrag), as applicable;
(c) if applicable, a copy of the current shareholder list certified by the
commercial register; (d) a copy of a resolution of the shareholders of such
German Borrower; and (e) if applicable, a copy of a resolution of the
supervisory board (Aufsichtsrat) and/or advisory board (Beirat) of each such
German Borrower; in the case of the preceding items (d) and (e) above, approving
the terms of, and the transactions contemplated by, this Agreement and the Loan
Documents to which each such German Borrower is or is to be a party.

                         (iii) Opinion of Counsel. The German Borrowers shall
deliver to the Administrative Agent an Opinion of their German counsel in a form
acceptable to the Administrative Agent which confirms the capacity of the German
Borrowers in execution and performance of the relevant Loan Documents, and
confirms the enforceability under the Laws of Germany of a judgment rendered
against such German Borrowers under the Laws of the United States.

                    (2) English Borrowers:

                         (i) Officer's Certificate. Each of the English
Borrowers shall deliver to the Administrative Agent an officer's certificate in
relation to each such English Borrower in the form described in Sections 6.1.1
and 6.1.2 as conformed to English market standard and containing as attachments
copies of the current memorandum and articles of association of each such
English Borrower approving the terms of, and the transactions contemplated by,
this Agreement and the Loan Documents to which each such English Borrower is or
is to be a party.


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                         (ii) Opinion of Counsel. The English Borrowers shall
deliver to the Administrative Agent an Opinion of its English counsel in a form
acceptable to the Administrative Agent which confirms the matters described in
Section 6.1.4 with respect to the English Borrowers required to be confirmed by
the Administrative Agent, and confirms the enforceability under the Laws of
England and Wales of a judgment rendered against such English Borrowers under
the Laws of the United States.

          7.2 NEGATIVE COVENANTS.

               The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations (other
than non-assessed contingent reimbursement obligations) under the Loan Documents
and termination of the Commitments, the Loan Parties shall comply with the
following negative covenants:

               7.2.1 INDEBTEDNESS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:

                    (i) Indebtedness under the Loan Documents;

                    (ii) existing Indebtedness as set forth on SCHEDULE 7.2.1;

                    (iii) Indebtedness incurred pursuant to capitalized leases;

                    (iv) the 2006 Senior Notes in a maximum principal amount
outstanding not to exceed $200,000,000, at any time, and the 2010 Senior Notes,
in a maximum principal amount outstanding not to exceed $100,000,000;

                    (v) Indebtedness secured by Purchase Money Security
Interests;

                    (vi) Indebtedness of a Loan Party to another Loan Party
(subject to compliance with Section 7.2.4(v)), provided that such Indebtedness
is subordinated to the Obligations pursuant to the terms and conditions of the
Intercompany Subordination Agreement, provided further that Indebtedness
initially incurred by the Company to Pulp Wood and immediately contributed by
Pulp Wood to GPW VA Timberlands or a Monetization Entity (after which time such
Indebtedness constituted a portion of the Permitted Timberland Intercompany
Indebtedness and/or Permitted Additional Timberland Intercompany Indebtedness)
shall not be subordinated to the Obligations and shall not constitute
"Intercompany Indebtedness" under the Intercompany Subordination Agreement;

                    (vii) any Interest Rate, Currency and Commodity Hedge;


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                    (viii) Guaranties by the Loan Parties or their Subsidiaries
permitted under Section 7.2.3;

                    (ix) Permitted Timberland Indebtedness of GPW VA
Timberlands;

                    (x) Permitted Additional Timberland Indebtedness of GPW VA
Timberlands or a Monetization Entity in an aggregate amount not to exceed
$80,000,000.00 outstanding at any time;

                    (xi) unsecured Indebtedness incurred pursuant to or to
finance a Permitted Acquisition;

                    (xii) Indebtedness of the Receivables Entity under the, or
in connection with a, Permitted Accounts Receivable Program;

                    (xiii) Permitted Timberland Intercompany Indebtedness in an
aggregate principal amount not to exceed $15,000,000.00 outstanding at any time;

                    (xiv) Permitted Additional Timberland Intercompany
Indebtedness in an aggregate principal amount not to exceed $15,000,000.00
outstanding at any time;

                    (xv) Fox River OU3-5 Related Debt;

                    (xvi) refinancings, refundings, renewals or extensions of
Indebtedness permitted by

                    (A) clauses (ii) or (iv), provided that (x) the amount of
such Indebtedness is not increased at the time of such refinancing, refunding,
renewal or extension except by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection
with such refinancing and by an amount equal to any existing commitments
unutilized thereunder, and (y) unless otherwise consented by the Administrative
Agent, the terms relating to interest, amortization, maturity, collateral (if
any), recourse, and subordination (if any), and other material terms of any such
refinancing, refunding, renewing or extending Indebtedness, and of any agreement
entered into and of any instrument issued in connection therewith, do not
materially differ from those applicable to the original Indebtedness permitted
hereunder except to the extent necessary to conform with prevailing market
terms; or

                    (B) clauses (ix), (x), (xiii) and (xiv), provided that (x)
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder, and (y) unless otherwise
consented by the Administrative Agent, the terms relating to interest,
amortization,


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maturity, collateral (if any), recourse, and subordination (if any), and other
material terms of any such refinancing, refunding, renewing or extending
Indebtedness, and of any agreement entered into and of any instrument issued in
connection therewith, do not materially differ from those applicable to the
original Indebtedness permitted hereunder except to the extent necessary to
conform with prevailing market terms;

                    (xvii) unsecured Indebtedness not otherwise permitted under
one of the sub-clauses of this Section 7.2.1, in an aggregate amount not to
exceed $75,000,000.00 outstanding at any time; and

                    (xviii) secured Indebtedness and other secured obligations
in an aggregate principal amount not to exceed $30,000,000.00 outstanding at any
time, to the extent that the Liens securing such Indebtedness and other
obligations are otherwise permitted under Section 7.2.2.

               7.2.2 LIENS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens.

               7.2.3 GUARANTIES.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty of Indebtedness, or assume, guarantee, become surety
for, endorse or otherwise agree, become or remain directly or contingently
liable upon or with respect to any Indebtedness of any other Person, except for
Guaranties of the Loan Parties and their Subsidiaries of Indebtedness of other
Loan Parties or their Subsidiaries, to the extent such Indebtedness is permitted
under Section 7.2.1 (other than clause (viii) of such Section), and then only so
long as such Guaranties would not violate Sections 7.2.4, 7.2.9 and 7.2.17.

               7.2.4 LOANS AND INVESTMENTS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time make or suffer to remain outstanding any loan
or advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) or limited
liability company interest in, or any other investment or interest in, or make
any capital contribution to, any other Person, except:

                    (i) investments identified on Part I of Schedule 7.2.4
hereto;

                    (ii) trade credit extended on usual and customary terms in
the ordinary course of business;


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                    (iii) loans or advances to employees, officers or directors
in the ordinary course of business in an aggregate principal amount not to
exceed $2,000,000.00 at any time outstanding, provided that such loans and
advances shall comply with all applicable Law;

                    (iv) Permitted Investments;

                    (v) (a) loans and advances to Foreign Loan Parties existing
as of the Closing Date identified on Part II of Schedule 7.2.4 hereto, together
with any refinancings, refundings, renewals or extensions thereof provided that
the amount of such Indebtedness is not increased at the time of such
refinancing, refunding, renewal or extension except by an amount equal to a
reasonable premium or other reasonable amount paid, and fees and expenses
reasonably incurred, in connection with such refinancing and by an amount equal
to any existing commitments unutilized thereunder, (b) other loans and advances
to Foreign Loan Parties existing after the Closing Date in an aggregate amount
not to exceed $20,000,000, provided that if the aggregate amount of other loans
and advances to Foreign Loan Parties existing after the Closing Date exceeds
$20,000,000, an Event of Default shall not occur so long as the Loan Parties
pledge to the Administrative Agent, for its benefit and the benefit of the
Lenders, the required amount of Pledged Loans pursuant to Section 10.19, (c)
loans, advances and investments to and in Loan Parties which are not Foreign
Loan Parties, and (d) investments, not in the form of loans or advances, in
Foreign Loan Parties;

                    (vi) Permitted Acquisitions;

                    (vii) loans and investments in connection with a Permitted
Accounts Receivable Program;

                    (viii) additional investments to or in a Person, provided
that such investments measured at the time of the making thereof (determined
without regard to any write-down or write-offs thereof and net of cash payments
of principal in the case of loans and cash equity returns, whether as a dividend
or a redemption in the case of equity investments) do not exceed in the
aggregate the greater of $60,000,000.00 and 5% of Consolidated Total Assets as
determined as of the most recent fiscal year and for which financial statements
are required to be delivered hereunder;

                    (ix) receivables, prepaid expenses or deposits owing to the
Borrowers or any receivables, prepaid expenses, deposits or advances to
suppliers, in each case if created, acquired or made in the ordinary course of
business and payable or dischargeable in accordance with customary trade terms;

                    (x) Guaranties by the Loan Parties of Indebtedness of (a)
other Loan Parties and (b) other Non-Loan Party Subsidiaries, to the extent such
Guaranties are permitted under Section 7.2.3 and such Indebtedness is permitted
under Section 7.2.1;


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                    (xi) debt securities, seller notes and other similar
investments made as a result of the receipt of partial non-cash consideration
from a sale of assets which is permitted hereunder (excluding sales of
timberland); and

                    (xii) (a) the Glawson Note and (b) other similar investments
in the form of Indebtedness from timberland purchasers to finance the purchase
price under Permitted Timberland Installment Sales in an aggregate amount not to
exceed $80,000,000.00 outstanding at any time, which Indebtedness is monetized
through the issuance of Permitted Timberland Indebtedness or Permitted
Additional Timberland Indebtedness.

               7.2.5 DIVIDENDS AND RELATED DISTRIBUTIONS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to make or pay, or agree to become or remain liable to make or
pay, any Restricted Payment unless no Material Event of Default exists or would
be caused thereby, except (a) dividends or other distributions payable to a Loan
Party or a Non-Loan Party Subsidiary, provided that Loan Parties may only make
dividends and distributions to Non-Loan Party Subsidiaries to the extent a
dividend or distribution in a corresponding amount is also made (concurrently or
immediately thereafter) from the recipient Non-Loan Party Subsidiary to a Loan
Party; (b) dividend payments or other distributions payable solely in the common
stock or other common equity interests of such Person; (c) in the ordinary
course of business or consistent with past practices, repurchase, retire or
otherwise acquire for value equity interests (including any restricted stock or
restricted stock units) held by any present, future or former employee,
director, officer or consultant (or any Affiliate, spouse, former spouse, other
immediate family member, successor, executor, administrator, heir, legatee or
distributee of any of the foregoing) of the Company or any of its Subsidiaries
pursuant to any employee, management or director benefit plan or any agreement
(including any stock subscription or shareholder agreement) with any employee,
director, officer or consultant of the Company or any Subsidiary; (d) the
proceeds of which shall be used to pay customary salary, bonus and other
benefits payable to officers; (e) dividends permitted to be made hereunder
within sixty (60) days of the date of declaration thereof; and (f) other
Restricted Payments in an aggregate amount not to exceed $5,000,000.00 in any
fiscal year; subject, in each case, to compliance with Section 7.2.9.

               7.2.6 LIQUIDATIONS, MERGERS, CONSOLIDATIONS, ACQUISITIONS.

               Each of the Loan Parties shall not, and shall permit any of its
Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party
to any merger or consolidation, or acquire by purchase, lease or otherwise all
or substantially all of the assets or capital stock or other equity interests of
any other Person, and further provided that

                    (i) (a) any Loan Party other than the Company or any
Non-Loan Party Subsidiary may consolidate or merge into another Loan Party or
Non-Loan Party Subsidiary, (b) any Loan Party may acquire whether by purchase,
merger, lease or otherwise, all or substantially all of the assets or capital
stock or other equity interests of another Loan Party (other than the Company)
or a Non-Loan Party Subsidiary, and (c) any Non-Loan Party Subsidiary may
acquire, whether by purchase, merger, lease or otherwise, all or substantially
all


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of the assets or capital stock or other equity interests of a Loan Party (other
than the Company) or another Non-Loan Party Subsidiary, in each case subject to
compliance with Sections 7.2.4, 7.2.9 and 7.2.17, and

                    (ii) any Loan Party may acquire, whether by purchase or by
merger, (x) all of the ownership interests of any other Person or (y)
substantially all of assets of another Person or of a business or division of
any other Person (each an "PERMITTED ACQUISITION"), provided that each of the
following requirements is met:

                         (A) if any Loan Party acquires the ownership interests
in such Person, such Person shall, if required pursuant to Section 7.2.9,
execute a Borrower Joinder or Guarantor Joinder and join this Agreement as a
Borrower or Guarantor pursuant to Section 7.1.10 and otherwise comply with
Section 7.1.10 within the time periods set forth therein (including any extended
time period applicable thereunder);

                         (B) the board of directors or other equivalent
governing body of such Person shall have approved such Permitted Acquisition
and, if the Loan Parties shall use any portion of the Loans to fund such
Permitted Acquisition, the Loan Parties also shall have delivered to the Lenders
written evidence of the approval of the board of directors (or equivalent body)
of such Person for such Permitted Acquisition;

                         (C) the business acquired, or the business conducted by
the Person whose ownership interests are being acquired, as applicable, shall be
substantially the same as one or more line or lines of business conducted by the
Loan Parties and shall comply with Section 7.2.10;

                         (D) no Potential Default or Event of Default shall
exist immediately prior to and after giving effect to such Permitted
Acquisition;

                         (E) the Company shall demonstrate that the Borrowers
shall be in pro forma compliance with the covenants contained in Sections 7.2.15
and 7.2.16 after giving effect to such Permitted Acquisition (including in such
computation, Indebtedness or other liabilities assumed or incurred in connection
with such Permitted Acquisition and including income earned or expenses incurred
by the Person, business or assets to be acquired as more fully provided herein)
by delivering at least five (5) Business Days prior to such Permitted
Acquisition a certificate in substantially the form of EXHIBIT 7.2.6 evidencing
such pro forma compliance;

                         (F) if the Leverage Ratio (after taking into account
the pro forma effect of the Permitted Acquisition) is in excess of 3.25 to 1.00,
then Required Lenders shall have consented in writing thereto prior to its
consummation;

                         (G) the Loan Parties deliver such updates to Schedules
required under Sections 5.3 and 6.3; and


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                         (H) the Loan Parties shall deliver to the
Administrative Agent at least five (5) Business Days before consummation of such
Permitted Acquisition a copy of the definitive acquisition agreement(s) relating
to such Permitted Acquisition, including all schedules and exhibits thereto,
together with such other information about such Person and its assets as the
Administrative Agent may reasonably require; and

                    (iii) any Subsidiary of the Company may liquidate, dissolve
or wind-up its affairs , including any such change necessary to consummate a
transaction permitted elsewhere under this Section 7.2.6, provided that (a) any
liquidation, winding up or dissolution of a Loan Party relating to a disposition
of its assets to a Non-Loan Party Subsidiary shall comply with Sections 7.2.4,
7.2.7 and 7.2.9, (b) at least five (5) Business Days') prior written notice
detailing such proposed action shall be delivered by the Company to the
Administrative Agent and the Lenders if such proposed action relates to a Loan
Party or its assets, and (c) no such action that would be materially adverse to
the Lenders may be taken without obtaining the prior written consent of the
Required Lenders.

               7.2.7 DISPOSITIONS OF ASSETS OR SUBSIDIARIES.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer
or dispose of, voluntarily or involuntarily, any of its properties or assets,
tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest, partnership interests or limited liability company interests of a
Subsidiary of such Loan Party), except for the following:

                    (i) transactions involving the sale of inventory in the
ordinary course of business;

                    (ii) any sale, transfer or lease of assets in the ordinary
course of business which are obsolete, worn out or no longer necessary or
required in the conduct of such Loan Party's or such Subsidiary's business;

                    (iii) any sale, transfer or lease of assets by (a) one Loan
Party or a Non-Loan Party Subsidiary, to a Loan Party, (b) a Non-Loan Party
Subsidiary to another Non-Loan Party Subsidiary, or (c) a Loan Party to a
Non-Loan Party Subsidiary, so long as the aggregate market value of sales,
transfers or leases of assets by Loan Parties to Non-Loan Party Subsidiaries
does not exceed 5% of Consolidated Total Assets at any time, subject in each
case to compliance with Sections 7.2.4, 7.2.5, 7.2.9 and 7.2.17; and

                    (iv) sales or other transfers of accounts receivables and
related rights of the Company and its Subsidiaries pursuant to or in connection
with a Permitted Accounts Receivable Program;

                    (v) any sale of assets not listed in clauses (i) through
(iv) above provided that (A) no Event of Default shall exist or shall result
from such disposition, and


                                       84



(B) the aggregate net book value of all assets so sold by the Loan Parties and
their Subsidiaries pursuant to this clause (v) shall not exceed in any fiscal
year 10% of the Consolidated Total Assets measured as of the end of the previous
fiscal year (such 10% figure shall be referred to as "AVAILABILITY"), provided
that to the extent that such value of assets sold is less than Availability in
such fiscal year (the difference being, the "UNUSED PORTION"), such Unused
Portion may be carried over to the next fiscal year (but not to subsequent
fiscal years) and increase Availability in such next fiscal year by such amount,
provided further that the aggregate net book value of all assets sold in any two
consecutive fiscal years may not exceed 20% of Consolidated Total Assets
measured at the beginning of such two-consecutive fiscal year period;

                    (vi) any sale, transfer or lease of assets, other than those
specifically excepted pursuant to clauses (i) through (v) above, which is
approved by the Required Lenders;

                    (vii) any installment sale of timberland in connection with
a timberland installment note monetization transaction or which is otherwise
consented to by Administrative Agent (a "PERMITTED TIMBERLAND INSTALLMENT
SALE"); and

                    (viii) any sale, conveyance, assignment, transfer, lease or
disposition of assets among the Company and its Subsidiaries to the extent
permitted under Section 7.2.1, 7.2.2, 7.2.3, 7.2.4, 7.2.5 or 7.2.6.

               7.2.8 AFFILIATE TRANSACTIONS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, enter into or carry out any transaction (including
purchasing property or services from or selling property or services to any
Affiliate of any Loan Party or other Person other than another Loan Party)
unless such transaction (i) is not otherwise prohibited by this Agreement, (ii)
is entered into in the ordinary course of business upon fair and reasonable
arm's-length terms and conditions which are fully disclosed to the
Administrative Agent (with public filing of a description of such transaction
with the SEC constituting such full disclosure), and is in accordance with all
applicable Law, and, as applicable, is permitted by Section 7.2.1, 7.2.2, 7.2.3,
7.2.4, 7.2.5, 7.2.6 or 7.2.7, (iii) involves any employment agreement entered
into by the Company or any of the Subsidiaries in the ordinary course of
business, or (iv) is in existence as of the Closing Date and is reflected in the
Company's Report on Form 10-K as filed with the SEC for fiscal year 2009.

               7.2.9 SUBSIDIARIES.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, own or create directly or indirectly any Material
Subsidiaries other than: (i) subject to Section 10.18 for the avoidance of doubt
(if applicable), any Foreign Subsidiary which has joined this Agreement as a
Guarantor or a Borrower on the Closing Date, or so joins this Agreement after
the Closing Date, pursuant to and in compliance with Section 7.1.10; (ii) any
other Material Subsidiary (except for the Receivables Entity) which has joined
this Agreement as a Guarantor or a Borrower on the Closing Date; or (iii) any
other Material Subsidiary formed,


                                       85



acquired or in existence after the Closing Date (except for the Receivables
Entity) which joins this Agreement as a Guarantor or a Borrower pursuant to and
in compliance with Section 7.1.10; provided that a Subsidiary of the Company
which is not a Material Subsidiary may opt to join this Agreement as a Guarantor
or a Borrower pursuant to and in compliance with Section 7.1.10.

               7.2.10 CONTINUATION OF OR CHANGE IN BUSINESS.

               Each of the Loan Parties will not, nor will it permit any of its
Subsidiaries to, alter the character of the business of the Loan Parties and
their Subsidiaries, taken as a whole, in any material respect from that
conducted as of the Closing Date.

               7.2.11 PLANS AND BENEFIT ARRANGEMENTS.

               None of the Loan Parties shall engage in a Prohibited Transaction
with any Plan, Benefit Arrangement or Multiemployer Plan which, alone or in
conjunction with any other circumstances or set of circumstances resulting in
liability under ERISA or otherwise violate ERISA, provided that it shall not be
deemed to be a violation of this Section 7.2.11 if any engagement in a
Prohibited Transaction would not result in fines or penalties that in the
aggregate would reasonably be expected to result in a Material Adverse Change.

               7.2.12 FISCAL YEAR.

               The Company shall not, and shall not permit any Loan Party to,
change its fiscal year from the twelve-month period beginning January 1 and
ending December 31.

               7.2.13 ISSUANCE OF STOCK.

               None of the Subsidiaries of the Company shall issue any
additional shares of its capital stock or any options, warrants or other rights
in respect thereof, except as may be permitted under Sections 7.2.4 and 7.2.5.

               7.2.14 CHANGES IN ORGANIZATIONAL DOCUMENTS.

               Each of the Loan Parties shall not amend, modify or change its
certificate of incorporation (including any provisions or resolutions relating
to capital stock), by-laws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents in any manner materially adverse to the interests
of the Lenders without obtaining the prior written consent of the Required
Lenders, and, if such proposed action relates to a Loan Party, providing,
through the Company, at least five (5) Business Days' prior written notice
(without duplication of a corresponding notice period under Section 7.2.6(iii),
if applicable) to the Administrative Agent and the Lenders detailing such
proposed action.


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               7.2.15 MAXIMUM LEVERAGE RATIO.

               The Borrowers shall not permit the Leverage Ratio, measured as of
the end of each fiscal quarter, to exceed 3.50 to 1.00.

               7.2.16 MINIMUM INTEREST COVERAGE RATIO.

               The Borrowers shall not permit the ratio (the "INTEREST COVERAGE
RATIO") of Consolidated EBITDA to consolidated interest expense (excluding
Timberland Installment Sale Interest Expense) of the Borrowers and their
Subsidiaries, measured as of the end of each fiscal quarter, for the four (4)
fiscal quarters then ended, to be less than 3.50 to 1.0.

               7.2.17 RECEIVABLES ENTITIES AND TIMBERLAND NOTE MONETIZATION
ENTITIES.

               The Loan Parties covenant as follows: (i) each Permitted Accounts
Receivable Program shall be entered into by a Subsidiary of the Company which is
wholly owned by the Company (directly or indirectly) and which engages in no
activities other than in connection with the financing of accounts receivables
of the Designated Credit Parties pursuant to a Permitted Accounts Receivable
Program (a "RECEIVABLES ENTITY") and which is designated as such by the Company
as provided below in this Section; (ii) no portion of the Indebtedness or any
other obligations (contingent or otherwise) of a Receivables Entity (a) shall be
guaranteed by the Company or any other Subsidiary of the Company (excluding
guarantees of obligations pursuant to Standard Securitization Undertakings), (b)
shall be recourse to or obligate the Company or any other Subsidiary of the
Company in any way other than pursuant to Standard Securitization Undertakings,
or (c) shall subject any property or asset of the Company or any other
Subsidiary of the Company, directly or indirectly, contingently or otherwise, to
the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings; (iii) GPW VA Timberlands and each other Subsidiary of the Company
designated to monetize timberland installment sale notes (a "MONETIZATION
ENTITY") shall engage in no activities other than the monetization of timberland
installment sale notes pursuant to Permitted Timberland Installment Sales and
the incurrence and performance of the Permitted Timberland Indebtedness or
Permitted Additional Timberland Indebtedness (as applicable) in connection
therewith; and (iv) no portion of the Indebtedness or any other obligations
(contingent or otherwise) of GPW VA Timberlands or any Monetization Entity (a)
shall be guaranteed by the Company or any other Subsidiary of the Company, (b)
shall be recourse to or obligate the Company or any other Subsidiary of the
Company in any way other than through a collateral pledge of the Permitted
Timberland Intercompany Indebtedness (securing the Permitted Timberland
Indebtedness) or a similar collateral pledge of Permitted Additional Timberland
Intercompany Indebtedness (to secure Permitted Additional Timberland
Indebtedness), or (c) shall subject any property or asset of the Company or any
other Subsidiary of the Company, directly or indirectly, contingently or
otherwise, to the satisfaction thereof, other than as contemplated in the
preceding clause (iv)(b). The Company may designate any Subsidiary as a
"Receivables Entity" hereunder by delivered to the Administrative Agent a
certificate of the Company executed by a Responsible Officer certifying that
such Subsidiary meets the requirements to be a Receivables Entity set forth in


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subsection (i) above. The Company may designate any Subsidiary as a
"Monetization Entity" hereunder by delivered to the Administrative Agent a
certificate of the Company executed by a Responsible Officer certifying that
such Subsidiary meets the requirements to be a Monetization Entity set forth in
subsection (iii) above.

          7.3 REPORTING REQUIREMENTS.

               The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations (other
than non-assessed contingent reimbursement obligations) and termination of the
Commitments, the Loan Parties will furnish or cause to be furnished to the
Administrative Agent and each of the Lenders:

               7.3.1 QUARTERLY FINANCIAL STATEMENTS.

               As soon as available and in any event within forty-five (45)
calendar days (or any such earlier date as may be mandated by the SEC) after the
end of each of the first three fiscal quarters in each fiscal year, financial
statements of the Company and its Subsidiaries, consisting of a consolidated
balance sheet as of the end of such fiscal quarter and related consolidated
statements of income, consolidated retained earnings and cash flows for the
fiscal quarter then ended and the fiscal year through that date, all in
reasonable detail and certified (subject to normal year-end audit adjustments)
by a Responsible Officer of the Company as having been prepared in accordance
with GAAP, consistently applied, and setting forth in comparative form the
respective financial statements for the corresponding date and period in the
previous fiscal year. The Loan Parties will be deemed to have complied with the
delivery requirements of this Section 7.3.1 if within forty-five (45) days (or
any such earlier date as may be mandated by the SEC) after the end of its fiscal
quarter, the Company delivers to the Administrative Agent and each of the
Lenders a copy of its Form 10-Q as filed with the SEC and the financial
statements contained therein meets the requirements described in this Section.

               7.3.2 ANNUAL FINANCIAL STATEMENTS.

               As soon as available and in any event within ninety (90) days (or
any such earlier date as may be mandated by the SEC) after the end of each
fiscal year of the Company and its Subsidiaries, financial statements of the
Company consisting of a consolidated balance sheets as of the end of such fiscal
year, and related consolidated statements of income, consolidated retained
earnings and cash flows for the fiscal year then ended, all in reasonable detail
and setting forth in comparative form the financial statements as of the end of
and for the preceding fiscal year, and certified by independent certified public
accountants of nationally recognized standing satisfactory to the Administrative
Agent. The certificate or report of accountants shall be free of qualifications
(other than any consistency qualification that may result from a change in the
method used to prepare the financial statements as to which such accountants
concur) and shall not indicate the occurrence or existence of any event,
condition or contingency which would materially impair the prospect of payment
or performance of any covenant, agreement or duty of any Loan Party under any of
the Loan Documents. The Loan


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Parties will be deemed to have complied with the delivery requirements of this
Section 7.3.2 if within ninety (90) days (or any such earlier date as may be
mandated by the SEC) after the end of its fiscal year, the Company delivers to
the Administrative Agent and each of the Lenders a copy of its Annual Report and
Form 10-K as filed with the SEC and the financial statements and certification
of public accountants contained therein meets the requirements described in this
Section. The Loan Parties shall deliver with such financial statements and
certification by their accountants (i) a certificate to be delivered pursuant to
Section 7.3.3 with respect to such financial statements and (ii) any management
letters of such accounts addressed to the Company.

               7.3.3 CERTIFICATE OF THE BORROWER.

               Concurrently with the financial statements the Company furnished
to the Administrative Agent and to the Lenders pursuant to Sections 7.3.1 and
7.3.2, a certificate (each a "COMPLIANCE CERTIFICATE") of the Company signed by
a Responsible Officer of the Company, in the form of EXHIBIT 7.3.3, to the
effect that, except as described pursuant to Section 7.3.4, (i) the
representations and warranties of the Borrowers contained in Section 5 and in
the other Loan Documents are true in all material respects on and as of the date
of such certificate with the same effect as though such representations and
warranties had been made on and as of such date (except representations and
warranties which expressly relate solely to an earlier date or time), (ii) no
Event of Default or Potential Default exists and is continuing on the date of
such certificate, and (iii) containing calculations in sufficient detail to
demonstrate compliance as of the date of such financial statements with all
financial covenants contained in Sections 7.1.15 and 7.1.16.

               7.3.4 NOTICE OF DEFAULT.

               Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
a Responsible Officer of such Loan Party setting forth the details of such Event
of Default or Potential Default and the action which the such Loan Party
proposes to take with respect thereto.

               7.3.5 NOTICE OF LITIGATION.

               Promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations before or by any Official Body or any other
Person against any Loan Party or Subsidiary of any Loan Party which involve a
claim or series of claims in excess of $15,000,000.00 or which if adversely
determined would constitute a Material Adverse Change.

               7.3.6 NOTICE OF CHANGE IN DEBT RATING.

               Within three (3) Business Days after Standard & Poor's or Moody's
announces a change in the Company's Debt Rating, notice of such change. The
Company, on behalf of the Loan Parties, will deliver, together with such notice,
a copy of any written notification which the Company received from the
applicable rating agency regarding such change of Debt Rating.


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               7.3.7 CERTAIN EVENTS.

               Written notice to the Administrative Agent:

                    (i) at least ten (10) Business Days prior thereto, with
respect to any proposed sale or transfer of assets pursuant to Section
7.2.7(iii)(c), (v), (vi) or (vii), and

                    (ii) within the time limits set forth in Section 7.2.14, any
amendment to the organizational documents of any Loan Party; and

               7.3.8 BUDGETS, FORECASTS, OTHER REPORTS AND INFORMATION.

               The following documents (1) upon the request of the
Administrative Agent for so long as the Company is obligated to publicly file
the reports listed below with the SEC, or (2) promptly upon their becoming
available to the Company (without any such request by the Administrative Agent)
in the event that the Company shall cease to be so obligated to publicly file
such reports :

                    (i) any reports including management letters submitted to
the Company by independent accountants in connection with any annual, interim or
special audit,

                    (ii) any reports, notices or proxy statements generally
distributed by the Company to its stockholders on a date no later than two (2)
Business Days after the date supplied to such stockholders,

                    (iii) regular or periodic reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses, filed by the Company
with the SEC,

                    (iv) a copy of any order in any proceeding to which the
Company or any of its Subsidiaries is a party issued by any Official Body, and

                    (v) such other reports and information as any of the
Lenders, through the Administrative Agent, may from time to time reasonably
request.

                    Any financial statement, report, proxy statement or other
material required to be delivered pursuant to clause (ii) or (iii) above or
pursuant to Sections 7.3.1 and 7.3.2 shall be deemed to have been furnished to
the Administrative Agent and each Lender, if the Company has issued a notice of
Website Posting in accordance with Section 10.6 specific to such type of
financial statement, report, proxy statement or other material, on the date that
the Company posts such financial statement, report, proxy statement or other
material on the SEC's website at www.sec.gov or on the Company's website at
www.glatfelter.com; provided that the Company will furnish paper copies of such
financial statement, report, proxy statement or material to the Administrative
Agent or any Lender that so requests, by notice to the Company,


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that the Company do so, until the Company receives notice from the
Administrative Agent or such Lender, as applicable, to cease delivering such
paper copies.

               7.3.9 NOTICES REGARDING PLANS AND BENEFIT ARRANGEMENTS.

                    7.3.9.1 CERTAIN EVENTS.

                    Promptly upon becoming aware of the occurrence thereof,
notice (including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:

                    (i) any Reportable Event with respect to the Loan Parties or
any other member of the ERISA Group,

                    (ii) any Prohibited Transaction which could subject the Loan
Parties to a material civil penalty assessed pursuant to Section 502(i) of ERISA
or a tax imposed by Section 4975 of the Internal Revenue Code in connection with
any Plan, any Benefit Arrangement or any trust created thereunder,

                    (iii) any assertion of material withdrawal liability with
respect to any Multiemployer Plan,

                    (iv) any partial or complete withdrawal from a Multiemployer
Plan by the Loan Parties or any other member of the ERISA Group under Title IV
of ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,

                    (v) any cessation of operations (by the Loan Parties or any
other member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,

                    (vi) withdrawal by the Loan Parties or any other member of
the ERISA Group from a Multiple Employer Plan, or

                    (vii) a failure by the Loan Parties or any other member of
the ERISA Group to make a payment to a Plan required to avoid imposition of a
Lien under Section 303(k) of ERISA.

                    7.3.9.2 NOTICES OF INVOLUNTARY TERMINATION AND ANNUAL
REPORTS.

                    Promptly after receipt thereof, copies of (a) all notices
received by the Loan Parties or any other member of the ERISA Group of the
PBGC's intent to terminate any Plan administered or maintained by the Loan
Parties or any member of the ERISA Group, or to have a trustee appointed to
administer any such Plan; and (b) at the request of the Administrative Agent or
any Lender each annual report (IRS Form 5500 series) and all accompanying
schedules, the most recent actuarial reports, the most recent financial
information concerning the


                                       91



financial status of each Plan administered or maintained by the Loan Parties or
any other member of the ERISA Group, and schedules showing the amounts
contributed to each such Plan by or on behalf of the Loan Parties or any other
member of the ERISA Group in which any of their personnel participate or from
which such personnel may derive a benefit, and each Schedule B (Actuarial
Information) to the annual report filed by the Loan Parties or any other member
of the ERISA Group with the Employee Benefit Security Administration.

                    7.3.9.3 NOTICE OF VOLUNTARY TERMINATION.

                    Promptly upon the filing thereof, copies of any Form 5310,
or any successor or equivalent form to Form 5310, filed with the PBGC in
connection with the termination of any Plan.

                                   8. DEFAULT

          8.1 EVENTS OF DEFAULT.

               An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason therefor
and whether voluntary, involuntary or effected by operation of Law):

               8.1.1 PAYMENTS UNDER LOAN DOCUMENTS.

               The Borrowers shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement Obligation or Letter of Credit Borrowing when due or
shall fail to pay any interest on any Loan, Reimbursement Obligation or Letter
of Credit Borrowing or any other amount owing hereunder or under the other Loan
Documents within three (3) Business Days after such interest or other amount
becomes due in accordance with the terms hereof or thereof;

               8.1.2 BREACH OF WARRANTY.

               Any representation or warranty made at any time by any of the
Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or furnished;

               8.1.3 BREACH OF NEGATIVE COVENANTS AND CERTAIN AFFIRMATIVE
COVENANTS.

               Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Sections 7.1.6 or 7.2;



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               8.1.4 BREACH OF OTHER COVENANTS.

               Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of twenty
(20) Business Days after any Responsible Officer of any Loan Party has actual
knowledge of the occurrence thereof;

               8.1.5 DEFAULTS IN OTHER AGREEMENTS OR INDEBTEDNESS.

               A default or event of default shall occur at any time under the
terms of any other agreement involving borrowed money or the extension of credit
or any other Indebtedness under which any Loan Party or Subsidiary of any Loan
Party may be obligated as a borrower or guarantor in excess of $5,000,000.00 in
the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not, but in any event not beyond thirty (30) days) any
Indebtedness when due (whether at stated maturity, by acceleration or otherwise)
or if such breach or default permits or causes the acceleration of any
Indebtedness (whether or not such right shall have been waived) or the
termination of any commitment to lend;

               8.1.6 FINAL JUDGMENTS OR ORDERS.

               Any final judgments or orders for the payment of money in excess
of $10,000,000.00 in the aggregate shall be entered against any Loan Party by a
court having jurisdiction in the premises, which judgment is not discharged,
vacated, bonded or stayed pending appeal within a period of forty-five (45) days
from the date of entry;

               8.1.7 LOAN DOCUMENT UNENFORCEABLE.

               Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against any Loan Party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or cease to give or provide the respective Liens, security
interests, rights, titles, interests, remedies, powers or privileges intended to
be created thereby, or the validity or enforceability of any of the Loan
Documents shall in any way be challenged or contested;

               8.1.8 PROCEEDINGS AGAINST ASSETS.

               Assets of the Loan Parties' or any of their Subsidiaries are
attached, seized, levied upon or subjected to a writ or distress warrant; or
such come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the fair market value of such assets are in
excess of $10,000,000.00 in the aggregate and the same is not cured within
forty-five (45) days thereafter;


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               8.1.9 NOTICE OF LIEN OR ASSESSMENT.

               A notice of Lien or assessment in excess of $10,000,000.00 which
is not a Permitted Lien is filed of record with respect to all or any part of
any of the Loan Parties' or any of their Subsidiaries' assets by the United
States, or any department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including the PBGC, or any taxes
or debts in excess of $10,000,000.00 owing at any time or times hereafter to any
one of these becomes payable and the same is not paid or bonded within
forty-five (45) days after the same becomes payable;

               8.1.10 INSOLVENCY.

               Any Loan Party or any Material Subsidiary of a Loan Party ceases
to be solvent or admits in writing its inability to pay its debts as they
mature;

               8.1.11 EVENTS RELATING TO PLANS AND BENEFIT ARRANGEMENTS.

               Any of the following occurs in relation to the Borrowers or any
members of their ERISA Group: (i) any Reportable Event, which the Administrative
Agent determines in good faith constitutes grounds for the termination of any
Plan by the PBGC or the appointment of a trustee to administer or liquidate any
Plan, shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Administrative Agent
determines in good faith that the amount of the Loan Parties' liability is
likely to exceed $10,000,000.00; (v) the Loan Parties or any member of the ERISA
Group shall fail to make any material contributions when due to a Plan or a
Multiemployer Plan; (vi) the Loan Parties or any other member of the ERISA Group
shall withdraw completely or partially from a Multiemployer Plan; or (vii) the
Borrowers or any other member of the ERISA Group shall withdraw (or shall be
deemed under Section 4062(e) of ERISA to withdraw) from a Multiple Employer
Plan; and, with respect to any of the events specified in (v), (vi) or (vii),
the Administrative Agent determines in good faith that any such occurrence would
be reasonably likely to materially and adversely affect the total enterprise
represented by the Loan Parties and the other members of the ERISA Group;

               8.1.12 CESSATION OF BUSINESS.

               Any Loan Party ceases to conduct its business as contemplated,
except as expressly permitted under Sections 7.2.6 or 7.2.7, or any Loan Party
or Subsidiary of a Loan Party is enjoined, restrained or in any way prevented by
court order from conducting all or any material part of its business and such
injunction, restraint or other preventive order is not dismissed within thirty
(30) days after the entry thereof;


                                       94



               8.1.13 CHANGE OF CONTROL.

                    (i) Any person or group of persons (within the meaning of
Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended)
shall have acquired, after the Closing Date, beneficial ownership of (within the
meaning of Rule 13d-3 promulgated by the SEC under said Act) 20.00% or more of
the voting capital stock of P. H. Glatfelter Company; or (ii) within a period of
twelve (12) consecutive calendar months, individuals who were directors of the
Company on the first day of such period (together with any new directors whose
election by the board of directors of the Company or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors as of the first
day of such period or whose election or nomination for election was previously
so approved) shall cease to constitute a majority of the board of directors of
the Company;

               8.1.14 INVOLUNTARY PROCEEDINGS.

               A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party, Material Subsidiary or group of Subsidiaries which, if their
assets were aggregated in a single Subsidiary, would meet the requirements to be
a Material Subsidiary, in an involuntary case under any applicable bankruptcy,
insolvency, reorganization or other similar law now or hereafter in effect, or
for the appointment of a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or similar official) of any such Person or group of
Persons for any substantial part of its or their property, or for the winding-up
or liquidation of its or their affairs, and such proceeding shall remain
undismissed or unstayed and in effect for a period of forty-five (45)
consecutive days or such court shall enter a decree or order granting any of the
relief sought in such proceeding; or

               8.1.15 VOLUNTARY PROCEEDINGS.

               Any Loan Party, Material Subsidiary or group of Subsidiaries
which, if their assets were aggregated in a single Subsidiary, would meet the
requirements to be a Material Subsidiary, shall commence a voluntary case under
any applicable bankruptcy, insolvency, reorganization or other similar law now
or hereafter in effect, shall consent to the entry of an order for relief in an
involuntary case under any such law, or shall consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian, trustee,
sequestrator, conservator (or other similar official) of itself or themselves or
for any substantial part of its or their property or shall make a general
assignment for the benefit of creditors, or shall fail generally to pay its or
their debts as they become due, or shall take any action in furtherance of any
of the foregoing (in the case of a Loan Party organized under the laws of
Germany, the application for commencement of any insolvency proceeding
(Insolvenzantrag) shall have been filed).


                                       95



          8.2 CONSEQUENCES OF EVENT OF DEFAULT.

               8.2.1 EVENTS OF DEFAULT OTHER THAN BANKRUPTCY, INSOLVENCY OR
REORGANIZATION PROCEEDINGS.

               If an Event of Default specified under Sections 8.1.1 through
8.1.13 shall occur and be continuing, the Lenders and the Administrative Agent
shall be under no further obligation to make Loans or issue Letters of Credit,
as the case may be, and the Administrative Agent may, and upon the request of
the Required Lenders, shall (i) by written notice to the Borrowers, declare the
unpaid principal amount of the Notes then outstanding and all interest accrued
thereon, any unpaid fees and all other Indebtedness and Obligations of the
Borrowers to the Lenders hereunder and thereunder to be forthwith due and
payable, and the same shall (subject to Section 10.18 for the avoidance of
doubt, if applicable) thereupon become and be immediately due and payable to the
Administrative Agent for the benefit of each Lender without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly
waived, and (ii) require any Borrowers to, and such Borrowers shall thereupon,
deposit in a non-interest-bearing account with the Administrative Agent, as cash
collateral for Borrowers' Obligations under the Loan Documents, an amount equal
to the maximum amount currently or at any time thereafter available to be drawn
on all outstanding Letters of Credit, and each Borrower hereby pledges to the
Administrative Agent and the Lenders, and grants to the Administrative Agent and
the Lenders a security interest in, all such cash as security for such
Obligations. Upon the curing of all existing Events of Default to the
satisfaction of the Required Lenders, the Administrative Agent shall return such
cash collateral to the Borrowers (or applicable Borrowers, as the case may be);
and

               8.2.2 BANKRUPTCY, INSOLVENCY OR REORGANIZATION PROCEEDINGS.

               If an Event of Default specified under Sections 8.1.14 or 8.1.15
shall occur, the Lenders shall be under no further obligations to make Loans or
issue Letters of Credit hereunder and the unpaid principal amount of the Loans
then outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness and Obligations of the Borrowers to the Lenders hereunder and
thereunder shall be immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived; and

               8.2.3 SET-OFF.

               If an Event of Default shall occur and be continuing, any Lender
to whom any Obligation is owed by any Loan Party hereunder or under any other
Loan Document or any participant of such Lender which has agreed in writing to
be bound by the provisions of Section 9.13 and any branch, Subsidiary or
Affiliate of such Lender or participant anywhere in the world shall have the
right, in addition to all other rights and remedies available to it, without
notice to such Loan Party except as provided herein, to set-off (subject to
Section 10.18 for the avoidance of doubt, if applicable) against and apply to
the then unpaid balance of all the Loans and all other Obligations of the
Borrowers and the other Loan Parties hereunder or under any other Loan Document
any debt owing to, and any other funds held in any manner for the account of, a
Borrower or such other Loan Party by such Lender or participant or by such
branch,


                                       96



Subsidiary or Affiliate, including all funds in all deposit accounts (whether
time or demand, general or special, provisionally credited or finally credited,
or otherwise) now or hereafter maintained by a Borrower or such other Loan Party
for its own account (but not including funds held in custodian or trust
accounts) with such Lender or participant or such branch, Subsidiary or
Affiliate, and each Lender and the Administrative Agent agrees to promptly
notify the Borrowers after such set-off, provided that the failure to give any
such notice shall not affect the validity of such set-off and application. Such
right shall exist whether or not any Lender or the Administrative Agent shall
have made any demand under this Agreement or any other Loan Document, whether or
not such debt owing to or funds held for the account of a Borrower or such other
Loan Party is or are matured or unmatured and regardless of the existence or
adequacy of any collateral, Guaranty or any other security, right or remedy
available to any Lender or the Administrative Agent; and

               8.2.4 SUITS, ACTIONS, PROCEEDINGS.

               If an Event of Default shall occur and be continuing, and whether
or not the Administrative Agent shall have accelerated the maturity of
Obligations pursuant to any of the foregoing provisions of this Section 8.2, the
Administrative Agent, on behalf of the Lenders, if any Lender is owed any amount
with respect to the Obligations, may proceed to protect and enforce the Lenders'
rights by suit in equity, action at law and/or other appropriate proceeding,
whether for the specific performance of any covenant or agreement contained in
this Agreement or the other Loan Documents, including as permitted by applicable
Law the obtaining of the ex parte appointment of a receiver, and, if such amount
shall have become due, by declaration or otherwise, proceed to enforce the
payment thereof or any other legal or equitable right of the Administrative
Agent, on behalf of the Lenders; and

               8.2.5 APPLICATION OF PROCEEDS.

               From and after the date on which the Administrative Agent has
taken any action pursuant to this Section 8.2 and until all Obligations of the
Loan Parties have been paid in full, any and all proceeds received by the
Administrative Agent from the exercise of any remedy by the Administrative
Agent, shall be applied as follows:

                    (i) first, to reimburse the Administrative Agent and the
Lenders for out-of-pocket costs, expenses and disbursements, including
reasonable attorneys' and paralegals' fees and legal expenses, incurred by the
Administrative Agent or the Lenders in connection with collection of any
Obligations of any of the Loan Parties under any of the Loan Documents;

                    (ii) second, to the repayment of all Obligations then due
and unpaid of the Loan Parties to the Lenders incurred under this Agreement or
any of the other Loan Documents or a Lender-Provided Interest Rate Hedge,
whether of principal, interest, fees, expenses or otherwise, in such manner as
the Administrative Agent may determine in its discretion; and


                                       97



                    (iii) the balance, if any, to the Loan Parties or as
otherwise required by Law.

                                  9. THE AGENT

          9.1 APPOINTMENT.

               Each Lender hereby irrevocably designates, appoints and
authorizes PNC Bank to act as Administrative Agent for such Lender under this
Agreement and to execute and deliver or accept on behalf of each of the Lenders
the other Loan Documents. Each Lender hereby irrevocably authorizes, and each
holder of any Note by the acceptance of a Note shall be deemed irrevocably to
authorize, the Administrative Agent to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and any other
instruments and agreements referred to herein, and to exercise such powers and
to perform such duties hereunder as are specifically delegated to or required of
the Administrative Agent by the terms hereof, together with such powers as are
reasonably incidental thereto. PNC Bank agrees to act as the Administrative
Agent on behalf of the Lenders to the extent provided in this Agreement.

          9.2 DELEGATION OF DUTIES.

               The Administrative Agent may perform any of its duties hereunder
by or through agents or employees (provided such delegation does not constitute
a relinquishment of its duties as Administrative Agent) and, subject to Sections
9.5 and 9.6, shall be entitled to engage and pay for the advice or services of
any attorneys, accountants or other experts concerning all matters pertaining to
its duties hereunder and to rely upon any advice so obtained.

          9.3 NATURE OF DUTIES; INDEPENDENT CREDIT INVESTIGATION.

               The Administrative Agent shall have no duties or responsibilities
except those expressly set forth in this Agreement and no implied covenants,
functions, responsibilities, duties, obligations, or liabilities shall be read
into this Agreement or otherwise exist. The duties of the Administrative Agent
shall be mechanical and administrative in nature; the Administrative Agent shall
not have, by reason of this Agreement, a fiduciary or trust relationship in
respect of any Lender; and nothing in this Agreement, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement except as expressly set forth
herein. Without limiting the generality of the foregoing, the use of the term
"agent" in this Agreement with reference to the Administrative Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. Each
Lender expressly acknowledges (i) that the Administrative Agent has not made any
representations or warranties to it and that no act by the Administrative Agent
hereafter taken, including any review of the affairs of any of the Loan Parties,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender; (ii) that it has made and will continue to
make, without reliance upon the Administrative Agent, its own


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independent investigation of the financial condition and affairs and its own
appraisal of the creditworthiness of each of the Loan Parties in connection with
this Agreement and the making and continuance of the Loans and issuance and
maintenance of Letters of Credit hereunder; and (iii) except as expressly
provided herein, that the Administrative Agent shall have no duty or
responsibility, either initially or on a continuing basis, to provide any Lender
with any credit or other information with respect thereto, whether coming into
its possession before the making of any Loan or issuance of any Letter of Credit
or at any time or times thereafter.

          9.4 ACTIONS IN DISCRETION OF ADMINISTRATIVE AGENT; INSTRUCTIONS FROM
THE LENDERS.

               The Administrative Agent agrees, upon the written request of the
Required Lenders, to take or refrain from taking any action of the type
specified as being within the Administrative Agent's rights, powers or
discretion herein, provided that the Administrative Agent shall not be required
to take any action which exposes the Administrative Agent to personal liability
or which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Lenders, the Administrative
Agent shall have authority, in its sole discretion, to take or not to take any
such action, unless this Agreement specifically requires the consent of the
Required Lenders or all of the Lenders. Any action taken or failure to act
pursuant to such instructions or discretion shall be binding on the Lenders,
subject to Section 9.6. Subject to the provisions of Section 9.6, no Lender
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder in
accordance with the instructions of the Required Lenders, or in the absence of
such instructions, in the absolute discretion of the Administrative Agent.

          9.5 REIMBURSEMENT AND INDEMNIFICATION OF ADMINISTRATIVE AGENT BY THE
BORROWER.

               The Borrowers, on a joint and several basis (subject to Section
10.18 for the avoidance of doubt, if applicable), unconditionally agree to pay
or reimburse the Administrative Agent and hold the Administrative Agent harmless
against (a) liability for the payment of all reasonable out-of-pocket costs,
expenses and disbursements, including fees and expenses of counsel (including
the allocated costs of staff counsel), appraisers and environmental consultants,
incurred by the Administrative Agent (i) in connection with the development,
negotiation, preparation, printing, execution, administration, syndication,
interpretation and performance of this Agreement and the other Loan Documents,
(ii) relating to any requested amendments, waivers or consents pursuant to the
provisions hereof, (iii) in connection with the enforcement of this Agreement or
any other Loan Document or collection of amounts due hereunder or thereunder or
the proof and allowability of any claim arising under this Agreement or any
other Loan Document, whether in bankruptcy or receivership proceedings or
otherwise, and (iv) in any workout or restructuring or in connection with the
protection, preservation, exercise or enforcement of any of the terms hereof or
of any rights hereunder or under any other Loan Document or in connection with
any foreclosure, collection or bankruptcy proceedings, and (b) all liabilities,
obligations, losses, damages, penalties, actions, judgments,


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suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Administrative Agent, in
its capacity as such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by the Administrative
Agent hereunder or thereunder, provided that the Borrowers shall not be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements if the same results
from the Administrative Agent's gross negligence or willful misconduct, or if
the Borrowers was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that the Borrowers
shall remain liable to the extent such failure to give notice does not result in
a loss to the Borrower), or if the same results from a compromise or settlement
agreement entered into without the consent of the Borrowers, which shall not be
unreasonably withheld. In addition, the Borrowers, jointly and severally, agrees
to reimburse and pay all reasonable out-of-pocket expenses of the Administrative
Agent's regular employees and agents engaged periodically to perform audits of
the Loan Parties' books, records and business properties, provided that such
reimbursement obligation shall be limited to one (1) audit in each fiscal year
so long as no Event of Default exists and is continuing.

          9.6 EXCULPATORY PROVISIONS; LIMITATION OF LIABILITY.

               Neither the Administrative Agent nor any of its directors,
officers, employees, agents, attorneys or Affiliates shall (a) be liable to any
Lender for any action taken or omitted to be taken by it or them hereunder, or
in connection herewith including pursuant to any Loan Document, unless caused by
its or their own gross negligence or willful misconduct, (b) be responsible in
any manner to any of the Lenders for the effectiveness, enforceability,
genuineness, validity or the due execution of this Agreement or any other Loan
Documents or for any recital, representation, warranty, document, certificate,
report or statement herein or made or furnished under or in connection with this
Agreement or any other Loan Documents, or (c) be under any obligation to any of
the Lenders to ascertain or to inquire as to the performance or observance of
any of the terms, covenants or conditions hereof or thereof on the part of the
Loan Parties, or the financial condition of the Loan Parties, or the existence
or possible existence of any Event of Default or Potential Default. No claim may
be made by any of the Loan Parties, any Lender, the Administrative Agent or any
of their respective Subsidiaries against the Administrative Agent, any Lender or
any of their respective directors, officers, employees, agents, attorneys or
Affiliates, or any of them, for any special, indirect or consequential damages
or, to the fullest extent permitted by Law, for any punitive damages in respect
of any claim or cause of action (whether based on contract, tort, statutory
liability, or any other ground) based on, arising out of or related to any Loan
Document or the transactions contemplated hereby or any act, omission or event
occurring in connection therewith, including the negotiation, documentation,
administration or collection of the Loans, and each of the Loan Parties (for
itself and on behalf of each of its Subsidiaries), the Administrative Agent and
each Lender hereby waives, releases and agrees never to sue upon any claim for
any such damages, whether such claim now exists or hereafter arises and whether
or not it is now known or suspected to exist in its favor. Each Lender agrees
that, except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Administrative Agent hereunder or given to the
Administrative Agent for the account of or with copies for the Lenders, the
Administrative Agent


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and each of its directors, officers, employees, agents, attorneys or Affiliates
shall not have any duty or responsibility to provide any Lender with an credit
or other information concerning the business, operations, property, condition
(financial or otherwise), prospects or creditworthiness of the Loan Parties
which may come into the possession of the Administrative Agent or any of its
directors, officers, employees, agents, attorneys or Affiliates.

          9.7 REIMBURSEMENT AND INDEMNIFICATION OF ADMINISTRATIVE AGENT BY
LENDERS.

               Each Lender agrees to reimburse and indemnify the Administrative
Agent (to the extent not reimbursed by the Borrowers and without limiting the
Obligation of the Borrowers to do so) in proportion to its Ratable Share from
and against all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements, including attorneys' fees
and disbursements (including the allocated costs of staff counsel), and costs of
appraisers and environmental consultants, of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Administrative Agent, in
its capacity as such, in any way relating to or arising out of this Agreement or
any other Loan Documents or any action taken or omitted by the Administrative
Agent hereunder or thereunder, provided that no Lender shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements (a) if the same results from
the Administrative Agent's gross negligence or willful misconduct, or (b) if
such Lender was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that such Lender
shall remain liable to the extent such failure to give notice does not result in
a loss to the Lender), or (c) if the same results from a compromise and
settlement agreement entered into without the consent of such Lender, which
shall not be unreasonably withheld. In addition, each Lender agrees promptly
upon demand to reimburse the Administrative Agent (to the extent not reimbursed
by the Borrowers and without limiting the Obligation of the Borrowers to do so)
in proportion to its Ratable Share for all amounts due and payable by the
Borrowers to the Administrative Agent in connection with the Administrative
Agent's periodic audit of the Loan Parties' books, records and business
properties.

          9.8 RELIANCE BY ADMINISTRATIVE AGENT.

               The Administrative Agent shall be entitled to rely upon any
writing, telegram, telex or teletype message, resolution, notice, consent,
certificate, letter, cablegram, statement, order or other document or
conversation by telephone or otherwise believed by it to be genuine and correct
and to have been signed, sent or made by the proper Person or Persons, and upon
the advice and opinions of counsel and other professional advisers selected by
the Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action.


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          9.9 NOTICE OF DEFAULT.

               The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Potential Default or Event of Default unless the
Administrative Agent has received written notice from a Lender or a Borrower
referring to this Agreement, describing such Potential Default or Event of
Default and stating that such notice is a "notice of default."

          9.10 NOTICES.

               The Administrative Agent shall promptly send to each Lender a
copy of all notices received from a Borrower pursuant to the provisions of this
Agreement or the other Loan Documents promptly upon receipt thereof.

          9.11 LENDERS IN THEIR INDIVIDUAL CAPACITIES; ADMINISTRATIVE AGENT IN
ITS INDIVIDUAL CAPACITY.

               With respect to its Revolving Credit Commitment, the Revolving
Credit Loans, and PNC Bank's Swing Loan Commitment, the Swing Loans made by it
and any other rights and powers given to it as a Lender hereunder or under any
of the other Loan Documents, the Administrative Agent shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not the Administrative Agent, and the term "LENDER" and "LENDERS" shall,
unless the context otherwise indicates, include the Administrative Agent in its
individual capacity. PNC Bank and its Affiliates and each of the Lenders and
their respective Affiliates may, without liability to account, except as
prohibited herein, make loans to, issue letters of credit for the account of,
acquire equity interests in, accept deposits from, discount drafts for, act as
trustee under indentures of, and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with, the Loan Parties and
their Affiliates, as though it were not acting as Administrative Agent hereunder
and in the case of each Lender, as though such Lender were not a Lender
hereunder, without notice to or consent of the other Lenders. The Lenders and
the Administrative Agent acknowledge that, pursuant to such activities, the
Administrative Agent or its Affiliates, and the Lenders or their Affiliates, may
(i) receive information regarding the Loan Parties or any of their Subsidiaries
or Affiliates (including information that may be subject to confidentiality
obligations in favor of the Loan Parties or such Subsidiary or Affiliate) and
acknowledge that neither the Administrative Agent nor any Lender shall be under
any obligation to provide such information to the others, and (ii) accept fees
and other consideration from the Loan Parties for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.

          9.12 HOLDERS OF NOTES.

               The Administrative Agent may deem and treat any payee of any Note
as the owner thereof for all purposes hereof unless and until written notice of
the assignment or transfer thereof shall have been filed with the Administrative
Agent. Any request, authority or consent of any Person who at the time of making
such request or giving such authority or


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consent is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.

          9.13 SHARING OF PAYMENTS.

               The Lenders and the holders of any participations in any
Commitments, Loans, Letters of Credit or other rights or obligations of a Lender
hereunder agree among themselves that, with respect to all amounts received by
any Lender or any such holder for application on any Obligation hereunder or
under any such participation, whether received by voluntary payment, by
realization upon security, by the exercise of the right of set-off or banker's
lien, by counterclaim or by any other non-pro rata source, equitable adjustment
will be made in the manner stated in the following sentence so that, in effect,
all such excess amounts will be shared ratably among the Lenders and such
holders in proportion to their interests in payments on the Obligations, except
as otherwise provided in Sections 3.4.3, 4.4.2 or 4.6, in connection with any
assignment pursuant to Section 10.11 or as otherwise specifically set forth
herein. The Lenders or any such holder receiving any such amount shall purchase
for cash from each of the other Lenders an interest in Obligations owed to such
Lender in such amount as shall result in a ratable participation by the Lenders
and each such holder in the aggregate unpaid amount of the Obligations, provided
that if all or any portion of such excess amount is thereafter recovered from
the Lender or the holder making such purchase, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, together with
interest or other amounts, if any, required by law (including court order) to be
paid by the Lender or the holder making such purchase.

          9.14 SUCCESSOR ADMINISTRATIVE AGENT.

               The Administrative Agent (i) may resign as Administrative Agent
or (ii) shall resign if such resignation is requested by the Required Lenders
(if the Administrative Agent is a Lender, the Administrative Agent's Loans and
its Commitment shall be considered in determining whether the Required Lenders
have requested such resignation) or required by Section 4.4.2, in either case of
(i) or (ii) by giving not less than thirty (30) days' prior written notice to
the Company, for all Borrowers. If the Administrative Agent shall resign under
this Agreement, then either (a) the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, subject to the consent of the
Company, for all Borrowers, such consent not to be unreasonably withheld, or (b)
if a successor agent shall not be so appointed and approved within the thirty
(30) day period following the Administrative Agent's notice to the Lenders of
its resignation, then the Administrative Agent shall appoint, with the consent
of the Company, for all Borrowers, such consent not to be unreasonably withheld,
a successor agent who shall serve as Administrative Agent until such time as the
Required Lenders appoint and the Company's consent on behalf of all Borrowers to
the appointment of a successor agent. Upon its appointment pursuant to either
clause (a) or (b) above, such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term "ADMINISTRATIVE
AGENT" shall mean such successor agent, effective upon its appointment, and the
former Administrative Agent's rights, powers and duties as Administrative Agent
shall be terminated without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to


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this Agreement. After the resignation of any Administrative Agent hereunder, the
provisions of this Section 9 shall inure to the benefit of such former
Administrative Agent and such former Administrative Agent shall not by reason of
such resignation be deemed to be released from liability for any actions taken
or not taken by it while it was an Administrative Agent under this Agreement.

          9.15 ADMINISTRATIVE AGENT'S FEE.

               The Borrowers, on a joint and several basis, shall pay to the
Administrative Agent a nonrefundable fee (the "ADMINISTRATIVE AGENT'S FEE")
under the terms of a letter (the "ADMINISTRATIVE AGENT'S LETTER") among the
Borrowers and Administrative Agent, as amended from time to time.

          9.16 AVAILABILITY OF FUNDS.

               The Administrative Agent may assume that each Lender has made or
will make the proceeds of the applicable Loan available to the Administrative
Agent in the applicable currency unless the Administrative Agent shall have been
notified by such Lender on or before the later of (1) the close of Business on
the Business Day preceding the Borrowing Date with respect to such Loan or two
(2) hours before the time on which the Administrative Agent actually funds the
proceeds of such Loan to the Borrowers (whether using its own funds pursuant to
this Section 9.16 or using proceeds deposited with the Administrative Agent by
the Lenders and whether such funding occurs before or after the time on which
Lenders are required to deposit the proceeds of such Loan with the
Administrative Agent). The Administrative Agent may, in reliance upon such
assumption (but shall not be required to), make available to the Borrowers a
corresponding amount in the applicable currency. If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender in the
applicable currency, the Administrative Agent shall be entitled to recover such
amount on demand from such Lender (or, if such Lender fails to pay such amount
forthwith upon such demand from the Borrower) together with interest thereon, in
respect of each day during the period commencing on the date such amount was
made available to the Borrowers and ending on the date the Administrative Agent
recovers such amount, at a rate per annum equal to (i) the Federal Funds
Effective Rate during the first three (3) days after such interest shall begin
to accrue and (ii) the applicable interest rate in respect of such Loan after
the end of such three-day period.

          9.17 CALCULATIONS.

               In the absence of gross negligence or willful misconduct, the
Administrative Agent shall not be liable for any error in computing the amount
payable to any Lender whether in respect of the Loans, fees or any other amounts
due to the Lenders under this Agreement. In the event an error in computing any
amount payable to any Lender is made, the Administrative Agent, the Borrowers
and each affected Lender shall, forthwith upon discovery of such error, make
such adjustments as shall be required to correct such error, and any
compensation therefor will be calculated at the Federal Funds Effective Rate or
the Overnight Rate if such computation relates to a Revolving Credit Loan made
in an Optional Currency.


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          9.18 NO RELIANCE ON ADMINISTRATIVE AGENT'S CUSTOMER IDENTIFICATION
PROGRAM.

               Each Lender acknowledges and agrees that neither such Lender, nor
any of its Affiliates, participants or assignees, may rely on the Administrative
Agent to carry out such Lender's, Affiliate's, participant's or assignee's
customer identification program, or other obligations required or imposed under
or pursuant to the USA Patriot Act or the regulations thereunder, including the
regulations contained in 31 CFR 103.121 (as hereafter amended or replaced, the
"CIP REGULATIONS"), or any other Anti-Terrorism Law, including any programs
involving any of the following items relating to or in connection with any of
the Loan Parties, their Affiliates or their agents, the Loan Documents or the
transactions hereunder or contemplated hereby: (1) any identity verification
procedures, (2) any recordkeeping, (3) comparisons with government lists, (4)
customer notices or (5) other procedures required under the CIP Regulations or
such other Laws.

          9.19 BENEFICIARIES.

               Except as expressly provided herein, the provisions of this
Section 9 are solely for the benefit of the Administrative Agent and the
Lenders, and the Loan Parties shall not have any rights to rely on or enforce
any of the provisions hereof. In performing its functions and duties under this
Agreement, the Administrative Agent shall act solely as agent of the Lenders and
does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for any of the Loan Parties.

                                10. MISCELLANEOUS

          10.1 MODIFICATIONS, AMENDMENTS OR WAIVERS.

               With the written consent of the Required Lenders, the
Administrative Agent, acting on behalf of all the Lenders, and the Company on
behalf of the Loan Parties, may from time to time enter into written agreements
amending or changing any provision of this Agreement or any other Loan Document
or the rights of the Lenders or the Loan Parties hereunder or thereunder, or may
grant written waivers or consents to a departure from the due performance of the
Obligations of the Loan Parties hereunder or thereunder. Any such agreement,
waiver or consent made with such written consent shall be effective to bind all
the Lenders and the Loan Parties; provided, that, no such agreement, waiver or
consent may be made which will:

          10.1.1 INCREASE OF COMMITMENT.

               Increase the amount of the Revolving Credit Commitment or Swing
Loan Commitment of any Lender hereunder without the written consent of all
Lenders;


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               10.1.2 EXTENSION OF PAYMENT; REDUCTION OF PRINCIPAL INTEREST OR
FEES.

               Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan (excluding the due date of any
mandatory prepayment of a Loan or any mandatory Commitment reduction in
connection with such a mandatory prepayment hereunder except for mandatory
reductions of the Commitments on the Expiration Date), the Commitment Fee or any
other fee payable to any Lender, or reduce the principal amount of or the rate
of interest borne by any Loan or reduce the Commitment Fee or any other fee
payable to any Lender, without the written consent of all Lenders;

               10.1.3 RELEASE A GUARANTOR.

               Except in connection with a transaction permitted hereunder or as
otherwise permitted hereunder, release any Guarantor from its Obligations under
the Guaranty Agreement, without the written consent of the Administrative Agent
and all Lenders; or

               10.1.4 MISCELLANEOUS.

               Amend Sections 4.2, 9.6 or 9.13 or this Section 10.1, alter any
provision regarding the pro rata treatment of the Lenders or requiring all
Lenders to authorize the taking of any action or reduce any percentage specified
in the definition of Required Lenders, in each case without the consent of all
the Lenders (other than Defaulting Lenders);

               provided, that no agreement, waiver or consent which would modify
the interests, rights or obligations of the Administrative Agent in its capacity
(as applicable) as Administrative Agent or the issuer of Letters of Credit or
PNC Bank, in the case of Swing Loan, without the written consent of the
Administrative Agent and each such other affected Person, as applicable, and
provided, further, that, if in connection with any proposed waiver, amendment or
modification referred to in Sections 10.1.1 through 10.1.4 above, the consent of
the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained (each a "NON-CONSENTING
LENDER"), then the Borrower shall have the right to replace any such
Non-Consenting Lender with one or more replacement Lenders pursuant to Section
4.4.2.

          10.2 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.

               No course of dealing and no delay or failure of the
Administrative Agent or any Lender in exercising any right, power, remedy or
privilege under this Agreement or any other Loan Document shall affect any other
or future exercise thereof or operate as a waiver thereof, nor shall any single
or partial exercise thereof or any abandonment or discontinuance of steps to
enforce such a right, power, remedy or privilege preclude any further exercise
thereof or of any other right, power, remedy or privilege. The rights and
remedies of the Administrative Agent and the Lenders under this Agreement and
any other Loan Documents are cumulative and not exclusive of any rights or
remedies which they would otherwise have. Any waiver, permit, consent or
approval of any kind or character on the part of any Lender of any breach or
default


                                      106



under this Agreement or any such waiver of any provision or condition of this
Agreement must be in writing and shall be effective only to the extent
specifically set forth in such writing.

          10.3 REIMBURSEMENT AND INDEMNIFICATION OF LENDERS BY THE BORROWER.

               The Borrowers, jointly and severally, agree unconditionally upon
demand to pay or reimburse to each Lender (other than the Administrative Agent,
as to which the Borrowers' Obligations are set forth in Section 9.5) and to save
such Lender harmless against (i) liability for the payment of all reasonable
out-of-pocket costs, expenses and disbursements (including reasonable fees and
expenses of counsel for each Lender except with respect to (a) and (b) below),
incurred by such Lender (a) in connection with the administration and
interpretation of this Agreement, and other instruments and documents to be
delivered hereunder, (b) relating to any amendments, waivers or consents
pursuant to the provisions hereof, (c) in connection with the enforcement of
this Agreement or any other Loan Document, or collection of amounts due
hereunder or thereunder or the proof and allowability of any claim arising under
this Agreement or any other Loan Document, whether in bankruptcy or receivership
proceedings or otherwise, and (d) in any workout or restructuring or in
connection with the protection, preservation, exercise or enforcement of any of
the terms hereof or of any rights hereunder or under any other Loan Document or
in connection with any foreclosure, collection or bankruptcy proceedings, or
(ii) all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (other than taxes) which may be imposed on, incurred by or asserted
against such Lender, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by such Lender hereunder or thereunder, provided that the Borrowers shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements (A) if
the same results from such Lender's gross negligence or willful misconduct, or
(B) if the Borrowers were not given notice of the subject claim and the
opportunity to participate in the defense thereof, at its expense (except that
the Borrowers shall remain liable to the extent such failure to give notice does
not result in a loss to the Borrower), or (C) if the same results from a
compromise or settlement agreement entered into without the consent of the
Borrowers, which shall not be unreasonably withheld. The Lenders will attempt to
minimize the fees and expenses of legal counsel for the Lenders which are
subject to reimbursement by the Borrowers hereunder by considering the usage of
one law firm to represent the Lenders and the Administrative Agent if
appropriate under the circumstances.

          10.4 HOLIDAYS.

               Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day (except as provided in Section 3.2 with respect to Interest Periods
under the Euro-Rate Option) and such extension of time shall be included in
computing interest and fees, except that the Loans shall be due on the Business
Day preceding the Expiration Date if the Expiration Date is not a Business Day.
Whenever any payment or action to be made or taken hereunder (other than payment
of the Loans) shall be stated to be due on a day which is not a Business Day,
such


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payment or action shall be made or taken on the next following Business Day, and
such extension of time shall not be included in computing interest or fees, if
any, in connection with such payment or action.

          10.5 FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE.

               10.5.1 NOTIONAL FUNDING.

               Each Lender shall have the right from time to time, without
notice to the Borrowers, to deem any branch, Subsidiary or Affiliate (which for
the purposes of this Section 10.5 shall mean any corporation or association
which is directly or indirectly controlled by or is under direct or indirect
common control with any corporation or association which directly or indirectly
controls such Lender) of such Lender to have made, maintained or funded any Loan
to which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from the Borrowers to
such other office), and as a result of such change, the Borrowers would not be
under any greater financial obligation pursuant to Section 4.6 than it would
have been in the absence of such change. Notional funding offices may be
selected by each Lender without regard to such Lender's actual methods of
making, maintaining or funding the Loans or any sources of funding actually used
by or available to such Lender.

               10.5.2 ACTUAL FUNDING.

               Each Lender shall have the right from time to time to make or
maintain any Loan or Letter of Credit Borrowing by arranging for a branch,
Subsidiary or Affiliate of such Lender to make or maintain such Loan subject to
the last sentence of this Section 10.5.2. If any Lender causes a branch,
Subsidiary or Affiliate to make or maintain any part of the Loans or Letter of
Credit Borrowing hereunder, all terms and conditions of this Agreement shall,
except where the context clearly requires otherwise, be applicable to such part
of the Loans or Letter of Credit Borrowing to the same extent as if such Loans
or Letter of Credit Borrowing were made or maintained by such Lender, but in no
event shall any Lender's use of such a branch, Subsidiary or Affiliate to make
or maintain any part of the Loans or Letter of Credit Borrowing hereunder cause
such Lender or such branch, Subsidiary or Affiliate to incur any cost or
expenses payable by the Borrowers hereunder or require the Borrowers to pay any
other compensation to any Lender (including any expenses incurred or payable
pursuant to Section 4.6) which would otherwise not be incurred.

          10.6 NOTICES; LENDING OFFICES.

               Any notice, request, demand, direction or other communication
(for purposes of this Section 10.6 only, a "NOTICE") to be given to or made upon
any party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes means of electronic transmission (i.e.,
"e-mail") or facsimile transmission or by setting forth such Notice on a site on
the World Wide Web (a "WEBSITE POSTING") if Notice of such Website Posting
(including the information necessary to access such site) has previously been
delivered to the applicable parties hereto by another means set forth in this
Section 10.6) in


                                      108



accordance with this Section 10.6. Any such Notice must be delivered to the
applicable parties hereto at the addresses and numbers set forth under their
respective names on SCHEDULE 1.1(B) hereof or in accordance with any subsequent
unrevoked Notice from any such party that is given in accordance with this
Section 10.6. Any Notice shall be effective:

                    (i) In the case of hand-delivery, when delivered;

                    (ii) If given by mail, four days after such Notice is
deposited with the United States Postal Service, with first-class postage
prepaid, return receipt requested;

                    (iii) In the case of a telephonic Notice, when a party is
contacted by telephone, if delivery of such telephonic Notice is confirmed no
later than the next Business Day by hand delivery, a facsimile or electronic
transmission, a Website Posting or overnight courier delivery of a confirmatory
notice (received at or before noon on such next Business Day);

                    (iv) In the case of a facsimile transmission, when sent to
the applicable party's facsimile machine's telephone number if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;

                    (v) In the case of electronic transmission, when actually
received;

                    (vi) In the case of a Website Posting, upon delivery of a
Notice of such posting (including the information necessary to access such web
site) by another means set forth in this Section 10.6; and

                    (vii) If given by any other means (including by overnight
courier), when actually received.

Any Lender giving a Notice to a Loan Party shall concurrently send a copy
thereof to the Administrative Agent, and the Administrative Agent shall promptly
notify the other Lenders of its receipt of such Notice. SCHEDULE 1.1(B) lists
the Lending Offices of each Lender. Each Lender may change its respective
Lending Office by written Notice to the Administrative Agent and other Lenders.

          10.7 SEVERABILITY.

               The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole
or in part in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without in
any manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.


                                      109



          10.8 GOVERNING LAW.

               This Agreement shall be governed by and construed in accordance
with the laws of the State of New York. Each standby Letter of Credit issued
under this Agreement shall be subject either to the rules of the Uniform Customs
and Practice for Documentary Credits, as most recently published by the
International Chamber of Commerce (the "ICC") at the time of issuance ("UCP") or
the rules of the International Standby Practices (ICC Publication Number 590),
as determined by the issuing Lender, and each trade Letter of Credit issued
under this Agreement shall be subject to the UCP, and in each case to the extent
not inconsistent therewith, the Laws of the State of New York without regard to
its conflict of laws principles.

          10.9 PRIOR UNDERSTANDING.

               This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.

          10.10 DURATION; SURVIVAL.

               All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the Administrative Agent or the
Lenders, the making of Loans, issuance of Letters of Credit, or payment in full
of the Loans. All covenants and agreements of the Loan Parties contained herein
shall continue in full force and effect from and after the date hereof so long
as the Borrowers may borrow or request Letters of Credit hereunder and until
termination of the Commitments and payment in full of the Obligations (other
than non-assessed contingent reimbursement obligations) and expiration or
termination of all Letters of Credit. Section 4 and Sections 9.5, 9.7 and 10.3
shall survive payment in full of the Obligations, expiration or termination of
the Letters of Credit and termination of the Commitments. In addition, all
covenants and agreements of the Borrowers and the Lenders contained herein
shall, if any related payment is later declared to be a fraudulent conveyance or
a preference in any respect, set aside or required to be paid to a debtor in
possession, any secured party, receiver or similar Person, or otherwise voided
or nullified (a "VOIDED PAYMENT"), be reinstated and deemed to have survived
payment in full of the Obligations, expiration or termination of the Letters of
Credit and termination of the Commitments, to the extent such reinstatement and
survival is necessary for the Administrative Agent to recover such Voided
Payment.

          10.11 SUCCESSORS AND ASSIGNS.

                    (i) This Agreement shall be binding upon and shall inure to
the benefit of the Lenders, the Administrative Agent, the Loan Parties and their
respective successors and assigns, except that none of the Loan Parties may
assign or transfer any of its rights and Obligations hereunder or any interest
herein. Each Lender may, at its own cost, make assignments of or sell
participations in all or any part of its Commitments and the Loans and


                                      110



Letter of Credit Borrowings made by it to one or more banks or other entities,
subject to the consent of the Company, on behalf of the Borrowers, and the
Administrative Agent with respect to any assignee, such consent not to be
unreasonably withheld, provided that (1) no consent of the Borrowers shall be
required (A) if an Event of Default exists and is continuing, or (B) in the case
of an assignment by a Lender to an Affiliate of such Lender, and (2) any
assignment by a Lender to a Person other than an Affiliate of such Lender may
not be made in amounts less than the lesser of $5,000,000.00 and the amount of
the assigning Lender's Revolving Credit Commitment. In the case of an
assignment, upon receipt by the Administrative Agent of the Assignment and
Assumption Agreement, the assignee shall have, to the extent of such assignment
(unless otherwise provided therein), the same rights, benefits and obligations
as it would have if it had been a signatory Lender hereunder, the Commitments
shall be adjusted accordingly, and upon surrender of any Note subject to such
assignment, the Borrowers shall execute and deliver a new Note to the assignee,
if such assignee requests such a Note in an amount equal to the amount of the
Revolving Credit Commitment assumed by it and a new Revolving Credit Note to the
assigning Lender, if the assigning Lender requests such a Note, in an amount
equal to the Revolving Credit Commitment retained by it hereunder. Any Lender
which assigns any or all of its Revolving Credit Commitment or Loans to a Person
other than an Affiliate of such Lender shall pay to the Administrative Agent a
service fee in the amount of $3,500.00 for each assignment. In the case of a
participation, the participant shall only have the rights specified in Section
8.2.3 (the participant's rights against such Lender in respect of such
participation to be those set forth in the agreement executed by such Lender in
favor of the participant relating thereto and not to include any voting rights
except with respect to changes of the type referenced in Sections 10.1.1,
10.1.2, or 10.1.3), all of such Lender's obligations under this Agreement or any
other Loan Document shall remain unchanged, and all amounts payable by any Loan
Party hereunder or thereunder shall be determined as if such Lender had not sold
such participation.

                    (ii) Any assignee or participant which is not incorporated
under the Laws of the United States of America or a state thereof shall deliver
to the Borrowers and the Administrative Agent the form of certificate described
in Section 10.17 relating to federal income tax withholding. Each Lender may
furnish any publicly available information concerning any Loan Party or its
Subsidiaries and any other information concerning any Loan Party or its
Subsidiaries in the possession of such Lender from time to time to assignees and
participants (including prospective assignees or participants), provided that
such assignees and participants agree to be bound by the provisions of Section
10.12.

                    (iii) Notwithstanding any other provision in this Agreement,
any Lender may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Note (if any) and the other Loan
Documents to any Federal Reserve Lender in accordance with Regulation A of the
FRB or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or
consent of the Borrowers or the Administrative Agent. No such pledge or grant of
a security interest shall release the Transferor Lender of its obligations
hereunder or under any other Loan Document.


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          10.12 CONFIDENTIALITY.

               10.12.1 GENERAL.

               The Administrative Agent and the Lenders each agree to keep
confidential all information obtained from any Loan Party or its Subsidiaries
which is nonpublic and confidential or proprietary in nature (including any
information the Borrowers specifically designate as confidential), except as
provided below, and to use such information only in connection with their
respective capacities under this Agreement and for the purposes contemplated
hereby. The Administrative Agent and the Lenders shall be permitted to disclose
such information (i) to outside legal counsel, accountants and other
professional advisors who need to know such information in connection with the
administration and enforcement of this Agreement, subject to agreement of such
Persons to maintain the confidentiality, (ii) to assignees and participants as
contemplated by Section 10.11, and prospective assignees and participants who
will be required to maintain confidentiality as if they were a Lender under this
Agreement, (iii) to the extent requested by any bank regulatory authority or,
with notice to the Borrowers, as otherwise required by applicable Law or by any
subpoena or similar legal process, or in connection with any investigation or
proceeding arising out of the transactions contemplated by this Agreement, (iv)
if it becomes publicly available other than as a result of a breach of this
Agreement or becomes available from a source not known to be subject to
confidentiality restrictions, or (v) if the Borrowers shall have consented to
such disclosure.

               10.12.2 SHARING INFORMATION WITH AFFILIATES OF THE LENDERS.

               Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrowers or one or more of its Affiliates (in connection with this
Agreement or otherwise) by any Lender or by one or more Subsidiaries or
Affiliates of such Lender and each of the Loan Parties hereby authorizes each
Lender to share any information delivered to such Lender by such Loan Party and
its Subsidiaries pursuant to this Agreement, or in connection with the decision
of such Lender to enter into this Agreement, to any such Subsidiary or Affiliate
of such Lender, it being understood that any such Subsidiary or affiliate of any
Lender receiving such information shall be bound by the provisions of Section
10.12.1 as if it were a Lender hereunder. Such Authorization shall survive the
repayment of the Loans and other Obligations and the termination of the
Commitments. Each of the Administrative Agent, the Lenders and the issuer of
Letters of Credit, solely on its own behalf, acknowledges that the information
provided by the Loan Parties and their respective Subsidiaries may include
material non-public information concerning the Loan Parties or their respective
Subsidiaries, as the case may be, and that, to the extent such Person has not
opted out by written notice to the Administrative Agent and the Company from
receiving any such material non-public information, such Person will take
commercially reasonable measures to use such material non-public information in
compliance with applicable Law according to its usual procedures for the
handling of such information as in effect from time to time.


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          10.13 COUNTERPARTS.

               This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.

          10.14 ADMINISTRATIVE AGENT'S OR LENDER'S CONSENT.

               Whenever the Administrative Agent's or any Lender's consent is
required to be obtained under this Agreement or any of the other Loan Documents
as a condition to any action, inaction, condition or event, the Administrative
Agent and each Lender shall be authorized to give or withhold such consent in
its sole and absolute discretion (unless otherwise specified herein) and to
condition its consent upon the payment of money or any other matter.

          10.15 EXCEPTIONS.

               The representations, warranties and covenants contained herein
shall be independent of each other, and no exception to any representation,
warranty or covenant shall be deemed to be an exception to any other
representation, warranty or covenant contained herein unless expressly provided,
nor shall any such exceptions be deemed to permit any action or omission that
would be in contravention of applicable Law.

          10.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.

               EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL
COURT OF THE UNITED STATES OF AMERICA SITTING IN NEW YORK CITY, AND ANY
APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR PROCEEDING ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS TO WHICH IT IS A
PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY JUDGMENT, AND EACH PARTY HEREBY
IRREVOCABLY AND UNCONDITIONALLY AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH
ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH NEW YORK STATE
COURT OR, TO THE FULLEST EXTENT PERMITTED BY LAW, IN SUCH FEDERAL COURT, AND
EACH LOAN PARTY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND
CONSENTS THAT ALL SUCH SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED
MAIL DIRECTED TO SUCH LOAN PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 10.6
AND SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF.
EACH OF THE PARTIES HERETO HEREBY WAIVES ANY OBJECTION TO JURISDICTION AND VENUE
OF ANY ACTION INSTITUTED AGAINST IT AS PROVIDED HEREIN AND AGREES NOT TO ASSERT
ANY DEFENSE BASED ON LACK OF JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT
AND THE LENDERS HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR
COUNTERCLAIM OF


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ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
TO THE FULL EXTENT PERMITTED BY LAW.

          10.17 CERTIFICATIONS FROM LENDERS AND PARTICIPANTS.

               10.17.1 TAX WITHHOLDING.

               Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
(and, upon the written request of the Administrative Agent, each other Lender or
assignee or participant of a Lender) shall deliver to each of the Company and
the Administrative Agent two (2) duly completed appropriate valid Withholding
Certificates (as defined under Section 1.1441-1(c)(16) of the Income Tax
Regulations (the "REGULATIONS")) certifying its status (i.e. U.S. or foreign
person) and, if appropriate, making a claim of reduced, or exemption from, U.S.
withholding tax on the basis of an income tax treaty or an exemption provided by
the Internal Revenue Code. The term "WITHHOLDING CERTIFICATE" means a Form W-9;
a Form W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and
certifications as required under Section 1.1441-1(e)(2) and/or (3) of the
Regulations; a statement described in Section 1.871-14(c)(2)(v) of the
Regulations; or any other certificates under the Internal Revenue Code or
Regulations that certify or establish the status of a payee or beneficial owner
as a U.S. or foreign person. Each Lender, assignee or participant required to
deliver to the Company and the Administrative Agent a Withholding Certificate
pursuant to the preceding sentence shall deliver such valid Withholding
Certificate as follows: (A) each Lender which is a party hereto on the Closing
Date shall deliver such valid Withholding Certificate at least five (5) Business
Days prior to the first date on which any interest or fees are payable by the
Borrowers hereunder for the account of such Lender; (B) each assignee or
participant shall deliver such valid Withholding Certificate at least five (5)
Business Days before the effective date of such assignment or participation
(unless the Administrative Agent in its sole discretion shall permit such
assignee or participant to deliver such valid Withholding Certificate less than
five (5) Business Days before such date in which case it shall be due on the
date specified by the Administrative Agent). Each Lender, assignee or
participant which so delivers a valid Withholding Certificate further undertakes
to deliver to each of the Company and the Administrative Agent two (2)
additional copies of such Withholding Certificate (or a successor form) on or
before the date that such Withholding Certificate expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent
Withholding Certificate so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by the Borrowers
or the Administrative Agent. In addition, each Lender or assignee or participant
of a Lender that is not incorporated under the Laws of the United States of
America or state thereof (and, upon the written request of the Administrative
Agent, any financial institution through which any such Lender, assignee or
participant has directed any payment to be made) shall enter into and comply
with any applicable certification, documentation, information or other reporting
requirement or agreement concerning U.S. accounts that it maintains or
concerning U.S. ownership of such Lender, assignee or participant, or any
substantially similar requirement or agreement, if entering into or complying
with such requirement or agreement is required by statute or regulation of the
United States as a precondition to relief or exemption from any tax, assessment
or other governmental


                                      114



charge. Notwithstanding the submission of a Withholding Certificate claiming a
reduced rate of or exemption from U.S. withholding tax, the Administrative Agent
shall be entitled to withhold United States federal income taxes at the full 30%
withholding rate if in its reasonable judgment it is required to do so under the
due diligence requirements imposed upon a withholding agent under U.S. Federal
tax Law. Further, the Administrative Agent is indemnified under Section
1.1461-1(e) of the Regulations against any claims and demands of any Lender or
assignee or participant of a Lender for the amount of any tax it deducts and
withholds in accordance with regulations under Section 1441 of the Internal
Revenue Code.

               10.17.2 USA PATRIOT ACT.

               Each Lender or assignee or participant of a Lender that is not
incorporated under the Laws of the United States of America or a state thereof
(and is not excepted from the certification requirement contained in Section 313
of the USA Patriot Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical
presence in the United states or foreign county, and (ii) subject to supervision
by a banking authority regulating such affiliated depository institution or
foreign bank) shall deliver to the Administrative Agent the certification, or,
if applicable, recertification, certifying that such Lender is not a "shell" and
certifying to other matters as required by Section 313 of the USA Patriot Act
and the applicable regulations: (1) within 10 days after the Closing Date, and
(2) at such other times as are required under the USA Patriot Act.

          10.18 NATURE OF FOREIGN BORROWER OBLIGATIONS.

               (a) Notwithstanding the joint and several liability of the
Foreign Borrowers under this Agreement or any other Loan Document, and
notwithstanding any other provision herein and in any other Loan Document, all
obligations and liabilities of each Foreign Borrower under this Agreement and
any of the Loan Documents on account of principal and interest under the Loans
and Reimbursement Obligations and Letters of Credit Borrowings shall be limited
to the principal amount advanced to such Foreign Borrower or its Subsidiaries
and reimbursement of draws under Letters of Credit issued for the account of
such Foreign Borrower or its Subsidiaries and, in each case, interest thereon.
Each Foreign Borrower shall be liable only for its pro rata share of all fees
and expenses and other sums due hereunder (other than principal and interest on
the Loans) based upon the ratio of the sum of Loans outstanding to and Letters
of Credit issued for such Foreign Borrower to the total amount of Loans
outstanding and Letters of Credit issued hereunder.

               (b) Any Foreign Borrower may from time to time deliver a
termination notice to the Administrative Agent requesting that it no longer be a
party hereto. Such termination shall be effective two Business Days after
receipt by the Administrative Agent so long as all obligations of such Foreign
Borrower hereunder have been paid in full (including principal, interest and
other amounts) and no Letter of Credit issued for the account or benefit of such
Foreign Borrower is outstanding; provided that, to the extent this Agreement
provides for the survival of certain provisions upon termination hereof, such
surviving provisions shall survive a termination under this subsection with
respect to any such Foreign Borrower. Following receipt of such notice, no
further Loans may be borrowed by such Foreign Borrower


                                      115



hereunder, unless such Foreign Borrower shall thereafter rejoin this Agreement
as a Borrower pursuant to the joinder provisions of Section 7.1.10.

          10.19 PLEDGE OF FOREIGN LOAN PARTY LOANS.

               (a) To secure all of the Obligations, each of the Loan Parties
(other than the Foreign Loan Parties) hereby grants to the Administrative Agent,
for its benefit and the benefit of the Lenders, a security interest in and to
the following property of such Loan Party, whether now or hereafter existing,
and wherever located (collectively, the "PLEDGED COLLATERAL"): (i) loans and
advances made by the Loan Parties to Foreign Loan Parties pursuant to Section
7.2.4(v)(b) in an aggregate amount equal to the amount by which the aggregate
amount of loans and advances pursuant to Section 7.2.4(v)(b) exceeds
$20,000,000.00 (collectively, the "PLEDGED LOANS"); (ii) all instruments,
promissory notes, chattel paper, documents, certificates, securities and
investment property evidencing such Pledged Loans; (iii) all Liens and other
contracts securing or otherwise relating to such Pledged Loans; (iv) all books
and records relating to such Pledged Loans and items of collateral described in
the preceding clauses (ii) and (iii); and (v) all proceeds of such Pledged Loans
and items of collateral described in the preceding clauses (ii) and (iii).

               (b) In furtherance of the foregoing: (i) the Company, on behalf
of the Loan Parties, shall promptly as practicable after the existence thereof,
cause all of the Pledged Loans to be evidenced by a duly executed intercompany
promissory note and deliver same to the Administrative Agent together with all
other original items of Pledged Collateral of a type requiring possession by the
Administrative Agent for perfection of the Administrative Agent's and Lenders'
Lien under applicable Law, duly endorsed and dated in blank, if such endorsement
is necessary or customary; and (ii) the Loan Parties hereby authorize the
Administrative Agent, for its benefit and the benefit of the Lenders, to file
Uniform Commercial Code financing statements naming each Loan Party holding
Pledged Collateral as a debtor and describing the Pledged Collateral therein.
Upon and during the continuation of an Event of Default, the Administrative
Agent, for its benefit and the benefit of the Lenders, may exercise all of the
rights and remedies of a secured creditor with respect to the Pledged Collateral
under the applicable Uniform Commercial Code, including without limitation the
right to demand that payment of the Pledged Collateral be made directly to the
Administrative Agent, for its benefit and the benefit of the Lenders, for
application to the Obligations consistent with Section 8.2.5.

               (c) If, after the pledge of Pledged Loans as contemplated in this
Section 10.19, the aggregate amount of loans and advances made by the Loan
Parties to Foreign Loan Parties under Section 7.2.4(v)(b) no longer exceeds
$20,000,000.00, the Borrower Agent may provide to the Administrative Agent a
certificate of a Responsible Officer certifying to such fact (including
reasonable confirming calculations) and request that the Administrative Agent
release such Pledged Loans. The Administrative shall thereafter effectuate such
release by return of the original Pledged Collateral relating to such Pledged
Loans to the Borrower Agent and amendment to any of its applicable Uniform
Commercial Code financing statements. Any such release shall be limited to the
specific Pledged Loans released and shall not constitute a general release of
the requirements of Section 7.2.4(v)(b) and this Section 10.19.


                                       116



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

                                        BORROWERS:
                                        P.H. GLATFELTER COMPANY


                                        By: /s/ John P. Jacunski
                                            ------------------------------------
                                        Name: John P. Jacunski
                                        Title: Senior Vice President and Chief
                                               Financial Officer


                                        PHG TEA LEAVES, INC.


                                        By: /s/ George B. Amoss, Jr.
                                            ------------------------------------
                                        Name: George B. Amoss, Jr.
                                        Title: Vice President


                                        GLATFELTER GERNSBACH GMBH & CO. KG

                                        By: Glatfelter Verwaltungsgesellschaft
                                            mbH,
                                            its General Partner


                                        By: /s/ John P. Jacunski
                                            ------------------------------------
                                        Name: John P. Jacunski
                                        Title: Managing Director
                                               (Geschaftsfuhrer)


                                        GLATFELTER VERWALTUNGSGESELLSCHAFT MBH


                                        By: /s/ Martin Rapp
                                            ------------------------------------
                                        Name: Martin Rapp
                                        Title: Managing Director
                                               (Geschaftsfuhrer)


                                        GLATFELTER LYDNEY, LTD.


                                        By: /s/ Martin Rapp
                                            ------------------------------------
                                        Name: Martin Rapp
                                        Title: Director


                                        MOLLANVICK, INC.


                                        By: /s/ George B. Amoss, Jr.
                                            ------------------------------------
                                        Name: George B. Amoss, Jr.
                                        Title: President


                                      117



                                      GLATFELTER FALKENHAGEN GMBH


                                      By: /s/ Martin Rapp
                                          ------------------------------------
                                      Name: MARTIN RAPP
                                      Title: Managing Director (Geschaftsfuhrer)


                                      GLATFELTER FALKENHAGEN HOLDING GMBH


                                      By: /s/ Martin Rapp
                                          ------------------------------------
                                      Name: MARTIN RAPP
                                      Title: Managing Director (Geschaftsfuhrer)


                                      GLATFELTER CANADA INC.


                                      By: /s/ John P. Jacunski
                                          ------------------------------------
                                      Name: John P. Jacunski
                                      Title: Vice President


                                      GLATFELTER GATINEAU LTEE


                                      By: /s/ John P. Jacunski
                                          ------------------------------------
                                      Name: John P. Jacunski
                                      Title: Vice President


                                      GLATFELTER CAERPHILLY LTD.


                                      By: /s/ Martin Rapp
                                          ------------------------------------
                                      Name: Martin Rapp
                                      Title: Director


                                      118



                                        GUARANTORS:

                                        THE GLATFELTER PULP WOOD COMPANY


                                        By: /s/ Thomas V. Bosley
                                            ------------------------------------
                                        Name: Thomas V. Bosley
                                        Title: Vice President and
                                               General Manager


                                        GLATFELTER HOLDINGS, LLC


                                        By: /s/ Donald R. Gross
                                            ------------------------------------
                                        Name: Donald R. Gross
                                        Title: Treasurer


                                      119



                                        PNC BANK, NATIONAL ASSOCIATION, and as
                                        Administrative Agent and as a Lender


                                        By: /s/ Brian Vesey
                                            ------------------------------------
                                        Name:  Brian Vesey
                                        Title:  Vice President


                                      120



                                        CITIZENS BANK OF PENNSYLVANIA, as
                                        Syndications Agent and a Lender


                                        By: /s/ Michael J. Gillig
                                            ------------------------------------
                                        Name: Michael J. Gillig
                                        Title: Vice President


                                      121



                                        COBANK, ACB, as a Lender


                                        By: /s/ Jeffrey C. Norte
                                            ------------------------------------
                                        Name: Jeffrey C. Norte
                                        Title: Vice President


                                      122



                                        MANUFACTURERS AND TRADERS TRUST COMPANY,
                                        as a Lender


                                        By: /s/ Paul R. Delmonte
                                            ------------------------------------
                                        Name: Paul R. Delmonte
                                        Title: Assistant Vice President


                                      123




                                        HSBC BANK USA, N.A., as a Lender


                                        By: /s/ Susan A. Waters
                                            ------------------------------------
                                        Name: Susan A. Waters
                                        Title: Vice President


                                      124




                                        BANK OF AMERICA, N.A., as a Lender


                                        By: /s/ Michael J. Balok
                                            ------------------------------------
                                        Name: Michael J. Balok
                                        Title:  Sr. Vice President


                                      125



                                        JPMORGAN CHASE BANK, N.A., as a Lender


                                        By: /s/ James A. Knight
                                            ------------------------------------
                                        Name: James A. Knight
                                        Title: Vice President


                                      126



                                 SCHEDULE 1.1(A)

                   PRICING GRID FOR P. H. GLATFELTER COMPANY*
                             PRICING IN BASIS POINTS



                               LEVEL I           LEVEL II           LEVEL III         LEVEL IV          LEVEL V
                          ----------------   ----------------   ----------------   --------------   --------------
                                                                                                        IF THE
                          IF THE COMPANY'S                                             IF THE       COMPANY'S DEBT
                           DEBT RATING IS    IF THE COMPANY'S   IF THE COMPANY'S   COMPANY'S DEBT      RATING IS
                             BAA2/BBB OR      DEBT RATING IS     DEBT RATING IS       RATING IS       BA3/BB- OR
BASIS FOR PRICING              HIGHER.          BAA3/BBB-.          BA1/BB+.           BA2/BB.          LOWER.
- -----------------         ----------------   ----------------   ----------------   --------------   --------------
                                                                                     
COMMITMENT FEE                    30                 35               42.5                50               60
LETTER OF CREDIT
   FEE/EURO-RATE SPREAD          175                200                225               250              275
BASE RATE SPREAD                  75                100                125               150              175


*    IN THE EVENT THE COMPANY'S SENIOR UNSECURED DEBT IS SPLIT-RATED, PRICING
     WILL BE DETERMINED BY THE HIGHER OF THE TWO RATINGS, EXCEPT THAT IF THE
     RATINGS DIFFER BY MORE THAN ONE LEVEL, PRICING WILL BE DETERMINED BY ONE
     LEVEL ABOVE THE LOWER RATING. IN THE EVENT THAT EITHER MOODY'S OR STANDARD
     & POOR'S SHALL CEASE TO RATE THE SENIOR UNSECURED DEBT OF THE COMPANY,
     LEVEL V PRICING SHALL APPLY. INCREASES OR DECREASES IN PRICING AND FEES
     PURSUANT TO THE GRID ABOVE SHALL BE EFFECTIVE AS OF THE DATE ON WHICH ANY
     RATING OF THE SENIOR UNSECURED DEBT OF THE COMPANY SHALL CHANGE (IF SUCH
     CHANGE RESULTS IN A CHANGE IN THE PRICING LEVEL), EXCEPT THAT ANY INCREASE
     OR DECREASE IN THE PRICING RELATING TO OUTSTANDING BORROWING TRANCHES OF
     LOANS IN AN OPTIONAL CURRENCY SHALL BE EFFECTIVE UPON THE EXPIRATION OF THE
     CURRENT INTEREST PERIOD (AND NOT AT THE TIME OF THE CHANGE IN THE COMPANY'S
     SENIOR UNSECURED DEBT RATING).

                               SCHEDULE 1.1(A) - 1

PRN 459548



                                 SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

PART 1 - COMMITMENTS OF LENDERS AND ADDRESSES FOR NOTICES TO LENDERS AND
ADMINISTRATIVE AGENT



                                                     AMOUNT
                                                 OF COMMITMENT       AMOUNT OF
                                                 FOR REVOLVING    COMMITMENT FOR
                    LENDER                        CREDIT LOANS      SWING LOANS       COMMITMENT      RATABLE SHARE
                    ------                      ---------------   --------------   ---------------   --------------
                                                                                         
LENDER NAME (ALSO
ADMINISTRATIVE AGENT):
PNC Bank, National Association
ADDRESS FOR NOTICES:
1000 Westlakes Drive
Suite 200
Berwyn, PA 19312
Phone: 610-725-5740
Fax:610-725-5799
Email: brian.vesey@pnc.com

ADDRESS OF LENDING OFFICE:                      $ 40,000,000.00   $20,000,000.00   $ 40,000,000.00     17.777777778%
PNC Firstside Center, 3rd Floor
500 First Ave.
Pittsburgh, PA  15219
Attention: Rini Davis
Telephone: (412) 762-7638
Facsimile: (412) 762-8672
Email: rini.davis@pnc.com

LENDER NAME:
Citizens Bank of Pennsylvania
ADDRESS FOR NOTICES:
2 N. Second Street, FL 12
Harrisburg, PA  17101
Attention: Curt S. Lang, VP
Telephone: (717) 777-3350
Facsimile: (717) 777-3363
Email: curt.s.lang@citizensbank.com

ADDRESS OF LENDING OFFICE:                      $ 40,000,000.00         N/A        $ 40,000,000.00     17.777777778%
2 N. Second Street, FL 12



                               SCHEDULE 1.1(B) - 1

PRN 459548



                                                                                         
Harrisburg, PA 17101
Attention: Lynn Downing
Telephone: (781) 655-4398
Facsimile: (781) 655-4097
Email: lynn.downing@rbscitizens.com

LENDER NAME:
CoBank, ACB
ADDRESS FOR NOTICES:
5500 South Quebec St.
Greenwood Village, CO 80111
Attention: Michael Tousignant
Telephone: (303) 694-5838
Facsimile:
Email: mtousignant@cobank.com

ADDRESS OF LENDING OFFICE:                      $ 35,000,000.00         N/A        $ 35,000,000.00     15.555555556%
5500 South Quebec St.
Greenwood Village, CO 80111
Attention: Betty Marshall
(303) 740-4016
Facsimile: (303) 740-4021
Email: Agencybank@cobank.com

LENDER NAME:
Manufacturers and Traders Trust
Company

ADDRESS FOR NOTICES:
2055 S. Queens St., 2nd Floor
York, PA 17403
Attention: Paul Delmonte
Telephone: (717) 771-4901
Facsimile: (717) 771-4914
Email: pdelmonte@mtb.com

ADDRESS OF LENDING OFFICE:                      $ 35,000,000.00         N/A        $ 35,000,000.00     15.555555556%
2055 S. Queens St., 2nd Floor
York, PA 17403
Attention: Paul Delmonte
Telephone: (717) 771-4901
Facsimile: (717) 771-4914
Email: pdelmonte@mtb.com

LENDER NAME:




                               SCHEDULE 1.1(B) - 2

PRN 459548



                                                                                         
HSBC Bank USA, N.A.
ADDRESS FOR NOTICES:
Four Tower Bridge
200 Barr Harbor Dr.
Suite 400
West Conshohoken, PA 19428
Attention: Susan Waters
Telephone: (267) 575-0042
Facsimile:
Email: susan.waters@us.hsbc.com

ADDRESS OF LENDING OFFICE:                      $ 28,000,000.00         N/A        $ 28,000,000.00     12.444444444%
Four Tower Bridge
200 Barr Harbor Dr.
Suite 400
West Conshohoken, PA 19428
Attention: Tina Craiglow
Telephone: (716) 841-1670
Facsimile: (917) 229-0979
Email: tina.craiglow@us.hsbc.com

LENDER NAME:
Bank of America, N.A.
ADDRESS FOR NOTICES:
315 Montgomery St., 6th Fl.
San Francisco, CA 94104-1866
Attention: Michael J. Balok, Sr. VP
Telephone: (415) 913-4776
Facsimile: (415) 913-2357
Email: mike.balok@baml.com

ADDRESS OF LENDING OFFICE:                      $ 23,500,000.00         N/A        $ 23,500,000.00     10.444444444%
315 Montgomery St., 6th Fl.
San Francisco, CA 94104-1866
Attention: Neha Walla
Telephone: (415) 436-4777 x 8621
Facsimile: (804) 266-8065
Email: neha.walla@bankofamerloan.com




                               SCHEDULE 1.1(B) - 3

PRN 459548



                                                                                         
LENDER NAME:
JPMorgan Chase Bank, N.A.
ADDRESS FOR NOTICES:
277 Park Ave., 23rd Floor
New York, NY 10172
Attention: James Knight
Telephone: (212) 622-8486
Facsimile: (212) 534-3081
Email: james.a.knight@jpmorgan.com

ADDRESS OF LENDING OFFICE:                      $ 23,500,000.00         N/A        $ 23,500,000.00     10.444444444%
277 Park Ave., 23rd Floor
New York, NY 10172
Attention: Non-Agented Servicing Team
Telephone: (312) 385-7072
Facsimile: (312) 256-2608
Email:
cls.chicago.non-agentedservicing@jpmorgan.com
TOTALS                                          $225,000,000.00   $20,000,000.00   $225,000,000.00   $100.000000000%




                               SCHEDULE 1.1(B) - 4

PRN 459548



                                 SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

PART 2 - ADDRESSES FOR NOTICES TO LOAN PARTIES:

EACH LOAN PARTY:

c/o P. H. Glatfelter Company
Address: 96 South George Street, Suite 500
York, PA 17401
Attention: George B. Amoss, Jr., Treasurer
Telephone: (717) 225-2746
Facsimile: (717) 812-8964
Email: gamoss@glatfelter.com


                               SCHEDULE 1.1(B) - 5

PRN 459548



                                 SCHEDULE 1.1(E)

                           EXISTING LETTERS OF CREDIT

L/C # 902151 $10,000 Beneficiary: PA Department of Environmental Resources
(expiration--7/19/2010), Issued by PNC Bank

L/C # 902152 $4,400,000 Beneficiary: Bureau of Worker's Compensation PA Self
Insurance Division (expiration--9/30/2010), Issued by PNC Bank

L/C # 18103725 $940,000 Beneficiary: Liberty Mutual (expiration--9/12/2010),
Issued by PNC Bank

L/C # 18103701 $350,000 Beneficiary: MD Workers Compensation
(expiration--9/8/2010), Issued by PNC Bank

L/C # 907756 $50,000 Beneficiary: Zurich American Insurance Comp.
(expiration--4/30/2010), Issued by M and T

L/C # 68030701 $1,100,000 Beneficiary: Royal Bank of Scotland
(expiration--5/31/2010), Issued by Bank of America

L/C# 68030688 $660,000 Beneficiary: ABN Amro Bank (expiration--5/12/2011),
Issued by Bank of America


                               Schedule 1.1(E) - 1


                                 SCHEDULE 1.1(M)

                              MATERIAL SUBSIDIARIES

Glatfelter Gatineau Ltee. (formerly known as Glatfelter Airlaid Inc.)

Glatfelter Falkenhagen Holding GmbH (formerly known as Concert Europe GmbH)

Glatfelter Falkenhagen GmbH (formerly known as Concert GmbH)

Glatfelter Pulp Wood Company

Glatfelter Canada, Inc.

Mollanvick, Inc.

Glatfelter Gernsbach GmbH & Co. KG (formerly known as Papierfabrik Schoeller &
Hoesch GmbH & Co. KG)

Glatfelter Verwaltungsgesellschaft mbH (formerly known as S&H
Verwaltungsgesellschaft mbH)

PHG Tea Leaves, Inc.

Glatfelter Lydney Ltd. (formerly known as Glatfelter-UK, Ltd.)


                               Schedule 1.1(M) - 1


                                 SCHEDULE 1.1(P)

                                 PERMITTED LIENS

1. The following UCC-1 financing statements, currently on file with the
Pennsylvania Department of State, Uniform Commercial Code Section, filed against
the Company, as debtor, which the Borrowers represent and warrant relate to
consignment arrangements of the Company, and extends only to the properties
consigned by (and no other property or assets of the Company):

File Type :             Original
File Number :           2006062206559
File Date :             06/19/2006
Current Secured Party
of Record :             AstenJohnson, Inc.

File Type :             Original
File Number :           2008022202824
File Date :             02/22/2008
Current Secured Party
of Record :             Motion Industries, Inc.

File Type :             Original
File Number :           2009082505490
File Date :             8/25/2009
Current Secured Party
of Record :             Kaman Industrial Technologies Corporation

File Type :             Original
File Number :           2009030401715
File Date :             3/3/2009
Current Secured Party
of Record :             Kemira Chemicals, Inc.

File Type :             Original
File Number :           2009072303111
File Date :             7/23/2009
Current Secured Party
of Record :             Alabama River Group, Inc.

2. The following UCC-1 financing statements, currently on file with the
Pennsylvania Department of State, Uniform Commercial Code Section, filed against
the Loan Parties, as debtors, which the Borrowers represent and warrant relate
to such Loan Parties and extend only to the equipment leased by (and no other
property or assets of) the Loan Parties:

File Type :             Original
File Number :           2006110303491


                               Schedule 1.1(P) - 1



File Date :             11/01/2006
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2007022304260
File Date :             02/22/2007
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2007050702028
File Date :             05/07/2007
Current Secured Party
of Record :             CIT Technologies Corporation

File Type :             Original
File Number :           2007050702066
File Date :             05/07/2007
Current Secured Party
of Record :             CIT Technologies Corporation

File Type :             Assignment
File Number :           2007102311832
File Date :             10/23/2007
Current Secured Party
of Record :             RBS Asset Finance, Inc.,
                        assignee of CIT Technologies Corporation

File Type :             Original
File Number :           2007060502329
File Date :             06/04/2007
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2007082305620
File Date :             08/23/2007
Current Secured Party
of Record :             CIT Technologies Corporation

File Type :             Assignment
File Number :           2007102311856
File Date :             10/23/2007
Current Secured Party
of Record :             RBS Asset Finance, Inc.,
                        assignee of CIT Technologies Corporation


                               Schedule 1.1(P) - 2



File Type :             Original
File Number :           2008010200939
File Date :             12/31/2007
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2008010201056
File Date :             12/31/2007
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2008011002269
File Date :             01/09/2008
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2008013006687
File Date :             01/30/2008
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2008031405798
File Date :             03/14/2008
Current Secured Party
of Record :             Macquarie Equipment Finance, LLC

File Type :             Assignment
File Number :           2008032507389
File Date :             03/25/2008
Current Secured Party
of Record :             RBS Asset Finance, Inc.,
                        assignee of Macquarie Equipment Finance, LLC

File Type :             Amendment
File Number :           2008040406208
File Date :             04/04/2008
Current Secured Party
of Record :             Macquarie Equipment Finance, LLC
(Glatfelter Pulp Wood Company added as Debtor)

File Type :             Original
File Number :           2008032100844


                               Schedule 1.1(P) - 3



File Date :             03/20/2008
Current Secured Party
of Record :             M&T Credit Services, LLC

File Type :             Original
File Number :           2008060203505
File Date :             06/2/2008
Current Secured Party
of Record :             Macquarie Equipment Finance, LLC

File Type :             Assignment
File Number :           2008060407608
File Date :             06/04/2008
Current Secured Party
of Record :             RBS Asset Finance, Inc.,
                        assignee of Macquarie Equipment Finance, LLC

File Type :             Original
File Number :           2008061105419
File Date :             06/11/2008
Current Secured Party
of Record :             Macquarie Equipment Finance, LLC

File Type :             Assignment
File Number :           2008061801910
File Date :             06/18/2008
Current Secured Party
of Record :             RBS Asset Finance, Inc.,
                        assignee of Macquarie Equipment Finance, LLC

File Type :             Original
File Number :           2008071602011
File Date :             07/16/2008
Current Secured Party
of Record :             Macquarie Equipment Finance, LLC

File Type :             Assignment
File Number :           2008072401763
File Date :             07/24/2008
Current Secured Party
of Record :             RBS Asset Finance, Inc.,
                        assignee of Macquarie Equipment Finance, LLC

File Type :             Original
File Number :           2008081906613
File Date :             08/19/2008


                               Schedule 1.1(P) - 4



Current Secured Party
of Record :             Macquarie Equipment Finance, LLC

File Type :             Assignment
File Number :           2008090903935
File Date :             09/09/2008
Current Secured Party
of Record :             RBS Asset Finance, Inc.,
                        assignee of Macquarie Equipment Finance, LLC

File Type :             Original
File Number :           2008101005240
File Date :             10/10/2008
Current Secured Party
of Record :             xpedx, An International Paper Company


File Type :             Original
File Number :           2009050802428
File Date :             5/7/2009
Current Secured Party
of Record :             Manufacturers and Traders Trust Company


File Type :             Original
File Number :           2009110604041
File Date :             11/06/2009
Current Secured Party
of Record :             Macquarie Equipment Finance, LLC

File Type :             Original
File Number :           2009112002465
File Date :             11/19/2009
Current Secured Party
of Record :             Manufacturers and Traders Trust Company

File Type :             Original
File Number :           2010021204935
File Date :             02/12/2010
Current Secured Party
of Record :             IBM Credit LLC


                               Schedule 1.1(P) - 5


                                 SCHEDULE 5.1.1

                          QUALIFICATIONS TO DO BUSINESS

                            P. H. GLATFELTER COMPANY
                                  SUBSIDIARIES



                                           JURISDICTION OF INCORPORATION
                 ENTITY                             OR FORMATION           STATES QUALIFIED TO DO BUSINESS
- ----------------------------------------   -----------------------------   -------------------------------
                                                                     
Glatfelter Falkenhagen Engineering GmbH    Germany                         N/A
(formerly known as AA-Tech Systems GmbH)

Glatfelter Gatineau Ltee. (formerly        Canada                          N/A
known as Glatfelter Airlaid Inc.)

Glatfelter Falkenhagen GmbH                Germany                         N/A
(formerly known as Concert GmbH)

Glatfelter Falkenhagen Holding GmbH        Germany                         N/A
(formerly known as Concert Europe GmbH)

P. H. Glatfelter Company (GLT)             Pennsylvania                    Alabama
                                                                           California
                                                                           Delaware
                                                                           Georgia
                                                                           Iowa
                                                                           Kansas
                                                                           Kentucky
                                                                           Massachusetts
                                                                           Michigan
                                                                           Minnesota
                                                                           Missouri
                                                                           North Carolina
                                                                           New Jersey
                                                                           Ohio
                                                                           Oregon
                                                                           Tennessee
                                                                           Texas
                                                                           Virginia
                                                                           Wisconsin
                                                                           West Virginia



                               Schedule 5.1.1 - 1





                                           JURISDICTION OF INCORPORATION
                 ENTITY                             OR FORMATION           STATES QUALIFIED TO DO BUSINESS
- ----------------------------------------   -----------------------------   -------------------------------
                                                                     
PHG Tea Leaves, Inc.                       Delaware                        N/A

Glatfelter Canada, Inc.                    Canada                          N/A

Glatfelter Pulp Wood Company               Maryland                        Delaware
                                                                           Pennsylvania
                                                                           Virginia

Glatfelter Holdings, LLC                   Delaware                        N/A

GPW Virginia Timberlands LLC               Delaware                        N/A

GW Partners, LLC (50% partnership          Wisconsin                       N/A
interest)

Mollanvick, Inc.                           Delaware                        N/A

Glatfelter Composite Fibers  N.A., Inc.    Delaware                        Missouri
(formerly known as Schoeller & Hoesch                                      North Carolina
N.A., Inc.)                                                                Ohio
                                                                           South Carolina
                                                                           Texas
                                                                           Virginia
                                                                           Georgia
                                                                           Massachusetts

Glatfelter Gernsbach GmbH & Co. KG         Germany                         N/A
(formerly known as Papierfabrik
Schoeller & Hoesch GmbH & Co. KG)

Papcel-Papier und Cellulose, Technologie   Germany                         N/A
und Handels-GmbH

Glatfelter  Auslandsbeteiligungen GmbH     Germany                         N/A
(formerly known as Papierfabrik
Schoeller & Hoesch Auslandsbeteiligungen
GmbH)

PHG Verwaltungsgesellschaft                Germany                         N/A



                               Schedule 5.1.1 - 2





                                           JURISDICTION OF INCORPORATION
                 ENTITY                             OR FORMATION           STATES QUALIFIED TO DO BUSINESS
- ----------------------------------------   -----------------------------   -------------------------------
                                                                     
mbH

Glatfelter Verwaltungsgesellschaft mbH     Germany                         N/A
(formerly known as S&H
Verwaltungsgesellschaft mbH)

TL Verwaltungsgesellschaft mbH             Germany                         N/A

Glatfelter Scaer SAS (formerly known as    France                          N/A
Schoeller & Hoesch SAS)

Glatfelter Lydney Ltd. (formerly known     United Kingdom                  N/A
as Glatfelter-UK, Ltd.)

Balo-I Industrial, Inc.                    Philippines                     N/A

Newtech Pulp Inc.                          Philippines                     N/A

Papcel-Kiew                                Ukraine                         N/A



                               Schedule 5.1.1 - 3


                                 SCHEDULE 5.1.2

                                  SUBSIDIARIES



                                        JURISDICTION OF
                                       INCORPORATION OF
NAME                                       FORMATION             AUTHORIZED SHARES          SHARES OUTSTANDING/STOCKHOLDERS
- ----                                   ----------------   -------------------------------   -------------------------------
                                                                                   
Glatfelter Falkenhagen Engineering     Germany            EUR 25,000                        Owned by Glatfelter Falkenhagen
GmbH (formerly known as AA-Tech                                                             Holding GmbH
Systems GmbH)
                                                                                            Divided into two shares (EUR
                                                                                            13,500 + 11,500); only one
                                                                                            class of shares; all
                                                                                            non-certificated

Glatfelter Gatineau Ltee.              Canada             Unlimited number of common        10,266,668 common shares owned
(formerly known as Glatfelter                             shares                            by Glatfelter Canada Inc.
Airlaid Inc.)

Glatfelter Falkenhagen GmbH            Germany            DM 20,000,000                     Owned by Glatfelter Falkenhagen
(formerly known as Concert GmbH)                                                            Holding GmbH

                                                                                            Divided into nine shares
                                                                                            (DM 24,000 + 26,000 + 2,150,000
                                                                                            + 3,300,000 + 2,490,000 +
                                                                                            2,010,000 + 5,500,000 +
                                                                                            2,490,000 + 2,010,000); only
                                                                                            one class of shares; all
                                                                                            non-certificated

Glatfelter Falkenhagen Holding GmbH    Germany            EUR 50,200                        Owned by Glatfelter Gernsbach
(formerly known as Concert Europe                                                           GmbH & Co. KG
GmbH)
                                                                                            Divided into four shares (EUR
                                                                                            47,500 + 2500 + 100 + 100);
                                                                                            only one class of shares; all
                                                                                            non-certificated

PHG Tea Leaves, Inc.                   Delaware           1,000 shares common stock         1,000 shares owned by P.H.
                                                          ($0.01 par)                       Glatfelter Company ("GLT")

Glatfelter Canada, Inc.                Canada             Unlimited number of common        29,501,000 common shares owned
                                                          shares                            by PHG Tea Leaves, Inc.

Glatfelter Pulp Wood Company           Maryland           50 shares common stock            50 shares owned by GLT



                               Schedule 5.1.2 - 1





                                        JURISDICTION OF
                                       INCORPORATION OF
NAME                                       FORMATION             AUTHORIZED SHARES          SHARES OUTSTANDING/STOCKHOLDERS
- ----                                   ----------------   -------------------------------   -------------------------------
                                                                                   
Glatfelter Holdings, LLC               Delaware           wholly owned by Glatfelter Pulp   Glatfelter Pulp Wood Company -
                                                          Wood Company                      sole member

GPW Virginia Timberlands LLC           Delaware           N/A                               Glatfelter Pulpwood Company -
                                                                                            sole member

GW Partners, LLC                       Wisconsin          N/A                               50% GLT (2,625 interests
(50% partnership interest)                                                                  $26.25 million)
                                                                                            50% WTMI (Wisconsin Tissue Paper
                                                                                            Company) (Joint Venture)

Mollanvick, Inc.                       Delaware           1,000 shares common stock         100 shares owned by GLT
                                                          ($0.01 par)

Glatfelter Composite Fibers  N.A.,     Delaware           1,000 shares common stock         100% owned by GLT
Inc. (formerly known as Schoeller &                       ($1.00 par)
Hoesch N.A., Inc.)

Glatfelter Gernsbach GmbH & Co. KG     Germany            N/A                               Glatfelter
(formerly known as Papierfabrik                                                             Verwaltungsgesellschaft mbH -
Schoeller & Hoesch GmbH & Co. KG)                                                           DM 21,890,000 PHG
                                                                                            Verwaltungsgesellschaft mbH -
                                                                                            DM 110,000 (limited partner)

Papcel-Papier und Cellulose,           Germany            wholly owned by Glatfelter        Glatfelter Gernsbach GmbH & Co.
Technologie und Handels-GmbH                              Gernsbach GmbH & Co. KG           KG - DM 50,000

Glatfelter Auslandsbeteiligungen       Germany            wholly owned by Glatfelter        Glatfelter Gernsbach GmbH & Co.
GmbH (formerly known as Papierfabrik                      Gernsbach GmbH & Co. KG           KG - DM 50,000
Schoeller & Hoesch
Auslandsbeteiligungen GmbH)

PHG Verwaltungsgesellschaft mbH        Germany            wholly owned by PHG Tea Leaves,   PHG Tea Leaves, Inc. - DM 50,000
                                                          Inc.

Glatfelter Verwaltungsgesellschaft     Germany            wholly owned by PHG Tea Leaves,   PHG Tea Leaves, Inc. - DM 50,000
mbH (formerly known as S&H                                Inc.
Verwaltungsgesellschaft mbH)                                                                Divided into two shares
                                                                                            (DM 15,000 + 35,000)



                               Schedule 5.1.2 - 2





                                        JURISDICTION OF
                                       INCORPORATION OF
NAME                                       FORMATION             AUTHORIZED SHARES          SHARES OUTSTANDING/STOCKHOLDERS
- ----                                   ----------------   -------------------------------   -------------------------------
                                                                                   
TL Verwaltungsgesellschaft mbH         Germany            wholly owned by PHG Tea Leaves,   PHG Tea Leaves, Inc.
                                                          Inc.

Glatfelter Scaer SAS (formerly known   France             wholly owned by Glatfelter        Glatfelter
as Schoeller & Hoesch SAS)                                Auslandsbeteiligungen GmbH        Auslandsbeteiligungen
                                                                                            GmbH-1,002,500 shares;
                                                                                            15,300,000 Euros S

Glatfelter Lydney Ltd. (formerly       United Kingdom     wholly owned by PHG Tea Leaves    Glatfelter Gernsbach GmbH & Co.
known as Glatfelter-UK, Ltd.)                             Inc.                              KG

Balo-I Industrial, Inc.                Philippines        10,000 common shares of P100      Papcel-Papier und Cellulose,
                                                          each                              Technologie und Handels GmbH
                                                                                            998 shares
                                                                                            Eduardo Ramin-1 share (in
                                                                                            person)
                                                                                            Alberto Fenix, Jr.-750 shares
                                                                                            (in person)
                                                                                            Dr. Bernd Seger - 1 share
                                                                                            (proxy)
                                                                                            Alberto Guevara, Jr. - 749
                                                                                            shares (in person)
                                                                                            Martin Rapp - 1 share

Newtech Pulp Inc.                      Philippines        4,000,000 common shares of P100   Papcel-Papier und Cellulose,
                                                          each                              Technologie and Handels GmbH
                                                                                            1,999,995 shares
                                                                                            Dr. Bernd Seger-1 share (proxy)
                                                                                            Martin Rapp - 1 share (proxy)
                                                                                            Alberto Guevara, Jr.-1
                                                                                            share (in person)
                                                                                            Eduardo Ramin-1 share (in
                                                                                            person)
                                                                                            Alberto Fenix, Jr.-1 share
                                                                                            (in person)

Papcel-Kiew                            Ukraine            N/A                               100% owned by Papcel-Papier und
                                                                                            Cellulose, Technologie und
                                                                                            Handels GmbH

Glatfelter Caerphilly Ltd.             United Kingdom     100 common shares                 Glatfelter Lydney Ltd.



                               Schedule 5.1.2 - 3





                                        JURISDICTION OF
                                       INCORPORATION OF
NAME                                       FORMATION             AUTHORIZED SHARES          SHARES OUTSTANDING/STOCKHOLDERS
- ----                                   ----------------   -------------------------------   -------------------------------
                                                                                   
Glatfelter Russia, LLC                 Russia             N/A                               98% owned by PHG Tea Leaves,
                                                                                            Inc.

                                                                                            1.5% owned by Glatfelter
                                                                                            Composite Fibers  N.A., Inc.

                                                                                            0.5% owned by Parinov Sergey
                                                                                            Vladimirovich



                               Schedule 5.1.2 - 4


                                 SCHEDULE 5.1.6

                                   LITIGATION

1. FOX RIVER - NEENAH, WISCONSIN

     The Company has significant uncertainties associated with environmental
claims arising out of the presence of polychlorinated biphenyls ("PCBs") in
sediments in the lower Fox River and in the Bay of Green Bay Wisconsin ("Site").
As part of the 1979 acquisition of the Bergstrom Paper Company, the Company
acquired a facility located at the Site (the "Neenah Facility"). In part, the
Neenah Facility used wastepaper as a source of fiber. At no time did the Neenah
Facility utilize PCBs in the pulp and paper making process, but discharges to
the lower Fox River from the Neenah Facility which may have contained PCBs from
wastepaper may have occurred from 1954 to the late 1970s. Any PCBs that the
Company's Neenah Facility discharged into the lower Fox River resulted from the
presence of PCBs in NCR(R)-brand carbonless copy paper in the wastepaper that
was recycled at the Neenah Facility. The Company closed the Neenah Facility in
June 2006.

     The United States, the State of Wisconsin and various state and federal
governmental agencies (collectively, the "Governments"), as well as private
parties, have found PCBs in sediments in the bed of the Fox River, apparently
from a number of sources at municipal and industrial facilities along the
upstream and downstream portions of the Site. The Governments have identified
manufacturing and recycling of NCR(R)-brand carbonless copy paper as the
principal source of that contamination.

     The United States Environmental Protection Agency ("EPA") has divided the
lower Fox River and the Bay of Green Bay site into five "operable units"
numbered from the most upstream ("OU1") to the most downstream ("OU5"). OU1 is
the reach from primarily Lake Winnebago to the dam at Appleton, and is comprised
of Little Lake Butte des Morts. The Company's Neenah Facility discharged its
wastewater into OU1. OU2 extends from the dam at Appleton to the dam at Little
Rapids, OU3 from the dam at Little Rapids to the dam at De Pere, OU4 from the
dam at De Pere to the mouth of the river, and OU5 from the mouth into the lower
portion of Green Bay. The river extends 39 miles from the upstream end of OU1 to
the downstream end of OU4.

     The Company's liabilities, if any, for this contamination primarily arise
under the federal Comprehensive Environmental, Response, Compensation and
Liability Act ("CERCLA" or "Superfund"). The Governments have sought to recover
"response actions" or "response costs," which are the costs of studying and
cleaning up contamination, from various "responsible parties." In addition,
various natural resource trustee agencies of the United States, the States of
Wisconsin and Michigan, and several Indian Tribes (the "Natural Resources
Trustees" or "Trustees") have sought to recover natural resource damages
("NRDs"), including natural resource damage assessment costs. Parties that have
incurred response costs or NRDs either voluntarily or in response to the
governments' and Trustees' demands may have an opportunity to seek contribution
or other recovery of some or all of those costs from other parties who are
jointly and severally responsible under Superfund for those costs. Therefore, as
the Company incurs costs, it also will acquire a claim against other parties who
may not have paid their equitable share of those costs. As others incur costs,
they acquire a claim against the Company to the extent that they claim that the
Company has not paid its equitable share of the total. Any party that resolves
its liability to the United States or a state in a judicially or
administratively


                                       1



approved settlement agreement obtains protection from contribution claims for
matters addressed in the settlement.

     For these reasons, all of the parties who are potentially responsible
("PRPs") under CERCLA for response costs or NRDs have exposure to liability for:
(a) the cost of past response actions taken by anyone else, (b) the cost of past
NRD payments or restoration projects incurred by anyone else, (c) the cost of
response actions to be taken in the future, and (d) NRDs. All of this exposure
is subject to substantial defenses, including, for example, that the PRP is not
liable or not jointly and severally liable for any particular cost or damage,
that the cost or damage is not recoverable under CERCLA or any other law, or
that the recovery is barred by the passage of time. In addition, a party that
has incurred or committed to incur costs or has paid NRDs may be able to claim
credit for that cost or payment in any equitable allocation of response costs or
NRDs in any action for reallocation of costs.

CLEANUP DECISIONS

     The Company's liability exposure depends importantly on the decisions made
by EPA and the Wisconsin Department of Natural Resources ("WDNR") as to how the
Site will be cleaned up, and consequently the costs and timing of those response
actions. The nature of the response actions has been highly controversial. EPA
issued a record of decision ("ROD") selecting response actions for OU1 and OU2
in December 2002. EPA issued a separate ROD selecting response actions for OU3,
OU4, and OU5 in March 2004 and in June 2007.

     EPA amended the RODs for OUs 2-5 in June 2007 to require less dredging and
more capping and covering of sediments containing PCBs. The governments have
concluded that these methods will result in a reduction in the costs for this
portion of the cleanup. Others disagree. Likewise, in June 2008, EPA also
amended the ROD for OU1.

NRD ASSESSMENT

     The Natural Resources Trustees have engaged in work to assess NRDs at and
arising from the Site. However, they have not completed a required NRD
Assessment under the pertinent regulations. The Trustees' 2009 estimate of NRDs
and associated costs ranges from $287 million to $423 million, some of which has
already been satisfied. With specific respect to NRD claims, the Company and
others contended that the Trustees' claims are barred by the applicable 3 year
statute of limitations.

PAST COSTS DEMAND

     By letter dated January 15, 2009, EPA demanded that the Company and six
other parties reimburse EPA for approximately $17.6 million in costs that EPA
claims it incurred as necessary costs of response not subject to any other
agreement in this matter. In response, the Company and the other parties which
were contacted, notified the EPA that the supporting documentation provided by
EPA did not allow the Company to fully evaluate this demand and the Company
requested that the EPA provide additional supporting information for the claimed
costs. EPA has not yet responded to this request. Accordingly, the Company is
unable to reasonably estimate its potential liability for these costs.

WORK UNDER AGREEMENTS, ORDERS, AND DECREES

     The Company's exposure to liability depends on the amount of work done,
costs incurred, and damages paid both by the Company and by others. The
procedural context of any work done, costs incurred, and damages paid also
impact are ultimate exposure.


                                       2



Since 1991, the Governments and various groups of potentially responsible
parties, including the Company, have entered into a series of agreements,
orders, and decrees under which the Company and others have performed work,
incurred costs, or paid damages in connection with the Site. As a result, some
parties have contributed or performed substantial work at the Site and at least
one party, Fort Howard Corporation (whose successor is either the Fort James
Operating Company or Georgia Pacific Corporation) has resolved its NRD liability
at the Site.

     Notably, in April 2004, the United States District Court for the Eastern
District of Wisconsin entered a consent decree ("OU1 Consent Decree") in United
States v. P.H. Glatfelter Co., No. 2:03-cv-949, under which the Company and WTM
I Corp. have been implementing the remedy in OU1, dividing costs evenly in
addition to a $7 million contribution from Menasha Corp. and a $10 million
contribution that the United States contributed from a separate settlement in
United States v. Appleton Papers Inc., No. 2:01-cv-816, obligating NCR and
Appleton Papers to contribute to certain NRD projects. In June 2008, the parties
entered into an amendment to the OU1 Consent Decree ("Amended OU1 Consent
Decree"). That amendment allowed for implementation of the amended remedy for
OU1 and committed the Company and WTM I to implement that remedy without a cost
limitation on that commitment. The Company and WTM I have substantially
completed the amended remedy for OU1. The Company anticipates that the remaining
tasks, other than monitoring and maintenance, will be completed by the second
quarter of 2010.

     Further, in November 2007, EPA issued an administrative order for remedial
action ("UAO") to Appleton Papers Inc., CBC Coating, Inc. (formerly known as
Riverside Paper Corporation), Georgia-Pacific Consumer Products, L.P. (formerly
known as Fort James Operating Company), Menasha Corporation, NCR Corporation,
the Company, U.S. Paper Mills Corp., and WTM I Company directing those
respondents to implement the amended remedy in OU2-5. Shortly following issuance
of the UAO, Appleton Papers Inc. and NCR Corp. commenced litigation against the
Company and others, as described below. Accordingly, the Company has no vehicle
for complying with the UAO's overall requirements other than answering a
judgment in the litigation, and the Company has so informed EPA. However, in
February 2009, the EPA sent a demand to each of the respondents on the UAO other
than WTM I demanding payment of the government's oversight costs under the UAO
for the period from November 2007 through August 2008. In February 2009, the
Company notified the EPA that it believed that its demand could prove
distracting to litigation commenced by Appleton Papers and NCR against the other
UAO respondents. In order to remove this distraction, and in the spirit of
cooperation, the Company stated that it would satisfy the EPA's demand, an
amount which was insignificant, in full. The Company paid this amount.

NRDS

     The Trustees claimed that the Company was jointly and severally responsible
for NRDs with a value between $176 million and $333 million. In their recently
filed brief, they further claim that this range should be inflated to 2009
dollars and then certain unreimbursed past assessment costs should be added, so
that the range of their claim would be $287 million to $423 million. The Company
denies (a) liability for most of these NRDs, (b) that if anyone is liable, that
the Company is jointly and severally liable for the full amount; and (c) that
the Trustees can pursue this claim at this late date as the limitations period
for NRD claims is three years from discovery.


                                       3



ALLOCATION

     Since 1991, various potentially responsible parties have, without success,
attempted to agree on a binding, final, allocation of costs and damages among
themselves. All costs that they have incurred to date have been incurred
individually, or under interim, nonbinding allocations. However, the consent
decree in United States v. P. H. Glatfelter Co. affords the Company and WTM I
contribution protection for claims seeking to reallocate costs of implementing
the OU1 remedy, and Fort James Operating Co. (now Georgia-Pacific) has certain
rights under its consent decree. Otherwise, the parties have not litigated their
internal allocation with the Company except as described below.

     NCR and Appleton Papers Inc. commenced litigation in the United States
District Court for the Eastern District of Wisconsin captioned Appleton Papers
Inc. v. George A. Whiting Paper Co., No. 2:08-cv-16, seeking to reallocate costs
and damages allegedly incurred or paid or to be incurred or paid by NCR or
Appleton Papers (the "Whiting Litigation"). They have to date joined a number of
defendants, dismissed some of those, filed a parallel action, and consolidated
the two cases. At present, the case involves allocation claims among the two
plaintiffs and 28 defendants: the Company, George A. Whiting Paper Co., Menasha
Corporation, Green Bay Packaging Inc., International Paper Company, Leicht
Transfer & Storage Company, Neenah Foundry Company, Newpage Wisconsin System
Inc., The Procter & Gamble Paper Products Company, Wisconsin Public Service
Corp., the Cities of Appleton, De Pere, and Green Bay, Brown County, Green Bay
Metropolitan Sewerage District, Heart of the Valley Metropolitan Sewerage
District, Neenah-Menasha Sewerage Commission, WTM I Company, U.S. Paper Mills
Corporation, Georgia-Pacific Consumer Products LP, Georgia-Pacific LLC, Fort
James Operating Company, CBC Coating Company, Inc., Fort James Corporation,
Kimberly-Clark Corporation, LaFarge North America Inc., Union Pacific Railroad
Company, and the United States Army Corps of Engineers. As the result of certain
third-party claims, federal agencies other than the Corps of Engineers are also
involved in this allocation.

     On December 16, 2009, the Court granted motions for summary judgment in the
Company's favor on the contribution claims brought by NCR and Appleton Papers
Inc. in the Whiting litigation. The Court held that neither NCR nor Appleton
Papers may seek contribution from the Company or other recyclers under CERCLA.
The Court made no ruling as to any other allocation, the liability of NCR or
Appleton Papers to the Company for costs the Company has incurred, or the
Company's liability to the governments or Trustees. NCR and Appleton Papers have
stated their intention to appeal, but an appeal is not yet timely because the
Court has not entered a final judgment.

     As described above, the Company has counterclaims against NCR and Appleton
Papers Inc. to recover the costs the Company has incurred and may later incur
and the damages the Company has paid and may later pay in connection with the
Fox River site. Other defendants have similar claims. On January 20, 2010, the
Court issued an order inviting submissions from the parties as to whether the
counterclaims of the defendants, as well as certain additional claims, could be
resolved without a trial within approximately six months. If the Court is
convinced that the case may be resolvable on that basis, it will establish a
briefing schedule and attempt to decide the remaining issues on the Company's
claims before an appeal will become timely.

     On December 16, 2009, the Court approved a de minimis party consent decree
("Consent Decree") settlement among the United States, the State of Wisconsin,
and eleven defendants resolving those defendants' liability for this site. The
eleven settling defendants are: George A.


                                       4



Whiting Paper Co.; Green Bay Metropolitan Sewerage District; Green Bay
Packaging, Inc.; Heart of the Valley Metropolitan Sewerage District;
International Paper Co.; LaFarge North America Inc.; Leicht Transfer and Storage
Co.; Neenah Foundry Co.; Procter & Gamble Paper Products Co.; Union Pacific
Railroad Co.; and Wisconsin Public Service Corp. (collectively, the "Eleven
Settling Defendants"). The Consent Decree reflects the conclusion by the United
States and the State of Wisconsin that each of the Eleven Settling Defendants
qualifies for treatment as a de minimis party under CERCLA. The Consent Decree
requires the Settling Defendants to make a collective payment of $1,875,000.
Those Eleven Settling Defendants have moved for judgment in the Whiting
Litigation based upon the protections in the Consent Decree. In addition, the
Governments on September 25, 2009, lodged a separate consent decree in the same
case that would, if entered, resolve the liabilities of the City of DePere.
Under that consent decree, the City of DePere would pay $210,000 to resolve its
liability at the Site. That Consent Decree has not yet been approved.

     The Company contends that the Company is not jointly and severally liable
for costs or damages arising from the presence of PCBs downstream of OU1. In
addition, the Company contends that NCR or other sources of NCR(R)-brand
carbonless copy paper that the Company's Neenah Mill recycled bear most of the
responsibility for costs and damages arising from the presence of PCBs in OU1.
Other parties disagree. The Company's counterclaims for a re-allocation of costs
it has incurred or may incur remain pending.

OTHER INFORMATION

     Based in part upon the Court's December 16, 2009, ruling and the Court's
January 10, 2010 order in the Whiting Litigation, the Company continues to
believe that a volumetric allocation would not constitute an equitable
allocation of the potential liability for the contamination at the Fox River.
The Company contends that other factors, such as the location of contamination,
the location of discharge, and a party's role in causing discharge, must be
considered in order for the allocation to be equitable.

     The Wisconsin DNR and FWS have each published studies, the latter in draft
form, estimating the amount of PCBs discharged by each identified PRP's facility
to the lower Fox River and the Bay of Green Bay. These reports estimate the
Neenah Facility's share of the volumetric discharge to be as high as 27%. The
Company does not believe the volumetric estimates used in these studies are
accurate because (a) the studies themselves disclose that they are not accurate
and (b) the volumetric estimates contained in the studies are based on
assumptions that are unsupported by existing data on the Site. The Company
believes that the Neenah Facility's volumetric contribution is significantly
lower than the estimates set forth in these studies.

     The Company previously entered into interim cost-sharing agreements with
four of the other PRPs, which provided for those PRPs to share certain costs
relating to scientific studies of PCBs discharged at the Site ("Interim Cost
Sharing Agreements"). These interim cost-sharing agreements do not establish the
final allocation of remediation costs incurred at the Site. Based upon the
Company's evaluation of the Court's December 16, 2009, ruling in the Whiting
Litigation as well as the volume, nature and location of the various discharges
of PCBs at the Site and the relationship of those discharges to identified
contamination, the Company believes its allocable share of liability at the Site
is less than its share of costs under the Interim Cost Sharing Agreements.


                                       5



     While the Amended OU1 Consent Decree provides a negotiated framework for
resolving both the Company's and WTM I's liability for the remediation of OU1,
it does not resolve the Company's exposure at the Site. The OU1 Consent Decree
does not address response costs necessary to remediate the remainder of the Site
and only addresses NRDs and claims for reimbursement of government expenses to a
limited extent. Because CERCLA imposes strict and often joint and several
liability, uncertainty persists regarding the Company's exposure with respect to
the remainder of the Fox River site. In addition, as mentioned previously, EPA
has issued a UAO to the Company and others calling for further work in OU2-5,
and Appleton Papers and NCR have commenced the Whiting Litigation that may
become more complicated and involve additional parties. The Company cannot
predict the ultimate outcome of the Whiting Litigation or any other litigation
or regulatory actions related to this matter.

RANGE OF REASONABLY POSSIBLE OUTCOMES

     The Company's analysis of the range of reasonably possible outcomes is
derived from all available information, including but not limited to official
documents such as RODs, discussions with the United States and other PRPs, as
well as legal counsel and engineering consultants. Based on the Company's
analysis of the current RODs and cost estimates for work to be performed at the
Site, it believes that it is reasonably possible that its liability associated
with the Fox River matter may exceed the aggregate amounts which the Company has
accrued for the Fox River matter by amounts that are insignificant or that could
range up to $265 million over a period that is currently undeterminable but that
could range beyond 15 years. The Company believes that the likelihood of an
outcome in the upper end of the monetary range is significantly less than other
possible outcomes within the range and that the possibility of an outcome in
excess of the upper end of the monetary range is remote. The summary judgment in
the Company's favor in the Whiting Litigation, if sustained on appeal, suggests
that outcomes in the upper end of the monetary range have become somewhat less
probable, while increases in cost estimates for some of the work may militate in
the opposite direction.

     All remedial work in OU-1 has been completed and the Company and WTM I are
in the process of decommissioning and performing the restoration of the staging
area from which the remediation activity occurred and completing all required
reports for the project. The Company believes that these activities can be
completed with the funds that remain in the OU1 Escrow Account.

2. ECUSTA ENVIRONMENTAL MATTERS

     Beginning in April 2003, government authorities, including the North
Carolina Department of Environment and Natural Resources ("NCDENR"), initiated
discussions with the Company and other parties regarding, among other
environmental issues, certain landfill closure liabilities associated with the
Company's former Ecusta mill and its properties (the "Ecusta Property"). The
discussions focused on NCDENR's desire to establish a plan and secure financial
resources to close three landfills located at the Ecusta Property and to address
other environmental matters at the facility. During the third quarter of 2003,
the discussions ended with NCDENR's conclusion to hold the Company responsible
for the closure of three landfills. Accordingly, in 2003 the Company established
reserves totaling approximately $7.6 million representing estimated landfill
closure costs. During 2009, the Company completed the closure


                                       6



of the last of those three landfills (collectively, the "Landfill Closure and
Post-Closure Obligations").

     On January 25, 2008, the Company entered into a series of agreements with,
among others, Davidson River Village, LLC ("DRV")- the current owner of the
Ecusta Property pursuant to which the Company transferred potential liabilities
for certain environmental matters at the Ecusta Property to DRV (the "DRV
Transaction"). In connection with the DRV Transaction, DRV assumed, and
indemnified the Company for, liability arising from environmental matters and
conditions at the Ecusta Property with certain exceptions, including the
Landfill Closure and Post-Closure Obligations and investigation and remediation
(if necessary) of any pollutants that may have migrated from the Ecusta Property
to the Davidson and French Broad Rivers (the "River Areas"), which liabilities
were retained by the Company.


                                       7


                                 SCHEDULE 5.1.12

                             CONSENTS AND APPROVALS

None.

                               Schedule 6.1.12 - 1



                                 SCHEDULE 5.1.14

            MATERIAL PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.

                             P.H. GLATFELTER COMPANY
                    TRADEMARK APPLICATIONS AND REGISTRATIONS

MARCH 31, 2006



                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
           BEYOND PAPER              P.H. Glatfelter Company                         PENDING
                                                                                     FILING DATE: 4/18/2005
                                                                                     SERIAL NUMBER: 76323579

           BEYOND PAPER              P.H. Glatfelter Company                         PENDING
                                                                                     FILING DATE: 10/26/2005
                                                                                     SERIAL NUMBER: 78741058

           BEYOND PAPER              P.H. Glatfelter Company                         REGISTERED
                                                                                     9/30/2003
                                                                                     REGISTRATION NUMBER: 2769893

             DIGIBOOK                P.H. Glatfelter Company                         REGISTERED
                                                                                     10/29/2002
                                                                                     REGISTRATION NUMBER: 2644324

                EPA                  P.H. Glatfelter Company                         REGISTERED
                                                                                     1/22/1991
                                                                                     REGISTRATION NUMBER: 1632345



                               Schedule 6.1.14 - 1





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
          EXHERE (DESIGN)            P.H. Glatfelter Company                         REGISTERED
         (EXHERE(R) LOGO)                                                            1/21/2003
                                                                                     REGISTRATION NUMBER: 2676873

              EXHERE                 P.H. Glatfelter Company                         REGISTERED
                                                                                     8/15/1972
                                                                                     REGISTRATION NUMBER: 0940978

           G (STYLIZED)              P.H. Glatfelter Company                         REGISTERED
           (G(R) LOGO)                                                               12/2/2003
                                                                                     REGISTRATION NUMBER: 2789388

           G (STYLIZED)              P.H. Glatfelter Company                         PENDING
           (G(R) LOGO)                                                               FILING DATE: 4/18/2005
                                                                                     SERIAL NUMBER: 78610795



                               Schedule 6.1.14 - 2





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
          GLATEX (DESIGN)            P.H. Glatfelter Co.                             REGISTERED
           (GLATEX LOGO)                                                             2/10/1959
                                                                                     REGISTRATION NUMBER: 073883

        G. COLORS ENVELOPE           P.H. Glatfelter Company                         FILING DATE: 10/15/2002
          PAPERS (DESIGN)                                                            SERIAL NUMBER: 76458308
 (G. COLORS ENVELOPE PAPERS LOGO)

             G COLORS                P.H. Glatfelter Company                         PENDING
                                                                                     FILING DATE: 1/13/2006
                                                                                     SERIAL NUMBER: 78791696

             G COLORS                P.H. Glatfelter Company                         PENDING
                                                                                     FILING DATE: 10/15/2002
                                                                                     SERIAL NUMBER: 76458309

         IMPACT BY DESIGN            P.H. Glatfelter Company                         PENDING
                                                                                     FILING DATE: 12/4/2002
                                                                                     SERIAL NUMBER: 76473260



                               Schedule 6.1.14 - 3





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
              AUTHORS                P.H. Glatfelter Company                         REGISTERED
                                                                                     9/12/1995
                                                                                     REGISTRATION NUMBER: 1917945

              EDITORS                P.H. Glatfelter Company                         REGISTERED
                                                                                     9/12/1995
                                                                                     REGISTRATION NUMBER: 1917932

             ECOLOTEXT               P.H. Glatfelter Company                         REGISTERED
                                                                                     4/11/2000
                                                                                     REGISTRATION NUMBER: 2339858

             ECOLOCOTE               P.H. Glatfelter Company                         REGISTERED
                                                                                     10/22/1996
                                                                                     REGISTRATION NUMBER: 20009392

            GLATFELTER               P.H. Glatfelter Company                         REGISTERED
                                                                                     12/23/2003
                                                                                     REGISTRATION NUMBER: 2796668

            GLATFELTER               P.H. Glatfelter Company                         REGISTERED
                                                                                     8/9/2005
                                                                                     REGISTRATION NUMBER: 2982538

            GLATFELTER               P.H. Glatfelter Company                         REGISTERED
                                                                                     8/17/2004
                                                                                     REGISTRATION NUMBER: 2873152



                               Schedule 6.1.14 - 4





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
            GLATFELTER               P.H. Glatfelter Company                         PENDING
                                                                                     FILING DATE: 4/2/2005
                                                                                     SERIAL NUMBER: 78600703

            RELEASE THE              P.H. Glatfelter Company                         REGISTERED
           POSSIBILITIES                                                             4/15/2003
                                                                                     REGISTRATION NUMBER: 2707827

             STABILITE               P.H. Glatfelter Company                         REGISTERED
                                                                                     6/17/1997
                                                                                     REGISTRATION NUMBER: 2071914

              NATURES                P.H. Glatfelter Company                         REGISTERED
                                                                                     7/16/1996
                                                                                     REGISTRATION NUMBER: 1986600

         PIXELLE (DESIGN)            P.H. Glatfelter Company                         REGISTERED
        (PIXELLE(R) LOGO)                                                            10/23/2001
                                                                                     REGISTRATION NUMBER: 2500009

           RESTORE COTE              P.H. Glatfelter Company                         REGISTERED
                                                                                     4/24/1973
                                                                                     REGISTRATION NUMBER: 957786



                               Schedule 6.1.14 - 5





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
              SUPPLE                 P.H. Glatfelter Company                         REGISTERED
                                                                                     7/16/1996
                                                                                     REGISTRATION NUMBER: 1986601

           THOR (DESIGN)             P.H. Glatfelter Company                         REGISTERED
            (THOR LOGO)                                                              9/16/1924
                                                                                     REGISTRATION NUMBER: 189282

             OLD FORGE               P.H. GLATFELTER CO.                             REGISTERED
                                                                                     1/5/1960
                                                                                     REGISTRATION NUMBER: 620914

       OLD FORGE VELVETLITH          P.H. GLATFELTER COMPANY                         REGISTERED
                                                                                     4/8/1969
                                                                                     REGISTRATION NUMBER: 967920

            VELVETLITH               P.H. GLATFELTER COMPANY                         REGISTERED
                                                                                     8/8/1989
                                                                                     REGISTRATION NUMBER: 1550967

            WHITE ROSE               P.H. GLATFELTER CO.                             REGISTERED
                                                                                     3/11/1958
                                                                                     REGISTRATION NUMBER: 659360



                               Schedule 6.1.14 - 6





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
         WRITERS (DESIGN)            P.H. Glatfelter Co.                             REGISTERED
          (WRITERS LOGO)                                                             8/1/1978
                                                                                     REGISTRATION NUMBER: 1098137

              DYNAPOD                Papierfabrik Schoeller & Hoesch GmbH & Co. KG   PENDING
                                                                                     FILING DATE: 3/4/2004
                                                                                     SERIAL NUMBER: 78378327

              DYNAPOD                Papierfabrik Schoeller & Hoesch GmbH & Co. KG   PENDING
                                                                                     FILING DATE: 3/4/2004
                                                                                     SERIAL NUMBER: 78378319

              DYNAPOD                Papierfabrik Schoeller & Hoesch GmbH & Co. KG   PENDING
                                                                                     FILING DATE: 3/4/2004
                                                                                     SERIAL NUMBER: 78378349

             DYNAPORE                Papierfabrik Schoeller & Hoesch GmbH & Co. KG   PENDING
                                                                                     FILING DATE: 3/3/2004
                                                                                     SERIAL NUMBER: 79012481

             DYNASEAL                Papierfabrik Schoeller & Hoesch GmbH & Co. KG   REGISTERED
                                                                                     7/26/2005
                                                                                     REGISTRATION NUMBER: 2977129



                               Schedule 6.1.14 - 7





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
      (SCHOELLER HOESCH LOGO)        Papierfabrik Schoeller & Hoesch GmbH & Co. KG   PENDING
                                                                                     FILING DATE: 4/8/2002
                                                                                     SERIAL NUMBER: 76392274

      (SCHOELLER HOESCH LOGO)        Papierfabrik Schoeller & Hoesch GmbH & Co. KG   REGISTERED
                                                                                     1/17/1995
                                                                                     REGISTRATION NUMBER: 1873454

              GEPALUX                Papierfabrik Schoeller & Hoesch GmbH & Co. KG   REGISTERED
                                                                                     12/17/1985
                                                                                     REGISTRATION NUMBER: 1375853

           G (STYLIZED)              P.H. Glatfelter Company                         CTM COMMUNITY TRADEMARKS
           (G(R) LOGO)                                                               REGISTERED
                                                                                     4/9/2002
                                                                                     REGISTRATION NUMBER: 2648129



                               Schedule 6.1.14 - 8





                                                                                               SERIAL NO.
               MARK                                      OWNER                              REGISTRATION NO.
               ----                  ---------------------------------------------   -----------------------------
                                                                               
            GLATFELTER               P.H. Glatfelter Company                         CTM COMMUNITY TRADEMARKS
                                                                                     REGISTERED
                                                                                     4/9/2002
                                                                                     REGISTRATION NUMBER: 2648095

           BEYOND PAPER              P.H. Glatfelter Company                         CTM COMMUNITY TRADEMARKS
                                                                                     REGISTERED
                                                                                     4/9/2002
                                                                                     REGISTRATION NUMBER: 2647881



                               Schedule 6.1.14 - 9




COUNTRY         REFERENCE#   TYPE     FILED      SERIAL #      ISSUED      PATENT #     STATUS
- -------         ----------   ----   ---------   ----------   ----------   ---------   ---------
                                                                 
                Next Action Due (Original)

FORMULATION FOR ACHIEVEMENT OF OIL AND GREASE RESISTANCE WITHOUT THE USE OF FLUOROCHEMICALS AND
METHOD OF MAKING SAME

UNITED STATES   GLT-103USP   NEW    8/15/2000   60/225,285                            EXPIRED

HEATSEALABLE FILTER MATERIAL

UNITED STATES   GLT-105US    NEW    7/11/2003   10/518,109                            PENDING
                3/16/2006    RESPONSE TO OA

INK JET PRINTABLE HEAT TRANSFER PAPER

UNITED STATES   GLT-102US    NEW    4/20/2001   02/839,793    10/4/2005   6,951,671   ISSUED
                4/4/2005     ARCHIVE FILE

METHOD FOR MAKING COATED PAPER AND A PAPER COATING COMPOSITION

UNITED STATES   GLT-105US    NEW    8/28/1992   07/938,338    3/29/1994   5,295,335   ISSUED
                9/29/2005    3RD MAINT FEE DUE

NOVEL UNIVERSAL INK JET RECORDING SYSTEM

UNITED STATES   GLT-104US    NEW    3/27/2001   09/818,058                            ABANDONED
UNITED STATES   GLT-104US1   CDN    5/24/2004   10/524,725                            PENDING
                8/28/2006    STATUS CHECK

PROCESS FOR PREPARATION OF HIGH OPACITY PRECIPITATED CALCIUM CARBONATE BY REACTING SODIUM
CARBONATE WITH CALCIUM HYDROXIDE

UNITED STATES   GLT-100US    NEW    5/15/1993   09/075,851   11/15/1994   5,364,810   ISSUED
                5/15/2006    3RD MAINT FEE DUE

QUICK DRYING, WATERFAST INKJET RECORDING MEDIA

UNITED STATES   GLT-101US    FCA     2/3/2004   10/770,753                            PENDING
                3/28/2006    RESPONSE TO OA

                                    END OF REPORT            TOTAL ITEMS SELECTED =           0



                              Schedule 6.1.14 - 10


                               Overview SH patents
                                 status 12/2005



                                                                      GRANTED
NO     BU            TITLE             INVENTOR        PATENT NO       SINCE        COUNTRY
- --  -------- --------------------- --------------- ---------------- ---------- -----------------
                                                             
1   L&OP/L   hsf Teebeutelpapier   G. Heinrich     EP 0380127       15.12.93   Osterreich
             u. Verfahren zu                                                   Belgien
             seiner Herstellung                                                Schweiz/
             (base patent for                                                  Lichtenstein
             heat sealable, 2                                                  Deutschland
             layer tea bags)                                                   Spanien
                                                                               Frankreich
                                                                               England
                                                                               Italien
                                                                               Niederlande
                                                   US 5,173,154     12/22/1992 USA
2   L&OP/L   Filtermaterial (heat  G. Heinrich     EP 0656224       8.10.97    Osterreich
             sealable tea bag      R. Kochel                                   Belgien
             paper with meltblown                                              Schweiz/
             technology)                                                       Lichtenstein
                                                                               Deutschland
                                                                               Danemark
                                                                               Spanien
                                                                               Frankreich
                                                                               England
                                                                               Italien
                                                                               Niederlande
                                                   US 5,601,716     2/11/1997  USA
                                                   CA 2,136,563     11/13/1998 Canada
3   FS       Verfahren zur         J. Voronecky    EP 881326,       17.10.01   Osterreich
             Herstellung von       J. Kuhn         DE 597 04 964.5             Schweiz/
             gebleichten                                                       Lichtenstein
             Spezialzellstoffen                                                Deutschland
             (bleaching process                                                Danemark
             for fibres)                                                       Spanien
                                                                               Frankreich
                                                                               England
                                                                               Italien
                                                                               Portugal
                                                                               Schweden
4   L&OP/L   hsf Filtermaterial    Timmerman       Prufungsphase               Australien
             mit biologisch        Trigat          in Europa                   Asia
             abbaubaren            Schulz-Schlitte (EP 98924249),
             Polymeren,            S. Schroft      DE 19719607,                USA
             (biodegradable tea    Grangladen      US 09/423,572,
             bag paper, patent     G. Heinrich     Asien (Korea,               EP
             with Bayer, chance                    China,
             for granting <10%,                    Hongkong),                  EP, annual fees
             hearing for                           Australien                  Germany
             biodegradable with                    erteilt
             lubricants and
             stretched fibre
             positive)


            NO. OF YEAR /                 ANNIVERSARY
  PAYMENT    ANNUAL FEES    STATUS/DATE       DATE
- ---------- -------------- --------------- -----------
                                 
31.1.01    12/1439 DM     canc., 18.10.01
31.1.01    12/1021 DM     canc., 18.10.01
31.1.01    12/1226 DM     canc., 18.10.01

31.1.04    15/1338 (euro) valid           2005
31.1.04    15/761 (euro)  valid           2005
31.1.04    15/686 (euro)  valid           2005
26.1.04    15/806 (euro)  valid           2005
31.1.04    15/1034 (euro) valid           2005
26.1.03    8/1505 (euro)  canc., 18.10.01
6/22/2000  8/2468 (euro)  valid           2004
18.5.00    7/773 DM       canc., 18.5.01
18.5.00    7/593 DM       canc., 16.2.01
18.5.00    7/988 DM       canc., 18.5.01

31.5.03    10/535 (euro)  valid           2004
                          canc., 11.4.97
18.5.00    7/594 DM       canc., 18.5.01
18.5.03    10/410 (euro)  valid           2204
18.5.03    10/532 (euro)  valid           2004
18.5.01    8/349 (euro)   canc., 2000
18.5.00    3/973 DM       canc., 18.5.01
8/11/2000  4/1170 (euro)  valid           2004
11/24/2003 10/399 (euro)  valid           2004
30.5.01    5/583 (euro)   canc., 30.5.02
           nicht          nicht benannt
           benannt
31.5.03    7/300 (euro)   valid           2004
30.5.01    5/583 (euro)   canc., 30.5.02
30.5.03    7/317 (euro)   valid           2005
30.5.03    7/364 (euro)   valid           2005
30.5.03    7/376 (euro)   valid           2005
30.5.01    5/583 (euro)   canc., 30.5.02
30.5.01    5/583 (euro)   canc., 30.5.02
30.5.01    5/583 (euro)   canc., 30.5.02
4/30/2004  7/362          valid, granted  2005
examination reports, questionable         2004-2007
outcome, orientation to European decis
examination reports, questionable         2004-2006
outcome
examination reports, questionable         2004-2006
outcome
4/30/2004  7/943 (euro)   examination     2004
12/31/2003 7/331          examination     2004



                              Schedule 6.1.14 - 11


                               Overview SH patents
                                 status 12/2005



                                                                      GRANTED
NO     BU            TITLE             INVENTOR        PATENT NO       SINCE        COUNTRY
- --  -------- --------------------- --------------- ---------------- ---------- -----------------
                                                             
5   L&OP/O   Neue ultraleichte     H. Blum         DE 19756871.8               Deutschland
             Harzschichttrager u.  J. Voronecky
             Verfahren zur
             Herstellung
             derselben.  (light
             weight overlay
             paper; 12.5 gsm)
6   L&OP/L   Filtermaterial mit    G. Grauar       EP 0943731;      13.6.01    Osterreich
             einstellbarer         Y. La Brech     DE-598 00 843.8             Belgien
             Benutzbarkeit u.                                                  Deutschland
             Verfahren zu seiner                                               Spanien
             Herstallung (binder                                               Frankreich
             containing non                                                    England
             heatsealable tea bag)                                             Irland
                                                                               Niederlands
                                                                               Schweden
                                                                               Italien
                                                   US 09/170,99     8/12/2002  USA
7   S&H SARL einlagiges,           J.M. Brink      EP Anmeldung                Europa
             beidseitig            M. Buchsel      01102686.1                  (Staalenbenennung
             abrassives Vlies u.   J.M. Dallenbach (1126065) DE                UK France,
             Verfahren dessen                      10005454.4                  Germany, Belgium,
             Herstellung                                                       Netherlands,
             (Meltblown-non                                                    __________)
             woven, abrasive)
                                                                               Deutschland



8   L&OP/L   biologisch abbaubare  M. Buchsel      DE 19931401                 Deutschland
             u. kompostierbare     G. Heinrich
             Filtemateriallen      M. Kau(beta)en                              examination fee
             (biodegradable        S. Schroft
             filter paper with
             softener)
9   L&OP/O   Papier mit            H. Blum         DE 19939060                 Deutschland
             eingelagerten,        D. Evers
             ummantelten Partikel
             u. Verfahren zu
             dessen Herstellung
             (loaded overlay
             paper with melamin
             coated corundum)
10  L&OP/L   Filtermaterial mit    H. Salow        DE 1109947.0                Deutschland
             Aromatisierung u.     B. Herhut       EP 01129130.9
             Armoaschulz                           JP 2002-035519              Europa
             (aromatisied tea                                                  Japan
             bag, cyclodextrine)
                                                   US 6,565,710     20.05.03   USA


            NO. OF YEAR /                 ANNIVERSARY
  PAYMENT    ANNUAL FEES    STATUS/DATE       DATE
- ---------- -------------- --------------- -----------
                                 
31.12.04   8/391 (euro)   examination     2004






20.8.04    7.407 (euro)   valid           2005
20.8.04    7.818 (euro)   valid           2005
31.8.05    8.390 (euro)   valid           2005
20.8.04    7.320 (euro)   valid           2005
20.8.04    7.364 (euro)   valid           2005
20.8.04    7.364 (euro)   valid           2005
20.8.04    7.425 (euro)   valid           2005
20.8.04    3.527 (euro)   valid           2005
cancelled                 valid           2005
20.3.94    7.320 (euro)   valid           2005
28.1.03    4/1170 (euro)  valid           2007
28.2.04    4/530 (euro)   examination     2005






28.2.04    5/205 (euro)   erteilt         2005
                          18.08.06
14.10.04                  erteilt
                          18.08.06
31.7.03    5/206 (euro)   no request for  2004
                          examination
                                          2004



21.8.03    5/206 (euro)   examination     8/31/2804
28.11.04                  official reply to German
                          Patent Office
15.10.04                  comment of official letter




31.05.03   4/188          examination     2004

31.12.03   3/380          examination     2004
no request for                            2004-2008
examination
                          valid           2005



                              Schedule 6.1.14 - 12


                               Overview SH patents
                                 status 12/2005



                                                                      GRANTED
NO     BU            TITLE             INVENTOR        PATENT NO       SINCE        COUNTRY
- --  -------- --------------------- --------------- ---------------- ---------- -----------------
                                                             
11  L&OP/L   Filtermaterial sowle  H. Dannhauser   DE 10043217      erteilt    Deutschland
             Filterbeutel u.       G. Grauer                        02.06.
             Filtertuten aus
             diesem Material
             (printed filter
             paper)
12  L&OP/O   Gasfiltemateriallen   H. Blum         DE 10059835                 Deutschland
             mit Donor-u./od.      M. Kau(beta)en  EP 01122765.9               Europa
             Akzeptor-funkllon     H. Salow
             (innerliner with      S. Sick
             cyclodextrines)
13  L&OP/L   Filtermaterial mit    H. Dannhauser   DE 10062031      18.11.02   Deutschland
             verbesserten          D. Meger        EP 1215134.07               Europa
             Infusions-            H. Salow        US 10/021,778               USA
             eigenschaften                         CA 2,356,018
             (filter paper with                    JP 263,003/2002             Japan
             superabsorber fibres)
                                                   Korea                       Korea
                                                   200-0046997
14  L&OP/O   Flammenfestes Vlies,  H. Blum         DE 10104277.9    18.11.02   Deutschland
             das                   S. Sick         EP 02000887.5               Europa
             Celluloseregenerat-
             fasernumfasst, (flame
             retardant paper for
             cryogenic
             application)
15  NPD      Selbstreinigende,     M. Buchsel      DE 10106494.2               Deutschland
             antiadhasive Papiere  M. Kau(beta)en  EP 02 003 342.9             Europa
             (Lotus)               S Schroft       US 10/073,096    28.01.04   USA
16  L&OP/L   Filtrationspapiere    H. Dannhauser   DE 10134020.8               Deutschland
             mit Ionenaustauscher  H. Salow/TITK
             (filtration paper
             with ALCERU fibres)
17  L&OP/O   Computer Based        H. Blum         EP 01116149.2
             System and Method     M. Knapperst-
             for Trading Tangible  busch,
             Goods via an          D. Parini,
             Electronic            Ruckenbrod
             Communication System  S. Sick
             (trading software)
18  L&OP/O   Lichtbestandiges      H. Blum         DE 10163344                 Deutschland
             Overlaypapier         R. Hansmann     EP 02 028 521.9             Europa
             (UV-stabilised        S. Sick         US 2003/01411027 31.07.03   USA
             overlay paper)
19  NPD      hel(beta)siegelfahige M. Buchsel      DE 10206924.7               Deutschland
             Filtermateriallen     H. Heinrich
             (heat sealable,       M. Kau(beta)en  JP 569,305/2003             Japan
             biodegradable filter                  RUS 200 312 8071            Ru(beta)land
             paper with                            Indo W0020031858            Indonesien
             lubricants)                           CN 03800075;                China
                                                   1533343
                                                   ZA 2003/7300                Sudafrika
                                                   US 10/472,086               USA
                                                   CD 2,435,578                Kanada


            NO. OF YEAR /                 ANNIVERSARY
  PAYMENT    ANNUAL FEES    STATUS/DATE       DATE
- ---------- -------------- --------------- -----------
                                 
9/21/2004  5/212 (euro)   valid, 02.08.05 2004





12/31/2003 3/531          examination     2004
9/30/2003  3/531          examination     2004



12/31/2004 5/206 (euro)   valid           2004
12/31/2003 3/531          examination     2004
                          examination     2004
12/12/2003 3/398          examination     2004
no request for                            2004-2006
examination
no request for                            2006-2008
examination
31.01.04   4/188b (euro)  valid           2005
12/8/2003  3/531          examination     2005
                          granted




2/28/2004  4/221 (euro)   examination     2005
2/28/2004  3/531          examination     2005
1/28/2004  1630           valid           2008
31.7.03    3/186 (euro)   examination     2004



31.7.03    3/530 (euro)   examination     2004






31.12.04   4/186          examination     2004
31.12.04   8/531          examination     2004
2003       1/170          valid           2007

28.04.04   3/186          valid           2005
20.10.04   Amisbescheid vom 7.04
2003       6850           no request for examination
2003       3900           no request for examination
2003       2200           no request for examination
2003       3650           request for examination

2003       2820           examination
2003       3660           no request for examination
2003       2730           examination



                              Schedule 6.1.14 - 13


                               Overview SH patents
                                 status 12/2005



                                                                      GRANTED
NO     BU            TITLE             INVENTOR        PATENT NO       SINCE        COUNTRY
- --  -------- --------------------- --------------- ---------------- ---------- -----------------
                                                             
                                                   EP 03 742 544.4             Europa
                                                   IN PCT/EP                   Indien
                                                   03/01672
20  L&OP/L   hel(beta)siegelfahige G. Heinrich     DE 10206926.3               Deutschland
             Filtermaterial        D. Meger
             (biodegradable        M. Kau(beta)en  CD 2,435,577                Kanada
             filter paper with                     AUS 200 321 5589            Australien
             stretched fibres)                     RUS 2003 12 8089            Ru(beta)land
                                                   JP                          Japan
                                                   569,308/2003;
                                                   517,829/2005
                                                   CN 03 800 077.6             China
                                                   ZA 2003/7299                Sudafrika
                                                   US 10/472,089               USA
                                                   EP 03742545.1               Europa
                                                   EP 1526911                  Europa
                                                   Indo                        Indonesien
                                                   PCT/EP03/01673
                                                   IN                          Indien
                                                   01248/DELNP/2003
21  L&OP/L   hel(beta)siegelfahige Y. Le Brech     DE 10231403      5.02.04    Deutschland
             Filtermaterial (heat  G. Heinrich     EP 03015105.4               Europa
             sealable tea bag      M. Kau(beta)en  US 10/618,109               USA
             with coupling agent)  S. Kuntz        ZA 2003/5329     28.04.04   Sudafrika
                                   M. Meger        JP 273,626/2003;            Japan
                                                   JP 154,764/2004
                                                   AUS 2003213314              Australien
                                                   CD 2 435 030                Kanada
22  L&OP/L   Filtermaterial (tea                   DE 103 42 416.4             Deutschland
             bag + outlast fibre)                  EP 1 514 587                Europa
                                                   ZA 2004/7269     29.06.05   South Africa
                                                   RUS 2004/127218             Russia
                                                   AUS 2004/210563             Australia
                                                   US 10/937,045               USA
                                                   CD 2,481,395                Canada


            NO. OF YEAR /                 ANNIVERSARY
  PAYMENT    ANNUAL FEES    STATUS/DATE       DATE
- ---------- -------------- --------------- -----------
                                 

2003       3310           no request for examination

28.02.04   3/186          valid
20.10.04                  Amisbescheid vom 1.7.04
2003       8150           no request for examination
2003       2900           examination
2003       4800           examination
2003       6600           no request for examination


2003       3640           request for examination
2003       2890           examination
2003       4920           examination
2003       4140           examination

2003       2100           no request for examination

2003       2430           no request for examination

                          valid           2005
2003       2800           examination

2003       4830
2003       6430           no request for examination

2003       3500           examination
2003       3100           examination
9/13/2003  1550
                          filed 08.09.04
11/23/2004
11/18/2004
11/23/2004

11/23/2004



                              Schedule 6.1.14 - 14


                 GULTIGE MARKEN SCHOELLER & HOESCH GMBH & CO. KG

STAND: 04/03/2004



                          ANMELDE-/                             ANMELDE-                          VERLANGERUNG
LAND                     MARKEN- NR.         MARKENNAME           TAG            KLASSE(N)          FALLIG AM        SONSTIGES
- ----------------------- ------------ ------------------------- ---------- ----------------------- ------------ --------------------
                                                                                             
DEUTSCHE MARKEN
DE                      303 62 061.7 DYNAPORE                  11/27/2003 05, 16, 24              11/30/2013
DE                      302 61 044.8 DYNAMET                   12/13/2002 05, 16                  12/31/2012
DE                      302 61 042.1 DYNAPAD                   12/13/2002 16, 24, 30              12/31/2012
DE                      300 48 137.3 GEPALUX HoloGloss         6/28/2000  16                      6/30/2010
DE                      396 65 362.1 TIPA                      12/19/1996 16, 34                  12/31/2008
DE                      2 076 841    DYNAPOR                   11/2/1993  16                      11/30/2013
DE                      2 015 108    Microsorb                 4/9/1992   24                      4/30/2012
DE                      2 010 341    SCHOELLER HOESCH          10/9/1991  01, 03, 16, 17          10/31/2011
                                     SPEZIAL-PAPIERE (farbig)
DE                      2 002 045    MICAMID                   5/7/1991   16                      5/30/2011
DE                      1 180 319    ELKO (Bldtz., farbig)     7/17/1990  09, 17                  7/31/2010
DE                      1 161 968    rikaprint PERMANENCE      12/22/1989 16                      12/31/2009
DE                      1 037 335    RIKAPRINT                 3/20/1981  16                      3/31/2011
DE                      1 024 038    GEFOLUX                   8/28/1981  17                      8/31/2011
DE                      1 023 687    GEPALUX                   8/28/1981  16                      8/31/2011
DE                      636 126      Napakon                   6/16/1952  16, 17, 34              9/30/2012
DE                      615 357      Tuko                      8/30/1950  17, 34                  8/31/2010
EU-MARKEN
EU                      003 247 986  DYNAPOD                   7/1/2003   16, 24, 30              7/1/2013     Im Anmeldeverfahren
EU                      003 216 462  DYNAPOD                   6/6/2003   16, 24, 30              6/6/2013     Im Anmeldeverfahren
EU                      003 169 687  DYNACLEAR                 5/16/2003  03, 05, 16, 24          5/16/2013    Im Anmeldeverfahren
EU                      002 714 848  DYNAGREEN                 5/27/2002  03, 05, 16, 24          5/27/2012    Widerspr. aufgrund
                                                                                                               Gynatren



                              Schedule 6.1.14 - 15



                                                                                             
EU                      002 712 776  DYNAPLANT                 5/27/2002  03, 05, 16, 24          5/27/2012
EU                      002 647 147  SCHOELLER HOESCH A        4/8/2002   01, 03, 05, 16, 17, 24  4/8/2012
                                     GLATFELTER Company
EU                      002 511 640  DYNACRIMP                 12/20/2001 16                      12/20/2011
EU                      002 363 539  DYNASEAL                  9/4/2001   16                      9/4/2011
EU                      002 001 006  GEPALUX HoloGloss         12/15/2000 16                      12/15/2010
IR-MARKEN
AT, AU, BX, CH, CN, CZ,              DYNAPORE                  3/3/2004   5, 16, 24                            Im Anmeldeverfahren
DK, ES, PR, GB, IE, IT,
JP, PT, RU, SG, TR, UA,
US
AT, BX, CH, CN, ES, FR, 635 878      GEPALUX                   4/12/1995  16                      4/12/2015
IT, PL
AT, BX, CH, CZ, ES, FR, 591 178      SCHOELLER HOESCH          3/27/1992  01, 03, 05, 18, 17, 19, 3/27/2012
HR, HU, IT, MK, SI, SK,              SPEZIAL-PAPIERE (farbig)             34
YU
AT, BX, CH, CZ, ES, FR, 579 349      MICAMID                   1/9/1992   16                      1/9/2012
HU, IT
DE                      177 420      Byblos                    5/31/1954  16                      5/31/2014
AT, BX, CH, CZ, DE, ES, 159 305      Napakon                   5/15/1953  16, 17, 34              5/15/2013
FR, HR, HU, IT, SI, YU
DE                      161 401      Tuko                      5/7/1952   16, 34                  5/7/2012
AUSLANDSMARKEN
AUSTRALIEN              921028       DYNAGREEN                 7/25/2002  16, 24                  7/25/2012
CHINA                                SCHOELLER HOESCH A                   16
                                     GLATFELTER Company
                        3305384      DYNAPLANT                 9/12/2002  24                                   Im Anmeldeverfahren




                              Schedule 6.1.14 - 16



                                                                                             
                        200306914    DYNAPLANT                 9/11/2003  16                                   Im Anmeldeverfahren
GROA(beta)RITANNIEN     2019728      GEPALUX                   5/5/1995   24                      5/5/2005
                        1507051      MICROSORB                 7/18/1992  16                      4/9/2009
                        1478722      MICAMID                   10/17/1991 17                      5/7/2009
                        596 400      Tuko                      2/28/1951  34                      10/28/2010
FINNLAND                90087        POV                       11/4/1982  16                      9/5/2004
IRLAND                  146498       MICAMID                   10/21/1998 16, 24,30               5/7/2008
JAPAN                   55439/2003   DYNAPOD                   7/7/2003   16, 24,30                            Fallengelassen auf
                                                                                                               Anweisung F. Werner,
                                                                                                               04/08/04
                        1,692,565    DYNAGREEN                 9/13/2002  16                      7/28/2013
                        4,692,584    DYNAPLANT                 9/13/2002  16, 24                  7/18/2013
                        3024922      Microsorb                 8/6/1992   24                      2/28/2005
                        3155894      SCHOELLER HOESCH          4/9/1992   16                      5/31/2006
                                     SPEZIAL-PAPIERE (farbig)
                        3100168      SCHOELLER HOESCH          4/9/1992   17                      11/30/2005
                                     SPEZIAL-PAPIERE (farbig)
                        3058426      SCHOELLER HOESCH          4/9/1992   3                       6/30/2005
                                     SPEZIAL-PAPIERE (farbig)
KANADA                               DYNAPORE                             5, 16, 24                            Im Anmeldeverfahren
                        1,147,541    DYNAGREEN                 7/25/2002  16, 24                               Im Anmeldeverfahren
                        1,147,540    DYNAPLANT                 7/25/2002  16, 24                               Im Anmeldeverfahren
                        1,136,790    SCHOELLER HOESCH A        4/9/2002                                        Im Anmeldeverfahren
                                     GLATFELTER Company
                        285343       POV                       11/14/1982 16                                   11/25/2013
NEUSEELAND              661447       DYNAGREEN                 7/28/2002  16, 24                  5/27/2009
SUDAFRIKA               2002/10937-8 DYNAGREEN                 7/28/2002  16, 24                               Im Anmeldeverfahren
U.S.A.                  78/378,319   DYNAPOD                   3/4/2004   16                                   Im Anmeldeverfahren
                        78/378,327   DYNAPOD                   3/4/2004   24                                   Im Anmeldeverfahren
                        78/378,349   DYNAPOD                   3/4/2004   30                                   Im Anmeldeverfahren
                        78/476,950   DYNASEAL                  12/19/2002 16                                   Im Anmeldeverfahren




                              Schedule 6.1.14 - 17



                                                                                             
                        78/149,302   DYNAGREEN                 7/31/2002  16, 24                               Im Anmeldeverfahren
                        78/149,288   DYNAPLANT                 7/31/2002  16, 24                               Im Anmeldeverfahren
                        76/392,274   SCHOELLER HOESCH A        4/8/2002   1, 16, 17
                                     GLATFELTER Company
                        1,896,181    TUKO                      4/6/1994   16                      5/30/2005
                        1,873,454    SCHOELLER HOESCH          8/4/1992   1, 3, 16, 17, 21, 34    1/17/2005
                                     SPEZIAL-PAPIERE (farbig)
                        1,375,852    GEPALUX                   4/13/1985  14, 37                  12/17/2005
                        1,332,098    SCHOELLER & HOESCH (Logo) 9/10/1984  16, 17, 34              4/23/2005
                        1,307,376    POV                       3/28/1983  34                      11/27/2004




                              Schedule 6.1.14 - 18



                  MARKEN SCHOELLER & HOESCH S.A.S., FRANKREICH

                                                                                             
EU-MARKEN
EU                      002 782 852  MICROSORB (fig.)          7/19/2002  24                      7/19/2012    SARL
IR-MARKEN
AT, BX, CH, ES, FR, HU, 589 146      Microsorb                 7/16/1992  24                      7/16/2012    S.A.S.
IT, PT




                              Schedule 6.1.14 - 19


                                 SCHEDULE 7.2.1

                             PERMITTED INDEBTEDNESS

                               Letters of Credit:



                                                   BEGIN                               INTEREST   ANNUAL
          BENEFICIARY               BANK           DATE     MATURITY DATE   $ AMOUNT     RATE      COST
- ---------------------------- ------------------ ---------- -------------- ------------ -------- ----------
                                                                              
Zurich American Insurance
Company                            M and T       4/30/2009    4/29/2010      50,000.00             750.00
                                                                                (USD)   1.50%       (USD)
Royal Bank of Scotland         Bank of America   5/31/2009    5/31/2010    $  1,100,00             11,000
                                                                                (GBP)      1%       (GBP)
ABN Amro Bank                  Bank of America   5/12/2009    5/12/2011    $   660,000              6,600
                                                                                (GBP)      1%       (GBP)


                               Other Indebtedness:



                                  BORROWER/        BEGIN                               INTEREST   ANNUAL
            LENDER                 ISSUER          DATE     MATURITY DATE    AMOUNT      RATE      COST
- ---------------------------- ------------------ ---------- -------------- ------------ -------- ----------
                                                                              
GPW Virginia Timberlands LLC    PH Glatfelter    1/15/2008    1/15/2027      5,781,000            491,385
                                                                               (USD)     8.5%       (USD)
GPW Virginia Timberlands LLC    PH Glatfelter    1/15/2008    1/15/2027      3,377,000            287,045
                                                                               (USD)     8.5%       (USD)
SunTrust Bank                   GPW Virginia
                               Timberlands LLC   1/13/2008    1/14/2013     36,694,500
                                                                               (USD)   Variable   Variable
Deutsche Bank                    Glatfelter
                              Gernsbach GmbH &             Cancellable by    5,000,000
                                   Co. KG        5/05/2009     lender         (Euros)  Variable   Variable
Royal Bank of Scotland        Glatfelter Lydney            Cancellable by
                                    Ltd.        06/20/2006     lender        1,100,000
                                                                               (GBP)   Variable   Variable
Deutsche Bank                    Glatfelter                Cancellable by    4,000,000
                              Falkenhagen GmbH  02/15/2010     lender         (Euros)  Variable   Variable
HSBC                         NewTech Pulp, Inc.            Cancellable by    8,000,000
                                                  9/8/2009     lender          (USD
                                                                           equivalent) Variable   Variable
CIBC                             Glatfelter                Cancellable by
                                Gatineau Inc.   02/12/2010     lender        3,000,000
                                                                               (CAD)   Variable   Variable



                                 Schedule 7.2.1 - 1




                                                   BEGIN                               INTEREST   ANNUAL
          BENEFICIARY            BOOK-RUNNER       DATE     MATURITY DATE   $ AMOUNT     RATE      COST
- ---------------------------- ------------------ ---------- -------------- ------------ -------- ----------
                                                                              
Bond Holders                  Credit Suisse       2/5/2010     5/1/2016    100,000,000  7.125%   7,125,000
                                                                               (USD)                (USD)
Bond Holders                  Credit Suisse       5/1/2006     5/1/2016    200,000,000          14,250,000
                                                                               (USD)    7.125%      (USD)



                                        2


                                 SCHEDULE 7.2.4

                              EXISTING INVESTMENTS

                                     PART I

See Schedule 5.1.2

                                    PART II

                               Intercompany Loans:



LENDER (FUNCTIONAL                       BORROWER                      CURRENCY
CURRENCY)                         (FUNCTIONAL CURRENCY)                 OF LOAN     AMOUNT     EXCHANGE RATE   USD EQUIVALENT
- ---------------------   --------------------------------------------   --------   ----------   -------------   ---------------
                                                                                                
PHG Tea Leaves (USD)    Glatfelter Verwaltungsgesellschaft mbH (EUR)   USD         8,150,000       1.0000         8,150,000
PHG Tea Leaves (USD)    Glatfelter Lydney Ltd. (GBP)                   USD         4,500,000       1.0000         4,500,000
PHG Tea Leaves (USD)    Glatfelter Canada, Inc.                        USD        56,200,824       1.0000        56,200,824
P.H. Glatfelter (USD)   Glatfelter Gatineau Ltee.                      USD         2,952,756       1.0000         2,952,756
PHG Tea Leaves (USD)    Glatfelter Verwaltungsgesellschaft mbH (EUR)   EUR        46,414,134       1.3472        62,529,121
PHG Tea Leaves (USD)    Glatfelter Gernsbach GmbH & Co. KG             EUR        56,789,929       1.3472        76,507,392
PHG Tea Leaves (USD)    Glatfelter Falkenhagen Holding GmbH            EUR        16,308,937       1.3472        21,971,400
PHG Tea Leaves (USD)    Glatfelter Lydney Ltd. (GBP)                   GBP        27,500,000       1.5151        41,665,250
PHG Tea Leaves (USD)    Glatfelter Lydney Ltd. (GBP)                   GBP         2,641,994       1.5151         4,002,885
P.H. Glatfelter (USD)   NewTech Pulp Inc.                              PHP        85,000,000      45.5240         1,867,147



                               Schedule 7.2.4 - 1


                                 EXHIBIT 1.1(A)

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

     This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment as if set forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below, the interest in and to all of
the Assignor's rights and obligations under the Credit Agreement and any other
documents or instruments delivered pursuant thereto that represents the amount
and percentage interest identified below of all of the Assignor's outstanding
rights and obligations under the respective facilities identified below
(including, to the extent included in any such facilities, letters of credit and
swingline loans) (the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment,
without representation or warranty by the Assignor.

1. Assignor:             ______________________________

2. Assignee:             ______________________________ [and is an Affiliate]

3. Borrower(s):          P. H. GLATFELTER COMPANY, a Pennsylvania corporation,
                         and the other Borrowers now or hereafter party thereto

4. Administrative Agent: PNC BANK, NATIONAL ASSOCIATION, as the Administrative
                         Agent under the Credit Agreement

5. Credit Agreement:     The Credit Agreement dated as of April ___, 2010 among
                         P. H. GLATFELTER COMPANY, a Pennsylvania corporation,
                         and the other Borrowers now or hereafter party thereto,
                         PNC BANK, NATIONAL ASSOCIATION, as Administrative
                         Agent, the Guarantors now or hereafter party thereto
                         and the Lenders now or hereafter party thereto



6. Assigned Interest:



                          Aggregate
                          Amount of                                      Percentage
                    Commitment/Loans of           Amount of              Assigned of
                    such Facility for all     Commitment/Loans of    Commitment/Loans of
Facility Assigned          Lenders          such Facility Assigned    such Facility(1)
- -----------------   ---------------------   ----------------------   -------------------
                                                            
 _____________(2)       $_____________          $_____________          _____________%
 _____________          $_____________          $_____________          _____________%
 _____________          $_____________          $_____________          _____________%


Effective Date: _____________ ___, 20___ [TO BE INSERTED BY ADMINISTRATIVE AGENT
AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.](3)

     The terms set forth in this Assignment are hereby agreed to:

                                        ASSIGNOR
                                        [NAME OF ASSIGNOR]


                                        By:
                                            ------------------------------------
                                            Title:

                                        ASSIGNEE
                                        [NAME OF ASSIGNEE]


                                        By:
                                            ------------------------------------
                                            Title:

Consented to and Accepted:

PNC BANK, NATIONAL ASSOCIATION, as
  Administrative Agent


By
   ----------------------------------
   Name:
   Title:

[Consented to:](4)

- ----------
(1)  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
     of all Lenders thereunder.

(2)  Fill in the appropriate terminology for the types of facilities under the
     Credit Agreement that are being assigned under this Assignment (e.g.
     "Revolving Credit Commitment"). The same percentage of each facility owned
     by the Assignor shall be assigned to the Assignee.

(3)  Assignor shall pay a fee of $3,500 to the Administrative Agent in
     connection with the Assignment.

(4)  To be added only if the consent of the Borrower is required by the terms of
     Section 10.11 of the Credit Agreement.



Company, as Borrower Agent


By
   ----------------------------------
   Name:
   Title:



                                                                         ANNEX 1

                  STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
                            AND ASSUMPTION AGREEMENT

     1. Representations and Warranties.

     1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby;
and (b) assumes no responsibility with respect to (i) any statements, warranties
or representations made in or in connection with any Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document delivered pursuant
thereto, other than this Assignment (herein collectively the "Loan Documents"),
or any collateral thereunder, (iii) the financial condition of the Borrower, any
of its Subsidiaries or Affiliates or any other Person obligated in respect of
any Loan Document or (iv) the performance or observance by the Borrower, any of
its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Lender under the Credit Agreement, (ii) it meets all
requirements, if any, of an eligible assignee under the Credit Agreement, (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit Agreement and, to the extent of the Assigned Interest, shall have the
obligations of a Lender thereunder, (iv) it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.3.2 thereof, as applicable, and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and to purchase the Assigned
Interest on the basis of which it has made such analysis and decision, and (v)
if Assignee is not incorporated or organized under the laws of the United States
of America or any State thereof, attached to the Assignment is any documentation
required to be delivered by it pursuant to the terms of the Credit Agreement,
duly completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations which by the terms of the
Loan Documents are required to be performed by it as a Lender.

     2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts
which have accrued to but excluding the Effective Date and to the Assignee for
amounts which have accrued from and after the Effective Date.(5)

- ----------
(5)  Administrative Agent should consider whether this method conforms to its
     systems. In some circumstances, the following alternative language may be
     appropriate: "From and after the Effective Date, the Administrative Agent
     shall make all payments in respect of the Assigned Interest (including
     payments of principal, interest, fees and other amounts) to the Assignee
     whether such amounts have accrued prior to or on or after the Effective
     Date. The Assignor and the Assignee shall make all appropriate adjustments
     in payments by the Administrative Agent for periods prior to the Effective
     Date or with respect to the making of this assignment directly between
     themselves."



     3. General Provisions. This Assignment shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.
This Assignment may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the laws of the State of New
York.


                                       2


                                 EXHIBIT 1.1(B)

                                     FORM OF
                    BORROWER JOINDER AND ASSUMPTION AGREEMENT

     THIS BORROWER JOINDER AND ASSUMPTION AGREEMENT is made as of ____________,
20__, by _____________________________________________________, a
_____________________ [corporation/partnership/limited liability company] (the
"New Borrower").

                                   Background

     Reference is made to (i) the Credit Agreement, dated as of April ___, 2010,
as the same may be amended, restated, supplemented or modified from time to time
(the "Credit Agreement"), by and among P. H. GLATFELTER COMPANY, a Pennsylvania
corporation, the other Borrowers now or hereafter party thereto (collectively,
the "Borrowers"), each of the Guarantors now or hereafter party thereto, the
Lenders now or hereafter party thereto (the "Lenders") and PNC BANK, NATIONAL
ASSOCIATION, in its capacity as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent"), (ii) the Continuing Agreement of Guaranty
and Suretyship (Subsidiary), dated as of April ___, 2010, as the same may be
amended, restated, supplemented or modified from time to time (the "Guaranty"),
made by the Guarantors in favor of the Administrative Agent, and (iii) the other
Loan Documents referred to in the Credit Agreement, as the same may be amended,
restated, supplemented or modified from time to time (collectively, the "Loan
Documents").

                                    Agreement

     Capitalized terms defined in the Credit Agreement are used herein as
defined therein.

     New Borrower hereby becomes a Borrower under the terms of the Credit
Agreement and in consideration of the value of the synergistic and other
benefits received by New Borrower as a result of being or becoming affiliated
with the Borrowers and the Guarantors, New Borrower hereby agrees that effective
as of the date hereof [subject to the limitations set forth in Section 10.18 of
the Credit Agreement (Nature of Foreign Borrower Obligations) ](1) it hereby is,
and shall be deemed to be, and assumes the obligations of, a "Loan Party" and a
"Borrower", jointly and severally, under the Credit Agreement and the Notes, and
a Loan Party or Borrower, as the case may be, under each of the other Loan
Documents to which the Loan Parties or Borrowers are a party; and, New Borrower
hereby agrees that from the date hereof and so long as any Loan or any
Commitment of any Lender shall remain outstanding and until the payment in full
of the Loans and the Notes, the expiration of all Letters of Credit, and the
performance of all other obligations of the Loan Parties under the Loan
Documents, New Borrower shall perform, comply with, and be subject to and bound
by each of the terms and provisions of the Credit Agreement and each of the
other Loan Documents, jointly and severally, with the existing parties thereto.
Without limiting the generality of the foregoing, New Borrower hereby represents
and warrants that (i) each of the representations and warranties set forth in
Section 5 of the Credit

- ----------
(1)  To be included for each New Borrower that is a Foreign Borrower



Agreement applicable to a Loan Party is true and correct as to New Borrower on
and as of the date hereof and (ii) New Borrower has heretofore received a true
and correct copy of the Credit Agreement and each of the other Loan Documents
(including any modifications thereof or supplements or waivers thereto) in
effect on the date hereof.

     New Borrower hereby makes, affirms, and ratifies in favor of the Lenders
and the Administrative Agent, the Credit Agreement and each of the other Loan
Documents executed and delivered by the Borrowers to the Administrative Agent
and any of the Lenders.

     New Borrower is simultaneously delivering to the Administrative Agent the
documents, together with this Borrower Joinder and Assumption Agreement,
required under Section 7.1.10.

     In furtherance of the foregoing, New Borrower shall execute and deliver or
cause to be executed and delivered at any time and from time to time such
further instruments and documents and do or cause to be done such further acts
as are reasonably necessary in the reasonable opinion of Administrative Agent to
carry out more effectively the provisions and purposes of this Borrower Joinder
and Assumption Agreement and the other Loan Documents.

     New Borrower acknowledges and agrees that a telecopy transmission to the
Administrative Agent or any Lender of signature pages hereof purporting to be
signed on behalf of New Borrower shall constitute effective and binding
execution and delivery hereof by New Borrower.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]


                                      -2-



      [SIGNATURE PAGE 1 OF 1 OF BORROWER JOINDER AND ASSUMPTION AGREEMENT]

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the New
Borrower has duly executed this Borrower Joinder and Assumption Agreement and
delivered the same to the Administrative Agent for the benefit of the Lenders,
as of the date and year first above written with the intention that this
Borrower Joinder and Assumption Agreement constitute a sealed instrument.

ATTEST:
                                        ----------------------------------------


                                        By:                               (SEAL)
                                           -------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

Acknowledged and accepted:

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------


                                EXHIBIT 1.1(G)(1)

                                     FORM OF
                   GUARANTOR JOINDER AND ASSUMPTION AGREEMENT

     THIS GUARANTOR JOINDER AND ASSUMPTION AGREEMENT is made as of ____________,
20__, by _____________________________________________________, a
_____________________ [corporation/partnership/limited liability company] (the
"New Guarantor").

                                   Background

     Reference is made to (i) the Credit Agreement, dated as of April __, 2010,
as the same may be amended, restated, supplemented or modified from time to time
(the "Credit Agreement"), by and among P. H. GLATFELTER COMPANY, a Pennsylvania
corporation, the other Borrowers now or hereafter party thereto (collectively,
the "Borrowers"), each of the Guarantors now or hereafter party thereto, the
Lenders now or hereafter party thereto (the "Lenders") and PNC BANK, NATIONAL
ASSOCIATION, in its capacity as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent"), (ii) the Continuing Agreement of Guaranty
and Suretyship (Subsidiary), dated as of April ___, 2010, as the same may be
amended, restated, supplemented or modified from time to time (the "Guaranty"),
made by Guarantors in favor of the Administrative Agent, and (iii) the other
Loan Documents referred to in the Credit Agreement, as the same may be amended,
restated, supplemented or modified from time to time (collectively, the "Loan
Documents").

                                    Agreement

     Capitalized terms defined in the Credit Agreement are used herein as
defined therein.

     New Guarantor hereby becomes a Guarantor under the terms of the Credit
Agreement and in consideration of the value of the synergistic and other
benefits received by New Guarantor as a result of being or becoming affiliated
with the Borrower and the Guarantors, New Guarantor hereby agrees that effective
as of the date hereof [subject to the limitations set forth in Section 19 of the
Continuing Agreement of Guaranty and Suretyship, Obligations of Foreign
Guarantors,](1) it hereby is, and shall be deemed to be, and assumes the
obligations of, a "Loan Party" and a "Guarantor", jointly and severally, under
the Credit Agreement, a "Guarantor," jointly and severally with the existing
Guarantors under the Guaranty, and a Loan Party or Guarantor, as the case may
be, under each of the other Loan Documents to which the Loan Parties or
Guarantors are a party; and, New Guarantor hereby agrees that from the date
hereof and so long as any Loan or any Commitment of any Lender shall remain
outstanding and until the payment in full of the Loans and the Notes, the
expiration of all Letters of Credit, and the performance of all other
obligations of the Loan Parties under the Loan Documents, New Guarantor shall
perform, comply with, and be subject to and bound by each of the terms and
provisions of the Credit Agreement, Guaranty and each of the other Loan
Documents, jointly and severally, with the existing parties thereto. Without
limiting the generality of the foregoing,

- ----------
(1)  To be included for each New Guarantor that is a Foreign Borrower



New Guarantor hereby represents and warrants that (i) each of the
representations and warranties set forth in Section 5 of the Credit Agreement
applicable to a Loan Party is true and correct as to New Guarantor on and as of
the date hereof and (ii) New Guarantor has heretofore received a true and
correct copy of the Credit Agreement, Guaranty and each of the other Loan
Documents (including any modifications thereof or supplements or waivers
thereto) in effect on the date hereof.

     New Guarantor hereby makes, affirms, and ratifies in favor of the Lenders
and the Administrative Agent, the Credit Agreement, Guaranty and each of the
other Loan Documents given by the Guarantors to the Administrative Agent and any
of the Lenders.

     New Guarantor is simultaneously delivering to the Administrative Agent the
documents, together with this Guarantor Joinder and Assumption Agreement,
required under Section 7.1.10.

     In furtherance of the foregoing, New Guarantor shall execute and deliver or
cause to be executed and delivered at any time and from time to time such
further instruments and documents and do or cause to be done such further acts
as may be reasonably necessary in the reasonable opinion of Administrative Agent
to carry out more effectively the provisions and purposes of this Guarantor
Joinder and Assumption Agreement and the other Loan Documents.

     New Guarantor acknowledges and agrees that a telecopy transmission to the
Administrative Agent or any Lender of signature pages hereof purporting to be
signed on behalf of New Guarantor shall constitute effective and binding
execution and delivery hereof by New Guarantor.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]


                                      -2-



      [SIGNATURE PAGE 1 OF 1 OF GUARANTOR JOINDER AND ASSUMPTION AGREEMENT]

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the New
Guarantor has duly executed this Guarantor Joinder and Assumption Agreement and
delivered the same to the Administrative Agent for the benefit of the Lenders,
as of the date and year first above written with the intention that this
Guarantor Joinder and Assumption Agreement constitute a sealed instrument.

ATTEST:
                                        ----------------------------------------


                                        By:                               (SEAL)
                                            ------------------------------
Name:                                   Name:
     --------------------------------         ----------------------------------
Title:                                  Title:
      -------------------------------          ---------------------------------

Acknowledged and accepted:

PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------



                                EXHIBIT 1.1(G)(2)

                                     FORM OF
                 CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP

     This Continuing Agreement of Guaranty and Suretyship (the "Guaranty"),
dated as of this ___ day of April, 2010, is jointly and severally given by each
of the undersigned and each of the other Persons which become Guarantors
hereunder from time to time (each a "Guarantor" and collectively the
"Guarantors") in favor of PNC BANK, NATIONAL ASSOCIATION, as Administrative
Agent for the Lenders (the "Administrative Agent") in connection with that
Credit Agreement, dated as of April __, 2010, by and among P. H. GLATFELTER
COMPANY, a Pennsylvania corporation, the other Borrowers now or hereafter party
thereto (collectively, the "Borrowers"), the Guarantors now or hereafter party
thereto, the Administrative Agent, and the Lenders now or hereafter party
thereto (the "Lenders") (as amended, restated, modified, or supplemented from
time to time hereafter, the "Credit Agreement"). Capitalized terms not otherwise
defined herein shall have the respective meanings ascribed to them by the Credit
Agreement and the rules of construction set forth in Section 1.2 of the Credit
Agreement shall apply to this Guaranty.

     1. Guaranteed Obligations. To induce the Administrative Agent and the
Lenders to make loans and grant other financial accommodations to the Borrowers
under the Credit Agreement, each Guarantor hereby jointly and severally (subject
to Section 18, if applicable) unconditionally, and irrevocably, guaranties to
the Administrative Agent, each Lender and any provider of a Lender-Provided
Interest Rate Hedge; and becomes surety, as though it was a primary obligor for,
the full and punctual payment and performance when due (whether on demand, at
stated maturity, by acceleration, or otherwise and including any amounts which
would become due but for the operation of an automatic stay under the federal
bankruptcy code of the United States or any similar laws of any country or
jurisdiction) of all Obligations, and all extensions, modifications,
substitutions, amendments or renewals thereof, whether such Obligations are
direct or indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising (and including Obligations arising or accruing
after the commencement of any bankruptcy, insolvency, reorganization, or similar
proceeding with respect to the Borrower or any Guarantor or which would have
arisen or accrued but for the commencement of such proceeding, even if the claim
for such Obligation is not enforceable or allowable in such proceeding, and
including all Obligations arising from any extensions of credit under or in
connection with the Loan Documents from time to time, regardless whether any
such Obligations are in excess of the amount committed under or contemplated by
the Loan Documents or are made in circumstances in which any condition to
extension of credit is not satisfied) (all such Obligations are referred to,
collectively, as the "Guaranteed Obligations" and each as a "Guaranteed
Obligation"). Without limitation of the foregoing, any of the Guaranteed
Obligations shall be and remain Guaranteed Obligations entitled to the benefit
of this Guaranty if the Administrative Agent or any of the Lenders (or any one
or more assignees or transferees thereof) from time to time assign or otherwise
transfer all or any portion of their respective rights and obligations under the
Loan Documents, or any other Guaranteed Obligations, to any other Person, in
accordance with the terms of the Credit Agreement. In furtherance of the
foregoing, each Guarantor jointly and severally (subject to Section 18, if
applicable) agrees as follows.


     2. Guaranty. Each Guarantor hereby promises to pay and perform all such
Guaranteed Obligations immediately upon demand of the Administrative Agent and
the Lenders or any one or more of them at maturity or upon an Event of Default.
All payments made hereunder shall be made by each Guarantor in immediately
available funds in United States Dollars and shall be made without setoff,
counterclaim, withholding, or other deduction of any nature, except as may
otherwise be required by Law.

     3. Obligations Absolute. The Guaranteed Obligations of the Guarantors
hereunder shall not be discharged or impaired or otherwise diminished by the
failure, default, omission, or delay, willful or otherwise, by any Lender, the
Administrative Agent, or any Borrower or any other obligor on any of the
Guaranteed Obligations, or by any other act or thing or omission or delay to do
any other act or thing which would vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity.
Each of the Guarantors agrees that the Guaranteed Obligations will be paid and
performed strictly in accordance with the terms of the Loan Documents. Without
limiting the generality of the foregoing, each Guarantor hereby consents to, at
any time and from time to time, and the joint and several (subject to Section
18, if applicable) Guaranteed Obligations of each Guarantor hereunder shall not
be diminished, terminated, or otherwise similarly affected by any of the
following:

     (a) Any lack of genuineness, legality, validity, enforceability or
allowability (in a bankruptcy, insolvency, reorganization or similar proceeding,
or otherwise), or any avoidance or subordination, in whole or in part, of any
Loan Document or any of the Guaranteed Obligations and to the fullest extent of
the law regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of the Guaranteed Obligations, any of the terms
of the Loan Documents, or any rights of the Administrative Agent or the Lenders
or any other Person with respect thereto;

     (b) Any increase, decrease, or change in the amount, nature, type or
purpose of any of, or any release, surrender, exchange, compromise or settlement
of, any of the Guaranteed Obligations (whether or not contemplated by the Loan
Documents as presently constituted); any change in the time, manner, method, or
place of payment or performance of, or in any other term of, any of the
Guaranteed Obligations; any execution or delivery of any additional Loan
Documents; or any amendment, modification or supplement to, or refinancing or
refunding of, any Loan Document or any of the Guaranteed Obligations;

     (c) Any failure to assert any breach of or default under any Loan Document
or any of the Guaranteed Obligations; any extensions of credit in excess of the
amount committed under or contemplated by the Loan Documents, or in
circumstances in which any condition to such extensions of credit has not been
satisfied; any other exercise or non-exercise, or any other failure, omission,
breach, default, delay, or wrongful action in connection with any exercise or
non-exercise, of any right or remedy against any Borrower or any other Person
under or in connection with any Loan Document or any of the Guaranteed
Obligations; any refusal of payment or performance of any of the Guaranteed
Obligations, whether or not with any reservation of rights against any
Guarantor; or any application of collections (including but not limited to
collections resulting from realization upon any direct or indirect security for
the


                                      -2-


Guaranteed Obligations) to other obligations, if any, not entitled to the
benefits of this Guaranty, in preference to Guaranteed Obligations entitled to
the benefits of this Guaranty, or if any collections are applied to Guaranteed
Obligations, any application to particular Guaranteed Obligations;

     (d) Any taking, exchange, amendment, modification, waiver, supplement,
termination, subordination, compromise, release, surrender, loss, or impairment
of, or any failure to protect, perfect, or preserve the value of, or any
enforcement of, realization upon, or exercise of rights, or remedies under or in
connection with, or any failure, omission, breach, default, delay, or wrongful
action by the Administrative Agent or the Lenders, or any of them, or any other
Person in connection with the enforcement of, realization upon, or exercise of
rights or remedies under or in connection with, or, any other action or inaction
by any of the Administrative Agent or the Lenders, or any of them, or any other
Person in respect of, any direct or indirect security for any of the Guaranteed
Obligations. As used in this Guaranty, "direct or indirect security" for the
Guaranteed Obligations, and similar phrases, includes any collateral security,
guaranty, suretyship, letter of credit, capital maintenance agreement, put
option, subordination agreement, or other right or arrangement of any nature
providing direct or indirect assurance of payment or performance of any of the
Guaranteed Obligations, made by or on behalf of any Person;

     (e) Any merger, consolidation, liquidation, dissolution, winding-up,
charter revocation, or forfeiture, or other change in, restructuring or
termination of the corporate structure or existence of, any Borrower or any
other Person; any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Borrower or any other Person; or any action taken or
election made by the Administrative Agent or the Lenders, or any of them
(including but not limited to any election under Section 1111(b)(2) of the
United States Bankruptcy Code), any Borrower, or any other Person in connection
with any such proceeding;

     (f) Any defense, setoff, or counterclaim which may at any time be available
to or be asserted by any Borrower or any other Person with respect to any Loan
Document or any of the Guaranteed Obligations; or any discharge by operation of
law or release of any Borrower or any other Person from the performance or
observance of any Loan Document or any of the Guaranteed Obligations;

     (g) Any other event or circumstance, whether similar or dissimilar to the
foregoing, and whether known or unknown, which might otherwise constitute a
defense available to, or limit the liability of, any Guarantor, a guarantor or a
surety, excepting only full, strict, and indefeasible payment and performance of
the Guaranteed Obligations in full.

     Each Guarantor acknowledges, consents, and agrees that new Guarantors may
join in this Guaranty pursuant to Section 7.1.10 of the Credit Agreement and
each Guarantor affirms that its Guaranteed Obligations hereunder shall continue
undiminished.

     4. Waivers, etc. Subject to Section 18, if applicable, each of the
Guarantors hereby waives any defense to or limitation on its Guaranteed
Obligations under this Guaranty arising out of or based on any event or
circumstance referred to in Section 3 hereof. Without limitation and to the
fullest extent permitted by applicable law, each Guarantor waives each of the
following:


                                      -3-



     (a) All notices, disclosures and demand of any nature which otherwise might
be required from time to time to preserve intact any rights against any
Guarantor, including the following: any notice of any event or circumstance
described in Section 3 hereof; any notice required by any law, regulation or
order now or hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Loan Document or any of the
Guaranteed Obligations; any notice of the incurrence of any Guaranteed
Obligation; any notice of any default or any failure on the part of any Borrower
or any other Person to comply with any Loan Document or any of the Guaranteed
Obligations or any direct or indirect security for any of the Guaranteed
Obligations; and any notice of any information pertaining to the business,
operations, condition (financial or otherwise) or prospects of any Borrower or
any other Person;

     (b) Any right to any marshalling of assets, to the filing of any claim
against any Borrower or any other Person in the event of any bankruptcy,
insolvency, reorganization or similar proceeding, or to the exercise against any
Borrower or any other Person of any other right or remedy under or in connection
with any Loan Document or any of the Guaranteed Obligations or any direct or
indirect security for any of the Guaranteed Obligations; any requirement of
promptness or diligence on the part of the Administrative Agent or the Lenders,
or any of them, or any other Person; any requirement to exhaust any remedies
under or in connection with, or to mitigate the damages resulting from default
under, any Loan Document or any of the Guaranteed Obligations or any direct or
indirect security for any of the Guaranteed Obligations; any benefit of any
statute of limitations; and any requirement of acceptance of this Guaranty or
any other Loan Document, and any requirement that any Guarantor receive notice
of any such acceptance;

     (c) Any defense or other right arising by reason of any law now or
hereafter in effect in any jurisdiction pertaining to election of remedies
(including, but not limited to, anti-deficiency laws, "one action" laws or the
like), or by reason of any election of remedies or other action or inaction by
the Administrative Agent or the Lenders, or any of them (including but not
limited to commencement or completion of any judicial proceeding or nonjudicial
sale or other action in respect of collateral security for any of the Guaranteed
Obligations), which results in denial or impairment of the right of the
Administrative Agent or the Lenders, or any of them, to seek a deficiency
against any Borrower or any other Person or which otherwise discharges or
impairs any of the Guaranteed Obligations; and

     (d) Any and all defenses it may now or hereafter have based on principles
of suretyship, impairment of collateral, or the like.

     5. Reinstatement. This Guaranty is a continuing guaranty of the Guarantors
and shall remain in full force and effect notwithstanding that no Guaranteed
Obligations may be outstanding from time to time. Upon termination of all
Commitments, the expiration of all Letters of Credit and indefeasible payment in
full of all Guaranteed Obligations (other than non-assessed contingent
reimbursement obligations), this Guaranty shall terminate; provided, however,
that this Guaranty shall continue to be effective or be reinstated, as the case
may be, any time any payment of any of the Guaranteed Obligations is rescinded,
recouped, avoided, or must otherwise be returned or released by any Lender or
Administrative Agent upon or during the insolvency, bankruptcy, or
reorganization of, or any similar proceeding affecting, any


                                      -4-



Borrower or for any other reason whatsoever, all as though such payment had not
been made and was due and owing.

     6. Subrogation. Each Guarantor waives and agrees it will not exercise any
rights against any Borrower or any other Guarantor arising in connection with,
or any collateral securing, the Guaranteed Obligations (including rights of
subrogation, contribution, and the like) until the Guaranteed Obligations have
been indefeasibly paid in full, and all Commitments have been terminated and all
Letters of Credit have expired. If, during the occurrence and continuance of an
Event of Default, any amount shall be paid to any Guarantor by or on behalf of
any Borrower or any other Guarantor by virtue of any right of subrogation,
contribution, or the like, such amount shall be deemed to have been paid to such
Guarantor for the benefit of, and shall be held in trust for the benefit of, the
Administrative Agent and the Lenders and shall forthwith be paid to the
Administrative Agent to be credited and applied upon the Guaranteed Obligations,
whether matured or unmatured, in accordance with the terms of the Credit
Agreement.

     7. No Stay. If any declaration of default or acceleration or other exercise
or condition to exercise of rights or remedies under or with respect to any
Guaranteed Obligation shall at any time be stayed, enjoined, or prevented for
any reason (including, but not limited to, stay or injunction resulting from the
pendency against any Borrower or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantors agree that, for the
purposes of this Guaranty and their Guaranteed Obligations hereunder, the
Guaranteed Obligations shall be deemed to have been declared in default or
accelerated, and such other exercise or conditions to exercise shall be deemed
to have been taken or met.

     8. Taxes. Each Guarantor agrees to comply with Section 4.8 of the Credit
Agreement as applied to such Guarantor and the Guaranteed Obligations.

     9. Notices. Each Guarantor agrees that all notices, statements, requests,
demands and other communications under this Guaranty shall be given to such
Guarantor at the address set forth on a Schedule to, or in a Guarantor Joinder
and Assumption Agreement given under, the Credit Agreement and in the manner
provided in Section 10.6 of the Credit Agreement. The Administrative Agent and
the Lenders may rely on any notice (whether or not made in a manner contemplated
by this Guaranty) purportedly made by or on behalf of a Guarantor, and the
Administrative Agent and the Lenders shall have no duty to verify the identity
or authority of the Person giving such notice.

     10. Counterparts; Telecopy Signatures. This Guaranty may be executed in any
number of counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument. Each Guarantor acknowledges and agrees that a telecopy transmission
to Administrative Agent or any Lender of signature pages hereof purporting to be
signed on behalf of any Guarantor shall constitute effective and binding
execution and delivery hereof by such Guarantor.

     11. Setoff, Default Payments by Borrowers.


                                      -5-



     (a) Each Guarantor agrees to be bound by Section 8.2.3 of the Credit
Agreement as applied to such Guarantor.

     (b) Upon the occurrence and during the continuation of any default under
any Guaranteed Obligation, if any amount shall be paid to any Guarantor by or
for the account of any Borrower, such amount shall be held in trust for the
benefit of each Lender and Administrative Agent and shall forthwith be paid to
the Administrative Agent to be credited and applied to the Guaranteed
Obligations when due and payable.

     12. Construction. The section and other headings contained in this Guaranty
are for reference purposes only and shall not affect interpretation of this
Guaranty in any respect. This Guaranty has been fully negotiated between the
applicable parties, each party having the benefit of legal counsel, and
accordingly neither any doctrine of construction of guaranties or suretyships in
favor of the guarantor or surety, nor any doctrine of construction of
ambiguities in agreement or instruments against the party controlling the
drafting thereof, shall apply to this Guaranty.

     13. Successors and Assigns. This Guaranty shall be binding upon each
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Administrative Agent and the Lenders, or any of them, and
their successors and permitted assigns provided, however, that no Guarantor may
assign or transfer any of its rights or obligations hereunder or any interest
herein and any such purported assignment or transfer shall be null and void.
Without limitation of the foregoing, the Administrative Agent and the Lenders,
or any of them (and any successive assignee or transferee), from time to time
may assign or otherwise transfer all or any portion of its rights or obligations
in accordance with the Loan Documents (including all or any portion of any
commitment to extend credit), or any other Guaranteed Obligations, to any other
person and such Guaranteed Obligations (including any Guaranteed Obligations
resulting from extension of credit by such other Person under or in connection
with the Loan Documents) shall be and remain Guaranteed Obligations entitled to
the benefit of this Guaranty, and to the extent of its interest in such
Guaranteed Obligations such other Person shall be vested with all the benefits
in respect thereof granted to the Administrative Agent and the Lenders in this
Guaranty or otherwise.

     14. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

     (a) Governing Law. This Guaranty shall be governed by, construed, and
enforced in accordance with the laws of the State of New York.

     (b) Certain Waivers. Each Guarantor hereby irrevocably:

          (i) Certain Waivers; Submission to Jurisdiction. Each Guarantor hereby
irrevocably and unconditionally submits to the nonexclusive jurisdiction of any
New York state court or Federal court of the United States of America sitting in
New York City, and any appellate court thereof in any action or proceeding
arising out of or relating to this Guaranty or for recognition or enforcement of
any judgment, and irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in any such
New York State court, or, to the fullest extent permitted by law, in such
federal court, and


                                      -6-



waives personal service of any and all process upon it and consents that all
such service of process be made by certified or registered mail directed to any
Borrower at the address provided for in the Credit Agreement and service so made
shall be deemed to be completed upon actual receipt thereof. Each Guarantor
waives any objection to jurisdiction and venue of any action instituted against
it as provided herein and agrees not to assert any defense based on lack of
jurisdiction or venue.

     Each Guarantor hereby appoints a process agent, P. H. Glatfelter Company,
as its agent to receive on behalf of such party and its respective property,
service of copies of the summons and complaint and any other process which may
be served in any action or proceeding (the "Process Agent"). Such service may be
made by mailing or delivering a copy of such process to any of the Guarantors in
care of the Process Agent at the Process Agent's address, and each of the
Guarantors hereby authorizes and directs the Process Agent to receive such
service on its behalf. Each Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions (or any political subdivision thereof) by suit on the judgment or
in any other manner provided by law. Each Guarantor further agrees that it
shall, for so long as any Commitment, Letter of Credit or any Obligation of any
Loan Party to the Lenders remains outstanding, continue to retain Process Agent
for the purposes set forth in this Section 14. The Process Agent hereby accepts
the appointment of Process Agent by the Guarantors and agrees to act as Process
Agent on behalf of the Guarantors. The Process Agent has an address of, on the
date hereof, that of P. H. Glatfelter Company as reflected in the Credit
Agreement.

          (ii) WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR
COUNTERCLAIM OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE CREDIT
AGREEMENT, OR ANY OTHER LOAN DOCUMENT TO THE FULLEST EXTENT PERMITTED BY LAW.

     15. Severability; Modification to Conform to Law.

     (a) It is the intention of the parties that this Guaranty be enforceable to
the fullest extent permissible under applicable law, but that the
unenforceability (or modification to conform to such law) of any provision or
provisions hereof shall not render unenforceable, or impair, the remainder
hereof. If any provision in this Guaranty shall be held invalid or unenforceable
in whole or in part in any jurisdiction, this Guaranty shall, as to such
jurisdiction, be ineffective to the extent of such invalidity or
unenforceability, without in any manner affecting the validity or enforceability
of such provision or provisions in any other jurisdiction or the remaining
provisions hereof in any jurisdiction.

     (b) Each Guarantor, and by its acceptance of this Guaranty, the
Administrative Agent and the Lenders, hereby confirm that it is the intention of
all such Persons that this Guaranty and the Guaranteed Obligations of each
Guarantor hereunder not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent
Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder. To effectuate the foregoing intention,
the Administrative Agent and the Lenders hereby


                                      -7-



irrevocably agree that the Guaranteed Obligations of each Guarantor under this
Guaranty at any time shall be limited to the maximum amount as will result in
the Guaranteed Obligations of such Guarantor under this Guaranty not
constituting a fraudulent transfer or conveyance. For purposes hereof,
"BANKRUPTCY LAW" means any proceeding of the type referred to in the definition
of Insolvency Proceeding in the Credit Agreement or Title 11, U.S. Code, or any
similar foreign, federal or state law for the relief of debtors.

     (c) Each Guarantor hereby unconditionally and irrevocably agrees that in
the event any payment shall be required to be made to the Administrative Agent
or any Lender under this Guaranty or any other guaranty, such Guarantor will
contribute, to the maximum extent permitted by law, such amounts to each other
Guarantor and each other guarantor so as to maximize the aggregate amount paid
to the Lenders under or in respect of the Loan Documents.

     (d) Notwithstanding anything to the contrary in this Section or elsewhere
in this Guaranty, this Guaranty shall be presumptively valid and enforceable to
its full extent in accordance with its terms, as if this Section (and references
elsewhere in this Guaranty to enforceability to the fullest extent permitted by
law) were not a part of this Guaranty, and in any related litigation the burden
of proof shall be on the party asserting the invalidity or unenforceability of
any provision hereof or asserting any limitation on any Guarantor's Guaranteed
Obligations hereunder as to each element of such assertion.

     16. Additional Guarantors. At any time after the initial execution and
delivery of this Guaranty to the Administrative Agent and the Lenders,
additional Persons may become parties to this Guaranty and thereby acquire the
duties and rights of being Guarantors hereunder by executing and delivering to
the Administrative Agent and the Lenders a Guarantor Joinder and Assumption
Agreement pursuant to the Credit Agreement. No notice of the addition of any
Guarantor shall be required to be given to any pre-existing Guarantor and each
Guarantor hereby consents thereto.

     17. Joint and Several Obligations. Subject to Section 18 hereof, if
applicable, the Guaranteed Obligations of the Guarantors under this Agreement
are joint and several obligations of the Guarantors, and each Guarantor hereby
waives to the full extent permitted by law any defense it may otherwise have to
the payment and performance of the Obligations that its liability hereunder is
limited and not joint and several. Each Guarantor acknowledges and agrees that
the foregoing waivers and those set forth below serve as a material inducement
to the agreement of the Administrative Agent and the Lenders to make the Loans,
and that the Administrative Agent and the Lenders are relying on each specific
waiver and all such waivers in entering into this Guaranty. The undertakings of
each Guarantor hereunder secure the Guaranteed Obligations of itself and the
other Guarantors. The Administrative Agent and the Lenders, or any of them, may,
in their sole discretion, elect to enforce this Guaranty against any Guarantor
without any duty or responsibility to pursue any other Guarantor and such an
election by the Administrative Agent and the Lenders, or any of them, shall not
be a defense to any action the Administrative Agent and the Lenders, or any of
them, may elect to take against any Guarantor. Each of the Lenders and
Administrative Agent hereby reserve all right against each Guarantor.


                                      -8-



     18. Obligations of Foreign Guarantors.

          (a) Notwithstanding the joint and several liability of the Guarantors
organized under the laws of a jurisdiction other than the United States (each, a
"FOREIGN GUARANTOR") under this Guaranty or any other Loan Document, and
notwithstanding any other provision of this Guaranty or any other Loan Document,
all Guaranteed Obligations of each Foreign Guarantor under this Guaranty and any
other Loan Documents on account of principal and interest under the Loans and
Reimbursement Obligations and Letters of Credit Borrowings shall be limited to
the principal amount advanced to such Foreign Guarantor or its Subsidiaries and
reimbursement of draws under Letters of Credit issued for the account of such
Foreign Guarantor or its Subsidiaries and, in each case, interest thereon. Each
Foreign Guarantor shall be liable only for its pro rata share of all fees and
expenses and other sums due hereunder (other than principal and interest on the
Loans) based upon the ratio of the sum of Loans outstanding to and Letters of
Credit issued for such Foreign Guarantor to the total amount of Loans
outstanding and Letters of Credit issued hereunder.

          (b) Any Foreign Guarantor may from time to time deliver a termination
notice to the Administrative Agent requesting that it no longer be a party to
this Guaranty. Such termination shall be effective two Business Days after
receipt by the Administrative Agent so long as all Guaranteed Obligations for
which such Foreign Guarantor is liable pursuant to Section 18(a) above have been
paid in full (including principal, interest and other amounts) and no Letter of
Credit issued for the account or benefit of such Foreign Guarantor is
outstanding; provided that, to the extent this Guaranty provides for the
survival of certain provisions upon termination hereof, such surviving
provisions shall survive a termination under this subsection with respect to any
such Foreign Guarantor.

     19. Receipt of Credit Agreement, Other Loan Documents, Benefits.

     (a) Each Guarantor hereby acknowledges that it has received a copy of the
Credit Agreement and the other Loan Documents and each Guarantor certifies that
the representations and warranties made therein with respect to such Guarantor
are true and correct. Further, each Guarantor acknowledges and agrees to
perform, comply with, and be bound by all of the provisions of the Credit
Agreement and the other Loan Documents.

     (b) Each Guarantor hereby acknowledges, represents, and warrants that it
receives synergistic benefits by virtue of its affiliation with Borrowers and
the other Guarantors and that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that such
benefits, together with the rights of contribution and subrogation that may
arise in connection herewith are a reasonably equivalent exchange of value in
return for providing this Guaranty.

     20. Miscellaneous. (a) Generality of Certain Terms. As used in this
Guaranty, the terms "hereof," "herein," and terms of similar import refer to
this Guaranty as a whole and not to any particular term or provision; the term
"including," as used herein, is not a term of limitation and means "including
without limitation." (b) Amendments, Waivers. No amendment to or waiver of any
provision of this Guaranty, and no consent to any departure by any Guarantor
herefrom, shall in any event be effective unless in a writing manually signed by
or on behalf of


                                      -9-



the Administrative Agent and the Lenders. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No delay or failure of the Administrative Agent or the Lenders, or any of
them, in exercising any right or remedy under this Guaranty shall operate as a
waiver thereof; nor shall any single or partial exercise of any such right or
remedy preclude any other or further exercise thereof or the exercise of any
other right or remedy. The rights and remedies of the Administrative Agent and
the Lenders under this Guaranty are cumulative and not exclusive of any other
rights or remedies available hereunder, under any other agreement or instrument,
by law, or otherwise. (c) Telecommunications. Each Lender and Administrative
Agent shall be entitled to rely on the authority of any individual making any
facsimile or telephonic notice, request, or signature without the necessity of
receipt of any verification thereof. (d) Expenses. Subject to Section 18, if
applicable, each Guarantor unconditionally agrees to pay all costs and expenses,
including reasonable attorney's fees incurred by the Administrative Agent or any
of the Lenders in enforcing this Guaranty against any Guarantor and each
Guarantor shall pay and indemnify the Administrative Agent and any Lender from
and against any and all claims, demands, liabilities, damages, penalties,
interest, judgments, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel, but excluding taxes) which the Administrative Agent or any Lender may
incur or be subject to as a consequence, direct or indirect, arising out of this
Guaranty or any document, instrument or agreement relating to any of the
Guaranteed Obligations, other than as a sole result of (i) the gross negligence
or willful misconduct of the Administrative Agent or the Lender as determined by
a final judgment of a court of competent jurisdiction or (ii) the wrongful
dishonor by the Administrative Agent or any Lender of a proper demand for
payment made under any Letter of Credit, except if such dishonor resulted from
any act or omission, whether rightful or wrongful, of any present or future de
jure or de facto government or governmental authority. (e) Prior Understandings.
This Guaranty and the Credit Agreement constitute the entire agreement of the
parties hereto with respect to the subject matter hereof and supersede any and
all other prior and contemporaneous understandings and agreements. (f) Survival.
All representations and warranties of the Guarantors made in connection with
this Guaranty shall survive, and shall not be waived by, the execution and
delivery of this Guaranty, any investigation by or knowledge of the
Administrative Agent and the Lenders, or any of them, any extension of credit,
or any other event or circumstance whatsoever.

                            [SIGNATURE PAGE FOLLOWS]


                                      -10-



   [SIGNATURE PAGE 1 OF 1 OF CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP]

     IN WITNESS WHEREOF, each Guarantor intending to be legally bound, has
executed this Guaranty as of the date first above written with the intention
that this Guaranty shall constitute a sealed instrument.

                                        GLATFELTER PULP WOOD COMPANY


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER HOLDINGS, LLC


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                 EXHIBIT 1.1(R)

                                     FORM OF
                              REVOLVING CREDIT NOTE

$______________

                                                        __________________, ____

     FOR VALUE RECEIVED, the undersigned, P. H. GLATFELTER COMPANY, a
Pennsylvania corporation, and the other Borrowers signatory hereto
(collectively, the "Borrowers"), jointly and severally, hereby promise to pay to
the order of _________________________________ (the "Lender"), the lesser of (i)
the principal sum of _____________________________________________________
(US$____________), and (ii) the aggregate unpaid principal balance of all
Revolving Credit Loans made by the Lender to the Borrowers pursuant to the
Credit Agreement, dated as of April __, 2010, among the Borrowers, the
Guarantors now or hereafter party thereto, the Lenders now or hereafter party
thereto, and PNC BANK, NATIONAL ASSOCIATION, as Administrative Agent
(hereinafter referred to in such capacity as the "Administrative Agent") (as
amended, restated, modified, or supplemented from time to time, the "Credit
Agreement"), payable by 11:00 a.m. on the Expiration Date, together with
interest the unpaid principal balance hereof from time to time outstanding from
the date hereof at the rate or rates per annum specified by the Borrowers
pursuant to, or as otherwise provided in, the Credit Agreement.

     Interest on the unpaid principal balance hereof from time to time
outstanding from the date hereof will be payable at the times provided for in
the Credit Agreement. Upon the occurrence and during the continuation of an
Event of Default, the Borrowers shall pay interest on the entire principal
amount of the then outstanding Revolving Credit Loans evidenced by this
Revolving Credit Note and all other obligations due and payable to the Lender
pursuant to the Credit Agreement and the other Loan Documents at a rate per
annum as set forth in the Credit Agreement. Such interest will accrue before and
after any judgment has been entered.

     Subject to the provisions of the Credit Agreement, payments of both
principal and interest shall be made without setoff, counterclaim, or other
deduction of any nature at the office of the Administrative Agent located at PNC
Firstside Center, 500 First Avenue, 3rd Floor, Pittsburgh, PA 15219, Attn: Rini
Davis, Assistant Vice President, unless otherwise directed in writing by the
holder hereof or provided in the Credit Agreement, in lawful money of the United
States of America in immediately available funds.

     This Note is one of the Revolving Credit Notes referred to in, and is
subject to the provisions (including, but not limited to, the limitations set
forth in Section 10.18 of the Credit Agreement (Nature of Foreign Borrower
Obligations) if applicable), and is entitled to the benefits of, the Credit
Agreement and other Loan Documents, including the representations, warranties,
covenants, conditions, security interests, and Liens contained or granted
therein. The Credit Agreement among other things contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayment, in certain circumstances, on



account of principal hereof prior to maturity upon the terms and conditions
therein specified. The Borrowers waive presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note and the Credit Agreement.

     This Note shall bind the Borrowers and their respective successors and
assigns, and the benefits hereof shall inure to the benefit of the Lender and
its successors and assigns. All references herein to the "Borrowers" and the
"Lender" shall be deemed to apply to the Borrowers and the Lender, respectively,
and their respective successors and assigns as permitted under the Credit
Agreement.

     This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the laws of the
State of New York.

     All capitalized terms used herein shall, unless otherwise defined herein,
have the same meanings given to such terms in the Credit Agreement.

                            [SIGNATURE PAGE FOLLOWS]


                                      -2-



     IN WITNESS WHEREOF, and intending to be legally bound hereby, the
undersigned has executed this Note by its duly authorized officer with the
intention that it constitute a sealed instrument.

                                        P.H. GLATFELTER COMPANY


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        PHG TEA LEAVES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER GERNSBACH GMBH & CO. KG


                                        By: Glatfelter Verwaltungsgesellschaft
                                            mbH, its General Partner


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER VERWALTUNGSGESELLSCHAFT MBH


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER LYDNEY, LTD.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        MOLLANVICK, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                      -3-



                                        GLATFELTER FALKENHAGEN GMBH


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER FALKENHAGEN HOLDING GMBH


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER CANADA INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER GATINEAU LTEE


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER CAERPHILLY LTD.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                    [Revolving Credit Note - signature page]


                                      -4-


                                 EXHIBIT 1.1(S)

                                     FORM OF
                                 SWING LOAN NOTE

$20,000,000.00

                                                               __________, _____

     FOR VALUE RECEIVED, the undersigned, P. H. GLATFELTER COMPANY, a
Pennsylvania corporation, and the other Borrowers signatory hereto
(collectively, the "Borrowers"), jointly and severally, hereby unconditionally
promise to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the "Lender"),
the lesser of (i) the principal sum of TWENTY MILLION DOLLARS
(US$20,000,000.00), and (ii) the aggregate unpaid principal balance of all Swing
Loans made by the Lender to the Borrowers pursuant to Section 2.5.2 of the
Credit Agreement, dated as of April__, 2010, among the Borrowers, the Guarantors
now or hereafter party thereto, the Lenders now or hereafter party thereto, and
PNC Bank, National Association, as Administrative Agent for the Lenders
(hereinafter referred to in such capacity as the "Administrative Agent") (as
amended, restated, supplemented, or otherwise modified from time to time, the
"Credit Agreement"), payable with respect to each Swing Loan evidenced hereby on
the earlier of (i) demand by the Lender or (ii) by 11:00 a.m. Pittsburgh time on
the Expiration Date, or at such other time specified in the Credit Agreement.

     The Borrowers shall pay interest on the unpaid principal balance of each
Swing Loan from time to time outstanding hereunder from the date hereof at the
rate per annum and on the date(s) provided in the Credit Agreement. Upon the
occurrence and during the continuation of an Event of Default, the Borrowers
shall pay interest on the entire principal amount of the then outstanding Swing
Loans evidenced by this Note at a rate per annum as set forth in the Credit
Agreement. Such interest will accrue before and after any judgment has been
entered.

     Subject to the provisions of the Credit Agreement, payments of both
principal and interest shall be made without setoff, counterclaim or other
deduction of any nature at the office of the Administrative Agent located at PNC
Firstside Center, 500 First Avenue, 3rd Floor, Pittsburgh, PA 15219, Attn: Rini
Davis, Assistant Vice President, unless otherwise directed in writing by the
holder hereof, in lawful money of the United States of America in immediately
available funds.

     This Note is the Swing Loan Note referred to in, and is subject to the
provisions (including, but not limited to, the limitations set forth in Section
10.18 of the Credit Agreement (Nature of Foreign Borrower Obligations) if
applicable), and is entitled to the benefits of, the Credit Agreement and other
Loan Documents, including the representations, warranties, covenants or
conditions contained or granted therein. The Credit Agreement among other things
contains provisions for acceleration of the maturity hereof upon the happening
of certain stated events and also for prepayment, in certain circumstances, on
demand or otherwise, on account of principal hereof prior to maturity upon the
terms and conditions therein specified. All capitalized terms used herein shall,
unless otherwise defined herein, have the same meanings given to such terms in
the Credit Agreement. The Borrowers waive presentment, demand,



notice, protest and all other demands and notices in connection with the
delivery, acceptance, performance, default or enforcement of this Note and the
Credit Agreement.

     The Borrowers acknowledge and agree that the Lender may at any time and in
its sole discretion demand payment of all amounts outstanding under this Note
without prior notice to the Borrowers.

     This Note shall bind the Borrowers and their respective successors and
assigns, and the benefits hereof shall inure to the benefit of the Lender and
its successors and assigns. All references herein to the "Borrowers" and the
"Lender" shall be deemed to apply to the Borrowers and the Lender, respectively,
and their respective successors and assigns.

     This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the laws of the
State of New York.

     The Borrowers acknowledge and agree that a telecopy transmission to
Administrative Agent or any Lender of signature pages hereof purporting to be
signed on behalf of Borrowers shall constitute effective and binding execution
and delivery hereof by Borrowers.

                            [SIGNATURE PAGE FOLLOWS]


                                       2



                   [SIGNATURE PAGE 1 OF 1 TO SWING LOAN NOTE]

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the
undersigned has executed this Note by its duly authorized officer with the
intention that it constitute a sealed instrument.

                                        P.H. GLATFELTER COMPANY


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        PHG TEA LEAVES, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER GERNSBACH GMBH & CO. KG


                                        By: Glatfelter Verwaltungsgesellschaft
                                            mbH, its General Partner


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER
                                        VERWALTUNGSGESELLSCHAFT MBH


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER LYDNEY, LTD.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        MOLLANVICK, INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:



                                        GLATFELTER FALKENHAGEN GMBH


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER FALKENHAGEN HOLDING GMBH


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER CANADA INC.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER GATINEAU LTEE


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER CAERPHILLY LTD.


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:

                       [Swing Loan Note - signature page]


                                   EXHIBIT 2.4

                              FORM OF LOAN REQUEST

                                                                 Date: _________

TO:  PNC Bank, National Association, as Administrative Agent
     PNC Firstside Center
     500 First Avenue, 3rd Floor
     Pittsburgh, PA 15219
     Telephone No.: (412) 762-7638
     Telecopier No.: (412) 762-8672
     Attention: Rini Davis

FROM: __________________________

RE:  Credit Agreement (as it may be amended, restated, modified or supplemented,
     the "Agreement") dated as of April __, 2010 by and among P. H. Glatfelter
     Company, the other Borrowers party thereto (collectively, "Borrowers"), the
     Guarantors party thereto, the Lenders party thereto and PNC Bank, National
     Association, as Administrative Agent for the Lenders (the "Administrative
     Agent")

Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to them by the Agreement.

A.   Pursuant to Section [2.4] [3.2] of the Agreement, the undersigned
     [Borrower] [Borrower Agent] irrevocably requests [check one line under 1(a)
     below and fill in blank space next to the line as appropriate]:

     1.(a) __  A new Revolving Credit Loan OR

           __  A new Swing Loan OR

           __  Renewal of the Euro-Rate Option applicable to an outstanding
               Revolving Credit Loan, originally made on __________ __, ____ OR

           __  Conversion of the Base Rate Option applicable to an outstanding
               Revolving Credit Loan, originally made on _____________ to a
               Revolving Credit Loan to which the Euro-Rate Option applies, OR

           __  Conversion of the Euro-Rate Option applicable to an outstanding
               Revolving Credit Loan originally made on __________ __, ____ to a
               Revolving Credit Loan to which the Base Rate Option applies.



     SUCH NEW, RENEWED OR CONVERTED LOAN SHALL BEAR INTEREST:

        [Check one line under 1(b) below and fill in blank spaces in line
                                 next to line]:

     1.(b)(i) __ Under the Base Rate Option. Such Loan shall have a Borrowing
               Date of __________, ___ (which date shall be (i) one (1) Business
               Day subsequent to the Business Day of receipt by the
               Administrative Agent by 10:00 a.m. of this Loan Request for
               making a new Revolving Credit Loan to which the Base Rate Option
               applies, or (ii) the last day of the preceding Interest Period
               under the Euro-Rate Option if a Loan to which the Euro-Rate
               Option applies is being converted to a Loan to which the Base
               Rate Option applies).

                                       OR

        (ii) __ Under the Euro-Rate Option. Such Loan shall have a Borrowing
               Date of _____________ (which date shall be (i) three (3) Business
               Days   subsequent to the Business Day of receipt by the
               Administrative Agent by 10:00 a.m. of this Loan Request for
               making a new Revolving Credit Loan in Dollars to which the
               Euro-Rate Option applies, renewing a Loan in Dollars to which the
               Euro-Rate Option applies, or converting a Loan to which the Base
               Rate Option applies to a Loan to which the Euro-Rate Option
               applies, (ii) four (4) Business Days subsequent to the Business
               Day of receipt by the Administrative  Agent by 10:00 a.m. of this
               Loan Request for making a new Revolving Credit Loan in an
               Optional Currency, or renewing a Loan in an Optional Currency, or
               (iii) one (1) Business Day subsequent to the last day of the
               preceding Interest Period if a Loan to which the Euro-Rate Option
               applies is being convert to a Loan to which the Base Rate Option
               applies).

  [Check one line under 2 below and fill in blank spaces in the line checked]

     2.   (a) _____ Such Loan is in Dollars and in the principal amount of
                    $_____________ or the principal amount to be renewed or
                    converted is $_____________

          OR

          (b) _____ Such Loan is in _____________  [identify Optional Currency]
                    and in the principal amount of ________________________, or
                    the principal amount of such Optional Currency to be
                    renewed is _____________________.

     [(1)  Revolving Credit Loans under Section 2.4 not to be less than
     $2,000,000.00 and in increments of $100,000.00 if in excess thereof for
     each Borrowing Tranche to which the Euro-Rate Option applies and not less
     than the lesser of $2,000,000.00 or the maximum amount available for each
     Borrowing Tranche to which the Base Rate Option applies]


                                       2



     3.   [Complete blank below if the Borrower is selecting the Euro-Rate
          Option]: Such Loan shall have an Interest Period of [one, two, three,
          or six] Month(s).
          _________________________________

     [Interest Periods for Loans in Optional Currency limited to one month]

          [If a new Loan]

     4.   The proceeds of the Loan shall be advanced to the  following
          Borrower(s):
     ___________________________________________________________________________

B.   As of the date hereof and the date of making of the above-requested Loan
     (and after giving effect thereto): all of Borrowers' representations and
     warranties therein are true and correct in all material respects (except
     representations and warranties which expressly relate solely to an earlier
     date or time, which representations and warranties were true and correct in
     all material respects on and as of the specific dates or times referred to
     therein); no Event of Default or Potential Default has occurred and is
     continuing or shall exist; and the making of any Revolving Credit Loan
     shall not cause the aggregate Revolving Credit Loans, plus Swing Loans plus
     the Letters of Credit Outstanding to exceed the aggregate Revolving Credit
     Commitments.

C.   The undersigned hereby irrevocably requests [check one line under paragraph
     1 below and fill in blank space next to the line as appropriate]:

     1. ______ Funds to be deposited into PNC bank account per our current
standing instructions. Complete amount of deposit if not full loan advance
amount: $ _________.

          ______ Funds to be wired per the following wire instructions:

          $____________________ Amount of Wire Transfer

          Bank Name: __________________________________

          ABA: ________________________________________

          Account Number: _____________________________

          Account Name: _______________________________

          Reference: __________________________________


                                       3



          ______ Funds to be wired per the attached Funds Flow (multiple wire
               transfers)

                            [SIGNATURE PAGE FOLLOWS]


                                       4



                     [SIGNATURE PAGE 1 OF 1 TO LOAN REQUEST]

     The undersigned certifies to the Administrative Agent as to the accuracy of
the foregoing.

                                        [NAME OF BORROWER]

Date: __________, 2010                  _______________________________[(SEAL)]
                                        By:
                                            ------------------------------------
                                        Title:
                                               ---------------------------------


                                  EXHIBIT 7.2.6

                   FORM OF ACQUISITION COMPLIANCE CERTIFICATE

     In accordance with the provisions of Section 7.2.6 of the Credit Agreement
dated as of April___, 2010, as amended, restated and otherwise modified through
the date hereof (the "Credit Agreement") by and among P. H. Glatfelter Company,
the other Borrowers party thereto (collectively, the "Borrowers"), PNC Bank,
National Association, as Administrative Agent (the "Administrative Agent"), and
the other parties thereto from time to time, I, _______________, the
____________________ and authorized officer of P. H. Glatfelter Company, on
behalf of all of the Borrowers, do hereby certify to the Administrative Agent
and Lenders as follows:

          (a) The representations and warranties made by the Borrowers and other
Loan Parties in Section 5 of the Credit Agreement and in the other Loan
Documents are true in all material respects with the same effect as though such
representations and warranties are made on and as of this date (except
representations and warranties which expressly relate solely to an earlier date
or time, which remain true in all material respects as of such date or time);

          (b) No Event of Default or Potential Default has occurred or now
exists, or will occur after giving effect to the proposed Permitted Acquisition;
and

          (c) After giving effect to the proposed Permitted Acquisition, on a
pro forma basis, the Borrowers will continue to be in compliance with the
financial covenants set forth in Section 7.2 of the Credit Agreement as more
fully set forth below and on Annex 1 hereto:



                                                   Actual      Required
                                                  -------   -------------
                                                      
CONSOLIDATED LEVERAGE RATIO
ratio of Consolidated Total Net Debt divided by   _______
Consolidated Adjusted EBITDA                      _______
Leverage Ratio                                    _______   not more than
                                                            3.50 to 1.00(1)
INTEREST COVERAGE RATIO
ratio of Consolidated EBITDA divided by           _______
consolidated interest expense                     _______
Interest Coverage Ratio                           _______   not less than
                                                            3.50 to 1.00(2)


- ----------
(1)  Refer to Section 7.2.15 of Credit Agreement to determine applicable maximum
     ratio.

(2)  Refer to Section 7.2.16 of Credit Agreement.


                                        1



Attached hereto as Annex 1 are calculations supporting the figures reported
above.

     Any capitalized terms which are used in this Certificate and which are not
defined herein, but which are defined in the above-described Credit Agreement,
shall have the meanings given to those terms in the Credit Agreement.

     IN WITNESS WHEREOF, I have executed this Certificate the _____ day of
___________.


                                        By:
                                            ------------------------------------
                                            ___________ of P. H. Glatfelter
                                            Company, on behalf of all the
                                            Borrowers


                                        2


                                  EXHIBIT 7.3.3

                    FORM OF QUARTERLY COMPLIANCE CERTIFICATE

     In accordance with the provisions of Section 7.3.3 of the Credit Agreement
dated as of April___, 2010, as amended, restated and otherwise modified through
the date hereof (the "Credit Agreement") by and among P. H. Glatfelter Company
(the "Company"), the other Borrowers party thereto (collectively, the
"Borrowers"), PNC Bank, National Association, as Administrative Agent (the
"Agent"), and the other parties thereto from time to time, I, __________, the
__________ and authorized officer of the Company, on behalf of all of the
Borrowers, do hereby certify to the Administrative Agent and Lenders as follows:

          (a) The representations and warranties made by the Borrowers and other
Loan Parties in Section 5 of the Credit Agreement and in the other Loan
Documents are true in all material respects with the same effect as though such
representations and warranties are made on and as of this date (except
representations and warranties which expressly relate solely to an earlier date
or time, which remain true in all material respects as of such date or time);

          (b) No Event of Default or Potential Default has occurred or now
exists; and

          (c) The Company, on a consolidated basis, is in compliance with the
financial covenants set forth in Section 7.2 of the Credit Agreement as more
fully set forth below and on Annex 1 hereto:



                                                    Actual         Required
                                                  ----------   ---------------
                                                         
LEVERAGE RATIO
ratio of Consolidated Total Net Debt divided by   __________
Consolidated Adjusted EBITDA                      __________
Leverage Ratio                                    __________   not more than
                                                               3.50 to 1.00(1)
INTEREST COVERAGE RATIO
ratio of Consolidated EBITDA divided by           __________
consolidated interest expense                     __________
Interest Coverage Ratio                           __________   not less than
                                                               3.50 to 1.00(2)


- ----------
(1)  Refer to Section 7.2.15 of Credit Agreement.

(2)  Refer to Section 7.2.16 of Credit Agreement.


                                       1



Attached hereto as Annex 1 are calculations supporting the figures reported
above.

     Any capitalized terms which are used in this Certificate and which are not
defined herein, but which are defined in the above-described Credit Agreement,
shall have the meanings given to those terms in the Credit Agreement.

     IN WITNESS WHEREOF, I have executed this Certificate the _____ day of
__________.



                                        By:
                                            ------------------------------------
                                        __________ of P. H. Glatfelter
                                        Company, on behalf of all of the
                                        Borrowers


                                       2

EX-10.2

                                                               EXECUTION VERSION

                               TERM LOAN AGREEMENT

                          dated as of January 15, 2008

                                     between

                          GPW VIRGINIA TIMBERLANDS LLC
                                   as Borrower

                   THE LENDERS FROM TIME TO TIME PARTY HERETO

                                       AND

                                  SUNTRUST BANK
                                    as Agent



                                TABLE OF CONTENTS

                                                                           
ARTICLE I.    DEFINITIONS; CONSTRUCTION....................................    1
SECTION 1.01  DEFINITIONS..................................................    1
SECTION 1.02  ACCOUNTING TERMS AND DETERMINATION...........................   14
SECTION 1.03  TERMS GENERALLY..............................................   14

ARTICLE II.   AMOUNT AND TERMS OF THE COMMITMENT...........................   15
SECTION 2.01  TERM LOAN COMMITMENT.........................................   15
SECTION 2.02  INTEREST ELECTION............................................   15
SECTION 2.03  TERMINATION OF COMMITMENTS...................................   15
SECTION 2.04  REPAYMENT OF TERM LOAN.......................................   16
SECTION 2.05  OPTIONAL PREPAYMENTS.........................................   16
SECTION 2.06  MANDATORY PREPAYMENTS........................................   16
SECTION 2.07  INTEREST ON TERM LOAN........................................   16
SECTION 2.08  FEES.........................................................   17
SECTION 2.09  COMPUTATION OF INTEREST......................................   17
SECTION 2.10  INABILITY TO DETERMINE INTEREST RATES........................   17
SECTION 2.11  ILLEGALITY...................................................   18
SECTION 2.12  INCREASED COSTS..............................................   18
SECTION 2.13  FUNDING INDEMNITY............................................   19
SECTION 2.14  TAXES........................................................   19
SECTION 2.15  PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF SET-OFFS..   21

ARTICLE III.  CONDITIONS PRECEDENT.........................................   23
SECTION 3.01  REPRESENTATIONS AND WARRANTIES...............................   23
SECTION 3.02  PERFORMANCE; NO DEFAULT......................................   23
SECTION 3.03  COMPLIANCE CERTIFICATES......................................   23
SECTION 3.04  OPINIONS OF COUNSEL..........................................   23
SECTION 3.05  INSTALLMENT SALE TRANSACTION; INITIAL CAPITALIZATION
              TRANSACTION..................................................   24
SECTION 3.06  TRANSACTION DOCUMENTS........................................   24
SECTION 3.07  COLLATERAL...................................................   25
SECTION 3.08  INTEREST RESERVE ACCOUNT AND COLLECTION ACCOUNT..............   25
SECTION 3.09  INTEREST RESERVE AMOUNT......................................   25
SECTION 3.10  TERM LOAN PERMITTED BY APPLICABLE LAW, ETC...................   25
SECTION 3.11  PAYMENT OF SPECIAL COUNSEL FEES..............................   26
SECTION 3.12  FUNDING INSTRUCTIONS.........................................   26
SECTION 3.13  PROCEEDINGS AND DOCUMENTS....................................   26

ARTICLE IV.   REPRESENTATIONS AND WARRANTIES...............................   26
SECTION 4.01  ORGANIZATION; POWER AND AUTHORITY............................   26
SECTION 4.02  AUTHORIZATION, ETC...........................................   26
SECTION 4.03  DISCLOSURE...................................................   27
SECTION 4.04  ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES.........   27
SECTION 4.05  CLOSING DATE BALANCE SHEET; LIABILITIES......................   27
SECTION 4.06  COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.................   27
SECTION 4.07  GOVERNMENTAL AUTHORIZATIONS, ETC.............................   27
SECTION 4.08  LITIGATION; OBSERVANCE OF STATUTES AND ORDERS................   28
SECTION 4.09  TAXES........................................................   28
SECTION 4.10  TITLE TO PROPERTY............................................   28
SECTION 4.11  LICENSES, PERMITS, ETC.......................................   28
SECTION 4.12  COMPLIANCE WITH ERISA........................................   28
SECTION 4.13  [Reserved]...................................................   29
SECTION 4.14  USE OF PROCEEDS; MARGIN REGULATIONS..........................   29




                                        i



                                                                           
SECTION 4.15  INDEBTEDNESS.................................................   30
SECTION 4.16  SOLVENCY.....................................................   30
SECTION 4.17  ACTIVITIES...................................................   30
SECTION 4.18  FOREIGN ASSETS CONTROL REGULATIONS, ETC......................   30
SECTION 4.19  INVESTMENT COMPANY ACT.......................................   31

ARTICLE V.    AFFIRMATIVE COVENANTS........................................   31
SECTION 5.01  FINANCIAL AND BUSINESS INFORMATION...........................   31
SECTION 5.02  OFFICER'S CERTIFICATE........................................   32
SECTION 5.03  VISITATION...................................................   32
SECTION 5.04  COMPLIANCE WITH LAW..........................................   33
SECTION 5.05  INSURANCE....................................................   33
SECTION 5.06  MAINTENANCE OF PROPERTIES....................................   33
SECTION 5.07  PAYMENT OF TAXES.............................................   33
SECTION 5.08  CORPORATE EXISTENCE, ETC.....................................   33
SECTION 5.09  PAYMENT OF OBLIGATIONS.......................................   33
SECTION 5.10  BOOKS AND RECORDS............................................   34
SECTION 5.11  ACTIVITIES...................................................   34
SECTION 5.12  CHARACTERIZATION OF BORROWER FOR TAX PURPOSES................   34

ARTICLE VI.   NEGATIVE COVENANTS...........................................   34
SECTION 6.01  INDEBTEDNESS.................................................   34
SECTION 6.02  LIENS........................................................   34
SECTION 6.03  TRANSACTIONS WITH AFFILIATES.................................   34
SECTION 6.04  MERGER, CONSOLIDATION, ETC...................................   35
SECTION 6.05  LINE OF BUSINESS.............................................   35
SECTION 6.06  TERRORISM SANCTIONS REGULATIONS..............................   35
SECTION 6.07  INVESTMENTS..................................................   35
SECTION 6.08  DISTRIBUTIONS................................................   35
SECTION 6.09  CAPITAL EXPENDITURES.........................................   36
SECTION 6.10  BANKRUPTCY, INSOLVENCY.......................................   36
SECTION 6.11  AMENDMENTS AND MODIFICATIONS TO ORGANIZATIONAL DOCUMENTS
              AND COLLATERAL...............................................   36

ARTICLE VII.  EVENTS OF DEFAULT............................................   37
SECTION 7.01  EVENTS OF DEFAULT............................................   37
SECTION 7.02  REMEDIES ON DEFAULT, ETC.....................................   38

ARTICLE VIII. THE AGENT....................................................   39
SECTION 8.01  APPOINTMENT OF AGENT.........................................   39
SECTION 8.02  NATURE OF DUTIES OF AGENT....................................   40
SECTION 8.03  LACK OF RELIANCE ON THE AGENT................................   40
SECTION 8.04  CERTAIN RIGHTS OF THE AGENT..................................   40
SECTION 8.05  RELIANCE BY AGENT............................................   41
SECTION 8.06  THE AGENT IN ITS INDIVIDUAL CAPACITY.........................   41
SECTION 8.07  SUCCESSOR AGENT..............................................   41
SECTION 8.08  AUTHORIZATION TO EXECUTE OTHER LOAN DOCUMENTS................   42

ARTICLE IX.   MISCELLANEOUS................................................   42
SECTION 9.01  NOTICES......................................................   42
SECTION 9.02  WAIVER; AMENDMENTS...........................................   43
SECTION 9.03  EXPENSES; INDEMNIFICATION....................................   44
SECTION 9.04  SUCCESSORS AND ASSIGNS.......................................   45
SECTION 9.05  GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS...   49
SECTION 9.06  WAIVER OF JURY TRIAL.........................................   49
SECTION 9.07  RIGHT OF SETOFF..............................................   50
SECTION 9.08  COUNTERPARTS; INTEGRATION....................................   50
SECTION 9.09  SURVIVAL.....................................................   50
SECTION 9.10  SEVERABILITY.................................................   51
SECTION 9.11  CONFIDENTIALITY..............................................   51




                                       ii



                                                                           
SECTION 9.12  INTEREST RATE LIMITATION.....................................   51
SECTION 9.13  QUALIFIED PURCHASER..........................................   52



Schedules
   Schedule 4.05 - Closing Date Balance Sheet
   Schedule 4.15 - Other Indebtedness

Exhibits
   Exhibit A     - Term Note
   Exhibit B     - Form of Glatfelter Note
   Exhibit C     - Form of Assignment and Acceptance


                                       iii



                               TERM LOAN AGREEMENT

          THIS TERM LOAN AGREEMENT (this "Agreement") is made and entered into
as of January 15, 2008, by and between GPW VIRGINIA TIMBERLANDS LLC, a Delaware
limited liability company (the "Borrower") the several banks and other financial
institutions from time to time party hereto (the "Lenders"), and SUNTRUST BANK,
in its capacity as Agent for the Lenders (in such capacity, the "Agent").

                                   WITNESSETH:

          WHEREAS, the Borrower has requested that the Lender make a term loan
in a principal amount equal to $36,694,500.00 to the Borrower;

          WHEREAS, subject to the terms and conditions of this Agreement, the
Lender is willing to make the term loan to the Borrower.

          NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Agent, the Borrower and the Lenders agree as
follows:

                      ARTICLE I. DEFINITIONS; CONSTRUCTION

          SECTION 1.01 DEFINITIONS.

     In addition to the other terms defined herein, the following terms used
herein shall have the meanings herein specified (to be equally applicable to
both the singular and plural forms of the terms defined):

          "ADJUSTED LIBO RATE" shall mean, with respect to each Interest Period
for a Eurodollar Loan, the rate per annum obtained by dividing (i) LIBOR for
such Interest Period by (ii) a percentage equal to 1.00 minus the Eurodollar
Reserve Percentage.

          "ADMINISTRATIVE QUESTIONNAIRE" shall mean, with respect to each
Lender, an administrative questionnaire in the form prepared by the Agent and
submitted to the Agent duly completed by such Lender.

          "AFFILIATE" means, at any time, and with respect to any Person, any
other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person. As used in this definition, "Control" means the possession,
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting



securities, by contract or otherwise. Unless the context otherwise clearly
requires, any reference to an "Affiliate" is a reference to an Affiliate of the
Borrower.

          "AGENT" shall have the meaning set forth in the introductory paragraph
hereof.

          "ANTI-TERRORISM ORDER" means Executive Order No. 13,224 of September
24, 2001, Blocking Property and Prohibiting Transactions with Persons Who
Commit, Threaten to Commit or Support Terrorism, 66 U.S. Fed. Reg. 49, 079
(2001), as amended.

          "APPLICABLE LENDING OFFICE" shall mean, for each Lender the "Lending
Office" of such Lender (or an Affiliate of such Lender) designated in the
Administrative Questionnaire submitted by such Lender or such other office of
such Lender (or an Affiliate of such Lender) as such Lender may from time to
time specify to the Agent and the Borrower as the office by which its Term Loan
is to be made and maintained.

          "APPLICABLE MARGIN" shall mean 0.00% per annum on a Base Rate Loan and
1.20% per annum on a Eurodollar Loan.

          "APPROVED FUND" means any Person (other than a natural Person) that is
(or will be) engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and that is administered or managed by (a) the Lender, (b) an Affiliate
of the Lender or (c) an entity or an Affiliate of an entity that administers or
manages the Lender.

          "ASSIGNMENT AND ACCEPTANCE" shall mean an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04(b)) and accepted by the Agent, in the form
of Exhibit C attached hereto or any other form approved by the Agent.

          "AVAILABLE FUNDS" means, as of any date of determination, the amount
by which cash on deposit in the Interest Reserve Account and the Collection
Account, and Permitted Investments standing to the credit of the Interest
Reserve Account or the Collection Account or otherwise subject to a perfected,
first priority Lien in favor of the Collateral Trustee, exceeds the sum of (a)
the amount of principal, interest and other sums in respect of the Term Loan
that is due and payable within the 45 days following such date of determination,
plus (b) the Interest Reserve Amount, plus (c) the amount of expenses projected
by the Borrower in good faith to be due and payable on or prior to the last day
of the immediately succeeding Interest Period as certified by a Responsible
Officer of the Borrower to the Collateral Trustee.

          "BASE RATE" shall mean the higher of (i) the per annum rate which the
Agent publicly announces from time to time to be its prime lending rate, as in
effect from time to time, and (ii) the Federal Funds Rate, as in effect from
time to time, plus one-half of one percent (0.50%). The Agent's prime lending
rate is a reference rate and does not necessarily represent the lowest or best
rate charged to customers. The Agent may make commercial loans or other loans at
rates of interest at, above or below the Agent's prime lending rate. Each change
in the Agent's prime lending rate shall be effective from and including the date
such change is publicly


                                        2



announced as being effective. When used in reference to the Term Loan, "Base
Rate" refers to whether the Term Loan bears interest at a rate determined by
reference to the Base Rate (e.g., a "Base Rate Loan").

          "BORROWER" shall have the meaning in the introductory paragraph
hereof.

          "BUSINESS DAY" shall mean (i) any day other than a Saturday, Sunday or
other day on which commercial banks in Atlanta, Georgia or Richmond, Virginia
are authorized or required by law to close and (ii) if such day relates to a
borrowing of, a payment or prepayment of principal or interest on, a conversion
of, or an Interest Period for, a Eurodollar Loan or a notice with respect to any
of the foregoing, any London Business Day.

          "CAPITALIZATION TRANSACTION" means, collectively, (a) the Initial
Capitalization Transaction, (b) the purchase by the Borrower from Glatfelter on
the date of Closing of a Glatfelter Note in the principal amount of
$3,377,000.00 for a purchase price equal to 100% of the principal amount
thereof, paid by the Borrower with proceeds of the Term Loan, and (c) the
contribution by the Parent on the date of Closing of a Glatfelter Note in the
principal amount of $5,781,000.00.

          "CHANGE IN LAW" shall mean (i) the adoption of any applicable law,
rule or regulation after the date of this Agreement, (ii) any change in any
applicable law, rule or regulation, or any change in the interpretation or
application thereof, by any Governmental Authority after the date of this
Agreement, or (iii) compliance by the Lender (or by the Lender's holding
company, if applicable) with any request, guideline or directive (whether or not
having the force of law) of any Governmental Authority made or issued after the
date of this Agreement.

          "CLOSING DATE" or the "CLOSING" shall mean the date on which the
conditions precedent set forth in Article III have been satisfied or waived.

          "CLOSING DATE BALANCE SHEET" means the balance sheet of the Borrower
as of the date of Closing, after giving effect and fully reflecting all of the
transactions contemplated to occur on or prior to Closing, including, without
limitation, the Capitalization Transaction, the Term Loan and the Closing Date
Distribution.

          "CLOSING DATE DISTRIBUTION" means a cash distribution made by the
Borrower to the Parent on the date of Closing in the amount of $32,377,500.

          "CODE" shall mean the Internal Revenue Code of 1986, as amended and in
effect from time to time.

          "COLLATERAL" means (a) the Installment Note, (b) the Letter of Credit,
(c) the Glatfelter Securities, (d) the Interest Reserve Account and all cash and
other items from time to time standing to the credit of the Interest Reserve
Account, (e) the Collection Account and all cash and other items from time to
time standing to the credit of the Collection Account, (f) all rights of the
Borrower under the Contribution Agreement, (g) all other assets of the Borrower,
and (h) any and all proceeds of any of the foregoing.


                                        3



          "COLLATERAL TRUSTEE" means SunTrust Bank, in its capacity as
Collateral Trustee pursuant to the Collateral Trust Indenture.

          "COLLATERAL TRUST INDENTURE" means that certain Collateral Trust
Indenture dated as of January 15, 2008 between the Collateral Trustee and the
Borrower.

          "COMMITMENT" shall mean the Term Loan Commitment.

          "CONTRIBUTION AGREEMENT" means the Contribution Agreement, dated as of
January 14, 2008, between the Parent and the Borrower.

          "CONTRIBUTION AGREEMENT EVENT" means (a) any representation or
warranty made by the Parent in the Contribution Agreement proves to have been
false or incorrect in any material respect on the date as of which made or (b)
the Parent defaults in the performance of or compliance with any term in the
Contribution Agreement to be performed by or complied with by the Parent and
such defaults are not remedied within 30 days after the earlier of (i) a
responsible officer of the Parent obtaining actual knowledge of such default and
(ii) the Parent receiving written notice of such default.

          "DEFAULT" shall mean any condition or event that, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.

          "DEFAULT INTEREST" shall have the meaning set forth in Section
2.07(b).

          "DOLLAR(S)" and the sign "$" shall mean lawful money of the United
States of America.

          "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.

          "ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Borrower
under section 414 of the Code.

          "EURODOLLAR" when used in reference to the Term Loan, refers to
whether the Term Loan bears interest at a rate determined by reference to the
Adjusted LIBO Rate (e.g., a "Eurodollar Loan").

          "EURODOLLAR RESERVE PERCENTAGE" shall mean the aggregate (without
duplication) of the maximum reserve percentages (including, without limitation,
any emergency, supplemental, special or other marginal reserves) expressed as a
decimal (rounded upwards to the next 1/100th of 1%) in effect on any day to
which the Lender is subject with respect to the Adjusted LIBO Rate pursuant to
regulations issued by the Board of Governors of the Federal Reserve System (or
any Governmental Authority succeeding to any of its principal functions) with
respect to eurocurrency funding (currently referred to as "eurocurrency
liabilities" under


                                        4



Regulation D). Any Eurodollar Loan shall be deemed to constitute eurocurrency
funding and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to the Lender under Regulation D. The Eurodollar Reserve Percentage shall
be adjusted automatically on and as of the effective date of any change in any
reserve percentage.

          "EVENT OF DEFAULT" shall have the meaning provided in Section 7.01.

          "EXCLUDED TAXES" shall mean with respect to the Agent, any Lender or
any other recipient of any payment to be made by or on account of any obligation
of the Borrower hereunder, (a) Taxes imposed on or measured by such recipient's
overall net income (however denominated), franchise Taxes imposed on such
recipient (in lieu of net income Taxes), and branch profits or similar Taxes
imposed on it by any jurisdiction (or any political subdivision thereof) as a
result of such recipient being organized or having its principal office or, in
the case of any Lender, its Applicable Lending Office located in such
jurisdiction or as a result of a present or former connection with such
jurisdiction (other than any such connection arising from such recipient having
executed, delivered or performed its obligations or received a payment under, or
enforced, or otherwise with respect to, any of the Loan Documents), and (b) any
withholding or backup withholding Tax that (i) is imposed under the law in
effect at the time such recipient becomes a party to this Agreement, except to
the extent of any additional amounts to which such Lender's assignor (if any)
was entitled at the time of assignment, or designates a new lending office
(unless such re-designation was at the request of the Borrower), other than
Taxes that have accrued prior to the designation of such lending office that are
otherwise not Excluded Taxes, or (ii) is attributable to such Foreign Lender's
failure (or unreasonable delay) to comply (other than as a result of a change in
law, rule, regulation or treaty or treaty or in the administration,
interpretation or application thereof by a Governmental Authority) with Section
2.14(e).

          "FEDERAL FUNDS RATE" shall mean, for any day, the rate per annum
(rounded upwards, if necessary, to the next 1/100th of 1%) equal to the weighted
average of the rates on overnight Federal funds transactions with member banks
of the Federal Reserve System arranged by Federal funds brokers, as published by
the Federal Reserve Bank of New York on the next succeeding Business Day or if
such rate is not so published for any Business Day, the Federal Funds Rate for
such day shall be the average rounded upwards, if necessary, to the next 1/100th
of 1% of the quotations for such day on such transactions received by the Agent
from three Federal funds brokers of recognized standing selected by the Agent.

          "FEE LETTER" shall mean that certain fee letter, dated as of January
9, 2008, executed by SunTrust Robinson Humphrey, Inc. and SunTrust Bank and
accepted by the Borrower.

          "FOREIGN LENDER" shall mean any Lender that is not a United States
person under Section 7701(a)(30) of the Code.

          "GAAP" shall mean generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of Section
1.02.


                                        5



          "GLATFELTER" means P.H. Glatfelter Company, a Pennsylvania
corporation.

          "GLATFELTER NOTE" means any note issued by Glatfelter in favor of the
Borrower in the form of Exhibit B.

          "GLATFELTER SECURITIES" means, collectively, (a) the Glatfelter Note
in the principal amount of $5,781,000.00 contributed by the Parent to the
Borrower on the date of Closing, and (b) the Glatfelter Note in the principal
amount of $3,377,000.00 purchased by the Borrower from Glatfelter on the date of
Closing with proceeds from the Term Loan.

          "GOVERNMENTAL AUTHORITY" means (a) the government of (i) the United
States of America or any State or other political subdivision thereof, or (ii)
any other jurisdiction in which the Borrower conducts all or any part of its
business, or which asserts jurisdiction over any properties of the Borrower, or
(b) any entity exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, any such government

          "GUARANTEE" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including (without limitation) obligations
incurred through an agreement, contingent or otherwise, by such Person:

          (a) to purchase such indebtedness or obligation or any property
constituting security therefor;

          (b) to advance or supply funds (i) for the purchase or payment of such
indebtedness or obligation, or (ii) to maintain any working capital or other
balance sheet condition or any income statement condition of any other Person or
otherwise to advance or make available funds for the purchase or payment of such
indebtedness or obligation;

          (c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or

          (d) otherwise to assure the owner of such indebtedness or obligation
against loss in respect thereof.

          In any computation of the indebtedness or other liabilities of the
obligor under any Guarantee, the indebtedness or other obligations that are the
subject of such Guarantee shall be assumed to be direct obligations of such
obligor.

          "INDEBTEDNESS" with respect to any Person means, at any time, without
duplication,


                                        6



     (a) its liabilities for borrowed money and its redemption obligations in
respect of mandatorily redeemable Preferred Stock;

     (b) its liabilities for the deferred purchase price of property acquired by
such Person (excluding accounts payable arising in the ordinary course of
business but including all liabilities created or arising under any conditional
sale or other title retention agreement with respect to any such property);

     (c) (i) all liabilities appearing on its balance sheet in accordance with
GAAP in respect of Capital Leases and (ii) all liabilities which would appear on
its balance sheet in accordance with GAAP in respect of Synthetic Leases
assuming such Synthetic Leases were accounted for as Capital Leases;

     (d) all liabilities for borrowed money secured by any Lien with respect to
any property owned by such Person (whether or not it has assumed or otherwise
become liable for such liabilities);

     (e) all its liabilities in respect of letters of credit or instruments
serving a similar function issued or accepted for its account by banks and other
financial institutions (whether or not representing obligations for borrowed
money);

     (f) all Swap Contracts of such Person; and

     (g) any Guaranty of such Person with respect to liabilities of a type
described in any of clauses (a) through (f) hereof.

          "INDEMNIFIED TAXES" shall mean Taxes other than Excluded Taxes.

          "INITIAL CAPITALIZATION TRANSACTION" means the contribution by the
Parent to the Borrower prior to the Closing of the Installment Note and the
Letter of Credit with respect to membership interests constituting 100% of the
issued and outstanding equity capital of the Borrower, pursuant to a
Contribution Agreement and the operating agreement of the Borrower.

          "INSTALLMENT NOTE" means that certain Purchase Note No. P-1 in the
principal amount of $43,170,000, dated November 15, 2007, issued by the
Installment Note Issuer, originally made payable to the order of the Parent, and
conveyed and transferred by the Parent to the Borrower pursuant to the
Contribution Agreement.

          "INSTALLMENT NOTE ISSUER" means GIC Investments LLC, a Delaware
limited liability company.

          "INSTALLMENT SALE TRANSACTION" means the sale by the Parent on
November 16, 2007 of its equity interests in two limited liability companies
formed to hold certain timberlands to the Installment Note Issuer, the purchase
price for which the Installment Note Issuer delivered to the Parent (a) the
Installment Note and (b) the Letter of Credit.


                                        7



          "INSTALLMENT NOTE TRIGGER EVENT" means any of (a) a default in the
payment of any amount when due (whether on a scheduled payment date, upon
acceleration or otherwise) under the Installment Note that has not been cured
with the proceeds of a drawing under the Letter of Credit within 5 days
following such default; (b) failure of the Borrower to direct the Collateral
Trustee to accelerate the maturity of the Installment Note within 5 days
following the delivery by the L/C Bank of a Timely Reimbursement Failure Notice
(as such term is defined in the Letter of Credit); and (c) an insolvency event
relating to the L/C Bank.

          "INTEREST PERIOD" means (i) initially, the period commencing on the
date hereof and ending on June 15, 2008 and (ii) thereafter, each period
commencing on the last day of the immediately preceding Interest Period and
ending on the 15th day of the sixth consecutive month ending after the month in
which such immediately preceding Interest Period ended. The determination of
Interest Periods shall be subject to the following provisions:

     (i) if any Interest Period would otherwise expire on a day that is not a
     Business Day, such Interest Period shall expire on the immediately
     succeeding Business Day; provided, however, that if any Interest Period
     would otherwise expire on a day that is not a Business Day but is a day of
     the month after which no further Business Day occurs in such month, such
     Interest Period shall expire on the immediately preceding Business Day; and

     (ii) no Interest Period shall extend beyond the stated maturity date
     hereof.

          "INTEREST RESERVE AMOUNT" means $350,000.

          "INTEREST RESERVE ACCOUNT" means a trust account established by the
Collateral Trustee to hold certain amounts to be used to make payments on the
Term Loan.

          "INVESTMENT COMPANY ACT" shall mean the United States Investment
Company Act of 1940, as amended.

          "LC BANK" means the Royal Bank of Scotland plc, together with any
issuer of a substitute Letter of Credit.

          "LETTER OF CREDIT" means that certain Irrevocable Standby Letter of
Credit No. LCA11020701586NY, in the initial "Base Amount" (as defined in said
letter of credit) of $43,170,000 issued by the LC Bank, together with any
substitute letter of credit that replaces such letter of credit pursuant to the
terms of the Installment Note.

          "LIBOR" means, (i) 4.110625% per annum for the first Interest Period,
and (ii) for any subsequent Interest Period:

          (a) an interest rate per annum appearing on page BBAM on the Bloomberg
Terminal ("Page BBAM") (or any other page that may replace such page from time
to time for the purpose of displaying offered rates of leading banks for London
interbank deposits in United States dollars) at approximately 11:00 a.m. (London
time) on the day that is two London


                                        8



Business Days prior to the commencement of such Interest Period for United
States dollar deposits having a tenor equal to the duration of such Interest
Period;

          (b) if a rate is not available, the rate per annum determined by the
Collateral Trustee to be the arithmetic mean (rounded, if necessary, to the
nearest fifth decimal place (with 5's being rounded up)) of the respective rates
of interest communicated by each of the Reference Banks to the Collateral
Trustee as the rates at which such Reference Banks would offer a United States
dollar deposit having a tenor equal to the duration of such Interest Period and
an amount at least equal to US$100 million to prime banks in the London
interbank market at approximately 11:00 a.m. (London time) on the day that is
two London Business Days prior to the commencement of such Interest Period;
provided, however, that if less than all Reference Banks provide such rate
quotations, then the Collateral Trustee shall determine the above-mentioned
arithmetic mean based on the rates quoted by those Reference Banks that provide
such a quotation, and if only one Reference Bank provides such a rate quotation,
then the Collateral Trustee shall use such sole Reference Bank's quoted rate; or

          (c) if a rate cannot be determined pursuant to the foregoing
provisions, the LIBO Rate for such Interest Period shall be the rate per annum
determined by the Collateral Trustee to be the arithmetic mean (rounded, if
necessary, to the nearest fifth decimal place (with 5's being rounded up)) of
the respective rates of interest communicated by each of the Reference Banks to
the Collateral Trustee as the rates at which such Reference Banks would offer a
United States dollar deposit having a tenor equal to the duration of such
Interest Period and an amount at least equal to US$100 million to prime banks in
the New York interbank market at approximately 11:00 a.m. (New York City time)
on the first day of such Interest Period; provided, however, that if less than
all Reference Banks provide such rate quotations, then the Collateral Trustee
shall determine the above-mentioned arithmetic mean based on the rates quoted by
those Reference Banks that provide such a quotation, and if only one Reference
Bank provides such a rate quotation, then the Collateral Trustee shall use such
sole Reference Bank's quoted rate.

     In respect of any Interest Period having a tenor other than six months, the
LIBO Rate shall be determined through the use of straight-line interpolation by
reference to two rates calculated in accordance with clauses (a), (b) and (c)
above, one of which shall be determined as if the maturity of the Dollar
deposits referred to therein were the period of time for which rates are
available next shorter than the Interest Period and the other of which shall be
determined as if the maturity were the period of time for which rates are
available next longer than the Interest Period; provided that, if an Interest
Period is less than or equal to seven days, then the LIBO Rate shall be
determined by reference to a rate calculated in accordance with clauses (a), (b)
and (c) above as if the maturity of the Dollar deposits referred to therein were
a period of time equal to seven days.

          "LENDERS" shall have the meaning set forth in the introductory
paragraph of this Agreement.

          "LIEN" shall mean any mortgage, pledge, security interest, lien
(statutory or otherwise), charge, encumbrance, hypothecation, assignment,
deposit arrangement, or other


                                        9



arrangement having the practical effect of the foregoing or any preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including any conditional sale or other title retention
agreement and any capital lease having the same economic effect as any of the
foregoing).

          "LOAN" shall have the meaning set forth in Section 2.01

          "LOAN DOCUMENTS" shall mean, collectively, (a) this Agreement, (b) the
Term Note, (c) the Pledge and Security Agreement, (d) the Collateral Trust
Indenture, (e) any deposit account control agreement or securities account
control agreement, if any, governing the Interest Reserve Account, Collection
Account or any investments made with the proceeds of any cash or other items
standing to the credit of the Interest Reserve Account or Collection Account and
(f) any other certificate, instrument, document or agreement executed or
delivered by the Borrower to the Collateral Trustee, the Agent or any Lender.

          "LONDON BUSINESS DAY" shall mean a day on which dealings in Dollars
are carried on in the London interbank market.

          "MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Borrower, or (b) the ability of the Borrower to perform its obligations under
this Agreement, the Term Note and the other Loan Documents, or (c) the validity
or enforceability of this Agreement, the Term Note or the other Loan Documents.

          "MATURITY DATE" shall mean, with respect to the Term Loan, the earlier
of (i) January 15, 2013 or (ii) the date on which the principal amount of the
Term Loan has been declared or automatically have become due and payable
(whether by acceleration or otherwise).

          "MEMBER" means the Parent in its capacity as the sole member of the
Borrower.

          "MOODY'S" shall mean Moody's Investors Service, Inc.

          "MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).

          "NOTE" shall mean the Term Note.

          "OBLIGATIONS" shall mean all amounts owing by the Borrower to the
Agent or any Lender pursuant to or in connection with this Agreement or any
other Loan Document, including without limitation, all principal, interest
(including any interest accruing after the filing of any petition in bankruptcy
or the commencement of any insolvency, reorganization or like proceeding
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), all reimbursement
obligations, fees, expenses, indemnification and reimbursement payments, costs
and expenses (including all fees and expenses of counsel to the Agent and any
Lender incurred pursuant to this Agreement or any other Loan Document), whether
direct or indirect, absolute or contingent, liquidated or


                                       10



unliquidated, now existing or hereafter arising hereunder or thereunder, and all
obligations to the Lender or any of its Affiliates, together with all renewals,
extensions, modifications or refinancings thereof.

          "OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of another officer of the Borrower whose responsibilities extend to
the subject matter of such certificate.

          "OTHER TAXES" shall mean any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.

          "PARENT" means Glatfelter Pulp Wood Company, a Maryland corporation
and a wholly-owned subsidiary of Glatfelter.

          "PARTICIPANT" shall have the meaning set forth in Section 9.04(d).

          "PAYMENT OFFICE" shall mean the office of the Agent located at
SunTrust Plaza, 303 Peachtree Street, Atlanta, Georgia 30303 or such other
location as to which the Agent shall have given written notice to the Borrower
and the Lenders.

          "PERMITTED INVESTMENTS" means (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States Government or issued by
any agency thereof and backed by the full faith and credit of the United States,
in each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurocurrency time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any commercial bank organized under the laws of the United
States or any state thereof having combined capital and surplus and undivided
profits of not less than $1,000,000,000; (c) commercial paper of an issuer rated
at least A-1 by S&P or P-1 by Moody's, or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days, with respect to securities
issued or fully guaranteed or insured by the United States government; (e)
securities with maturities of one year or less from the date of acquisition
issued or fully guaranteed by any state, commonwealth or territory of the United
States, by any political subdivision or taxing authority of any such state,
commonwealth or territory or by any foreign government, the securities of which
state, commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A+ by S&P or A1 by
Moody's; (f) securities with maturities of six months or less from the date of
acquisition backed by standby letters of credit issued by any commercial bank
satisfying the requirements of clause (b) of this definition; (g) money market
mutual or similar funds that invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition; (h) money market
funds that (1) comply with the criteria set forth in SEC Rule 2a-7 under the
Investment Company


                                       11



Act of 1940, as amended and (2) are rated A+ by S&P and A1 by Moody's and (iii)
have portfolio assets of at least $100,000,000.

          "PERSON" shall mean any individual, partnership, firm, corporation,
association, joint venture, limited liability company, trust or other entity, or
any Governmental Authority.

          "PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) subject to Title I of ERISA that is or has been established or
maintained, or to which contributions are or have been made or required to be
made, by the Borrower or any ERISA Affiliate with respect to which the Borrower
or any ERISA Affiliate may have any liability.

          "PLEDGE AND SECURITY AGREEMENT" means that certain Pledge and Security
Agreement, dated as of January 15, 2008, between the Borrower and the Collateral
Trustee.

          "PREFERRED STOCK" means any class of capital stock of a Person that is
preferred over any other class of capital stock (or similar equity interests) of
such Person as to the payment of dividends or the payment of any amount upon
liquidation or dissolution of such Person.

          "PRO RATA SHARE" shall mean, with respect to any Lender at any time, a
percentage the numerator of which shall be the outstanding principal amount of
such Lender's portion of the Term Loan, and the denominator of which shall be
the outstanding principal amount of the Term Loan.

          "PROPERTY" or "PROPERTIES" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or intangible, choate
or inchoate.

          "QUALIFIED PURCHASER" shall mean a "qualified purchaser" for purposes
of Section 3(c)(7) of the Investment Company Act and as defined in Section
2(a)(51) of the Investment Company Act.

          "REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System, as the same may be in effect from time to time, and
any successor regulations.

          "REFERENCE BANKS" means The Royal Bank of Scotland plc, SunTrust Bank,
JPMorgan Chase Bank N.A. and The Bank of New York.

          "RELATED PARTIES" shall mean, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.

          "REQUIRED LENDERS" means, at any time, Lenders holding greater than
50% of the principal amount of the Term Loan then outstanding.


                                       12



          "RESPONSIBLE OFFICER" shall mean the President, any Vice-President,
the Treasurer, the Secretary, any Senior Financial Officer and any other officer
of the Borrower with responsibility for the administration of the relevant
portion of this Agreement.

          "SENIOR FINANCIAL OFFICER" means the chief financial officer,
principal accounting officer, treasurer or comptroller of the Borrower.

          "S&P" shall mean Standard & Poor's.

          "SUBSIDIARY" shall mean, as to any Person, any other Person in which
such first Person or one or more of its Subsidiaries or such first Person and
one or more of its Subsidiaries owns sufficient equity or voting interests to
enable it or them (as a group) ordinarily, in the absence of contingencies, to
elect a majority of the directors (or Persons performing similar functions) of
such second Person, and any partnership or joint venture if more than a 50%
interest in the profits or capital thereof is owned by such first Person or one
or more of its Subsidiaries or such first Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Borrower.

          "SWAP CONTRACT" means (a) any and all interest rate swap transactions,
basis swap transactions, basis swaps, credit derivative transactions, forward
rate transactions, commodity swaps, commodity options, forward commodity
contracts, equity or equity index swaps or options, bond or bond price or bond
index swaps or options or forward foreign exchange transactions, cap
transactions, floor transactions, currency options, spot contracts or any other
similar transactions or any of the foregoing (including, but without limitation,
any options to enter into any of the foregoing), and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement.

          "SYNTHETIC LEASE" means, at any time, any lease (including leases that
may be terminated by the lessee at any time) of any property (a) that is
accounted for as an operating lease under GAAP and (b) in respect of which the
lessee retains or obtains ownership of the property so leased for United States
federal income tax purposes, other than any such lease under which such Person
is the lessor.

          "TAXES" means any income, stamp or other taxes, levies, imposts,
duties, charges, fees, deductions or withholdings, now or hereafter imposed,
levied, collected, withheld or assessed by any Governmental Authority, excluding
net income taxes and franchise taxes (imposed in lieu of net income taxes)
imposed on any Lender as a result of a present or former connection between such
holder and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than any
such connection arising solely from such holder having executed, delivered or
received a payment under, or enforced, this Agreement or any other Loan
Document).


                                       13



          "TERM LOAN" shall have the meaning set forth in Section 2.01.

          "TERM LOAN COMMITMENT" shall mean, with respect to the Lender, the
obligation of the Lender to make the Term Loan hereunder on the Closing Date, in
a principal amount equal to $36,694,500.00.

          "TERM NOTE" shall mean a Term Note of the Borrower payable to the
order of a Lender, in substantially the form of Exhibit A attached hereto.

          "TYPE", when used in reference to the Term Loan, refers to whether the
rate of interest on such Loan is determined by reference to the Adjusted LIBO
Rate or the Base Rate.

          "U.S. GOVERNMENT OBLIGATIONS" means marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States.

          "USA PATRIOT ACT" means United States Public Law 107-56, Uniting and
Strengthening America by Providing Appropriate Tools Required to Intercept and
Obstruct Terrorism (USA PATRIOT ACT) Act of 2001, as amended from time to time,
and the rules and regulations promulgated thereunder from time to time in
effect.

          SECTION 1.02 ACCOUNTING TERMS AND DETERMINATION

     Unless otherwise defined or specified herein, all accounting terms used
herein shall be interpreted, all accounting determinations hereunder shall be
made, and all financial statements required to be delivered hereunder shall be
prepared, in accordance with GAAP as in effect from time to time, applied on a
basis consistent (except for such changes approved by the Borrower's independent
public accountants) with the most recent audited consolidated financial
statement of the Borrower delivered pursuant to Section 5.01(a).

          SECTION 1.03 TERMS GENERALLY.

     The definitions of terms herein shall apply equally to the singular and
plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words
"include", "includes" and "including" shall be deemed to be followed by the
phrase "without limitation". The word "will" shall be construed to have the same
meaning and effect as the word "shall". In the computation of periods of time
from a specified date to a later specified date, the word "from" means "from and
including" and the word "to" means "to but excluding". Unless the context
requires otherwise (i) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as it was originally executed or as it
may from time to time be amended, supplemented or otherwise modified (subject to
any restrictions on such amendments, supplements or modifications set forth
herein), (ii) any reference herein to any Person shall be construed to include
such Person's successors and permitted assigns, (iii) the words "hereof",
"herein" and "hereunder" and words of similar import shall be construed to refer
to this Agreement as a whole and not to any particular provision


                                       14



hereof, (iv) all references to Articles, Sections, Exhibits and Schedules shall
be construed to refer to Articles, Sections, Exhibits and Schedules to this
Agreement and (v) all references to a specific time shall be construed to refer
to the time in the city and state of the Agent's principal office, unless
otherwise indicated.

                 ARTICLE II. AMOUNT AND TERMS OF THE COMMITMENT

          SECTION 2.01 TERM LOAN COMMITMENT.

          (a) Subject to the terms and conditions set forth herein, the Lenders
agree to make a single loan (the "TERM LOAN" or the "LOAN") to the Borrower on
the Closing Date in a principal amount not to exceed the Term Loan Commitment;
provided, that if for any reason the full amount of the Term Loan Commitment is
not fully drawn on the Closing Date, the undrawn portion thereof shall
automatically be cancelled. Subject to Section 2.10 and Section 2.11, the Term
Loan shall be a Eurodollar Loan. The execution and delivery of this Agreement by
the Borrower and the satisfaction of all conditions precedent pursuant to
Article III shall be deemed to constitute the Borrower's request to borrow the
Term Loan on the Closing Date. The Term Loan (net of the Agent's fees and
expenses) shall be deposited in the Collection Account.

          (b) The Borrower's obligation to pay the principal of, and interest
on, the Term Loan shall be evidenced by the records of the Agent and the Lenders
and by the Term Notes. The entries made in such records and on the schedule
annexed to the Term Notes shall be prima facie evidence of the existence and
amounts of the obligations of the Borrower therein recorded; provided, that the
failure or delay of the Agent or any Lender in maintaining or making entries
into any such record or on such schedule or any error therein shall not in any
manner affect the obligation of the Borrower to repay the Term Loan (both
principal and unpaid accrued interest) in accordance with the terms of this
Agreement.

          SECTION 2.02 INTEREST ELECTION.

          If, following the conversion of the Term Loan into a Base Rate Loan
pursuant to Section 2.10 or 2.11, the Agent determines (which determination
shall be conclusive and binding upon the Borrower) that it is possible to
ascertain LIBOR or that it is no longer unlawful to maintain or continue the
Term Loan as a Eurodollar Loan, as the case may be, then the Agent shall
promptly notify the Borrower and the Lenders of such determination. Following
such determination and notice, the Borrower shall have the right to convert the
Term Loan from a Base Rate Loan to a Eurodollar Loan in accordance with the
provisions of this Section 2.02. To make an election pursuant to this Section
2.02, the Borrower shall give the Agent prior written notice (or telephonic
notice promptly confirmed in writing) that the Term Loan is to be converted into
a Eurodollar Loan prior to 2:00 p.m. (Atlanta, Georgia time) three (3) Business
Days prior to such conversion. Such notice of conversion shall be irrevocable
and shall specify the effective date of the election.

          SECTION 2.03 TERMINATION OF COMMITMENTS.


                                       15



          Unless previously terminated, the Term Loan Commitment shall terminate
on the Closing Date upon the making of the Term Loan pursuant to Section 2.01.

          SECTION 2.04 REPAYMENT OF TERM LOAN.

          The Borrower unconditionally promises to pay to the Agent for the
account of the Lenders the principal amount of the Term Loan on the Maturity
Date.

          SECTION 2.05 OPTIONAL PREPAYMENTS.

          (a) The Borrower shall have the right at any time and from time to
time to prepay the Term Loan, in whole or in part, without premium or penalty,
by giving irrevocable written notice (or telephonic notice promptly confirmed in
writing) to the Agent no later than 11:00 a.m. not less than three (3) Business
Days prior to any such prepayment. Each such notice shall be irrevocable and
shall specify the proposed date of such prepayment and the principal amount of
the Term Loan or portion thereof to be prepaid. Upon receipt of any such notice,
the Agent shall promptly notify each Lender of the contents thereof and of such
Lender's Pro Rata Share of any such prepayment. Such amount shall be due and
payable on the date designated in such notice, together with accrued interest to
such date on the amount so prepaid in accordance with Section 2.07; provided,
that if the Term Loan is prepaid on a date other than the last day of an
Interest Period applicable thereto, the Borrower shall also pay all amounts
required pursuant to Section 2.13.

          (b) Unless a Default or an Event of Default has occurred and is
continuing, any prepayments made by the Borrower pursuant to Section 2.05(a)
above shall be applied as follows: first, to the Agent's fees and reimbursable
expenses then due and payable pursuant to any of the Loan Documents; second, to
all fees and reimbursable expenses of the Lenders then due and payable pursuant
to any of the Loan Documents, pro rata to the Lenders based on their respective
Pro Rata Shares of such expenses; third, to interest then due and payable on the
Term Loan, pro rata to the Lenders based on their respective Pro Rata Shares of
the Term Loan; and fourth, to the principal balance of the Term Loan, until the
same shall have been paid in full, pro rata to the Lenders based on their
respective Pro Rata Shares of the Term Loan.

          SECTION 2.06 MANDATORY PREPAYMENTS.

     In the event the Installment Note shall become immediately due and payable
for any reason, the Borrower shall prepay, within two Business Days following
such event, the entire principal amount of the Term Loan then outstanding, plus
all amounts required pursuant to Section 2.13. The Borrower will give the Agent
and each Lender written notice of a mandatory prepayment under this Section
2.06. Each such notice shall specify such date (which shall be a Business Day),
the aggregate principal amount of the Term Loan to be prepaid on such date, and
the interest to be paid on the prepayment date with respect to such principal
amount being prepaid, and shall be accompanied by a certificate of a Responsible
Officer as to all amounts required pursuant to Section 2.13 in connection with
such prepayment, setting forth the details of such computation.

          SECTION 2.07 INTEREST ON TERM LOAN.


                                       16



          (a) The Borrower shall pay to the Agent interest on any Base Rate Loan
at the Base Rate in effect from time to time and on any Eurodollar Loan at the
Adjusted LIBO Rate for the applicable Interest Period in effect, plus, in each
case, the Applicable Margin in effect from time to time.

          (b) While an Event of Default exists, the Borrower shall pay interest
("DEFAULT INTEREST") at the rate otherwise applicable plus an additional 2% per
annum.

          (c) Interest on the principal amount of the Term Loan shall accrue
from and including the date made to but excluding the date of any repayment
thereof.

          (d) Interest on any outstanding Base Rate Loan shall be payable
semi-annually in arrears on the fifteenth day of each June and December, and on
the Maturity Date. Interest on any outstanding Eurodollar Loan shall be payable
on the last day of each Interest Period applicable thereto, and on the Maturity
Date. If the Term Loan is converted into a Loan of another Type or repaid or
prepaid, interest shall be payable on the date of such conversion or on the date
of any such repayment or prepayment (on the amount repaid or prepaid) thereof.
All Default Interest shall be payable on demand.

          (e) The Agent shall determine each interest rate applicable to the
Term Loan hereunder and shall promptly notify the Borrower of such rate in
writing (or by telephone, promptly confirmed in writing). Any such determination
shall be conclusive and binding for all purposes, absent manifest error.

          SECTION 2.08 FEES.

          The Borrower shall pay to the Agent the fees set forth in the Fee
Letter.

          SECTION 2.09 COMPUTATION OF INTEREST.

          All computations of interest hereunder (other than interest based on
the Base Rate) shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable (to the extent computed
on the basis of days elapsed). Interest based on the Base Rate shall be
calculated on the basis of a 365-day year (or 366-day year, as the case may be)
for the actual days elapsed. Each determination by the Agent of an interest
amount hereunder shall be made in good faith and, except for manifest error,
shall be final, conclusive and binding for all purposes.

          SECTION 2.10 INABILITY TO DETERMINE INTEREST RATES.

          If prior to the commencement of any Interest Period, the Agent shall
have determined (which determination shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant interbank
market, adequate means do not exist for ascertaining LIBOR for such Interest
Period, the Agent shall give written notice (or telephonic


                                       17



notice, promptly confirmed in writing) to the Borrower and to the Lenders as
soon as practicable thereafter. Until the Agent shall notify the Borrower and
the Lenders that the circumstances giving rise to such notice no longer exist,
(i) the obligations of the Lenders to maintain the Term Loan as a Eurodollar
Loan shall be suspended and (ii) the Term Loan shall be converted into a Base
Rate Loan on the last day of the then current Interest Period applicable thereto
unless the Borrower prepays the Term Loan in accordance with this Agreement.

          SECTION 2.11 ILLEGALITY.

     If any Change in Law shall make it unlawful or impossible for any Lender to
make, maintain or fund any Eurodollar Loan and such Lender shall so notify the
Agent, the Agent shall promptly give notice thereof to the Borrower and the
other Lenders, whereupon until such Lender notifies the Agent and the Borrower
that the circumstances giving rise to such suspension no longer exist, the
obligation of the Lenders to continue the Term Loan as a Eurodollar Loan, shall
be suspended. The Term Loan shall be converted to a Base Rate Loan either (i) on
the last day of the then current Interest Period applicable to such Eurodollar
Loan if such Lender may lawfully continue to maintain the Term Loan to such date
or (ii) immediately if such Lender shall determine that it may not lawfully
continue to maintain such Eurodollar Loan to such date. Notwithstanding the
foregoing, the affected Lender shall, prior to giving such notice to the Agent,
designate a different Applicable Lending Office if such designation would avoid
the need for giving such notice and if such designation would not otherwise be
disadvantageous to such Lender in the good faith exercise of its discretion.

          SECTION 2.12 INCREASED COSTS.

          (a) If any Change in Law shall:

               (i) impose, modify or deem applicable any reserve, special
deposit or similar requirement that is not otherwise included in the
determination of the Adjusted LIBO Rate hereunder against assets of, deposits
with or for the account of, or credit extended by, any Lender (except any such
reserve requirement reflected in the Adjusted LIBO Rate); or

               (ii) impose on any Lender or the eurodollar interbank market any
other condition affecting this Agreement or any Eurodollar Loan made by such
Lender or any participation therein;

and the result of either of the foregoing is to increase the cost to such Lender
of making or maintaining a Eurodollar Loan or to reduce the amount received or
receivable by such Lender hereunder (whether of principal, interest or any other
amount), then the Borrower shall promptly pay, as set forth in paragraph (c)
below, to the Agent for the account of such Lender, additional amount or amounts
sufficient to compensate such Lender for such additional costs incurred or
reduction suffered.

          (b) If any Lender shall have determined that on or after the date of
this Agreement any Change in Law regarding capital requirements has or would
have the effect of reducing the rate of return on such Lender's capital (or on
the capital of such Lender's parent corporation) as


                                       18



a consequence of its obligations hereunder to a level below that which such
Lender or such Lender's parent corporation could have achieved but for such
Change in Law (taking into consideration such Lender's policies or the policies
of such Lender's parent corporation with respect to capital adequacy) then, from
time to time, as set forth in paragraph (c) below, the Borrower shall pay to
such Lender such additional amounts as will compensate such Lender or such
Lender's parent corporation for any such reduction suffered.

          (c) A certificate of a Lender setting forth the amount or amounts
necessary to compensate such Lender or such Lender's parent corporation, as the
case may be, specified in paragraph (a) or (b) of this Section 2.12 shall be
delivered to the Borrower (with a copy to the Agent) and shall be conclusive,
absent manifest error. The Borrower shall pay any such Lender such amount or
amounts within 10 days after receipt thereof; provided that the Borrower shall
not be required to make any such payment prior to the last day of the then
current Interest Period if Borrower does not have funds available to make such
payment.

          (d) Failure or delay on the part of any Lender to demand compensation
pursuant to this Section 2.12 shall not constitute a waiver of such Lender's
right to demand such compensation.

          (e) If any Lender shall seek any additional amount or amounts under
this Section 2.12, at the written request of the Borrower, such Lender shall
designate a different Applicable Lending Office if such designation would avoid
the need for or would reduce such amount or amounts and if such designation
would not otherwise be disadvantageous to such Lender in the good faith exercise
of its discretion.

          SECTION 2.13 FUNDING INDEMNITY.

     In the event of (a) the payment of any principal of a Eurodollar Loan other
than on the last day of the Interest Period applicable thereto (including as a
result of an Event of Default), or (b) the conversion of a Eurodollar Loan other
than on the last day of the Interest Period applicable thereto, or (c) the
failure by the Borrower to prepay any Eurodollar Loan on the date specified in
any applicable notice (regardless of whether such notice is withdrawn or
revoked), then, in any such event, the Borrower shall compensate each Lender,
within five (5) Business Days after written demand from such Lender, for any
loss, cost or expense attributable to such event. In the case of a Eurodollar
Loan, such loss, cost or expense shall be deemed to include an amount determined
by such Lender to be the excess, if any, of (A) the amount of interest that
would have accrued on the principal amount of such Eurodollar Loan if such event
had not occurred at the Adjusted LIBO Rate applicable to such Eurodollar Loan
for the period from the date of such event to the last day of the then current
Interest Period therefor over (B) the amount of interest that would accrue on
the principal amount of such Eurodollar Loan for the same period if the Adjusted
LIBO Rate were set on the date such Eurodollar Loan was prepaid or converted. A
certificate as to any additional amount payable under this Section 2.13
submitted to the Borrower by any Lender (with a copy to the Agent) shall be
conclusive, absent manifest error.

          SECTION 2.14 TAXES.


                                       19



          (a) Any and all payments by or on account of any obligation of the
Borrower hereunder shall be made free and clear of and without deduction for any
Indemnified Taxes or Other Taxes; provided, that if the Borrower shall be
required to deduct any Indemnified Taxes or Other Taxes from such payments, then
(i) the sum payable shall be increased as necessary so that after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.14) the Agent or any Lender (as the case may be) shall
receive an amount equal to the sum it would have received had no such deductions
been made, (ii) the Borrower shall make such deductions and (iii) the Borrower
shall pay the full amount deducted to the relevant Governmental Authority in
accordance with applicable law.

          (b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.

          (c) The Borrower shall indemnify the Agent and each Lender, within ten
(10) Business Days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by the Agent or such Lender, as the case
may be, on or with respect to any payment by or on account of any obligation of
the Borrower hereunder (including Indemnified Taxes or Other Taxes imposed or
asserted on or attributable to amounts payable under this Section 2.14) and any
penalties, interest and any reasonable expenses arising therefrom or with
respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender or by the Agent on its own behalf or on behalf of a Lender,
shall be conclusive absent manifest error.

          (d) As soon as practicable after any payment of Indemnified Taxes or
Other Taxes by the Borrower to a Governmental Authority, the Borrower shall
deliver to the Agent the original or a certified copy of a receipt issued by
such Governmental Authority evidencing such payment, a copy of the return
reporting such payment or other evidence of such payment reasonably satisfactory
to the Agent.

          (e) Any Foreign Lender that is entitled to an exemption from or
reduction of withholding tax under the Code or any treaty to which the United
States is a party, with respect to payments under this Agreement shall deliver
to the Borrower (with a copy to the Agent), at the time or times prescribed by
applicable law, such properly completed and executed documentation prescribed by
applicable law or reasonably requested by the Borrower as will permit such
payments to be made without withholding or at a reduced rate. Without limiting
the generality of the foregoing, each Foreign Lender agrees that it will deliver
to the Agent and the Borrower (or in the case of a Participant, to the Lender
from which the related participation shall have been purchased), as appropriate,
two (2) duly completed copies of (i) Internal Revenue Service Form W-8 ECI, or
any successor form thereto, certifying that the payments received from the
Borrower hereunder are effectively connected with such Foreign Lender's conduct
of a trade or business in the United States; or (ii) Internal Revenue Service
Form W-8 BEN, or any successor form thereto, certifying that such Foreign Lender
is entitled to benefits under an income tax treaty to which the United States is
a party which reduces the rate of withholding tax on payments of interest; or
(iii) Internal Revenue Service Form W-8 BEN, or any successor form


                                       20



prescribed by the Internal Revenue Service, together with a certificate (A)
establishing that the payment to the Foreign Lender qualifies as "portfolio
interest" exempt from U.S. withholding tax under Code Section 871(h) or 881(c),
and (B) stating that (1) the Foreign Lender is not a bank for purposes of Code
Section 881(c)(3)(A), or the obligation of the Borrower hereunder is not, with
respect to such Foreign Lender, a loan agreement entered into in the ordinary
course of its trade or business, within the meaning of that section; (2) the
Foreign Lender is not a 10% shareholder of the Borrower within the meaning of
Code Section 871(h)(3) or 881(c)(3)(B); and (3) the Foreign Lender is not a
controlled foreign corporation that is related to the Borrower within the
meaning of Code Section 881(c)(3)(C); or (iv) such other Internal Revenue
Service forms as may be applicable to the Foreign Lender, including Forms W-8
IMY or W-8 EXP. Each such Foreign Lender shall deliver to the Borrower and the
Agent such forms on or before the date that it becomes a party to this Agreement
(or in the case of a Participant, on or before the date such Participant
purchases the related participation) and periodically thereafter at the time or
times prescribed by applicable laws, including without limitation, promptly upon
the obsolescence or invalidity of any form previously delivered by such Foreign
Lender. Each such Foreign Lender shall promptly notify the Borrower and the
Agent at any time that it determines that it is no longer in a position to
provide any previously delivered certificate to the Borrower (or any other form
of certification adopted by the Internal Revenue Service for such purpose).

          (f) If a Lender or the Agent determines in its sole discretion that it
is entitled to claim a refund from a taxing authority in respect of amounts paid
by a Borrower pursuant to this Section 2.14, such Lender or Agent shall promptly
notify Borrower and Agent (as applicable) of the availability of such claim and,
if the Lender or the Agent (as applicable) determines in its sole discretion
that making such refund claim could not reasonably be expected to have an
adverse effect on its Taxes or business operations, shall make such claim. If
the Agent or a Lender determines, in its sole discretion, that it has received a
refund against any Taxes (including without limitation by way of offset) as to
which it has been indemnified by the Borrower or with respect to which Borrower
has paid additional amounts pursuant to this Section 2.14, it shall pay over
such refund or credit to Borrower (but only to the extent of amounts paid by
Borrower under this Section 2.14), net of all out-of-pocket expenses of such
Lender or the Agent and without interest (other than any interest paid by the
relevant taxing authority with respect to such refund); provided, however, that
the Borrower, upon the request of the Agent or such Lender, agrees to repay the
amount paid over to the Borrower to such Lender or the Agent in the event such
Lender or the Agent is required to repay such refund to such taxing authority.
This Section shall not be construed to require the Agent or any Lender to make
available its Tax returns (or any other information relating to its Taxes that
it deems confidential) to the Borrower or any other Person.

          (g) If any Lender shall seek any additional amount or amounts under
this Section 2.14, at the written request of the Borrower, such Lender shall
designate a different Applicable Lending Office if such designation would avoid
the need for or would reduce such amount or amounts and if such designation
would not otherwise be disadvantageous to such Lender in the good faith exercise
of its discretion.

          SECTION 2.15 PAYMENTS GENERALLY; PRO RATA TREATMENT; SHARING OF
SET-OFFS.


                                       21



          (a) The Borrower shall make each payment required to be made by it
hereunder (whether of principal, interest, fees or otherwise) to the Agent prior
to noon (Atlanta, Georgia time) on the date when due, in immediately available
funds, free and clear of any rights of set-off or counterclaim. Any amounts
received after such time on any date may, in the discretion of the Agent, be
deemed to have been received on the next succeeding Business Day for purposes of
calculating interest thereon. All such payments shall be made to the Agent at
the Payment Office. The Agent shall distribute any such payments received by it
for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day, and, in the case of any payment accruing interest,
interest thereon shall be made payable for the period of such extension. All
payments hereunder shall be made in Dollars.

          (b) If at any time insufficient funds are received by and available to
the Agent to pay fully all amounts of principal, interest and other amounts then
due hereunder, such funds shall be applied (i) first, towards payment of
interest and other amounts then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest and other amounts
then due to such parties, and (ii) second, towards payment of principal then due
hereunder, ratably among the parties entitled thereto in accordance with the
amounts of principal then due to such parties.

          (c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on the Term Loan that would result in such Lender receiving payment of
a greater proportion of the aggregate amount of its Pro Rata Share of the Term
Loan and accrued interest thereon than the proportion received by any other
Lender, then the Lender receiving such greater proportion shall purchase (for
cash at face value) participations in the Pro Rata Shares of the Term Loan of
other Lenders to the extent necessary so that the benefit of all such payments
shall be shared by the Lenders ratably in accordance with the aggregate amount
of principal of and accrued interest on their respective Pro Rata Shares of the
Term Loan; provided, that (i) if any such participations are purchased and all
or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by the Borrower pursuant to
and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in the Term Loan to any assignee or participant, other than to the
Borrower or any Subsidiary or Affiliate thereof (as to which the provisions of
this paragraph shall apply). The Borrower consents to the foregoing and agrees,
to the extent it may effectively do so under applicable law, that any Lender
acquiring a participation pursuant to the foregoing arrangements may exercise
against the Borrower rights of set-off and counterclaim with respect to such
participation as fully as if such Lender were a direct creditor of the Borrower
in the amount of such participation.

          (d) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Agent for the account of
the Lenders hereunder that the Borrower will not make such payment, the Agent
may assume that the Borrower has made such payment on such date in accordance
herewith and may, in reliance upon such assumption,


                                       22



distribute to the Lenders the amount or amounts due. In such event, if the
Borrower has not in fact made such payment, then each of the Lenders severally
agrees to repay to the Agent forthwith on demand the amount so distributed to
such Lender with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the Agent,
at the greater of the Federal Funds Rate and a rate determined by the Agent in
accordance with banking industry rules on interbank compensation.

          (e) If any Lender shall fail to make any payment required to be made
by it, then the Agent may, in its discretion (notwithstanding any contrary
provision hereof), apply any amounts thereafter received by the Agent for the
account of such Lender to satisfy such Lender's obligations under such Sections
until all such unsatisfied obligations are fully paid.

                        ARTICLE III. CONDITIONS PRECEDENT

     The obligations of the Lenders to make the Term Loan are subject to the
fulfillment to such Lenders' satisfaction, prior to or at the Closing, of the
following conditions:

          SECTION 3.01 REPRESENTATIONS AND WARRANTIES.

     The representations and warranties of the Borrower in this Agreement and
the other Loan Documents shall be correct when made and at the time of the
Closing.

          SECTION 3.02 PERFORMANCE; NO DEFAULT.

     The Borrower shall have performed and complied with all agreements and
conditions contained in this Agreement required to be performed or complied with
by it prior to or at the Closing, and after giving effect to the making of the
Term Loan (and the application of the proceeds thereof as contemplated by
Section 4.14) no Default or Event of Default shall have occurred and be
continuing.

          SECTION 3.03 COMPLIANCE CERTIFICATES.

          (a) Officer's Certificate. The Borrower shall have delivered to such
Lender an Officer's Certificate, dated the date of the Closing, certifying that
the conditions specified in Sections 3.01, 3.02, 3.05 and 3.09 have been
fulfilled.

          (b) Secretary's Certificate. The Borrower shall have delivered to such
Lender a certificate of its Secretary or other Responsible Officer, dated the
date of Closing, certifying as to the resolutions attached thereto and other
company proceedings relating to the authorization, execution and delivery of
this Agreement and the other Loan Documents.

          SECTION 3.04 OPINIONS OF COUNSEL.

          (a) Such Lender shall have received opinions in form and substance
reasonably satisfactory to such Lender, dated the date of the Closing:


                                       23



          (i) from Saul & Ewing LLP, counsel to the Borrower, the Parent and
Glatfelter, covering such Delaware, Maryland and Pennsylvania law matters
incident to the entry into this Agreement, the Capitalization Transaction, the
issuance of the Glatfelter Securities and the other transactions contemplated
hereby as such Lender or its counsel may reasonably request (and the Borrower
hereby instructs its counsel to deliver such opinion to the Lenders);

          (ii) from Debevoise & Plimpton LLP, counsel for the Borrower, the
Parent and Glatfelter, covering such New York and Federal law matters incident
to the entry into this Agreement, the Capitalization Transaction, the issuance
of the Glatfelter Securities and the other transactions contemplated hereby as
such Lender or its counsel may reasonably request (and the Borrower hereby
instructs its counsel to deliver such opinion to the Lenders);

          (iii) from Debevoise & Plimpton LLP, counsel for the Borrower,
regarding the nonconsolidation of the Borrower in a bankruptcy of Glatfelter or
any of its Subsidiaries and the true sale or true contribution of the assets of
the Parent sold or contributed pursuant to the Capitalization Transaction.

          (b) Such Lender shall have received copies of the following opinions
dated the date of issuance of the Installment Note and Letter of Credit:

          (i) from Dundas & Wilson CS LLP, counsel to the LC Issuer, covering
certain Scottish law matters relating to the LC Issuer and the Letter of Credit;

          (ii) from Latham & Watkins LLP, counsel to the LC Issuer, covering
certain New York and Federal law matters relating to the LC Issuer and the
Letter of Credit;

          (iii) from Sutherland, Asbill & Brennan LLP, counsel to the
Installment Note Issuer, covering certain matters relating to the Installment
Note Issuer and the Installment Note; and

          (iv) from Sutherland, Asbill & Brennan LLP, counsel to the Installment
Note Issuer, regarding the nonconsolidation of the Installment Note Issuer in a
bankruptcy of its parent company or of its Subsidiaries.

          SECTION 3.05 INSTALLMENT SALE TRANSACTION; INITIAL CAPITALIZATION
TRANSACTION.

     The Installment Sale Transaction and the Initial Capitalization Transaction
shall have been consummated.

          SECTION 3.06 TRANSACTION DOCUMENTS.

     The Collateral Trustee shall have received (i) this Agreement, executed by
the Borrower and each Lender, (ii) the Pledge and Security Agreement, executed
by the Borrower and the Collateral Trustee, (iii) the Collateral Trust
Indenture, executed by the Borrower and the Collateral Trustee and (iv) the
other Loan Documents.


                                       24



          SECTION 3.07 COLLATERAL.

          (a) Installment Note. The Collateral Trustee shall have received the
Installment Note, together with a transfer instrument executed by the Borrower
naming the Collateral Trustee as transferee. The Installment Note and instrument
of transfer shall have been submitted to the "Paying Agent" referenced in the
Installment Note for registration of transfer, and such Paying Agent shall have
registered such transfer, recorded the transfer on the Installment Note and
delivered the Installment Note to the Collateral Trustee.

          (b) Letter of Credit. The Collateral Trustee shall have received the
Letter of Credit, together with a "Request for Full Transfer" referenced therein
executed by the Borrower naming the Collateral Trustee as transferee. The Letter
of Credit and such Request for Full Transfer shall have been submitted to the LC
Bank, and the LC Bank shall have delivered to the Collateral Trustee the Letter
of Credit duly endorsed for transfer and accompanied by the LC Bank's customary
letter of transfer to the Collateral Trustee.

          (c) Glatfelter Securities. The Collateral Trustee shall have received
the Glatfelter Securities, together with undated transfer instruments executed
by the Borrower.

          (d) Contribution Agreement. The Collateral Trustee shall have received
a fully executed copy of the Contribution Agreement, certified by a Responsible
Officer of the Borrower as a true and complete copy thereof.

          (e) Evidence of Perfection; Uniform Commercial Code Financing
Statement. The Collateral Trustee shall have received such evidence (including,
without limitation, evidence of the filing of appropriate UCC-1 financing
statements) as the Collateral Trustee may require as to the perfection of the
security interest created by the Pledge and Security Agreement in the
Collateral.

          (f) Lien Searches. The Collateral Trustee shall have received written
reports of Uniform Commercial Code, judgment and tax lien searches of the Parent
and the Borrower in all appropriate jurisdictions, showing the absence of any
liens attaching to any of the Collateral.

          SECTION 3.08 INTEREST RESERVE ACCOUNT AND COLLECTION ACCOUNT.

     The Collateral Trustee shall have received evidence of (a) the
establishment of the Interest Reserve Account, and (b) the establishment of the
Collection Account.

          SECTION 3.09 INTEREST RESERVE AMOUNT.

     The Collateral Trustee shall have received evidence, in the form of a
certification by the Borrower pursuant to Section 3.03(a), that the Interest
Reserve Amount will be deposited into the Interest Reserve Account immediately
following the Closing.

          SECTION 3.10 TERM LOAN PERMITTED BY APPLICABLE LAW, ETC.


                                       25



     On the date of the Closing such Lender's making of the Term Loan shall (a)
be permitted by the laws and regulations of each jurisdiction to which such
Lender is subject, (b) not violate any applicable law or regulation (including,
without limitation, Regulation T, U or X of the Board of Governors of the
Federal Reserve System) and (c) not subject such Lender to any tax, penalty or
liability under or pursuant to any applicable law or regulation, which law or
regulation was not in effect on the date hereof. If requested by such Lender,
such Lender shall have received an Officer's Certificate certifying as to such
matters of fact as such Lender may reasonably specify to enable such Lender to
determine whether such purchase is so permitted.

          SECTION 3.11 PAYMENT OF SPECIAL COUNSEL FEES.

     The Borrower shall have paid on or before the Closing or made provision for
the payment on or before the Closing of the fees, charges and disbursements of
the Lender's special counsel to the extent reflected in a statement of such
counsel rendered to the Borrower at least two Business Days prior to the
Closing.

          SECTION 3.12 FUNDING INSTRUCTIONS.

     At least three Business Days prior to the date of the Closing, the Agent
shall have received written instructions signed by a Responsible Officer
providing wire instructions for the disbursement of the proceeds of the Term
Loan.

          SECTION 3.13 PROCEEDINGS AND DOCUMENTS.

     All corporate and other proceedings in connection with the transactions
contemplated by this Agreement and all documents and instruments incident to
such transactions shall be satisfactory to such Lender, and such Lender shall
have received all such counterpart originals or certified or other copies of
such documents as such Lender may reasonably request.

                   ARTICLE IV. REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Agent and each Lender as
follows:

          SECTION 4.01 ORGANIZATION; POWER AND AUTHORITY.

     The Borrower is a limited liability company duly formed, validly existing
and in good standing under the laws of its jurisdiction of formation, and is
duly qualified as a foreign limited liability company and is in good standing in
each jurisdiction in which such qualification is required by law. The Borrower
has the limited liability company power and authority to own or hold under lease
the properties it purports to own or hold under lease, to transact the business
it transacts and proposes to transact, to execute and deliver this Agreement,
the Note and the other Loan Documents and to perform the provisions hereof and
thereof.

          SECTION 4.02 AUTHORIZATION, ETC.


                                       26



     This Agreement, the Note and the other Loan Documents have been duly
authorized by all necessary limited liability company action on the part of the
Borrower, and this Agreement and the other Loan Documents (other than the Note)
constitute, and upon execution and delivery thereof the Note will constitute,
legal, valid and binding obligations of the Borrower enforceable against the
Borrower in accordance with their terms, except as such enforceability may be
limited by (i) applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting the enforcement of creditors' rights generally and
(ii) general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

          SECTION 4.03 DISCLOSURE.

     This Agreement, the other Loan Documents and the Closing Date Balance Sheet
(this Agreement, the other Loan Documents, and such Closing Date Balance Sheet
being referred to, collectively, as the "Disclosure Documents"), taken as a
whole, do not contain any material misstatement of fact or omit to state any
material fact necessary to make the statements therein not misleading in light
of the circumstances under which they were made.

          SECTION 4.04 ORGANIZATION AND OWNERSHIP OF SHARES OF SUBSIDIARIES.

     The Borrower has no Subsidiaries.

          SECTION 4.05 CLOSING DATE BALANCE SHEET; LIABILITIES.

     The Borrower has delivered to each Lender a copy of the Closing Date
Balance Sheet. The Closing Date Balance Sheet fairly presents in all material
respects the financial position of the Borrower as of the Closing Date and has
been prepared in accordance with GAAP. The Borrower does not have any
liabilities that are not disclosed on Closing Date Balance Sheet or otherwise
disclosed in the Disclosure Documents.

          SECTION 4.06 COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC.

     The execution, delivery and performance by the Borrower of this Agreement
and the other Loan Documents will not (i) contravene, result in any breach of,
or constitute a default under, or result in the creation of any Lien in respect
of any property of the Borrower under, any indenture, mortgage, deed of trust,
loan, purchase or credit agreement, lease, the Borrower's certificate of
formation or operating agreement, or any other agreement or instrument to which
the Borrower is bound or by which the Borrower or any of its properties may be
bound or affected, (ii) conflict with or result in a breach of any of the terms,
conditions or provisions of any order, judgment, decree, or ruling of any court,
arbitrator or Governmental Authority applicable to the Borrower or (iii) violate
any provision of any statute or other rule or regulation of any Governmental
Authority applicable to the Borrower.

          SECTION 4.07 GOVERNMENTAL AUTHORIZATIONS, ETC.


                                       27



     No consent, approval or authorization of, or registration, filing or
declaration with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Borrower of this Agreement or the
other Loan Documents.

          SECTION 4.08 LITIGATION; OBSERVANCE OF STATUTES AND ORDERS.

          (a) There are no actions, suits, investigations or proceedings pending
or, to the knowledge of the Borrower, threatened against or affecting the
Borrower or any property of the Borrower in any court or before any arbitrator
of any kind or before or by any Governmental Authority.

          (b) The Borrower is not in default under any order, judgment, decree
or ruling of any court, arbitrator or Governmental Authority or is in violation
of any applicable law, ordinance, rule or regulation (including without
limitation the USA Patriot Act) of any Governmental Authority.

          SECTION 4.09 TAXES.

     The Borrower has filed all income tax returns that are required to have
been filed in any jurisdiction, and has paid all taxes shown to be due and
payable on such returns and all other taxes and assessments payable by it, to
the extent such taxes and assessments have become due and payable and before
they have become delinquent. The Borrower has been and will be characterized and
treated as an entity disregarded as separate for income tax purposes.

          SECTION 4.10 TITLE TO PROPERTY.

     The Borrower has good and sufficient title to its properties, including all
such properties reflected in the Closing Date Balance Sheet, in each case free
and clear of Liens.

          SECTION 4.11 LICENSES, PERMITS, ETC.

     The Borrower owns or possesses all licenses, permits, franchises,
authorizations, patents, copyrights, proprietary software, service marks,
trademarks and trade names, or rights thereto, required for the conduct of its
business, without known conflict with the rights of others.

          SECTION 4.12 COMPLIANCE WITH ERISA.

          (a) The Borrower and each ERISA Affiliate have operated and
administered each Plan in compliance in all material respects with all
applicable laws. Neither the Borrower nor any ERISA Affiliate has any material
liability pursuant to Title I or IV of ERISA with respect to a Plan or any
material liability under the penalty or excise tax provisions of the Code
relating to employee benefit plans (as defined in section 3 of ERISA), and no
event, transaction or condition has occurred or exists that would reasonably be
expected to result in the incurrence of any such material liability by the
Borrower or any ERISA Affiliate, or in the imposition of any Lien on any of the
rights, properties or assets of the Borrower or any ERISA Affiliate, in either


                                       28



case pursuant to Title I or IV of ERISA or to such penalty or excise tax
provisions or to section 401(a)(29) or 412 of the Code or section 4068 of ERISA.

          (b) The present value of the aggregate benefit liabilities under each
of the Plans subject to Title IV of ERISA (other than Multiemployer Plans),
determined as of the end of such Plan's most recently ended plan year on the
basis of the actuarial assumptions specified for funding purposes in such Plan's
most recent actuarial valuation report, did not exceed the aggregate current
value of the assets of such Plan allocable to such benefit liabilities, in each
case as set forth in such most recent actuarial valuation report. In addition,
if each of the Plans were to terminate as of such Plan's most recently ended
plan year in a "standard termination" (within the meaning of Section 4041 of
ERISA), the additional contributions required to be made by the contributing
sponsor of such Plan in connection with such termination would not reasonably be
expected to be material.

          (c) The Borrower and its ERISA Affiliates have not incurred withdrawal
liabilities under section 4201 or 4204 of ERISA in respect of any Multiemployer
Plan which have not been satisfied in full, and no event, transaction or
condition has occurred or exists that would reasonably be expected to result in
the assessment of any additional material withdrawal liabilities under section
4201 or section 4204 of ERISA in respect of any Multiemployer Plan, and neither
the Borrower nor its ERISA Affiliates has any material contingent withdrawal
liabilities under section 4204 of ERISA in respect of any Multiemployer Plan.

          (d) The Borrower does not have any expected postretirement benefit
obligation determined as of the last day of the Borrower's most recently ended
fiscal year in accordance with Financial Accounting Standards Board Statement
No. 106, without regard to liabilities attributable to continuation coverage
mandated by section 4980B of the Code.

          (e) Assuming that no Lender funds any portion of the Term Loan with
"plan assets" (within the meaning of Section 3(42) of ERISA), the execution and
delivery of this Agreement and the consummation of the transactions contemplated
hereby will not involve any transaction that is subject to the prohibitions of
section 406 of ERISA or in connection with which a tax could be imposed pursuant
to section 4975(c)(1)(A) (D) of the Code.

          SECTION 4.13 [Reserved]

          SECTION 4.14 USE OF PROCEEDS; MARGIN REGULATIONS.

     No part of the proceeds from the Term Loan hereunder will be used, directly
or indirectly, for the purpose of buying or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System
(12 CFR 221), or for the purpose of buying or carrying or trading in any
securities under such circumstances as to involve the Borrower in a violation of
Regulation X of said Board (12 CFR 224) or to involve any broker or dealer in a
violation of Regulation T of said Board (12 CFR 220). None of the assets of the
Borrower constitute margin stock, and the Borrower does not have any present
intention that margin stock will constitute more any portion of such assets. As
used in this Section, the terms


                                       29



"margin stock" and "purpose of buying or carrying" shall have the meanings
assigned to them in said Regulation U.

          SECTION 4.15 INDEBTEDNESS.

          (a) The Borrower has no outstanding Indebtedness other than the Term
Loan.

          (b) The Borrower is not a party to, or otherwise subject to any
provision contained in, any instrument or agreement (other than its certificate
of formation, its operating agreement and this Agreement) which limits the
amount of, or otherwise imposes restrictions on the incurring of, Indebtedness
of the Borrower, except as disclosed on Schedule 4.15.

          SECTION 4.16 SOLVENCY.

     After giving effect to the Term Loan pursuant to this Agreement, the
Borrower will be "solvent" and for purposes hereof, the term "solvent" shall
mean that (a) the fair value of the property of the Borrower is greater than the
total amount of its liabilities (including contingent liabilities), (b) the
present fair saleable value of its property is not less than the amount that
will be required to pay the probable liability on its debts as they become
absolute and matured, (c) the Borrower does not intend to, and does not believe
that it will, incur debts or liabilities beyond its ability to pay as such debts
and liabilities mature, and (d) the Borrower is not engaged in a business for
which its property would constitute an unreasonably small capital.

          SECTION 4.17 ACTIVITIES.

     Since the date of formation of the Borrower, the Borrower has taken all
steps reasonably required by its certificate of formation and limited liability
company agreement to continue its identity as a separate legal entity and to
make it apparent to other Persons that the Borrower is an entity with assets and
liabilities distinct from those of any other Person. Without limiting the
foregoing, since the date of formation of the Borrower, the Borrower has (i)
been a limited purpose company whose activities have been restricted in its
certificate of formation and operating agreement, (ii) maintained books,
records, accounts, assets and financial statements separate from any other
Person and otherwise held itself out as an entity separate from any other
Person, (iii) not identified itself as a division of any other person or
commingled its funds with any other person, (iv) conducted its own business and
held its own assets in its own name, (v) observed all formalities required by
its certificate of formation and operating agreement, (vi) paid its own
employees and liabilities out of its own funds, (vii) allocated fairly and
reasonably overhead for any shared office space, (viii) maintained adequate
capital, to the extent necessary in light of its business operations, and (ix)
been treated as an entity disregarded as separate for income tax purposes.

          SECTION 4.18 FOREIGN ASSETS CONTROL REGULATIONS, ETC.

          (a) Neither the entry into this Agreement, the making of the Term Loan
nor its use of the proceeds thereof will violate the Trading with the Enemy Act,
as amended, or any of


                                       30



the foreign assets control regulations of the United States Treasury Department
(31 CFR, Subtitle B, Chapter V, as amended) or any enabling legislation or
executive order relating thereto.

          (b) The Borrower (i) is not a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti Terrorism Order and (ii) does not
engage in any dealings or transactions with any such Person. The Borrower is in
compliance, in all material respects, with the USA Patriot Act.

          (c) No part of the proceeds from the Term Loan will be used, directly
or indirectly, for any payments to any governmental official or employee,
political party, official of a political party, candidate for political office,
or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United
States Foreign Corrupt Practices Act of 1977, as amended, assuming in all cases
that such Act applies to the Borrower.

          SECTION 4.19 INVESTMENT COMPANY ACT.

     The Borrower is not subject to regulation under the Investment Company Act
of 1940, as amended.

                        ARTICLE V. AFFIRMATIVE COVENANTS

          The Borrower covenants and agrees that so long as the principal of and
interest on any Loan or any fee remains unpaid:

          SECTION 5.01 FINANCIAL AND BUSINESS INFORMATION.

     The Borrower shall deliver to the Agent:

          (a) Semi-Annual Statements -- not later 30 days following the close of
each six-month period ending June 30 and December 31 of each year, duplicate
copies of,

          (i)  a balance sheet of the Borrower, as at the end of such period,
               and

          (ii) statements of cash flows of the Borrower, for such period,

     in reasonable detail, prepared in accordance with GAAP, and accompanied by
a certificate of a Responsible Officer, which certificate shall state that such
financial statements present fairly, in all material respects, the financial
position of the Borrower and its cash flows and have been prepared in conformity
with GAAP;

          (b) Notice of Default or Event of Default -- promptly, and in any
event within five days after a Responsible Officer becoming aware of the
existence of any Default or


                                       31



Event of Default, a written notice specifying the nature and period of existence
thereof and what action the Borrower is taking or proposes to take with respect
thereto;

          (c) [Reserved]

          (d) Communications Regarding Collateral -- with reasonable promptness
following the Borrower's receipt thereof, any and all notices and other
communications received by the Borrower under or in connection with the
Installment Note or the Letter of Credit (including, without limitation, any
"Event of Default" under the Installment Note);

          (e) Litigation -- promptly, and in any event within five days after
the filing or commencement thereof, a written notice of action, suit or
proceeding by or before any arbitrator or Governmental Authority against or
affecting the Borrower; and

          (f) Requested Information -- with reasonable promptness, such other
data and information relating to the business, operations, affairs, financial
condition, assets or properties of the Borrower or relating to the ability of
the Borrower to perform its obligations under this Agreement and the other Loan
Documents as from time to time may be reasonably requested by the Agent.

          SECTION 5.02 OFFICER'S CERTIFICATE.

     Each set of financial statements delivered to the Agent pursuant to Section
5.01(a) shall be accompanied by a certificate of a Responsible Officer setting
forth a statement that a Responsible Officer reviewed the relevant terms hereof
and has made, or caused to be made, under his or her supervision, a review of
the transactions and conditions of the Borrower from the beginning of the
semi-annual period covered by the statements then being furnished to the date of
the certificate and that such review shall not have disclosed the existence
during such period of any condition or event that constitutes a Default or an
Event of Default or, if any such condition or event existed or exists,
specifying the nature and period of existence thereof and what action the
Borrower shall have taken or proposes to take with respect thereto.

          SECTION 5.03 VISITATION.

     The Borrower shall permit the Agent:

          (a) No Default -- if no Default or Event of Default then exists, at
the expense of the Lenders and upon reasonable prior notice to the Borrower, to
discuss the affairs, finances and accounts of the Borrower with the Borrower's
officers at such reasonable times and as often as may be reasonably requested in
writing; and

          (b) Default -- if a Default or Event of Default then exists, at the
expense of the Borrower to examine the Borrower's books of account, records,
reports and other papers, to make copies and extracts therefrom, and to discuss
the affairs, finances and accounts of the Borrower with its officers and
independent public accountants (and by this provision the


                                       32



Borrower authorizes said accountants to discuss the affairs, finances and
accounts of the Borrower), all at such times and as often as may be requested.

          SECTION 5.04 COMPLIANCE WITH LAW.

     The Borrower will comply with all laws, ordinances or governmental rules or
regulations to which it is subject, including, without limitation, ERISA and the
USA Patriot Act, and will obtain and maintain in effect all licenses,
certificates, permits, franchises and other governmental authorizations
necessary to the ownership of its properties or to the conduct of its
businesses, except where the failure to do so, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect.

          SECTION 5.05 INSURANCE.

     The Borrower will maintain, with financially sound and reputable insurers,
insurance with respect to its properties and businesses against such casualties
and contingencies, of such types, on such terms and in such amounts (including
deductibles, co-insurance and self-insurance, if adequate reserves are
maintained with respect thereto) as is customary in the case of entities engaged
in the same or a similar business and similarly situated, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect.

          SECTION 5.06 MAINTENANCE OF PROPERTIES.

     The Borrower will maintain and keep, or cause to be maintained and kept,
its properties in good repair, working order and condition (other than ordinary
wear and tear), so that the business carried on in connection therewith may be
properly conducted at all times.

          SECTION 5.07 PAYMENT OF TAXES.

     The Borrower will file all income tax or similar tax returns required to be
filed in any jurisdiction and pay and discharge all taxes shown to be due and
payable on such returns and all other taxes, assessments, governmental charges,
or levies payable by it, to the extent the same have become due and payable and
before they have become delinquent, provided that the Borrower need not pay any
such tax, assessment, charge or levy if the amount, applicability or validity
thereof is contested by the Borrower on a timely basis in good faith and in
appropriate proceedings, and the Borrower has established adequate reserves
therefor in accordance with GAAP on the books of the Borrower.

          SECTION 5.08 CORPORATE EXISTENCE, ETC.

     The Borrower will at all times preserve and keep in full force and effect
its existence. The Borrower will at all times preserve and keep in full force
and effect all rights and franchises of the Borrower material to the conduct of
its business.

          SECTION 5.09 PAYMENT OF OBLIGATIONS.


                                       33



     The Borrower will pay and discharge all of its obligations and liabilities
before the same shall become delinquent or in default; provided that the
Borrower need not pay any obligations or liabilities if the amount or validity
thereof is contested by the Borrower on a timely basis in good faith and in
appropriate proceedings, and the Borrower has established adequate reserves
therefor in accordance with GAAP on the books of the Borrower.

          SECTION 5.10 BOOKS AND RECORDS.

     The Borrower will maintain proper books of record and account in conformity
with GAAP and all applicable requirements of any Governmental Authority having
legal or regulatory jurisdiction over the Borrower, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect.

          SECTION 5.11 ACTIVITIES.

     The Borrower shall comply in all respects with Section 6.1 of its Amended
and Restated Limited Liability Company Agreement dated as of the Closing Date.

          SECTION 5.12 CHARACTERIZATION OF BORROWER FOR TAX PURPOSES.

     The Borrower will execute and caused to be filed such returns and make and
cause to be made such elections as may from time to time be required or
appropriate so as to maintain the Borrower's characterization, and will at all
times be characterized and treated, as an entity disregarded as separate for
income tax purposes.

                         ARTICLE VI. NEGATIVE COVENANTS

          The Borrower covenants and agrees that so long as the principal of or
interest on any Loan remains unpaid or any fee remains unpaid:

          SECTION 6.01 INDEBTEDNESS.

     The Borrower will not incur, assume or suffer to exist any Indebtedness
other than the Term Loan.

          SECTION 6.02 LIENS.

     The Borrower will not create, incur, assume or suffer to exist any Lien
other than those Liens expressly permitted by the Loan Documents.

          SECTION 6.03 TRANSACTIONS WITH AFFILIATES.

     The Borrower will not enter into, directly or indirectly, any transaction
(including without limitation the purchase, lease, sale or exchange of
properties of any kind or the rendering of any


                                       34



service) with any Affiliate, except (i) the Capitalization Transaction and (ii)
the making of distributions to the Parent to the extent permitted under Section
6.08.

          SECTION 6.04 MERGER, CONSOLIDATION, ETC.

     The Borrower will not consolidate with or merge with any other Person or
convey, transfer or lease any of its assets to any Person, except that the
Borrower may convey cash, the Installment Note and the Letter of Credit to the
Parent as a distribution to its sole member to the extent permitted under
Section 6.08.

          SECTION 6.05 LINE OF BUSINESS.

     The Borrower will not engage in any business other than (i) acquiring,
owning, managing, protecting, conserving and selling or otherwise dispose of the
Installment Note, the Letter of Credit, the Glatfelter Securities and Permitted
Investments, (ii) enter into and perform its obligations under the Loan
Documents to which the Borrower is a party, and (iii) engage in activities
related or incidental to the foregoing and necessary or appropriate therefor.

          SECTION 6.06 TERRORISM SANCTIONS REGULATIONS.

     The Borrower will not (a) become a Person described or designated in the
Specially Designated Nationals and Blocked Persons List of the Office of Foreign
Assets Control or in Section 1 of the Anti Terrorism Order or (b) engage in any
dealings or transactions with any such Person.

          SECTION 6.07 INVESTMENTS.

     The Borrower will not acquire any business or property, any equity interest
of any other Person, or any Indebtedness of any other Person, or otherwise make
or permit to remain outstanding any investment, other than the Borrower's
investment in the Installment Note, the Letter of Credit, the Glatfelter
Securities, any cash on deposit in the Interest Reserve Account or the
Collection Account, and Permitted Investments if such Permitted Investments
stand to the credit of the Interest Reserve Account or the Collection Account or
otherwise are subject to a perfected, first priority Lien in favor of the
Collateral Trustee.

          SECTION 6.08 DISTRIBUTIONS.

     The Borrower will not declare or make, or agree to pay or make, directly or
indirectly, any dividend payment or other distribution in respect of its
membership interests, except that (a) the Borrower may make the Closing Date
Distribution, (b) provided that, both before and after giving effect to such
distribution, no Default or Event of Default shall have occurred and be
continuing, the Borrower may make distributions to the Parent on each Interest
Payment Date to the extent provided in Section 6 of the Collateral Trust
Indenture in an amount equal to the amount of cash on hand of the Borrower in
excess of the sum of (x) the Interest Reserve Amount and (y) the amount of
expenses projected by the Borrower in good faith to be due and payable on or
prior to the immediately succeeding Interest Payment Date as certified by a
Responsible


                                       35



Officer of the Borrower to the Collateral Trustee, and (c) upon any release by
the Collateral Trustee of its Lien on the Installment Note and Letter of Credit
in accordance with Section 8(f) of the Collateral Trust Indenture, the Borrower
may distribute the Installment Note and the Letter of Credit to the Parent. The
Borrower will not redeem or repurchase any of its membership interests.

          SECTION 6.09 CAPITAL EXPENDITURES.

     The Borrower will not make any capital expenditures.

          SECTION 6.10 BANKRUPTCY, INSOLVENCY.

     The Borrower will not (i) voluntarily commence any proceeding or file any
petition seeking liquidation, reorganization or other similar relief under any
Federal, state or foreign bankruptcy, insolvency, receivership or similar law
now or hereafter in effect, (ii) consent to the institution of, or fail to
contest in a timely and appropriate manner, any proceeding or petition seeking
liquidation, reorganization or similar relief in respect of the Borrower or its
debts or of a substantial part of its assets, under any Federal, state or
foreign bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian or similar official for the Borrower or a substantial part of its
assets under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors or (vi) take any action
for the purpose of effecting any of the foregoing.

          SECTION 6.11 AMENDMENTS AND MODIFICATIONS TO ORGANIZATIONAL DOCUMENTS
AND COLLATERAL.

          (a) The Borrower will not without the prior written consent of the
Required Lenders (i) make any changes to its business objectives, purpose or
operations, (ii) make any change to its capital structure, including without
limitation the issuance of any membership interests or economic rights or units
or securities convertible into or exercisable for membership interests or
economic rights of the Borrower to any Person other than the Parent, (iii)
reorganize itself under the laws of any jurisdiction other than the jurisdiction
in which it is organized as of the date of the Closing, or (iv) amend or modify,
and will not authorize, consent to or permit the amendment or modification of,
its Amended and Restated Limited Liability Company Agreement dated as of the
Closing Date.

          (b) The Borrower will not amend or modify, and will not authorize,
consent to or permit the amendment or modification of, the Installment Note, the
Letter of Credit, the Glatfelter Securities or the Contribution Agreement
without the prior written consent of the Required Lenders, provided that this
provision shall not limit the ability of the Borrower to request a substitution
of the Letter of Credit and take all steps and actions to implement such
substitution (including the replacement of the Letter of Credit by a substitute
Letter of Credit) in circumstances where the holder of the Installment Note is
permitted to request such a substitution pursuant to the terms of the
Installment Note.


                                       36



                         ARTICLE VII. EVENTS OF DEFAULT

          SECTION 7.01 EVENTS OF DEFAULT.

     The following events are each an "Event of Default":

          (a) the Borrower defaults in the payment of any principal or amount
required pursuant to Section 2.13 in connection with a prepayment of principal,
if any, on the Term Loan when the same becomes due and payable, whether at
maturity or at a date fixed for prepayment or by declaration or otherwise; or

          (b) the Borrower defaults in the payment of any interest on the Term
Loan or any other amount payable under this Agreement or any other Loan Document
for more than three Business Days after the same becomes due and payable; or

          (c) the Borrower defaults in the performance of or compliance with any
term contained in Section 5.01(b), Section 5.08, Section 5.12 or Article VI; or

          (d) the Borrower defaults in the performance of or compliance with any
term contained herein or any other Loan Document (other than those referred to
in Sections 7.01(a), (b) and (c)) and such default is not remedied within 30
days after the earlier of (i) a Responsible Officer obtaining actual knowledge
of such default and (ii) the Borrower receiving written notice of such default
from the Agent (any such written notice to be identified as a "notice of
default" and to refer specifically to this Section 7.01(d)); or

          (e) any representation or warranty made in writing by or on behalf of
the Borrower or by a Responsible Officer or any other representative of the
Borrower in this Agreement or any other Loan Document or in any writing
furnished in connection with the transactions contemplated hereby proves to have
been false or incorrect in any material respect on the date as of which made; or

          (f) the Borrower (i) is generally not paying, or admits in writing its
inability to pay, its debts as they become due, (ii) files, or consents by
answer or otherwise to the filing against it of, a petition for relief or
reorganization or arrangement or any other petition in bankruptcy, for
liquidation or to take advantage of any bankruptcy, insolvency, reorganization,
moratorium or other similar law of any jurisdiction, (iii) makes an assignment
for the benefit of its creditors, (iv) consents to the appointment of a
custodian, receiver, trustee or other officer with similar powers with respect
to it or with respect to any substantial part of its property, (v) is
adjudicated as insolvent or to be liquidated, or (vi) takes any organizational
action for the purpose of any of the foregoing; or

          (g) a court or Governmental Authority of competent jurisdiction enters
an order appointing, without consent by the Borrower, a custodian, receiver,
trustee or other officer with similar powers with respect to it or with respect
to any substantial part of its property, or


                                       37



constituting an order for relief or approving a petition for relief or
reorganization or any other petition in bankruptcy or for liquidation or to take
advantage of any bankruptcy or insolvency law of any jurisdiction, or ordering
the dissolution, winding-up or liquidation of the Borrower, or any such petition
shall be filed against the Borrower and such petition shall not be dismissed
within 60 days; or

          (h) the Borrower is dissolved or liquidated or takes any
organizational action for the purpose of dissolving or liquidating; or

          (i) a final judgment or judgments for the payment of money are
rendered against the Borrower and which judgments are not, within 30 days after
entry thereof, bonded, discharged or stayed pending appeal, or are not
discharged within 30 days after the expiration of such stay; or

          (j) the L/C Bank is replaced with a substitute L/C Bank that is not a
commercial bank organized under the laws of the United States or any state
thereof or a branch located in the United States of any commercial bank
organized under the laws of any other country that is a member of the
Organization for Economic Cooperation and Development, in each case having a
long-term debt rating assigned by S&P of at least A+ and Moody's of at least A1;
or

          (k) the LC Bank ceases to be rated at least "A+" by S&P and "A1" by
Moody's, and the LC Bank is not replaced within 60 days thereof with a
substitute LC Bank that (i) is a commercial bank organized under the laws of the
United States or any state thereof or a branch located in the United States of
any commercial bank organized under the laws of any other country that is a
member of the Organization for Economic Cooperation and Development, and (ii)
has a long-term debt rating assigned by S&P of at least "A+" and by Moody's of
at least "A1"; or

          (l) an Installment Note Trigger Event shall have occurred; or

          (m) an "Event of Default" (as such term is defined in the Glatfelter
Securities) shall have occurred and be continuing; or

          (n) Glatfelter shall cease to own, directly or indirectly, one hundred
percent (100%) of the issued and outstanding membership interests of the
Borrower; or

          (o) a Contribution Agreement Event shall have occurred;

          SECTION 7.02 REMEDIES ON DEFAULT, ETC.

          (a) Acceleration.

          (i) If an Event of Default with respect to the Borrower described in
Section 7.01(f), (g) or (h) (other than an Event of Default described in clause
(i) of Section 7.01(f) or described in clause (vi) of Section 7.01(f) by virtue
of the fact that such clause encompasses clause (i) of Section 7.01(f)) has
occurred, the principal of the Term Loan then outstanding,


                                       38



together with accrued interest thereon, and all other Obligations shall
automatically become due and payable.

          (ii) If any other Event of Default has occurred and is continuing, the
Agent may, and upon the written request of the Required Lenders shall, by notice
to the Borrower, take any or all of the following actions, at the same or
different times: (i) declare the principal of and any accrued interest on the
Term Loan and all other Obligations owing hereunder to be, whereupon the same
shall become, due and payable immediately; (ii) exercise all remedies contained
in any other Loan Document; and (iii) exercise any other remedies available at
law or in equity.

Upon the Term Loan becoming due and payable under this Section 7.02, whether
automatically or by declaration, all Obligations will forthwith mature and the
entire unpaid principal amount of the Term Loan, plus (x) all accrued and unpaid
interest thereon (including, but not limited to, interest accrued thereon at the
Default Rate) and (y) all amounts required pursuant to Section 2.13 determined
in respect of such principal amount (to the full extent permitted by applicable
law), shall all be immediately due and payable, in each and every case without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower.

          (b) Enforcement of Collateral. Upon the Term Loan becoming due and
payable, whether automatically or by declaration, the Required Lenders may
direct the Collateral Trustee to take any and all action with respect to the
Collateral permitted under the Loan Documents, at law, in equity or otherwise,
including, without limitation, to foreclose upon any or all of the Collateral
and to draw under the Letter of Credit to the extent permitted to do so under
the terms thereof.

          (c) Rescission. At any time after the Term Loan has been declared due
and payable pursuant to Section 7.02(a)(ii), the Required Lenders, by written
notice to the Borrower, may rescind and annul any such declaration and its
consequences.

                             ARTICLE VIII. THE AGENT

          SECTION 8.01 APPOINTMENT OF AGENT.

Each Lender irrevocably appoints SunTrust Bank as the Agent and authorizes it to
take such actions on its behalf and to exercise such powers as are delegated to
the Agent under this Agreement and the other Loan Documents, together with all
such actions and powers that are reasonably incidental thereto. The Agent may
perform any of its duties hereunder or under the other Loan Documents by or
through any one or more sub-agents or attorneys-in-fact appointed by the Agent.
The Agent and any such sub-agent or attorney-in-fact may perform any and all of
its duties and exercise its rights and powers through their respective Related
Parties. The exculpatory provisions set forth in this Article shall apply to any
such sub-agent or attorney-in-fact and the Related Parties of the Agent, any
such sub-agent and any such attorney-in-fact and


                                       39



shall apply to their respective activities in connection with the syndication of
the credit facilities provided for herein as well as activities as Agent.

          SECTION 8.02 NATURE OF DUTIES OF AGENT.

The Agent shall not have any duties or obligations except those expressly set
forth in this Agreement and the other Loan Documents. Without limiting the
generality of the foregoing, (a) the Agent shall not be subject to any fiduciary
or other implied duties, regardless of whether a Default or an Event of Default
has occurred and is continuing, (b) the Agent shall not have any duty to take
any discretionary action or exercise any discretionary powers, except those
discretionary rights and powers expressly contemplated by the Loan Documents
that the Agent is required to exercise in writing by the Required Lenders (or
such other number or percentage of the Lenders as shall be necessary under the
circumstances as provided herein), and (c) except as expressly set forth in the
Loan Documents, the Agent shall not have any duty to disclose, and shall not be
liable for the failure to disclose, any information relating to the Borrower
that is communicated to or obtained by the Agent or any of its Affiliates in any
capacity. The Agent shall not be liable for any action taken or not taken by it,
its sub-agents or attorneys-in-fact with the consent or at the request of the
Required Lenders (or such other number or percentage of the Lenders as shall be
necessary under the circumstances as provided herein) in the absence of its own
gross negligence or willful misconduct. The Agent shall not be responsible for
the negligence or misconduct of any sub-agents or attorneys-in-fact selected by
it with reasonable care. The Agent shall not be deemed to have knowledge of any
Default or Event of Default unless and until written notice thereof is given to
the Agent by the Borrower or any Lender, and the Agent shall not be responsible
for or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with any Loan Document, (ii) the
contents of any certificate, report or other document delivered hereunder or
thereunder or in connection herewith or therewith, (iii) the performance or
observance of any of the covenants, agreements, or other terms and conditions
set forth in any Loan Document, (iv) the validity, enforceability, effectiveness
or genuineness of any Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article III or
elsewhere in any Loan Document, other than to confirm receipt of items expressly
required to be delivered to the Agent. The Agent may consult with legal counsel
(including counsel for the Borrower) concerning all matters pertaining to such
duties.

          SECTION 8.03 LACK OF RELIANCE ON THE AGENT.

Each of the Lenders acknowledges that it has, independently and without reliance
upon the Agent or any other Lender and based on such documents and information
as it has deemed appropriate, made its own credit analysis and decision to enter
into this Agreement. Each of the Lenders also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it has deemed appropriate, continue to make
its own decisions in taking or not taking of any action under or based on this
Agreement, any related agreement or any document furnished hereunder or
thereunder.

          SECTION 8.04 CERTAIN RIGHTS OF THE AGENT.


                                       40



If the Agent shall request instructions from the Required Lenders with respect
to any action or actions (including the failure to act) in connection with this
Agreement, the Agent shall be entitled to refrain from such act or taking such
act, unless and until it shall have received instructions from such Lenders; and
the Agent shall not incur liability to any Person by reason of so refraining.
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent acting or refraining from
acting hereunder in accordance with the instructions of the Required Lenders
where required by the terms of this Agreement.

          SECTION 8.05 RELIANCE BY AGENT.

The Agent shall be entitled to rely upon, and shall not incur any liability for
relying upon, any notice, request, certificate, consent, statement, instrument,
document or other writing believed by it to be genuine and to have been signed,
sent or made by the proper Person. The Agent may also rely upon any statement
made to it orally or by telephone and believed by it to be made by the proper
Person and shall not incur any liability for relying thereon. The Agent may
consult with legal counsel (including counsel for the Borrower), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or not taken by it in accordance with the advice of such
counsel, accountants or experts.

          SECTION 8.06 THE AGENT IN ITS INDIVIDUAL CAPACITY.

The bank serving as the Agent shall have the same rights and powers under this
Agreement and any other Loan Document in its capacity as a Lender as any other
Lender and may exercise or refrain from exercising the same as though it were
not the Agent; and the terms "Lenders", "Required Lenders", "holders of Notes",
or any similar terms shall, unless the context clearly otherwise indicates,
include the Agent in its individual capacity. The bank acting as the Agent and
its Affiliates may accept deposits from, lend money to, and generally engage in
any kind of business with the Borrower or Affiliate of the Borrower as if it
were not the Agent hereunder.

          SECTION 8.07 SUCCESSOR AGENT.

          (a) The Agent may resign at any time by giving at least 30 days' prior
notice thereof to the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Agent, subject to
the approval by the Borrower (such approval not to be unreasonably withheld or
delayed) provided that no Default or Event of Default shall exist at such time.
If no successor Agent shall have been so appointed, and shall have accepted such
appointment within 30 days after the retiring Agent gives notice of resignation,
then the retiring Agent may, on behalf of the Lenders, appoint a successor
Agent, which shall be a commercial bank, insurance company or other financial
institution organized under the laws of the United States of America or any
state thereof or a bank, insurance company or other financial institution which
maintains an office in the United States, having a combined capital and surplus
of at least $500,000,000.

          (b) Upon the acceptance of its appointment as the Agent hereunder by a
successor, such successor Agent shall thereupon succeed to and become vested
with all the


                                       41



rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations under this Agreement
and the other Loan Documents. If within 45 days after written notice is given of
the retiring Agent's resignation under this Section 8.07 no successor Agent
shall have been appointed and shall have accepted such appointment, then on such
45th day (i) the retiring Agent's resignation shall become effective, (ii) the
retiring Agent shall thereupon be discharged from its duties and obligations
under the Loan Documents and (iii) the Required Lenders shall thereafter perform
all duties of the retiring Agent under the Loan Documents until such time as the
Required Lenders appoint a successor Agent as provided above. After any retiring
Agent's resignation hereunder, the provisions of this Article VIII shall
continue in effect for the benefit of such retiring Agent and its
representatives and agents in respect of any actions taken or not taken by any
of them while it was serving as the Agent.

          SECTION 8.08 AUTHORIZATION TO EXECUTE OTHER LOAN DOCUMENTS.

Each Lender hereby authorizes the Agent to execute on behalf of all Lenders all
Loan Documents other than this Agreement.

                            ARTICLE IX. MISCELLANEOUS

          SECTION 9.01 NOTICES.

          (a) Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications to any
party herein to be effective shall be in writing and shall be delivered by hand
or overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:

          To the Borrower:       GPW Virginia Timberlands LLC
                                 c/o P.H. Glatfelter Company
                                 96 South George Street Suite 400
                                 York, PA 17401
                                 Attention: Donald Gross
                                 Facsimile: 717-812-8964
                                 Attention: Thomas Bosley, VP & General Manager
                                 Facsimile: 717-225-4711

          To the Agent:          SunTrust Bank
                                 303 Peachtree Street, N. E.
                                 Atlanta, Georgia 30308
                                 Attention: Mark Flatin
                                 Telecopy Number: 804.782.5413

          To any other Lender:   the address set forth in the Administrative
                                 Questionnaire


                                       42



Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto. All such notices
and other communications shall, when transmitted by overnight delivery, or
faxed, be effective when delivered for overnight (next-day) delivery, or
transmitted in legible form by facsimile machine, respectively, or if mailed,
upon the third Business Day after the date deposited into the mail or if
delivered, upon delivery.

          (b) Any agreement of the Agent and the Lenders herein to receive
certain notices by telephone or facsimile is solely for the convenience and at
the request of the Borrower. The Agent and the Lenders shall be entitled to rely
on the authority of any Person purporting to be a Person authorized by the
Borrower to give such notice and the Agent and Lenders shall not have any
liability to the Borrower or other Person on account of any action taken or not
taken by the Agent or the Lenders in reliance upon such telephonic or facsimile
notice. The obligation of the Borrower to repay the Term Loan and all other
Obligations hereunder shall not be affected in any way or to any extent by any
failure of the Agent or the Lenders to receive written confirmation of any
telephonic or facsimile notice or the receipt by the Agent and the Lenders of a
confirmation which is at variance with the terms understood by the Agent and the
Lenders to be contained in any such telephonic or facsimile notice.

          SECTION 9.02 WAIVER; AMENDMENTS.

          (a) No failure or delay by the Agent or any Lender in exercising any
right or power hereunder or any other Loan Document, and no course of dealing
between the Borrower and the Agent or any Lender, shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right or power or
any abandonment or discontinuance of steps to enforce such right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power hereunder or thereunder. The rights and remedies of the Agent and
the Lenders hereunder and under the other Loan Documents are cumulative and are
not exclusive of any rights or remedies provided by law. No waiver of any
provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) of this Section 9.02, and then such
waiver or consent shall be effective only in the specific instance and for the
purpose for which given. Without limiting the generality of the foregoing, the
making of a Loan shall not be construed as a waiver of any Default or Event of
Default, regardless of whether the Agent or any Lender may have had notice or
knowledge of such Default or Event of Default at the time.

          (b) No amendment or waiver of any provision of this Agreement or the
other Loan Documents, nor consent to any departure by the Borrower therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Borrower and the Required Lenders or the Borrower and the Agent with the
consent of the Required Lenders and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given; provided, that no amendment or waiver shall: (i) increase the Commitment
of any Lender without the written consent of such Lender, (ii) reduce the
principal amount of any Loan or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written


                                       43



consent of each Lender affected thereby, (iii) postpone the date fixed for any
payment of any principal of, or interest on, any Loan or interest thereon or any
fees hereunder or reduce the amount of, waive or excuse any such payment, or
postpone the scheduled date for the termination or reduction of any Commitment,
without the written consent of each Lender affected thereby, (iv) change Section
2.15(b) or (c) in a manner that would alter the pro rata sharing of payments
required thereby, without the written consent of each Lender, (v) change any of
the provisions of this Section 9.02 or the definition of "Required Lenders" or
any other provision hereof specifying the number or percentage of Lenders which
are required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, without the consent of each
Lender; (vi) release any guarantor or limit the liability of any such guarantor
under any guaranty agreement, without the written consent of each Lender; (vii)
release all or substantially all collateral (if any) securing any of the
Obligations or agree to subordinate any Lien in such collateral to any other
creditor, without the written consent of each Lender; provided further, that no
such agreement shall amend, modify or otherwise affect the rights, duties or
obligations of the Agent or the Collateral Trustee without the prior written
consent of the such Person. Notwithstanding anything contained herein to the
contrary, this Agreement may be amended and restated without the consent of any
Lender (but with the consent of the Borrower and the Agent) if, upon giving
effect to such amendment and restatement, such Lender shall no longer be a party
to this Agreement (as so amended and restated), the Commitments of such Lender
shall have terminated (but such Lender shall continue to be entitled to the
benefits of Sections 2.12, 2.13, 2.14 and 9.03), such Lender shall have no other
commitment or other obligation hereunder and shall have been paid in full all
principal, interest and other amounts owing to it or accrued for its account
under this Agreement.

          SECTION 9.03 EXPENSES; INDEMNIFICATION.

          (a) The Borrower shall pay (i) all reasonable, out-of-pocket costs and
expenses of the Agent and its Affiliates, including, without limitation, the
reasonable fees, charges and disbursements of outside counsel and allocated cost
of inside counsel for the Agent and its Affiliates, in connection with the
preparation and administration of the Loan Documents and any amendments,
modifications or waivers of the Loan Documents (whether or not the transactions
contemplated in this Agreement or any other Loan Document shall be consummated),
and (ii) all out-of-pocket costs and expenses (including, without limitation,
the reasonable fees, charges and disbursements of outside counsel and the
allocated cost of inside counsel) incurred by the Agent or any Lender in
connection with the enforcement or protection of its rights in connection with
this Agreement, including its rights under this Section 9.03, or in connection
with the Term Loan, including all such out-of-pocket expenses incurred during
any workout, restructuring or negotiations in respect of the Term Loan.

          (b) The Borrower shall indemnify the Agent (and any sub-agent thereof)
and each Lender and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all costs, losses, liabilities, claims, damages and
related expenses (including the fees, charges and disbursements of any counsel
for any Indemnitee), incurred by any Indemnitee or asserted against any
Indemnitee by any third party or by the Borrower or any Affiliate thereof
arising out of, in connection with, or as a result of (i) the execution or
delivery of this Agreement, any other Loan


                                       44



Document or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto of their respective obligations hereunder or
thereunder or the consummation of any of the transactions contemplated hereby or
thereby, (ii) any Loan or the use or proposed use of the proceeds therefrom or
(iii) any actual or prospective claim, litigation, investigation or proceeding
relating to any of the foregoing, whether based on contract, tort or any other
theory, whether brought by a third party or by the Borrower or any Affiliate
thereof, and regardless of whether any Indemnitee is a party thereto, provided
that such indemnity shall not, as to any Indemnitee, be available to the extent
that such losses, claims, damages, liabilities or related expenses are
determined by a court of competent jurisdiction by final and nonappealable
judgment to have resulted from the gross negligence or willful misconduct of
such Indemnitee or any Related Party of such Indemnitee.

          (c) The Borrower shall pay, and hold the Agent and each of the Lenders
harmless from and against, any and all present and future stamp, documentary,
and other similar taxes with respect to this Agreement and any other Loan
Documents, any collateral described therein, or any payments due thereunder, and
save the Agent and each Lender harmless from and against any and all liabilities
with respect to or resulting from any delay or omission to pay such taxes.

          (d) To the extent that the Borrower fails to pay any amount required
to be paid to the Agent, each Lender severally agrees to pay to the Agent such
Lender's Pro Rata Share (determined as of the time that the unreimbursed expense
or indemnity payment is sought) of such unpaid amount; provided, that the
unreimbursed expense or indemnified payment, claim, damage, liability or related
expense, as the case may be, was incurred by or asserted against the Agent in
its capacity as such.

          (e) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to actual or direct damages) arising out of, in connection with or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
transactions contemplated therein, any Loan or the use of proceeds thereof.

          (f) All amounts due under this Section 9.03 shall be payable promptly
after written demand therefor.

          SECTION 9.04 SUCCESSORS AND ASSIGNS.

          (a) The provisions of this Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and assigns
permitted hereby, except that the Borrower may not assign or otherwise transfer
any of its rights or obligations hereunder without the prior written consent of
the Agent and each Lender, and no Lender may assign or otherwise transfer any of
its rights or obligations hereunder except (i) to an assignee in accordance with
the provisions of paragraph (b) of this Section, (ii) by way of participation in
accordance with the provisions of paragraph (d) of this Section or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of
paragraph (f) of this Section (and any other attempted assignment or transfer by
any party hereto shall be null and void). Nothing in this Agreement, expressed
or implied, shall be construed to confer upon any Person (other


                                       45



than the parties hereto, their respective successors and assigns permitted
hereby, Participants to the extent provided in paragraph (d) of this Section
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Agent and the Lenders) any legal or equitable right, remedy or claim under
or by reason of this Agreement.

          (b) Any Lender may at any time assign to one or more assignees all or
a portion of its rights and obligations under this Agreement (including all or a
portion of the Term Loan at the time owing to it); provided that any such
assignment shall be subject to the following conditions:

          (i) Minimum Amounts.

               (A) in the case of an assignment of the entire remaining amount
of the assigning Lender's portion of the Term Loan at the time owing to it or in
the case of an assignment to a Lender, an Affiliate of a Lender or an Approved
Fund, no minimum amount need be assigned; and

               (B) in any case not described in paragraph (b)(i)(A) of this
Section, the outstanding principal balance of the Term Loan of the assigning
Lender subject to each such assignment (determined as of the date the Assignment
and Acceptance with respect to such assignment is delivered to the Agent or, if
"Trade Date" is specified in the Assignment and Acceptance, as of the Trade
Date) shall not be less than $1,000,000, unless each of the Agent and, so long
as no Event of Default has occurred and is continuing, the Borrower otherwise
consents (each such consent not to be unreasonably withheld or delayed).

          (ii) Proportionate Amounts. Each partial assignment shall be made as
an assignment of a proportionate part of all the assigning Lender's rights and
obligations under this Agreement with respect to the Term Loan assigned.

          (iii) Required Consents. No consent shall be required for any
assignment except to the extent required by paragraph (b)(i)(B) of this Section
and, in addition:

               (A) the consent of the Borrower (such consent not to be
unreasonably withheld or delayed) shall be required unless (x) an Event of
Default has occurred and is continuing at the time of such assignment or (y)
such assignment is to a Lender, an Affiliate of a Lender or an Approved Fund;
and

               (B) the consent of the Agent (such consent not to be unreasonably
withheld or delayed) shall be required for assignments to a Person that is not a
Lender.

          (iv) Assignment and Acceptance. The parties to each assignment shall
deliver to the Agent (A) a duly executed Assignment and Acceptance, which shall
include a representation for the benefit of the Borrower that the assignee is a
Qualified Purchaser, (B) a processing and recordation fee of $3,500, (C) an
Administrative Questionnaire unless the assignee is already a Lender, and (D)
the documents required under Section 2.15 if such assignee is a Foreign Lender.


                                       46



          (v) No Assignment to Borrower. No such assignment shall be made to the
Borrower or any of the Borrower's Affiliates or Subsidiaries.

          (vi) No Assignment to Natural Persons; Qualified Purchaser. No such
assignment shall be made to a natural person or to a Person that is not a
Qualified Purchaser.

     Subject to acceptance and recording thereof by the Agent pursuant to
paragraph (c) of this Section 9.04, from and after the effective date specified
in each Assignment and Acceptance, the assignee thereunder shall be a party to
this Agreement and, to the extent of the interest assigned by such Assignment
and Acceptance, have the rights and obligations of a Lender under this
Agreement, and the assigning Lender thereunder shall, to the extent of the
interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto) but shall continue
to be entitled to the benefits of Sections 2.12, 2.13, 2.14 and 9.03 with
respect to facts and circumstances occurring prior to the effective date of such
assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this Agreement as a sale by such Lender of a participation in
such rights and obligations in accordance with paragraph (d) of this Section
9.04. If the consent of the Borrower to an assignment is required hereunder
(including a consent to an assignment which does not meet the minimum assignment
thresholds specified above), the Borrower shall be deemed to have given its
consent five Business Days after the date notice thereof has actually been
delivered by the assigning Lender (through the Agent) to the Borrower, unless
such consent is expressly refused by the Borrower prior to such fifth Business
Day.

          (c) The Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at one of its offices in Atlanta, Georgia a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, the principal amount of
the Term Loan owing to, each Lender pursuant to the terms hereof from time to
time (the "Register"). Information contained in the Register with respect to any
Lender shall be available for inspection by such Lender at any reasonable time
and from time to time upon reasonable prior notice; information contained in the
Register shall also be available for inspection by the Borrower at any
reasonable time and from time to time upon reasonable prior notice. In
establishing and maintaining the Register, the Agent shall serve as the
Borrower's agent solely for tax purposes and solely with respect to the actions
described in this Section, and the Borrower hereby agrees that, to the extent
SunTrust Bank serves in such capacity, SunTrust Bank and its officers,
directors, employees, agents, sub-agents and affiliates shall constitute
"Indemnitees."

          (d) Any Lender may at any time, without the consent of, or notice to,
the Borrower or the Agent sell participations to any Person (other than a
natural person, the Borrower or any of the Borrower's Affiliates or
Subsidiaries) (each, a "PARTICIPANT") in all or a portion of such Lender's
rights and/or obligations under this Agreement (including all or a portion of
the Term Loan owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other


                                       47



parties hereto for the performance of such obligations and (iii) the Borrower,
the Agent and the Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement.

          (e) Any agreement or instrument pursuant to which a Lender sells such
a participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver with respect to the following to the
extent affecting such Participant: (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or reduce the rate of interest thereon, or reduce any fees payable
hereunder, without the written consent of each Lender affected thereby, (iii)
postpone the date fixed for any payment of any principal of, or interest on, any
Loan or any fees hereunder or reduce the amount of, waive or excuse any such
payment, or postpone the scheduled date for the termination or reduction of any
Commitment, without the written consent of each Lender affected thereby, (iv)
change Section 2.15(b) or (c) in a manner that would alter the pro rata sharing
of payments required thereby, without the written consent of each Lender, (v)
change any of the provisions of this Section 9.04 or the definition of "Required
Lenders" or any other provision hereof specifying the number or percentage of
Lenders which are required to waive, amend or modify any rights hereunder or
make any determination or grant any consent hereunder, without the consent of
each Lender; (vi) release any guarantor or limit the liability of any such
guarantor under any guaranty agreement without the written consent of each
Lender except to the extent such release is expressly provided under the terms
of such guaranty agreement; or (vii) release all or substantially all collateral
(if any) securing any of the Obligations. Subject to paragraph (f) of this
Section 9.04, the Borrower agrees that each Participant shall be entitled to the
benefits of (and shall have the related obligations under) Sections 2.12, 2.13,
and 2.14 to the same extent as if it were a Lender and had acquired its interest
by assignment pursuant to paragraph (b) of this Section 9.04. To the extent
permitted by law, each Participant also shall be entitled to the benefits of
Section 9.07 as though it were a Lender, provided such Participant agrees to be
subject to Section 2.15 as though it were a Lender.

          (f) A Participant shall not be entitled to receive any greater payment
under Section 2.12 and Section 2.14 than the applicable Lender would have been
entitled to receive with respect to the participation sold to such Participant,
unless the sale of the participation to such Participant is made with the
Borrower's prior written consent. A Participant that would be a Foreign Lender
if it were a Lender shall not be entitled to the benefits of Section 2.14 unless
the Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the Borrower, to comply with Section
2.14(e) as though it were a Lender.

          (g) Any Lender may at any time pledge or assign a security interest in
all or any portion of its rights under this Agreement to secure obligations of
such Lender, including without limitation any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.


                                       48



          SECTION 9.05 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.

          (a) This Agreement and the other Loan Documents shall be construed in
accordance with and be governed by the law (without giving effect to the
conflict of law principles thereof) of the State of New York.

          (b) The Borrower hereby irrevocably and unconditionally submits, for
itself and its property, to the non-exclusive jurisdiction of any New York state
court or federal court sitting in the County of New York and any appellate court
from any thereof, in any action or proceeding arising out of or relating to this
Agreement or any other Loan Document or the transactions contemplated hereby or
thereby, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York state court or, to the extent permitted by applicable law, such Federal
court. Each of the parties hereto agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions by suit on the judgment or in any other manner provided by law.
Nothing in this Agreement or any other Loan Document shall affect any right that
the Agent and the Lenders may otherwise have to bring any action or proceeding
relating to this Agreement or any other Loan Document against the Borrower or
its properties in the courts of any jurisdiction.

          (c) The Borrower irrevocably and unconditionally waives any objection
which it may now or hereafter have to the laying of venue of any such suit,
action or proceeding described in paragraph (b) of this Section and brought in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto irrevocably waives, to the fullest extent permitted by applicable law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.

          (d) Each party to this Agreement irrevocably consents to the service
of process in the manner provided for notices in Section 9.01. Nothing in this
Agreement or in any other Loan Document will affect the right of any party
hereto to serve process in any other manner permitted by law.

          SECTION 9.06 WAIVER OF JURY TRIAL.

     EACH PARTY HERETO IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING
DIRECTLY OR INDIRECTLY ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT,
TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN


                                       49



DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.

          SECTION 9.07 RIGHT OF SETOFF.

     In addition to any rights now or hereafter granted under applicable law and
not by way of limitation of any such rights, the Agent and each Lender shall
have the right, at any time or from time to time upon the occurrence and during
the continuance of an Event of Default, without prior notice to the Borrower,
any such notice being expressly waived by the Borrower to the extent permitted
by applicable law, to set off and apply against all deposits (general or
special, time or demand, provisional or final) of the Borrower at any time held
or other obligations at any time owing by the Agent or any Lender to or for the
credit or the account of the Borrower against any and all Obligations held by
the Agent or any Lender, irrespective of whether the Agent or such Lender shall
have made demand hereunder and although such Obligations may be unmatured. The
Agent and Lenders agree promptly to notify the Borrower after any such set-off
and any application made by the Agent or any Lender; provided, that the failure
to give such notice shall not affect the validity of such set-off and
application.

          SECTION 9.08 COUNTERPARTS; INTEGRATION.

     This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts (including by telecopy), and
all of said counterparts taken together shall be deemed to constitute one and
the same instrument. This Agreement, the Fee Letter and the other Loan Documents
constitute the entire agreement among the parties hereto and thereto regarding
the subject matters hereof and thereof and supersede all prior agreements and
understandings, oral or written, regarding such subject matters.

          SECTION 9.09 SURVIVAL.

     All covenants, agreements, representations and warranties made by the
Borrower herein and in the certificates or other instruments delivered in
connection with or pursuant to this Agreement shall be considered to have been
relied upon by the other parties hereto and shall survive the execution and
delivery of this Agreement and the making of the Term Loan, regardless of any
investigation made by any such other party or on its behalf and notwithstanding
that the Agent or the Lenders may have had notice or knowledge of any Default or
incorrect representation or warranty at the time any credit is extended
hereunder, and shall continue in full force and effect as long as the principal
of or any accrued interest on any Loan or any fee or any other amount payable
under this Agreement is outstanding and unpaid. The provisions of Sections 2.11,
2.12, and 9.03 shall survive and remain in full force and effect regardless of
the consummation of the transactions contemplated hereby, the repayment of the
Term Loan, the expiration or termination of the Commitments or the termination
of this Agreement or any provision hereof. All representations and warranties
made herein, in the certificates, reports, notices, and other documents
delivered pursuant to this Agreement shall survive the execution and delivery of
this Agreement and the other Loan Documents, and the making of the Term Loan.


                                       50



          SECTION 9.10 SEVERABILITY.

     Any provision of this Agreement or any other Loan Document held to be
illegal, invalid or unenforceable in any jurisdiction, shall, as to such
jurisdiction, be ineffective to the extent of such illegality, invalidity or
unenforceability without affecting the legality, validity or enforceability of
the remaining provisions hereof or thereof; and the illegality, invalidity or
unenforceability of a particular provision in a particular jurisdiction shall
not invalidate or render unenforceable such provision in any other jurisdiction.

          SECTION 9.11 CONFIDENTIALITY.

     The Agent and the Lenders agree to take normal and reasonable precautions
to maintain the confidentiality of (i) any information designated in writing as
confidential and (ii) any and all information relating to the Installment Sale
Transaction and provided to it by the Borrower or any Subsidiary, except that
such information may be disclosed (i) to any Related Party of the Agent or the
Lenders, including without limitation accountants, legal counsel and other
advisors; provided that the Agent or the Lender disclosing such information
first advises the party receiving such information that it is confidential as
per the provisions of this Section and that the Agent or Lender shall be
responsible for compliance by the party receiving the information with the
provisions of this Section, (ii) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (iii) to the extent
requested by any regulatory agency or authority, (iv) to the extent that such
information becomes publicly available other than as a result of a breach of
this Section, or which becomes available to the Agent or a Lender or any Related
Party of the Agent or a Lender on a nonconfidential basis from a source other
than the Borrower, (v) in connection with the exercise of any remedy hereunder
or any suit, action or proceeding relating to this Agreement or the enforcement
of rights hereunder, and (ix) subject to provisions substantially similar to
this Section 9.11, to any actual or prospective assignee or Participant, or (vi)
with the consent of the Borrower. Any Person required to maintain the
confidentiality of any information as provided for in this Section shall be
considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
information as such Person would accord its own confidential information.

          SECTION 9.12 INTEREST RATE LIMITATION.

     Notwithstanding anything herein to the contrary, if at any time the
interest rate applicable to the Term Loan, together with all fees, charges and
other amounts which may be treated as interest on such Loan under applicable law
(collectively, the "CHARGES"), shall exceed the maximum lawful rate of interest
(the "MAXIMUM RATE") which may be contracted for, charged, taken, received or
reserved by the Agent and the Lenders in accordance with applicable law, the
rate of interest payable in respect of the Term Loan hereunder, together with
all Charges payable in respect thereof, shall be limited to the Maximum Rate
and, to the extent lawful, the interest and Charges that would have been payable
in respect of such Loan but were not payable as a result of the operation of
this Section shall be cumulated and the interest and Charges payable to the
Agent on behalf of the Lenders in respect of other periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the


                                       51



Federal Funds Rate to the date of repayment, shall have been received by the
Agent on behalf of the Lenders.

          SECTION 9.13 QUALIFIED PURCHASER.

     Each Lender severally represents that it is a Qualified Purchaser.

                  (remainder of page left intentionally blank)


                                       52



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

                                        GPW VIRGINIA TIMBERLANDS LLC


                                        By /s/ Thomas V. Bosley
                                           -------------------------------------
                                        Name:  Thomas V. Bosley
                                        Title: Vice President and
                                               General Manager


                                        SUNTRUST BANK


                                        By /s/ Mark A. Flatin
                                           -------------------------------------
                                        Name: Mark A. Flatin

                                        Title: Managing Director

                     [SIGNATURE PAGE TO TERM LOAN AGREEMENT]



                                  SCHEDULE 4.05

                           Closing Date Balance Sheet



                                       LLC
                                  BALANCE SHEET
                                     JAN-08

                                       
ASSETS
   Cash and cash equivalents              $   400,000
   Accounts receivable                             --
   Inventories                                     --
   Other current assets                     9,158,000
   Deferred transaction costs                 520,000
                                          -----------
      Current assets                       10,078,000
                                          -----------

   Net plant, equipment and timberlands            --
   Total other non-current assets          43,170,000
                                          -----------
      Total assets                        $53,248,000
                                          ===========
LIABILITIES
      Current liabilities                          --
                                          -----------
   Long-term debt                          36,694,500
   Other long term liabilities                     --
                                          -----------
      Total liabilities                    36,694,500
                                          -----------
SHAREHOLDER'S EQUITY
   Common shares                          $        --
   Capital in excess of par value          16,573,500
   Retained earnings                          (20,000)
                                          -----------
      Total liabilities and equity        $53,248,000
                                          ===========



Balance Sheet


                                  SCHEDULE 4.15

1.   The Credit Agreement, dated as of April 3, 2006, by and among P. H.
     Glatfelter Company, certain of its subsidiaries identified therein, the
     Guarantors (as defined therein), the Banks (as defined therein), PNC Bank,
     National Association, as agent for the Banks, PNC Capital Markets LLC and
     Credit Suisse Securities (USA) LLC, as joint arrangers and bookrunners, and
     Credit Suisse Securities (USA) LLC, as syndication agent, as amended from
     time to time.

2.   The Indenture, dated as of April 28, 2006 among P. H. Glatfelter Company as
     the Issuer of 7 1/8 % Senior Notes due 2016 and SunTrust Bank as Trustee,
     and the Subsidiary Guarantors (as defined therein), as amended from time to
     time.


                       Term Loan Agreement - Schedule 4.15



                                    EXHIBIT A

                                    TERM NOTE

                                   (SUNTRUST)

THIS TERM NOTE IS SUBJECT TO THE RESTRICTIONS ON TRANSFER CONTAINED IN SECTION
9.04 OF THE TERM LOAN AGREEMENT INCLUDING, WITHOUT LIMITATION, THE REQUIREMENT
THAT ANY TRANSFEREE BE A "QUALIFIED PURCHASER" AS DEFINED IN SECTION 2(A)(51) OF
THE INVESTMENT COMPANY ACT OF 1940

$36,694,500                                                         New York, NY
                                                                January 15, 2008

     FOR VALUE RECEIVED, the undersigned, GPW VIRGINIA TIMBERLANDS LLC, a
Delaware limited liability company (the "BORROWER"), hereby promises to pay to
SUNTRUST BANK (the "LENDER") or its registered assigns at the office of Lender
located at 919 East Main St., 22nd Floor, Richmond, Virginia 23219 or such other
location as to which the Lender shall have given written notice to the Borrower
(i) on the Maturity Date (as defined in that certain Term Loan Agreement, dated
as of January 15, 2008 among the Borrower, the lenders from time to time party
thereto, and SunTrust Bank, as Agent, as the same may be amended, restated,
supplemented or otherwise modified from time to time, the "TERM LOAN AGREEMENT")
the aggregate unpaid principal amount of the portion of the Term Loan (as
defined in the Term Loan Agreement) made by the Lender to the Borrower pursuant
to the Term Loan Agreement, and (ii) on each date specified in the Term Loan
Agreement, interest on the portion of the principal amount of the Term Loan
payable to such Lender, at the rate or rates per annum as provided in the Term
Loan Agreement, in each case in lawful money of the United States of America in
immediately available funds. In addition, should legal action or an
attomey-at-law be utilized to collect any amount due hereunder, the Borrower
further promises to pay all costs of collection, including the reasonable
attorneys' fees of the Lender.

     The Borrower promises to pay, on demand, Default Interest (as defined in
the Term Loan Agreement) on the terms and conditions set forth in the Term Loan
Agreement.

     This Note is issued in connection with, and is entitled to the benefits of,
the Term Loan Agreement which, among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain events, for
prepayment of the principal hereof prior to the maturity hereof and for the
amendment or waiver of certain provisions of the Term Loan Agreement, all upon
the terms and conditions therein specified. THIS NOTE SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK AND ANY
APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.



     IN WITNESS WHEREOF, Borrower has caused this Note to be executed and
delivered as of the date first above written.

                                        GPW VIRGINIA TIMBERLANDS LLC


                                        By:                               (SEAL)
                                            -----------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------


                                    EXHIBIT B

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR UNDER ANY SECURITIES LAW OF ANY STATE OF THE UNITED STATES OF
AMERICA AND, ACCORDINGLY, MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933 AND ANY
APPLICABLE STATE LAW, UNLESS PURSUANT TO AN EXEMPTION FROM REGISTRATION
THEREUNDER OR IN A TRANSACTION NOT SUBJECT TO REGISTRATION THEREUNDER.

                            PROMISSORY NOTE NO. [__]

$[__________]                                                       [__________]

     FOR VALUE RECEIVED, the undersigned, P. H. GLATFELTER COMPANY, a
Pennsylvania corporation (the "Issuer"), hereby promises to pay [__________]
(the "Payee"), or its registered assigns (the Payee and each such assignee is
referred to herein as the "Holder"), the principal amount of [__________]
($[__________]) plus accrued interest from the date of this Promissory Note, in
lawful money of the United States of America, at the place for payment provided
for herein on the terms and conditions set forth below.

                                    ARTICLE I

                           DEFINITIONS AND OTHER TERMS

     1.1 Definitions. As used in this Promissory Note, the following terms shall
have the following meanings:

          "Agreement" has the meaning specified in Section 2.1.

          "Business Day" means a day on which commercial banks and foreign
     exchange markets settle payments and are open for general business
     (including dealings in foreign exchange and foreign currency deposits) in
     New York City.

          "Buyer" has the meaning specified in Section 2.1.

          "Code" means the Internal Revenue Code of 1986, as amended from time
     to time.

          "Event of Default" has the meaning specified in Section 3.1.

          "Excluded Taxes" has the meaning specified in Section 2.4(d).



          "Foreign Holder" means any Holder that is organized under the laws of
     a jurisdiction other than that in which Issuer is located. For purposes of
     this definition, the United States of America, each State thereof and the
     District of Columbia shall be deemed to constitute a single jurisdiction.

          "GAAP" means United States generally accepted accounting principles
     consistently applied.

          "Governmental Authority", with respect to any Person, means any
     nation, any state or other political subdivision thereof and any entity
     exercising executive, legislative, judicial, regulatory or administrative
     functions of or pertaining to government, including any government
     authority, agency, department, board, commission or instrumentality of the
     United States, any state of the United States or any political subdivision
     thereof, and any tribunal or arbitrator(s) of competent jurisdiction, and
     in each case, having jurisdiction or authority over such Person.

          "Gross-Up Amount" has the meaning specified in Section 2.4(d).

          "Institutional Investor" means any bank, trust company, savings and
     loan association or other financial institution, any pension plan, any
     investment company, any insurance company, any broker or dealer, or any
     other similar financial institution or entity, regardless of legal form.

          "Interest Period" means (i) initially, the period commencing on the
     date hereof and ending on [__________] and (ii) thereafter, each period
     commencing on the last day of the immediately preceding Interest Period and
     ending on the [_____] day of the sixth consecutive month ending after the
     month in which such immediately preceding Interest Period ended. The
     determination of Interest Periods shall be subject to the following
     provisions:

               (i) if any Interest Period would otherwise expire on a day that
          is not a Business Day, such Interest Period shall expire on the
          immediately succeeding Business Day; provided, however, that if any
          Interest Period would otherwise expire on a day that is not a Business
          Day but is a day of the month after which no further Business Day
          occurs in such month, such Interest Period shall expire on the
          immediately preceding Business Day; and

               (ii) no Interest Period shall extend beyond the stated maturity
          date hereof.

          "Lenders" shall have the meaning assigned to such term in the Term
     Loan Agreement.


                                        2



          "Material Adverse Effect" means a material adverse effect on (i) the
     business, operations, affairs, financial condition, assets or properties of
     the Issuer, or (ii) the ability of the Issuer to perform its obligations
     under the Notes and the Agreement, or (iii) the validity or enforceability
     of the Notes or the Agreement.

          "Notes" has the meaning specified in Section 2.1.

          "Interest Rate" has the meaning specified in Section 2.2(a).

          "Person" means any natural person, corporation, limited liability
     company, trust, joint venture, association, company, partnership,
     Governmental Authority or other entity.

          "Promissory Note" means this promissory note issued by Issuer.

          "SEC" means the Securities and Exchange Commission or any governmental
     agencies substituted therefor.

          "Securities Act" means the Securities Exchange Act of 1934, as
     amended.

          "Similar Law" has the meaning specified in Section 5.2.

          "Taxes" has the meaning specified in Section 2.4(d).

          "Term Loan" shall mean the floating rate loan in the principal amount
     of $36,694,500 made pursuant to the Term Loan Agreement.

          "Term Loan Agreement" shall mean that certain Term Loan Agreement,
     dated as of the date hereof, by and among GPW Virginia Timberlands LLC, the
     Lenders from time to time party thereto, and SunTrust Bank, as agent.

     1.2 Interpretation. In this Promissory Note, except to the extent that the
context otherwise requires:

               (a) the Articles and Section headings are for convenience of
     reference only and shall not affect the interpretation of this Promissory
     Note;

               (b) unless otherwise specified, references to Articles, Sections,
     Schedules and clauses are references to Articles, Sections, Schedules and
     clauses of this Promissory Note;

               (c) references to any document or agreement, including this
     Promissory Note, shall be deemed to include references to such document or
     agreement as amended, supplemented, restated or replaced and in effect from
     time


                                       3


     to time in accordance with its terms and subject to compliance with the
     requirements, if any, set forth herein and therein;

               (d) references to any party to this Promissory Note or any other
     document or agreement or to any other Person shall include its permitted
     successors and assigns;

               (e) when used in this Promissory Note, the words "including",
     "includes" and "include" shall be deemed to be followed in each instance by
     the words "without limitation";

               (f) when used in this Promissory Note, the words "herein",
     "hereby", "hereunder", "hereof, "hereto", "hereinbefore", and
     "hereinafter", and words of similar import, shall refer to this Promissory
     Note in its entirety and not to any particular section, subsection,
     paragraph, sub-paragraph, clause or other subdivision of this Promissory
     Note; and

               (g) when used herein, the singular shall include the plural, the
     plural shall include the singular and the use of any gender shall include
     all genders, unless the context requires otherwise.

                                   ARTICLE II

                   PAYMENTS OF PRINCIPAL, PREMIUM AND INTEREST

     2.1 Payment of Principal. Except as otherwise provided herein, Issuer
agrees to pay the principal amount of this Promissory Note in full on
[__________]. This Promissory Note is one of the promissory notes in the
aggregate principal amount of $[__________] (the "Notes") issued by Issuer
pursuant to the [Note Purchase Agreement] dated as of January 15, 2008 (the
"Agreement"), between the Issuer and [______] (the "Buyer"), pursuant to which
Issuer sold the Notes to the Buyer.

     2.2 Payment of Interest.

          (a) General. Interest shall accrue on the unpaid principal amount of
this Promissory Note from the date of this Promissory Note to maturity (whether
by acceleration, notice of prepayment or otherwise) at the rate per annum equal
to [_____]% per annum (the "Interest Rate") and shall be payable on the last day
of each Interest Period.

          (b) Default Interest. Upon the occurrence and during the continuance
of any Event of Default, interest shall accrue and be payable by Issuer on the
unpaid principal amount hereof, together with any and all past due interest and
other past due amounts due hereunder, at the Interest Rate plus an additional
[_____]% per annum.


                                       4


     2.3 Optional Prepayments. For so long as any principal of, accrued interest
on, or any other amount due in respect of the Term Loan remains unpaid, Issuer
is not permitted to prepay the principal amount of this Promissory Note.

     2.4 Terms of Payment.

          (a) All payments under this Promissory Note shall be made without
defense, set-off or counterclaim to the Holder not later than 11:00 a.m. (New
York, New York time) on the date when due and shall be made in United States
dollars in the manner provided in clauses (b) and (c) below.

          (b) Subject to clause (c) below, payments of principal, premium, if
any, and interest becoming due and payable on this Promissory Note shall be made
at the principal office of Issuer in York, Pennsylvania. Issuer may at any time,
by notice to the Holder, change the place of payment of the Notes so long as
such place of payment shall be either the principal office of Issuer in York,
Pennsylvania or the principal office of a bank or trust company in New York, New
York.

          (c) So long as [_____] or its nominee shall be a Holder of this
Promissory Note, and notwithstanding anything contained in clause (b) above or
elsewhere herein to the contrary, Issuer will pay all sums due on this
Promissory Note for principal, premium, if any, and interest by the method and
at the address as the Holder shall from time to time specify to Issuer in
writing for such purpose, without the presentation or surrender of this
Promissory Note or the making of any notation hereon, except that upon written
request of Issuer made concurrently with or reasonably promptly after payment or
prepayment in full of this Promissory Note, the Holder shall surrender this
Promissory Note for cancellation, reasonably promptly after any such request, to
Issuer at its principal executive office or at the place of payment most
recently designated by Issuer pursuant to clause (b) above. Prior to any sale or
other disposition of this Promissory Note by the Holder or any nominee of the
Holder, the Holder will, at its election, either endorse hereon the amount of
principal paid hereon and the last date to which interest has been paid hereon
or surrender this Promissory Note to Issuer in exchange for a new Note.

          (d) (i) Any and all payments by Issuer under this Promissory Note
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on or measured by the
net income of the Holder, franchise taxes, branch profits taxes imposed by the
United States of America, and, in the case of a Foreign Holder, the amount of
any withholding obligation that would not have arisen but for the inability or
failure of such Foreign Holder to comply with the provisions of clause (iv)
below unless such withholding is imposed as a result of a change in law, tax
treaty or regulation occurring subsequent to the date on which such Foreign
Holder originally acquired this Promissory Note (all such excluded net income
taxes,


                                       5



franchise taxes, branch profits taxes, and withholding collectively referred to
as the "Excluded Taxes"; all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being collectively referred to
as "Taxes"). If Issuer shall be required by law to deduct any Taxes from or in
respect of any sum payable under this Promissory Note to the Holder, (A) the sum
so payable shall be increased by such amount (the "Gross-up Amount") as may be
necessary so that after making all required deductions (including deductions
with respect to Taxes owed by the Holder on the Gross-up Amount) the Holder
receives an amount equal to the sum it would have received had no such
deductions been made, (B) Issuer shall make such deductions, and (C) Issuer
shall pay the full amount deducted to the relevant taxation authority or other
authority in accordance with applicable law.

          (ii) Issuer will indemnify the Holder for the full amount of Taxes
(together with any Taxes or Excluded Taxes owed by the Holder applicable to the
Gross-up Amount payable under clause (i) above or on the indemnification
payments made by Issuer under this clause (ii), but without duplication
thereof), and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or such Excluded
Taxes were correctly or legally asserted, so as to compensate the Holder for any
loss, cost, expense or liability incurred as a consequence of any such Taxes.
The Holder claiming indemnification shall make written demand therefor no later
than one year after the earlier of (A) the date on which the Holder makes
payment of such Taxes or Excluded Taxes and (B) the date on which the
appropriate Governmental Authority makes written demand on the Holder for
payment of such Taxes or Excluded Taxes. Payment pursuant to such
indemnification shall be made within 10 days from the date the Holder makes
written demand therefor. Within 30 days after the date of Issuer's payment of
Taxes, Issuer will furnish to the Holder the original or a certified copy of a
receipt evidencing payment thereof.

          (iii) The obligations of Issuer contained in this Section shall
survive the payment in full of the principal of, premium, if any, and interest
hereunder.

          (iv) Any Foreign Holder shall deliver to Issuer, at the time or times
prescribed by applicable law or reasonably requested by Issuer, such properly
completed and executed documentation prescribed by applicable law as will permit
such payments to be made without withholding. Should a Holder be subject to
withholding tax because of the Holder's failure to comply with the provisions of
this clause (iv), Issuer shall take such steps (at the Holder's expense) as the
Holder shall reasonably request in writing to assist the Holder to recover such
tax.

          (e) All computations of interest and fees hereunder and under the
other Notes shall be made on the basis of a year of 360 days for the actual
number of days (including the first day but excluding the last day) occurring in
the period for which such interest or fees are payable (to the extent computed
on the basis of days elapsed).


                                       6



          (f) Each payment on this Promissory Note shall be accompanied by a
written statement of the Issuer setting forth in detail the portion of such
payment that constitutes interest, the portion of such payment that constitutes
a payment of principal, and the portion of such payment that represents any
other amount due hereunder.

     2.5 Denominations. This Promissory Note may be in the denomination of
$[__________] or any amount in excess thereof. At the option of the Holder, this
Promissory Note may be exchanged for a Note or Notes in any other denomination
or denominations permitted hereby and of a like aggregate principal amount and
tenor, upon surrender of this Promissory Note to be exchanged at the principal
office of Issuer. Whenever this Promissory Note is so surrendered for exchange,
Issuer shall issue and execute the Note or Notes which the Holder is entitled to
receive.

                                   ARTICLE III

                                EVENTS OF DEFAULT

     3.1 Default. The occurrence of any of the following events shall constitute
an event of default ("Event of Default") under this Promissory Note (whatever
the reason for such event and whether or not it shall be voluntary or
involuntary or be effected by operation of law or pursuant to any judgment,
decree, order, rule or regulation of any Governmental Authority):

               (a) Issuer shall fail to pay any principal of any Note, or Issuer
     shall fail to pay any interest on any Note or any other amount owing
     hereunder or under the Agreement within three Business Days after such
     interest or other amount becomes due in accordance with the terms hereof or
     thereof; or

               (b) any representation or warranty made at any time by the Issuer
     herein or in the Agreement, or in any certificate, other instrument or
     statement furnished pursuant to the provisions hereof or thereof, shall
     prove to have been false or misleading in any material respect as of the
     time it was made or furnished; or

               (c) Issuer shall default in the observance or performance of any
     covenant, condition or provision hereof or of the Agreement (other than
     those referred to in clauses (a) and (b) above) and such default shall
     continue unremedied for a period of 30 days after the earlier of (i) a
     responsible officer of Issuer obtaining actual knowledge of such default
     and (ii) Issuer receiving written notice of such default from the holder of
     this Promissory Note; or

               (d) Issuer (i) is generally not paying, or admits in writing its
     inability to pay, its debts as they become due, (ii) files, or consents by
     answer or otherwise to the filing against it of, a petition for relief or
     reorganization or


                                       7



     arrangement or any other petition in bankruptcy, for liquidation or to take
     advantage of any bankruptcy, insolvency, reorganization, moratorium or
     other similar law of any jurisdiction, (iii) makes an assignment for the
     benefit of its creditors, (iv) consents to the appointment of a custodian,
     receiver, trustee or other officer with similar powers with respect to it
     or with respect to any substantial part of its property, (v) is adjudicated
     as insolvent or to be liquidated, or (vi) takes any organizational action
     for the purpose of any of the foregoing; or

               (e) a court or Governmental Authority of competent jurisdiction
     enters an order appointing, without consent by the Issuer, a custodian,
     receiver, trustee or other officer with similar powers with respect to it
     or with respect to any substantial part of its property, or constituting an
     order for relief or approving a petition for relief or reorganization or
     any other petition in bankruptcy or for liquidation or to take advantage of
     any bankruptcy or insolvency law of any jurisdiction, or ordering the
     dissolution, winding-up or liquidation of the Issuer, or any such petition
     shall be filed against the Issuer and such petition shall not be dismissed
     within 60 days; or

               (f) Issuer is dissolved or liquidated or takes any organizational
     action for the purpose of dissolving or liquidating; or

               (g) (i) any person or group of persons (within the meaning of
     Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended)
     shall have acquired, after the date hereof, beneficial ownership of (within
     the meaning of Rule 13d-3 promulgated by the SEC under said Act) 20.00% or
     more of the voting capital stock of P. H. Glatfelter Company, or (ii)
     within a period of twelve (12) consecutive calendar months, individuals who
     were directors of the Issuer on the first day of such period (together with
     any new directors whose election by the board of directors of the Issuer or
     whose nomination for election by the shareholders of the Issuer was
     approved by a vote of a majority of the directors then still in office who
     were either directors as of the first day of such period or whose election
     or nomination for election was previously so approved) shall cease to
     constitute a majority of the board of directors of the Issuer.

     3.2 Remedies.

          (a) Upon the occurrence and during the continuation of an Event of
Default the Holder may, in its sole discretion, declare this Promissory Note,
including, without limitation, principal, premium, if any, accrued interest and
costs of collection (including, without limitation attorneys' fees and
disbursements if collected by or through an attorney at law or in bankruptcy,
receivership or other judicial proceedings), immediately due and payable,
without presentment, demand, protest or any other notice of any kind, all of
which are expressly waived.


                                       8



          (b) Upon the occurrence of an Event of Default described in Section
3.l(d), 3.1(e) or 3.1(f), this Promissory Note, including, without limitation,
principal, premium, if any, accrued interest and costs of collection (including,
without limitation, attorneys' fees if collected by or through an attorney at
law or in bankruptcy, receivership or other judicial proceedings), shall
automatically become immediately due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are expressly waived.

          (c) Upon the occurrence of an Event of Default and acceleration of
this Promissory Note as provided in Section 3.2(a) or (b), the Holder may pursue
any remedy available under this Promissory Note or available at law or in
equity, all of which shall be cumulative. The order and manner in which the
rights and remedies of the Holder may be exercised shall be determined by the
Holder in its sole discretion.

          (d) All payments with respect to this Promissory Note received by the
Holder after the occurrence of an Event of Default shall be applied first, to
the costs and expenses (including actual attorneys' fees and disbursements)
incurred by the Holder as a result of such Event of Default, second, to the
payment of premium, if any, and accrued and unpaid interest on this Promissory
Note, to and including the date of such application, third, to the payment of
the unpaid principal of this Promissory Note, and fourth, to the payment of all
other amounts then owing to the Holder under this Promissory Note. No
applications of the payments will cure any Event of Default or prevent
acceleration, or continued acceleration, of amounts payable under this
Promissory Note or prevent the exercise, or continued exercise, of rights or
remedies of the Holder hereunder or under applicable law.

                                   ARTICLE IV

                                    COVENANTS

     4.1 Annual Financial Statements. if Issuer (or any permitted successor to
Issuer) ceases to be a company subject to the reporting requirements of Section
13(a) or 15(d) of the Securities Act, then as soon as available and in any event
within 90 days after the end of each fiscal year of the Issuer, the Issuer shall
furnish, or cause to be furnished to the Holder, financial statements of the
Issuer consisting of a consolidated balance sheet as of the end of such fiscal
year, and related consolidated statement of income, consolidated retained
earnings and cash flows for the fiscal year then ended, all in reasonable detail
and setting forth in comparative form the financial statements as of the end of
and for the preceding fiscal year, and certified by independent certified public
accountants of nationally recognized standing. The certificate or report of
accountants shall be free of qualifications (other than any consistency
qualification that may result from a change in the method used to prepare the
financial statements as to which such accountants concur) and shall not indicate
the occurrence or existence of any event, condition or contingency which would
materially impair the prospect of payment or


                                       9



performance of any covenant, agreement or duty of Issuer under this Promissory
Note or the Note Purchase Agreement.

     4.2 Existence. The Issuer shall maintain its legal existence as a
corporation and its license or qualification and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary, except to the extent the
failure to do so would not reasonably be expected to result in a Material
Adverse Effect.

     4.3 Books and Records. The Issuer shall maintain and keep proper books of
record and account which enable the Issuer to issue financial statements in
accordance with GAAP and as otherwise required by applicable laws of any
Governmental Authority having jurisdiction over the Issuer, and in which full,
true and correct entries shall be made in all material respects of all its
dealings and business and financial affairs.

                                    ARTICLE V

                                  MISCELLANEOUS

     5.1 Usury. It is the intent of Issuer and the Holder not to violate any
federal or state law, rule or regulation pertaining either to usury or to the
contracting for or charging or collecting of interest, and Issuer and the Holder
agree that, should any provision of this Promissory Note or any act performed
hereunder violate any such law, rule or regulation, then the excess of interest
contracted for or charged or collected over the maximum lawful rate of interest
shall be applied to the outstanding principal indebtedness due to the Holder by
Issuer under this Promissory Note.

     5.2 Assignment. Subject to the following sentence, the Holder may assign,
sell, transfer or pledge this Promissory Note without the consent of Issuer, and
any reference herein to the Holder shall be treated as a reference to any such
assignee, purchaser, transferee or pledgee. Issuer may not assign or otherwise
transfer its obligations with respect to this Promissory Note without the prior
written consent of the Holder.

     5.3 Absolute Obligation. The obligation of Issuer to pay the principal
balance hereof to the Holder shall be absolute and unconditional, and Issuer
shall make such payment without abatement, diminution or deduction regardless of
any cause or circumstances whatsoever, including, without limitation, any
defense, setoff, recoupment or counterclaim which Issuer may have or assert
against the Holder or any other Person.

     5.4 Waiver. ISSUER WAIVES PRESENTMENT AND DEMAND FOR PAYMENT, NOTICE OF
DISHONOR, PROTEST AND NOTICE OF PROTEST OF THIS PROMISSORY NOTE, AND ALL OTHER
NOTICES IN CONNECTION WITH


                                       10



THE DELIVERY, ACCEPTANCE, PERFORMANCE, DEFAULT OR ENFORCEMENT OF THIS PROMISSORY
NOTE.

     5.5 Amendments.

          (a) This Promissory Note may be amended, and the observance of any
term hereof may be waived (either retroactively or prospectively), with (and
only with) the written consent of Issuer and the Holder.

          (b) Issuer will provide the Holder (irrespective of the amount of
Notes then owned by it) with sufficient information, sufficiently far in advance
of the date a decision is required, to enable the Holder to make an informed and
considered decision with respect to any proposed amendment, waiver or consent in
respect of any of the provisions of the Notes. Issuer will deliver executed or
true and correct copies of each amendment, waiver or consent effected pursuant
to the provisions of this Section 5.5 to the Holder promptly following the date
on which it is executed and delivered by, or receives the consent or approval
of, the applicable Holders of Notes.

          (c) Issuer will not directly or indirectly pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, or grant any security, to any Holder of Notes as consideration for or
as an inducement to the entering into by any such Holder of any waiver or
amendment of any of the terms and provisions of any Note unless such
remuneration is concurrently paid, or security is concurrently granted, on the
same terms, ratably to each Holder of Notes then outstanding even if such Holder
did not consent to such waiver or amendment.

          (d) No amendment or waiver of the terms of this Promissory Note will
extend to or affect any obligation, covenant, agreement or Event of Default not
expressly amended or waived or impair any right consequent thereon. No course of
dealing between Issuer and the Holder of any Note nor any delay in exercising
any rights under any Note shall operate as a waiver of any rights of the Holder.

     5.6 Reimbursement. Issuer hereby agrees to pay or reimburse the Holder for
all costs, expenses or losses incurred by the Holder in connection with the
collection or enforcement of the provisions hereof or of its rights in
connection with this Promissory Note (whether or not any formal action or
proceeding is commenced), including, but not limited to, the entire amount of
legal or collection fees and disbursements incurred by the Holder.

     5.7 Construction. Should any part or provision of this Promissory Note
require judicial interpretation, Issuer and the Holder agree that the court
interpreting such part or provision shall not apply a presumption that the terms
hereof shall be more strictly construed against one party by reason of the rule
of construction that a document is to be more strictly construed against the
party that itself or through its agent prepared the same,


                                       11



it being agreed that Issuer and the Holder have both participated in the
preparation of this Promissory Note.

     5.8 Severability. Any provision of this Promissory Note that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or enforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provisions in any other jurisdiction.

     5.9 No Release. The rights, powers and remedies provided to the Holder
herein are cumulative and not exclusive of any right, power or remedy provided
at law or in equity. Failure or forbearance of the Holder to exercise any right
hereunder or otherwise granted at law or equity shall not affect or release
Issuer from its liability hereunder and shall not constitute a waiver of such
right unless so stated by the Holder in writing and then only in the specific
instance and for the specific purpose given.

     5.10 Binding Effect. The Promissory Note shall inure to the benefit of the
Holder and its successors and assigns, and shall be binding upon Issuer, its
permitted successors and assigns.

     5.11 Governing Law. THIS PROMISSORY NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
ITS PRINCIPLES OR RULES OF CONFLICT OF LAWS (OTHER THAN GOL Section 5-1401 OR
ANY SUCCESSOR PROVISION).

     5.12 Consent to Jurisdiction. Issuer and, by its acceptance of this
Promissory Note, the Holder agree that any and all actions arising under or in
respect of this Promissory Note may be litigated in any federal or state court
of competent jurisdiction located in the State of New York. Each of Issuer and
the Holder irrevocably submits to the personal and non-exclusive jurisdiction of
such courts for itself and in respect of its property with respect to such
action. Issuer and the Holder each agree that venue would be proper in any of
such courts, and hereby waive any objection that any such court is an improper
or inconvenient forum for the resolution of any such action. Issuer and the
Holder further agree that the mailing by certified or registered mail, return
receipt requested, to the addresses specified for notice in the Agreement of any
process or summons required by any such court shall constitute valid and lawful
service of process against it, without the necessity for service by any other
means provided by statute or rule of court.

     5.13 Time. Time is of the essence under this Promissory Note.

     5.14 WAIVER OF JURY TRIAL. EACH OF THE ISSUER AND, BY ITS ACCEPTANCE OF
THIS PROMISSORY NOTE, THE HOLDER HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY AND ALL


                                       12



RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO
THIS PROMISSORY NOTE OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                            [signature page follows]


                                       13



     IN WITNESS WHEREOF, Issuer has executed this Promissory Note on
[__________].

                                        P. H. GLATFELTER COMPANY


                                        By:
                                            ------------------------------------
                                        Name:
                                        Title:



                                    EXHIBIT C

                                    [FORM OF]
                            ASSIGNMENT AND ACCEPTANCE

          Reference is made to the Term Loan Agreement, dated as of January 15,
2008 (as amended, supplemented or otherwise modified from time to time, the
"Term Loan Agreement"), among GPW VIRGINIA TIMBERLANDS LLC (the "Borrower"), the
several banks and other financial institutions or entities from time to time
parties thereto (the "Lenders"), and SUNTRUST BANK, as agent for the Lenders (in
such capacity, the "Agent"). Unless otherwise defined herein, terms defined in
the Term Loan Agreement and used herein shall have the meanings given to them in
the Term Loan Agreement.

          The Assignor identified on Schedule 1 hereto (the "Assignor") and the
Assignee identified on Schedule 1 hereto (the "Assignee") agree as follows:

     1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest described in Schedule 1 hereto
(the "Assigned Interest") in and to the Assignor's rights and obligations under
the Term Loan Agreement with respect to the Term Loan in the Term Loan Agreement
as are set forth on Schedule 1 hereto (individually, an "Assigned Loan";
collectively, the "Assigned Loans"), in a principal amount for each Assigned
Loan as set forth on Schedule 1 hereto.

     2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Term Loan Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Term Loan Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower or any obligor or the performance or
observance by the Borrower or any obligor of any of its obligations under the
Term Loan Agreement or any other Loan Document or any other instrument or
document furnished pursuant hereto or thereto; and (c) attaches any Notes held
by it evidencing the Assigned Loan and [(i)] requests that the Agent, upon
request by the Assignee, exchange the attached Term Notes, if any, for a new
Term Note or Term Notes payable to the Assignee [and (ii) if the Assignor has
retained any interest in an Assigned Loan, requests that the Agent exchange the
attached Term Notes, if any, for a new Term Note or Term Notes payable to the
Assignor, in each case] in amounts which reflect the assignment being made
hereby (and after giving effect to any other assignments which have become
effective on the Effective Date).



     3. The Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance including without limitation, the
requirement that it be a "qualified purchaser" as defined in Section 2(a)(51) of
the Investment Company Act of 1940; (b) confirms that it has received a copy of
the Term Loan Agreement and each other Loan Document which such Assignee has
requested, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Term Loan Agreement,
the other Loan Documents or any other instrument or document furnished pursuant
hereto or thereto; (d) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Term
Loan Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto as are delegated to the Agent by the terms
thereof, together with such powers as are incidental thereto; and (e) agrees
that it will be bound by the provisions of the Term Loan Agreement and will
perform in accordance with its terms all the obligations which by the terms of
the Term Loan Agreement are required to be performed by it as a Lender including
its obligations, if any, pursuant to Section 2.14 of the Term Loan Agreement.

     4. The effective date of this Assignment and Acceptance shall be the
Effective Date of Assignment described in Schedule 1 hereto (the "Effective
Date"). Following the execution of this Assignment and Acceptance, it will be
delivered to the Agent for acceptance by it and recording by the Agent pursuant
to the Term Loan Agreement, effective as of the Effective Date (which shall not,
unless otherwise agreed to by the Agent, be earlier than five Business Days
after the date of such acceptance and recording by the Agent).

     5. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments in respect of the Assigned Interest (including
payments of principal, interest, fees and other amounts) [to the Assignor for
amounts which have accrued to the Effective Date and to the Assignee for amounts
which have accrued subsequent to the Effective Date] [to the Assignee whether
such amounts have accrued prior to the Effective Date or accrue subsequent to
the Effective Date. The Assignor and the Assignee shall make all appropriate
adjustments in payments by the Agent for periods prior to the Effective Date or
with respect to the making of this assignment directly between themselves.]

     6. From and after the Effective Date, (a) the Assignee shall be a party to
the Term Loan Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance and the
Term Loan Agreement, relinquish its rights and be released from its obligations
under the Term Loan Agreement.

     7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.



          IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.



                                   Schedule 1
                          to Assignment and Acceptance

Name of Assignor:
                  ----------------------
Name of Assignee:
                  ----------------------
Effective Date of Assignment:
                              ----------



Principal Amount Assigned                                    Percentage Assigned
- -------------------------                                    -------------------
                                                          
$__________                                                         _____%


[Name of Assignee]                      [Name of Assignor]


- -------------------------------------   ----------------------------------------
Name:                                   Name:
Title:                                  Title:

Accepted:                               Consented to (if required pursuant
                                        to the Term Loan Agreement):

SUNTRUST BANK,                          GPW VIRGINIA TIMBERLANDS LLC
as Agent


- -------------------------------------   ----------------------------------------
Name:                                   Name:
Title:                                  Title:


                                        4

EX-10.3.(A)

                          UNITED STATES DISTRICT COURT
                      FOR THE EASTERN DISTRICT OF WISCONSIN

UNITED STATES OF AMERICA
and the STATE OF WISCONSIN

          Plaintiffs,                          CIVIL ACTION NO.

     v.

P. H. GLATFELTER COMPANY
and
WTM I COMPANY
(f/k/a Wisconsin Tissue Mills Inc.),

          Defendants.

                                 CONSENT DECREE
          FOR REMEDIAL DESIGN AND REMEDIAL ACTION AT OPERABLE UNIT 1 OF
                     THE LOWER FOX RIVER AND GREEN BAY SITE



                                TABLE OF CONTENTS

                                                                                                             
I.        BACKGROUND.........................................................................................        1
II.       JURISDICTION.......................................................................................        4
III.      PARTIES BOUND  ....................................................................................        4
IV.       DEFINITIONS........................................................................................        5
V.        GENERAL PROVISIONS.................................................................................       13
VI.       ESTABLISHMENT AND USE OF CERTAIN SITE-SPECIFIC ACCOUNTS ...........................................       15
VII.      PERFORMANCE OF THE RESPONSE WORK BY SETTLING DEFENDANTS............................................       19
VIII.     POST-REMEDY RESPONSE WORK AND REMEDY REVIEW........................................................       26
IX.       QUALITY ASSURANCE, SAMPLING, AND DATA ANALYSIS.....................................................       28
X.        ACCESS AND INSTITUTIONAL CONTROLS .................................................................       30
XI        REPORTING REQUIREMENTS.............................................................................       36
XII.      RESPONSE AGENCIES' APPROVAL OF PLANS AND OTHER SUBMISSIONS.........................................       40
XIII.     PROJECT COORDINATORS   ............................................................................       43
XIV.      CERTIFICATION OF COMPLETION........................................................................       44
XV.       EMERGENCY RESPONSE.................................................................................       47
XVI.      NATURAL RESOURCE RESTORATION EFFORTS ..............................................................       48
XVII.     PAYMENTS TO PLAINTIFFS.............................................................................       51
XVIII.    INDEMNIFICATION AND INSURANCE......................................................................       58
XIX.      FORCE MAJEURE EVENTS...............................................................................       61
XX.       DISPUTE RESOLUTION.................................................................................       63
XXI.      STIPULATED PENALTIES...............................................................................       68
XXII.     COVENANTS NOT TO SUE BY PLAINTIFFS ................................................................       75
XXIII.    COVENANTS BY SETTLING DEFENDANTS ..................................................................       81
XXIV.     CONSENT DECREE FUNDING LIMITATION AND SPECIAL RESERVATION OF RIGHTS ...............................       84
XXV.      EFFECT OF SETTLEMENT AND CONTRIBUTION PROTECTION...................................................       89
XXVI.     ACCESS TO INFORMATION..............................................................................       92
XXVII.    RETENTION OF RECORDS...............................................................................       94
XXVIII.   NOTICES AND SUBMISSIONS ...........................................................................       95
XXIX.     EFFECTIVE DATE.....................................................................................       98
XXX.      RETENTION OF JURISDICTION..........................................................................       98
XXXI.     APPENDICES.........................................................................................       99
XXXII.    COMMUNITY RELATIONS................................................................................       99
XXXIII.   MODIFICATIONS......................................................................................      100
XXXIV.    LODGING AND OPPORTUNITY FOR PUBLIC COMMENT.........................................................      100
XXXV.     SIGNATORIES/SERVICE................................................................................      101
XXXVI.    FINAL JUDGMENT.....................................................................................      102



                                       -i-



                               TABLE OF APPENDICES

Appendix A        Trustee Council Resolution relating to this Consent Decree

Appendix B        Appendix addressing Management of the Disbursement Special
                  Account

Appendix C        Appendix addressing Escrow Account Management

Appendix D        Form of Escrow Agreement

Appendix E        Appendix addressing Special Procedures for Restoration Work

Appendix F        Administrative Order on Consent between WTM I Company, EPA,
                  and WDNR, captioned In the matter of the Lower Fox River and
                  the Green Bay Site, Docket No. V-W-'03-C-745 (including the
                  Statement of Work for Remedial Design)

Appendix G        Map of Operable Unit 1

Appendix H        Record of Decision for Operable Units 1 and 2

Appendix I        Statement of Work for the Remedial Action

                                      -ii-



                                 CONSENT DECREE
          FOR REMEDIAL DESIGN AND REMEDIAL ACTION AT OPERABLE UNIT 1 OF
                     THE LOWER FOX RIVER AND GREEN BAY SITE

                                  I. BACKGROUND

         A.       The United States of America ("United States"), on behalf of
the Administrator of the United States Environmental Protection Agency ("EPA"),
and the State of Wisconsin (the "State"), on behalf of the Wisconsin Department
of Natural Resources ("WDNR"), filed a Complaint in this matter pursuant to
Sections 106 and 107 of the Comprehensive Environmental Response, Compensation,
and Liability Act ("CERCLA"), 42 U.S.C. Sections 9606 and 9607.

         B.       The Plaintiffs' Complaint seeks, inter alia: (i) reimbursement
of certain costs incurred by the United States and the State for response
actions at the Lower Fox River and Green Bay Site (the "Site," as defined below)
in Northeastern Wisconsin, together with accrued interest; and (ii) performance
of response work by the defendants at Operable Unit 1 ("OU1," as defined below)
of the Site consistent with the National Contingency Plan, 40 C.F.R. Part 300
(as amended) (the "NCP").

         C.       In accordance with the NCP and Section 121(f)(l)(F) of CERCLA,
42 U.S.C. Section 9621(f)(1)(F), the State was notified of negotiations with
potentially responsible parties regarding the implementation of the remedial
design and the remedial action for OU1. The State has been an active participant
in such negotiations and is a party to this Consent Decree.

         D.       In accordance with Section 122(j)(1) of CERCLA, 42 U.S.C.
Section 9622(j)(1), EPA has notified the appropriate natural resource trustees
(the "Trustees"), as represented by the Fox River/Green Bay Natural Resource
Trustee Council, of negotiations with potentially responsible parties regarding
the releases of hazardous substances that may have resulted in injuries to

                                        1



natural resources under Federal, State, and Tribal trusteeship at the Site. The
Trustees have participated in the negotiation of this Consent Decree, and
support this Consent Decree, as indicated by the Trustee Council Resolution
attached to this Consent Decree as Appendix A.

         E.       EPA, WDNR, and the Trustees are parties to several
Site-specific Memoranda of Agreement, as "Inter-Governmental Partners" sharing
a "mutual goal of remediating and/or responding to hazardous substances releases
and threats of releases to, and restoring injured and potentially injured
natural resources in, [the Site area]." The Inter-Governmental Partners'
founding Memorandum of Agreement recognized that WDNR would have "a leadership
role, in full partnership with EPA, in exercising response authority" at the
Site, and the Plaintiffs intend to continue that cooperative relationship as to
actions required under this Consent Decree.

         F.       The defendants that have entered into this Consent Decree
("Settling Defendants," as defined below) do not admit any liability to the
Plaintiffs, to the Trustees, or to any other party arising out of the
transactions or occurrences alleged in the Complaint, nor do they acknowledge
that the release or threatened release of hazardous substance(s) at or from the
Site constitutes an imminent or substantial endangerment to the public health or
welfare or the environment.

         G.       In response to a release or a substantial threat of a release
of a hazardous substance(s) at or from the Site, WDNR in 1998 commenced a
Remedial Investigation and Feasibility Study ("RI/FS") for the Site pursuant to
40 C.F.R. Section 300.430, with funding and technical assistance from EPA. In
December 2002, WDNR completed a Remedial Investigation ("RI") Report and a Final
Feasibility Study ("FS") for the Site.

         H.       Pursuant to Section 117 of CERCLA, 42 U.S.C. Section 9617,
notice of the completion of the FS and of the proposed plan for remedial action
was published in major local newspapers of general circulation in the Fox River
Valley. WDNR and EPA provided an opportunity for

                                        2



written and oral comments from the public on the proposed plan for remedial
action. A copy of the transcript of the public meeting is available to the
public as part of the administrative record upon which WDNR and EPA based the
selection of the response action.

         I.       The decision by WDNR and EPA on the remedial action to be
implemented at OU1 at the Site is embodied in a final Record of Decision
("ROD"), executed by WDNR and EPA in December 2002. The ROD includes an
explanation of significant differences between the final remedial action plan
and the proposed plan as well as a responsiveness summary to the public
comments. Notice of the final plan was published in accordance with Section
117(b) of CERCLA.

         J.       Based on the information presently available to EPA and WDNR,
EPA and WDNR believe that the Response Work (as defined below) will be properly
and promptly conducted by the Settling Defendants if conducted in accordance
with the requirements of this Consent Decree and its appendices.

         K.       Solely for the purposes of Section 113(j) of CERCLA, the
remedial action selected by the ROD and the Response Work to be performed by the
Settling Defendants shall constitute a response action taken or ordered by the
President.

         L.       The Parties recognize, and the Court by entering this Consent
Decree finds, that this Consent Decree has been negotiated by the Parties in
good faith and implementation of this Consent Decree will expedite the cleanup
of OU1 and will avoid prolonged and complicated litigation between the Parties,
and that this Consent Decree is fair, reasonable, and in the public interest.

         NOW, THEREFORE, it is hereby Ordered, Adjudged, and Decreed:

                                        3



                                II. JURISDICTION

         1.       This Court has jurisdiction over the subject matter of this
action pursuant to 28 U.S.C. Sections 1331 and 1345, and 42 U.S.C. Sections
9606, 9607, and 9613(b). This Court also has personal jurisdiction over the
Settling Defendants. Solely for the purposes of this Consent Decree and the
underlying Complaint, Settling Defendants waive all objections and defenses that
they may have to jurisdiction of the Court or to venue in this District.
Settling Defendants shall not challenge the terms of this Consent Decree or this
Court's jurisdiction to enter and enforce this Consent Decree.

                               III. PARTIES BOUND

         2.       This Consent Decree applies to and is binding upon the United
States and the State and upon Settling Defendants and their successors and
assigns. Any change in ownership or corporate status of a Settling Defendant
including, but not limited to, any transfer of assets or real or personal
property, shall in no way alter such Settling Defendant's responsibilities under
this Consent Decree.

         3.       Settling Defendants shall provide a copy of this Consent
Decree to each contractor hired to perform the Response Work required by this
Consent Decree and to each person representing any Settling Defendant with
respect to OU1 or the Response Work and shall condition all contracts entered
into hereunder upon performance of the Response Work in conformity with the
terms of this Consent Decree. Settling Defendants or their contractors shall
provide written notice of the Consent Decree to all subcontractors hired to
perform any portion of the Response Work required by this Consent Decree.
Settling Defendants shall nonetheless be responsible for ensuring that their
contractors and subcontractors perform the Response Work contemplated herein in
accordance with this Consent Decree. With regard to the activities

                                        4



undertaken pursuant to this Consent Decree, each contractor and subcontractor
shall be deemed to be in a contractual relationship with the Settling Defendants
within the meaning of Section 107(b)(3) of CERCLA, 42 U.S.C. Section 9607(b)(3).

                                 IV. DEFINITIONS

         4.       Unless otherwise expressly provided herein, terms used in this
Consent Decree which are defined in CERCLA or in regulations promulgated under
CERCLA shall have the meaning assigned to them in CERCLA or in such regulations.
Whenever terms listed below are used in this Consent Decree or in the appendices
attached hereto and incorporated hereunder, the following definitions shall
apply:

         "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Sections
9601-9675.

         "Consent Decree" shall mean this Decree and all appendices attached
hereto (listed in Section XXXI). In the event of conflict between this Decree
and any appendix, this Decree shall control.

         "Day" shall mean a calendar day unless expressly stated to be a working
day. "Working day" shall mean a day other than a Saturday, Sunday, or Federal
holiday. In computing any period of time under this Consent Decree, where the
last day would fall on a Saturday, Sunday, or Federal holiday, the period shall
run until the close of business of the next working day.

         "Date of Lodging" shall mean the day on which this Consent Decree is
lodged with the Court.

         "DOI" shall mean the United States Department of the Interior and any
successor departments or agencies of the United States.

                                        5



         "DOI Past Cost Payments" shall mean the payments to be made to the
DOI NRDAR Fund under Subparagraph 52.a.(ii) (Initial Payments to the United
States) of this Consent Decree to reimburse DOI for a portion of its past
natural resource damage assessment costs related to the Site.

         "DOJ" shall mean the United States Department of Justice and any
successor departments or agencies of the United States.

         "Effective Date" shall be the effective date of this Consent Decree as
provided by Section XXIX.

         "EPA" shall mean the United States Environmental Protection Agency and
any successor departments or agencies of the United States.

         "EPA Past Cost Payments" shall mean the payments to be made to the Fox
River Site Special Account within the EPA Hazardous Substance Superfund under
Subparagraph 52.a.(i) (Initial Payments to the United States) of this Consent
Decree to reimburse EPA for a portion of its past response costs related to the
Site.

         "Force Majeure Event," for purposes of this Consent Decree, shall mean
any event arising from causes beyond the control of the Settling Defendants, of
any entity controlled by Settling Defendants, or of Settling Defendants'
contractors or subcontractors, that delays or prevents the performance of any
obligation under this Consent Decree despite Settling Defendants' best efforts
to fulfill the obligation. The requirement that the Settling Defendants exercise
"best efforts to fulfill the obligation" includes using best efforts to
anticipate any potential Force Majeure Event and best efforts to address the
effects of any potential Force Majeure Event (i) as it is occurring and (ii)
following the potential Force Majeure Event, such that the delay is minimized to
the greatest extent possible.

                                        6



         "Fox River OU1 Disbursement Special Account" or the "Disbursement
Special Account" shall mean the disbursement special account established for OU1
by EPA pursuant to Section 122(b)(3) of CERCLA, 42 U.S.C. Section 9622(b)(3),
and this Consent Decree.

         "Fox River Site Special Account" shall mean the special account
established for the Site by EPA pursuant to Section 122(b)(3) of CERCLA, 42
U.S.C. Section 9622(b)(3).

         "Fox River OU1 Escrow Account" or the "Escrow Account" shall mean the
escrow account trust fund established for OU1 by the Settling Defendants
pursuant to this Consent Decree.

         "Institutional Controls" shall mean all response activities to
implement institutional controls requirements under the ROD.

         "Interest" shall mean interest at the rate specified for interest on
investments of the EPA Hazardous Substance Superfund established by 26 U.S.C.
Section 9507, compounded annually on October 1 of each year, in accordance with
42 U.S.C. Section 9607(a). The applicable rate of interest shall be the rate in
effect at the time the interest accrues. The rate of interest is subject to
change on October 1 of each year.

         "Interest Earned" shall mean interest earned on amounts in the
Disbursement Special Account, which shall be computed monthly at a rate based on
the annual return on investments of the Hazardous Substance Superfund. The
applicable rate of interest shall be the rate in effect at the time the interest
accrues.

         "July 2003 AOC" shall mean the Administrative Order on Consent between
WTM I Company, EPA, and WDNR, captioned In the matter of the Lower Fox River and
the Green Bay Site, Docket No. V-W-'03-C-745 (the "July 2003 AOC"). The July
2003 AOC is attached hereto as Appendix F.

                                        7



         "Long Term Monitoring" shall mean all response activities to implement
long term monitoring requirements under the ROD.

         "National Contingency Plan" or "NCP" shall mean the National Oil and
Hazardous Substances Pollution Contingency Plan promulgated pursuant to Section
105 of CERCLA, 42 U.S.C. Section 9605, codified at 40 C.F.R. Part 300, and any
amendments thereto.

         "NRD Commitment" shall mean the $3,000,000 committed to natural
resource restoration efforts under Paragraph 52 (Initial Payments to Plaintiffs)
and Paragraph 53 (Subsequent Payments for Natural Resource Restoration).

         "NRDAR Fund" shall mean DOI's Natural Resource Damage Assessment and
Restoration Fund.

         "Operation and Maintenance" or "O & M" shall mean all activities
required to maintain the effectiveness of the Remedial Action as required under
the Operation and Maintenance Plan approved or developed by the Response
Agencies pursuant to this Consent Decree and the Statements of Work.

         "Operable Unit 1" or "OU1" shall mean the Little Lake Butte des Morts
reach of the Lower Fox River, as delineated by the Record of Decision signed by
WDNR and EPA in December 2002. More specifically, OU1 is the portion of the
Lower Fox River (and the underlying River sediment) starting at the outlet of
Lake Winnebago at the Neenah Dam and the Menasha Dam downstream to the Upper
Appleton Dam, including sediment deposits A through H and POG. As so defined,
OU1 is depicted in Figure 7-9 of the December 2002 Final Feasibility Study for
the Site, a copy of which is attached hereto as Appendix G.

         "Paragraph" shall mean a portion of this Consent Decree identified by
an arabic numeral or an upper case letter.

                                        8



         "Parties" shall mean the United States, the State of Wisconsin, and the
Settling Defendants.

         "Performance Standards" shall mean the selected remedy requirements,
contingent remedy requirements, and cleanup standards for measuring the
achievement of the goals of the Remedial Action, as set forth in Sections
13.1,13.3.1, and 13.4 through 13.6 of the ROD and Section II of the SOW for
Remedial Action.

         "Plaintiffs" shall mean the United States and the State of Wisconsin.

         "Post-Remedy Institutional Controls Work" shall mean all response
activities to implement institutional controls requirements under the ROD and
the Institutional Controls Plan after Certification of Completion of Remedial
Action by EPA pursuant to Subparagraph 44.b.

         "Post-Remedy Monitoring" shall mean all response activities to
implement Long Term Monitoring requirements under the ROD and the Final
Operation and Maintenance Plan after Certification of Completion of Remedial
Action by EPA pursuant to Subparagraph 44.b.

         "RCRA" shall mean the Solid Waste Disposal Act, as amended, 42
U.S.C. Sections 6901 et seq. (also known as the Resource Conservation and
Recovery Act).

         "Record of Decision" or "ROD" shall mean the Record of Decision
relating to OU1 at the Site signed in December 2002 by the Deputy Administrator
of the Water Division of WDNR and by the Director of the Superfund Division of
EPA Region 5, and all attachments thereto. A copy of the ROD (excluding the ROD
Appendices) is attached as Appendix H.

         "Remedial Action" shall mean those activities (except for Operation and
Maintenance, Post-Remedy Institutional Controls Work, and Post-Remedy
Monitoring), to be undertaken by the Settling Defendants to implement the ROD
requirements for OU1, in accordance with the SOW, the final Remedial Design Work
Plan, the final Remedial Action Work Plan, and other

                                        9



plans approved by the Response Agencies. For the purpose of this Consent Decree,
Remedial Action shall not include any response action required solely under
Section XV (Emergency Response).

         "Remedial Action Work Plan" shall mean the document developed pursuant
to Paragraph 14 of this Consent Decree and approved by the Response Agencies,
and any amendments thereto.

         "Remedial Design" shall mean those activities to be undertaken by
Settling Defendant WTMI Company to conduct predesign investigations and to
develop the final plans and specifications for the Remedial Action for OU1
pursuant to the July 2003 AOC and the Remedial Design Work Plan.

         "Remedial Design Work Plan" shall mean the document described by
Paragraph 12 of this Consent Decree and approved by the Response Agencies, and
any amendments thereto.

         "Response Agencies" shall mean WDNR and EPA.

         "Response Work" shall mean all activities Settling Defendants are
required to perform under this Consent Decree, except those required by Section
XVI (Natural Resource Restoration Efforts) and Section XXVII (Retention of
Records).

         "Section" shall mean a portion of this Consent Decree identified by a
roman numeral.

         "Settling Defendants" shall mean P.H. Glatfelter Company and WTM I
Company.

         "Settling Defendants' Related Parties" shall mean: (i) Settling
Defendants' successors, but only to the extent that the alleged liability of
such person is based on the alleged liability of a Settling Defendant; (ii)
Settling Defendants' former or current officers, directors, employees, or
shareholders, but only to the extent that the alleged liability of such person
is based on acts

                                       10



and/or omissions which occurred in the scope of the person's employment or
capacity as an officer, director, employee, or shareholder of a Settling
Defendant.

         "Site" shall mean the Lower Fox River and Green Bay Site in
Northeastern Wisconsin.

         "Specified Future Response Costs" shall mean all costs, including, but
not limited to, direct and indirect costs, that the United States and the State
incur after July 1, 2003 in reviewing or developing plans, reports and other
items pursuant to the July 2003 AOC and this Consent Decree, in verifying the
Response Work, in implementing O&M, Institutional Controls, and Long Term
Monitoring requirements required under the ROD and the SOW, or in otherwise
implementing, overseeing, or enforcing this Consent Decree, including, but not
limited to, payroll costs, contractor costs, travel costs, laboratory costs, the
costs incurred pursuant to Paragraph 19 of Section VIII, Section X (including,
but not limited to, the cost of attorney time and any monies paid to secure
access and/or to secure or implement Institutional Controls including, but not
limited to, the amount of just compensation), Section XV, and Paragraph 90 of
Section XXII.

         "State" shall mean the State of Wisconsin.

         "State Past Cost Payments" shall mean the $10,000 payment to be made to
the State under Subparagraph 52.b (Initial Payments to the State) of this
Consent Decree to reimburse the State for a portion of its past response costs
related to the Site.

         "Statements of Work" or "SOW" shall mean: (i) the statement of work for
implementation of the Remedial Design, as set forth at Appendix F to this
Consent Decree, and any modifications made in accordance with the July 2003 AOC
and this Consent Decree; and/or (ii) the statement of work for implementation of
the Remedial Action, Institutional Controls,

                                       11



Long Term Monitoring, and Operation and Maintenance at the Site, as set forth in
Appendix I to this Consent Decree and any modifications made in accordance with
this Consent Decree.

         "Supervising Contractor" shall mean the principal contractor retained
by the Settling Defendants to supervise and direct the implementation of the
Response Work under this Consent Decree.

         "United States" shall mean the United States of America.

         "Unresolved DOI Past Costs" shall mean the unreimbursed natural
resource damage assessment costs that the United States has paid at or in
connection with the Site (or any portion of the Site) through July 1,2003.

         "Unresolved EPA Past Costs" shall mean the unreimbursed response costs,
including, but not limited to, direct and indirect costs, that the United States
has paid at or in connection with the Site (or any portion of the Site) through
July 1, 2003.

         "Unresolved State Past Costs" shall mean the unreimbursed response
costs, including, but not limited to, direct and indirect costs, that the State
has paid at or in connection with the Site (or any portion of the Site) through
July 1, 2003.

         "Waste Material" shall mean: (i) any "hazardous substance" under
Section 101(14) of CERCLA, 42 U.S.C.Section 9601(14); (ii) any pollutant or
contaminant under Section 101(33), 42 U.S.C.Section 9601(33); (iii) any "solid
waste" under Section 1004(27) of RCRA, 42 U.S.C. Section 6903(27); and (iv) any
"hazardous substance" under Wis. Stat. Section 292.01.

         "WDOJ" shall mean the Wisconsin Department of Justice and any successor
departments or agencies of the State.

         "WDNR" shall mean the Wisconsin Department of Natural Resources and any
successor departments or agencies of the State.

                                       12



                              V. GENERAL PROVISIONS

         5.       Objectives of the Parties. The objectives of the Parties in
entering into this Consent Decree are to protect public health and welfare and
the environment by the design and implementation of certain response actions at
OU1 by the Settling Defendants, to reimburse a portion of the EPA and State past
costs and to reimburse all Specified Future Response Costs, to provide partial
compensation for natural resource damages, and to resolve the claims of
Plaintiffs against Settling Defendants as provided in this Consent Decree.

         6.       Commitments by Settling Defendants.

                  a.       Settling Defendants shall finance and perform the
Response Work in accordance with this Consent Decree, the ROD, the SOW, and all
work plans and other plans, standards, specifications, and schedules set forth
herein or developed by Settling Defendants and approved by the Response Agencies
pursuant to this Consent Decree. Settling Defendants shall also reimburse EPA
and the State for a portion of their past response costs and shall reimburse EPA
and the State for future response costs, as provided by this Consent Decree.
Settling Defendants shall also provide partial compensation for natural resource
damages, as provided herein.

                  b.       Settling Defendants need not perform Response Work
under this Consent Decree unless: (i) the Disbursement Special Account and/or
the Escrow Account described by Section VI and Appendices B and C contain funds
to finance the work; or (ii) this Consent Decree specifically requires the
Settling Defendants to fund or to perform the work without reimbursement from,
or recourse to, the Disbursement Special Account and/or the Escrow Account.

                                       13



         7.       Compliance With Applicable Law. All activities undertaken by
Settling Defendants pursuant to this Consent Decree shall be performed in
accordance with the requirements of all applicable federal and state laws and
regulations. Settling Defendants must also comply with all applicable or
relevant and appropriate requirements of all Federal and state environmental
laws as set forth in the ROD and the SOW, unless the Response Agencies determine
that there are grounds for invoking a waiver under 40 C.F.R. Section
300.430(f)(l)(ii)(C). The activities conducted pursuant to this Consent Decree,
if approved by the Response Agencies, shall be considered to be necessary and
consistent with the NCP.

         8.       Permits.

                  a.       As provided in Section 121(e) of CERCLA and Section
300.400(e) of the NCP, no permit shall be required for any portion of the
Response Work conducted entirely on-site (i.e., within the areal extent of
contamination or in very close proximity to the contamination and necessary for
implementation of the Response Work). Where any portion of the Response Work
that is not on-site requires a federal or state permit or approval, Settling
Defendants shall submit timely and complete applications and take all other
actions necessary to obtain all such permits or approvals.

                  b.       The Settling Defendants may seek relief under the
provisions of Section XIX (Force Majeure Events) of this Consent Decree for any
delay in the performance of the Response Work resulting from a failure to
obtain, or a delay in obtaining, any permit required for the Response Work.

                  c.       This Consent Decree is not, and shall not be
construed to be, a permit issued pursuant to any federal or state statute or
regulation.

                                       14



         VI. ESTABLISHMENT AND USE OF CERTAIN SITE-SPECIFIC ACCOUNTS

         9.       Generally. As provided by this Section and Appendices B and C,
two separate Site-specific accounts - to be known as the Fox River OU1
Disbursement Special Account (the "Disbursement Special Account") and the Fox
River OU1 Escrow Account (the "Escrow Account") - shall be established and
managed to provide sources of funds for payment and reimbursement of particular
categories of Site-related response costs and natural resource restoration
costs, as specified by Paragraphs 10 and 11. The Escrow Account may be
established as several accounts or sub - accounts to address the different
sources and uses of the funds paid into the Escrow Account. The response costs
to be paid and reimbursed from the Disbursement Special Account and the Escrow
Account are expected to include, but will not be limited to, certain costs
incurred by the Settling Defendants that are defined herein as "Allowable RD/RA
Costs." The natural resource restoration costs to be paid and reimbursed from
the Escrow Account may include, but will not be limited to, certain costs
incurred by the Settling Defendants that are defined herein as "Allowable
Restoration Work Costs."

                  a.       Allowable RD/RA Costs. Solely for the purpose of this
Consent Decree, the term "Allowable RD/RA Costs" is defined as necessary
response costs incurred and paid by Settling Defendants for the Remedial Design
and the Remedial Action, excluding the following costs that shall not be
eligible for payment or reimbursement as Allowable RD/RA Costs:

                           (1)      any costs exceeding $2 million for the
                  contaminant delineation investigation and Remedial Design
                  components of the Response Work, as provided by Subparagraph
                  8.a of Appendix C;

                           (2)      response costs incurred or paid by the
                  Settling Defendants pursuant to Section XV (Emergency
                  Response);

                                       15



                           (3)      any other payments made by Settling
                  Defendants to the Plaintiffs pursuant to this Consent Decree,
                  including, but not limited to: (i) any direct payments to
                  Plaintiffs under Section XVII; and (ii) any interest,
                  stipulated penalties, or stipulated damages paid pursuant to
                  Section XXI;

                           (4)      attorneys' fees and costs;

                           (5)      costs of any response activities Settling
                  Defendants perform that are not required under, or approved by
                  the Response Agencies pursuant to this Consent Decree;

                           (6)      costs related to Settling Defendants'
                  litigation, settlement, development of potential contribution
                  claims or identification of defendants;

                           (7)      internal costs of Settling Defendants,
                  including but not limited to, salaries, travel, or in-kind
                  services, except for those costs that represent the work of
                  employees of Settling Defendants directly performing the
                  Remedial Design or the Remedial Action;

                           (8)      any costs incurred by Settling Defendants
                  prior to the Effective Date, except for: (i) Remedial Design
                  work approved by the Response Agencies; or (ii) other costs of
                  Response Work required by this Consent Decree after the Date
                  of Lodging; or

                           (9)      any costs incurred by Settling Defendants
                  pursuant to Section XX (Dispute Resolution).

                  b.       Allowable Restoration Work Costs. Solely for the
purpose of this Consent Decree, the term "Allowable Restoration Costs" is
defined as necessary restoration costs incurred and paid by Settling Defendants
for Approved Restoration Work (as defined by Paragraph 48),

                                       16



excluding the following costs that shall not be eligible for payment or
reimbursement as Allowable Restoration Work Costs:

                           (1)      any costs for work other than Approved
                  Restoration Work;

                           (2)      any costs exceeding the pre-approved cost
                  ceiling set by the Statement of Work for Approved Restoration
                  Work;

                           (3)      any other payments made by Settling
                  Defendants to the Plaintiffs pursuant to this Consent Decree,
                  including, but not limited to: (i) any direct payments to
                  Plaintiffs under Section XVII; and (ii) any interest,
                  stipulated penalties, or stipulated damages paid pursuant to
                  Section XXI;

                           (4)      attorneys' fees and costs;

                           (5)      costs of any restoration activities Settling
                  Defendants perform that are not required under, or approved by
                  the Plaintiffs pursuant to, this Consent Decree;

                           (6)      costs related to Settling Defendants'
                  litigation, settlement, development of potential contribution
                  claims or identification of defendants;

                           (7)      internal costs of Settling Defendants,
                  including but not limited to, salaries, travel, or in-kind
                  services, except for those costs that represent the work of
                  employees of Settling Defendants directly performing Approved
                  Restoration Work;

                           (8)      any costs incurred by Settling Defendants
                  prior to the Effective Date, except for Approved Restoration
                  Work completed pursuant to this Consent Decree; or

                                       17



                           (9)      any costs incurred by Settling Defendants
                  pursuant to Section XX (Dispute Resolution).

         10.      Establishment and Management of the Disbursement Special
Account. In accordance with the procedures and requirements established by the
December 2001 Consent Decree in the matter captioned United States and the State
of Wisconsin v. Appleton Papers Inc. and NCR Corporation. Case No. 0l-C-0816
(E.D. Wis.) (the "API/NCR Decree"), the Plaintiffs shall use their best efforts
to have $10 million available for funding response action projects under the
API/NCR Decree deposited in the Disbursement Special Account after the Effective
Date. EPA shall establish the Disbursement Special Account as a new special
account within the EPA Hazardous Substance Superfund. Subject to the terms and
conditions set forth in this Consent Decree, EPA agrees to make those funds in
the Disbursement Special Account, including Interest Earned on those funds in
the Special Account, available for disbursement to the Escrow Account as partial
reimbursement of certain Allowable RD/RA Costs. The Disbursement Special Account
shall be managed as set forth in Appendix B to this Consent Decree, which is
incorporated herein by reference

         11.      Establishment and Management of the Escrow Account. By no
later than March 31, 2004, the Settling Defendants shall establish and maintain
financial security in the form of the Escrow Account trust fund, from which
funds shall be disbursed for payment and reimbursement of particular categories
of Site-related response costs and natural resource restoration costs. The
Settling Defendants shall establish the Escrow Account with the funds required
to be paid pursuant to Section XVII (Payments) below. The Escrow Account shall
be managed as set forth in Appendix C to this Consent Decree, which is
incorporated herein by reference. The escrow agreement establishing the Escrow
Account shall be in substantially the

                                       18



form attached hereto as Appendix D and shall identify the manager for the Escrow
Account (the "Escrow Agent"). The Settling Defendants may establish the Escrow
Account (or an account or sub-account within the Escrow Account) as a Qualified
Settlement Fund (or "QSF") within the meaning of 468B-1 of the Treasury
Regulations.

          VII. PERFORMANCE OF THE RESPONSE WORK BY SETTLING DEFENDANTS

         12.      OU1 Remedial Design.

                  a.       Settling Defendant WTMI Company shall perform the
Remedial Design components of the Response Work (including predesign
investigations) in accordance with the July 2003 AOC. A copy of the July 2003
AOC is attached as Appendix F to this Consent Decree, is incorporated herein by
this reference, and all requirements under the July 2003 AOC are hereby made
enforceable requirements of this Consent Decree, but only as to Settling
Defendant WTM I Company.

                  b.       Settling Defendant WTM I Company shall submit the
following plans and reports to the Response Agencies pursuant to the July 2003
AOC and this Paragraph: (i) a Pre-Design Sampling Work Plan; (ii) a Remedial
Design Work Plan; (iii) a Basis of Design Report; (iv) a Preliminary (50%)
Design; (v) a Pre-Final (90%) Design; and (vi) a Final (100%) Design. Upon
approval by the Response Agencies, all submittals required by the July 2003 AOC
and this Paragraph 12 shall be incorporated into and become enforceable under
this Consent Decree.

                  c.       Settling Defendant WTM I Company shall provide
Settling Defendant P. H. Glatfelter Company with copies of the plans and reports
identified in the preceding Subparagraph contemporaneously with their submission
to the Response Agencies. Within 15 days of the date of submission, Settling
Defendant P. H. Glatfelter may submit written comments

                                       19



on the relevant plan or submission; provided, however, that nothing in this
Paragraph shall be construed as affording Settling Defendant P. H. Glatfelter
Company a right to invoke or participate in any dispute resolution process under
Section XX (Dispute Resolution) concerning any submittal under the July 2003
AOC.

         13.      Selection of Supervising Contractor.

                  a.       All Remedial Design components of the Response Work
to be performed by Settling Defendant WTMI Company pursuant to Paragraph 12 of
this Consent Decree shall be under the direction and supervision of WTM I
Company's Project Coordinator designated pursuant to the July 2003 AOC. All
other aspects of the Response Work to be performed by Settling Defendants
pursuant to Sections VII (Performance of the Response Work by Settling
Defendants), VIII (Post-Remedy Response Work and Remedy Review), IX (Quality
Assurance, Sampling and Data Analysis), and XV (Emergency Response) of this
Consent Decree shall be under the direction and supervision of the Settling
Defendants' Supervising Contractor, the selection of which shall be subject to
disapproval by the Response Agencies. Within 10 days after Settling Defendant
WTM I Company's submittal of the Pre-Final (90%) Design, Settling Defendants
shall notify the Response Agencies in writing of the name, title, and
qualifications of any contractor proposed to be the Supervising Contractor. The
Response Agencies will issue a notice of disapproval or an authorization to
proceed. If at any time thereafter, Settling Defendants propose to change a
Supervising Contractor, Settling Defendants shall give such notice to the
Response Agencies and must obtain an authorization to proceed from the Response
Agencies before the new Supervising Contractor performs, directs, or supervises
any Response Work under this Consent Decree.

                                       20



                  b.       If the Response Agencies disapprove a proposed
Supervising Contractor, the Response Agencies will notify Settling Defendants in
writing. Settling Defendants shall submit to the Response Agencies a list of
contractors, including the qualifications of each contractor, that would be
acceptable to them within 30 days of receipt of the Response Agencies'
disapproval of the contractor previously proposed. The Response Agencies will
provide written notice of the names of any contractors that they disapprove and
an authorization to proceed with respect to any of the other contractors.
Settling Defendants may select any contractor from that list that is not
disapproved and shall notify the Response Agencies of the name of the contractor
selected within 21 days of the Response Agencies' authorization to proceed.

                  c.       If the Response Agencies fail to provide written
notice of their authorization to proceed or disapproval as provided in this
Paragraph and this failure prevents the Settling Defendants from meeting one or
more deadlines in a plan approved by the Response Agencies pursuant to this
Consent Decree, Settling Defendants may seek relief under the provisions of
Section XIX (Force Majeure Events).

         14.      OU1 Remedial Action. Subject only to the funding limitations
of this Consent Decree and the special reservations of rights specified in
Section XXIV, the Settling Defendants shall perform all requirements under this
Paragraph 14 until the Performance Standards are achieved and for so long
thereafter as is otherwise required under this Consent Decree.

                  a.       The requirements under this Paragraph 14 shall be
performed by Settling Defendants with funding from the following sources:

                           (1)      To the extent such funds are available in
the Disbursement Special Account, the Settling Defendants shall be entitled to
seek disbursement from the Disbursement Special Account for reimbursement of
Allowable RD/RA Costs.

                                       21



                           (2)      To the extent such funds are available in
the Escrow Account and not earmarked or disbursed for other purposes under this
Consent Decree, the Settling Defendants shall be entitled to seek disbursements
from the Escrow Account for payment or reimbursement of Allowable RD/RA Costs.

                  b.       Within 90 days after the approval of the Final Design
submittal described by the Statement of Work appended to the July 2003 AOC, but
no earlier than 90 days after the Effective Date, the Settling Defendants shall
submit to the Response Agencies a work plan for the performance of the Remedial
Action (the "Remedial Action Work Plan"). The Remedial Action Work Plan shall
provide for construction and implementation of the remedy set forth in the ROD
such that the Performance Standards will be achieved, in accordance with this
Consent Decree, the ROD, the SOW, and the design plans and specifications
developed by Settling Defendant WTM I Company under Paragraph 12 and approved by
the Response Agencies. Upon its approval by the Response Agencies, the Remedial
Action Work Plan shall be incorporated into and become enforceable under this
Consent Decree.

                  c.       The Remedial Action Work Plan shall include the
following: (i) an updated schedule for implementing all Remedial Action tasks
identified in the final design submittal, incorporating any refinements to the
Final Project Schedule submitted under the July 2003 AOC and Paragraph 12; (ii)
any refinements to the Final Health and Safety Plan, the Final Contingency Plan,
the Final Sediment Removal Verification Plan, and the Capital and Operation and
Maintenance Cost Estimate submitted under the July 2003 AOC and Paragraph 12;
(iii) a Final Construction Quality Assurance Project Plan; (iv) an Institutional
Controls Plan; (v) a Final Operation and Maintenance Plan (including a plan for
Long Term Monitoring); (vi) a schedule for submitting any other Remedial Action
Plans; and (vii) the initial formulation of the Settling

                                       22



Defendants' Remedial Action Project Team (including, but not limited to, the
Supervising Contractor).

                  d.       Upon approval of the Remedial Action Work Plan by the
Response Agencies, Settling Defendants shall perform the activities required
under the Remedial Action Work Plan. The Settling Defendants shall submit to the
Response Agencies all plans, submittals, or other deliverables required under
the approved Remedial Action Work Plan in accordance with the approved schedule
for review and approval pursuant to Section XII (Response Agencies' Approval of
Plans and Other Submissions). Unless otherwise directed by the Response
Agencies, Settling Defendants shall not commence physical Remedial Action
activities at OU1 prior to approval of the Remedial Action Work Plan. Subject
only to the funding limitations of this Consent Decree and the special
reservations of rights specified in Section XXIV, the Settling Defendants shall
implement the Remedial Action as set forth in the approved Remedial Action Work
Plan until the Performance Standards are achieved.

                  e.       Notwithstanding the funding limitations of this
Consent Decree, after Certification of Completion of Remedial Action by EPA
pursuant to Subparagraph 44.b, the Settling Defendants shall continue to
implement the Institutional Controls Plan and the Final Operation and
Maintenance Plan for so long as required by those plans.

         15.      Modification of the SOW or Related Work Plans.

                  a.       Subject to Subparagraph 15.c below, if the Response
Agencies determine that modification to the work specified in the SOW and/or in
work plans developed pursuant to the SOW is necessary to achieve and maintain
the Performance Standards or to carry out and maintain the effectiveness of the
remedy set forth in the ROD, the Response Agencies may require that such
modification be incorporated in the SOW and/or such work plans; provided,

                                       23



however, that a modification may only be required pursuant to this Paragraph to
the extent that it is consistent with the scope of the remedy selected in the
ROD.

                  b.       For the purposes of this Paragraph 15 and Paragraph
44 only, the "scope of the remedy selected in the ROD" is, as described by
Sections 13.1 and 13.3 of the ROD:

(i) removal of sediment in OU1 with PCB concentrations greater than the 1 ppm
remedial action level ("RAL") or achieving a surface weighed average
concentration ("SWAC") of 0.25 ppm or less after removal of sediment; (ii)
dewatering of the sediment that is removed; (iii) treatment of the water
collected during the dewatering process; (iv) off-Site disposal of the removed
sediment after dewatering; (v) demobilization and site restoration; and (vi)
Institutional Controls and Long Term Monitoring. The "scope of the remedy
selected in the ROD" may also include partial capping or supplemental capping of
contaminated sediments in certain areas of OU1, if specified requirements are
met, as described by Sections 13.4 through 13.7 of the ROD.

                  c.       If Settling Defendants object to any modification
determined by the Response Agencies to be necessary pursuant to this Paragraph,
they may seek dispute resolution pursuant to Section XX (Dispute Resolution),
Paragraph 65 (record review). The SOW and/or related work plans shall be
modified in accordance with final resolution of the dispute.

                  d.       Subject only to the funding limitations of this
Consent Decree and the special reservations of rights specified in Section XXIV,
Settling Defendants shall implement any work required by any modifications
incorporated in the SOW and/or in work plans developed pursuant to the SOW in
accordance with this Paragraph.

                  e.       Nothing in this Paragraph shall be construed to limit
the Response Agencies' authority to require performance of further response
actions as otherwise provided in this Consent Decree.

                                       24



         16.      Settling Defendants acknowledge and agree that nothing in this
Consent Decree, the SOW, the Remedial Design Work Plan, or Remedial Action Work
Plan constitutes a warranty or representation of any kind by Plaintiffs that
compliance with the work requirements set forth in the SOW and the Work Plans
will achieve the Performance Standards.

         17.      Settling Defendants shall, prior to any off-Site shipment of
Waste Material from the Site to an out-of-state waste management facility,
provide written notification to the appropriate state environmental official in
the receiving facility's state and to the Response Agencies' Project
Coordinators of such shipment of Waste Material. However, this notification
requirement shall not apply to any off-Site shipments when the total volume of
all such shipments will not exceed 10 cubic yards.

                  a.       The Settling Defendants shall include in the written
notification the following information, where available: (i) the name and
location of the facility to which the Waste Material is to be shipped; (ii) the
type and quantity of the Waste Material to be shipped; (iii) the expected
schedule for the shipment of the Waste Material; and (iv) the method of
transportation. The Settling Defendants shall notify the state in which the
planned receiving facility is located of major changes in the shipment plan,
such as a decision to ship the Waste Material to another facility within the
same state, or to a facility in another state.

                  b.       The identity of the receiving facility and state will
be determined by the Settling Defendants following the award of the contract for
Remedial Action construction. The Settling Defendants shall provide the
information required by Subparagraph 17.a as soon as practicable after the award
of the contract and before the Waste Material is actually shipped.

                                       25



                VIII. POST-REMEDY RESPONSE WORK AND REMEDY REVIEW

         18.      O&M and Post-Remedy Institutional Controls. After
Certification of Completion of Remedial Action by EPA pursuant to Subparagraph
44.b, Settling Defendants shall perform O&M and Post-Remedy Institutional
Controls Work as required by the ROD, the Final Operation and Maintenance Plan,
and the Institutional Controls Plan. In the event that Settling Defendants fail
to perform O&M and Post-Remedy Institutional Controls Work as required by this
Paragraph, and EPA or, as appropriate, the State takes such action instead,
Settling Defendants shall reimburse EPA and the State for all costs of the
response action not inconsistent with the NCP pursuant to Paragraph 54 (Payment
of Specified Future Response Costs).

         19.      Periodic Remedy Review and Post-Remedy Monitoring. Settling
Defendants shall conduct any studies and investigations as requested by the
Response Agencies, in order to permit the Response Agencies to conduct reviews
of whether the Remedial Action is protective of human health and the environment
at least every five years as required by Section 121(c) of CERCLA and any
applicable regulations. Such studies and investigations shall include, but shall
not be limited to, Post-Remedy Monitoring after Certification of Completion of
Remedial Action by EPA pursuant to Subparagraph 44.b. In the event that Settling
Defendants fail to conduct such studies and investigations as required by this
Paragraph, and EPA or, as appropriate, the State takes such action instead,
Settling Defendants shall reimburse EPA and the State for all costs of the
response action not inconsistent with the NCP pursuant to Paragraph 54 (Payment
of Specified Future Response Costs).

                                       26



         20.      Further Response Actions.

                  a.       If the Response Agencies determine, at any time, that
the Remedial Action is not protective of human health and the environment, the
Response Agencies may select further response actions for OU1 in accordance with
the requirements of CERCLA and the NCP.

                  b.       Settling Defendants and, if required by Sections
113(k)(2) or 117 of CERCLA, the public, will be provided with an opportunity to
comment on any further response actions proposed by the Response Agencies as a
result of the review conducted pursuant to Section 121 (c) of CERCLA and to
submit written comments for the record during the comment period.

                  c.       Notwithstanding Paragraph F of Section I
(Background), Settling Defendants hereby agree and covenant that the Plaintiffs
shall not have to prove and that Settling Defendants shall not contest the
following facts with respect to OU1 in response to any administrative order or
in any judicial proceeding relating to any further response action the Response
Agencies select for OU1 to the extent that the reopener conditions in Paragraph
86 or Paragraph 87 (United States' reservations of liability based on unknown
conditions or new information) are satisfied:

         (i)      Each Settling Defendant is a person who at the time of
                  disposal of a hazardous substance owned or operated a facility
                  from which such hazardous substances were disposed of, and
                  from which there have been releases of hazardous substances
                  which caused the incurrence of response costs for OU1; and

         (ii)     Each Settling Defendant is a person who by contract,
                  agreement, or otherwise arranged for the disposal or treatment
                  of hazardous substances owned or possessed by the Settling
                  Defendant, by another party or entity, at a facility owned

                                       27



                  or operated by another party or entity and containing such
                  hazardous substances, from which there have been releases of
                  hazardous substances which caused the incurrence of response
                  costs for OU1.

                  d.       Except as provided by Subparagraph 20.c, nothing
herein shall constitute a waiver of any claim or defense by any Party with
respect to any such further response action.

               IX. QUALITY ASSURANCE, SAMPLING, AND DATA ANALYSIS

         21.      Settling Defendants shall use quality assurance, quality
control, and chain of custody procedures for all treatability, design,
compliance and monitoring samples in accordance with "EPA Requirements for
Quality Assurance Project Plans (QA/R5)" (EPA/240/B-01/003, March 2001),
"Guidance for Quality Assurance Project Plans (QA/G-5)" (EPA/600/R-98/018,
February 1998), and subsequent amendments to such guidelines upon notification
by the Response Agencies to Settling Defendants of such amendment. Amended
guidelines shall apply only to procedures conducted after such notification.
Prior to the commencement of any monitoring project under this Consent Decree,
Settling Defendants shall submit to the Response Agencies for approval a Quality
Assurance Project Plan ("QAPP") that is consistent with the SOW, the NCP and
applicable guidance documents. If relevant to the proceeding, the Parties agree
that validated sampling data generated in accordance with the QAPP(s) and
reviewed and approved by the Response Agencies shall be admissible as evidence,
without objection, in any proceeding under this Decree. Settling Defendants
shall ensure that the Response Agencies' personnel and their authorized
representatives are allowed access at reasonable times to all laboratories
utilized by Settling Defendants in implementing this Consent Decree. In
addition, Settling Defendants shall ensure that such laboratories shall analyze
all samples submitted by the Response Agencies pursuant to the QAPP for quality
assurance monitoring. Settling Defendants

                                       28



shall ensure that the laboratories they utilize for the analysis of samples
taken pursuant to this Decree perform all analyses according to accepted EPA
methods. Accepted EPA methods consist of those methods which are documented in
the "Contract Lab Program Statement of Work for Inorganic Analysis" and the
"Contract Lab Program Statement of Work for Organic Analysis," dated February
1988, and any amendments made thereto during the course of the implementation of
this Decree; however, upon approval by the Response Agencies, Settling
Defendants may use other analytical methods which are as stringent as or more
stringent than the CLP-approved methods. Settling Defendants shall ensure that
all laboratories they use for analysis of samples taken pursuant to this Consent
Decree participate in an EPA or EPA-equivalent QA/QC program. Settling
Defendants shall only use laboratories that have a documented Quality System
which complies with ANSI/ASQC E4-1994, "Specifications and Guidelines for
Quality Systems for Environmental Data Collection and Environmental Technology
Programs," (American National Standard, January 5, 1995), and "EPA Requirements
for Quality Management Plans (QA/R-2)," (EPA/240/B-01/002, March 2001) or
equivalent documentation as determined by the Response Agencies. The Response
Agencies may consider laboratories accredited under the National Environmental
Laboratory Accreditation Program ("NELAP") as meeting the Quality System
requirements. Settling Defendants shall ensure that all field methodologies
utilized in collecting samples for subsequent analysis pursuant to this Decree
will be conducted in accordance with the procedures set forth in the QAPP
approved by the Response Agencies.

         22.      Upon request, the Settling Defendants shall allow split or
duplicate samples to be taken by the Response Agencies or their authorized
representatives. Settling Defendants shall notify the Response Agencies not less
than 15 days in advance of any sample collection activity

                                       29



unless shorter notice is agreed to by the Response Agencies. In addition, the
Response Agencies shall have the right to take any additional samples that the
Response Agencies deem necessary. Upon request, the Response Agencies shall
allow the Settling Defendants to take split or duplicate samples of any samples
they take as part of the Plaintiffs' oversight of the Settling Defendants'
implementation of the Response Work.

         23.      Settling Defendants shall submit to the Response Agencies
copies of the results of all sampling and/or tests or other data obtained or
generated by or on behalf of Settling Defendants with respect to OU1 and/or the
implementation of this Consent Decree unless the Response Agencies agree
otherwise.

         24.      Notwithstanding any provision of this Consent Decree, the
United States and the State hereby retain all of their information gathering and
inspection authorities and rights, including enforcement actions related
thereto, under CERCLA, RCRA and any other applicable statutes or regulations.

                      X. ACCESS AND INSTITUTIONAL CONTROLS

         25.      If any property where access and/or land/water use
restrictions are needed to implement this Consent Decree is owned or controlled
by any of the Settling Defendants, such Settling Defendants shall:

                  a.       commencing on the date of lodging of this Consent
Decree, provide the Plaintiffs and their representatives, including the Response
Agencies and their contractors, with access at all reasonable times to such
property, for the purpose of conducting any activity related to this Consent
Decree including, but not limited to, the following activities:

                           (1)      monitoring the Response Work;

                           (2)      verifying any data or information submitted
         to the Plaintiffs;

                                       30



                           (3)      conducting investigations relating to
         contamination at or near the Site;

                           (4)      obtaining samples;

                           (5)      assessing the need for, planning, or
         implementing additional response actions at or near the Site;

                           (6)      implementing the Response Work pursuant to
         the conditions set forth in Paragraph 90 of this Consent Decree;

                           (7)      inspecting and copying records, operating
         logs, contracts, or other documents maintained or generated by Settling
         Defendants or their agents, consistent with Section XXVI (Access to
         Information);

                           (8)      assessing Settling Defendants' compliance
         with this Consent Decree; and

                           (9)      determining whether the Site or other
         property is being used in a manner that is prohibited or restricted, or
         that may need to be prohibited or restricted, by or pursuant to this
         Consent Decree;

                  b.       commencing on the date of lodging of this Consent
Decree, refrain from using the Site, or such other property, in any manner that
would interfere with or adversely affect the integrity or protectiveness of the
remedial measures to be implemented pursuant to this Consent Decree.

                  c.       if requested in writing by the Response Agencies,
execute and record in the appropriate County land records office, an easement,
running with the land, that: (i) grants a right of access for the purpose of
conducting any activity related to this Consent Decree including, but not
limited to, those activities listed in Paragraph 25.a of this Consent Decree,
and

                                       31



(ii) grants the right to enforce the land/water use restrictions listed in
Paragraph 25.b of this Consent Decree, or other restrictions that the Response
Agencies determine are necessary to implement, ensure non-interference with, or
ensure the protectiveness of the remedial measures to be performed pursuant to
this Consent Decree. Such Settling Defendants shall grant the access rights and
the rights to enforce the land/water use restrictions to: (i) the United States,
on behalf of EPA, and its representatives, (ii) the State, on behalf of WDNR,
and its representatives, (iii) the other Settling Defendants and their
representatives, and/or (iv) other appropriate grantees identified by the
Response Agencies. Such Settling Defendants shall, within 45 days after
receiving a written request from the Response Agencies, submit to the response
Agencies for review and approval with respect to such property:

         (i)      a draft easement that is enforceable under the laws of the
                  State of Wisconsin, free and clear of all prior liens and
                  encumbrances (except as approved by EPA), and acceptable under
                  the Attorney General's Title Regulations promulgated pursuant
                  to 40 U.S.C. Section 255; and

         (ii)     a current title commitment or report prepared in accordance
                  with the U.S. Department of Justice's Title Standards 2001
                  (the "Standards").

Within 15 days of EPA's approval and acceptance of the easement, such Settling
Defendants shall update the title search and, if it is determined that nothing
has occurred since the effective date of the commitment or report to affect the
title adversely, take the steps necessary to record the easement with the
appropriate County land records office. Within 30 days of recording the
easement, such Settling Defendants shall provide EPA with final title evidence
acceptable under the Standards, and a certified copy of the original recorded
easement showing the clerk's recording stamps.

                                       32



         26.      If any property where access and/or land/water use
restrictions are needed to implement this Consent Decree is owned or controlled
by persons other than any of the Settling Defendants, Settling Defendants shall
use best efforts to secure from such persons:

                  a.       an agreement to provide access thereto for Settling
Defendants, as well as for the Plaintiffs, on behalf of the response Agencies,
as well as their representatives (including contractors), for the purpose of
conducting any activity related to this Consent Decree including, but not
limited to, those activities listed in Paragraph 25.a of this Consent Decree;

                  b.       an agreement, enforceable by the Settling Defendants
and the Plaintiffs, to abide by the obligations and restrictions established by
Paragraph 25.b of this Consent Decree, or that are otherwise necessary to
implement, ensure non-interference with, or ensure the protectiveness of the
remedial measures to be performed pursuant to this Consent Decree; and

                  c.       if requested in writing by the Response Agencies, the
execution and recordation in the appropriate County land records office, of an
easement, running with the land, that: (i) grants a right of access for the
purpose of conducting any activity related to this Consent Decree including, but
not limited to, those activities listed in Paragraph 25.a of this Consent
Decree, and (ii) grants the right to enforce the land/water use restrictions
listed in Paragraph 25 .b of this Consent Decree, or other restrictions that the
Response Agencies determine are necessary to implement, ensure non-interference
with, or ensure the protectiveness of the remedial measures to be performed
pursuant to this Consent Decree. The access rights and/or rights to enforce
land/water use restrictions shall be granted to: (i) the United States, on
behalf of EPA, and its representatives, (ii) the State, on behalf of WDNR, and
its representatives, (iii) the other Settling Defendants and their
representatives, and/or (iv) other appropriate grantees. Settling

                                       33



Defendants shall, within 45 days after receiving a written request from the
Response Agencies, submit to the Response Agencies for review and approval with
respect to such property:

         (i)      a draft easement that is enforceable under the laws of the
                  State of Wisconsin, free and clear of all prior liens and
                  encumbrances (except as approved by the Response Agencies),
                  and acceptable under the Attorney General's Title Regulations
                  promulgated pursuant to 40 U.S.C. Section 255; and

         (ii)     a current title commitment or report prepared in accordance
                  with the U.S. Department of Justice's Title Standards 2001
                  (the "Standards").

Within 15 days of EPA's approval and acceptance of the easement, Settling
Defendants shall update the title search and, if it is determined that nothing
has occurred since the effective date of the commitment or report to affect the
title adversely, take the steps necessary to record the easement with the
appropriate County land records office. Within 30 days of the recording of the
easement, Settling Defendants shall provide EPA with final title evidence
acceptable under the Standards, and a certified copy of the original recorded
easement showing the clerk's recording stamps.

         27.      For purposes of Paragraph 26 of this Consent Decree, "best
efforts" includes the payment of reasonable sums of money in consideration of
access, access easements, land/water use restrictions, and/or restrictive
easements. If any access or land/water use restriction agreements required by
Paragraphs 26.a or 26.b of this Consent Decree are not obtained within 45 days
of the Effective Date of this Consent Decree, or if any access easements or
restrictive easements required by Paragraph 26.c of this Consent Decree are not
submitted to the Response Agencies in draft form within 45 days of receipt of a
written request by the Response Agencies, then Settling Defendants shall
promptly notify the United States in writing, and shall include in

                                       34



that notification a summary of the steps that Settling Defendants have taken to
attempt to comply with Paragraph 26 of this Consent Decree. The United States
and the State may, as they deem appropriate, assist Settling Defendants in
obtaining access or land/water use restrictions, either in the form of
contractual agreements or in the form of easements running with the land.
Settling Defendants shall reimburse the United States and the State, as
Specified Future Response Costs, for all costs incurred, direct or indirect, by
the United States or the State in obtaining such access and/or land/water use
restrictions including, but not limited to, the cost of attorney time and the
amount of monetary consideration paid or just compensation.

         28.      If any property where access and/or land/water use
restrictions are needed to implement this Consent Decree is owned or controlled
by the Plaintiffs, the Plaintiffs shall use best efforts to assist the Settling
Defendants in securing necessary access and/or land/water use restrictions.

         29.      If the Response Agencies determine that land/water use
restrictions in the form of state or local laws, regulations, ordinances or
other governmental controls are needed to implement the remedy selected in the
ROD, ensure the integrity and protectiveness thereof, or ensure non-interference
therewith, Settling Defendants shall cooperate with the Response Agencies'
efforts to secure such governmental controls.

         30.      Notwithstanding any provision of this Consent Decree, the
United States and the State retain all of their access authorities and rights,
as well as all of their rights to require land/water use restrictions, including
enforcement authorities related thereto, under CERCLA, RCRA and any other
applicable statute or regulations.

                                       35



                           XI. REPORTING REQUIREMENTS

         31.      Monthly RD/RA Progress Reports.

                  a.       In addition to any other requirement of this Consent
Decree, starting with the first month after the Date of Lodging, Settling
Defendants shall submit two copies of written Monthly RD/RA Progress Reports to
each of the Response Agencies that shall: (i) describe the actions which have
been taken toward achieving compliance with this Consent Decree during the
previous month; (ii) include a summary of all results of sampling and tests and
all other data received or generated by Settling Defendants or their contractors
or agents in the previous month; (iii) identify all work plans, plans and other
deliverables required by this Consent Decree completed and submitted during the
previous month; (iv) describe all actions, including, but not limited to, data
collection and implementation of work plans, which are scheduled for the next
month and provide other information relating to the progress of construction,
including, but not limited to, critical path diagrams, Gantt charts and Pert
charts; (v) include information regarding percentage of completion, unresolved
delays encountered or anticipated that may affect the future schedule for
implementation of the Response Work, and a description of efforts made to
mitigate those delays or anticipated delays; (vi) include any modifications to
the work plans or other schedules that Settling Defendants have proposed to the
Response Agencies or that have been approved by the Response Agencies; and (vii)
describe all activities undertaken in support of the Community Relations Plan
during the previous month and those to be undertaken in the next month. Settling
Defendants shall submit these progress reports to the Response Agencies by the
tenth day of every month following the Date of Lodging until Certification of
Completion of Remedial Action by EPA pursuant to Subparagraph 44.b. During
performance of the Remedial Design, the Monthly RD/RA Progress Reports shall
include all information required by

                                       36



Paragraph 38 of the July 2003 AOC and shall thereby satisfy the requirement to
submit a monthly progress report under the July 2003 AOC and this Consent
Decree. If requested by the Response Agencies, Settling Defendants shall also
provide briefings for the Response Agencies to discuss the progress of the
Response Work.

                  b.       The Settling Defendants shall notify the Response
Agencies of any change in the schedule described in the Monthly RD/RA Progress
Report for the performance of any activity, including, but not limited to, data
collection and implementation of work plans, no later than seven days prior to
the performance of the activity.

         32.      Quarterly Reports. Starting with the second quarter of 2004,
the Settling Defendants shall submit Quarterly Reports under this Paragraph to
assist the Plaintiffs in monitoring the funding and budgeting of the Response
Work and any Approved Restoration Work.

                  a.       The Settling Defendants shall submit Quarterly
Reports on a quarterly basis for so long as the Remedial Action continues under
this Consent Decree, until Certification of Completion of Remedial Action by EPA
pursuant to Subparagraph 44.b. For a given calendar year, the Report for the
first calendar quarter shall be submitted by no later than May 1 of that
calendar year, the Report for the second calendar quarter shall be submitted by
no later than August 1 of that calendar year, the Report for the third calendar
quarter shall be submitted by no later than November 1 of that calendar year,
and the Report for the fourth calendar quarter shall be submitted by no later
than February 1 of the next calendar year.

                  b.       Each Quarterly Report shall:

                           (1)      provide a complete and accurate written cost
                  summary of all Allowable RD/RA Costs submitted to the Escrow
                  Agent for payment from the

                                       37


                  Escrow Account during the reporting period, certified in
                  accordance with Subparagraph 32.c;

                           (2)      specify any amount requested as a periodic
                  disbursement from the Disbursement Special Account to the
                  Escrow Account pursuant to Paragraph 10 and Appendix B;

                           (3)      provide a complete and accurate written cost
                  summary of all Allowable Restoration Work Costs submitted to
                  the Escrow Agent for payment from the Escrow Account during
                  the reporting period, certified in accordance with
                  Subparagraph 32.c;

                           (4)      list and total all amounts requested and/or
                  disbursed during the reporting period as payments or
                  reimbursements from the Escrow Account pursuant to Paragraph
                  11 and Appendix C;

                           (5)      indicate the approximate balance of the
                  Escrow Account at the end of the reporting period;

                           (6)      summarize all Response Work and all Approved
                  Restoration Work funded and performed under the Consent Decree
                  during the reporting period; and

                           (7)      project whether the total balance remaining
                  in the Disbursement Special Account and the Escrow Account is
                  likely to be sufficient to fund the completion of the Remedial
                  Action, after making all other payments and reimbursements
                  from those Accounts that are required under the Consent
                  Decree.

                  c.       Each Quarterly Report shall contain the following
certification signed by the Chief Financial Officer of a Settling Defendant or
by an Independent Certified Public Accountant retained by the Settling
Defendants:

                                       38



         "To the best of my knowledge, after thorough investigation and review
         of Settling Defendants' documentation of unreimbursed costs incurred
         and paid for the work summarized in this report that was performed
         pursuant to the Consent Decree, I certify that the information
         contained in or accompanying this Quarterly Report is true, accurate,
         and complete. I am aware that there are significant penalties for
         knowingly submitting false information, including the possibility of
         fine and imprisonment."

Each Quarterly Report shall include a list of the cost documents that the
certifying individuals reviewed in support of the Quarterly Cost Summary Report.
Upon request by the Plaintiffs, Settling Defendants shall provide the Plaintiffs
any additional information that the Plaintiffs deem necessary for review of a
Quarterly Report.

                  d.       If the Plaintiffs find that a Quarterly Report
includes a mathematical error, an accounting error, costs that are not Allowable
Response Work Costs or Allowable Restoration Work Costs, costs that are
inadequately documented, or costs covered by a prior Quarterly Report, the
Plaintiffs will notify Settling Defendants and the Settling Defendants shall
cure the deficiency by submitting a revised Quarterly Report.

         33.      Release Reporting.

                  a.       Upon the occurrence of any event during performance
of the Response Work that Settling Defendants are required to report pursuant to
Section 103 of CERCLA or Section 304 of the Emergency Planning and Community
Right-to-Know Act ("EPCRA"), Settling Defendants shall within 24 hours of the
onset of such event orally notify the Response Agencies' Project Coordinators or
the Response Agencies' Alternate Project Coordinators (in the event of the
unavailability of the Project Coordinator). If neither the EPA Project
Coordinator nor the EPA Alternate Project Coordinator is available, oral
notification notice shall be given to the Emergency Response Section, Region 5,
United States Environmental Protection Agency.

                                       39



These reporting requirements are in addition to the reporting required by CERCLA
Section 103 or EPCRA Section 304.

                  b.       Within 20 days of the onset of such an event,
Settling Defendants shall furnish to Plaintiffs a written report, signed by the
Settling Defendants' Project Coordinator, setting forth the events which
occurred and the measures taken, and to be taken, in response thereto. Within 30
days of the conclusion of such an event, Settling Defendants shall submit a
report to Plaintiffs setting forth all actions taken in response thereto.

         34.      Submission and Certification of Reports.

                  a.       Settling Defendants shall submit two hard copies of
all plans, reports, and data required by the SOW, the Remedial Design Work Plan,
the Remedial Action Work Plan, or any other approved plans to each of the
Response Agencies in accordance with the schedules set forth in such plans. At
the same time, the Settling Defendants shall submit an additional copy to each
of the Response Agencies in electronic format.

                  b.       All reports and other documents submitted by Settling
Defendants to the Response Agencies (other than the monthly progress reports
referred to above) which purport to document Settling Defendants' compliance
with the terms of this Consent Decree shall be signed by an authorized
representative of the Settling Defendants, including but not limited to the
Settling Defendants' Project Coordinator.

         XII. RESPONSE AGENCIES' APPROVAL OF PLANS AND OTHER SUBMISSIONS

         35.      After review of any plan, report or other item which is
required to be submitted for approval by the Response Agencies pursuant to this
Consent Decree, the Response Agencies shall: (i) approve, in whole or in part,
the submission; (ii) approve the submission upon specified conditions; (iii)
modify the submission to cure the deficiencies; (iv) disapprove, in whole or in

                                       40



part, the submission, directing that the Settling Defendants modify the
submission; or (v) any combination of the above. However, the Response Agencies
shall not modify a submission without first providing Settling Defendants at
least one notice of deficiency and an opportunity to cure within 30 days, except
where to do so would cause serious disruption to the Response Work or where
previous submission(s) have been disapproved due to material defects and the
deficiencies in the submission under consideration indicate a bad faith lack of
effort to submit an acceptable deliverable.

         36.      In the event of approval, approval upon conditions, or
modification by the Response Agencies, pursuant to Paragraph 35(i), (ii), or
(iii), Settling Defendants shall proceed to take any action required by the
plan, report, or other item, as approved or modified by the Response Agencies
subject only to their right to invoke the Dispute Resolution procedures set
forth in Section XX (Dispute Resolution) with respect to the modifications or
conditions made by the Response Agencies. In the event that a submission has a
material defect and the Response Agencies modify the submission to cure the
deficiencies pursuant to Paragraph 35(i), the Response Agencies retain their
right to seek stipulated penalties, as provided in Section XXI (Stipulated
Penalties).

         37.      Resubmission of Plans.

                  a.       Upon receipt of a notice of disapproval pursuant to
Paragraph 35(iv), Settling Defendants shall, within 30 days or such longer time
as specified by the Response Agencies in such notice, correct the deficiencies
and resubmit the plan, report, or other item for approval. Any stipulated
penalties applicable to the submission, as provided in Section XXI, shall accrue
during the 30-day period or otherwise specified period but shall not be payable

                                       41



unless the resubmission is disapproved or modified due to a material defect as
provided in Paragraphs 38 and 39.

                  b.       Notwithstanding the receipt of a notice of
disapproval pursuant to Paragraph 35(iv), Settling Defendants shall proceed, at
the direction of the Response Agencies, to take any action required by any
non-deficient portion of the submission. Implementation of any non-deficient
portion of a submission shall not relieve Settling Defendants of any liability
for stipulated penalties under Section XXI (Stipulated Penalties).

         38.      In the event that a resubmitted plan, report or other item, or
portion thereof, is disapproved by the Response Agencies, the Response Agencies
may again require the Settling Defendants to correct the deficiencies, in
accordance with the preceding Paragraphs. The Response Agencies also retain the
right to modify or develop the plan, report or other item. Settling Defendants
shall implement any such plan, report, or item as modified or developed by the
Response Agencies, subject only to their right to invoke the procedures set
forth in Section XX (Dispute Resolution).

         39.      If upon resubmission, a plan, report, or item is disapproved
or modified by the Response Agencies due to a material defect, Settling
Defendants shall be deemed to have failed to submit such plan, report, or item
timely and adequately unless the Settling Defendants invoke the dispute
resolution procedures set forth in Section XX (Dispute Resolution) and the
response Agencies' action is overturned pursuant to that Section. The provisions
of Section XX (Dispute Resolution) and Section XXI (Stipulated Penalties) shall
govern the implementation of the Response Work and accrual and payment of any
stipulated penalties during Dispute Resolution. If the Response Agencies'
disapproval or modification is upheld, stipulated penalties shall accrue

                                       42



for such violation from the date on which the initial submission was originally
required, as provided in Section XXI.

         40.      All plans, reports, and other items required to be submitted
to the response Agencies under this Consent Decree shall, upon approval or
modification by the Response Agencies, be enforceable under this Consent Decree,
in the event the Response Agencies approve or modify a portion of a plan,
report, or other item required to be submitted to the Response Agencies under
this Consent Decree, the approved or modified portion shall be enforceable under
this Consent Decree.

                           XIII. PROJECT COORDINATORS

         41.      Within 10 days after Settling Defendant WTM I Company's
submittal of the Pre-Final (90%) Design, Settling Defendants, WDNR, and EPA will
notify each other, in writing, of the name, address and telephone number of
their respective designated Project Coordinators and Alternate Project
Coordinators. If a Project Coordinator or Alternate Project Coordinator
initially designated is changed, the identity of the successor will be given to
the other Parties at least 5 working days before the changes occur, unless
impracticable, but in no event later than the actual day the change is made. The
Settling Defendants' Project Coordinator shall be subject to disapproval by the
Response Agencies and shall have the technical expertise sufficient to
adequately oversee all aspects of the Response Work. The Settling Defendants'
Project Coordinator shall not be an attorney for any of the Settling Defendants
in this matter. He or she may assign other representatives, including other
contractors, to serve as a representative for oversight of performance of daily
operations during remedial activities at OU1.

         42.      Plaintiffs may designate other representatives, including, but
not limited to, EPA and WDNR employees, and federal and State contractors and
consultants, to observe and monitor

                                       43



the progress of any activity undertaken pursuant to this Consent Decree. EPA's
Project Coordinator and Alternate Project Coordinator shall have the authority
lawfully vested in a Remedial Project Manager ("RPM") and an On-Scene
Coordinator ("OSC") by the National Contingency Plan, 40 C.F.R. Part 300. In
addition, the Response Agencies' Project Coordinators or Alternate Project
Coordinators shall have authority, consistent with the National Contingency
Plan, to halt any Response Work required by this Consent Decree and to take any
necessary response action when s/he determines that conditions at the Site
constitute an emergency situation or may present an immediate threat to public
health or welfare or the environment due to release or threatened release of
Waste Material.

         43.      The Response Agencies' Project Coordinators and the Settling
Defendants' Project Coordinator will meet, at a minimum, on a monthly basis.

                        XIV. CERTIFICATION OF COMPLETION

         44.      Certification of Completion of the Remedial Action for OU1.

                  a.       Within 90 days after Settling Defendants conclude
that the Remedial Action has been fully performed such that the Performance
Standards have been achieved, Settling Defendants shall schedule and conduct a
pre-certification inspection to be attended by Settling Defendants and the
Response Agencies. If, after the pre-certification inspection, the Settling
Defendants still believe that the Remedial Action has been fully performed such
that the Performance Standards have been achieved, they shall submit a written
report to the Response Agencies requesting certification pursuant to Section XII
(Response Agencies' Approval of Plans and Other Submissions) within 60 days of
the inspection. In the report, a registered professional engineer and the
Settling Defendants' Project Coordinator shall state that the Remedial Action
has been completed in full satisfaction of the requirements of this Consent
Decree. The written

                                       44



report shall include as-built drawings signed and stamped by a professional
engineer. The report shall contain the following statement, signed by a
responsible corporate official of a Settling Defendant or the Settling
Defendants' Project Coordinator:

         To the best of my knowledge, after thorough investigation, I certify
         that the information contained in or accompanying this submission is
         true, accurate and complete. I am aware that there are significant
         penalties for submitting false information, including the possibility
         of fine and imprisonment for knowing violations.

If, after completion of the pre-certification inspection and receipt and review
of the written report, EPA, after reasonable opportunity to review and comment
by the State, determines that the Remedial Action or any portion thereof has not
been completed in accordance with this Consent Decree such that the Performance
Standards have not been achieved, EPA will notify Settling Defendants in writing
of the activities that must be undertaken by Settling Defendants pursuant to
this Consent Decree to complete the Remedial Action such that the Performance
Standards are achieved; provided, however, that EPA may only require Settling
Defendants to perform such activities pursuant to this Paragraph to the extent
that such activities are consistent with the "scope of the remedy selected in
the ROD," as that term is defined in Paragraph 15.b. EPA will set forth in the
notice a schedule for performance of such activities consistent with the Consent
Decree and the SOW or require the Settling Defendants to submit a schedule to
EPA for approval pursuant to Section XII (Response Agencies' Approval of Plans
and Other Submissions). Settling Defendants shall perform all activities
described in the notice in accordance with the specifications and schedules
established pursuant to this Paragraph, subject to their right to invoke the
dispute resolution procedures set forth in Section XX (Dispute Resolution).

                                       45



                  b.       If EPA concludes, based on the initial or any
subsequent report requesting Certification of Completion and after a reasonable
opportunity for review and comment by the State, that the Remedial Action has
been performed in accordance with this Consent Decree such that the Performance
Standards have been achieved, EPA will so certify in writing to Settling
Defendants. This certification shall constitute the Certification of Completion
of the Remedial Action for purposes of this Consent Decree, including, but not
limited to, Section XXII (Covenants Not to Sue by Plaintiffs). Except as
expressly provided by this Consent Decree, Certification of Completion of the
Remedial Action shall not affect Settling Defendants' obligations under this
Consent Decree.

         45.      Certification of Completion of the Response Work for OU1.

                  a.       Within 90 days after Settling Defendants conclude
that all phases of the Response Work (including O&M, Post-Remedy Institutional
Controls Work, and Post-Remedy Monitoring) have been fully performed, Settling
Defendants shall schedule and conduct a pre-certification inspection to be
attended by Settling Defendants and the Response Agencies. If, after the
pre-certification inspection, the Settling Defendants still believe that the
Response Work has been fully performed, Settling Defendants shall submit a
written report by a registered professional engineer stating that the Response
Work has been completed in full satisfaction of the requirements of this Consent
Decree. The report shall contain the following statement, signed by a
responsible corporate official of a Settling Defendant or the Settling
Defendants' Project Coordinator:

          To the best of my knowledge, after thorough investigation, I certify
          that the information contained in or accompanying this submission is
          true, accurate and complete. I am aware that there are significant
          penalties for submitting false information, including the possibility
          of fine and imprisonment for knowing violations.

                                       46



If, after review of the written report, EPA, after reasonable opportunity to
review and comment by the State, determines that any portion of the Response
Work has not been completed in accordance with this Consent Decree, EPA will
notify Settling Defendants in writing of the activities that must be undertaken
by Settling Defendants pursuant to this Consent Decree to complete the Response
Work; provided, however, that EPA may only require Settling Defendants to
perform such activities pursuant to this Paragraph to the extent that such
activities are consistent with the "scope of the remedy selected in the ROD," as
that term is defined in Paragraph 15.b. EPA will set forth in the notice a
schedule for performance of such activities consistent with the Consent Decree
and the SOW or require the Settling Defendants to submit a schedule to EPA for
approval pursuant to Section XII (Response Agencies' Approval of Plans and Other
Submissions). Settling Defendants shall perform all activities described in the
notice in accordance with the specifications and schedules established therein,
subject to their right to invoke the dispute resolution procedures set forth in
Section XX (Dispute Resolution).

                  b.       If EPA concludes, based on the initial or any
subsequent request for Certification of Completion by Settling Defendants and
after a reasonable opportunity for review and comment by the State, that the
Response Work has been performed in accordance with this Consent Decree, EPA
will so notify the Settling Defendants in writing.

                             XV. EMERGENCY RESPONSE

         46.      In the event of any action or occurrence during the
performance of the Response Work which causes or threatens a release of Waste
Material at or from OU1 that constitutes an emergency situation or may present
an immediate threat to public health or welfare or the environment, Settling
Defendants shall, subject to Paragraph 47, immediately take all appropriate
action to prevent, abate, or minimize such release or threat of release, and
shall immediately

                                       47



notify the Response Agencies' Project Coordinators, or, if a Response Agency
Project Coordinator is unavailable, the Response Agency's Alternate Project
Coordinator. If neither the EPA Project Coordinator nor the EPA Alternate
Project Coordinator is available, the Settling Defendants shall notify the EPA
Emergency Response Unit, Region 5. Settling Defendants shall take such actions
in consultation with the EPA's Project Coordinator or other available authorized
EPA officer and in accordance with all applicable provisions of the Health and
Safety Plans, the Contingency Plans, and any other applicable plans or documents
developed pursuant to the SOW. In the event that Settling Defendants fail to
take appropriate response action as required by this Section, and EPA or, as
appropriate, the State takes such action instead, Settling Defendants shall
reimburse EPA and the State for all costs of the response action not
inconsistent with the NCP pursuant to Paragraph 54 (Payment of Specified Future
Response Costs).

         47.      Nothing in the preceding Paragraph or in this Consent Decree
shall be deemed to limit any authority of the United States, or the State, to:
(i) take all appropriate action to protect human health and the environment or
to prevent, abate, respond to, or minimize an actual or threatened release of
Waste Material on, at, or from the Site, or (ii) direct or order such action, or
seek an order from the Court, to protect human health and the environment or to
prevent, abate, respond to, or minimize an actual or threatened release of Waste
Material at or from the Site, subject to Section XXII (Covenants Not to Sue by
Plaintiffs).

                    XVI. NATURAL RESOURCE RESTORATION EFFORTS

         48.      Settling Defendants' Performance of Approved Restoration Work.
As provided by the following Subparagraphs, the Settling Defendants may propose
to the Plaintiffs or the Plaintiffs may propose to the Settling Defendants that
the Settling Defendants perform certain

                                       48



natural resource restoration work under this Consent Decree, with the costs to
be paid or reimbursed from the Escrow Account.

                  a.       Any restoration work that the Parties agree will be
performed by one or both of the Settling Defendants under this Paragraph shall
be performed in accordance with a written Project Implementation Plan, jointly
approved by the Plaintiffs and by the other Trustees, as represented by the
Trustee Council ("Approved Restoration Work"). The Project Implementation Plan
shall: (i) describe the restoration work to be performed by one or both of the
Settling Defendants; (ii) establish a schedule for performance of the work; and
(iii) establish a project budget and a pre-approved cost ceiling for the work.
The Project Implementation Plan(including the project budget and the
pre-approved cost ceiling) may be revised during the course of the work by a
written amendment approved by the Parties to this Consent Decree and by the
other Trustees.

                  b.       All Approved Restoration Work shall be consistent
with the Trustees' Joint Restoration Plan and Environmental Assessment for the
Lower Fox River and Green Bay(the "Restoration Plan").

                  c.       All of the Settling Defendants' Allowable Restoration
Work Costs (as defined by Subparagraph 9.b) for Approved Restoration Work shall
be paid or reimbursed from the Escrow Account in accordance with Paragraph 11 of
this Consent Decree and Appendix C. Dispute resolution provisions and force
majeure provisions for Approved Restoration Work are set forth in Appendix E,
which is incorporated herein by reference.

                  d.       As provided by Paragraph 32, each Quarterly Report
submitted to the Plaintiffs under this Consent Decree shall include, among other
things, a complete and accurate written cost summary of all Allowable
Restoration Work Costs for the reporting period, and a

                                       49



summary of all Approved Restoration Work funded and performed under this
Paragraph during the reporting period.

                  e.       Within 60 days after completing all Approved
Restoration Work under a particular Project Implementation Plan, the Settling
Defendants shall submit a Final Project Report to DOI and WDNR summarizing: (i)
all Approved Restoration Work performed under the Plan; and (ii) the total
Allowable Restoration Work Costs for the Approved Restoration Work performed
under the Plan. DOI and WDNR shall in turn provide the other Trustees copies of
each Final Project Report.

         49.      Trustee-Sponsored Natural Resource Restoration Efforts.

                  a.       All funds paid and disbursed to a Site-specific
sub-account within the NRDAR Fund under Paragraph 53 shall be managed by DOI for
the joint benefit and use of the Trustees to pay for Trustee-sponsored natural
resource restoration efforts in accordance with the Restoration Plan. Consistent
with the Restoration Plan, all such funds shall be applied toward the costs of
restoration, rehabilitation, or replacement of injured natural resources at the
Site, and/or acquisition of equivalent resources, including but not limited to
any administrative costs and expenses necessary for, and incidental to,
restoration, rehabilitation, replacement, and/or acquisition of equivalent
resources planning, and any restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources undertaken.

                  b.       Decisions regarding any dedication or expenditure of
funds under this Paragraph shall be made by the Trustees, acting through the
Trustee Council. Settling Defendants shall not be entitled to dispute - under
Section XX (Dispute Resolution) or in another forum or proceeding - any decision
relating to funds or restoration efforts under this Paragraph.

                                       50



                                 XVII. PAYMENTS

         50.      Payments Into the Escrow Account.

                  a.       Timing and Amount of Payments. Each Settling
Defendant shall pay a total of $26,250,000 into the Escrow Account in accordance
with the following schedule: (i) each Settling Defendant shall deposit
$10,500,000 into the Escrow Account by no later than March 31, 2004; and (ii)
each Settling Defendant shall deposit an additional $15,750,000 into the Escrow
Account by no later than June 30, 2004. The payment requirements of this
Paragraph are several obligations only, not joint obligations.

                  b.       Nature of the Payments. Each Settling Defendant's
payment under this Paragraph includes the following: (i) $25,000,000 to fund the
Remedial Action; and (ii) $1,250,000 to fund a portion of the NRD Commitment.

         51.      Disbursements from the Escrow Account

                  a.       As provided by this Consent Decree and Appendix C,
certain funds from the Escrow Account shall be disbursed to the United States
and the State as payment of sums due under this Consent Decree, and certain
other funds from Escrow Account shall be disbursed to the Settling Defendants
for payment or reimbursement of Allowable RD/RA Costs and/or Allowable
Restoration Work Costs.

                  b.       It is anticipated that certain funds may be disbursed
from the Escrow Account for payment of certain Allowable RD/RA costs and/or
Allowable Restoration Work Costs even before the Effective Date. In the event
the Plaintiffs withdraw or withhold consent to this Consent Decree before entry,
or the Court declines to enter the Consent Decree, the unexpended balance of the
Escrow Account shall be disbursed to the Settling Defendants at their request.

                                       51



         52.      Initial Payments to Plaintiffs.

                  a.       Initial Payments to the United States. Within 30 days
after the Date of Lodging, the Settling Defendants shall pay a total of
$1,040,000 directly to the United States, with each Settling Defendant being
responsible for paying one-half of that total amount($520,000 each). The
$1,040,000 paid to the United States under this Subparagraph shall be applied as
follows: (i) $740,000 shall be directed to the Fox River Site Special Account
within the EPA Hazardous Substance Superfund, as the EPA Past Cost Payments, and
shall be retained and used to conduct or finance response actions at or in
connection with the Site, or transferred by EPA to the EPA Hazardous Substance
Superfund; and (ii) $300,000 shall be directed to the DOI NRDAR Fund, as the DOI
Past Cost Payments.

                  b.       State Past Cost Payments. Within 30 days after the
Date of Lodging, the Settling Defendants shall pay a total of $10,000 directly
to the State, as the State Past Cost Payments, with each Settling Defendant
being responsible for paying one-half of that total amount ($5,000 each).

                  c.       The payment requirements of this Paragraph are
several obligations only, not joint obligations.

         53.      Subsequent Payments and Disbursements for Natural Resource
Restoration. As provided by this Paragraph and by Appendix C, a total of
$3,000,000 shall be paid and disbursed as the NRD Commitment.

                  a.       By no later than January 31, 2004, the Settling
Defendants shall pay a total of $500,000 of the NRD Commitment directly to a
Site-specific sub-account within the DOI NRDAR Fund, with each Settling
Defendant being responsible for paying one-half of that total amount ($250,000
each), to finance Trustee-sponsored natural resource damage restoration

                                       52



efforts under Paragraph 49. The payment requirements of this Subparagraph are
several obligations only, not joint obligations.

                  b.       The remaining $2,500,000 of the NRD Commitment shall
be disbursed from the Escrow Account in accordance with the schedule and
requirements of Appendix C: (i) for payment or reimbursement of Allowable
Restoration Work Costs incurred for Approved Restoration Work to be performed by
the Settling Defendants under Paragraph 48; and/or (ii) for payment to a
Site-specific sub-account within the DOI NRDAR Fund, to finance
Trustee-sponsored natural resource damage restoration efforts under
Paragraph 49.

         54.      Reimbursement of Specified Future Response Costs.

                  a.       EPA Reimbursement. All Specified Future Response
Costs incurred by the United States shall be reimbursed as follows:

                           (1)      Except for costs under Section XV (Emergency
Response) that are payable under Subparagraph 54.a.(2), all Specified Future
Response Costs incurred and billed by the United States before Certification of
Completion of Remedial Action by EPA pursuant to Subparagraph 44.b shall be
reimbursed from the Escrow Account as provided by Appendix C, to the extent that
such costs are not inconsistent with the National Contingency Plan.

                           (2)      The Settling Defendants shall make direct
payments to EPA for any Specified Future Response Costs incurred by the United
States under Section XV (Emergency Response) and for any Specified Future
Response Costs incurred and/or billed by the United States after Certification
of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b, to the
extent such costs are not inconsistent with the National Contingency Plan. On a
periodic basis, the United States will send Settling Defendants a bill requiring
payment that includes an EPA cost summary, showing direct and indirect costs
incurred by EPA

                                       53



and its contractors, and a DOJ cost summary, showing costs incurred by DOJ and
its contractors, if any. Settling Defendants shall make all payments within 30
days of Settling Defendants' receipt of each bill requiring payment, except as
otherwise provided by Paragraph 68.

                           (3)      All payments and disbursements received by
EPA under this Subparagraph 54.a shall be deposited in the Fox River Site
Special Account within the EPA Hazardous Substance Superfund, and shall be
retained and used to conduct or finance response actions at or in connection
with the Site, or transferred by EPA to the EPA Hazardous Substance Superfund.

                  b.       State Reimbursement. All Specified Future Response
Costs incurred by the State shall be reimbursed as follows:

                           (1)      Except for costs under Section XV (Emergency
Response) that are payable under Subparagraph 54.b.(2), all Specified Future
Response Costs incurred and billed by the State before Certification of
Completion of Remedial Action by EPA pursuant to Subparagraph 44.b shall be
reimbursed from the Escrow Account as provided by Appendix C, to the extent that
such costs are not inconsistent with the National Contingency Plan.

                           (2)      The Settling Defendants shall make direct
payments to the State for any Specified Future Response Costs incurred by the
State under Section XV (Emergency Response) and for any Specified Future
Response Costs incurred and/or billed by the State after Certification of
Completion of Remedial Action by EPA pursuant to Subparagraph 44.b, to the
extent such costs are not inconsistent with the National Contingency Plan. On a
periodic basis, the State will send Settling Defendants a bill requiring payment
that includes a WDNR cost summary, showing direct and indirect costs incurred by
WDNR and its contractors, and a WDOJ cost summary, showing costs incurred by
WDOJ and its contractors, if any. Settling Defendants

                                       54



shall make all payments within 30 days of Settling Defendants' receipt of each
bill requiring payment, except as otherwise provided by Paragraph 68.

                  c.       The payment requirements of this Paragraph are joint
obligations of both Settling Defendants, not several obligations.

         55.      Payment Instructions.

                  a.       Payments to the United States.

                           (1)      Initial Payments to the United States. The
Initial Payments to the United States under Subparagraph 52.a shall be paid by
FedWire Electronic Funds Transfer ("EFT") to the U.S. Department of Justice
account in accordance with current EFT procedures, referencing the Lower Fox
River and Green Bay Site and DOJ Case Number 90-11-2-1045/2. Payment shall be
made in accordance with instructions to be provided by the Financial Litigation
Unit of the United States Attorney's Office for the Eastern District of
Wisconsin after the Date of Lodging. Any payments received by the Department of
Justice after 4:00 p.m. (Eastern Time) will be credited on the next business
day. At the time of payment, Settling Defendants shall ensure that notice that
payment has been made is sent to DOJ, DOI, and EPA in accordance with Section
XXVIII (Notices and Submissions) and to:

         Financial Management Officer
         U.S. Environmental Protection Agency, Region 5
         Mail Code MF-10J
         77 W. Jackson Blvd.
         Chicago, IL  60604

Of the $1,040,000 total amount paid to the United States under Subparagraph
52.a: (i) $740,000 shall be deposited in the Fox River Site Special Account, to
be retained and used to conduct or finance response actions at or in connection
with the Site, or transferred by EPA to the EPA Hazardous Substance Superfund;
and (ii) $300,000 shall be deposited in the DOI NRDAR Fund.

                                       55



                           (2)      All Other Payments to EPA. Except as
provided by Subparagraph 55.a.(l), all payments to EPA under this Section or
under Appendix C shall: (i) be made by a certified or cashier's check or checks
made payable to "EPA Hazardous Substance Superfund, Fox River Site Special
Account;" (ii) reference the Lower Fox River and Green Bay Site, EPA Site/Spill
ID Number A565, and DOJ Case Number 90-11-2-1045/2; and (iii) indicate that the
payment is for Specified Future Response Costs payable pursuant to this Consent
Decree. All payments to EPA under Section XXI (Stipulated Penalties and
Stipulated Damages) shall: (i) be made by a certified or cashier's check or
checks made payable to "EPA Hazardous Substance Superfund;" (ii) reference the
Lower Fox River and Green Bay Site, EPA Site/Spill ID Number A565, and DOJ Case
Number 90-11-2-1045/2; and (iii) indicate that the payment is for stipulated
penalties payable pursuant to this Consent Decree. All payments under this
Subparagraph 55.a. (2) shall be sent to:

         U.S. Environmental Protection Agency, Region 5
         Program Accounting and Analysis Branch
         P.O. Box 70753
         Chicago, IL 60673

At the time of payment, Settling Defendants shall ensure that notice that
payment has been made is sent to DOJ and EPA in accordance with Section XXVIII
(Notices and Submissions) and to:

         Financial Management Officer
         U.S. Environmental Protection Agency, Region 5
         Mail Code MF-10J
         77 W. Jackson Blvd.
         Chicago, IL 60604

                           (3)      All Other Payments to the DOI NRDAR Fund.
Except as provided by Subparagraph 55.a.(l), all payments to the DOI NRDAR Fund
under this Section or under Appendix C shall: (i) be made by an electronic funds
transfer transaction in accordance with

                                       56



transfer instruction to be provided by the United States; (ii) reference the
Lower Fox River and Green Bay Site and DOJ Case Number 90-11-2-1045/2; and (iii)
indicate that the payment is being made pursuant to this Consent Decree with
WTM I Company and P. H. Glatfelter Company. At the time of payment, Settling
Defendants shall ensure that notice that payment has been made is sent to DOI,
DOJ, WDNR, and WDOJ in accordance with Section XXVIII (Notices and Submissions)
and to:

         Department of the Interior
         Natural Resource Damage Assessment and Restoration Program
         Attn: Restoration Fund Manager
         1849 C Street, N.W.
         Mailstop 4449
         Washington, DC   20240

DOI shall in turn notify the other Trustees that a payment to the DOI NRDAR Fund
has been received under this Subparagraph.

                           (4)      Payments to the United States for Stipulated
Damages Under Paragraph 74. All payments to the United States under Paragraph 74
(Stipulated Damages Amounts - NRD Commitment) shall: (i) be made by a certified
or cashier's check or checks made payable to "Treasurer, United States of
America;" (ii) be tendered to the Financial Litigation Unit of the Office of the
United States Attorney for the Eastern District of Wisconsin; and (iii) be
accompanied by a letter referencing the Lower Fox River and Green Bay Site and
indicating that the payment is for stipulated damages payable pursuant to
Paragraph 74 of this Consent Decree with WTM I Company and P. H. Glatfelter
Company. At the time of payment, Settling Defendants shall ensure that notice
that payment has been made is sent to DOI and DOJ in accordance with Section
XXVIII (Notices and Submissions).

                                       57



                  b.       Payments to the State. All payments to the State
under this Section or under Section XXI (Stipulated Penalties and Stipulated
Damages) shall: (i) be made by a certified or cashier's check or checks made
payable to "Wisconsin Department of Natural Resources;" (ii) reference the Lower
Fox River and Green Bay Site; (iii) indicate that the payment is being made
pursuant to this Consent Decree with WTM I Company and P. H. Glatfelter Company;
and (iv) be sent to:

         Wisconsin Department of Natural Resources
         Attn: Greg Hill, State Project Coordinator
         101 S.Webster St.
         Madison, WI  53703

At the time of payment, Settling Defendants shall ensure that notice that
payment has been made is sent to the State in accordance with Section XXVIII
(Notices and Submissions).

                      XVIII. INDEMNIFICATION AND INSURANCE

         56.      Settling Defendants' Indemnification of the United States and
the State.

                  a.       The United States and the State do not assume any
liability by entering into this agreement or by virtue of any designation of
Settling Defendants as EPA's authorized representatives under Section 104(e) of
CERCLA. Settling Defendants shall indemnify, save and hold harmless the United
States, the State, and their officials, agents, employees, contractors,
subcontractors, or representatives for or from any and all claims or causes of
action arising from, or on account of, negligent or other wrongful acts or
omissions of Settling Defendants, their officers, directors, employees, agents,
contractors, subcontractors, and any persons acting on their behalf or under
their control, in carrying out activities pursuant to this Consent Decree,
including, but not limited to, any claims arising from any designation of
Settling Defendants as EPA's authorized representatives under Section 104(e) of
CERCLA. Further, the Settling Defendants

                                       58



agree to pay the United States and the State all costs they incur including, but
not limited to, attorneys fees and other expenses of litigation and settlement
arising from, or on account of, claims made against the United States or the
State based on negligent or other wrongful acts or omissions of Settling
Defendants, their officers, directors, employees, agents, contractors,
subcontractors, and any persons acting on their behalf or under their control,
in carrying out activities pursuant to this Consent Decree. Neither the United
States nor the State shall be held out as a party to any contract entered into
by or on behalf of Settling Defendants in carrying out activities pursuant to
this Consent Decree. Neither the Settling Defendants nor any such contractor
shall be considered an agent of the United States or the State.

                  b.       The United States and the State shall give Settling
Defendants notice of any claim for which the United States or the State plans to
seek indemnification pursuant to Paragraph 56, and shall consult with Settling
Defendants prior to settling such claim.

                  c.       Nothing contained in this Consent Decree is intended
to limit Settling Defendants' potential for insurance coverage.

         57.      Settling Defendants waive all claims against the United States
and the State for damages or reimbursement or for set-off of any payments made
or to be made to the United States or the State, arising from or on account of
any contract, agreement, or arrangement between any one or more of Settling
Defendants and any person for performance of Response Work on or relating to OU1
or any Approved Restoration Work, including, but not limited to, claims on
account of construction delays. In addition, Settling Defendants shall indemnify
and hold harmless the United States and the State with respect to any and all
claims for damages or reimbursement arising from or on account of any contract,
agreement, or arrangement between any one or more of Settling Defendants and any
person for performance of Response Work on or

                                       59



relating to OU1 or any Approved Restoration Work, including, but not limited to,
claims on account of construction delays.

         58.      No later than 15 days before commencing any on-site Remedial
Design work under this Consent Decree, Settling Defendant WTMI Company shall
secure, and shall maintain throughout the Remedial Design, comprehensive general
liability insurance with limits of 1 million dollars, combined single limit, and
automobile liability insurance with limits of 1 million dollars, combined single
limit, naming the United States and the State as additional insureds. No later
than 15 days before commencing any on-site Remedial Action work under this
Consent Decree, Settling Defendants shall secure, and shall maintain until the
first anniversary of EPA's Certification of Completion of the Remedial Action
pursuant to Subparagraph 44.b, comprehensive general liability insurance with
limits of 5 million dollars, combined single limit, and automobile liability
insurance with limits of 2 million dollars, combined single limit, naming the
United States and the State as additional insureds. In addition, for the
duration of this Consent Decree, Settling Defendants shall satisfy, or shall
ensure that their contractors or subcontractors satisfy, all applicable laws and
regulations regarding the provision of worker's compensation insurance for all
persons performing the Response Work on behalf of Settling Defendants in
furtherance of this Consent Decree. Prior to commencement of the Response Work
under this Consent Decree, Settling Defendants shall provide the Response
Agencies certificates of such insurance and a copy of each insurance policy.
Settling Defendants shall resubmit such certificates and copies of policies each
year on the anniversary of the Effective Date. If Settling Defendants
demonstrate by evidence satisfactory to the Response Agencies that any
contractor or subcontractor maintains insurance equivalent to that described
above, or insurance covering the same risks but in a lesser amount, then, with
respect to that contractor or

                                       60



subcontractor, Settling Defendants need provide only that portion of the
insurance described above which is not maintained by the contractor or
subcontractor. Costs incurred by Settling Defendants to comply with this
paragraph shall be considered Allowable RD/RA Costs.

                            XIX. FORCE MAJEURE EVENTS

         59.      Except as provided by Paragraph 2 of Appendix E, if any event
occurs or has occurred that may delay the performance of any obligation under
this Consent Decree, whether or not caused by a Force Majeure Event, the
Settling Defendants or their contractors shall orally notify the Response
Agencies' Project Coordinators or, in a Response Agency's Project Coordinator's
absence, the response Agency's Alternate Project Coordinator or, in the event
both of EPA's designated representatives are unavailable, Superfund Division
Director for EPA Region 5, within 5 working days of when Settling Defendants
first knew that the event might cause a delay. Within 10 working days
thereafter, Settling Defendants shall provide the Response Agencies a written
explanation and description of the reasons for the delay; the anticipated
duration of the delay; all actions taken or to be taken to prevent or minimize
the delay; a schedule for implementation of any measures to be taken to prevent
or mitigate the delay or the effect of the delay; the Settling Defendants'
rationale for attributing such delay to a Force Majeure Event if they intend to
assert such a claim; and a statement as to whether, in the opinion of the
Settling Defendants, such event may cause or contribute to an endangerment to
public health, welfare or the environment. The Settling Defendants shall include
with any notice all available documentation supporting their claim that the
delay was attributable to a Force Majeure Event. Failure to comply with the
above requirements shall preclude Settling Defendants from asserting any claim
of a Force Majeure Event for that event for the period of time of such failure
to comply, and for any additional delay caused by such failure. Settling
Defendants shall be

                                       61



deemed to know of any circumstance of which Settling Defendants, any entity
controlled by Settling Defendants, or Settling Defendants' contractors knew or
should have known.

         60.      If EPA, after a reasonable opportunity for review and comment
by WDNR, agrees that the delay or anticipated delay is attributable to a Force
Majeure Event, the time for performance of the obligations under this Consent
Decree that are affected by the Force Majeure Event will be extended by EPA,
after a reasonable opportunity for review and comment by WDNR, for such time as
is necessary to complete those obligations. An extension of the time for
performance of the obligations affected by the Force Majeure Event shall not, of
itself, extend the time for performance of any other obligation. If EPA, after a
reasonable opportunity for review and comment by WDNR, does not agree that the
delay or anticipated delay has been or will be caused by a Force Majeure Event,
EPA will notify the Settling Defendants in writing of its decision. If EPA,
after a reasonable opportunity for review and comment by WDNR, agrees that the
delay is attributable to a Force Majeure Event, EPA will notify the Settling
Defendants in writing of the length of the extension, if any, for performance of
the obligations affected by the Force Majeure Event.

         61.      If the Settling Defendants elect to invoke the dispute
resolution procedures set forth in Section XX (Dispute Resolution), they shall
do so no later than 15 days after receipt of EPA's notice. In any such
proceeding, Settling Defendants shall have the burden of demonstrating by a
preponderance of the evidence that the delay or anticipated delay has been or
will be caused by a Force Majeure Event, that the duration of the delay or the
extension sought was or will be warranted under the circumstances, that best
efforts were exercised to avoid and mitigate the effects of the delay, and that
Settling Defendants complied with the requirements of Paragraphs 57 and 58,
above. If Settling Defendants carry this burden, the delay at issue shall be

                                       62



deemed not to be a violation by Settling Defendants of the affected obligation
of this Consent Decree identified to EPA and the Court.

                             XX. DISPUTE RESOLUTION

         62.      Except as provided by Paragraph 3 of Appendix E, the dispute
resolution procedures of this Section shall be the exclusive mechanism to
resolve disputes between Settling Defendants and the Plaintiffs arising under or
with respect to this Consent Decree. However, the procedures set forth in this
Section shall not apply to actions by the Plaintiffs to enforce obligations of
the Settling Defendants that have not been disputed in accordance with this
Section. The dispute resolution procedures of this Section shall not apply to
any disputes between Settling Defendants and the Plaintiffs not arising under or
with respect to this Consent Decree.

         63.      Informal Dispute Resolution. Any dispute which arises under or
with respect to this Consent Decree shall in the first instance be the subject
of informal negotiations between the parties to the dispute. The period for
informal negotiations shall not exceed 20 days from the time the dispute arises,
unless it is modified by written agreement of the parties to the dispute. The
dispute shall be considered to have arisen when one party sends the other
parties a written Notice of Dispute.

         64.      Formal Dispute Resolution.

                  a.       Except as provided by Paragraph 3 of Appendix E, in
the event that the parties cannot resolve a dispute by informal negotiations
under Paragraph 63, then the position advanced by EPA shall be considered
binding unless, within 10 days after the conclusion of the informal negotiation
period, Settling Defendants invoke the formal dispute resolution procedures of
this Section by serving on the Plaintiffs a written Statement of Position on the
matter in

                                       63



dispute, including, but not limited to, any factual data, analysis or opinion
supporting that position and any supporting documentation relied upon by the
Settling Defendants. The Statement of Position shall specify the Settling
Defendants' position as to whether formal dispute resolution should proceed
under Paragraph 65 or Paragraph 66.

                  b.       Within 30 days after receipt of Settling Defendants'
Statement of Position, EPA will serve on Settling Defendants its Statement of
Position, including, but not limited to, any factual data, analysis, or opinion
supporting that position and all supporting documentation relied upon by EPA.
EPA's Statement of Position shall include a statement as to whether formal
dispute resolution should proceed under Paragraph 65 or 66. Within 10 days after
receipt of EPA's Statement of Position, Settling Defendants may submit a Reply.

                  c.       If there is disagreement between EPA and the Settling
Defendants as to whether dispute resolution should proceed under Paragraph 65 or
66, the parties to the dispute shall follow the procedures set forth in the
paragraph determined by EPA to be applicable. However, if the Settling
Defendants ultimately appeal to the Court to resolve the dispute, the Court
shall determine which paragraph is applicable in accordance with the standards
of applicability set forth in Paragraphs 65 and 66.

         65.      Formal dispute resolution for disputes pertaining to the
selection or adequacy of any response action, any disputes under Paragraph 98,
and all other disputes that are accorded review on the administrative record
under applicable principles of administrative law shall be conducted pursuant to
the procedures set forth in this Paragraph. For purposes of this Paragraph, the
adequacy of any response action includes, without limitation: (i) the adequacy
or appropriateness of plans, procedures to implement plans, or any other items
requiring approval by the Response Agencies under this Consent Decree; and (ii)
the adequacy of the performance

                                       64



of response actions taken pursuant to this Consent Decree. Nothing in this
Consent Decree shall be construed to allow any dispute by Settling Defendants
under this Consent Decree regarding the validity of the ROD's provisions.

                  a.       An administrative record of the dispute shall be
maintained by EPA and shall contain all statements of position, including
supporting documentation, submitted pursuant to this Section. Where appropriate,
EPA may allow submission of supplemental statements of position by the parties
to the dispute.

                  b.       The Superfund Division Director for EPA Region 5 will
issue a final administrative decision resolving the dispute based on the
administrative record described in Subparagraph 65.a. This decision shall be
binding upon the Settling Defendants, subject only to the right to seek judicial
review pursuant to Subparagraphs 65.c and d.

                  c.       Any administrative decision made by EPA pursuant to
Subparagraph 65.b shall be reviewable by this Court, provided that a motion for
judicial review of the decision is filed by the Settling Defendants with the
Court and served on all Parties within 20 days of receipt of EPA's decision. The
motion shall include a description of the matter in dispute, the efforts made by
the parties to resolve it, the relief requested, and the schedule, if any,
within which the dispute must be resolved to ensure orderly implementation of
this Consent Decree. The United States and the State may file a response to
Settling Defendants' motion.

                  d.       In proceedings on any dispute governed by this
Paragraph, Settling Defendants shall have the burden of demonstrating that the
decision of the Superfund Division Director for EPA Region 5 is arbitrary and
capricious or otherwise not in accordance with law. Judicial review of EPA's
decision shall be on the administrative record compiled pursuant to Subparagraph
65.a.

                                       65



         66.      Formal dispute resolution for disputes that neither pertain to
the selection or adequacy of any response action nor are otherwise accorded
review on the administrative record under applicable principles of
administrative law, shall be governed by this Paragraph.

                  a.       Following receipt of Settling Defendants' Statement
of Position submitted pursuant to Paragraph 64, and after service of EPA's
Statement of Position and any Reply, the Superfund Division Director for EPA
Region 5 will issue a final decision resolving the dispute. The Superfund
Division Director's decision shall be binding on the Settling Defendants unless,
within 20 days of receipt of the decision, the Settling Defendants file with the
Court and serve on the parties a motion for judicial review of the decision
setting forth the matter in dispute, the efforts made by the parties to resolve
it, the relief requested, and the schedule, if any, within which the dispute
must be resolved to ensure orderly implementation of the Consent Decree. The
United States may file a response to Settling Defendants' motion.

                  b.       Notwithstanding Paragraph K of Section I (Background)
of this Consent Decree, judicial review of any dispute governed by this
Paragraph shall be governed by applicable principles of law.

         67.      The invocation of formal dispute resolution procedures under
this Section shall not extend, postpone or affect in any way any obligation of
the Settling Defendants under this Consent Decree, not directly in dispute,
unless EPA or the Court agrees otherwise. Stipulated penalties with respect to
the disputed matter shall continue to accrue but payment shall be stayed pending
resolution of the dispute as provided in Paragraph 79. Notwithstanding the stay
of payment, stipulated penalties shall accrue from the first day of
noncompliance with any applicable provision of this Consent Decree. In the event
that the Settling Defendants do not

                                       66



prevail on the disputed issue, stipulated penalties shall be assessed and paid
as provided in Section XXI (Stipulated Penalties).

         68.      Disputes Regarding Specified Future Response Costs. Settling
Defendants may contest payment of any Specified Future Response Costs under
Paragraph 54 if they determine that the United States or the State has made an
accounting error or if they allege that a cost item that is included represents
costs that are inconsistent with the NCP. For any such costs incurred and billed
before Certification of Completion of Remedial Action by EPA pursuant to
Subparagraph 44.b, notice of any such objection shall be submitted in writing as
provided by Subparagraph 5.c of Appendix C. For any such costs incurred and
billed after Certification of Completion of Remedial Action by EPA pursuant to
Subparagraph 44.b, notice of any such objection shall be given in writing within
30 days of receipt of the bill. A copy of any notice of objection shall be sent
to the United States (if the United States' accounting is being disputed) or to
the State (if the State's accounting is being disputed) pursuant to Section
XXVIII (Notices and Submissions). Any such notice of objection shall
specifically identify the contested Specified Future Response Costs and the
basis for objection. In the event of an objection, all uncontested Specified
Future Response Costs shall immediately be paid to the United States or the
State in the manner described in Paragraph 54. Upon submitting a notice of
objection, the Settling Defendants shall initiate the Dispute Resolution
procedures in Section XX (Dispute Resolution). If the United States or the State
prevails in the dispute, within 10 days of the resolution of the dispute, all
sums due (with accrued Interest) shall be paid to EPA (if the United States'
cost are disputed) or to the State (if the State's costs are disputed) in the
manner described in Paragraph 54. If the Settling Defendants prevail concerning
any aspect of the contested costs, the portion of the costs (plus associated
accrued interest) for which they did not prevail shall be

                                       67



disbursed to EPA or the State, as appropriate, in the manner described in
Paragraph 54; and the amount that was successfully contested need not be paid to
EPA or to the State. The dispute resolution procedures set forth in this
Paragraph in conjunction with the procedures set forth in Section XX (Dispute
Resolution) shall be the exclusive mechanisms for resolving disputes regarding
reimbursement of the United States and the State for their Specified Future
Response Costs.

                XXI. STIPULATED PENALTIES AND STIPULATED DAMAGES

         69.      Settling Defendants shall be liable for stipulated penalties
and/or stipulated damages in the amounts set forth in this Section for failure
to comply with the requirements of this Consent Decree specified below, unless
excused under Section XIX (Force Majeure Events) or Paragraph 2 (Force Majeure
Events for Restoration Work) of Appendix E. "Compliance" by Settling Defendants
shall include completion of the activities under this Consent Decree or any work
plan or other plan approved under this Consent Decree identified below in
accordance with all applicable requirements of law, this Consent Decree, the
SOW, and any plans or other documents approved by the Plaintiffs pursuant to
this Consent Decree and within the specified time schedules established by and
approved under this Consent Decree.

                                       68




         70.     Stipulated Penalty Amounts - Failure to Make Payments. A
Settling Defendant shall be liable for stipulated penalties in the amounts set
forth below for each day of violation for that Settling Defendant's failure to
make payments as required under this Consent Decree:



                                                                                     PENALTY PER DAY
                                                                                ---------------------------
                                                                                 UP TO     11-30     OVER
         VIOLATION                                                              10 DAYS    DAYS     30 DAYS
         ---------                                                              -------   -------   -------
                                                                                           
Failure to deposit funds in the Escrow
 Account as required
 by Subparagraph 50.a:                                                          $10,000   $15,000   $25,000

Failure to make any Initial Payments to
 Plaintiffs as required by Paragraph 52:                                        $ 1,000   $ 2,500   $ 5,000

Failure to make any payment of Specified
 Future Response Costs as required by
 Subparagraphs 54.a.(2) or 54.b.(2):                                            $ 1,000   $ 2,500   $ 5,000


Any stipulated penalties for failure to deposit funds in the Escrow Account
shall be divided evenly between EPA and the State. Any stipulated penalties for
failure to make any Initial Payments to Plaintiffs shall be divided between the
United States and the State in proportion to the amounts that are unpaid or
overdue. Any stipulated penalties for failure to make payment of Specified
Future Response Costs shall be paid to the Party that rendered the bill
involved.

                                       69



         71.      Stipulated Penalty Amounts - Response Work. Settling
Defendants shall be liable for stipulated penalties in the amounts set forth
below for each day of violation for failure to perform Response Work as required
under this Consent Decree:



                                                                                     PENALTY PER DAY
                                                                                ---------------------------
                                                                                 UP TO     11-30     OVER
         VIOLATION                                                              10 DAYS    DAYS     30 DAYS
         ---------                                                              -------   -------   -------
                                                                                           
Failure to perform the Remedial Action in
 accordance with the schedule and requirements
 established by the Remedial Action Work Plan,
 as mandated by Paragraph 14:                                                   $ 2,000   $ 5,000   $10,000

Failure to perform O&M or Long Term Monitoring
 in accordance with the schedule and requirements
 established by the Final Operation and Maintenance
 Plan, as mandated by Paragraph 14, Paragraph 18,
 and Paragraph 19:                                                              $ 1,000   $ 2,500   $ 5,000

Failure to perform Institutional Controls requirements
 in accordance with the schedule and requirements
 established by the Institutional Controls Plan,
 as mandated by Paragraph 14 and Paragraph 18:                                  $ 1,000   $ 2,500   $ 5,000

Failure to undertake response action as required
 by Section XV (Emergency Response):                                            $ 5,000   $10,000   $20,000


Any stipulated penalties under this Paragraph shall be divided evenly between
EPA and the State.

         72.      Stipulated Penalty Amount - Response Work Takeover. In the
event that the Response Agencies assume performance of a portion or all of the
Response Work pursuant to Paragraph 90 of Section XXII (Covenants Not to Sue by
Plaintiffs), Settling Defendants shall be liable for a stipulated penalty in the
amount of $250,000. Any stipulated penalties under this Paragraph shall be
divided evenly between EPA and the State.

                                       70



         73.      Stipulated Penalty Amounts - Response Work Reports and
Submissions. Settling Defendants shall be liable for stipulated penalties in the
amounts set forth below for each day of violation for failure to comply with
Response Work reporting and submission requirements under this Consent Decree:



                                                                                     PENALTY PER DAY
                                                                                ---------------------------
                                                                                 UP TO     11-30     OVER
         VIOLATION                                                              10 DAYS    DAYS     30 DAYS
         ---------                                                              -------   -------   -------
                                                                                           
Failure to submit a Remedial Action Work Plan
 or any other Remedial Action Plan as
 Required by Paragraph 14:                                                      $ 2,000   $ 4,000   $ 5,000

Failure to submit any Monthly RD/RA
 Progress Report as required by
 Paragraph 31:                                                                  $ 1,000   $ 2,000   $ 2,500

Failure to submit any Quarterly
 Report as required by Paragraph 32:                                            $ 1,000   $ 2,000   $ 2,500

Failure to comply with the Release Reporting
 requirements under Paragraph 33:                                               $ 1,000   $ 2,000   $ 2,500


Any stipulated penalties under this Paragraph shall be divided evenly between
the United States and the State.

         74.      Stipulated Damages Amounts - NRD Commitment. A Settling
Defendant shall be liable for stipulated damages in the amounts set forth below
for each day of violation for that Settling Defendant's failure to comply with
requirements under this Consent Decree relating to the NRD Commitment:

                                       71





                                                                                     DAMAGES PER DAY
                                                                                ---------------------------
                                                                                 UP TO     11-30     OVER
         VIOLATION                                                              10 DAYS    DAYS     30 DAYS
         ---------                                                              -------   -------   -------
                                                                                           
Failure to make the Subsequent Payment for
 Natural Resource Restoration as required
 by Subparagraph 53.a:                                                          $ 1,000   $ 2,500   $ 5,000

Failure to perform Approved Restoration Work
 in accordance with an approved
 Project Implementation Plan, as required
 by Paragraph 48:                                                               $   500   $ 1,000   $ 1,500

Failure to submit a Final Project Report
 on Approved Restoration Work, as
 required by Subparagraph 48.e:                                                 $   500   $ 1,000   $ 2,000


Any stipulated damages under this Paragraph shall be divided evenly between the
United States and the State.

         75.      All stipulated penalties and/or stipulated damages shall begin
to accrue on the day after the complete performance is due or the day a
violation occurs, and shall continue to accrue through the final day of the
correction of the noncompliance or completion of the activity. However,
stipulated penalties shall not accrue: (i) with respect to a deficient
submission under Section XII (Response Agencies' Approval of Plans and Other
Submissions), during the period, if any, beginning on the 31st day after the
response Agencies' receipt of such submission until the date that the Response
Agencies notify Settling Defendants of any deficiency; (ii) with respect to a
decision by the Plaintiffs under Paragraph 3 (Dispute Resolution for Restoration
Work) of Appendix E, during the period, if any, beginning on the 21st day after
the date that Settling Defendants' Statement of Position is received until the
date that the Plaintiffs issue a final administrative decision regarding such
dispute; (iii) with respect to a decision by the Superfund Division Director for
Region 5 under Subparagraph 65.b or 66.a of Section XX

                                       72



(Dispute Resolution), during the period, if any, beginning on the 21st day after
the date that Settling Defendants' reply to EPA's Statement of Position is
received until the date that the Superfund Division Director issues a final
decision regarding such dispute; or (iv) with respect to judicial review by this
Court of any dispute under Section XX (Dispute Resolution) or Paragraph 3 of
Appendix E, during the period, if any, beginning on the 31st day after the
Court's receipt of the final submission regarding the dispute until the date
that the Court issues a final decision regarding such dispute. Nothing herein
shall prevent the simultaneous accrual of separate stipulated penalties and/or
stipulated damages for separate violations of this Consent Decree.

         76.      Following the Plaintiffs' determination that Settling
Defendants have failed to comply with a requirement of this Consent Decree, the
Plaintiffs may give Settling Defendants written notification of the same and
describe the noncompliance. The Plaintiffs may send the Settling Defendants a
written demand for the payment of the penalties. However, penalties shall accrue
as provided in the preceding Paragraph regardless of whether the Plaintiffs have
notified the Settling Defendants of a violation.

         77.      Settling Defendants shall pay any stipulated penalties or
stipulated damages accruing under this Section directly to the Plaintiffs, and
shall not be entitled to seek payment or reimbursement of such penalties or
damages from the Disbursement Special Account or from the Escrow Account under
Paragraph 10, Paragraph 11, Appendix B, or Appendix C. All penalties or damages
accruing under this Section shall be due and payable to the United States and
the State within 30 days of the Settling Defendants' receipt of a demand for
payment by the Plaintiffs, unless Settling Defendants invoke the Dispute
Resolution procedures under Paragraph 3 of Appendix E or Section XX (Dispute
Resolution). All payments under this

                                       73



Section shall be paid by certified or cashier's check(s), shall indicate that
the payment is for stipulated penalties or stipulated damages, and shall be
submitted to EPA, to the State, and/or to the DOINRDAR Fund, as appropriate, in
the manner specified by Paragraph 55 (Payment Instructions).

         78.      The payment of penalties or damages under this Section shall
not alter in any way Settling Defendants' obligation to complete the performance
of the Response Work or any Approved Restoration Work required under this
Consent Decree.

         79.      Penalties and/or damages shall continue to accrue as provided
in Paragraph 75 during any dispute resolution period, but need not be paid until
the following:

                  a.       If the dispute is resolved by agreement or by an
administrative decision that is not appealed to this Court, accrued penalties
and/or damages determined to be owing shall be paid to within 15 days of the
agreement or the receipt of the administrative decision;

                  b.       If the dispute is appealed to this Court and the
Plaintiffs prevail in whole or in part, Settling Defendants shall pay all
accrued penalties and/or damages determined by the Court to be owed to the
Plaintiffs within 60 days of receipt of the Court's decision or order, except as
provided in Subparagraph c below;

                  c.       If the District Court's decision is appealed by any
Party, Settling Defendants shall pay all accrued penalties and/or damages
determined by the District Court to be owing to the United States or the State
into an interest-bearing escrow account within 60 days of receipt of the Court's
decision or order. Penalties and/or damages shall be paid into this account as
they continue to accrue, at least every 60 days. Within 15 days of receipt of
the final appellate court decision, the Escrow Agent shall pay the balance of
the account to the Plaintiffs or to Settling Defendants to the extent that they
prevail.

                                       74



         80.      If Settling Defendants fail to pay stipulated penalties and/or
stipulated damages when due, the United States or the State may institute
proceedings to collect the penalties and/or damages, as well as interest.
Settling Defendants shall pay Interest on the unpaid balance, which shall begin
to accrue on the date of demand made pursuant to Paragraph 77.

         81.      Nothing in this Consent Decree shall be construed as
prohibiting, altering, or inane way limiting the ability of the United States or
the State to seek any other remedies or sanctions available by virtue of
Settling Defendants' violation of this Decree or of the statutes and regulations
upon which it is based, including, but not limited to, penalties pursuant to
Section 122(1) of CERCLA; provided, however, that the United States shall not
seek civil penalties pursuant to Section 122(1) of CERCLA for any violation for
which a stipulated penalty is provided herein, except in the case of a willful
violation of the Consent Decree.

         82.      Notwithstanding any other provision of this Section, the
United States may, in its unreviewable discretion, waive any portion of
stipulated penalties or stipulated damages payable to the United States that
have accrued pursuant to this Consent Decree. Similarly, notwithstanding any
other provision of this Section, the State may, in its unreviewable discretion,
waive any portion of stipulated penalties or stipulated damages payable to the
State that have accrued pursuant to this Consent Decree.

                     XXII. COVENANTS NOT TO SUE BY PLAINTIFFS

         83.      General Scope of Covenants

                  a.       As specified by the covenants not to sue contained in
Paragraphs 84 and 85, and subject to the reservations contained in Paragraphs
86, 87, 89, and 98, this Consent Decree is intended to addresses the Settling
Defendants' alleged liability under Sections 106 and

                                       75



107(a) of CERCLA for "OU1 Response Activities and Costs," as that term is
defined by the following Subparagraph 83.b.

                  b.       For the purpose of this Consent Decree, the term "OU1
Response Activities and Costs" is defined as all response activities for
Operable Unit 1 performed or to be performed after July 1, 2003, as well as all
costs for response activities for Operable Unit 1 incurred after July 1, 2003.
The "OU1 Response Activities and Costs" shall therefore include, but shall not
be limited to, all Response Work performed or to be performed after July 1, 2003
and all Specified Future Response Costs.

         84.      United States' Covenant Not To Sue. In consideration of the
actions that will be performed by the Settling Defendants pursuant to this
Consent Decree and the payments that will be made to the Plaintiffs under the
terms of the Consent Decree, and except as specifically provided by Paragraphs
86, 87, 89, and 98, the United States covenants not to sue or to take
administrative action against Settling Defendants for OU1 Response Activities
and Costs pursuant to: (i) CERCLA Sections 106 and 107,42 U.S.C. Sections 9606
and 9607; (ii) RCRA Section 7003, 42 U.S.C. Section 6973; (iii) Clean Water Act
Section 311, 33 U.S.C. Section 1321; (iv) Toxic Substances Control Act Section
7, 15 U.S.C. Section 2606; or (v) Section 10 of the Rivers and Harbors Act of
1899, 33 U.S.C. Section 403. Except with respect to future liability, these
covenants not to sue shall take effect upon the receipt by Plaintiffs of the
payments required by Paragraph 52 (Initial Payments to Plaintiffs). With respect
to future liability, these covenants not to sue shall take effect upon
Certification of Completion of Remedial Action by EPA pursuant to Paragraph
44.b. These covenants not to sue are conditioned upon the satisfactory
performance by Settling Defendants of their obligations under this Consent
Decree. These covenants not to sue extend only to the Settling Defendants and do
not extend to any other person; provided, however that

                                       76



these covenants not to sue (and the reservations thereto) shall also apply to
Settling Defendants' Related Parties.

         85.      State's Covenant Not To Sue. In consideration of the actions
that will be performed by the Settling Defendants and the payments that will be
made to the Plaintiffs under the terms of the Consent Decree, and except as
specifically provided by Paragraphs 86, 87, 89,and 98, the State covenants not
to sue or to take administrative action against Settling Defendants for OU1
Response Activities and Costs pursuant to: (i) CERCLA Section 107, 42 U.S.C.
Section 9607; (ii) RCRA Section 700, 42 U.S.C. Section 6972; (iii) Clean Water
Act Section 505, 33 U.S.C. Section 1365; (iv) Toxic Substances Control Act
Section 20, 15 U.S.C. Section 2619; or (v) Wisconsin statutory or common law.
Except with respect to future liability, these covenants not to sue shall take
effect upon the receipt by Plaintiffs of the payments required by Paragraph 52
(Initial Payments to Plaintiffs). With respect to future liability, these
covenants not to sue shall take effect upon Certification of Completion of
Remedial Action by EPA pursuant to Paragraph 44.b. These covenants not to sue
are conditioned upon the satisfactory performance by Settling Defendants of
their obligations under this Consent Decree. These covenants not to sue extend
only to the Settling Defendants and do not extend to any other person; provided,
however that these covenants not to sue (and the reservations thereto) shall
also apply to Settling Defendants' Related Parties.

         86.      Pre-certification Reservations. Notwithstanding any other
provision of this Consent Decree, the United States and the State reserve, and
this Consent Decree is without prejudice to, the right to institute proceedings
in this action or in a new action, or to issue an administrative order seeking
to compel Settling Defendants (i) to perform further response

                                       77


actions relating to OU1 or (ii) to reimburse the United States or the State for
additional costs of response if, prior to Certification of Completion of the
Remedial Action:

                           (1)      conditions relating to OU1, previously
         unknown to EPA, are discovered, or

                           (2)      information, previously unknown to EPA, is
         received, in whole or in part,

and these previously unknown conditions or information together with any other
relevant information indicates that the Remedial Action is not protective of
human health or the environment.

         87.      Post-certification Reservations. Notwithstanding any other
provision of this Consent Decree, the United States and the State reserve, and
this Consent Decree is without prejudice to, the right to institute proceedings
in this action or in a new action, or to issue an administrative order seeking
to compel Settling Defendants (i) to perform further response actions relating
to OU1 or (ii) to reimburse the United States or the State for additional costs
of response if, subsequent to Certification of Completion of the Remedial
Action:

                           (1)      conditions relating to OU1, previously
         unknown to EPA, are discovered, or

                           (2)      information, previously unknown to EPA, is
         received, in whole or in part,

and these previously unknown conditions or this information together with other
relevant information indicate that the Remedial Action is not protective of
human health or the environment.

                                       78


         88.      For purposes of Paragraph 86, the information and the
conditions known to EPA shall include only that information and those conditions
known to EPA as of the date the ROD was signed and set forth in the Record of
Decision and the administrative record supporting the Record of Decision. For
purposes of Paragraph 87, the information and the conditions known to EPA shall
include only that information and those conditions known to EPA as of the date
of Certification of Completion of the Remedial Action and set forth in the
Record of Decision, the administrative record supporting the Record of Decision,
the post-ROD administrative record, or in any information received by EPA
pursuant to the requirements of this Consent Decree prior to Certification of
Completion of the Remedial Action.

         89.      General Reservations of Rights. The covenants not to sue set
forth above do not pertain to any matters other than those expressly specified
in Paragraphs 84 and Paragraph 85. The United States and the State reserve, and
this Consent Decree is without prejudice to, all rights against Settling
Defendants with respect to all other matters, including but not limited to, the
following:

                  a.       claims based on a failure by Settling Defendants to
meet a requirement of this Consent Decree;

                  b.       liability for performance of response activities or
for response costs falling outside the definition of the OU1 Response Activities
and Costs, including but not limited to: (i) liability arising from the past,
present, or future disposal, release, or threat of release of Waste Materials
outside of the Site; (ii) liability for operable units at the Site other than
OU1; and (iii) liability for response costs for OU1 incurred by the United
States or by the State before the Date of Lodging (specifically including, but
not limited to, any additional liability for Unresolved EPA Past Costs or for
Unresolved State Past Costs);

                                       79


                  c.       liability for future disposal of Waste Material at
OU1, other than as provided in the ROD, the Response Work, or otherwise ordered
by EPA;

                  d.       liability, prior to Certification of Completion of
the Remedial Action, for additional response actions at OU1 that EPA determines
are necessary to achieve Performance Standards, but that cannot be required
pursuant to Paragraph 15 (Modification of the SOW or Related Work Plans);

                  e.       liability for damages for injury to, destruction of,
or loss of natural resources at the Site, and for the costs of any natural
resource damage assessments relating to the Site (specifically including, but
not limited to, any additional liability for natural resource damages beyond the
NRD Commitment or for Unresolved DOI Past Costs);

                  f.       liability for violations of federal or state
law which occur during or after implementation of the Remedial Action; and

                  g.       criminal liability.

         90.      Response Work Takeover In the event EPA, in consultation with
WDNR, determines that Settling Defendants have ceased implementation of any
portion of the Response Work, are seriously or repeatedly deficient or late in
their performance of the Response Work, or are implementing the Response Work in
a manner which may cause an endangerment to human health or the environment, EPA
and/or WDNR may assume the performance of all or any portions of the Response
Work as EPA determines necessary. Settling Defendants may invoke the procedures
set forth in Section XX (Dispute Resolution), Paragraph 65, to dispute EPA's
determination that takeover of the Response Work is warranted under this
Paragraph. Subject to the funding limitations and special reservations of rights
specified in Section XXIV, costs

                                       80


incurred by the United States and/or the State in performing the Response Work
pursuant to this Paragraph shall be considered Specified Future Response Costs.

         91.      Notwithstanding any other provision of this Consent Decree,
the United States and the State retain all authority and reserve all rights to
take any and all response actions authorized by law.

                     XXIII. COVENANTS BY SETTLING DEFENDANTS

         92.      Settling Defendants' Covenant Not to Sue. Subject to the
reservations in Paragraph 93 and Paragraph 98, Settling Defendants hereby
covenant not to sue and agree not to assert any claims or causes of action
against the United States or the State with respect to the EPA Past Cost
Payments, the State Past Cost Payments, the DOI Past Cost Payments, the NRD
Commitment, the OU1 Response Activities and Costs, or this Consent Decree,
including, but not limited to:

                  a.       any direct or indirect claim for reimbursement from
the Hazardous Substance Superfund (established pursuant to the Internal Revenue
Code, 26 U.S.C. Section 9507) through CERCLA Sections 106(b)(2), 107, 111, 112,
113 or any other provision of law;

                  b.       any claims against the United States (including any
department, agency or instrumentality of the United States) or State (including
any department, agency or instrumentality of the States) under CERCLA Sections
107 or 113, 42 U.S.C. Sections 9607 or 9613, related to the EPA Past Cost
Payments, the State Past Cost Payments, the DOI Past Cost Payments, the NRD
Commitment, or the OU1 Response Activities and Costs;

                  c.       any claims against the United States (including any
department, agency or instrumentality of the United States) or State (including
any department, agency or instrumentality of the States) under the United States
Constitution, the Wisconsin Constitution,

                                       81


the Tucker Act, 28 U.S.C. Section 1491, the Equal Access to Justice Act, 28
U.S.C. Section 2412, as amended, or at common law, related to the EPA Past Cost
Payments, the State Past Cost Payments, the DOI Past Cost Payments, the NRD
Commitment, or the OU1 Response Activities and Costs;

                  d.       any direct or indirect claim for disbursement from
the Disbursement Special Account (established pursuant to this Consent Decree),
except as provided by Paragraph 10; or

                  e.       any direct or indirect claim for disbursement from
the Fox River Site Special Account.

Except as provided in Paragraph 95 (Waiver of Claims Against De Micromis
Parties) and Paragraph 105 (Waiver of Claim-Splitting Defenses), these covenants
not to sue shall not apply in the event that the United States or the State
brings a cause of action or issues an order pursuant to the reservations set
forth in Paragraph 86, Paragraph 87, or Subparagraphs 89.b to 89.e, but only to
the extent that Settling Defendants' claims arise from the same response action,
response costs, or damages that the United States or the State is seeking
pursuant to the applicable reservation.

         93.      The Settling Defendants reserve, and this Consent Decree is
without prejudice to, claims against the United States, subject to the
provisions of Chapter 171 of Title 28 of the United States Code, for money
damages for injury or loss of property or personal injury or death caused by the
negligent or wrongful act or omission of any employee of the United States while
acting within the scope of his office or employment under circumstances where
the United States, if a private person, would be liable to the claimant in
accordance with the law of the place where the act or omission occurred.
However, any such claim shall not include a claim for any

                                       82

damages caused, in whole or in part, by the act or omission of any person,
including any contractor, who is not a federal employee as that term is defined
in 28 U.S.C. Section 2671; nor shall any such claim include a claim based on
EPA's selection of response actions, or the oversight or approval of the
Settling Defendants' plans or activities. The foregoing applies only to claims
which are brought pursuant to any statute other than CERCLA and for which the
waiver of sovereign immunity is found in a statute other than CERCLA;

         94.      Nothing in this Consent Decree shall be deemed to constitute
preauthorization of a claim within the meaning of Section 111 of CERCLA, 42
U.S.C. Section 9611, or 40 C.F.R. Section 300.700(d).

         95.      Waiver of Claims Against De Micromis Parties.

                  a.       Settling Defendants agree not to assert any claims
and to waive all claims or causes of action that they may have for all matters
relating to the Site, including for contribution, against any person where the
person's liability to Settling Defendants with respect to the Site is based
solely on having arranged for disposal or treatment, or for transport for
disposal or treatment, of hazardous substances at the Site, or having accepted
for transport for disposal or treatment of hazardous substances at the Site, if
the materials contributed by such person to the Site contained less than 2.0
kilograms of polychlorinated biphenyls (which amounts to 0.002% of the total
mass of polychlorinated biphenyls remaining at the Site, as estimated by the
December 2002 Remedial Investigation Report).

                  b.       This waiver shall not apply to any claim or cause of
action against any person meeting the above criteria if EPA has determined that
the materials contributed to the Site by such person contributed or could
contribute significantly to the costs of response at the Site. This waiver also
shall not apply with respect to any defense, claim, or cause of action that a

                                       83


Settling Defendant may have against any person if such person asserts a claim or
cause of action relating to the Site against such Settling Defendant.

                   XXIV. CONSENT DECREE FUNDING LIMITATION AND
                         SPECIAL RESERVATIONS OF RIGHTS

         96.      Generally. The Parties currently anticipate that the funds to
be deposited in the Escrow Account and the Disbursement Special Account under
this Consent Decree (together with the interest earned on such deposits) will be
sufficient to fund the completion of the Response Work, after all other payments
and reimbursements from those Accounts have been made as required under this
Consent Decree. This Section addresses the anticipated risk of a future
determination that those funds may not be sufficient for that purpose. If that
determination is made, the Parties' rights and obligations shall be governed by
this Section, and the insufficiency shall not be considered a change in
circumstances or a basis for seeking non-consensual relief from this Consent
Decree pursuant to Fed. R. Civ. P. 60(b).

         97.      Funding Limitation. Except as expressly provided by
Subparagraph 98.f.(3), this Consent Decree is not intended to impose any
obligation on Settling Defendants to finance the Remedial Action with funding
sources other than the Disbursement Special Account and the Escrow Account, or
to deposit funds in those Accounts other than as required by Subparagraph 50.a.

         98.      Special Reservations of Rights Based on Costs of the Remedial
Action.

                  a.       EPA Insufficiency Determination. EPA, in consultation
with WDNR, shall periodically evaluate and project whether the total aggregated
balance in the Escrow Account and the Disbursement Special Account is likely to
be sufficient to fund the completion of the Response Work, after all other
payments and reimbursements from those two Accounts

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have been made as required under this Consent Decree. EPA's evaluations shall
include an assessment of the timing and projected costs of the Remedial Action,
the O&M, the Post-Remedy Institutional Controls Work, and the Post-Remedy
Monitoring. In making such evaluations, EPA shall consider the information and
projections contained in Settling Defendants' Quarterly Reports submitted under
Paragraph 32 and any other information deemed relevant by EPA. If EPA determines
that the total aggregated balance in the Escrow Account and the Disbursement
Special Account is likely to be insufficient to fund the completion of the
Response Work, after all other payments and reimbursements from the Accounts
have been made as required under this Consent Decree, then EPA, in consultation
with WDNR, may provide the Settling Defendants formal written notice of that
determination (an "Insufficiency Determination") in the manner provided by
Section XXVIII (Notices and Submissions).

                  b.       Timing. EPA may make an Insufficiency Determination
under this Paragraph: (i) at any time after the Response Agencies' approval of
the Remedial Action Work Plan under Paragraph 14; but (ii) not after
Certification of Completion of Remedial Action by EPA pursuant to Paragraph
44.b.

                  c.       Request for an Insufficiency Determination. A
Settling Defendant may request that EPA make an Insufficiency Determination
under this Paragraph if: (i) the determination would be timely under
Subparagraph 98.b; (ii) the total aggregated balance in the Escrow Account and
the Disbursement Special Account is less than $6 million; and (iii) the Settling
Defendant can demonstrate that the total aggregated balance in the Escrow
Account and the Disbursement Special Account is likely to be insufficient to
fund the completion of the Response Work, after all other payments and
reimbursements from those two Accounts have been made as required under this
Consent Decree. Any such request shall be made in writing,

                                       85


shall include all information supporting the request, and shall be provided to
all Parties as provided by Section XXVIII (Notices and Submissions).

                  d.       Advance Notice. At least 30 days before issuing
formal written notice of an Insufficiency Determination under this Paragraph, or
within a longer time period agreed to in writing by the Parties, EPA shall send
the Settling Defendants a written communication affording the Settling
Defendants an opportunity, within that time period, to: (i) provide EPA
additional information relevant to whether the total aggregated balance in the
Accounts is likely to be sufficient or insufficient; (ii) deposit additional
funds in the Escrow Account, in order to avoid an Insufficiency Determination;
and (iii) have informal negotiations to attempt to resolve any dispute.

                  e.       Termination of Certain Consent Decree Rights and
Obligations. As specified by this Subparagraph, certain rights and obligations
of the Parties under this Consent Decree shall terminate if an Insufficiency
Determination is not disputed pursuant to Subparagraph 98.f, or if a dispute
under Subparagraph 98.f is resolved in EPA's favor.

                           (1)      For the purpose of this Subparagraph 98.e,
the "Termination Date" shall be defined as: (i) 10 days after an Insufficiency
Determination, if the Insufficiency Determination is not disputed in accordance
with Subparagraph 98.f; (ii) 10 days after the time expires for seeking
appellate court review, if this Court resolves a dispute under Subparagraph
98.f in EPA's favor and if this Court's decision is not appealed; or (iii) 10
days after any final appellate court decision resolving a dispute under
Subparagraph 98.f in EPA's favor.

                           (2)      Upon the Termination Date, the Settling
Defendants' Consent Decree obligation to perform the Remedial Action under
Paragraph 14 (OU1 Remedial Action) shall cease.

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                           (3)      Upon the Termination Date, the Settling
Defendants' Consent Decree obligation to perform the response actions under
Paragraph 18 (O&M and Post-Remedy Institutional Controls) shall cease.

                           (4)      Upon the Termination Date, the Settling
Defendants' Consent Decree obligation to perform the response actions under
Paragraph 19 (Periodic Remedy Review and Post-Remedy Monitoring) shall cease.

                           (5)      Upon the Termination Date, the Consent
Decree obligation to reimburse Plaintiffs' Specified Future Response Costs under
Paragraph 54 shall cease for costs incurred after the Termination Date.

                           (6)      Upon the Termination Date, the covenants not
to sue under Paragraph 84 (United States' Covenant Not to Sue) and Paragraph 85
(State's Covenant Not To Sue) shall cease to apply to Settling Defendants and
shall terminate as to all OU1 Response Activities and Costs. Even after the
Termination Date, the provisions of Paragraph 102 (Credit for Payments Made and
Work Performed) shall continue to apply.

                           (7)      Upon the Termination Date, the covenants not
to sue under Paragraph 92 (Settling Defendants' Covenant Not to Sue) shall cease
to apply to OU1 Response Activities and Costs after the Termination Date, such
as: (i) any response activities for OU1 performed or to be performed after the
Termination Date; and (ii) any costs of response activities for OU1 to the
extent that such costs are incurred after the Termination Date. Even after the
Termination Date, the covenants not to sue under Paragraph 92 (Settling
Defendants' Covenant Not to Sue) shall continue to apply to the EPA Past Cost
Payments, the State Past Cost Payments, the DOI Past Cost Payments, the NRD
Commitment, and any OU1 Response Activities and Costs before the Termination
Date, such as: (i) any response activities for OU1

                                       87


performed before the Termination Date; any (ii) any costs of response activities
for OU1 to the extent that such costs were incurred before after the Termination
Date.

                           (8)      Upon the Termination Date, Paragraph 101
shall cease to apply to Settling Defendants and shall terminate, and the OU1
Response Activities and Costs shall not be considered "matters addressed" by
this Consent Decree.

                           (9)      Settling Defendants specifically reserve any
rights they may have to seek review of the remedial action selected in the ROD
as authorized by CERCLA Section 113(h), 42 U.S.C. Section 9613(h), at any time
after the Termination Date, other than in an action brought by the United States
or the State to enforce this Consent Decree.

                  f.       Insufficiency Determination Disputes.

                           (1)      Settling Defendants shall not be entitled to
dispute - under Section XX (Dispute Resolution) or in any other forum or
proceeding - EPA's failure to make an Insufficiency Determination or EPA's
discretionary election to delay or defer issuance of formal written notice of an
Insufficiency Determination.

                           (2)      Within 10 days after EPA's issuance of
formal written notice of an Insufficiency Determination, the Settling Defendants
may dispute the Insufficiency Determination in accordance with Paragraph 64
(Formal Dispute Resolution) and Paragraph 65 (record review).

                           (3)      Until a dispute under this Subparagraph 98.f
is resolved, Settling Defendants shall continue to perform all Response Work
required under this Consent Decree, specifically including all work to implement
the Remedial Action under Paragraph 14, with the continuation of the Response
Work being financed either by: (i) any funds remaining in the Disbursement
Special Account or the Escrow Account; or (ii) any additional funds that
Settling

                                       88


Defendants may need to commit or provide under this Subparagraph, as necessary
to finance the continuation of the Response Work.

         99.      Nothing in this Consent Decree shall be construed as limiting
or precluding Plaintiffs' right to issue an administrative order or to institute
a judicial proceeding relating to OU1 after the Termination Date, including but
not limited any administrative order or judicial proceeding seeking continuation
or completion of the Response Work after the Termination Date. Notwithstanding
Paragraph F of Section I (Background), Settling Defendants hereby agree and
covenant that the Plaintiffs shall not have to prove and that Settling
Defendants shall not contest the following facts with respect to OU1 in response
to any administrative order or in any judicial proceeding relating to OU1 after
the Termination Date:

         (i)      Each Settling Defendant is a person who at the time of
                  disposal of a hazardous substance owned or operated a facility
                  from which such hazardous substances were disposed of, and
                  from which there have been releases of hazardous substances
                  which caused the incurrence of response costs for OU1; and

         (ii)     Each Settling Defendant is a person who by contract,
                  agreement, or otherwise arranged for the disposal or treatment
                  of hazardous substances owned or possessed by the Settling
                  Defendant, by another party or entity, at a facility owned or
                  operated by another party or entity and containing such
                  hazardous substances, from which there have been releases of
                  hazardous substances which caused the incurrence of response
                  costs for OU1.

             XXV. EFFECT OF SETTLEMENT AND CONTRIBUTION PROTECTION

         100.     Except as provided in Paragraph 95 (Waiver of Claims Against
De Micromis Parties), nothing in this Consent Decree shall be construed to
create any rights in, or grant any

                                       89


cause of action to, any person not a Party to this Consent Decree. The preceding
sentence shall not be construed to waive or nullify any rights that any person
not a signatory to this decree may have under applicable law. Except as provided
in Paragraph 95 (Waiver of Claims Against De Micromis Parties), each of the
Parties expressly reserves any and all rights (including, but not limited to,
any right to contribution), defenses, claims, demands, and causes of action
which each Party may have with respect to any matter, transaction, or occurrence
relating in any way to the Site against any person not a Party hereto.

         101.     Statutory Contribution Protection. The Parties agree, and by
entering this Consent Decree this Court finds, that the Settling Defendants are
entitled, as of the Effective Date, to protection from contribution actions or
claims as provided by CERCLA Section 113(f)(2), 42 U.S.C. Section 9613(f)(2) for
matters addressed in this Consent Decree. Settling Defendants' Related Parties
are also entitled, as of the Effective Date, to protection from contribution
actions or claims as provided by Section 113(f)(2) of CERCLA, 42 U.S.C. Section
9613(f)(2), for "matters addressed" in this Consent Decree. For the purpose of
this Paragraph 101, and except as provided by Subparagraph 98.e.(8), the
"matters addressed" by this Consent Decree are the OU1 Response Activities and
Costs.

         102.     Credit for Payments Made and Work Performed.

                  a.       The Parties agree and acknowledge that the Plaintiffs
shall recognize that the Settling Defendants are entitled to full credit,
applied against their liabilities for response costs and natural resource
damages at the Site, for: (i) the EPA Past Cost Payments, (ii) the State Past
Cost Payments; (iii) the DOJ Past Cost Payments; (iv) the NRD Commitment; (v)
all Specified Future Response Costs reimbursed under Paragraph 54; (vi) all
response costs incurred and paid by the Settling Defendants in performing the
Remedial Design under the July 2003

                                       90


AOC and this Consent Decree; and (vii) the Allowable RD/RA Costs paid or
reimbursed from the Escrow Account under Paragraph 11 of this Consent Decree and
Appendix C; provided, however, that the credit ultimately recognized shall take
into account and shall not include the amount of any recoveries by Settling
Defendants of any portion of such payments from other liable persons, such as
through a recovery under Sections 107 and 113 of CERCLA, 42 U.S.C. Sections 9607
and 9613. With respect to the Allowable RD/RA Costs, the recognized credit shall
take into account and shall not include the amount of any disbursements from the
Disbursement Special Account to the Escrow Account pursuant to Paragraph 10 of
this Consent Decree and Appendix B. With respect to the NRD Commitment, the
recognized credit may take into account, as appropriate, the value of
restoration projects funded by the NRD Commitment.

                  b.       As provided by Paragraph 30 of the API/NCR Consent
Decree, the Plaintiffs shall recognize that Appleton Papers Inc. and NCR
Corporation are entitled to full credit, applied against their liabilities for
response costs at the Site, for the funds deposited in and disbursed from the
Disbursement Special Account pursuant to Paragraph 10 of this Consent Decree and
Appendix B. In addition, the Settling Defendants hereby agree and acknowledge
that they shall recognize that Appleton Papers Inc. and NCR Corporation are
entitled to full credit, applied against their liabilities for response costs at
the Site, for the funds deposited in and disbursed from the Disbursement Special
Account pursuant to Paragraph 10 of this Consent Decree and Appendix B.

         103.     The Settling Defendants agree that with respect to any suit or
claim for contribution brought by them for matters related to this Consent
Decree they will notify the United States and the State in writing no later than
20 days prior to the initiation of such suit or claim.

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         104.     The Settling Defendants also agree that with respect to any
suit or claim for contribution brought against them for matters related to this
Consent Decree they will notify in writing the United States and the State
within 20 days of service of the complaint on them. In addition, Settling
Defendants shall notify the United States and the State within 20 days of
service or receipt of any Motion for Summary Judgment and within 20 days of
receipt of any order from a court setting a case for trial.

         105.     Waiver of Claim-Splitting Defenses. In any subsequent
administrative or judicial proceeding initiated by the United States or the
State for injunctive relief, recovery of response costs, or other appropriate
relief relating to the Site, Settling Defendants shall not assert, and may not
maintain, any defense or claim based upon the principles of waiver, res
judicata, collateral estoppel, issue preclusion, claim-splitting, or other
defenses based upon any contention that the claims raised by the United States
or the State in the subsequent proceeding were or should have been brought in
the instant case; provided, however, that nothing in this Paragraph affects the
enforceability of the covenants not to sue set forth in Section XXII (Covenants
Not to Sue by Plaintiffs).

                           XXVI. ACCESS TO INFORMATION

         106.     Settling Defendants shall provide to the Response Agencies,
upon request, copies of all documents and information within their possession or
control or that of their contractors or agents relating to activities at OU1 or
to the implementation of this Consent Decree, including, but not limited to,
sampling, analysis, chain of custody records, manifests, trucking logs,
receipts, reports, sample traffic routing, correspondence, or other documents or
information related to the Response Work. Settling Defendants shall also make
available to the Response Agencies, for purposes of investigation, information
gathering, or testimony, their employees, agents, or

                                       92


representatives with knowledge of relevant facts concerning the performance of
the Response Work.

         107.     Business Confidential and Privileged Documents.

                  a.       Settling Defendants may assert business
confidentiality claims covering part or all of the documents or information
submitted to Plaintiffs under this Consent Decree to the extent permitted by and
in accordance with Section 104(e)(7) of CERCLA, 42 U.S.C. Section 9604(e)(7),
and 40 C.F.R. Section 2.203(b). Documents or information determined to be
confidential by EPA will be afforded the protection specified in 40 C.F.R. Part
2, Subpart B. If no claim of confidentiality accompanies documents or
information when they are submitted to EPA and the State, or if EPA has notified
Settling Defendants that the documents or information are not confidential under
the standards of Section 104(e)(7) of CERCLA, the public may be given access to
such documents or information without further notice to Settling Defendants.

                  b.       The Settling Defendants may assert that certain
documents, records and other information are privileged under the
attorney-client privilege or any other privilege recognized by federal law. If
the Settling Defendants assert such a privilege in lieu of providing documents,
they shall provide the Plaintiffs with the following: (i) the title of the
document, record, or information; (ii) the date of the document, record, or
information; (iii) the name and title of the author of the document, record, or
information; (iv) the name and title of each addressee and recipient; (v) a
description of the contents of the document, record, or information: and (vi)
the privilege asserted by Settling Defendants. However, no documents, reports or
other information created or generated pursuant to the requirements of the
Consent Decree shall be withheld on the grounds that they are privileged.

                                       93


         108.     No claim of confidentiality shall be made with respect to any
data generated pursuant to the requirements of this Consent Decree, including,
but not limited to, all sampling, analytical, monitoring, hydrogeologic,
scientific, chemical, or engineering data, or any other documents or information
evidencing conditions at or around the Site.

                           XXVII. RETENTION OF RECORDS

         109.     Until 10 years after the Settling Defendants' receipt of EPA's
notification of Certification of Completion of the Response Work pursuant to
Paragraph 45.b, each Settling Defendant shall preserve and retain all records
and documents now in its possession or control or which come into its possession
or control that relate in any manner to the performance of the Response Work or
liability of any person for response actions conducted and to be conducted at
the Site, regardless of any corporate retention policy to the contrary. Until 10
years after the Settling Defendants' receipt of EPA's notification of
Certification of Completion of the Response Work pursuant to Paragraph 45.b,
Settling Defendants shall also instruct their contractors and agents to preserve
all documents, records, and information of whatever kind, nature or description
relating to the performance of the Response Work. At any time more than 5 years
after Certification of Completion of Remedial Action by EPA pursuant to Consent
Decree Subparagraph 44.b, the Settling Defendants may request Plaintiffs' assent
to terminate the document retention period earlier for specified categories of
records and documents. If Plaintiffs assent to any such request, the Plaintiffs
assent shall be given in writing.

         110.     At the conclusion of this document retention period, Settling
Defendants shall notify the United States and the State at least 90 days prior
to the destruction of any such records or documents, and, upon request by the
United States or the State, Settling Defendants shall deliver any such records
or documents to EPA or WDNR. The Settling Defendants may assert

                                       94


that certain documents, records and other information are privileged under the
attorney-client privilege or any other privilege recognized by federal law. If
the Settling Defendants assert such a privilege, they shall provide the
Plaintiffs with the following: (i) the title of the document, record, or
information; (ii) the date of the document, record, or information; (iii) the
name and title of the author of the document, record, or information; (iv) the
name and title of each addressee and recipient; (v) a description of the subject
of the document, record, or information; and (vi) the privilege asserted by
Settling Defendants. However, no documents, reports or other information created
or generated pursuant to the requirements of the Consent Decree shall be
withheld on the grounds that they are privileged.

         111.     Each Settling Defendant hereby certifies individually that, to
the best of its knowledge and belief, after thorough inquiry, it has not
altered, mutilated, discarded, destroyed or otherwise disposed of any records,
documents or other information relating to its potential liability regarding the
Site since notification of potential liability by the United States or the State
or the filing of suit against it regarding the Site and that it has fully
complied with any and all requests for information pursuant to Section 104(e)
and 122(e) of CERCLA, 42 U.S.C. Sections 9604(e) and 9622(e), and Section 3007
of RCRA, 42 U.S.C. Section 6927.

                         XXVIII. NOTICES AND SUBMISSIONS

         112.     Whenever, under the terms of this Consent Decree, written
notice is required to be given or a report or other document is required to be
sent by one Party to another, it shall be directed to the individuals at the
addresses specified below, unless those individuals or their successors give
notice of a change to the other Parties in writing. All notices and submissions
shall be considered effective upon receipt, unless otherwise provided. Written
notice as specified

                                       95


herein shall constitute complete satisfaction of any written notice requirement
of the Consent Decree with respect to the United States, the State, and the
Settling Defendants, respectively.

As to the United States:

         As to DOJ:

         Chief, Environmental Enforcement Section
         Environment and Natural Resources Division
         U.S. Department of Justice (DJ # 90-11-2-1045Z)

         P.O. Box 7611                     1425 New York Avenue, NW - 13th Floor
         Washington, D.C. 20044-7611       Washington, DC 20005

         As to EPA:

         Director, Superfund Division
         U.S. Environmental Protection Agency
         Region 5
         77 West Jackson Blvd.
         Chicago, IL 60604

         As to DOI:

         Office of the Solicitor
         Division of Parks and Wildlife
         U.S. Department of the Interior
         1849 C Street, N.W.
         Washington, DC 20240

As to the State:

         As to WDOJ:

         Jerry L. Hancock
         Assistant Attorney General
         Wisconsin Department of Justice

         P.O. Box 7857                     17 West Main Street
         Madison, WI 53707-7857            Madison, WI 53702

                                       96


         As to WDNR:

         Greg Hill
         State Project Coordinator
         Wisconsin Department of Natural Resources

         P.O. Box 7921                       101 S. Webster St.
         Madison, WI 53707-7921              Madison, WI 53703

As to the Settling Defendants:

         As to the P. H. Glatfelter Company

         Patrick H. Zaepfel
         Environmental Counsel
         P. H. Glatfelter Company
         96 South George St., Suite 420
         York, PA 17401

         with a copy to:

         David G. Mandelbaum
         Ballard Spahr Andrews & Ingersoll, LLP
         1735 Market Street, 51st Floor
         Philadelphia, PA 19103-7599

         As to WTM I Company:

         J.P. Causey Jr.
         Vice President & Corporate Secretary/WTM I Company
         c/o Chesapeake Corporation
         1021 E. Cary Street
         Box 2350
         Richmond, VA 23218-2350

         with a copy to:

         Nancy K. Peterson
         Quarles & Brady LLP
         411 East Wisconsin Avenue, Suite 2040
         Milwaukee, Wisconsin 53202-4497

                                       97


                              XXIX. EFFECTIVE DATE

         113.     The effective date of this Consent Decree shall be the date
upon which this Consent Decree is entered by the Court; provided, however, that
the Settling Defendants hereby agree that they shall be bound upon the Date of
Lodging to comply with obligations of the Settling Defendants specified in this
Consent Decree as accruing upon the Date of Lodging. In the event the Plaintiffs
withdraw or withhold consent to this Consent Decree before entry, or the Court
declines to enter the Consent Decree, then the preceding requirement to comply
with requirements of this Consent Decree upon the Date of Lodging shall
terminate; provided, however, that the parties hereby agree that even after any
such termination: (i) the Plaintiffs shall be entitled to retain any and all
payments already made to Plaintiffs under this agreement, and the provisions of
Section XVII (Payments) concerning Plaintiffs' retention and use of such
payments shall survive termination; and (ii) Plaintiffs shall continue to
recognize that the Settling Defendants are entitled to full credit for payments
already made and work already performed under this agreement as provided by
Subparagraph 102.a. In the event the Plaintiffs withdraw or withhold consent to
this Consent Decree before entry, or the Court declines to enter the Consent
Decree, the Parties agree that the unexpended balance of the Escrow Account
shall be disbursed to the Settling Defendants at their request.

                         XXX. RETENTION OF JURISDICTION

         114.     This Court retains jurisdiction over both the subject matter
of this Consent Decree and the Settling Defendants for the duration of the
performance of the terms and provisions of this Consent Decree for the purpose
of enabling any of the Parties to apply to the Court at any time for such
further order, direction, and relief as may be necessary or appropriate for the

                                       98


construction or modification of this Consent Decree, or to effectuate or enforce
compliance with its terms, or to resolve disputes in accordance with Section XX
(Dispute Resolution) hereof.

                                XXXI. APPENDICES

         115.     The following appendices are attached to and incorporated into
this Consent Decree:

         "Appendix A" is the Trustee Council Resolution relating to this Consent
Decree.

         "Appendix B" is the Appendix addressing Management of the Disbursement
Special Account.

         "Appendix C" is the Appendix addressing Escrow Account Management.

         "Appendix D" is the form of Escrow Agreement.

         "Appendix E" is the Appendix addressing Special Procedures for
Restoration Work.

         "Appendix F" is the July 2003 AOC (including the SOW for Remedial
Design).

         "Appendix G" is the map of OU1.

         "Appendix H" is the ROD.

         "Appendix I" is the Statement of Work for the Remedial Action.

                            XXXII. COMMUNITY RELATIONS

         116.     Settling Defendants shall propose to the Response Agencies the
Settling Defendants' participation in the community relations plan to be
developed by the Response Agencies. The Response Agencies will determine the
appropriate role for the Settling Defendants under the Plan. Settling Defendants
shall also cooperate with the Response Agencies in providing information
regarding the Response Work to the public. As requested by the Response
Agencies, Settling Defendants shall participate in the preparation of such
information

                                       99


for dissemination to the public and in public meetings which may be held or
sponsored by the Response Agencies to explain activities at or relating to OU1.

                              XXXIII. MODIFICATION

         117.     Schedules specified in this Consent Decree for completion of
the Response Work may be modified by agreement of the Response Agencies and the
Settling Defendants. All such modifications shall be made in writing.

         118.     Except as provided in Paragraph 15 ("Modification of the SOW
or related Work Plans"), no material modifications shall be made to the SOW
without written notification to and written approval of the United States, the
State, Settling Defendants, and the Court. Modifications to the SOW that do not
materially alter that document may be made by written agreement between the
Response Agencies and the Settling Defendants.

         119.     Nothing in this Decree shall be deemed to alter the Court's
power to enforce, supervise or approve modifications to this Consent Decree.

                XXXIV. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT

         120.     This Consent Decree shall be lodged with the Court for a
period of not less than thirty (30) days for public notice and comment in
accordance with Section 122(d)(2) of CERCLA, 42 U.S.C. Section 9622(d)(2), and
28 C.F.R. Section 50.7. The United States reserves the right to withdraw or
withhold its consent if the comments regarding the Consent Decree disclose facts
or considerations which indicate that the Consent Decree is inappropriate,
improper, or inadequate. Settling Defendants consent to the entry of this
Consent Decree without further notice.

         121.     If for any reason the Court should decline to approve this
Consent Decree in the form presented, this agreement is voidable at the sole
discretion of any Party and the terms of the agreement may not be used as
evidence in any litigation between the Parties.

                                       100


                            XXXV. SIGNATORIES/SERVICE

         122.     The undersigned representatives of each Settling Defendant,
the undersigned representatives of the State, and the Assistant Attorney General
for the Environment and Natural Resources Division of the United States
Department of Justice each certify that he or she is fully authorized to enter
into the terms and conditions of this Consent Decree and to execute and legally
bind such Party to this document.

         123.     Each Settling Defendant hereby agrees not to oppose entry of
this Consent Decree by this Court or to challenge any provision of this Consent
Decree unless the United States has notified the Settling Defendants in writing
that it no longer supports entry of the Consent Decree.

         124.     Each Settling Defendant shall identify, on the attached
signature page, the name, address and telephone number of an agent who is
authorized to accept service of process by mail on behalf of that Party with
respect to all matters arising under or relating to this Consent Decree.
Settling Defendants hereby agree to accept service in that manner and to waive
the formal service requirements set forth in Rule 4 of the Federal Rules of
Civil Procedure and any applicable local rules of this Court, including, but not
limited to, service of a summons.

                                       101


                              XXXVI. FINAL JUDGMENT

         125.     Upon approval and entry of this Consent Decree by the Court,
this Consent Decree shall constitute a final judgment between and among the
United States, the State, and the Settling Defendants. The Court finds that
there is no just reason for delay and therefore enters this judgment as a final
judgment under Fed. R. Civ. P. 54 and 58.

SO ORDERED THIS___DAY OF________________, 200__.

                                                    ____________________________

                                                    United States District Judge

                                       102


THE UNDERSIGNED PARTY enters into this Consent Decree in the matter of United
States and the State of Wisconsin v. P. H. Glatfelter Company and WTM I Company
(E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay
Site.

                                     FOR THE UNITED STATES OF AMERICA

9.5.03                               /s/ Thomas L. Sansonetti
- ---------                            -------------------------------------------
Date                                 THOMAS L. SANSONETTI
                                     Assistant Attorney General
                                     Environment and Natural Resources Division
                                     U.S. Department of Justice
                                     Washington, D.C. 20530

9/5/2003                             /s/ Randall M. Stone
- ---------                            -------------------------------------------
Date                                 RANDALL M. STONE, Trial Attorney
                                     JEFFREY A. SPECTOR, Trial Attorney
                                     DANIEL C. BECKHARD, Senior Counsel
                                     Environmental Enforcement Section
                                     Environment and Natural Resources Division
                                     U.S. Department of Justice
                                     P.O. Box 7611
                                     Washington, D.C. 20044-7611

                                     STEVEN M. BISKUPIC
                                     United States Attorney

                                     MATTHEW V. RICHMOND
                                     Assistant United States Attorney
                                     Eastern District of Wisconsin
                                     U.S. Courthouse and Federal Building
                                     Room 530
                                     517 E. Wisconsin Avenue
                                     Milwaukee, WI  53202



THE UNDERSIGNED PARTY enters into this Consent Decree in the matter of United
States and the State of Wisconsin v. P. H. Glatfelter Company and WTM I Company
(E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay
Site.

9/5/03                               /s/ Thomas V. Skinner
- ---------                            -------------------------------------------
Date                                 THOMAS V. SKINNER
                                     Regional Administrator
                                     U.S. Environmental Protection Agency
                                     Region 5
                                     77 West Jackson Boulevard
                                     Chicago, IL 60604

9/02/03                              /s/ Roger M. Grimes
- ---------                            -------------------------------------------
Date                                 ROGER M. GRIMES
                                     Associate Regional Counsel
                                     U.S. Environmental Protection Agency
                                     Region 5
                                     77 West Jackson Boulevard
                                     Chicago, IL 60604



THE UNDERSIGNED PARTY enters into this Consent Decree in the matter of United
States and the State of Wisconsin v. P. H. Glatfelter Company and WTM I Company
(E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay
Site.

                                     FOR THE STATE OF WISCONSIN

9/2/03                               /s/ P. Scott Hassett
- ---------                            -------------------------------------------
Date                                 P. SCOTT HASSETT
                                     Secretary
                                     Wisconsin Department of Natural Resources
                                     101 South Webster Street
                                     Madison, WI 53703

7/3/03                               /s/ Jerry L. Hancock
- ---------                            -------------------------------------------
Date                                 JERRY L. HANCOCK
                                     Assistant Attorney General
                                     Wisconsin Department of Justice
                                     17 West Main Street
                                     Madison, WI 53702



THE UNDERSIGNED PARTY enters into this Consent Decree in the matter of United
States and the State of Wisconsin v. P. H. Glatfelter Company and WTM I Company
(E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay
Site.

                                     FOR P. H. GLATFELTER COMPANY

08/26/03                             Signature: George H. Glatfelter II
- --------                                        --------------------------------
Date                                 Name (print): George H. Glatfelter II
                                     Title:        Chairman & C.E.O.
                                     Address:      96 S. George St., Suite 500
                                                   York, PA 17401

Agent Authorized to Accept Service on Behalf of Above-signed Party:

                                     Name (print): Patrick H. Zaepfel
                                                   --------------------
                                     Title: Environmental Counsel
                                     Address: 96 South George St., Suite 420
                                              York, PA 17401
                                     Ph. Number: (717) 225-2778



THE UNDERSIGNED PARTY enters into this Consent Decree in the matter of United
States and the State of Wisconsin v. P. H. Glatfelter Company and WTM I Company
(E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay
Site.

                                     FOR WTM I COMPANY

August 26, 2003                      Signature: J.P. Causey Jr.
- ---------------                                 --------------------------------
Date                                 Name (print): J.P. Causey Jr.
                                     Title:        Vice President
                                     Address:      1021 East Cary St., 22d Floor
                                                   Box 2350
                                                   Richmond, Virginia 23218

Agent Authorized to Accept Service on Behalf of Above-signed Party:

                                  Name (print): J.P. Causey Jr.
                                                --------------------
                                  Title:        Vice President
                                  Address:      c/o Chesapeake Corporation
                                                1021 East Cary Street, 22d Floor
                                                Box 2350, Richmond, VA 23218
                                  Ph. Number:   804 697-1166

                            CONSENT DECREE APPENDIX A

           TRUSTEE COUNCIL RESOLUTION RELATING TO THIS CONSENT DECREE



              FOX RIVER/GREEN BAY NATURAL RESOURCE TRUSTEE COUNCIL
                                RESOLUTION NO. 4

    RESOLUTION REGARDING THE PROPOSED CONSENT DECREE IN UNITED STATES AND THE
   STATE OF WISCONSIN v. P. H. GLATFELTER COMPANY AND WTM I COMPANY (E.D. WIS.)

      WHEREAS, the undersigned members of the Fox River/Green Bay Natural
Resource Trustee Council ("collectively the "Trustees") acknowledge that the
Trustees were informed of negotiations with potentially responsible parties
regarding the releases of hazardous substances that resulted in injuries to
natural resources under Federal, State, and Tribal Trusteeship at the Lower Fox
River and Green Bay Site;

      WHEREAS, the Trustees are aware that the negotiations have resulted in a
proposed Consent Decree in the case captioned United States and the State of
Wisconsin v. P. H. Glatfelter Company and WTM I Company (E.D. Wis.);

      WHEREAS, the Trustees participated in the negotiations concerning the
provisions of the Consent Decree relating to natural resource damages and
natural resource restoration efforts at the Site;

      WHEREAS, the Trustees understand that, under the Consent Decree, Settling
Defendants P. H. Glatfelter Company ("Glatfelter") and WTM I Company ("WTM")
would each: (1) pay $150,000 to the U.S. Department of the Interior ("DOI") to
reimburse a portion of DOI's past natural resource damage assessment costs
(collectively the $300,000 "DOI Past Cost Payments"); and (2) pay an additional
$1,500,000 to finance natural resource restoration efforts at the Site
(collectively the $3,000,000 "NRD Commitment");

      WHEREAS; the Trustees agree to cooperate and participate, as appropriate,
in the natural resource restoration efforts prescribed by Section XVI of the
Consent Decree;

      WHEREAS; the Trustees agree to cooperate and participate, as appropriate,
in the special procedures for restoration work prescribed by Consent Decree
Appendix E;

      WHEREAS, the Trustees acknowledge and agree that under Paragraph 48 of the
Consent Decree, a portion of the NRD Commitment may be used to fund Approved
Restoration Work that would be performed by Glatfelter and/or WTM, if the
Trustees jointly approve a Project Implementation Plan for such Work;

      WHEREAS, the Trustees acknowledge and agree that under Paragraph 49 of the
Consent Decree, the remainder of the NRD Commitment will be disbursed to a
Site-specific sub-account within the DOI NRDAR Fund and will be managed by DOI
for the joint benefit and use of the Trustees to pay for Trustee-sponsored
natural resource restoration efforts;

      WHEREAS, the Trustees acknowledge and agree that all funds disbursed to
the DOI NRDAR Fund under Paragraph 49 of the Consent Decree shall be used in a
manner consistent

                               Appendix A - Page 1



with the Trustees' Joint Restoration Plan, and shall be applied toward the costs
of restoration, rehabilitation, or replacement of injured natural resources at
the Site, and/or acquisition of equivalent resources, including but not limited
to any administrative costs and expenses necessary for, and incidental to,
restoration, rehabilitation, replacement, and/or acquisition of equivalent
resources planning, and any restoration, rehabilitation, replacement, and/or
acquisition of equivalent resources undertaken;

      WHEREAS, the Trustees acknowledge Subparagraph 102.a of the Consent Decree
and agree that the Trustees shall recognize that Glatfelter and WTM are entitled
to full credit for the NRD Commitment, applied against their liabilities for
natural resource damages relating to the Site; provided, however, that the
credit ultimately recognized shall take into account and shall not include the
amount of any recoveries by Glatfelter and WTM of any portions of such payments
from other liable persons, such as through a recovery under Sections 107 and 113
of CERCLA, 42 U.S.C. Sections 9607 and 9613; the Trustees also acknowledge and
agree that the recognized credit may take into account, as appropriate, the
value of restoration projects funded by the NRD Commitment;

      WHEREAS, the Trustees recognize and acknowledge that the Consent Decree
does not include a covenant not to sue Glatfelter or WTM for natural resource
damages, and recognize and acknowledge that the Consent Decree expressly
reserves all rights against Glatfelter and WTM for liability for natural
resource damages relating to the Site; and

      WHEREAS, the Trustees understand that Glatfelter and WTM, by entry into
the Consent Decree, have not admitted any liability for natural resource damages
relating to the Site.

      NOW THEREFORE BE IT RESOLVED that the Trustees support the proposed
Consent Decree and agree to act in accordance with the Consent Decree, as
specified by this Resolution.

                               Appendix A - Page 2



              FOX RIVER/GREEN BAY NATURAL RESOURCE TRUSTEE COUNCIL
                                RESOLUTION NO. 4

    RESOLUTION REGARDING THE PROPOSED CONSENT DECREE IN UNITED STATES AND THE
  STATE OF WISCONSIN v. P. H. GLATFELTER COMPANY AND WTM I COMPANY (E.D. WIS.)

FOR THE UNITED STATES DEPARTMENT OF THE INTERIOR

/s/ Charlie Wooley                                                 DATE: 9/16/03
- -------------------------------------------
Charlie Wooley, Assistant Regional Director
U.S. Fish and Wildlife Service, Region 3
in Consultation with NOAA

                               Appendix A - Page 3



              FOX RIVER/GREEN BAY NATURAL RESOURCE TRUSTEE COUNCIL
                                RESOLUTION NO. 4

   RESOLUTION REGARDING THE PROPOSED CONSENT DECREE IN UNITED STATES AND THE
  STATE OF WISCONSIN v. P. H. GLATFELTER COMPANY AND WTM I COMPANY (E.D. WIS.)

FOR THE WISCONSIN DEPARTMENT OF NATURAL RESOURCES

/s/ Bruce Baker                                                    DATE: 8/18/03
- ---------------------------------
Bruce Baker, Deputy Administrator
Water Division

                               Appendix A - Page 4




                                                                 AUGUST 14, 2003

              FOX RIVER/GREEN BAY NATURAL RESOURCE TRUSTEE COUNCIL
                                RESOLUTION NO. 4

    RESOLUTION REGARDING THE PROPOSED CONSENT DECREE IN UNITED STATES AND THE
   STATE OF WISCONSIN v. P. H. GLATFELTER COMPANY AND WTM I COMPANY (E.D. WIS.)

FOR THE MENOMINEE INDIAN TRIBE OF WISCONSIN

/s/ Gary Besaw
- --------------------------------
Gary Besaw, Vice-Chair                                          DATE: 8-28-03


                               Appendix A - Page 5



              FOX RIVER/GREEN BAY NATURAL RESOURCE TRUSTEE COUNCIL
                                RESOLUTION NO. 4

    RESOLUTION REGARDING THE PROPOSED CONSENT DECREE IN UNITED STATES AND THE
   STATE OF WISCONSIN v. P. H. GLATFELTER COMPANY AND WTM I COMPANY (E.D. WIS.)

FOR THE ONEIDA TRIBE OF INDIANS OF WISCONSIN

/s/ Paul Ninham                                               DATE: Aug 22, 2003
- ---------------------------
Paul Ninham, Council Member

                               Appendix A - Page 6



              FOX RIVER/GREEN BAY NATURAL RESOURCE TRUSTEE COUNCIL
                                RESOLUTION NO. 4

   RESOLUTION REGARDING THE PROPOSED CONSENT DECREE IN UNITED STATES AND THE
   STATE OF WISCONSIN v. P. H. GLATFELTER COMPANY AND WTM I COMPANY (E.D. WIS.)

FOR THE MICHIGAN TRUSTEES

Michigan Department of Environmental Quality

/s/ William Creal                                                DATE: 8-18-2003
- ----------------------------------------------
William Creal

Michigan Department of Attorney General

/s/ Kathleen Cavanaugh                                           DATE: 8-18-03
- ----------------------------------------------
Kathleen Cavanaugh, Assistant Attorney General

                               Appendix A - Page 7



                            CONSENT DECREE APPENDIX B

                 MANAGEMENT OF THE DISBURSEMENT SPECIAL ACCOUNT

      1. Background.

            a. The API/NCR Decree. Pursuant to the Consent Decree in United
States and the State of Wisconsin v. Appleton Papers Inc. and NCR Corporation,
Case No. 01-C-0816 (E.D. Wis.), Appleton Papers Inc. and NCR Corporation
(collectively "API/NCR") are obligated to provide the Plaintiffs up to $10
million per year over the four-year term of that Decree (up to $40 million in
total), to be applied toward response action projects and natural resource
damage restoration projects relating the Site. A separate Memorandum of
Agreement among the Plaintiffs and other Inter-Governmental Partners provides
that approximately one-half of the $40 million payable under the API/NCR Decree
shall be used to implement response action projects and that the remainder shall
be used to implement natural resource restoration projects. Funds under that
Decree can also be used as partial funding for larger projects. As set forth in
detail in the API/NCR Decree, within 21 days after the Plaintiffs provide
API/NCR a good faith written estimate of additional funds required for projects
to be performed over the next six months, API/NCR are obligated to provide the
requests funds, subject to the $10 million annual funding limitation. Funding
provided for response action projects under the API/NCR Decree can be deposited
in a Site-specific Superfund Special Account within the EPA Hazardous Substance
Superfund, to be retained and used to conduct or finance response action
projects at or in connection with the Site. As recognized by the API/NCR Decree,
funds paid under that Decree can provide partial funding for projects that are
also funded in part from other funding sources.

            b. Plaintiffs' Intention to Devote $10 Million From the API/NCR
Decree for Designated Response Projects in OU1. The Plaintiffs intend to devote
up to $10 million payable under the API/NCR Decree for one or more projects that
will be performed as part of the OU1 Remedial Action (hereinafter "Designated
Response Projects"), as permitted by the API/NCR Decree. Consistent with that
intention, the Plaintiffs shall use their best efforts to have $10 million
available for funding response action projects under the API/NCR Decree
deposited in the Fox River OU1 Disbursement Special Account (the "Disbursement
Special Account"), so that such funds can be used for Designated Response
Projects.

                  (1) The Plaintiffs and the Settling Defendants will jointly
identify Designated Response Projects, and the Settling Defendants will assist
the Plaintiffs in preparing a good faith estimate of costs required for the
Projects over the next six months.

                  (2) The Plaintiffs will then make an appropriate request for
the funds from API/NCR and will have such funds deposited in the Disbursement
Special Account, as permitted by the API/NCR Decree.

                  (3) Allowable RD/RA Costs for Designated Response Projects
shall be paid initially from the Escrow Account described by Consent Decree
Paragraph 11 and Appendix C. Approximately every three months, the Escrow
Account shall then be replenished pursuant to this Appendix B, through a
disbursement from the Disbursement Special Account to the Escrow Account.

                               Appendix B - Page 1



      2. Use of the Disbursement Special Account, Generally. Any funds deposited
in the Disbursement Special Account pursuant to Consent Decree Paragraph 10
shall be managed and disbursed as provided by this Appendix B. This Appendix
shall not apply to any funds other than those deposited in the Disbursement
Special Account pursuant to Consent Decree Paragraph 10, or to any account other
than the Disbursement Special Account.

      3. Special Account Disbursements to the Escrow Account. Approximately once
every three months, for so long as a balance remains in the Disbursement Special
Account, the Settling Defendants may request that the Escrow Account be
reimbursed for Allowable RD/RA Costs already paid from the Escrow Account for
Designated Response Projects. Any such request shall be made in a Quarterly
Report submitted to Plaintiffs pursuant to Consent Decree Paragraph 32. Settling
Defendants shall not include in any Quarterly Report costs included in a
previous Quarterly Report if those costs have been previously reimbursed
pursuant to this Appendix. Within 60 days of EPA's receipt of a Quarterly Report
requesting reimbursement of the Escrow Account under this Paragraph, or if EPA
has requested additional information under Consent Decree Subparagraph 32.c or a
revised Quarterly Report under Consent Decree Subparagraph 32.d, within 60 days
of receipt of the additional information or the revised Quarterly Report, and
subject to the conditions set forth in this Appendix, EPA shall disburse the
funds from the Disbursement Special Account to the Escrow Account as
reimbursement of the Allowable RD/RA Costs for the Designated Response Projects.
If the Settling Defendants fail to cure a deficiency in a Quarterly Report that
has been identified by the Response Agencies within 15 business days after being
notified of, and given the opportunity to cure, the deficiency, EPA will
recalculate the Allowable RD/RA Costs eligible for reimbursement and will
disburse the corrected amount to the Escrow Account in accordance with the
procedures in this Appendix. The Settling Defendants may dispute EPA's
recalculation under this Paragraph pursuant to Consent Decree Section XX
(Dispute Resolution). In no event shall funds be disbursed from the Disbursement
Special Account in excess of amounts properly documented in a Quarterly Report
accepted or modified by EPA.

      4. Procedure for Special Account Disbursements to Settling Defendants. EPA
shall disburse the funds from the Disbursement Special Account to the Escrow
Account in accordance with written instructions that the Settling Defendants
shall provide EPA after the Effective Date.

      5. Termination of Disbursements from the Special Account. EPA's obligation
to disburse funds from the Disbursement Special Account under this Consent
Decree shall terminate upon EPA's determination that Settling Defendants: (i)
have knowingly submitted a materially false or misleading Quarterly Report; (ii)
have submitted a materially inaccurate or incomplete Quarterly Report, and have
failed to correct the materially inaccurate or incomplete Quarterly Report
within 15 business days after being notified of, and given the opportunity to
cure, the deficiency; or (iii) failed to submit a Quarterly Report as required
by Consent Decree Paragraph 32 within 15 business days (or such longer period as
EPA agrees) after being notified that EPA intends to terminate its obligation to
make disbursements pursuant to this Appendix because of Settling Defendants'
failure to submit the Quarterly Report as required by Consent Decree Paragraph
32. EPA's obligation to disburse funds from the Disbursement Special Account
shall also terminate upon EPA's assumption of performance of any portion of the
Response Work pursuant to Consent Decree Paragraph 90, when such assumption of
performance of the Response Work is not challenged by Settling Defendants or, if
challenged, is

                               Appendix B - Page 2



upheld under Consent Decree Section XX (Dispute Resolution). Settling Defendants
may dispute EPA's termination of special account disbursements under Consent
Decree Section XX (Dispute Resolution).

      6. Recapture of Special Account Disbursements. Upon termination of
disbursements from the Disbursement Special Account under Paragraph 5 of this
Appendix, if EPA has previously disbursed funds from the Disbursement Special
Account for activities specifically related to the reason for termination (e.g.,
discovery of a materially false or misleading submission after disbursement of
funds based on that submission), EPA shall submit a bill to Settling Defendants
for those amounts already disbursed from the Disbursement Special Account
specifically related to the reason for termination, plus Interest on that amount
covering the period from the date of disbursement of the funds by EPA to the
date of repayment of the funds by Settling Defendants. Within 30 days of receipt
of EPA's bill, Settling Defendants shall reimburse the Hazardous Substance
Superfund for the total amount billed by a certified or cashier's check or
checks made payable to "EPA Hazardous Substance Superfund" referencing the name
and address of the party making payment, EPA Site/Spill Identification Number
A565, and DOJ Case Number 90-11-2-1045/2. Settling Defendants shall send the
check(s) to:

      U.S. Environmental Protection Agency, Region 5
      Program Accounting and Analysis Branch
      P.O. Box 70753
      Chicago, IL 60673

At the time of payment, Settling Defendants shall send notice that payment has
been made to the to DOJ and EPA in accordance with Consent Decree Section XXVIII
(Notices and Submissions) and to:

      Financial Management Officer
      U.S. Environmental Protection Agency, Region 5
      Mail Code MF-10J
      77 W. Jackson Blvd.
      Chicago, IL 60604

Upon receipt of payment, EPA may deposit all or any portion thereof, in the
Hazardous Substance Superfund, in the Fox River OU1 Disbursement Special
Account, in the Fox River Site Special Account, or in another Site-specific
special account within the Hazardous Substance Superfund. The determination of
where to deposit or how to use the funds shall not be subject to challenge by
Settling Defendants pursuant to the dispute resolution provisions of the Consent
Decree or in any other forum or proceeding. Settling Defendants may dispute
EPA's determination as to recapture of funds pursuant to Consent Decree Section
XX (Dispute Resolution).

      7. Balance of Special Account Funds. After Certification of Completion of
Remedial Action by EPA pursuant to Consent Decree Subparagraph 44.b, and after
EPA completes all disbursements to the Escrow Account in accordance with this
Appendix, if any funds remain in the Disbursement Special Account, EPA may
transfer such funds to the Hazardous Substance Superfund, to the Fox River Site
Special Account, or to another Site-specific special account within the
Hazardous Substance Superfund. Upon any Termination Date

                               Appendix B - Page 3



under Consent Decree Paragraph 98, and after EPA completes all disbursements to
the Escrow Account in accordance with this Appendix, if any funds remain in the
Disbursement Special Account, EPA may transfer such funds to the Hazardous
Substance Superfund, to the Fox River Site Special Account, or to another
Site-specific special account within the Hazardous Substance Superfund. Any
transfer of funds to the Hazardous Substance Superfund, to the Fox River Site
Special Account, or to another Site-specific sub-account within the Hazardous
Substance Superfund shall not be subject to challenge by Settling Defendants
pursuant to the dispute resolution provisions of the Consent Decree or in any
other forum or proceeding.

                               Appendix B - Page 4



                            CONSENT DECREE APPENDIX C

                            ESCROW ACCOUNT MANAGEMENT

      1. Escrow Account Establishment. Pursuant to Consent Decree Paragraph 11,
the Settling Defendants shall establish an escrow account trust fund -- to be
known as the Fox River OU1 Escrow Account (the "Escrow Account") -- with a
duly-chartered federally-insured bank (the "Escrow Agent"). The funds in the
Escrow Account shall be held in trust for the performance of certain
requirements of this Consent Decree, and the United States and the State shall
be beneficiaries of the Escrow Account. The Escrow Account may be established
and managed as several accounts or sub-accounts to address the different sources
and uses of the funds paid into the Escrow Account.

      2. Escrow Agreement Form and Requirements. The final escrow agreement
shall be provided to the Plaintiffs for approval primarily to ensure that the
escrowed funds will be handled in accordance with this Consent Decree. The
escrow agreement shall instruct and authorize the Escrow Agent to apply, retain,
or use the funds in the Escrow Account (and all interest or other income earned
on funds deposited in the Escrow Account) in order to finance response actions
taken or to be taken at or in connection with OU1 of the Site, but only in
accordance with, and to the extent required by, the governing provisions of the
Consent Decree.

      3. Monthly Financial Reports. The escrow agreement shall require that the
Escrow Agent prepare and submit to the Response Agencies' Project Coordinators
designated under the Consent Decree statements every month detailing money
received and disbursed in the preceding month, and the balance in the Escrow
Account on the date of the statement.

      4. Disbursements from the Escrow Account, Generally. The Escrow Agent
shall disburse certain funds from the Escrow Account to the United States and
the State as payment of sums due under this Consent Decree and shall disburse
certain other funds from the Escrow Account to the Settling Defendants for
reimbursement of Allowable RD/RA Costs and/or Allowable Restoration Work Costs.
In addition, the Settling Defendants may direct the Escrow Agent to pay
Allowable RD/RA Costs directly to a contractor or subcontractor responsible for
the performance of the Response Work, or to pay Allowable Restoration Work Costs
directly to a contractor or subcontractor responsible for the performance of
Approved Restoration Work.

      5. Disbursements from the Escrow Account.

            a. Disbursements shall be made from the Escrow Account only for:

                  (1) payment of amounts due under Consent Decree Subparagraph
            53.b (Subsequent Payments and Disbursements for Natural Resource
            Restoration);

                  (2) payment or reimbursement of Allowable RD/RA Costs under
            Consent Decree Paragraph 12 (OU1 Remedial Design) and Consent Decree
            Paragraph 14 (OU1 Remedial Action);

                  (3) payment of Specified Future Response Costs payable to
            Plaintiffs under Consent Decree Paragraph 54 (Payment of Specified
            Future Response Costs);

                               Appendix C - Page 1



                  (4) a payment of any or all unexpended funds remaining in the
            Escrow Account to the Fox River Site Special Account within the EPA
            Hazardous Substance Superfund, to be retained and used to conduct or
            finance response actions at or in connection with the Site, or
            transferred by EPA to the EPA Hazardous Substance Superfund, in the
            event EPA and/or WDNR assume performance of all or any portions of
            the Response Work under Consent Decree Paragraph 90 (Response Work
            Takeover);

                  (5) payment or reimbursement of Allowable Restoration Work
            Costs for Approved Restoration Work under Consent Decree Paragraph
            48;

                  (6) a partial refund payment to the Settling Defendants after
            Certification of Completion of Remedial Action by EPA pursuant to
            Consent Decree Subparagraph 44.b, if requested by the Settling
            Defendants and approved by EPA, after a determination by EPA that
            the partial refund will leave a balance in the account that will be
            sufficient to fund the completion of the Response Work;

                  (7) a refund payment to the Settling Defendants of any and all
            unexpended funds remaining in the Escrow Account, after a
            determination by the Plaintiffs that all required disbursements from
            Escrow Account have been made, after a Termination Date under
            Consent Decree Paragraph 98;

                  (8) a refund payment of any and all unexpended funds remaining
            in the Escrow Account, after a determination by the Plaintiffs that
            all required disbursements from Escrow Account have been made, in
            the event the Plaintiffs withdraw or withhold consent to the Consent
            Decree before entry, or the Court declines to enter the Consent
            Decree;

                  (9) a final payment of any and all unexpended funds remaining
            in the Escrow Account, after Certification of Completion of the
            Response Work by EPA pursuant to Consent Decree Subparagraph 45.b,
            either: (i) as a final refund payment to the Settling Defendant, if
            a final refund payment is requested by the Settling Defendants
            within 180 days after Certification of Completion of the Response
            Work; or (ii) as a payment to the Fox River Site Special Account
            within the EPA Hazardous Substance Superfund, to be retained and
            used to conduct or finance response actions at or in connection with
            the Site, or transferred by EPA to the EPA Hazardous Substance
            Superfund, if a final refund payment is not requested by Settling
            Defendants within 180 days after Certification of Completion of the
            Response Work; and

                  (10) payment of fees, taxes, and expenses under Section 5.3 of
            the Escrow Agreement.

            b. A disbursement from the Escrow Account shall only be made by the
Escrow Agent after receipt of a duly executed escrow disbursement certificate in
substantially the form attached hereto at Consent Decree Appendix D, Exhibit A
(Form of Escrow Disbursement Certificate for Trustee-Sponsored Natural Resource
Restoration Efforts), Exhibit B (Form of Escrow Disbursement Certificate for
Payment or Reimbursement of Allowable RD/RA Costs),

                               Appendix C - Page 2



Exhibit C (Form of Escrow Disbursement Certificate for Payment of Specified
Future Response Costs), Exhibit D (Form of Escrow Disbursement Certificate for
Response Work Takeover), Exhibit E (Form of Escrow Disbursement Certificate for
Payment or Reimbursement of Allowable Restoration Costs), Exhibit F (Form of
Escrow Disbursement Certificate for Refund Payment to Settling Defendants), or
Exhibit G (Form of Escrow Disbursement Certificate for Final Payment to Fox
River Site Special Account).

            c. Copies of any escrow disbursement certificate submitted to the
Escrow Agent shall be submitted to all other Parties to this Consent Decree in
accordance with Consent Decree Section XXVIII (Notices and Submissions), and
shall be submitted to the other Parties in the same manner and on the same day
that the escrow disbursement certificate is submitted to the Escrow Agent. No
disbursement from the Escrow Account shall be made in response to an escrow
disbursement certificate unless: (i) at least 10 business day have elapsed since
the Escrow Agent received the escrow disbursement certificate; and (ii) the
Escrow Agent has not received written notice within those 10 business days that
a Party to this Consent Decree objects to the requested disbursement and has
invoked the dispute resolution procedures under Consent Decree Section XX
(Dispute Resolution) to resolve the objection.

      6. Disbursements for Natural Resource Restoration. Beyond the $500,000
initial payment for Trustee-sponsored natural resource damage restoration
efforts required by Consent Decree Subparagraph 53.a, an additional $2,500,000
deposited in the Escrow Account shall be earmarked and dedicated for natural
resource restoration relating to the Site, as the remainder of the NRD
Commitment. That $2,500,000 shall be disbursed from the Escrow Account as set
forth in the following Subparagraphs: (i) for payment or reimbursement of
Allowable Restoration Work Costs incurred for Approved Restoration Work to be
performed by the Settling Defendants under Consent Decree Paragraph 48; and/or
(ii) for payment to a Site-specific sub-account within the DOI NRDAR Fund, to
finance Trustee-sponsored natural resource damage restoration efforts under
Consent Decree Paragraph 49.

            a. Disbursements shall be made from the Escrow Account in accordance
with Consent Decree Paragraph 11 and Consent Decree Paragraph 48 for payment or
reimbursement of Allowable Restoration Work Costs incurred for Approved
Restoration Work to be performed by the Settling Defendants.

            b. By no later than December 1, 2004, the following additional
amount shall be disbursed from the Escrow Account to a Site-specific sub-account
within the NRDAR Fund: $1,250,000 less the total amount of all disbursements
from the Escrow Account for Allowable Restoration Work Costs through September
30, 2004.

            c. By no later than December 1, 2005, the following additional
amount shall be disbursed from the Escrow Account to a Site-specific sub-account
within the NRDAR Fund: $1,250,000 less the total amount of all disbursements
from the Escrow Account for Allowable Restoration Work Costs between October 1,
2004 and September 30, 2005.

      7. Disbursements for Specified Future Response Costs. Except for costs
under Consent Decree Section XV (Emergency Response) that are payable under
Consent Decree Subparagraph 54.a.(2), all Specified Future Response Costs
incurred and billed by the United States and/or the State before Certification
of Completion of Remedial Action by EPA pursuant

                               Appendix C - Page 3



to Consent Decree Subparagraph 44.b shall be reimbursed from the Escrow Account,
to the extent that such costs are not inconsistent with the National Contingency
Plan. The procedures to be used for billing and reimbursing such Specified
Future Response Costs are specified by the following Subparagraphs.

            a. EPA Reimbursement. On a periodic basis, the United States will
send Settling Defendants a cost summary that includes an EPA cost summary,
showing direct and indirect costs incurred by EPA and its contractors, and a DOJ
cost summary, showing costs incurred by DOJ and its contractors, if any. At any
time after the bill has been sent to the Settling Defendants, the United States
may submit a duly executed escrow disbursement certificate requesting that the
Escrow Agent disburse the billed amount to EPA, subject to the dispute
procedures established by pursuant to Consent Decree Paragraph 68 and Section XX
(Dispute Resolution) of the Consent Decree.

            b. State Reimbursement. On a periodic basis, the State will send
Settling Defendants a cost summary that includes a WDNR cost summary, showing
direct and indirect costs incurred by WDNR and its contractors, and a WDOJ cost
summary, showing costs incurred by WDOJ and its contractors, if any. At any time
after the bill has been sent to the Settling Defendants, the State may submit a
duly executed escrow disbursement certificate requesting that the Escrow Agent
disburse the billed amount to the State, subject to the dispute procedures
established by Consent Decree Paragraph 68 and Section XX (Dispute Resolution)
of the Consent Decree.

      8. Disbursements for the Remedial Design

            a. Settling Defendant WTM I Company shall be entitled to seek
disbursements from the Escrow Account for payment or reimbursement up to $2
million in response costs incurred in performing its obligations under the July
2003 AOC and Consent Decree Paragraph 12, as Allowable RD/RA Costs. If the costs
of performing the work required under the June 2003 AOC and Consent Decree
Paragraph 12 exceed $2 million, then Settling Defendant WTM I Company shall
continue to perform and shall complete such work at its own expense, without
additional reimbursement from the Escrow Account.

            b. The Plaintiffs shall be entitled to seek disbursements from the
Escrow Account for payment of all response costs incurred by Plaintiffs in
overseeing the components of the Response Work performed under the July 2003 AOC
and Consent Decree Paragraph 12, as Specified Future Response Costs.

                               Appendix C - Page 4



                            CONSENT DECREE APPENDIX D

                                     FORM OF
                                ESCROW AGREEMENT
                      FOR THE FOX RIVER OU1 ESCROW ACCOUNT

      THIS ESCROW AGREEMENT for the Fox River OU1 Escrow Account (the "Escrow
Account") is effective as of ______________, ___________, by and among P. H.
Glatfelter Company ("Glatfelter") and WTM I Company ("WTM") and ___________ (the
"Escrow Agent"). The following parties are the beneficiaries of this Escrow
Agreement and the Escrow Account established and managed hereunder (collectively
the "Beneficiaries"): (i) the United States of America (the "United States") (on
behalf of the U.S. Environmental Protection Agency ("EPA") and the U.S.
Department of the Interior ("DOI")); and (ii) the State of Wisconsin (the
"State") (on behalf of the Wisconsin Department of Natural Resources ("WDNR")).

      WHEREAS, the United States and the State have filed an action, captioned
United States and the State of Wisconsin v. P. H. Glatfelter Company and WTM I
Company (E.D. Wis.) (the "Litigation"), pursuant to Sections 106 and 107 of the
Comprehensive Environmental Response, Compensation, and Liability Act
("CERCLA"), 42 U.S.C. Sections 9606 and 9607;

      WHEREAS, the Plaintiffs' Complaint in the Litigation seeks, inter alia:
(i) reimbursement of certain response costs incurred and to be incurred by the
United States and the State for response actions at Operable Unit 1 ("OU1") of
the Lower Fox River and Green Bay Site (the "Site") in Northeastern Wisconsin,
together with accrued interest; and (ii) performance of response work by the
defendants at OU1 of the Site, consistent with the National Contingency Plan, 40
C.F.R. Part 300 (as amended);

      WHEREAS, the United States, the State, Glatfelter, and WTM have negotiated
a Consent Decree in the Litigation memorializing a settlement of claims on
specified terms;

      WHEREAS, the appropriate natural resource trustees (the "Trustees"), as
represented by the Fox River/Green Bay Natural Resource Trustee Council,
participated in the negotiation of the Consent Decree, and support the Consent
Decree, as indicated by the Trustee Council Resolution attached as Appendix A to
the Consent Decree;

      WHEREAS, the Consent Decree requires that Glatfelter and WTM establish an
interest-bearing escrow account trust fund - to be known as the Fox River OU1
Escrow Account - and make specified payments into the Escrow Account as
financial assurance for certain obligations under the Consent Decree, including
for performance of response activities and natural resource restoration efforts;

      WHEREAS, the United States and the State will benefit from the funding and
performance of response activities and natural resource restoration efforts to
be funded and performed under the Consent Decree;

                               Appendix D - Page 1



      NOW, THEREFORE, in consideration of the promises and of other good and
valuable consideration the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:

      Section 1. Establishment and Funding of Escrow Account.

      The terms "Fox River OU1 Escrow Account" and "Escrow Account" shall mean
escrow account established by this Escrow Agreement to receive, hold, and
disburse funds to be used for payment and reimbursement of particular categories
of Site-related response costs and natural resource restoration costs under the
Consent Decree. The Escrow Account may be established and managed as several
accounts or sub-accounts to address the different sources and uses of the funds
paid into the Escrow Account. Glatfelter and WTM shall each pay a total of
$26,250,000 into the Escrow Account in accordance with the schedule specified by
Consent Decree Subparagraph 50.a. In addition, EPA will use best efforts in
seeking to have an additional $10,000,000 deposited in the Escrow Account
pursuant to Consent Decree Paragraph 10 and Consent Decree Appendix B. Finally,
Glatfelter and WTM may elect to deposit additional funds in the Escrow Account
pursuant to Consent Decree Paragraph 98.d.(ii), but they have no obligation to
do so under the Consent Decree. Glatfelter and WTM hereby absolutely and
irrevocably assign, convey, and transfer to the Escrow Account and its
successors and assigns, for the benefit of the Beneficiaries, all funds
deposited in the Escrow Account (as well as all interest and income earned on
the funds deposited in the Escrow Account), subject only to certain provisions
of this Escrow Agreement (namely Subsections 4.a.(2), 4.a.(5), and 4.a.(6)) and
certain provisions of the Consent Decree (namely Subparagraph 14.a.(2),
Subparagraph 48.c, Paragraph 51, Paragraph 113, and Consent Decree Appendix C).

      Section 2. Purpose.

      The purpose of the Escrow Account is to receive and hold funds in an
interest-bearing account, and to disburse those funds for payment and
reimbursement of particular categories of Site-related response costs and
natural resource restoration costs under the Consent Decree. The Escrow Agent
shall hold, invest, and reinvest all funds deposited in the Escrow Account under
this Escrow Agreement and shall disburse funds only as provided by this Escrow
Agreement.

      Section 3. Beneficial Interest.

      All funds deposited into the Escrow Account shall be held in trust for
 the benefit of the Beneficiaries, subject to disbursement as provided by
 Section 4 of this Escrow Agreement.

      Section 4. Disbursements from the Escrow Account.

      a. The Escrow Agent shall only make disbursements from the Escrow Account
for:

            (1) Payments to a Site-specific sub-account within the DOI Natural
      Resource Damage and Restoration Fund under the Consent Decree for
      Trustee-sponsored natural resource damage restoration efforts, after
      receipt of a duly-executed escrow disbursement

                               Appendix D - Page 2



      certificate in substantially the form attached hereto as Exhibit A (Form
      of Escrow Disbursement Certificate for Trustee-Sponsored Natural Resource
      Restoration Efforts);

            (2) Payments to Glatfelter, to WTM, and/or to their designated
      contractors or subcontractors, for payment or reimbursement of Allowable
      RD/RA Costs under the Consent Decree, after receipt of a duly-executed
      escrow disbursement certificate in substantially the form attached hereto
      as Exhibit B (Form of Escrow Disbursement Certificate for Payment or
      Reimbursement of Allowable RD/RA Costs);

            (3) Payments to the United States and/or to the State for payment of
      Specified Future Response Costs under the Consent Decree, after receipt of
      a duly-executed escrow disbursement certificate in substantially the form
      attached hereto as Exhibit C (Form of Escrow Disbursement Certificate for
      Payment of Specified Future Response Costs);

            (4) In the event EPA and/or WDNR assume performance of all or any
      portions of the Response Work under Consent Decree Paragraph 90 (Response
      Work Takeover), payment of any or all unexpended funds remaining in the
      Escrow Account to the Fox River Site Special Account within the EPA
      Hazardous Substance Superfund to be retained and used to conduct or
      finance response actions at or in connection with the Site, or transferred
      by EPA to the EPA Hazardous Substance Superfund, after receipt of a
      duly-executed escrow disbursement certificate in substantially the form
      attached hereto as Exhibit D (Form of Escrow Disbursement Certificate for
      Response Work Takeover);

            (5) Payments to Glatfelter, to WTM, and/or to their designated
      contractors or subcontractors, for payment or reimbursement of Allowable
      Restoration Work Costs under the Consent Decree, after receipt of a
      duly-executed escrow disbursement certificate in substantially the form
      attached hereto as Exhibit E (Form of Escrow Disbursement Certificate for
      Payment or Reimbursement of Allowable Restoration Work Costs);

            (6) Payments to Glatfelter and/or to WTM for any refund payments to
      the Settling Defendants under Subparagraphs 5.a.(6) through 5.a.(9).(i) of
      Consent Decree Appendix C, after receipt of a duly-executed escrow
      disbursement certificate in substantially the form attached hereto as
      Exhibit F (Form of Escrow Disbursement Certificate for Refund Payment to
      Settling Defendants);

            (7) A payment of any and all unexpended funds remaining in the
      Escrow Account to the Fox River Site Special Account within the EPA
      Hazardous Substance Superfund to be retained and used to conduct or
      finance response actions at or in connection with the Site, or transferred
      by EPA to the EPA Hazardous Substance Superfund, for any final payment
      under Subparagraph 5.a.(9).(ii) of Consent Decree Appendix C, after
      receipt of a duly executed escrow disbursement certificate in
      substantially the form attached hereto as Exhibit G (Form of Escrow
      Disbursement Certificate for Final Payment to Fox River Site Special
      Account); and

                               Appendix D - Page 3



            (8) payments of fees, taxes, and expenses under Section 5.3 of this
      Escrow Agreement.

      b. Any Party to the Consent Decree that submits an escrow disbursement
certificate to the Escrow Agent shall submit copies of the escrow disbursement
certificate to all other Parties to the Consent Decree in accordance with
Consent Decree Section XXVIII (Notices and Submissions) and Section 6.6 of this
Escrow Agreement. The escrow disbursement certificate shall be submitted to the
other Parties to the Consent Decree in the same manner and on the same day that
the escrow disbursement certificate is submitted to the Escrow Agent.

      c. The Escrow Agent shall not make any disbursement from the Escrow
Account in response to an escrow disbursement certificate unless: (i) at least
10 business day have elapsed since the Escrow Agent received the escrow
disbursement certificate; and (ii) the Escrow Agent has not received written
notice within those 10 business days that a Party to the Consent Decree objects
to the requested disbursement and has invoked the dispute resolution procedures
under Consent Decree Section XX (Dispute Resolution) to resolve the objection.

      Section 5. Escrow Agent.

      Section 5.1. Duties. The Escrow Agent's obligations and duties in
connection herewith are limited to those specifically enumerated in this Escrow
Agreement. The Escrow Agent shall at all times hold and invest the assets of the
Escrow Account in a manner designed to achieve the maximum investment return
possible, but to preserve the principal of the Escrow Account. Consistent with
that capital-preservation objective, the Escrow Agent shall invest and reinvest
the principal and income of the Escrow Account in securities of the United
States Government or an agency thereof, obligations secured or insured by the
United States Government, common trust funds or money market funds investing in
investment grade short-term municipal bonds or annuities purchased from
insurance companies having assets greater than $10 billion, or mutual funds
investing exclusively in such securities or obligations. The Escrow Agent shall
render a written statement every month identifying each financial instrument in
which the Escrow Agent has invested any portion of the Escrow Account, the
amount of each such investment, any change in the amount in the Escrow Account
since the date of the previous statement, and all transactions entered by the
Escrow Agent since the last statement (including investments, reinvestments, or
disbursements) involving funds of the Escrow Account. Monthly statements shall
be delivered to the persons identified in Section 6.6 below.

      Section 5.2. Receipt. The Escrow Agent shall acknowledge its receipt of
amounts deposited into the Escrow Account by sending written notice, within 5
business days of such receipt, to the persons identified in Section 6.6 below.

      Section 5.3. Fees, Taxes, and Expenses. The Escrow Agent's fees, if any,
shall be paid solely out of the Escrow Account. Interest earned on all funds in
the Escrow Account shall first be applied to defray any account fees. The fees
agreed to be paid are intended as full compensation for the Escrow Agent's
services as contemplated by this Escrow Agreement; provided, however, that if
the conditions of this Escrow Agreement are not fulfilled or the

                               Appendix D - Page 4



Escrow Agent renders any material service not contemplated in this Escrow
Agreement, or there is any assignment of interest in the subject matter of this
Escrow Agreement, or any material modification hereof, or if any material
controversy arises hereunder, or the Escrow Agent is made a party to or
justifiably intervenes in any litigation pertaining to this Escrow Agreement, to
the subject matter hereto, the Escrow Agent shall be reasonably compensated out
of the Escrow Account for such extraordinary services and reimbursed for all
costs and expenses, including reasonable attorneys' fees, occasioned by any
delay, controversy, litigation, or event. The Escrow Agent shall notify the
persons identified in Section 6.6 below, in writing, of Escrow Agent's fees or
expenses at least 45 days prior to the reimbursement of such extraordinary fees
or expenses from the Escrow Account; in the event Glatfelter, WTM, or the
Beneficiaries dispute the amount of the Escrow Agent's fees or expenses within
30 days of receipt of notice, the disputed fees or expenses shall not be paid
unless all parties agree in writing. Any taxes due on interest earned on Escrow
Account deposits, and any tax preparation fees, shall be paid from the Escrow
Account. Glatfelter, WTM, and the Beneficiaries shall have the right to comment
on any tax returns prepared on behalf of the Escrow Agent for the Escrow Account
at least 30 days prior to the filing deadline.

      Section 5.4. Successor Escrow Agent. The Escrow Agent shall have the right
to resign as escrow agent hereunder by delivering at least 30 days' prior notice
in writing to the parties identified in Section 6.6. Glatfelter, WTM, and the
Beneficiaries shall have the right to remove the Escrow Agent at any time by
joint written notice delivered to the Escrow Agent. If the Escrow Agent resigns
or is removed, a successor escrow agent shall be appointed by mutual agreement
of Glatfelter, WTM, and the Beneficiaries, and such resignation or removal shall
take effect no later than the effective date of the resignation or removal of
the Escrow Agent who resigns or is being removed. Any successor escrow agent at
any time serving hereunder shall be entitled to all rights, powers, and
indemnities granted to the Escrow Agent hereunder as if originally named herein.

      Section 5.5. Liability of Escrow Agent. So long as it acts in good faith
and in the exercise of its best judgment, the Escrow Agent shall not be in any
manner liable or responsible for the sufficiency, correctness, genuineness, or
validity of any instruments deposited with it or with reference to the form of
execution thereof, or the identity, authority, or rights of any person executing
or depositing same, and the Escrow Agent shall not be liable for any loss that
may occur by reason of forgery, false representation, or the exercise of its
discretion in any particular manner or for any other reason, except for its own
negligence, gross negligence, willful misconduct, bad faith, or breach of this
Escrow Agreement. Except in instances of the Escrow Agent's own negligence,
gross negligence or willful misconduct, Glatfelter and WTM shall indemnify,
defend, and hold the Escrow Agent harmless from any demands, suits or causes of
action arising out of this Escrow Agreement.

      Section 6. Miscellaneous.

      Section 6.1. Binding Effect. This Escrow Agreement shall be binding upon
Glatfelter, WTM, and the Escrow Agent and their respective successors and
assigns.

                               Appendix D - Page 5



      Section 6.2. Severability. If any section of this Escrow Agreement, or
portion thereof, shall be adjudged illegal, invalid, or unenforceable, such
illegality, invalidity, or unenforceability shall not affect the legality,
validity, or enforceability of this Escrow Agreement, as a whole, or of any
other section or portion thereof not so adjudged.

      Section 6.3. Effective Date. This Escrow Agreement shall become effective
upon the execution of this Escrow Agreement by Glatfelter, WTM, and the Escrow
Agent.

      Section 6.4. Governing Law. This Escrow Agreement shall be governed by and
construed and enforced in accordance with the laws of the State of Wisconsin.

      Section 6.5. Interpretation. As used in this Escrow Agreement, words in
the singular include the plural and words in the plural include the singular;
the masculine and neuter genders shall be deemed to include the masculine,
feminine and neuter. The section headings contained in this Escrow Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Escrow Agreement.

      Section 6.6. Notices. Any notice, request, instruction, or other document
to be given hereunder by a party hereto or by any or all of the Beneficiaries
shall be in writing, shall be given to all other parties hereunder and to the
Beneficiaries, and shall be deemed to have been given: (i) when received if
given in person, (ii) on the date of transmission if sent by confirmed telex,
facsimile, or other wire transmission, or (iii) four business days after being
deposited in the United States mail postage prepaid:

      If to the Beneficiaries, addressed as follows:

      [Name, address, facsimile, and e-mail]

            and

      [Name, address, facsimile, and e-mail]

      If to Glatfelter and WTM, addressed as follows:

      [Name, address, facsimile, and e-mail]

            and

      [Name, address, facsimile, and e-mail]

      If to the Escrow Agent, addressed as follows:

      [Name, address, facsimile, and e-mail]

                               Appendix D - Page 6



or to such other individual or address as a party hereto or the Beneficiaries
may designate for itself by notice given as herein provided.

      Section 6.7. No Limitation. The parties hereto agree that the rights and
remedies of the parties hereunder shall not operate to limit any other rights
and remedies otherwise available to the parties.

      Section 6.8. Counterparts. This Escrow Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original but all of
which together shall constitute one and the same instrument.

      Section 6.9. Modification. This Escrow Agreement may be modified only by a
written instrument signed by each of the parties hereto, and approved in writing
by the Beneficiaries.

      Section 6.10. Termination. If not sooner terminated pursuant to the terms
hereof, this Escrow Agreement shall terminate upon disbursement of all of the
funds held in the Escrow Account, and may be terminated prior to that date by
written mutual consent signed by Glatfelter, WTM, and the Beneficiaries.

      IN WITNESS WHEREOF, the parties hereto have executed their Escrow
Agreement as of the date first written above.

                  P. H. Glatfelter Company

                  By:
                       ----------------------
                  Its:
                       ----------------------

                  WTM I Company

                  By:
                       ----------------------
                  Its:
                       ----------------------

                  ---------------------------

                  By:
                       ----------------------
                  Its:
                       ----------------------

                               Appendix D - Page 7



EXHIBIT A TO ESCROW AGREEMENT: FORM OF ESCROW DISBURSEMENT CERTIFICATE FOR
TRUSTEE-SPONSORED NATURAL RESOURCE RESTORATION EFFORTS

                         ESCROW DISBURSEMENT CERTIFICATE
                     UNDER ESCROW AGREEMENT SUBSECTION 4.a.(1)

      Reference is made to that certain Escrow Agreement for the Fox River OU1
Escrow Account (the "Escrow Account"), dated ___________, by and among P. H.
Glatfelter Company, WTM I Company, and ___________(the "Escrow Agent'), with the
following beneficiaries (collectively the "Beneficiaries"): (i) the United
States of America (the "United States") (on behalf of the U.S. Environmental
Protection Agency ("EPA") and the U.S. Department of the Interior ("DOI")); and
(ii) the State of Wisconsin (the "State") (on behalf of the Wisconsin Department
of Natural Resources ("WDNR")).

      DOI and WDNR hereby certify as follows:

      This Escrow Disbursement Certificate is submitted pursuant to Subsection
4.a.(l) of the Escrow Agreement and Appendix C of the Consent Decree in the case
captioned United States and the State of Wisconsin v. P. H. Glatfelter Company
and WTM I Company (E.D. Wis.). This disbursement is sought for Trustee-sponsored
natural resource restoration efforts under Consent Decree Paragraph 49.

      NO SOONER THAN 10 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CERTIFICATE,
      YOU ARE INSTRUCTED TO DISBURSE $_______ TO THE FOX RIVER SITE ACCOUNT
      WITHIN DOI'S NATURAL RESOURCE DAMAGE ASSESSMENT AND RESTORATION FUND. THE
      DISBURSEMENT SHOULD BE MADE IN ACCORDANCE WITH THE PAYMENT INSTRUCTIONS
      ATTACHED HERETO.

      YOU ARE INSTRUCTED NOT TO DISBURSE ANY FUNDS PURSUANT TO THIS CERTIFICATE
      IF YOU RECEIVE WRITTEN NOTICE WITHIN 10 BUSINESS DAYS OF YOUR RECEIPT OF
      THIS CERTIFICATE THAT GLATFELTER AND/OR WTM DISPUTE THE DISBURSEMENT
      REQUEST CONTAINED IN THIS CERTIFICATE, AS PROVIDED BY ESCROW AGREEMENT
      SUBSECTION 4.c AND CONSENT DECREE SECTION XX (DISPUTE RESOLUTION).

This Certificate constitutes DOI Disbursement Certificate No. ________ (with a
separate sequential number to be assigned to each separate Certificate).

BY:

- --------------------------------       -----------------------------------------
Assistant Regional Director       and  Deputy Administrator, Division of Water
U.S. Fish and Wildlife Service,        Wisconsin Department of Natural Resources
Region 3

DATE: ______________                   DATE: _____________

                               Appendix D - Page 8



EXHIBIT B TO ESCROW AGREEMENT: FORM OF ESCROW DISBURSEMENT CERTIFICATE FOR
PAYMENT OR REIMBURSEMENT OF ALLOWABLE RD/RA COSTS

                         ESCROW DISBURSEMENT CERTIFICATE
                    UNDER ESCROW AGREEMENT SUBSECTION 4.a.(2)

      Reference is made to that certain Escrow Agreement for the Fox River OU1
Escrow Account (the "Escrow Account"), dated __________, by and among P. H.
Glatfelter Company ("Glatfelter"), WTM I Company (WTM"), and __________ (the
"Escrow Agent'), with the following beneficiaries (collectively the
"Beneficiaries"): (i) the United States of America (the "United States") (on
behalf of the U.S. Environmental Protection Agency ("EPA") and the U.S.
Department of the Interior ("DOI")); and (ii) the State of Wisconsin (the
"State") (on behalf of the Wisconsin Department of Natural Resources ("WDNR")).

      Glatfelter and WTM hereby certify as follows:

      This Escrow Disbursement Certificate is submitted pursuant to Subsection
4.a.(2) of the Escrow Agreement and Appendix C of the Consent Decree in the case
captioned United States and the State of Wisconsin v. P. H. Glatfelter Company
and WTM I Company (E.D. Wis.). This disbursement is sought for payment or
reimbursement of Allowable RD/RA Costs under the Consent Decree.

      NO SOONER THAN 10 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CERTIFICATE,
      YOU ARE INSTRUCTED TO DISBURSE THE AMOUNTS SPECIFIED BELOW TO GLATFELTER,
      TO WTM, AND/OR TO THEIR DESIGNATED CONTRACTORS OR SUBCONTRACTORS, AS
      SPECIFIED BELOW:

                 DISBURSE $___________________ TO ___________________.

                 DISBURSE $___________________ TO ___________________.

      THE DISBURSEMENTS SHOULD BE MADE IN ACCORDANCE WITH THE PAYMENT
      INSTRUCTIONS ATTACHED HERETO.

      YOU ARE INSTRUCTED NOT TO DISBURSE ANY FUNDS PURSUANT TO THIS CERTIFICATE
      IF YOU RECEIVE WRITTEN NOTICE WITHIN 10 BUSINESS DAYS OF YOUR RECEIPT OF
      THIS CERTIFICATE THAT THE UNITED STATES AND/OR THE STATE DISPUTE THE
      DISBURSEMENT REQUEST CONTAINED IN THIS CERTIFICATE, AS PROVIDED BY ESCROW
      AGREEMENT SUBSECTION 4.c AND CONSENT DECREE SECTION XX (DISPUTE
      RESOLUTION).

This Certificate constitutes Glatfelter/WTM Disbursement Certificate No.____
(with a separate sequential number to be assigned to each separate Certificate).

BY:

- --------------------------------       -----------------------------------------
[                           ]     and  [                               ]
For P. H. Glatfelter Company           For WTM I Company

DATE: _____________                    DATE: ________________

                               Appendix D - Page 9



EXHIBIT C TO ESCROW AGREEMENT: FORM OF ESCROW DISBURSEMENT CERTIFICATE FOR
PAYMENT OF SPECIFIED FUTURE RESPONSE COSTS

                         ESCROW DISBURSEMENT CERTIFICATE
                        UNDER ESCROW AGREEMENT SUBSECTION 4.a.(3)

      Reference is made to that certain Escrow Agreement for the Fox River OU1
Escrow Account (the "Escrow Account"), dated __________, by and among P. H.
Glatfelter Company ("Glatfelter"), WTM I Company (WTM"), and ________ (the
"Escrow  Agent'), with the following beneficiaries (collectively the
"Beneficiaries"): (i) the United States of America (the "United States") (on
behalf of the U.S. Environmental Protection Agency ("EPA") and the U.S.
Department of the Interior ("DOI")); and (ii) the State of Wisconsin (the
"State") (on behalf of the Wisconsin Department of Natural Resources ("WDNR")).

      The party submitting this Certificate hereby certifies as follows:

      This Escrow Disbursement Certificate is submitted pursuant to Subsection
4.a.(3) of the Escrow Agreement and Appendix C of the Consent Decree in the case
captioned United States and the State of Wisconsin v. P. H. Glatfelter Company
and WTM I Company (E.D. Wis.). This disbursement is sought for payment of
Specified Future Response Costs under the Consent Decree.

      NO SOONER THAN 10 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CERTIFICATE,
      YOU ARE INSTRUCTED TO DISBURSE THE AMOUNT SPECIFIED BELOW TO EPA OR TO
      WDNR, AS SPECIFIED BELOW:

      -     DISBURSE $__________ TO THE FOX RIVER SITE SPECIAL ACCOUNT WITHIN
            THE EPA HAZARDOUS SUBSTANCE SUPERFUND. This Certificate constitutes
            EPA Disbursement Certificate No._______ (with a separate sequential
            number to be assigned to each separate Certificate).

      -     DISBURSE $___________ TO THE WDNR. This Certificate constitutes WDNR
            Disbursement Certificate No._________ (with a separate sequential
            number to be assigned to each separate Certificate).

      THE DISBURSEMENT SHOULD BE MADE IN ACCORDANCE WITH THE PAYMENT
      INSTRUCTIONS ATTACHED HERETO.

      YOU ARE INSTRUCTED NOT TO DISBURSE ANY FUNDS PURSUANT TO THIS CERTIFICATE
      IF YOU RECEIVE WRITTEN NOTICE WITHIN 10 BUSINESS DAYS OF YOUR RECEIPT OF
      THIS CERTIFICATE THAT GLATFELTER AND/OR WTM DISPUTE THE DISBURSEMENT
      REQUEST CONTAINED IN THIS CERTIFICATE, AS PROVIDED BY ESCROW AGREEMENT
      SUBSECTION 4.c AND CONSENT DECREE SECTION XX (DISPUTE RESOLUTION).

BY:


- --------------------------------       -----------------------------------------
Director, Superfund Division,      or  Deputy Administrator, Division of Water
Region 5 U.S. Environmental            Wisconsin Department of Natural Resources
Protection Agency

DATE: _____________                    DATE:______________

                              Appendix D - Page 10



EXHIBIT D TO ESCROW AGREEMENT: FORM OF ESCROW DISBURSEMENT CERTIFICATE FOR
RESPONSE WORK TAKEOVER

                         ESCROW DISBURSEMENT CERTIFICATE
                    UNDER ESCROW AGREEMENT SUBSECTION 4.a.(4)

      Reference is made to that certain Escrow Agreement for the Fox River OU1
Escrow Account (the "Escrow Account"), dated _________, by and among P. H.
Glatfelter Company ("Glatfelter"), WTM I Company (WTM"), and ___________ (the
"Escrow Agent'), with the following beneficiaries (collectively the
"Beneficiaries"): (i) the United States of America (the "United States") (on
behalf of the U.S. Environmental Protection Agency ("EPA") and the U.S.
Department of the Interior ("DOI")); and (ii) the State of Wisconsin (the
"State") (on behalf of the Wisconsin Department of Natural Resources ("WDNR")).

      EPA hereby certifies as follows:

      This Escrow Disbursement Certificate is submitted pursuant to Subsection
4.a.(4) of the Escrow Agreement and Appendix C of the Consent Decree in the case
captioned United States and the State of Wisconsin v. P. H. Glatfelter Company
and WTM I Company (E.D. Wis.). This disbursement is sought because EPA and/or
the State have assumed performance of all or any portions of the Response Work
under Consent Decree Paragraph 90 (Response Work Takeover).

      No SOONER THAN 10 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CERTIFICATE,
      YOU ARE INSTRUCTED TO DISBURSE $________ FROM THE ESCROW ACCOUNT TO THE
      FOX RIVER SITE SPECIAL ACCOUNT WITHIN THE EPA HAZARDOUS SUBSTANCE
      SUPERFUND. THE DISBURSEMENT SHOULD BE MADE IN ACCORDANCE WITH THE PAYMENT
      INSTRUCTIONS ATTACHED HERETO.

      YOU ARE INSTRUCTED NOT TO DISBURSE ANY FUNDS PURSUANT TO THIS CERTIFICATE
      IF YOU RECEIVE WRITTEN NOTICE WITHIN 10 BUSINESS DAYS OF YOUR RECEIPT OF
      THIS CERTIFICATE THAT GLATFELTER AND/OR WTM DISPUTE THE DISBURSEMENT
      REQUEST CONTAINED IN THIS CERTIFICATE, AS PROVIDED BY ESCROW AGREEMENT
      SUBSECTION 4.c AND CONSENT DECREE SECTION XX (DISPUTE RESOLUTION).

This Certificate constitutes EPA Disbursement Certificate No._____ (with a
separate sequential number to be assigned to each separate Certificate).

BY:

- --------------------------------------
Director, Superfund Division, Region 5
U.S. Environmental Protection Agency

DATE:______________

                              Appendix D - Page 11



EXHIBIT E TO ESCROW AGREEMENT: FORM OF ESCROW DISBURSEMENT CERTIFICATE FOR
PAYMENT OR REIMBURSEMENT OF ALLOWABLE RESTORATION WORK COSTS

                         ESCROW DISBURSEMENT CERTIFICATE
                   UNDER ESCROW AGREEMENT SUBSECTION 4.a.(5)

      Reference is made to that certain Escrow Agreement for the Fox River OU1
Escrow Account (the "Escrow Account"), dated ________, by and among P. H.
Glatfelter Company ("Glatfelter"), WTM I Company (WTM"), and ____________ (the
"Escrow Agent'), with the following beneficiaries (collectively the
"Beneficiaries"): (i) the United States of America (the "United States") (on
behalf of the U.S. Environmental Protection Agency ("EPA") and the U.S.
Department of the Interior ("DOI")); and (ii) the State of Wisconsin (the
"State") (on behalf of the Wisconsin Department of Natural Resources ("WDNR")).

      Glatfelter and WTM hereby certify as follows:

      This Escrow Disbursement Certificate is submitted pursuant to Subsection
4.a.(5) of the Escrow Agreement and Appendix C of the Consent Decree in the case
captioned United States and the State of Wisconsin v. P. H. Glatfelter Company
and WTM I Company (E.D. Wis.). This disbursement is sought for payment or
reimbursement of Allowable Restoration Work Costs under the Consent Decree.

      NO SOONER THAN 10 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CERTIFICATE,
      YOU ARE INSTRUCTED TO DISBURSE THE AMOUNTS SPECIFIED BELOW TO GLATFELTER,
      TO WTM, AND/OR TO THEIR DESIGNATED CONTRACTORS OR SUBCONTRACTORS, AS
      SPECIFIED BELOW:

                 DISBURSE $___________________ TO ____________________.

                 DISBURSE $___________________ TO ____________________.

      THE DISBURSEMENTS SHOULD BE MADE IN ACCORDANCE WITH THE PAYMENT
      INSTRUCTIONS ATTACHED HERETO.

      YOU ARE INSTRUCTED NOT TO DISBURSE ANY FUNDS PURSUANT TO THIS CERTIFICATE
      IF YOU RECEIVE WRITTEN NOTICE WITHIN 10 BUSINESS DAYS OF YOUR RECEIPT OF
      THIS CERTIFICATE THAT THE UNITED STATES AND/OR THE STATE DISPUTE THE
      DISBURSEMENT REQUEST CONTAINED IN THIS CERTIFICATE, AS PROVIDED BY ESCROW
      AGREEMENT SUBSECTION 4.c AND CONSENT DECREE SECTION XX (DISPUTE
      RESOLUTION).

This Certificate constitutes Glatfelter/WTM Disbursement Certificate
No.____ (with a separate sequential number to be assigned to each separate
Certificate).

BY:

- ------------------------------            ---------------------------
[                         ]       and     [                     ]
For P. H. Glatfelter Company              For WTM I Company

DATE: ____________________                DATE: __________________

                              Appendix D - Page 12



EXHIBIT F TO ESCROW AGREEMENT: FORM OF ESCROW DISBURSEMENT CERTIFICATE FOR
REFUND PAYMENTS TO SETTLING DEFENDANTS

                         ESCROW DISBURSEMENT CERTIFICATE
                    UNDER ESCROW AGREEMENT SUBSECTION 4.a.(6)

      Reference is made to that certain Escrow Agreement for the Fox River OU1
Escrow Account (the "Escrow Account"), dated ________________, by and among P.
H. Glatfelter Company ("Glatfelter"), WTM I Company (WTM"), and
_____________________ (the "Escrow Agent'), with the following beneficiaries
(collectively the "Beneficiaries"): (i) the United States of America (the
"United States") (on behalf of the U.S. Environmental Protection Agency ("EPA")
and the U.S. Department of the Interior ("DOI")); and (ii) the State of
Wisconsin (the "State") (on behalf of the Wisconsin Department of Natural
Resources ("WDNR")).

      Glatfelter and WTM hereby certify as follows:

      This Escrow Disbursement Certificate is submitted pursuant to Subsection
4.a.(6) of the Escrow Agreement and Appendix C of the Consent Decree in the case
captioned United States and the State of Wisconsin v. P. H. Glatfelter Company
and WTM I Company (E.D. Wis.). This disbursement is sought for a refund payment
of some or all funds remaining in the Escrow Account, as permitted by the
Consent Decree.

      NO SOONER THAN 10 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CERTIFICATE,
      YOU ARE INSTRUCTED DISBURSE THE AMOUNTS SPECIFIED BELOW TO GLATFELTER
      AND/OR TO WTM, AS SPECIFIED BELOW:

      _     DISBURSE $___________ TO GLATFELTER AND DISBURSE $__________ TO WTM
            AS PARTIAL REFUND PAYMENTS UNDER SUBPARAGRAPH 5.a.(6) OF CONSENT
            DECREE APPENDIX C; OR

      _     DISBURSE $____________TO GLATFELTER AND DISBURSE $___________ TO WTM
            AS REFUND PAYMENTS UNDER SUBPARAGRAPH 5.a.(7), 5.a.(8), OR
            5.a.(9).(i) OF CONSENT DECREE APPENDIX C.

      THE DISBURSEMENTS SHOULD BE MADE IN ACCORDANCE WITH THE PAYMENT
      INSTRUCTIONS ATTACHED HERETO.

      YOU ARE INSTRUCTED NOT TO DISBURSE ANY FUNDS PURSUANT TO THIS CERTIFICATE
      IF YOU RECEIVE WRITTEN NOTICE WITHIN 10 BUSINESS DAYS OF YOUR RECEIPT OF
      THIS CERTIFICATE THAT THE UNITED STATES AND/OR THE STATE DISPUTE THE
      DISBURSEMENT REQUEST CONTAINED IN THIS CERTIFICATE, AS PROVIDED BY ESCROW
      AGREEMENT SUBSECTION 4.c AND CONSENT DECREE SECTION XX (DISPUTE
      RESOLUTION).

This Certificate constitutes Glatfelter/WTM Disbursement Certificate No._____
(with a separate sequential number to be assigned to each separate Certificate).

BY:

- ------------------------------            ---------------------------
[                         ]       and     [                     ]
For P. H. Glatfelter Company              For WTM I Company

DATE: _____________________               DATE: ____________________

                              Appendix D - Page 13



EXHIBIT G TO ESCROW AGREEMENT: FORM OF ESCROW DISBURSEMENT CERTIFICATE FOR FINAL
PAYMENT TO FOX RIVER SITE SPECIAL ACCOUNT

                         ESCROW DISBURSEMENT CERTIFICATE
                    UNDER ESCROW AGREEMENT SUBSECTION 4.a.(7)

      Reference is made to that certain Escrow Agreement for the Fox River OU1
Escrow Account (the "Escrow Account"), dated __________, by and among P. H.
Glatfelter Company ("Glatfelter"), WTM I Company (WTM"), and ___________ (the
"Escrow Agent'), with the following beneficiaries (collectively the
"Beneficiaries"): (i) the United States of America (the "United States") (on
behalf of the U.S. Environmental Protection Agency ("EPA") and the U.S.
Department of the Interior ("DOI")); and (ii) the State of Wisconsin (the
"State") (on behalf of the Wisconsin Department of Natural Resources ("WDNR")).

      EPA hereby certifies as follows:

      This Escrow Disbursement Certificate is submitted pursuant to Subsection
4.a.(7) of the Escrow Agreement and Appendix C of the Consent Decree in the case
captioned United States and the State of Wisconsin v. P. H. Glatfelter Company
and WTM I Company (E.D. Wis.). This disbursement is sought for payment of
Specified Future Response Costs under the Consent Decree.

      NO SOONER THAN 10 BUSINESS DAYS AFTER YOUR RECEIPT OF THIS CERTIFICATE,
      YOU ARE INSTRUCTED TO DISBURSE ANY AND ALL FUNDS UNEXPENDED REMAINING IN
      THE ESCROW ACCOUNT TO THE FOX RIVER SITE SPECIAL ACCOUNT WITHIN THE EPA
      HAZARDOUS SUBSTANCE SUPERFUND. THE DISBURSEMENT SHOULD BE MADE IN
      ACCORDANCE WITH THE PAYMENT INSTRUCTIONS ATTACHED HERETO.

      YOU ARE INSTRUCTED NOT TO DISBURSE ANY FUNDS PURSUANT TO THIS CERTIFICATE
      IF YOU RECEIVE WRITTEN NOTICE WITHIN 10 BUSINESS DAYS OF YOUR RECEIPT OF
      THIS CERTIFICATE THAT GLATFELTER AND/OR WTM DISPUTE THE DISBURSEMENT
      REQUEST CONTAINED IN THIS CERTIFICATE, AS PROVIDED BY ESCROW AGREEMENT
      SUBSECTION 4.c AND CONSENT DECREE SECTION XX (DISPUTE RESOLUTION).

This Certificate constitutes EPA Disbursement Certificate No. ____ (with a
separate sequential number to be assigned to each separate Certificate).

BY:

- ---------------------------------------
Director, Superfund Division, Region 5
U.S. Environmental Protection Agency

DATE:______________

                              Appendix D - Page 14


                            CONSENT DECREE APPENDIX E

                     SPECIAL PROCEDURES FOR RESTORATION WORK

      1. Claims of a Force Majeure Event and Disputes Relating to Approved
Restoration Work and Allowable Restoration Work Costs. Claims of a Force Majeure
Event and any disputes relating to Approved Restoration Work and Allowable
Restoration Work Costs shall be resolved in accordance with this Appendix E. The
Plaintiffs shall consult with the other members of the Trustee Council in taking
and advancing positions and in making decisions under this Appendix E.

      2. Force Majeure Events for Restoration Work

            a. If any event occurs or has occurred that may delay the
performance of any obligation under this Consent Decree to perform Approved
Restoration Work, whether or not caused by a Force Majeure Event, the Settling
Defendants shall notify the Plaintiffs in writing within 10 working days of when
Settling Defendants first knew that the event might cause a delay. The Settling
Defendants' written notice shall include an explanation and description of the
reasons for the delay; the anticipated duration of the delay; all actions taken
or to be taken to prevent or minimize the delay; a schedule for implementation
of any measures to be taken to prevent or mitigate the delay or the effect of
the delay; and the Settling Defendants' rationale for attributing such delay to
a Force Majeure Event if they intend to assert such a claim. The Settling
Defendants shall include with any notice all available documentation supporting
their claim that the delay was attributable to a Force Majeure Event. Failure to
comply with the above requirements shall preclude Settling Defendants from
asserting any claim of a Force Majeure Event for that event for the period of
time of such failure to comply, and for any additional delay caused by such
failure. Settling Defendants shall be deemed to know of any circumstance of
which Settling Defendants, any entity controlled by Settling Defendants, or
Settling Defendants' contractors knew or should have known.

            b. If the Plaintiffs agree that the delay or anticipated delay is
attributable to a Force Majeure Event, the time for performance of the
obligations under this Consent Decree that are affected by the Force Majeure
Event will be extended by the Plaintiffs for such time as is necessary to
complete those obligations. An extension of the time for performance of the
obligations affected by the force majeure event shall not, of itself, extend the
time for performance of any other obligation. If the Plaintiffs do not agree
that the delay or anticipated delay has been or will be caused by a Force
Majeure Event, the Plaintiffs will notify the Settling Defendants in writing of
their decision. If the Plaintiffs agree that the delay is attributable to a
Force Majeure Event, the Plaintiffs will notify the Settling Defendants in
writing of the length of the extension, if any, for performance of the
obligations affected by the Force Majeure Event.

            c. If the Settling Defendants elect to invoke the dispute resolution
procedures set forth in Paragraph 3 (Dispute Resolution for Restoration Work) of
this Appendix, they shall do so no later than 15 days after receipt of the
Plaintiffs' notice. In any such proceeding, Settling Defendants shall have the
burden of demonstrating by a preponderance of the evidence that the delay or
anticipated delay has been or will be caused by a Force Majeure Event, that the
duration of the delay or the extension sought was or will be warranted under the
circumstances, that best efforts were exercised to avoid and mitigate the
effects of the delay, and that Settling Defendants

                               Appendix E - Page 1


complied with the requirements of the preceding Subparagraphs. If Settling
Defendants carry this burden, the delay at issue shall be deemed not to be a
violation by Settling Defendants of the affected obligation of this Consent
Decree identified to the Plaintiffs and the Court.

      3. Dispute Resolution for Restoration Work.

            a. Informal Dispute Resolution. Any dispute under this Paragraph
shall in the first instance be the subject of informal negotiations between the
parties to the dispute. The period for informal negotiations shall not exceed 20
days from the time the dispute arises, unless it is modified by written
agreement of the parties to the dispute. The dispute shall be considered to have
arisen when one party sends the other parties a written Notice of Dispute.

            b. Formal Dispute Resolution. In the event that the parties cannot
resolve any dispute under this Paragraph by informal negotiations under the
preceding Subparagraph, the formal dispute procedures outlined by this
Subparagraph shall apply.

                  (1) The position advanced by the Plaintiffs shall be
considered binding unless, within fifteen working days after the conclusion of
the informal negotiation period, the Settling Defendants invoke formal dispute
resolution procedures by serving on the Plaintiffs, in accordance with Section
XXVIII (Notices and Submissions), a written Statement of Position on the matter
in dispute which shall include or attach any factual data, analysis, opinion or
documentation that the Settling Defendants rely upon in support of their
position.

                  (2) Following receipt of Settling Defendants' Statement of
Position, the Plaintiffs will issue an administrative decision resolving the
dispute which shall include or attach any factual data, analysis, opinion, or
documentation supporting the decision. The Plaintiffs shall compile and maintain
an administrative record of the dispute containing the Settling Defendants'
Statement of Position and the Plaintiffs administrative decision. The
Plaintiffs' administrative decision shall be binding on the Settling Defendants
unless, within 10 days of receipt of the decision, the Settling Defendants file
with the Court and serve on the parties a motion for judicial review of the
Plaintiffs' administrative decision, based on the administrative record compiled
and maintained by the Plaintiffs. Any such motion filed by the Settling
Defendants' shall setting forth the matter in dispute, the efforts made by the
parties to resolve it, the relief requested, and the schedule, if any, within
which the dispute must be resolved to ensure orderly implementation of the
Consent Decree. The Plaintiffs shall provide the Court a copy of the
administrative record of the dispute, and may file a response to Settling
Defendants' motion.

            c. Effect of Invoking Dispute Resolution. The invocation of dispute
resolution procedures under this Paragraph shall not extend, postpone, or affect
in any way any obligation of Settling Defendants under this Consent Decree, not
directly in dispute, unless the Plaintiffs agree otherwise or unless the Court
determines otherwise. Stipulated damages with respect to the disputed matter
shall continue to accrue from the first day of noncompliance, but payment shall
be stayed pending resolution of the dispute as provided in Consent Decree
Paragraph 79 (Penalty Accrual During Dispute Resolution). In the event that the
Settling Defendants do not prevail on the disputed issue, stipulated damages
shall be assessed and paid as provided in Consent Decree Section XXI (Stipulated
Penalties and Stipulated Damages).

                               Appendix E - Page 2


                            CONSENT DECREE APPENDIX F

ADMINISTRATIVE ORDER ON CONSENT BETWEEN WTM I COMPANY, EPA, AND WDNR, CAPTIONED
          IN THE MATTER OF THE LOWER FOX RIVER AND THE GREEN BAY SITE,
                            DOCKET NO. V-W-'03-C-745
              (INCLUDING THE STATEMENT OF WORK FOR REMEDIAL DESIGN)



                  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                                    REGION 5



                                     )   ADMINISTRATIVE ORDER ON
IN THE MATTER OF:                    )   CONSENT
                                     )
Lower Fox River and Green            )   U.S. EPA Region 5
Bay Site                             )   CERCLA Docket No. V-W-'03-C-745
                                     )
                                     )   Proceedings Under Sections 104, 106,
Respondent:                          )   122(a), and 122(d)(3) of the
                                     )   Comprehensive Environmental Response,
WTM I Company                        )   Compensation, and Liability Act, as
                                     )   Amended, 42 U.S.C. Sections 9604, 9606,
(f/k/a Wisconsin Tissue Mills Inc.)  )   9622(a), and 9622(d)(3).
_____________________________________)

                     I. JURISDICTION AND GENERAL PROVISIONS

      1. This Administrative Order on Consent ("Consent Order") is entered into
voluntarily by the United States Environmental Protection Agency ("EPA"), the
State of Wisconsin ("State") through the Wisconsin Department of Natural
Resources ("WDNR"), and WTM I Company ("Respondent"). The mutual objectives of
EPA, WDNR, and Respondent in entering into this Consent Order are: (i) to have
Respondent perform the Pre-design Sampling for Operable Unit 1 ("OU1") of the
Lower Fox River and Green Bay Site (also known as the Fox River NRDA PCB
Releases Site) ("Site"), located in the State of Wisconsin; and (ii) to have the
Respondent perform all other Remedial Design activities needed for
implementation of the Response Agencies' (EPA and WDNR) December 2002 selected
remedy (and/or contingent remedy, as necessary) for OU1 at the Site.

      2. This Consent Order is issued pursuant to the authority vested in the
President of the United States by Sections 104,106, 122(a), and 122(d)(3) of the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,42
U.S.C. Sections 9604, 9606, 9622(a), and 9622(d)(3), as amended ("CERCLA"). This
authority was delegated to the Administrator of EPA on January 23, 1987, by
Executive Order 12580, 52 Fed. Reg. 2926 (1987), and further delegated to EPA
Regional Administrators as of January 16, 2002, by EPA Delegation Nos. 14-1 and
14-2, and to the Director, Superfund Division, EPA Region 5, by Regional
Delegation Nos. 14-1 and 14-2.

      3. The activities conducted pursuant to this Consent Order are subject to
approval by EPA and WDNR, as provided herein, and shall be consistent with
CERCLA, the National Contingency Plan, 40 C.F.R. Part 300, and all other
applicable laws.

      4. EPA, WDNR, and Respondent recognize that this Consent Order has been
negotiated in good faith and that the actions undertaken by Respondent in
accordance with this



Consent Order do not constitute an admission of any liability. Nothing in this
Consent Order is intended by the Parties to be, nor shall it be construed as, an
admission of fact or law, an estoppel, or a waiver of defenses or claims by
Respondent for any purpose. The Parties agree that the provisions of this
Consent Order are not based on any views or assumptions regarding Respondent's
appropriate share of liability or costs relating to the Site. Participation in
this Consent Order by Respondent is not intended by the Parties to be, and shall
not be, an admission of any fact or opinion developed by EPA, the State, or any
other person or entity.

      5. Respondent agrees to comply with and be bound by the terms of this
Consent Order. Respondent consents to and agrees not to contest the authority or
jurisdiction of the Regional Administrator of EPA Region 5 and the Secretary of
the Wisconsin Department of Natural Resources or their delegatees to issue or
enforce this Consent Order, and also agrees not to contest the basis or validity
of this Consent Order or its terms in any action to enforce its provisions. The
Respondent does not, by signing this Consent Order, waive any rights it may have
to assert claims under CERCLA against any person, as defined in Section 101(21)
of CERCLA, 42 U.S.C. Section 9601(21), except as precluded by Section XXI (Other
Claims).

                                II. PARTIES BOUND

      6. This Consent Order applies to and is binding upon and inures to the
benefit of EPA, WDNR, Respondent, and their successors and assigns. Respondent
agrees to instruct its officers, directors, employees and agents involved in the
performance of the Work required by this Consent Order to take all necessary
steps to accomplish the performance of said Work in accordance with this Consent
Order. Any change in ownership or corporate status of Respondent, including but
not limited to any transfer of assets or real or personal property, shall not
alter Respondent's responsibilities under this Consent Order. Respondent shall
provide a copy of this Consent Order to any subsequent owners or successors
before ownership rights or stock or assets in a corporate acquisition are
transferred. The signatories to this Consent Order certify that they are
authorized to execute and legally bind the Parties they represent to this
Consent Order.

      7. Respondent shall provide a copy of this Consent Order to all
contractors, laboratories, and consultants which are retained to conduct any
work performed under this Consent Order, within fourteen (14) days after the
Effective Date of this Consent Order or the date of retaining their services;
whichever is later. Respondent shall condition any such contracts upon
satisfactory compliance with this Consent Order. Notwithstanding the terms of
any contract, Respondent is responsible for compliance with this Consent Order
and for ensuring that its subsidiaries, employees, contractors, consultants,
subcontractors, agents and attorneys comply with this Consent Order.

                                III. DEFINITIONS

      8. Unless otherwise specified, terms used in this Consent Order which are
defined in CERCLA or in regulations promulgated under CERCLA shall have the
meaning assigned to them in CERCLA or in such regulations. Whenever terms listed
below are used in this Consent Order or in the attachments hereto, the following
definitions shall apply:

                                     - 2 -


      a. "CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601 et
seq.

      b. "Consent Order" shall mean this Administrative Order on Consent and all
attachments hereto. In the event of conflict between this Consent Order and any
attachment, this Consent Order shall control.

      c. "Day" shall mean a calendar day unless expressly stated to be a working
day. "Working day" shall mean a day other than a Saturday, Sunday, or federal
holiday. In computing any period of time under this Consent Order, where the
last day would fall on a Saturday, Sunday, or federal holiday, the period shall
run until the close of business of the next working day.

      d. "Effective Date" shall mean the effective date of this Consent Order as
provided by Section XXVI of this Consent Order (Effective Date).

      e. "EPA" shall mean the United States Environmental Protection Agency and
any successor departments or agencies of the United States.

      f. "Future Response Costs" shall mean all costs, including, but not
limited to, direct and indirect costs, that the United States and the State
incur after the Effective Date in reviewing or developing plans, reports and
other items pursuant to this Consent Order, in verifying the Work, or in
otherwise implementing, overseeing, or enforcing this Consent Order, including,
but not limited to, payroll costs, contractor costs, travel costs, laboratory
costs, the costs incurred pursuant to Section XIV (including, but not limited
to, the cost of attorney time and any monies paid to secure access including,
but not limited to, the amount of just compensation) and Paragraph 71 of Section
XIX.

      g. "Interest" shall mean interest at the rate specified for interest on
investments of the EPA Hazardous Substance Superfund established by 26 U.S.C.
Section 9507, compounded annually on October 1 of each year, in accordance with
42 U.S.C. Section 9607(a). The applicable rate of interest shall be the rate in
effect at the time the interest accrues. The rate of interest is subject to
change on October 1 of each year.

      h. "National Contingency Plan" or "NCP" shall mean the National Oil and
Hazardous Substances Pollution Contingency Plan promulgated pursuant to Section
105 of CERCLA, 42 U.S.C. Section 9605, codified at 40 C.F.R. Part 300, and any
amendments thereto.

      i. "Operable Unit 1" or "OU1" shall mean the Little Lake Butte des Morts
reach of the Lower Fox River, as delineated by the Record of Decision signed by
WDNR and EPA in December 2002. More specifically, OU1 is the portion of the
Lower Fox River (and the underlying River sediment) starting at the outlet of
Lake Winnebago at the Neenah Dam and the Menasha Dam downstream to the Upper
Appleton Dam, including sediment deposits A through H and POG. As so defined,
OU1 is depicted in Figure 7-9 of the December 2002 Final Feasibility Study, a
copy of which is attached hereto as Attachment B.

                                     - 3 -


      j. "Paragraph" shall mean a portion of this Consent Order identified by an
Arabic numeral.

      k. "Parties" shall mean all signatories to this Consent Order.

      l. "Record of Decision" or "ROD" for purposes of this Consent Order shall
mean the WDNR/EPA Record of Decision relating to the Remedial Action planned for
Operable Units 1 and 2 of the Site, signed on December 18, 2002, by the WDNR and
on December 20, 2002 by the Superfund Division Director, EPA Region 5, and all
attachments.

      m. "Remedial Design" or "RD" shall mean those activities, including
pre-design sampling, investigations, and analyses, preparation of the basis for
design report, preliminary and final plans and specifications, and bid documents
for the Remedial Action for Operable Unit 1 pursuant to the Record of Decision,
the Statement of Work, the Pre-design Sampling Plan, and the Remedial Design
Work Plan (the documents submitted by Respondent pursuant to Section IX of this
Consent Order (Work to be Performed)).

      n. "Respondent" shall mean WTM I Company.

      o. "Response Agencies" shall mean the United States Environmental
Protection Agency (EPA) and the Wisconsin Department of Natural Resources
(WDNR).

      p. "Section" shall mean a portion of this Consent Order identified by a
Roman numeral.

      q. "Site" shall mean the Lower Fox River and Green Bay Site (also known as
the Fox River NRDA PCB Releases Site), or any relevant portion thereof.

      r. "State" shall mean the State of Wisconsin, including its departments,
agencies, and instrumentalities.

      s. "Statement of Work" or "SOW" shall mean the statement of work for
implementation of Remedial Design as set forth in Attachment A to this Consent
Order and any modifications made in accordance with this Consent Order.

      t. "United States" shall mean the United States of America, including its
departments, agencies, and instrumentalities.

      u. "WDNR" shall mean the Wisconsin Department of Natural Resources and any
successor departments or agencies of the State of Wisconsin.

      v. "Work" shall mean all activities Respondent is required to perform
under this Consent Order, except those required by Section XXIV (Record
Preservation).

                                     - 4 -


                            IV. STATEMENT OF PURPOSE

      9. The mutual objective of EPA, WDNR and Respondent in entering into this
Consent Order is to protect human health, welfare and the environment at
Operable Unit 1 by producing a Remedial Design for remedial action in accordance
with this Consent Order.

      10. The activities conducted pursuant to this Consent Order are subject to
approval by the Response Agencies. Respondent shall employ sound scientific,
engineering, and construction practices and all activities undertaken shall be
consistent with CERCLA, the NCP, and other applicable laws.

                               V. FINDINGS OF FACT

      11. Based on available information, including the Administrative Record in
this matter, EPA and WDNR hereby find that:

            a. At certain times in the past, primarily in the 1950's and 1960's,
      certain paper companies located along the Fox River engaged in the
      manufacture or recycling of carbonless copy paper. Polychlorinated
      biphenyls (PCBs), which are hazardous substances, were used in the
      production of carbonless copy paper and were contained in wastepaper that
      entered the paper recycling operations.

            b. As a result of the paper mills' production or recycling of
      carbonless copy paper an estimated 690,000 pounds of PCBs were likely
      released to the Fox River. An estimated 66,000 pounds of these PCBs remain
      in the lower 39 miles of the Fox River.

            c. As a result of this contamination, fish consumption advisories
      have been in effect on the Fox River and Green Bay since 1976.

            d. A Remedial Investigation and Feasibility Study (RI/FS) under the
      technical lead of WDNR, and a proposed remedial action plan, was issued
      for public comment on October 5, 2001.

            e. On January 7, 2003, the Response Agencies made public a Record of
      Decision for Operable Units 1 and 2 of the Site.

                    VI. CONCLUSIONS OF LAW AND DETERMINATIONS

      12. Based on the Findings of Fact set forth above, and the Administrative
Record, EPA and WDNR have determined that:

            a. The Site is a "facility" as defined by Section 101(9) of CERCLA,
42 U.S.C. Section 9601(9). Respondent's former Menasha paper mill is also a
"facility" as defined by Section 101(9) of CERCLA, 42 U.S.C. Section 9601(9).

            b." The contamination found at the Site, as identified in the
Findings of Fact above, includes "hazardous substances" as defined by Section
101(14) of CERCLA, 42 U.S.C. Section 9601(14).

                                     - 5 -


            c. Respondent is a "person" as defined by Section 101(21) of CERCLA,
42 U.S.C. Section 9601(21).

            d. Respondent WTM I Company is a responsible party under Section
107(a) of CERCLA, 42 U.S.C. Section 9607(a), as: (i) the "owner" or "operator"
of a facility at the time of disposal of a hazardous substance there; and/or
(ii) as a person who arranged for disposal or transport for disposal of a
hazardous substance at a facility from which there was a release of a hazardous
substance.

            e. The conditions described in the Findings of Fact above constitute
an actual or threatened "release" of a hazardous substance from the facility
into the "environment" as defined by Sections 101(8) and (22) of CERCLA, 42
U.S.C. Sections 9601(8) and (22).

            f. The conditions present at the Site may present a threat to public
health, welfare, or the environment based upon the factors set forth in Section
300.415(b)(2) of the National Contingency Plan, as amended, 40 C.F.R. Section
300.415(b)(2).

            g. The actual or threatened release of hazardous substances from the
Site may present an imminent and substantial endangerment to the public health,
welfare, or the environment within the meaning of Section 106(a) of CERCLA, 42
U.S.C. Section 9606(a).

            h. The response actions required by this Consent Order are necessary
to protect the public health, welfare, or the environment and if carried out in
compliance with the terms of this Consent Order, shall be deemed necessary and
consistent with the NCP.

                                   VII. ORDER

      13. Based upon the foregoing Findings of Fact, Conclusions of Law and
Determinations, and the Administrative Record for this Site, it is hereby
Ordered and Agreed that Respondent shall comply with all provisions of this
Consent Order. Respondent shall promptly and properly take appropriate response
action at Operable Unit 1 of the Site by conducting a Remedial Design.

           VIII. DESIGNATION OF CONTRACTORS AND PROJECT COORDINATORS

      14. Selection of Contractors, Personnel. All Work performed by Respondent
pursuant to this Consent Order shall be under the direction and supervision of
qualified personnel. Within forty-five (45) days of the Effective Date of this
Consent Order, and before the Work outlined below begins, Respondent shall
notify the Response Agencies in writing of the names, titles, and qualifications
of the key personnel, including contractors, subcontractors, consultants and
laboratories to be used in carrying out such Work. With respect to any proposed
contractor, the Respondent shall demonstrate that the proposed contractor has a
quality system which complies with ANSI/ASQC E4-1994, "Specifications and
Guidelines for Quality Systems for Environmental Data Collection and
Environmental Technology Programs," (American National Standard, January
5,1995), by submitting a copy of the proposed contractor's Quality Management
Plan (QMP). The QMP should be prepared in accordance with "EPA Requirements for
Quality Management Plans (QA/R-2)," (EPA/240/B-01/002, March 2001) or equivalent
documentation as determined by EPA. The qualifications of the key personnel

                                     - 6 -


undertaking the work for Respondent shall be subject to the Response Agencies'
review, for verification that such persons meet minimum technical background and
experience requirements. This Consent Order is contingent on Respondent's
demonstration to the Response Agencies' satisfaction that Respondent's personnel
are qualified to perform properly and promptly the actions set forth in this
Consent Order.

      15. If EPA or WDNR disapprove in writing of any contractor proposed by
Respondent, Respondent shall notify the Response Agencies of the identity and
qualifications of the replacement within thirty (30) days of the written notice.
If EPA or WDNR subsequently disapprove of the replacement, EPA reserves the
right to terminate this Consent Order and to conduct a complete Remedial Design,
and to seek reimbursement for costs and penalties from Respondent. During the
course of the Remedial Design, Respondent shall notify the Response Agencies in
writing of any changes or additions in the key personnel used to carry out such
work, providing their names, titles, and qualifications. The Response Agencies
shall have the same right to approve changes and additions to key personnel as
they have hereunder regarding the initial notification. Replacement of any of
Respondent's personnel shall not delay performance of the work under this
Consent Order.

      16. On or before the Effective Date of this Consent Order, Respondent
shall designate a Project Coordinator who shall be responsible for
administration of all Respondent's response actions required by the Consent
Order. Respondent shall submit to the Response Agencies the designated Project
Coordinator's name, address, telephone number, and qualifications. EPA and WDNR
retain the right to disapprove of any Project Coordinator named by Respondent.
If either Response Agency disapproves a selected Project Coordinator, Respondent
shall retain a different Project Coordinator and shall notify the Response
Agencies of that person's name and qualifications within seven (7) business days
of the Response Agency's disapproval.

      17. Receipt by Respondent's Project Coordinator of any notice or
communication from the Response Agencies relating to this Consent Order shall
constitute receipt by Respondent. To the maximum extent possible, communications
between the Respondent and the Response Agencies shall be directed to the
Project Coordinators by mail, with copies to such other persons as EPA, the
State, and Respondent may respectively designate. Communications include, but
are not limited to, all documents, reports, approvals, and other correspondence
submitted under this Consent Order.

      18. Respondent's Project Coordinator, or his/her designee, shall be
on-site during all hours of work when field work is ongoing in Operable Unit 1,
and shall be available at all reasonable times throughout the pendency of this
Consent Order. If Respondent or its agents become aware of any conditions at
Operable Unit 1 which may present an imminent and substantial endangerment to
human health or welfare or the environment, it shall immediately notify the EPA
and WDNR Project Coordinators. The absence of the EPA Project Coordinator and/or
the WDNR Project Coordinator from the area under study pursuant to this Consent
Order shall not be cause for the stoppage or delay of work, unless specifically
directed by the EPA Project Coordinator in consultation with the WDNR Project
Coordinator.

      19. The EPA Project Coordinator shall be responsible for overseeing the
implementation of this Consent Order, in consultation with the WDNR Project
Coordinator.

                                     - 7 -


EPA has designated James Hahnenberg (SR-6J) as the EPA Project Coordinator. The
EPA Project Coordinator shall have the same authority as that vested in an
On-Scene Coordinator and Remedial Project Manager by the NCP, including the
authority to halt, conduct, or direct any response action required by this
Consent Order, or to direct any other response action undertaken by EPA or
Respondent at the Site. Except as otherwise provided in this Consent Order,
Respondent shall direct all submissions required by this Consent Order to the
EPA Project Coordinator in accordance with Section XXV (Notices and
Submissions).

      20. The State designates Gregory Hill as the WDNR Project Coordinator.
Except as otherwise provided in this Consent Order, Respondent shall direct all
submissions required by this Consent Order to the WDNR Project Coordinator in
accordance with Section XXV (Notices and Submissions).

      21. The Response Agencies and Respondent shall have the right to change
their respective designated Project Coordinator. The Response Agencies shall
notify Respondent, and Respondent shall notify the Response Agencies, as early
as possible before such a change is made, but in no case less than twenty-four
(24) hours before such a change. The initial notification may be made orally,
but it shall be promptly followed by a written notice.

                            IX. WORK TO BE PERFORMED

      22. Activities. Respondent shall conduct activities and submit
deliverables as provided by the SOW (Attachment A) for performance of the RD,
which is incorporated by reference. All such work shall be conducted in
accordance with CERCLA, the NCP, and EPA guidance referenced in the SOW, as may
be amended or modified by the Response Agencies. The tasks that Respondent must
perform are described in the SOW and guidance. All work performed under this
Consent Order shall be in accordance with the schedules herein, and in full
accordance with the standards, specifications, and other requirements of the
work plan and sampling and analysis plan, as initially approved or modified by
the Response Agencies, and as may be amended or modified by the Response
Agencies from time to time.

      23. Respondent's compliance with the Work requirements shall not foreclose
the Response Agencies from seeking compliance with all terms and conditions of
this Consent Order.

      24. To the extent that EPA informs Respondent that particular information
is confidential, Respondent and its representatives and consultants shall treat
and maintain such information as confidential.

      25. Additional Work. In the event EPA, WDNR or the Respondent determine
that additional work, not otherwise included in the SOW, including remedial
investigatory work and engineering evaluation, is necessary to accomplish the
objectives of this Consent Order, notification of additional work shall be
provided to all Parties.

      26. Additional work determined to be necessary by Respondent shall be
subject to the written approval of the Response Agencies.

                                     - 8 -


      27. Additional work determined to be necessary by Respondent and approved
by the Response Agencies, or determined to be necessary by EPA or WDNR and
requested of Respondent, shall be completed by Respondent in accordance with the
standards and specifications determined or approved by the Response Agencies.
Respondent shall propose a schedule for additional work for approval by the
Response Agencies. The Response Agencies may jointly modify or determine the
schedule for additional work. Additional work shall be performed in a manner
consistent with the purposes and objectives of this Consent Order, and conform
with the requirements of this Section.

      28. Supplemental Investigations. The Parties acknowledge that Respondent
may implement a voluntary, supplemental, investigation of conditions in and
upstream of Operable Unit 1. These investigations shall be conducted using
methods consistent with those identified in the Pre-design Sampling Plan. The
Response Agencies agree to review and comment promptly on work generated by
Respondent during such supplemental investigation activities.

      29. Out-of-State Shipments. In the event of out-of-state shipments of
hazardous substances, Respondent shall provide written notification to the
Response Agencies and the appropriate environmental official of the state
receiving hazardous substances prior to shipment of hazardous substances in
quantities greater than ten (10) cubic yards from the Site to an out-of-state
location. The notification shall include:

            a.    The name and location of the facility receiving the hazardous
                  substances;

            b.    The type and quantity of the hazardous substances, including
                  the Department of Transportation shipping code, if any;

            c.    The schedule for shipment of the hazardous substances;

            d.    The method of transportation; and

            e.    Any special procedures necessary to respond to an accidental
                  release of the substances during transportation.

Respondent shall promptly notify the Response Agencies and the appropriate
environmental official for the receiving state of any changes to the shipment
plan.

                            X. PLANS AND SUBMISSIONS

      30. Respondent shall Submit the Pre-design Sampling Plan for OU1, Remedial
Design Work Plan ("RD Work Plan") and all documents required by the SOW, the RD
Work Plan, or this Consent Order to the Response Agencies according to the
schedule contained in the SOW and RD Work Plan, and when feasible shall submit
both a hard copy and an electronic copy of such documents.

      31. The Response Agencies shall review all documents specified as
requiring approval in the SOW, RD Work Plan, or this Consent Order. The Response
Agencies shall respond to each submission in writing with a single integrated
response. As a result of their review of a submission, the Response Agencies
may: (a) approve the submission; (b) approve

                                     - 9 -


the submission with minor modifications; (c) disapprove the submission and
direct Respondent to re-submit the document after incorporating the Response
Agencies' comments; or (d) if a re-submission, disapprove the re-submission and
the Response Agencies may assume responsibility for performing all or any part
of the response action.

      32. In the event of approval or approval with minor modifications by the
Response Agencies, Respondent shall proceed to take any action required by the
submittal, as approved or modified by the Response Agencies.

      33. Upon receipt of a notice of disapproval, Respondent shall, within
thirty (30) days or such longer time as specified by the Response Agencies in
their notice of disapproval, correct the deficiencies and resubmit the submittal
for approval. Notwithstanding the notice of disapproval, Respondent shall
proceed, if so directed by the Response Agencies, to take any action required by
any non-deficient portion of the submission that remains unaffected by the
notice of disapproval and can be reasonably implemented in the interim.

      34. If any re-submission is not approved by the Response Agencies, they
may determine that Respondent is in violation of this Consent Order, unless
Respondent invokes the procedures set forth in Section XV (Dispute Resolution)
and the Response Agencies' determination is revised pursuant to that Section.
Issues previously resolved pursuant to the procedures set forth in Section XV
may not be re-disputed.

      35. Neither failure of the Response Agencies to expressly approve or
disapprove of Respondent's document within the specified time period nor the
absence of comments shall be construed as approval of the document. In the event
of subsequent disapproval of a revised document, the Response Agencies retain
the right to terminate this Consent Order and perform additional studies or
conduct a complete or partial Remedial Design.

      36. For any document required to be submitted by the Respondent to the
Response Agencies, within forty-five (45) days of receipt of the document, the
Response Agencies shall provide written notification to Respondent of their
approval, approval with minor modifications or disapproval, of the submission or
any part thereof. If the Response Agencies require a longer review period, the
Response Agencies shall so notify Respondent within thirty (30) days of receipt
of the submitted document.

      37. The Project Coordinators shall hold progress report meetings /
telephone conferences twice a month unless such a meeting is deemed unnecessary
by the Response Agencies. By mutual agreement the Project Coordinators may hold
meetings or telephone conferences at more frequent intervals.

      38. Respondent shall provide written monthly progress reports to the
Response Agencies. These monthly progress reports shall include the following
information:

            a.    A description of the actions which have been taken to comply
                  with this Consent Order during the past month and work planned
                  for the coming month;

                                     - 10 -


            b.    All results of sampling and tests, including raw data and
                  validated data, and all other investigation results received
                  by the Respondent during the month, in the format prescribed
                  by the Response Agencies;

            c.    Target and actual completion dates of each element of the RD,
                  including project completion, with schedules relating such
                  work to the overall project schedule for RD completion, and an
                  explanation of any schedule deviation or anticipated deviation
                  from the RD Work Plan schedule, and proposed method of
                  mitigating such deviation;

            d.    A description of all problems encountered and any anticipated
                  problems during the reporting period, any actual or
                  anticipated delays, and solutions developed and implemented to
                  address any actual or anticipated problems or delays; and,

            e.    Changes in key personnel.

      39. Respondent shall submit the monthly progress reports, as both
electronic files and hard copy files, to the Response Agencies by the tenth
(10th) day of every month following the Effective Date of this Consent Order.

                   XI. QUALITY ASSURANCE AND DATA AVAILABILITY

      40. Quality Assurance. Respondent shall consult with the Response
Agencies' Project Coordinators in planning all sampling and analysis detailed in
the Pre-design Sampling Plan and RD Work Plan. Respondent shall assure that work
performed, samples taken and analyses conducted conform to the requirements of
the SOW, the Quality Assurance Project Plan ("QAPP") and guidance identified
therein.

      41. Respondent shall prepare preliminary and final QAPPs for submittal to
EPA according to the schedule in the SOW. Respondent shall participate in a
pre-QAPP meeting with EPA prior to submission of the preliminary QAPP to discuss
its contents.

      42. The QAPPs shall be subject to review, modification, and approval by
EPA in accordance with Section X (Plans and Reports).

      43. Data Availability. All results of sampling, tests, modeling or other
data (including raw data) generated by Respondent, or on Respondent's behalf,
pursuant to this Consent Order, shall be submitted in the format prescribed by
the Response Agencies and made available to and submitted to the Response
Agencies in the monthly progress reports described in Section X of this Consent
Order. The Response Agencies will make available to Respondent validated data
generated by the Response Agencies relating to Lake Winnebago and OU1 unless it
is exempt from disclosure by any federal or state law or regulation.

      44. Respondent will verbally notify the Response Agencies at least fifteen
(15) days prior to conducting significant field events (including any sampling,
tests and other data generation) as described in the SOW, Pre-design Sampling
Plan, or RD Work Plan or conducted under any other provision in this Consent
Order. Respondent shall allow split or duplicate

                                     - 11 -


samples to be taken by the Response Agencies (and their authorized
representatives) of any samples collected by the Respondent in implementing this
Consent Order. All split samples of Respondent's shall be analyzed by the
methods identified in the EPA-approved QAPP.

      45. Respondent may assert a claim of business confidentiality covering
part or all of the information submitted to the Response Agencies pursuant to
the terms of this Consent Order under 40 C.F.R. Section 2.203, provided such
claim is allowed by Section 104(e)(7) of CERCLA, 42 U.S.C. Section 9604(e)(7).
This claim shall be asserted in the manner described by 40 C.F.R. Section
2.203(b) and substantiated at the time the claim is made. Information determined
to be confidential by EPA will be given the protection specified in 40 C.F.R.
Part 2. If no such claim accompanies the information when it is submitted to the
Response Agencies, it may be made available to the public by EPA or the State
without further notice to the Respondent. Respondent agrees not to assert
confidentiality claims with respect to any data related to Operable Unit 1
conditions, sampling, or monitoring.

      46. In entering into this Consent Order, Respondent waives any objections
to the quality of any data gathered, generated, or evaluated by EPA, the State
or Respondent in the performance or oversight of the work that has been verified
according to the quality assurance/quality control (QA/QC) procedures required
by the Consent Order or any Work Plan approved by the Response Agencies. If
Respondent objects to any data relating to the RD, Respondent shall submit to
the Response Agencies a report that identifies and explains its objections,
describes the acceptable uses of the data, if any, and identifies any
limitations to the use of the data. The report must be submitted to the Response
Agencies within thirty (30) days of the monthly progress report or such other
report as may contain the data.

      47. Respondent may assert that certain documents, records and other
information are privileged under the attorney-client privilege or the work
product doctrine. If Respondent asserts such a privilege, in lieu of providing
documents, it shall inform the Response Agencies that it is claiming certain
documents as privileged and shall, upon request, provide the Response Agencies
with the following:

            a.    The title of the document;

            b.    The date of the document, record, or information;

            c.    The name and title of the author of the document, record, or
                  information;

            d.    The name and title of each addressee and recipient;

            e.    A description of the contents of the document, record, or
                  information; and

            f.    The privilege asserted by the Respondent.

      48. Failure to challenge Respondent's assertion of privilege by EPA or
WDNR during the implementation of the RD does not waive the Response Agencies'
right to challenge the assertion during the implementation of the Remedial
Action.

                                     - 12 -


                                   XII. ACCESS

      49. To the extent that Operable Unit 1 or other on-site and off-site areas
where work is to be performed is presently owned by parties other than
Respondent, Respondent shall obtain, or use its best efforts to obtain, access
agreements from the present owners within sixty (60) days of approval of the RD
Work Plan. For purposes of this Paragraph, "best efforts" includes the payment
of reasonable sums of money in consideration of access. Access agreements shall
provide access for the Response Agencies and all authorized representatives of
the Response Agencies. Respondent shall immediately notify the Response Agencies
if, after using its best efforts, it is unable to obtain such agreements.
Respondent shall describe in writing its efforts to obtain access. The Response
Agencies may then assist Respondent in gaining access, to the extent necessary
to effectuate the activities required by this Consent Order, using such means as
the Response Agencies deem appropriate. All costs incurred, direct or indirect,
by the United States or the State in obtaining such access including, but not
limited to, the cost of attorney time and the amount of monetary consideration
paid or just compensation shall be considered Future Response Costs. In
accordance with Paragraph 53 (Liability for Future Response Costs), Respondent
may be required to reimburse the United States and the State for all such Future
Response Costs.

      50. At all reasonable times the Response Agencies and their authorized
representatives shall have the authority to enter and freely move about all
property owned by Respondent at Operable Unit 1 and at any other on-site and
off-site areas where work, if any, is being performed, for the purposes of
inspecting conditions, activities, the results of activities, records, operating
logs, and contracts related to Operable Unit 1 pursuant to this Consent Order;
reviewing Respondent's progress in carrying out the terms of this Consent Order;
conducting tests as the Response Agencies or their authorized representatives
deem necessary; using a camera, sound recording device or other documentary type
equipment for purposes of documenting the Work; and verifying the data submitted
to the Response Agencies by Respondent. Respondent shall allow these persons to
inspect and copy all records, files, photographs, documents, sampling and
monitoring data, and other writings related to work undertaken in carrying out
this Consent Order, subject to Paragraph Nos. 43-48. Nothing herein shall be
interpreted as limiting or affecting the Response Agencies' right of entry or
inspection authority under federal law or state law. All individuals with access
to Operable Unit 1 under this paragraph shall comply with all approved health
and safety plans.

                      XIII. COMPLIANCE WITH APPLICABLE LAWS

      51. Respondent shall perform all Work under this Consent Order in
compliance with applicable federal, state and local laws, ordinances, or
regulations. In the event a conflict arises between these laws, ordinances, or
regulations, Respondent shall comply with the more stringent law, ordinance, or
regulation, unless otherwise approved by EPA.

      52. Respondent shall be responsible for obtaining state and local permits
necessary for the performance of any off-site work, and for complying with the
substantive provisions of state and local permit regulations for any on-site
work, The standards and provisions of Section XVI (Force Majeure) shall govern
delays in obtaining such permits. The Response

                                     - 13 -


Agencies shall cooperate with Respondent and endeavor to expedite the issuance
of permits for off-site work within their respective jurisdictions.

                           XIV. FUTURE RESPONSE COSTS

      53. Liability for Future Response Costs. If a Consent Decree addressing
Remedial Action in OU1 is not entered by the U.S. District Court for the Eastern
District of Wisconsin (the "Court") within one year of the Effective Date or
such additional time as agreed by the Parties in writing, Respondent shall be
liable for Future Response Costs (as defined in this Consent Order) and
Respondent shall make direct payments to EPA and the State for any Future
Response Costs incurred by the United States or the State, to the extent such
costs are not inconsistent with the National Contingency Plan. If, however, the
Court does enter such a Consent Decree within one year of the Effective Date (or
such additional time as agreed by the Parties in writing), this Section shall be
deemed null and void.

      54. Payment of Future Response Costs.

            a. Payments to EPA. On a periodic basis, the United States will send
Respondent a bill requiring payment that includes an EPA cost summary, which
includes direct and indirect costs incurred by EPA and its contractors, and a
DOJ cost summary, which reflects costs incurred by DOJ and its contractors, if
any. Respondent shall make all payments within forty-five (45) days of
Respondent's receipt of each bill requiring payment, except as otherwise
provided by Paragraph 55.

            b. Payments to the State. On a periodic basis, the State will send
Respondent a bill requiring payment that includes a WDNR cost summary, which
includes direct and indirect costs incurred by WDNR and its contractors, and a
WDOJ cost summary, which reflects costs incurred by WDOJ and its contractors, if
any. Respondent shall make all payments within forty-five (45) days of
Respondent's receipt of each bill requiring payment, except as otherwise
provided by Paragraph 55.

      55. Disputes Regarding Future Response Costs. Respondent may contest
payment of any Future Response Costs under Paragraph 54 if it determines that
the United States or the State has made an accounting error or if it alleges
that a cost item that is included represents costs that are inconsistent with
the NCP. Notice of any such objection shall be made in writing within
forty-five (45) days of receipt of the bill and must be sent to the United
States (if the United States' accounting is being disputed) or to the State (if
the State's accounting is being disputed) pursuant to Section XXV (Notices and
Submissions). Any such notice of objection shall specifically identify the
contested Future Response Costs and the basis for objection. In the event of an
objection, all uncontested Future Response Costs shall immediately be paid to
the United States or the State in the manner described in Paragraph 56. Upon
submitting a notice of objection, Respondent shall initiate the Dispute
Resolution procedures in Section XV (Dispute Resolution). If the United States
or the State prevails in the dispute, within ten (10) days of the resolution of
the dispute, all sums due (with accrued Interest) shall be paid to EPA (if the
United States' cost are disputed) or to the State (if the State's costs are
disputed) in the manner described in Paragraph 56. If Respondent prevails
concerning any aspect of the contested costs, the portion of the costs (plus
associated accrued Interest) for which they did not prevail shall be

                                     - 14 -


disbursed to EPA or the State, as appropriate, in the manner described in
Paragraph 56; and the amount that was successfully contested need not be paid to
EPA or to the State. The dispute resolution procedures set forth in this
Paragraph in conjunction with the procedures set forth in Section XV (Dispute
Resolution) shall be the exclusive mechanisms for resolving disputes regarding
reimbursement of the United States and the State for their Future Response
Costs.

      56. Payment Instructions.

            a. Payments to EPA. All payments to EPA under this Section or under
Section XVII (Stipulated Penalties) shall: (1) be made by a certified or
cashier's check or checks made payable to "EPA Hazardous Substance Superfund;"
(2) reference the Lower Fox River and Green Bay Site, EPA Site/Spill ID Number
A565, and DOJ Case Number 90-11-2-1045/2; (3) indicate that the payment is being
made pursuant to this Consent Order with WTM I Company; and (4) be sent to:

      U.S. Environmental Protection Agency, Region 5
      Program Accounting and Analysis Branch
      P.O. Box 70753
      Chicago, IL 60673

At the time of payment, Respondent shall ensure that notice that payment has
been made is sent to DOJ and EPA in accordance with Section XXV (Notices and
Submissions) and to:

      Financial Management Officer
      U.S. Environmental Protection Agency, Region 5
      Mail Code MF-10J
      77 W. Jackson Blvd.
      Chicago, IL 60604

            b. Payments to the State. All payments to the State under this
Section or under Section XVII (Stipulated Penalties) shall: (l) be made by a
certified or cashier's check or checks made payable to "Wisconsin Department of
Natural Resources;" (2) reference the Lower Fox River and Green Bay Site; (3)
indicate that the payment is being made pursuant to this Consent Order with WTM
I Company; and (4) be sent to:

      Gregory Hill
      WDNR Project Coordinator
      Wisconsin Department of Natural Resources

      P.O. Box 7921                        101 S. Webster St.
      Madison, WI 53707-7921               Madison, WI 53703
      (Regular Mail)                       (Over-Night Mail)

At the time of payment, Respondent shall ensure that notice that payment has
been made is sent to the State in accordance with Section XXV (Notices and
Submissions).

                                     - 15 -


                             XV. DISPUTE RESOLUTION

      57. The parties to this Consent Order shall attempt to resolve,
expeditiously, informally, and in good faith, any disagreements concerning this
Consent Order.

      58. Any disputes concerning activities or deliverables required under this
Consent Order for which Dispute Resolution has been expressly provided for,
shall be resolved as follows: Respondent shall notify the Response Agencies in
writing of its objection(s) within fourteen (14) calendar days of such action,
unless the objection(s) has (have) been informally resolved. This written notice
shall include a statement of the issues in dispute, the relevant facts upon
which the dispute is based, all factual data, analysis or opinion supporting
Respondent's position, and all supporting documentation on which Respondent
relies. The Response Agencies shall submit their Statement of Position,
including supporting documentation, no later than fourteen (14) calendar days
after receipt of Respondent's written notice of dispute. Respondent may submit a
response to the Response Agencies' Statement of Position within five (5)
business days after receipt of the Statement. During the five (5) business days
following receipt of the Response Agencies' Statement of Position, the parties
shall attempt to negotiate, in good faith, a resolution of their differences.
The time periods for exchange of written documents may be extended by agreement
of all parties.

      59. An administrative record of any dispute under this Section shall be
maintained by EPA and shall contain the notice of objections and accompanying
materials, the Statement of Position, any other correspondence between the
Response Agencies and Respondent regarding the dispute, and all supporting
documentation. The administrative record shall be available for inspection by
all parties. If the Response Agencies do not concur with the position of
Respondent, the Division Director for the Office of Superfund, EPA Region V, in
consultation with the Secretary of the WDNR, shall resolve the dispute based
upon the administrative record and consistent with the terms and objectives of
this Consent Order, and shall provide written notification of such resolution to
Respondent.

      60. Respondent's obligations under this Consent Order, other than the
obligations affected by the dispute, shall not be tolled by submission of any
objection for dispute resolution under this Section. Elements of Work and/or
obligations not affected by the dispute shall be completed in accordance with
the schedule contained in the Statement of Work. Following resolution of the
dispute, as provided by this Section, Respondent shall fulfill the requirement
that was the subject of the dispute in accordance with the agreement reached or
with EPA's decision, whichever occurs.

                               XVI. FORCE MAJEURE

      61. Respondent agrees to perform all requirements under this Consent Order
within the time limits established under this Consent Order, unless the
performance is delayed by a force majeure. For purposes of this Consent Order, a
force majeure is defined as any event arising from causes beyond the control of
Respondent or of any entity controlled by Respondent, including but not limited
to its contractors and subcontractors, that delays or prevents performance of
any obligation under this Consent Order despite Respondent's best efforts to

                                     - 16 -


fulfill the obligation. Force majeure does not include financial inability to
complete the response actions or increased cost of performance.

      62. If any event occurs or has occurred that may delay the performance of
any obligation under this Consent Order, whether or not caused by a force
majeure event, Respondent shall notify the Response Agencies orally within seven
(7) business days of when Respondent first knew that the event might cause a
delay. Within fourteen (14) calendar days thereafter, Respondent shall provide
to the Response Agencies in writing an explanation and description of the
reasons for the delay; the anticipated duration of the delay; all actions taken
or to be taken to prevent or minimize the delay; a schedule for implementation
of any measures to be taken to prevent or mitigate the delay or the effect of
the delay; Respondent's rationale for attributing such delay to a force majeure
event if it intends to assert such a claim; and a statement as to whether, in
Respondent's opinion, such event may cause or contribute to an endangerment to
public health, welfare or the environment. Failure to comply with the above
requirements shall preclude Respondent from asserting any claim of force majeure
for that event for the period of time of such failure to comply and for any
additional delay caused by such failure.

      63. If EPA, following consultation with the State, agrees that the delay
or anticipated delay is attributable to a force majeure event, the time for
performance of the obligations under this Consent Order that are affected by the
force majeure event will be extended by the Response Agencies for such time as
is necessary to complete those obligations. An extension of the time for
performance of the obligations affected by the force majeure event shall not, of
itself, extend the time for performance of any other obligation. If EPA,
following consultation with the State, does not agree that the delay or
anticipated delay has been or will be caused by a force majeure event, EPA will
notify Respondent in writing of its decision. If EPA, following consultation
with the State, agrees that the delay is attributable to a force majeure event,
EPA will notify Respondent in writing of the length of the extension, if any,
for performance of the obligations affected by the force majeure event.

                           XVII. STIPULATED PENALTIES

      64. Respondent shall be liable for payment into the Hazardous Substances
Superfund administered by EPA of the sums set forth below as stipulated
penalties for each week or part thereof that Respondent fails to comply with a
work schedule or payment schedule in accordance with the requirements contained
in this Consent Order, unless the Response Agencies determine that such a
failure or delay is attributable to force majeure as defined in Section XVI or
is otherwise approved by EPA. Such sums shall be due and payable within thirty
(30) days of receipt of written notification from EPA specifically identifying
the noncompliance and assessing penalties, unless Respondent invokes the
procedures of Section XV (Dispute Resolution). For failure to submit the final
RD Work Plan on schedule, stipulated penalties shall accrue in the amount of
$1,000 per day for the first 7 days and $2,500 per day for each day thereafter.
Stipulated penalties for all other matters shall accrue in the amount of
$1,000.00 for the first week or part thereof, and $1,500.00 for each week or
part thereof thereafter. Stipulated penalties shall begin to accrue on the day
that performance is due or a violation occurs and extends through the period of
correction.

                                     - 17 -


      65. The stipulated penalties set forth herein shall not preclude the
Agencies from electing to pursue any other remedy or sanction because of
Respondent's failure to comply with any of the terms of this Consent Order,
including a suit to enforce the terms of this Consent Order. Said stipulated
penalties shall not preclude the EPA from seeking statutory penalties up to the
amount authorized by law if Respondent fails to comply with any requirements of
this Consent Order. Provided, however, that the United States shall not seek
civil penalties pursuant to Section 122(1) of CERCLA for any violation for which
a stipulated penalty is provided herein, except in the case of a willful
violation of this Consent Order.

      66. Upon receipt of written demand from EPA, Respondent shall make payment
to EPA within thirty (30) days and interest shall accrue on late payments.
Payments shall be made in accordance with instructions provided by EPA in the
written demand. If Respondent fails to pay stipulated penalties when due, EPA
may institute proceedings to collect the penalties, as well as interest.

      67. Even if violations are simultaneous, separate penalties shall accrue
for separate violations of this Consent Order. Penalties shall accrue regardless
of whether EPA has notified Respondent of a violation or act of noncompliance.
The payment of penalties shall not alter in any way Respondent's obligation to
complete the performance of any work required under this Consent Order.
Stipulated penalties shall accrue during any dispute resolution period
concerning the particular penalties at issue, but need not be paid until fifteen
(15) days after the dispute is resolved by agreement or by receipt of EPA's
decision. If Respondent prevails upon resolution, Respondent shall pay only such
penalties as the resolution requires. In its unreviewable discretion, EPA may
waive its rights to demand all or a portion of the stipulated penalties due
under this Section.

                        XVIII. COVENANT NOT TO SUE BY EPA

      68. In consideration of the actions that will be performed under the terms
of this Consent Order, and except as otherwise specifically provided in this
Consent Order, EPA covenants not to sue or to take administrative action
against Respondent pursuant to Sections 106 and 107(a) of CERCLA, 42 U.S.C.
Sections 9606 and 9607(a), for performance of the Work. This covenant not to sue
shall take effect upon the Effective Date and is conditioned upon the complete
and satisfactory performance by Respondent of all obligations under this Consent
Order. This covenant not to sue extends only to Respondent and does not extend
to any other person.

                   XIX. RESERVATIONS OF RIGHTS BY EPA AND WDNR

      69. Except as specifically provided in this Consent Order, nothing herein
shall limit the power and authority of EPA or the United States to take, direct,
or order all actions necessary to protect public health, welfare, or the
environment or to prevent, abate, or minimize an actual or threatened release of
hazardous substances, pollutants or contaminants, or hazardous or solid waste
on, at, or from the Site. Further, nothing herein shall prevent EPA or WDNR from
seeking legal or equitable relief to enforce the terms of this Consent Order,
from taking other legal or equitable action as it deems appropriate and
necessary, or from requiring Respondent in the future to perform additional
activities pursuant to CERCLA or any other applicable law.

                                     - 18 -


      70. The covenant not to sue set forth in Section XVIII above does not
pertain to any matters other than those expressly identified therein. EPA and
WDNR reserve, and this Consent Order is without prejudice to, all rights against
Respondent with respect to all other matters, including, but not limited to:

            a.    claims based on a failure by Respondent to meet a requirement
                  of this Consent Order;

            b.    liability for past or future response costs incurred or paid
                  by the United States or the State for OU1 or for the Site
                  (except for any Future Response Costs paid pursuant to this
                  Consent Order);

            c.    liability for performance of response action other than the
                  Work;

            d.    criminal liability;

            e.    liability for damages for injury to, destruction of, or loss
                  of natural resources, and for the costs of any natural
                  resource damage assessments;

            f.    liability arising from the past, present, or future disposal,
                  release or threat of release of Waste Materials outside of the
                  Site; and

            g.    liability for costs incurred or to be incurred by EPA for
                  costs of the Agency for Toxic Substances and Disease Registry
                  related to the Site.

      71. Work Takeover. In the event EPA, in consultation with WDNR, determines
that Respondent has ceased implementation of any portion of the Work, is
seriously or repeatedly deficient or late in its performance of the Work, or is
implementing the Work in a manner which may cause an endangerment to human
health or the environment, EPA or WDNR may assume the performance of all or any
portion of the Work as the Response Agencies determine necessary. Costs incurred
by the United States or the State in performing the Work pursuant to this
Paragraph shall be considered Future Response Costs. In accordance with
Paragraph 53 (Liability for Future Response Costs), Respondent may be required
to reimburse the United States and the State for all such Future Response
Costs. Respondent may invoke the procedures set forth in Section XV (Dispute
Resolution) to dispute EPA's determination that takeover of the Work is
warranted under this Paragraph. Notwithstanding any other provision of this
Consent Order, EPA and WDNR retain all authority and reserve all rights to take
any and all response actions authorized by law.

                      XX. COVENANT NOT TO SUE BY RESPONDENT

      72. Respondent covenants not to sue and agrees not to assert any claims or
causes of action against the United States or the State, or their contractors or
employees, with respect to the Work or this Consent Order, including, but not
limited to:

            a. any direct or indirect claim for reimbursement from the Hazardous
Substance Superfund established by 26 U.S.C. Section 9507, based on Sections
106(b)(2), 107, 111,

                                     - 19 -


112, or 113 of CERCLA, 42 U.S.C. Sections 9606(b)(2), 9607, 9611, 9612, or 9613,
or any other provision of law;

            b. any claim arising out of the Work, including any claim under the
United States Constitution, the Constitution of the State of Wisconsin, the
Tucker Act, 28 U.S.C. Section 1491, the Equal Access to Justice Act, 28 U.S.C.
Section 2412, as amended, or at common law; or

            c. any claim against the United States or the State pursuant to
Sections 107 and 113 of CERCLA, 42 U.S.C. Sections 9607 and 9613, relating to
the Work.

      73. These covenants not to sue shall not apply in the event the United
States brings a cause of action or issues an order pursuant to the reservations
set forth in Paragraphs 70(b), (c), and (e) - (g), but only to the extent that
Respondent's claims arise from the same response action, response costs, or
damages that the United States is seeking pursuant to the applicable
reservation.

      74. Nothing in this Agreement shall be deemed to constitute approval or
preauthorization of a claim within the meaning of Section 111 of CERCLA, 42
U.S.C. Section 9611, or 40 C.F.R. Section 300.700(d).

                               XXI. OTHER CLAIMS

      75. Respondent waives all claims or demands for compensation under
Sections 106, 111 and 112 of CERCLA, 42 U.S.C. Sections 9606, 9611 and 9612
against the United States or the Hazardous Substances Superfund established by
Section 9507 of Title 26 of the United States Code arising from activity
performed pursuant to this Consent Order. This Consent Order does not constitute
any decision on preauthorization of funds under Section 111(a)(2) of CERCLA, 42
U.S.C. Section 9611(a)(2). Respondent further waives all other statutory and
common law claims against the Response Agencies, including, but not limited to,
contribution and counterclaims, relating to or arising out of conduct of the
Work.

      76. Nothing in this Consent Order shall constitute or be construed as a
release from any claim, cause of action or demand in law or equity against any
person, firm, partnership, subsidiary or corporation not a signatory to this
Consent Order for any liability it may have arising out of or relating in any
way to the generation, storage, treatment, handling, transportation, release, or
disposal of any hazardous substances, pollutants, or contaminants found at,
taken to, or taken from Operable Unit 1.

      77. Respondent specifically reserves all rights and defenses that it may
have, including but not limited to any rights to contest any Findings of Fact
and Conclusions of Law and Determinations set forth in Sections V and VI of this
Consent Order in any proceeding other than an action brought by EPA or the State
to enforce this Consent Order. Under this Consent Order, Respondent specifically
reserves any right it may have to seek review of the remedial action selected in
the ROD as authorized by CERCLA Section 113(h), 42 U.S.C. Section 9613(h), other
than in an action brought by EPA or the State to enforce this Consent Order.

      78. Each party to this Consent Order shall bear its own costs and
attorneys fees.

                                     - 20 -


             XXII. CONTRIBUTION PROTECTION AND EFFECT OF SETTLEMENT

      79. The Parties agree that Respondent is entitled, as of the Effective
Date, to protection from contribution actions or claims as provided by Sections
113(f)(2) and 122(h)(4) of CERCLA, 42 U.S.C. Sections 9613(f)(2) and 9622(h)(4),
for "matters addressed" in this Consent Order. The "matters addressed" in this
Consent Order are the Work. Nothing in this Consent Order precludes the United
States, the State, or Respondent from asserting any claims, causes of action, or
demands against any person not parties to this Consent Order for
indemnification, contribution, or cost recovery.

      80. The Parties agree and acknowledge that the Response Agencies shall
recognize that Respondent is entitled to full credit for all response costs
incurred in performance of the Remedial Design and all future response costs
paid under this Consent Order, with such credit to be applied against
Respondent's liabilities for response costs at the Site; provided, however, that
the credit ultimately recognized shall take into account the amount of any
recoveries by Respondent of any portion of such payments from other liable
persons such as through a recovery under Sections 107 and 113 of CERCLA, 42
U.S.C. Sections 96707 and 9613.

                             XXIII. INDEMNIFICATION

      81. Respondent shall indemnify, save and hold harmless the United States,
the State, and their officials, agents, contractors, subcontractors, employees
and representatives from any and all claims or causes of action arising from, or
on account of, negligent or other wrongful acts or omissions of Respondent, its
officers, directors, employees, agents, contractors, or subcontractors, in
carrying out actions pursuant to this Consent Order. In addition, Respondent
agrees to pay the United States and/or the State all costs incurred by the
United States and/or the State, including but not limited to attorneys fees and
other expenses of litigation and settlement, arising from or on account of
claims made against the United States and/or the State based on negligent or
other wrongful acts or omissions of Respondent, its officers, directors,
employees, agents, contractors, subcontractors and any persons acting on their
behalf or under their control, in carrying out activities pursuant to this
Consent Order. Neither the United States nor the State shall be held out as a
party to any contract entered into by or on behalf of Respondent in carrying out
activities pursuant to this Consent Order. Neither Respondent nor any such
contractor shall be considered an agent of the United States or the State.

      82. The United States and/or the State shall give Respondent notice of any
claim for which the United States and/or the State plan to seek indemnification
pursuant to this Section and shall consult with Respondent prior to settling
such claim.

      83. Respondent waives all claims against the United States and the State
for damages or reimbursement or for set-off of any payments made or to be made
to the United States and/or the State, arising from or on account of any
contract, agreement, or arrangement between Respondent and any person for
performance of response actions on or relating to the Site, including, but not
limited to, claims on account of construction delays. In addition, Respondent
shall indemnify and hold harmless the United States and the State with respect
to any and all claims for damages or reimbursement arising from or on account of
any contract, agreement, or

                                     - 21 -


arrangement between Respondent and any person for performance of response
actions on or relating to the Site, including, but not limited to, claims on
account of construction delays.

                            XXIV. RECORD PRESERVATION

      84. Respondent shall preserve all records and documents which relate to
implementation of the RD at Operable Unit 1 for a minimum of ten (10) years
following completion of Remedial Action construction. Respondent shall acquire
and retain copies of all documents that relate to Remedial Design for Operable
Unit 1 and are in the possession of its employees, agents, accountants,
contractors, or attorneys. After this 10-year period, Respondent shall notify
the Response Agencies at least ninety (90) days before the documents are
scheduled to be destroyed. If EPA or WDNR request that the documents be saved,
Respondent shall, at no cost to the Response Agencies, give the Response
Agencies the documents or copies of the documents.

                          XXV. NOTICES AND SUBMISSIONS

      85. Documents, including but not limited to reports, approvals,
disapprovals, and other correspondence which must be submitted under this
Consent Order, shall be sent by overnight delivery or certified mail, return
receipt requested, to the following addressees or to any other addressees which
the Respondent, EPA, and WDNR designate in writing:

As to the United States:

            James Hahnenberg
            EPA Project Coordinator
            United States Environmental Protection Agency
            77 West Jackson Blvd., mail code: SR-6J
            Chicago, Illinois 60604-3590
            Phone: (312) 353-4213
            FAX: (312) 886-4071
            E-mail: Hahnenberg.James@epa.gov

      with a copy to:

            Roger Grimes (C-14J)
            Assistant Regional Counsel
            U.S. Environmental Protection Agency
            Region 5
            77 West Jackson Blvd.
            Chicago, IL 60604
            Phone: (312) 886-6595
            FAX: (312) 886-0747
            E-mail: grimes.roger@epa.gov

                                     - 22 -


As to the State:

            Gregory Hill
            WDNR Project Coordinator
            Wisconsin Department of Natural Resources

            P.O. Box 7921                                    101 S. Webster St.
            Madison, WI 53707-7921                           Madison, WI 53703
            (Regular Mail)                                   (Over-Night Mail)
            Phone: (608) 267-9352
            FAX: (608) 267-2800
            E-mail: hillg@dnr.state.wi.us

As to the Respondent:

            J.P. Causey Jr.
            Vice President & Secretary / WTM I Company
            c/o Chesapeake Corporation
            1021 E. Cary Street
            Box 2350
            Richmond, VA 23218-2350
            Phone: (804) 697-1166
            FAX: (804) 697-1192
            E-mail: jp.causey@cskcorp.com

      with a copy to:

            Nancy K. Peterson
            Quarles & Brady LLP
            411 E. Wisconsin Ave.
            Milwaukee, WI 53202-4497
            Phone: (414) 277-5515
            Fax: (414) 203-0190
            E-mail: nkp@quarles.com

                      XXVI. EFFECTIVE DATE OF CONSENT ORDER

      86. This Consent Order shall become effective upon receipt by Respondent
of the Consent Order signed by the Director of the Superfund Division, EPA,
Region 5 and the Secretary of the WDNR.

                           XXVII. COMMUNITY RELATIONS

      87. Respondent shall cooperate with the Response Agencies in providing RD
information to the public. If requested by the Response Agencies, Respondent
shall participate in the preparation of all RD information disseminated to the
public pertaining to Operable Unit 1.

                                     - 23 -


                      XXVIII. MODIFICATION OF CONSENT ORDER

      88. In addition to the procedures set forth in Section VIII (Project
Coordinators), Section IX (Work to be Performed), Section XV (Dispute
Resolution) and Section XVI (Force Majeure), this Consent Order may be amended
by mutual agreement of the Parties. Amendments shall be in writing and shall
become effective on the date of execution by the Response Agencies. Project
Coordinators do not have the authority to sign amendments to the Consent Order.

      89. No informal advice, guidance, suggestions, or comments by the Response
Agencies regarding reports, plans, specifications, schedules, and any other
writing submitted by the Respondent will be construed as relieving Respondent of
its obligation to obtain such formal approval as may be required by this Consent
Order. Any deliverables, plans, technical memoranda, reports (other than
progress reports), specifications, schedules and attachments required by this
Consent Order are, upon approval by the Response Agencies, incorporated into
this Consent Order.

                           XXIX. NOTICE OF COMPLETION

      90. At the request of Respondent, the Response Agencies shall promptly
determine whether all actions have been performed in accordance with this
Consent Order, except for certain continuing obligations required by this
Consent Order (e.g., record retention). Any request shall demonstrate in writing
that such actions have been performed in accordance with this Consent Order and
shall be accompanied by the following attestation by a responsible official for
the Respondent: "I certify that the information contained in or accompanying
this certification is true, accurate, and complete." Upon such determination by
the Response Agencies, the Response Agencies will promptly provide written
notice to Respondent. Such notice will not be unreasonably withheld. If the
Response Agencies determine that any required response activities have not been
completed in accordance with this Consent Order, they will notify Respondent,
provide a list of the deficiencies, and require that Respondent correct such
deficiencies.

                                     - 24 -


IN THE MATTER OF:
Administrative Order by Consent

Lower Fox River and Green Bay Site

AGREED AS STATED ABOVE:

WTM I Company
(f/k/a Wisconsin Tissue Mills Inc.)

BY: /s/ J.P. Causey Jr.                              DATE: June 23, 2003
    -----------------------------------
    Name:  J.P. Causey Jr.
    Title: Vice President

                                     - 25 -


IN THE MATTER OF:
Administrative Order by Consent

Lower Fox River and Green Bay Site

IT IS SO ORDERED AND AGREED:

U.S. ENVIRONMENTAL PROTECTION AGENCY

BY: /s/ William E. Muno                              DATE: 7/1/03
    -----------------------------------
    William E. Muno, Director
    Superfund Division
    U.S. Environmental Protection Agency

    Region 5

WISCONSIN DEPARTMENT OF NATURAL RESOURCES

BY: /s/ Scott Hassett                                DATE: 6/23/03
    -----------------------------------
        Scott Hassett, Secretary

                                     - 26 -


                               STATEMENT OF WORK

                          FOR THE REMEDIAL DESIGN FOR

                             OPERABLE UNIT 1 AT THE

                       LOWER FOX RIVER AND GREEN BAY SITE

               BROWN, OUTAGAMIE, AND WINNEBAGO COUNTIES, WISCONSIN

I. PURPOSE

This Statement of Work (SOW) sets forth the requirements for the Remedial Design
(RD) for all components of the remedial action set forth in the Record of
Decision (ROD) for Operable Unit 1 (OU1) of the Lower Fox River and Green Bay
Site (Site).(1) This ROD encompasses Operable Unit 1 and Operable Unit 2 and was
signed by the Deputy Administrator, Water Division, Wisconsin Department of
Natural Resources (WDNR) and the Superfund Director of EPA Region 5 on December
18, 2002 and December 20, 2002, respectively.(2) This SOW addresses only the
Remedial Design for OU1. The Respondent shall develop the Remedial Design
consistent with the ROD, the Consent Order to which this SOW is attached (AOC),
EPA Superfund Remedial Design and Remedial Action Guidance, and any additional
guidance provided by the Response Agencies in submitting deliverables for
designing a remedial action for the Site. This SOW does not include
implementation of the remedy.

II DESCRIPTION OF THE REMEDIAL ACTION / PERFORMANCE STANDARDS

The Respondent shall design the remedy necessary to meet the Performance
Standards and specifications set forth in the ROD for OU1, as discussed below
(Alternative C2). The Remedial Design shall address the timing and sequencing of
the remedial action to account for the multifaceted and multi-year components of
the remedy. Appropriate consideration of the provisions of the contingent ROD,
and such other work as proposed by Respondent under the AOC, may also be
incorporated into the Remedial Design process.

- ----------
(1)   "Operable Unit 1" or "OU1" shall mean the Little Lake Butte des
      Morts reach of the Lower Fox River, as delineated by the Record of
      Decision signed by WDNR and EPA in December 2002. More specifically, OU1
      is the portion of the Lower Fox River (and the underlying River sediment)
      starting at the outlet of Lake Winnebago at the Neenah Dam and the Menasha
      Dam downstream to the Upper Appleton Dam, including sediment deposits A
      through H and POG. As so defined, OU1 is depicted in Figure 7-9 of the
      December 2002 Final Feasibility Study, a copy of which is attached to the
      Consent Order as Attachment B.

(2)   Operable Units 3, 4, and 5 of the Lower Fox River and Green Bay Site will
      be addressed in a separate Record of Decision.



OPERABLE UNIT 1 - LITTLE LAKE BUTTE DES MORTS, ALTERNATIVE C2 - Alternative C2
includes the removal of sediment with PCB concentrations greater than the 1 ppm
remedial action level (RAL), followed by dewatering and off-site disposal of the
sediment

- -     SITE MOBILIZATION AND PREPARATION. The staging area for OU1 will be
      determined during the design stage. Site preparation at the staging area
      will include collecting soil samples, securing the onshore property area
      for equipment staging, and constructing the sediment dewatering facility,
      water treatment facilities, and sediment storage and truck loading areas

- -     SEDIMENT REMOVAL. Sediment removal will be conducted using a dredge (e.g.,
      cutterhead or horizontal auger or other method) or other suitable sediment
      removal equipment.

- -     SEDIMENT DEWATERING. Sediment that is removed will require dewatering.

- -     WATER TREATMENT. Unless other arrangements can be made, water treatment
      will consist of flocculation, clarification, sand filtration, and
      treatment through activated carbon filters.

- -     SEDIMENT DISPOSAL. Sediment disposal includes the loading and
      transportation of the sediment to an NR 500 landfill with Toxic Substances
      Control Act (TSCA) approval, if needed.

- -     DEMOBILIZATION AND SITE RESTORATION. Demobilization and site restoration
      will involve removing all equipment from the staging and work areas and
      restoring the site to, at a minimum, its original condition before
      construction of the staging area commenced.

- -     INSTITUTIONAL CONTROLS AND MONITORING. Baseline monitoring will include
      pre-and post-remedial sampling of water, sediment, and biological tissue.
      Monitoring during implementation will include air and surface water
      sampling. Plans for monitoring during and after construction will be
      developed during the Remedial Design and modified during and after
      construction, as appropriate. Institutional controls may include access
      restrictions, land use or water use restrictions, dredging moratoriums,
      fish consumption advisories, and domestic water supply restrictions. Land
      and water use restrictions and access restrictions may require local or
      state legislative action to prevent inappropriate use or development of
      contaminated areas.

                                     - 2 -


- -     ACHIEVEMENT OF REMEDIAL ACTION LEVEL OBJECTIVE. The mass and volume to be
      remediated will be determined by (1) establishing a dredge elevation based
      on a RAL of 1 ppm or, if sampling conducted after dredging is completed
      shows that the 1 ppm RAL has not been achieved, (2) by achieving a Surface
      Weighted Average Concentration (SWAC) of 0.25 ppm.(3)

III. SCOPE OF REMEDIAL DESIGN

The Remedial Design shall be consistent with the ROD for OU1. Specific tasks are
described below.

TASK 1: REMEDIAL DESIGN WORK PLAN

Within 60 days of receiving Notice of Authorization to proceed with Remedial
Design, Respondent shall submit a complete Remedial Design Work Plan (RD Work
Plan) to EPA and WDNR for their review and approval. The RD Work Plan shall
discuss how each component of the OU1 remedy will be addressed, identify tasks
necessary for completing the pre-design investigations and design work required
by the ROD for OU1, and provide an overall management strategy for completion of
such tasks. The RD Work Plan shall also include a project schedule for each
major activity and submission of deliverables to be generated during the
Remedial Design. The plan shall document the responsibility and authority of all
organizations and key personnel involved with the design and shall include a
description of qualifications of key personnel directing the Remedial Design,
including contractor personnel. Respondent shall submit the RD Work Plan in
accordance with Section X of the Consent Order and Section IV of this SOW. Once
EPA and WDNR approve the RD Work Plan, Respondent shall implement the plan in
accordance with the approved schedule therein.

TASK 2: PRE-DESIGN PHASE

On or before July 21, 2003, Respondent shall submit a Pre-design Sampling Plan
for OU1 to WDNR and EPA for their review and approval. Among other things, the
Pre-design Sampling Plan will describe necessary field and analytical
evaluations of sediment in OU1 required for completion of the Remedial Design.
The Pre-design Sampling Plan will consist of the Quality Assurance Project Plan,
Sampling and Analysis Plan, and Health and Safety Plan. The Plan will not
address baseline bathymetric and related surveys, which have been or will be

- ----------
(3)   The Parties recognize that an Explanation of Significant Differences or
      ROD Amendment issued by the Response Agencies could result in an
      alternative RAL or SWAC.

                                     - 3 -


performed by WDNR and/or EPA. Respondent shall submit any necessary
modifications to these documents for review and approval prior to implementing
the pre-design investigation.

Validated sample results shall be submitted in accordance with provisions in
Section X of the AOC. Following completion of sampling and validation of data,
Respondent shall submit a Basis of Design Report for approval by the Response
Agencies which shall include all information collected during the pre-design
investigation, as well as appropriate literature and design references. The
Basis of Design report shall include the basis for designation of specific
sediment deposits in OU1 for remediation. The designation of sediment deposits
for removal will be subject to approval by the Response Agencies and be
consistent with the Record of Decision for OU1. Presentation of alternative
remedial measures may be made for Response Agencies' approval under the
provisions of the contingent ROD.

TASK 3: REMEDIAL DESIGN PHASES

Following completion of the Pre-Design Phase, Respondent shall prepare
construction plans and specifications to implement the Remedial Action at OU1 as
described in the ROD and this SOW. Such plans and specifications shall be
submitted in accordance with the schedule set forth in Section IV below. Subject
to approval by EPA and WDNR, Respondent may submit more than one set of design
submittals reflecting different components of the Remedial Action. All design
plans and specifications shall be developed consistent with EPA's Superfund
Remedial Design and Remedial Action Guidance (OSWER Directive No. 9355.0-4A),
except as otherwise specified in this SOW, and shall demonstrate that the
Remedial Action based on the final Remedial Design will meet all Performance
Standards. Respondent shall meet regularly with EPA and WDNR to discuss design
issues. If Respondent, consistent with the ROD capping contingency, proposes to
leave any capped area in place as part of the final remedy either based on
recharacterization and/or other information, Respondent shall provide a detailed
submittal with technical justification supporting such a proposal to WDNR and
EPA for review and approval. This submittal shall be consistent with ROD
Sections 13.4 and 13.5 and all appropriate EPA Guidance, and in accordance with
a schedule established in the approved RD Work Plan.

If Respondent, based on investigation activities and assessments conducted
during the design phase, proposes that alternative remedial measures be
designated by the Response Agencies for any portion of OU1, Respondent shall
provide a detailed submittal with technical justification supporting such a
proposal to WDNR and EPA for review

                                     - 4 -


and approval. The submittal shall be consistent with all appropriate EPA
Guidance. Approval of the proposal will require either an Explanation of
Significant Differences or a ROD Amendment by EPA and WDNR before it becomes
effective. The submittal shall be in addition to all other submittals required
by this SOW, and shall not delay the submittal of other design documents.
Respondent may make a submittal proposing alternate remedial measures, and EPA
and WDNR will consider the submittal, either during design or after the Final
Design is completed, but before remedial action commences in the portion(s) of
OU1 addressed by the submittal.

A. Preliminary Design (50%)

Respondent shall submit the Preliminary Design for OU1 to EPA and WDNR for
review and approval when the design effort is approximately 50% complete. The
Preliminary Design submittal shall include or discuss, at a minimum, the
following:

      -     Preliminary plans, drawings, and sketches, including design
            calculations;

      -     Results of studies and additional field sampling and analysis, if
            any, conducted after the Pre-Design Phase;

      -     Design assumptions and parameters, including design restrictions,
            process performance criteria, appropriate unit processes for the
            treatment train, and expected removal or treatment efficiencies for
            both the process and waste (concentration and volume), as
            applicable;

      -     Sediment Removal Verification Plan (in appropriate phase), including
            the proposed cleanup verification methods (i.e., probing methods)
            and compliance with Applicable or Relevant and Appropriate
            Requirements (ARARs);

      -     Outline of required specifications;

      -     Proposed siting/locations of processes/construction activity;

      -     Mitigation Plan to restore habitats that have been physically
            impacted by sediment removal equipment or soil excavation equipment
            (not including the soft sediment deposits themselves);

      -     Expected long-term monitoring and operation requirements;

      -     Real estate, easement, and permit requirements;

                                     - 5 -


      -     Preliminary construction schedule, including contracting strategy.

B. Pre-Final Design (90%)

The Respondent shall submit the Pre-Final Design when the design effort is 90%
complete. The Pre-Final Design shall fully incorporate all Response Agency
comments made to the Preliminary Design.

The Pre-Final Design submittals shall include those elements listed for the
Preliminary Design, as well as the following:

      -     Draft Construction Quality Assurance Project Plan;

      -     Final Health and Safety Plan;

      -     Final Contingency Plan;

      -     Final Sediment Removal Verification Plan;

      -     Draft Operation and Maintenance Plan;

      -     Capital and Operation and Maintenance Cost Estimate. This cost
            estimate shall refine the Feasibility Study cost estimate to reflect
            the detail presented in the Pre-Final Design;

      -     Final Project Schedule for the construction and implementation of
            the Remedial Action addressed in this SOW which identifies timing
            for initiation and completion of all critical path tasks. The final
            project schedule submitted as part of the Final Design shall include
            specific dates for completion of the project and major milestones.
            Specific dates will assume and be dependant upon, a defined start
            date.

C. Final Design (100%)

The Respondent shall submit the Final Design when the design effort is 100%
complete. The Final Design shall fully incorporate all Response Agency comments
made to the Pre-Final Design and shall include reproducible drawings and
specifications suitable for bid advertisement. The Final Design submittals shall
include those elements listed for the Pre-Final Design.

                                     - 6 -


D. Content of Supporting Plans

      1.    Health and Safety Plan (HSP)

      Respondent shall develop and submit to EPA / WDNR for review and comment a
site-specific HSP which is designed to protect construction personnel and area
residents from physical, chemical, and other hazards posed by any work at the
Site during the RA. The Health and Safety Plan shall follow OSHA requirements as
outlined in 29 CFR Sections 1910 and 1926.

      2.    Contingency Plan

      Consistent with the Consent Order, Respondent shall develop and submit to
EPA / WDNR for approval a Contingency Plan that describes the mitigation
procedures it will use in the event of an accident or emergency at the Site. The
Contingency Plan may be incorporated into the HSP. The final Contingency Plan
shall be submitted prior to the start of construction, in accordance with the
approved construction schedule. The Contingency Plan shall include, at a
minimum, the following:

            a.    Name of the person or entity responsible for responding in the
                  event of an emergency incident;

            b.    Plan and date to meet with the local community, including
                  local, State and Federal agencies involved in the Remedial
                  Action, as well as local emergency squads and hospitals; and,

            c.    First aid medical information

      3.    Construction Quality Assurance Project Plan (CQAPP)


      Respondent shall develop and submit to EPA / WDNR for review and approval
a draft CQAPP which describes the site specific components of the quality
assurance program that the Respondent shall use to ensure that the completed
project meets or exceeds all design criteria, plans, and specifications. The
final CQAPP shall be submitted in accordance with the approved RA Work Plan
schedule. The CQAPP shall contain, at a minimum, the following elements:

            a.    Responsibilities and authorities of all organizations and key
                  personnel involved in the construction of the Remedial Action.

                                     - 7 -


            b.    Qualifications of the Quality Assurance Official to
                  demonstrate that he/she possesses the training and experience
                  necessary to fulfill his/her identified responsibilities.

            c.    Protocols for sampling and testing used to monitor the
                  remedial action.

            d.    Identification of proposed quality assurance sampling
                  activities including the sample size, locations, frequency of
                  testing, acceptance and rejection data sheets, problem
                  identification and corrective measures reports, evaluation
                  reports, acceptance reports, and final documentation.

            e.    Reporting requirements for CQAPP activities shall be described
                  in detail in the CQAPP. This shall include such items as daily
                  summary reports, inspection data sheets, problem
                  identification and corrective measures reports, and design
                  acceptance reports, and final documentation. Provisions for
                  the final storage of all OU1 cleanup records shall be
                  presented in the CQAPP.

      4.    Sediment Removal Verification Plan

      Respondent shall develop and submit a Sediment Removal Verification Plan
to EPA / WDNR for review and approval. The purpose of the Sediment Removal
Verification Plan is to provide a mechanism to ensure that Performance Standards
for the Remedial Action are met. Once approved, the Sediment Removal
Verification Plan shall be implemented on the approved schedule. The Sediment
Removal Verification Plan shall include, at a minimum:

            a.    Quality Assurance Project Plan (may be part of RA QAPP);

            b.    Health and Safety Plan (may be part of RA HSP); and

            c.    Field Sampling Plan.

IV. SUMMARY OF MAJOR DELIVERABLES / SCHEDULE

A summary of the project schedule and reporting requirements for each phase of
the OU1 Remedial Action contained in this OU1 RD SOW is presented below. The
draft Pre-design Sampling Plan will sequence the work so that samples are first
collected and analyzed from Deposit A/B. The portion of the design necessary to
commence construction of the remedial action in 2004 will be expedited on a
schedule to be specified in the RD Work Plan.

                                     - 8 -


Unless modified by the final RD Work Plan or otherwise approved in writing by
the Project Coordinators, the project schedule will be as follows:



Deliverable / Milestone            Due Date (calendar days)
- ------------------------------     ---------------------------------------------
                                
Draft Pre-design Sampling Plan     July 21, 2003

Draft RD Work Plan                 Sixty (60) days after receiving Notice of
                                   Authorization to proceed with RD.

Final RD Work Plan                 Thirty (30) days after the receipt of
                                   comments.

Monthly Progress Reports           As described in the Consent Order and SOW.

Pre-design Sampling                Initiate within thirty (30) days after
                                   receipt of Notice of Authorization to proceed
                                   with pre-design investigation approved in
                                   Pre-design Sampling Plan, but no earlier than
                                   August 4, 2003.

Basis of Design Report             Ninety (90) days after receipt of
                                   validated data from the pre-design
                                   investigation.

Preliminary Design (50%)           One hundred and eighty (180) days after
                                   receipt of validated data from the pre-design
                                   investigation or sixty (60) days after
                                   approval of the Basis of Design, whichever is
                                   later..

Pre-Final Design (90%)             Ninety (90) days after receipt of comments
                                   from EPA and WDNR on the Preliminary Design
                                   for that phase.

Final Design (100%)                Thirty (30) days after receipt of comments
                                   from EPA and WDNR on the Pre-Final Design for
                                   that phase.


                                     - 9 -


                                     [MAP]


                           CONSENT DECREE APPENDIX G

                             MAP OF OPERABLE UNIT 1


                                     [MAP]



                           CONSENT DECREE APPENDIX H

                 RECORD OF DECISION FOR OPERABLE UNITS 1 AND 2


                               Record of Decision
                      Operable Unit 1 and Operable Unit 2

                         [EPA LOGO]   [WISCONSIN LOGO]

                       Lower Fox River and Green Bay Site
                                    Wisconsin

                                  December 2002



                       SUPERFUND RECORD OF DECISION (ROD)
                           FOR OPERABLE UNITS I AND 2
                           WISCONSIN DNR AND U.S. EPA

                                 LOWER FOX RIVER
              BROWN, OUTAGAMIE, AND WINNEBAGO COUNTIES, WISCONSIN,
                                  WID000195481
                                 DECEMBER 2002

                                TABLE OF CONTENTS

                                                                        
Executive Summary

Part 1: Declaration for the Record of Decision

Part 2: The Record of Decision

1. SITE NAME, LOCATION, AND BRIEF DESCRIPTION ..........................    1
   1.1 Site Name and Location ..........................................    1
   1.2 Brief Description ...............................................    2
   1.3 Lead Agency .....................................................    3
2. SITE HISTORY AND ENFORCEMENT ACTIVITIES .............................    3
   2.1 Site History ....................................................    3
   2.2 Actions to Date .................................................    4
   2.3 Enforcement Activities ..........................................    8
3. COMMUNITY PARTICIPATION .............................................    8
   3.1 Public Participation ............................................    8
4. SCOPE AND ROLE OF RESPONSE ACTION ...................................   10
5. PEER REVIEW .........................................................   11
6. SITE CHARACTERISTICS ................................................   12
   6.1 Conceptual Site Model ...........................................   12
   6.2 Results of the Remedial Investigation ...........................   14
      6.2.1 Site Overview ..............................................   14
      6.2.2 Summary of Sampling Results ................................   14
      6.2.3 Nature of Contamination ....................................   14
      6.2.4 Geochemistry and Modeling Conclusions ......................   19
7. CURRENT AND POTENTIAL FUTURE SITE AND RESOURCE USES .................   19
   7.1 Current and Reasonably Anticipated Future Land Use ..............   19
   7.2 Surface Water Uses ..............................................   20
8. SUMMARY OF SITE RISKS ...............................................   20
   8.1 Identification of Chemicals of Concern ..........................   21
   8.2 Human Health Risk Assessment ....................................   21
      8.2.1 Summary Of Site Risks ......................................   21
      8.2.2 Data Collection and Analysis ...............................   21
      8.2.3 Exposure Assessment ........................................   23
      8.2.4 Toxicity ...................................................   24
      8.2.5 Risk Characterization ......................................   25
      8.2.6 Cancer Risks ...............................................   25
      8.2.7 Non-Cancer Health Hazards ..................................   26
      8.2.8 Probabilistic Analysis .....................................   27
      8.2.9 Uncertainty ................................................   28
   8.3 Ecological Risk Assessment ......................................   29



                                                                               i



                                TABLE OF CONTENTS

                                                                        
      8.3.1 Screening Ecological Risk Assessment .......................   30
      8.3.2 Baseline Ecological Risk Assessment ........................   31
   8.4 Derivation of SQTs ..............................................   49
   8.5 Basis for Action ................................................   50
9. REMEDIAL ACTION OBJECTIVES ..........................................   50
   9.1 Remedial Action Objectives ......................................   50
   9.2 Applicable or Relevant and Appropriate Requirements (ARARs) .....   52
10. DESCRIPTION OF ALTERNATIVES ........................................   53
   10.1 Description of Alternative Components ..........................   55
   10.2 Key/Common Elements ............................................   57
11. COMPARATIVE ANALYSIS OF ALTERNATIVES ...............................   59
   11.1 Operable Unit 1 (Little Lake Butte des Morts) ..................   60
      11.1.1 Threshold Criteria for Operable Unit 1 ....................   61
      11.1.2 Balancing Criteria for Operable Unit 1 ....................   65
      11.1.3 Agency and Community Criteria for Operable Unit ...........   74
   11.2 Operable Unit 2 (Appleton to Little Rapids) ....................   74
      11.2.1 Threshold Criteria for Operable Unit 2 ....................   75
      11.2.2 Balancing Criteria for Operable Unit 2 ....................   77
      11.2.3 Agency and Community Criteria for Operable Unit 2 .........   79
12. PRINCIPAL THREAT WASTES ............................................   79
13. SELECTED REMEDY ....................................................   80
   13.1 The Selected Remedy ............................................   80
   13.2 Summary of the Estimated Costs of the Selected Remedy ..........   82
   13.3 Cleanup Standards and Outcomes for the Selected Remedy .........   82
      13.3.1 Achieving Cleanup Standards ...............................   83
      13.3.2 Expected Outcomes of Selected Remedy and RAL Rationale ....   83
   13.4 Contingent Remedy - In Situ Capping (i.e., "Partial
        Capping" or "Supplemental Capping") ............................   89
   13.5 Basis for Implementing the Contingent Remedy (OU 1) ............   90
   13.6 Description of Contingent Remedy ...............................   90
   13.7 Estimated Costs of the Contingent Remedy .......................   91
14. STATUTORY DETERMINATIONS ...........................................   91
   14.1 Protection of Human Health and the Environment .................   91
   14.2 Compliance with ARARs ..........................................   91
      14.2.1 Potential Chemical-Specific ARARs .........................   91
      14.2.2 Potential Action- and Location-Specific ARARs .............   93
      14.2.3 Additional To Be Considered Information ...................   94
   14.3 Cost-Effectiveness .............................................   96
   14.4 Utilization of Permanent Solutions and Alternative
        Treatment Technologies or Resource Recovery
        Technologies to the Maximum Extent Practicable .................   96
   14.5 Preference for Treatment as a Principal Element ................   96
   14.6 Five-Year Review Requirements ..................................   97
11. DOCUMENTATION OF SIGNIFICANT CHANGES FROM PREFERRED
    ALTERNATIVE OF PROPOSED PLAN .......................................   97



                                                                              ii



                                        TABLE OF CONTENTS

TABLES

          
Table 1      PCB Distribution in the lower Fox River OUs 1 and 2
Table 2      Predominant Land Use by Operable Unit
Table 3      Summary of PCB Data and Medium-Specific Human Exposure Point
             Concentrations for OU 1
Table 4      Summary of PCB Data and Medium-Specific Human Exposure Point
             Concentrations for OU 2
Table 5      Cancer Risk from Fish Ingestion - Summary for OU 1
Table 6      Cancer Risk from Fish Ingestion - Summary for OU 2
Table 7      Non-Cancer Health Hazard from Fish Ingestion - Summary for OU 1
Table 8      Non-Cancer Health Hazard from Fish Ingestion - Summary for OU 2
Table 9      Summary of Chemicals of Concern and Medium-Specific Exposure Point
             Concentrations for Water Column Invertebrates
Table 10     Summary of Chemicals of Concern and Medium-Specific Exposure Point
             Concentrations for Benthic Invertebrates
Table 11     Summary of Chemicals of Concern and Medium-Specific Exposure Point
             Concentrations for Fish
Table 12     Summary of Chemicals of Concern and Medium-Specific Exposure Point
             Concentrations for Birds
Table 13     Summary of Chemicals of Concern and Medium-Specific Exposure Point
             Concentrations for Mammals
Table 14     Ecological Risk Summary
Table 15     Years to Human Health and Ecological Thresholds for Lower Fox River at 1 ppm
             PCB Action Level and No Action in OU 1
Table 16     Human Health Sediment Quality Threshold (SQT) Values
Table 17     Ecological Sediment Quality Threshold (SQT) Values
Table 18     Operable Unit 1. Little Lake Butte des Morts Alternatives
Table 19     Post-Remediation Sediment and Surface Water Concentrations in OU 1
Table 20     Time Achieve Acceptable Fish Tissue Concentrations for Walleye in OU 1
Table 21     Time Required to Achieve Protective Levels in Sediments for Representative
             Ecological Receptors in OU 1
Table 22     Operational Components for OU 1 Alternatives
Table 23     Final Disposition of Contaminated Sediments in OU 1
Table 24     Comparison of Present Worth Costs for OU 1 Alternatives at the 1 ppm RAL
Table 25     Operable Unit 2. Appleton to Little Rapids Alternatives
Table 26     Post-Remediation Sediment and Surface Water Concentrations in OU 2
Table 27     Time to Achieve Acceptable Fish Tissue Concentrations for Walleye in OU 2 at 1 ppm
Table 28     Time to Protective Levels in Sediments for Representative Ecological Receptors in OU 2.
Table 29     Comparison of Present Worth Costs for OU 2 Alternatives at a 1 ppm RAL
Table 30     Estimated Years to Reach Human Health and Ecological Thresholds to Achieve
             Risk Reduction for the Operable Unit 1 at a RAL of 1.0 ppm
Table 31     Fox River ARARs



                                                                             iii



                                TABLE OF CONTENTS

FIGURES

          
Figure 1     Lower Fox River PCB Contaminated Sediment Deposits and Operable Units
Figure 2     Human Health Site Conceptual Model
Figure 3     Ecological Site Conceptual Model                      .
Figure 4     Relationship of Models Used for Risk Projections in the Lower Fox River and Green Bay
Figure 5     Remedial Action Levels and Estimated SWACS  for Evaluated RALs for OU 1 (from FS Table 5-4)
Figure 6     Estimates of Surface Water PCB Concentrations for the Evaluated RALs 30 Years After Completion
             of Remedial Activities for OU 1
Figure 7     Time to Achieve Acceptable Fish Tissue Concentrations for OU 1
Figure 8     Time to Safe Fish Consumption by Birds in OU 1
Figure 9     RALs and Downstream Loadings in OU 1

APPENDICES

Appendix A   - Responsiveness Summary
Appendix B   - White Papers
Appendix C   - Administrative Record Index                                                         .



                                                                              iv



LIST OF ACRONYMS AND ABBREVIATIONS

          
API/NCR -    Appleton Papers Inc./NCR Corp.
ARAR -       applicable or relevant and appropriate requirement
AR -         administrative record
AOC -        Administrative Order on Consent or Area of Concern
BTAG -       Biological Technical Assistance Group
BLERA -      Baseline Ecological Risk Assessment
BLRA -       Baseline Human Health and Ecological Risk Assessment
CERCLA -     Comprehensive Environmental Response, Compensation, and Liability Act
cfs -        cubic feet per second
CWA -        Clean Water Act
cy -         cubic yard
CIP -        Community Involvement Plan
CWAC -       Clean Water Action Council
COC -        Chemical of Concern
CT -         central tendency
CTE -        central tendency exposure
CSF -        Cancer Slope Factor
CDI -        Chronic Daily Intake
COPC -       Chemical of Potential Concern
CDF -        Confined Disposal Facility
CAD -        Confined Aquatic Disposal
DDT -        dichlorodiphenyltrichloroethane
DDD -        dichlorodiphenyldichloroethane
DDE -        Dieldrin
DO -         dissolved oxygen
EPA -        Environmental Protection Agency
ESD -        Explanation of Significant Difference
ERA-         Ecological Risk Assessment
FS -         Feasibility Study
FRFOOD -     Fox River Food Chain Model
FRC -        Fox River Coalition
FRG -        Fox River Group
FRDB -       Fox River Data Base
GBRAP -      Green Bay Remedial Action Plan
GBMBS -      Green Bay Mass Balance Study
GFT          Glass Furnace Technology
GLNPO -      Great Lakes National Program Office
HHRA-        Human Health Risk Assessment
HI -         Hazard Index
HQ -         Hazard Quotient
HTTD -       High-temperature Thermal Desorption
IRIS-        Integrated Risk Information System
IC -         institutional control
ISC -        in situ capping
IGP -        Intergovernmental Partnership
kg -         kilogram
LLBdM -      Little Lake Butte des Morts
LMMBS -      Lake Michigan Mass Balance Study
LOAEL -      Lowest Observed Adverse Effects Level
LOAEC -      Lowest Observed Adverse Effects Concentration
MNR -        Monitored Natural Recovery
mg/kg -      milligrams per kilogram
mg/kg/day -  milligrams per kilogram per day
NPL -        National Priorities List
NCP -        National Contingency Plan
NAS -        National Academies of Science
NOAA -       National Oceanographic and Atmospheric Administration



                                                                               v



                       LIST OF ACRONYMS AND ABBREVIATIONS

          
NCR -        National Cash Register Corp.
NRDA -       Natural Resource Damages Assessment
ng/L-        nanograms per liter
NOAEL -      No Observed Adverse Effects Level
NOAEC -      No Observed Adverse Effects Concentration
NPDES -      National Pollutant Discharge Elimination System
NHPA -       National Historic Preservation Act
OU -         Operable Unit
OSWER -      Office of Solid Waste and Emergency Response
PCB -        Polychlorinated Biphenyl
ppm -        parts per million
PRP -        potentially responsible party
POTW -       publicly owned treatment works
ppb -        parts per billion
ppt -        parts per trillion
PAL -        preventive action limit
PEL -        probable exposure limit,
QA -         quality assurance
QA/QC -      quality assurance/quality control
RAL -        Remedial Action Level
RAP -        Remedial Action Plan
RI/FS -      Remedial Investigation/Feasibility Study
ROD -        Record of Decision
RI -         Remedial Investigation
RME -        Reasonable Maximum Exposure
RfD -        Reference Dose
RAO -        Remedial Action Objective
RCRA -       Resource Conservation and Recovery Act
SMU -        Sediment Management Unit
SERA -       Screening Ecological Risk Assessment
SMDP -       Scientific Management Decision Point
SLRA -       Screening Level Risk Assessment
SQT -        Sediment Quality Threshold
SWAC -       Surface Weighted Average Concentration
TAG -        Technical Assistance Grant
TEF -        toxic equivalency factor
TEL -        threshold exposure limit.
TRV -        toxicity reference values
TBC -        to be considered
TSCA -       Toxic Substances Control Act
TMDL -       Total Maximum Daily Load
USACE -      United States Army Corps of Engineers
USFWS -      United States Fish and Wildlife Service
USGS -       United States Geological Survey
UCL -        Upper Confidence Limit
WDNR -       Wisconsin Department of Natural Resources
WLA -        Waste Load Allocation
wLFRM -      whole Lower Fox River Model
WAC -        Wisconsin Administrative Code
WPDES -      Wisconsin Pollutant Discharge Elimination System
WDOT -       Wisconsin Department of Transportation



                                                                              vi



                                EXECUTIVE SUMMARY

                          RECORD OF DECISION (ROD) FOR
                             OPERABLE UNITS 1 AND 2
                            WISCONSIN DNR & U.S. EPA

The Lower Fox River and Green Bay Site includes an approximately 39-mile
stretch of the Lower Fox River as well as the bay of Green Bay. The river
portion of this Site extends from the outlet of Lake Winnebago and continues
downstream to the mouth of the River at Green Bay, Wisconsin. The Bay portion of
the Site includes all of Green Bay from the city of Green Bay to the point where
Green Bay enters Lake Michigan. This Record of Decision (ROD) addresses some of
the human health and ecological risks posed to people and ecological receptors
associated with polychlorinated biphenyls (PCBs) that have been released to the
Site. Presently these PCBs reside primarily in the sediments in the River and in
the Bay, and this ROD outlines a remedial plan to address a certain portion of
PCB contaminated sediments.

The Site has been divided into certain discrete areas (Operable Units or OUs)
for ease of management and administration. The River has been divided into
Operable Units 1 through 4 and Green Bay constitutes Operable Unit 5. These
Operable Units are:

            Operable Unit 1 - Little Lake Butte des Morts
            Operable Unit 2 - Appleton to Little Rapids
            Operable Unit 3 - Little Rapids to De Pere
            Operable Unit 4 - De Pere to Green Bay
            Operable Unit 5 - Green Bay

This ROD selects a remedial action for Operable Units 1 and 2, and it is
anticipated that a second ROD addressing Operable Units 3 through 5 will be
issued in the future.

For many years along the Lower Fox River there have been and continue to be
located an intense concentration of paper mills. Some of these mills operated
de-inking facilities in connection with the recycling of paper. Others
manufactured carbonless copy paper. In both the de-inking operations and the
manufacturing of carbonless copy paper, these mills handled polychlorinated
biphenyls (PCBs), which were used in the emulsion that coated carbonless copy
paper. In the de-inking process and in the manufacturing process, PCBs were
released from the mills to the River directly or after passing through local
water treatment works. PCBs have a tendency to adhere to sediment and they have
contaminated the River sediments. In addition, the PCBs and contaminated
sediments were carried down river and released into Green Bay.

Presently, it is estimated that Operable Unit 1 contains approximately 4100
pounds of PCBs in 2,200,400 cubic yards of sediment. This ROD provides for the
removal by hydraulic dredging 784,000 cubic yards of contaminated sediments from
Operable Unit 1. The dredged material will be mechanically "dewatered" and taken
to a landfill for permanent disposal. This ROD establishes an "action level" of
1 part per million (ppm) for this cleanup effort. In other words, any sediment
found in Operable Unit 1 which has a concentration of PCBs of 1 ppm or greater
will be targeted for removal. The goal of the remedial action in Operable Unit 1
is to reach a surface weighted average concentration (SWAC) of less than 0.25
ppm after dredging is completed. This means that the concentration of PCBs
averaged over the Operable Unit will not exceed 0.25 ppm when the cleanup is
complete. By removing the contaminated sediment, it is presently estimated that
Operable Unit 1 will reach a surface weighted average concentration of 0.19
parts per million, well below the goal. By reducing the concentration of PCBs in

                                                                             A-1



                                EXECUTIVE SUMMARY

Operable Unit 1 to the SWAC level or below will dramatically reduce the human
health and ecological risk.

Operable Unit 2, which is about 20 miles in length, contains approximately 240
pounds of PCBs in 339,200 cubic yards (cy) of sediment. A significant portion of
the PCBs contained in this Operable Unit has already been removed through the
sediment removal demonstration project at Deposit N. The result is that in
Operable Unit 2 there remain no significant (i.e., greater than 10,000 cubic
yards) contaminated sediment deposits with concentrations of PCBs above the
action level. Moreover, it is contemplated that the farthest downstream deposit
in Operable Unit 2 (Deposit DD) may be remediated in connection with the
remedial action to be undertaken in Operable Unit 3 at a later time. Without
active remediation, the SWAC for Operable Unit 2 is only 0.61ppm.
Therefore for Operable Unit 2 the ROD selects a remedy of monitored natural
recovery (MNR). This remedy does not involve sediment removal. Rather, it
consists of a comprehensive monitoring program designed in part to monitor the
levels of PCBs in various environmental compartments as the natural recovery
processes work. Coupling this MNR with the substantial upstream dredging remedy
in Operable Unit 1 should result in reduced human health or ecological risk in
Operable Unit 2.

The estimated cost for the remedial action in Operable Unit 1 is $66.2 million
and for Operable Unit 2 it is $9.9 million.

                                                                             A-2



                DECLARATION FOR THE RECORD OF DECISION (ROD) FOR
                             OPERABLE UNITS 1 AND 2
                            WISCONSIN DNR & U.S. EPA

                                 LOWER FOX RIVER
              BROWN, OUTAGAMIE, AND WINNEBAGO COUNTIES, WISCONSIN
                                  WID000195481
                                  DECEMBER 2002

PART 1: DECLARATION FOR THE RECORD OF DECISION

The Lower Fox River and Green Bay Site ("the Site" or "the Fox River Site")
includes an approximately 39 mile section of the Lower Fox River from Lake
Winnebago down river to the mouth of the Fox River and all of Green Bay
(approximately 2700 square miles in area). This stretch of the Fox River and
Green Bay flows through or borders Brown, Door, Kewaunee, Marinette, Oconto,
Outagamie, and Winnebago Counties, in Wisconsin, and, Delta and Menominee
Counties in Michigan. The River portion of the Site has been divided into,
"Operable Units" (OUs) OU 1 through OU 4, and the Green Bay portion of the Site
is designated OU 5 for purposes of Site management. The OUs were selected
based, at least in part, on stretches of the River that have similar
characteristics. They are OU 1 from the Lake Winnebago outlet to Appleton dam;
OU 2 from the Appleton dam to Little Rapids dam; OU 3 from Little Rapids dam to
the De Pere dam; OU 4 from the De Pere dam to the mouth of the River at Green
Bay; and OU 5 Green Bay.

This Record of Decision ("this ROD") addresses the risks to people and
ecological receptors associated with polychlorinated biphenyls (PCBs) in OUs 1
and 2; Little Lake Butte des Morts and Appleton to Little Rapids, respectively.
PCBs are the primary risk driver, contained in sediment deposits located in the
River and the Bay. The implementation of the remedy selected in this ROD will
result in reduced risks to humans and ecological receptors living in and near
the Site.

With the exception of continuing releases of PCBs from contaminated sediments,
it is believed that the original PCB sources are now essentially controlled.
PCBs in the River were from historical discharges, primarily related to
carbonless copy paper manufacturing and recycling.

                         STATEMENT OF BASIS AND PURPOSE

In June 1997, the United States Environmental Protection Agency (EPA) announced
its intent to list the Fox River and portions of Green Bay on the National
Priorities List (NPL), a list of the nation's hazardous waste sites eligible for
investigation and cleanup under the federal Superfund program, and formally
proposed listing of the Site to the NPL in a Federal Register publication on
July 28, 1998. By agreement with EPA, the Wisconsin Department of Natural
Resources (WDNR) is the "lead agency" with respect to the Site. This decision
document was developed by WDNR for OUs 1 and 2 of the Fox River Site, pursuant
to WDNR's authority under Ch. 292, Wisconsin Statutes. EPA has concurred and has
adopted this ROD for the Fox River Site, as provided for in 40 CFR Section
300.515(e).

This ROD was written in accordance with the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA) as amended by the
Superfund Amendments and Reauthorization Act of 1986 (SARA), in a manner not
inconsistent with the requirement of the National Oil and Hazardous Substances
Pollution Contingency Plan (NCP), 40 CFR Part

                                                                             A-3



                     Declaration for the Record of Decision
                     Fox River and Green Bay OU 1 and OU 2

300. This decision is based on information contained in the Administrative
Record for this Site. This ROD is consistent with the findings of the National
Academy of Sciences' (NAS) National Research Council report entitled A Risk
Management Strategy for PCB-Contaminated Sediments and EPA policy.

                             ASSESSMENT OF THE SITE

The response action selected in this ROD is necessary to protect the public
health, welfare, or the environment from an imminent and substantial
endangerment from actual or threatened releases of hazardous substances into the
environment.

                       DESCRIPTION OF THE SELECTED REMEDY

The objectives of the response actions for this Site are to protect public
health, welfare and the environment and to comply with applicable federal and
state laws. The selected remedy specifies response actions that will address
PCB contaminated sediment in the Site's OUs 1 and 2. The WDNR and EPA (Agencies)
believe the remedial actions outlined in this ROD, if properly implemented, will
result in the cleanup of contaminated sediments in OUs 1 and 2 and will protect
human health and the environment. Among the goals for the selected remedy are
the removal of fish consumption advisories and the protection of the fish and
wildlife that use the Fox River and Green Bay, and to reduce the transport of
PCBs from the Fox River to Green Bay.

The major components of the selected remedy include:

- -     Removal of a total of approximately 784,000 cubic yards (cy) of
      contaminated sediment containing over 1715 kilograms (kg) or 3770 pounds
      of PCBs from OU 1 using environmental dredging techniques that minimize
      adverse environmental impacts. The selected remedy calls for de-watering
      and stabilizing the dredged sediment and disposing of it off site at
      existing licensed facilities and/or new facilities yet to be constructed
      and licensed in the Fox River Valley. In conducting the design of this
      remedy, WDNR and EPA may utilize vitrification of dredged contaminated
      sediment, as an alternative to off-site disposal at a licensed facility,
      if this is determined to be practicable and cost effective.


- -     The use of natural recovery processes and monitoring for OU 2, with the
      possible exception of deposit DD. A final decision on deposit DD will be
      made when the ROD for OU 3 is issued.

- -     Monitored Natural Recovery (MNR) of the residual PCB contamination
      remaining in dredged areas and undisturbed areas until the concentrations
      of PCBs in fish tissue are reduced to an acceptable level. Fish
      consumption advisories and fishing restrictions will remain in place until
      acceptable PCB levels are achieved.

- -     A long term monitoring program (water, sediment and tissue) throughout the
      OU 1 and 2 to determine the effectiveness of the remedy.

                            STATUTORY DETERMINATIONS

The selected remedy meets the requirements for remedial actions set forth in
Section 121 of CERCLA, 42 USC Section 9621. It is protective of human health
and the environment, complies with federal and state applicable or relevant and
appropriate requirements, and is cost effective. The selected remedy utilizes
permanent solutions and alternative treatment technologies to the maximum extent
practicable. It does not completely satisfy the statutory preference for
treatment as a principal element of the remedy, because PCB-contaminated
sediment may not be treated prior to disposal.

                                                                             A-4



                     Declaration for the Record of Decision
                     Fox River and Green Bay OU 1 and OU 2

With respect to the portions of the Fox River addressed in this Record of
Decision, some PCB concentrations create a risk in the range of 10-(3) or more,
thus "qualifying" those sediments to be a principal threat waste. The preference
for treatment applies to these particular sediments. However, it would be wholly
impracticable to closely identify, isolate and treat these principal threat
wastes differently than the other PCB sediments identified for removal and
disposal. Typical dredging technology that may be employed may not be capable of
distinguishing among such fine gradations of PCB concentrations. Nevertheless,
at the conclusion of the OU 1 remedy the principal threat wastes will have been
removed from OU 1 and deposited in a landfill. In so doing, the mobility of the
principal threat wastes will have been greatly reduced.

Because the selected remedy will result in hazardous substances remaining on the
Site above levels that allow unlimited use and unrestricted exposure, five-year
reviews will be conducted.

                          DATA CERTIFICATION CHECKLIST

The following information is in the Decision Summary section of this ROD.
Additional information is in the Administrative Record file for this Site.

- -     Chemicals of concern and their respective concentrations - Sections 6
      and 8

- -     Baseline risk presented by the chemicals of concern - Section 8

- -     Cleanup levels established for the chemical of concern and the basis for
      these levels - Section 13.3

- -     How source materials constituting principal threats are addressed -
      Section 12

- -     Surface water and land use assumptions used in the baseline risk
      assessments and ROD - Sections 7 and 8

- -     Potential land and ground water use that will be available at the Site as
      a result of the Selected Remedy - Section 7

- -     Estimated capital, operation and maintenance and total present-worth
      costs; and the time to implement each of the various remedial
      alternatives - Sections 11 and 13.2

- -     Key factors that led to selecting the remedy (i.e., best balance of
      trade-offs with respect to the balancing and modifying criteria) -
      Sections 11 and 14

12/18/02
Date

                                        -s- Bruce Baker
                                        Bruce Baker, Deputy Administrator
                                        Water Division
                                        Wisconsin DNR

                                                                             A-5



                     Declaration for the Record of Decision
                     Fox River and Green Bay OU 1 and OU 2

By signing this ROD, U.S. EPA Regions 5 concurs with the selected remedy.

12/20/02
Date

                                        -s- William E. Muno
                                        William  E. Muno, Director
                                        Superfund Division
                                        U.S. EPA -- Region 6

                                                                             A-6



                 Fox River and Green Bay ROD for OU 1 and OU 2

                       SUPERFUND RECORD OF DECISION (ROD)
                           FOR OPERABLE UNITS 1 AND 2
                           WISCONSIN DNR AND U.S. EPA

                                LOWER FOX RIVER
              BROWN, OUTAGAMIE, AND WINNEBAGO COUNTIES, WISCONSIN,
                            CERCLIS ID: WID000195481
                                 DECEMBER, 2002

PART 2: SUPERFUND RECORD OF DECISION

1. SITE NAME, LOCATION, AND BRIEF DESCRIPTION

1.1 SITE NAME AND LOCATION

The Lower Fox River and Green Bay Site is located in Northeast Wisconsin (in
Brown, Door, Marinette, Oconto, Outagamie, Kewaunee, and Winnebago Counties),
and the Eastern portion of Upper Peninsula of Michigan, (in Delta and Menominee
Counties). The Lower Fox River flows northeast from Lake Winnebago for 39 miles
where it discharges into Green Bay. Green Bay is approximately 119 miles long
and is an average of 23 miles wide (Figure 1).

The Lower Fox River and Green Bay have been divided into 5 Operable Units (OU)
by WDNR and EPA. For purposes of the RI/FS, the River was divided into four
River reaches and Green Bay was divided into three major zones on the basis of
physical features and information generated in previous investigations. Each of
the River reaches has been deemed a separate Operable Unit (OU 1 through OU 4),
while all of Green Bay has been designated a single Operable Unit (OU 5). An
Operable Unit is a geographical area designated for the purpose of analyzing and
implementing remedial actions. OUs are defined on the basis of similar physical
and geographic properties and characteristics. The River reaches, Green Bay
zones, and corresponding Operable Units are:

      1.    OU 1 - Little Lake Butte des Morts River reach

      2.    OU 2 - Appleton to Little Rapids River reach

      3.    OU 3 - Little Rapids to De Pere River reach

      4.    OU 4 - De Pere to Green Bay River reach

      5.    OU 5 - Green Bay

This ROD addresses Operable Units 1 and 2. For OU 1, active remediation
(dredging, dewatering, stabilization or vitrification and on-site or off-site
disposal) of in-place sediment has been selected. For OU 2, a monitoring program
has been selected to evaluate the effectiveness of natural processes that are
expected to reduce risk over time. Risk reduction will occur more quickly in OU
1 due to active remediation of that Operable Unit.

The remedial action selected herein is to remove and isolate, or otherwise
ameliorate the threats to human health and the environment in OU 1 and OU 2
caused by the release of PCBs into the upper part of the Lower Fox River. While
the release of PCBs to the environment occurred between 1954 and the late 1970s,
the PCB contamination in the sediments continues to act as a source to the
water, biota, and air.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

1.2 BRIEF DESCRIPTION

The study area comprises two distinctly different water bodies, the Lower Fox
River and Lake Michigan's Green Bay (Figure 1). The Lower Fox River flows
northeast approximately 39 miles from Lake Winnebago to the River mouth at the
southern end of Green Bay. Green Bay's watershed drains approximately 15,625
square miles. Two-thirds of the Green Bay basin is in Wisconsin; the remaining
one-third is in Michigan's Upper Peninsula.

FIGURE 1 LOWER FOX RIVER PCB CONTAMINATED SEDIMENT DEPOSITS AND OPERABLE UNITS

                                    [MAP]

The Lower Fox River is the primary tributary to Green Bay, draining
approximately 6,330 miles 2. The River's elevation drops approximately 168 ft
between Lake Winnebago and Green Bay. Twelve dams and 17 locks accommodate this
elevation change and allow navigation between Lake Winnebago and Green Bay.
While the entire Lower Fox River still has a federally authorized navigation
channel and is navigable by recreational boats, the Rapide Croche lock is
permanently closed to restrict upstream migration of the sea lamprey.

The Lower Fox River is generally less than 1,000 ft wide over much of its length
and is up to approximately 20 ft deep in some areas. Where the River widens
significantly, the depth generally decreases to less than 10 ft, and, in the
case of Little Lake Butte des Morts (LLBdM), water depths range between 2 and 5
ft except in the main channel. The main channel of the River ranges from
approximately 6 to 20 ft in depth.

Since 1918, flow in the Lower Fox River has been monitored at the Rapide Croche
Dam, midway between Lake Winnebago and the River mouth. Mean annual discharge
is approximately 4,237 cubic feet per second (cfs). The recorded maximum daily
discharge of 24,000 cfs occurred on April 18,1952; the minimum daily discharge
of 138 cfs occurred on August 2, 1936. Flow in the River between Appleton and
the Little Rapids Dam averages 0.78 f/s.

                                  Page 2 of 97



                  Fox River and Green Bay ROD for OU 1 and OU 2

OU 1 is identified primarily as Little Lake Butte des Morts and extends from
Lake Winnebago to the Appleton dam for a distance of approximately 6 miles.
This reach includes sediment deposits A though H and POG. OU 2 extends from the
Appleton dam to Little Rapids dam for a distance of approximately 32 km (20ml).
This reach includes sediment deposits I through DD.

1.3 LEAD AGENCY

The Wisconsin Department of Natural Resources (WDNR) is the lead agency for this
project. The United States Environmental Protection Agency (EPA), the support
agency, has worked jointly with WDNR in the development of this ROD and concurs
with the decision described herein.

2. SITE HISTORY AND ENFORCEMENT ACTIVITIES

2.1 SITE HISTORY

The Fox River Valley is one of the largest urbanized regions in the state of
Wisconsin, with a population of approximately 400,000. The Fox River Valley has
a significant concentration of pulp and paper industries, with 20 mills located
along or near the Lower Fox River. Other important regional industries include
metal working, printing, food and beverages, textiles, leather goods, wood
products, and chemicals. In addition to heavy industrial land uses, the region
also supports a mixture of agricultural, residential, light industrial, and
conservancy uses, as well as wetlands. For investigative purposes, the Site is
defined as the 39 river miles of the Lower Fox River and Green Bay to a line
that extends between Washington Island, Wisconsin, and the Garden Peninsula of
Michigan.

Problems related to water quality have been noted and measured in the Lower Fox
River and lower Green Bay almost since the area was settled. Water quality
studies were initiated in the early 1900s and have been conducted almost
annually since . Between the early 1930s and mid-1970s, the population of
desirable fish and other aquatic organisms in the system was poor. Recorded fish
kills and the increasing predominance of organisms able to tolerate highly
polluted conditions were found throughout the Lower Fox River and lower Green
Bay. Few people used the River or lower Green Bay for recreation because of the
poor water quality and the lack of a sport fishery. During this same time
period, dissolved oxygen levels were often very low (2 milligrams per liter
[mg/L] or less). The poor water quality was attributed to many sources such as
the effluent discharged from pulp and paper mills and municipal sewage treatment
plants.

In large part because of the federal Clean Water Act (1972), over time improved
waste treatment systems began operations. As part of this effort, WDNR developed
and implemented a Waste Load Allocation system to regulate the discharge of
oxygen-demanding pollutants from wastewater treatment plants. Fish and aquatic
life in the Lower Fox River and Green Bay have responded dramatically to the
improved water quality conditions. Fishery surveys conducted from 1973 to the
present indicate a sharp increase in the sport fish population. Species
sensitive to water quality, such as lake trout, which were absent since the late
1800s or early 1900s, have been found in the River since 1977. These
improvements resulted in a large part from a substantial reduction in organic
wastes discharged into the River.

With the return of the sport fishery, human use of the River and Green Bay has
also returned. Recognizing concerns about potential health impacts of PCBs in
the environment and their bioaccumulative properties, WDNR began routinely
monitoring contamination in fish in the early

                                  Page 3 of 97



                 Fox River and Green Bay ROD for OU 1 and OU 2

1970s. Significantly elevated levels of PCBs were detected in all species of
fish and all OUs. Measured concentrations of PCBs in fish were (and remain)
above levels that have been shown to be harmful to human health. As a result,
fish consumption advisories for the Site were first issued in 1976 and 1977 by
WDNR and the state of Michigan, respectively. Fish consumption advisories remain
in effect today. WDNR has continued to collect data on contaminant
concentrations in fish tissue since that time.

PCB USE IN THE LOWER FOX RIVER VALLEY

The principal source of Polychlorinated Biphenyls (PCBs) in the Lower Fox River
and Green Bay is from the manufacture and recycling of carbonless copy paper.
The former National Cash Register Company (NCR) is credited with inventing
carbonless copy paper. The method used microcapsules of a waxy material to
enclose a colorless dye dissolved in PCBs. This material was manufactured as an
emulsion and could be coated onto the back of a sheet of paper. A second
reactive coating was then applied to the front of a second sheet of paper. When
the two sheets were joined, an impact on the front sheet would rupture the
capsules and allow the dye to react with the coating on the second sheet,
leaving an identical image.

PCB discharges to the Lower Fox River resulted from the production and recycling
of carbonless copy paper made with PCB-containing coating emulsions.
Manufacturing carbonless paper using the PCB containing emulsion began in the
Fox River Valley in 1954 and continued until 1971. The production of carbonless
copy paper increased during the 1950s and 1960s and by 1971, approximately 7.5
percent of all office forms were printed on carbonless copy paper. With
increased production of carbonless copy paper, PCBs began to appear in many
types of paper products made using recycled carbonless copy paper. As documented
in an EPA report, nearly all paper products contained detectable levels of PCBs
by the late 1960s. During this time period, other Fox River Valley paper mills
also began recycling wastepaper laden with PCBs. Evidence of PCBs in paper
products includes studies conducted by the Institute of Paper Chemistry to
determine the rate at which PCBs migrated from paper container materials to the
food products contained in them.

The production of carbonless copy paper was discontinued after 1971 because of
increased concern about PCBs in the environment. During the period of use (1954
- - 1971) an estimated 13.6 million kg (30 million lbs.) of emulsion were
estimated to be used in the production of carbonless copy paper produced in the
Fox River Valley. PCBs were released into the Lower Fox River in discharge water
from several facilities. By analyzing purchase, manufacturing, and discharge
records, conservative estimates have shown that approximately 313,600 kg
(690,000 lbs.) of PCBs were released to the Fox River environment during this
time. Ninety-eight percent of the total PCBs released into the Lower Fox River
had been released by the end of 1971. Ceasing production of carbonless copy
paper and the wastewater control measures put in place by the Clean Water Act
were effective in eliminating point sources. Non-point sources, such as PCB
contaminated groundwater plumes, are not known to exist from any of the
potentially responsible parties' sites.

2.2 ACTIONS TO DATE

To date seven companies have been identified and formally notified by the
governmental agencies as potentially responsible parties (PRPs) with respect to
the PCB contamination. These companies include Appleton Paper Company, NCR, P.H.
Glatfelter Company, Georgia Pacific (formerly Fort James), WTM1 (formerly
Wisconsin Tissue), Riverside Paper Co., and U.S. Paper Co. This group is
commonly referred to as the Fox River Group (FRG).

EPA's proposed inclusion of the Lower Fox River and Green Bay Site on the
National Priorities List (NPL) defines the Site as the Lower Fox River from the
outlet of Lake Winnebago to a point

                                  Page 4 of 97



                  Fox River and Green Bay ROD for OU 1 and OU 2

in Green Bay 27 miles from the River mouth. That Site is officially called the
Fox River NRDA PCB Releases Site in the proposed NPL listing. This Site, for the
purpose of the RI/FS and Proposed Plan, includes the 39 miles of the Lower Fox
River and all of Green Bay. The federal trustees conducting a Natural Resource
Damage Assessment (NRDA) have defined the Site somewhat differently from the
proposed listing to include all of Green Bay and nearby areas of Lake Michigan.

With the finding that PCBs released into the Lower Fox River were appearing at
harmful levels to human health and the environment, several cooperative efforts
were initiated to document residual PCBs in the sediments, and the fate,
transport, and risks of PCBs within the Lower Fox River and Green Bay. In
1989/90, following recommendations made in the Green Bay Remedial Action Plan,
EPA and WDNR began a comprehensive sampling program of sediment, water, and
biota in the Lower FOX River and Green Bay for use in the Green Bay Mass
Balance Study (GBMBS).

The GBMBS was a pilot project to test the feasibility of using a mass balance
approach for assessing the sources and fates of toxic pollutants spreading
throughout the food chain. The objectives of the GBMBS were to:

      1.    Inventory and map PCB mass and contaminated sediment volume;

      2.    Calculate PCB fluxes into and out of the Lower Fox River and Green
            Bay by evaluating Lake Winnebago, point sources, landfills,
            groundwater, atmospheric contributions, and sediment resuspension;

      3.    Increase understanding of the physical, chemical, and biological
            processes that affect PCB fluxes;

      4.    Develop, calibrate, and validate computer models for the River and
            Bay systems; and,

      5.    Conduct predictive simulations using computer models to assist in
            assessing specific management scenarios and selecting specific
            remedial actions.

The GBMBS confirmed that the primary source (more than 95 percent) of the PCBs
moving within the Lower Fox River is the river sediment itself. The contribution
of PCBs from wastewater discharges, landfills, groundwater, and the atmosphere
is insignificant in comparison to the PCBs originating from the sediment.
Furthermore, the GBMBS showed that PCBs released from the sediments were
directly linked to the levels of PCBs measured throughout the biological
food chain, including fish, birds, and mammals that depend on the River for
food.

Inventory and mapping activities showed that PCBs are distributed throughout the
entire Lower Fox River. Thirty-five discrete sediment deposits were identified
between Lake Winnebago and the De Pere Dam. One relatively large, continuous
sediment deposit exists downstream of the De Pere Dam. Water column sampling
indicated that the water entering the Lower Fox River from Lake Winnebago
contains relatively low PCB concentrations. However, upon exposure to the
contaminated river sediment in Little Lake Butte des Morts, water in the River
exceeds state water quality standards. During the GBMBS, the lowest water column
concentration (5 nanograms per liter [ng/L]) of PCBs measured in any River
sample still exceeded the state water quality standard by a factor of more than
1,500. As expected, water column concentrations also increased as River flow
increased and PCBs attached to River sediment were resuspended into the water
column. These higher flows resulted in PCB concentrations that exceeded
standards by a factor of almost 40,000. The GBMBS also documented that more than
60 percent of PCB transport occurs during the relatively short time when River
flows are above normal. Movement of PCBs in the water column extends throughout
Green Bay, with some PCBs from the Lower Fox River ultimately entering Lake

                                  Page 5 of 97



                  Fox River and Green Bay ROD for OU 1 and OU 2

Michigan proper. The GBMBS also documented that a considerable amount of PCB is
lost to the atmosphere from the surface of the water in the River and Bay.

EPA's Great Lakes National Program Office (GLNPO) initiated a similar mass
balance study for all of Lake Michigan, the Lake Michigan Mass Balance Study
(LMMBS). To accomplish the objectives of this study, which were similar to those
of the GBMBS but on a larger scale, pollutant loading (including PCBs) from 11
major tributaries flowing into Lake Michigan was measured. The Lake Michigan
Tributary Monitoring Program confirmed the magnitude and significance of the
Lower Fox River contribution to pollutant loading in Lake Michigan. It is
estimated that each day, up to 70 percent of the PCBs entering Lake Michigan via
its tributaries are from the Lower Fox River.

In 1993, a group of paper mills approached WDNR to establish a cooperative
process for resolving the contaminated sediment issue. The outcome was formation
of the Fox River Coalition, a private-public partnership of area businesses,
state and local officials, environmentalists, and others committed to improving
the quality of the Lower Fox River. The Coalition focused on the technical,
financial, and administrative issues that would need to be resolved to achieve a
whole River cleanup.

The Coalition's first project was an RI/FS of several sediment deposits upstream
of the De Pere Dam. The sediment deposits targeted for the Coalition's RI/FS
were selected after all the deposits had been prioritized based on their threat
and contribution to the contaminant problems. Previous studies on the River had
focused only on the nature and extent of contamination. The Coalition's RI/FS
first confirmed the nature and extent of the contamination within each deposit,
then evaluated remedial technologies for cleaning up two of the deposits.

The Coalition also undertook a project to more thoroughly inventory and map
sediment contamination in the River downstream of the De Pere Dam, collecting
sediment cores from 113 locations. The sampling was completed in 1995 with
technical and funding assistance from both WDNR and EPA. The resulting data led
to a revised estimate of PCB mass and the volume of contaminated sediment in
this River reach. The expanded database also made it possible to prioritize
areas of sediment contamination, much as had previously been done for areas
upstream of the De Pere Dam.

Following completion of the Coalition's RI/FS for the upstream sites, the
Coalition selected Deposit N as an appropriate site for a pilot project to
evaluate remedial design issues. The primary objectives were to determine
requirements for implementing a cleanup project and to generate site-specific
information about cleanup costs. Although the Coalition initiated the effort,
WDNR, with funding from EPA, was responsible for implementing the Deposit N
pilot project.

In 1994, the U.S. Department of the Interior acting through the U.S. Fish and
Wildlife Service (USFWS), the National Oceanic and Atmospheric Administration
(NOAA) of the Department of Commerce, the Menominee Indian Tribe of Wisconsin,
and the Oneida Tribe of Indians of Wisconsin initiated a Natural Resources
Damage Assessment (NRDA) for the Site. The State, federal and Tribal Trustees
are working together to determine what is necessary to address natural resource
injuries caused to-date by releases of PCBs. This is a separate, but related
process to the remediation consideration discussed herein.

In January 1997, the WDNR and the FRG signed an agreement dedicating $10 million
to fund demonstration projects on the River and other work to evaluate various
methods of restoration. This collaborative effort, however, was not completely
successful and did not resolve technical issues as was initially hoped. At about
this same time, USFWS issued a formal Notice of Intent to sue the paper
companies. In June 1997, the U.S. EPA announced its intent to list the Lower

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Fox River and portions of Green Bay on the NPL, a list of the nation's hazardous
waste sites eligible for investigation and cleanup under the federal Superfund
program. The state indicated its opposition to listing the River as a Superfund
site. Federal, state, and tribal officials subsequently signed an agreement on
July 11, 1997 to share their resources in developing a comprehensive cleanup and
restoration plan for the Lower Fox River and Green Bay. EPA formally proposed
listing of the Site to the National Priorities List in the Federal Register on
July 28, 1998.

In October 1997, the FRG submitted an offer to conduct an RI/FS on the Lower Fox
River. An RI/FS is the first step in the federal process initiated by EPA to
assess current health risks and evaluate potential remediation methods.
Following unsuccessful attempts to negotiate this work activity with the FRG,
EPA delegated the lead role for the Site to WDNR and helped craft a scope of
work and cooperative agreement with WDNR for completing the RI/FS. WDNR, EPA,
USFWS, NOAA, and the Menominee and Oneida Tribes worked in close cooperation to
guide, review and issue the RI/FS. Two draft documents were released for public
comment (1999, 2001). Comments received from the PRPs, the public, and
independent peer review committees were incorporated into the Final RI/FS.

DEPOSIT N

In 1998 and 1999, the WDNR and EPA-GLNPO sponsored a project to remove
PCB-contaminated sediment from Deposit N in the Lower Fox River. This project
was successful at meeting its primary objective by demonstrating that dredging
of PCB-contaminated sediment can be performed in an environmentally safe and
cost-effective manner. Other benefits of the project included the opportunity
for public outreach and education on the subject of environmental dredging, as
well as the actual removal of PCBs from the River system. Deposit N, located
near Little Chute and Kimberly, Wisconsin, covered approximately 3 acres and
contained about 11,000 cubic yards (cy) of sediment. PCB concentrations were as
high as 186 milligrams per kilogram (mg/kg). Of the 11,000 cy in Deposit N,
about 65 percent of the volume was targeted for removal.

Approximately 8,200 cy of sediment were removed, generating 6,500 tons of
dewatered sediment that contained 112 total pounds of PCBs. The total included
about 1,000 cy of sediment from Deposit O, another contaminated sediment deposit
adjacent to Deposit N. Monitoring data showed that the River was protected
during the dredging and that wastewater discharged back to the River complied
with all permit conditions. The project met the design specifications for the
removal, such as the volume of sediment removed, sediment tonnage, and allowed
thickness of residual sediment. It should be noted that the project's goals
were to test and meet the design specifications and focus on PCB mass removal,
not to achieve a concentration-based cleanup, i.e., removal of all
PCB-contaminated sediment above a certain cleanup level, A cost analysis of this
project indicated that a significant portion of the funds was expended in
pioneering efforts associated with the first PCB cleanup project on the Lower
Fox River, for the winter construction necessary to meet an accelerated
schedule, and for late season work in 1998.

FOX RIVER GROUP DEMONSTRATION PROJECT

As part of the January 1997 agreement between the FRG and the State of
Wisconsin, the FRG agreed to make available a total of $10 million for a number
of projects. One of these was a sediment remediation project for which the
objective was to design, implement, and monitor a project downstream of the De
Pere Dam. The project was intended to yield important information about
large-scale sediment restoration projects in the Lower Fox River. The project,
as described in the agreement, had a pre-defined financial limit of $8 million.
The FRG and

                                  Page 7 of 97



                 Fox River and Green Bay ROD for OU 1 and OU 2

WDNR agreed on Sediment Management Units 56 and 57 (SMU 56/57) as the project
site. Contractors and consultants, under contract to the FRG, designed and
implemented the project. Dredging at SMU 56/57 began on August 30, 1999.
Dewatered sediment was trucked to a landfill owned and operated by Fort James
Corporation(now Georgia Pacific). Because of cold weather and ice, dredging
ceased on December 15, 1999, after approximately 31,350 cy of contaminated
sediment containing more than 1,400 pounds of PCBs were removed from the River.

At the time this project was halted for the first year, SMU 56/57 had not met
the project's dredging objective of removal of 80,000 cy of material. This
resulted in unacceptably high concentrations of PCBs in surface sediment in
portions of the dredged area. Despite this, the project provided instructive
experience concerning hydraulic dredging. Building on the successes of this
project, Fort James (now Georgia Pacific) worked cooperatively with WDNR and EPA
in the spring of 2000 to complete the SMU 56/57 project. (See description of
this enforcement agreement in Section 2.3, below). The sediment volume targeted
for removal in 2000 was 50,000 cy. The additional volume of sediment removed
from SMU 56/57 in 2000 was 50,316 cy, which was transported to the same Fort
James landfill following dewatering. Approximately 670 pounds of PCBs were
removed from SMU 56/57 during the 2000 project phase. Overall, the 1999 and 2000
efforts at SMU 56/57 resulted in the removal of approximately 2,070 pounds of
PCBs from the River. The 2000 project phase met all goals set forth in the
Administrative Order By Consent, and also met or exceeded the project's
operational goals for removal rates, dredge slurry solids, filter cake solids,
and production rates that were set forth for the original 1999 FRG project.

In February 1999, WDNR released a draft RI/FS for public review and comment. The
draft RI/FS was released to solicit public comment early in the planning
process, to, better evaluate public acceptance, and to assist WDNR and U.S. EPA
in selecting a cleanup alternative having the greatest public acceptance.
Comments were received from other governmental agencies, the public,
environmental groups, and private sector corporations. These comments were used
to revise and refine the scope of work that led to the RI/FS and Proposed
Remedial Action Plan (PRAP) released for public comment in October 2001.

2.3 ENFORCEMENT ACTIVITIES

The work described above on SMU 56/57 was conducted from July to November 2000,
under an Administrative Order By Consent (Docket No. V-W-OO-C-596), that was
entered into by Fort James, EPA, and the State of Wisconsin. Under its terms,
Fort James funded and managed the project in 2000 with oversight from both WDNR
and EPA.

An interim Consent Decree settlement was reached with Appleton Papers/NCR
(API/NCR), with the Court entering the Decree on December 10, 2001. Under this
agreement, API/NCR agrees to provide $10 million a year for both remediation and
restoration work (under the NRD process), with projects determined by the
Intergovernmental Partnership. In return, the Intergovernmental Partnership
agree to not order API/NCR to do remediation or restoration work on the River
for the 4-year life of the agreement.

3. COMMUNITY PARTICIPATION

3.1 PUBLIC PARTICIPATION

The community/public participation activities to support selection of the remedy
were conducted in accordance with CERCLA Section 117 and the NCP Section
300.430(f)(3).

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                 Fox River and Green Bay ROD for OU 1 and OU 2

More than 100 people were interviewed in late 1998 and early 1999 to develop the
Site's community involvement plan (CIP). Residents, tribal members, elected
officials, business organizations, local health staff, and environmental groups
from the affected communities discussed their concerns and those discussions are
included in the CIP. In addition, an extensive profile of each municipality and
reservation, as well as history of the River, was completed for the CIP. The CIP
was placed in the information repositories for the Site in 2001.

The information repositories are located at the Appleton Public Library; Oshkosh
Public Library; Brown County Library in Green Bay; Door County Library in
Sturgeon Bay; and Oneida Community Library. Five additional locations, at the
Kaukauna, Little Chute, Neenah, De Pere and Wrightstown Public Libraries, still
maintain a fact sheet file, although they are no longer information
repositories.

EPA awarded a $50,000 Technical Assistance Grant to the Clean Water Action
Council (CWAC) in 1999 and another $50,000 grant was provided in 2001. The
council has used its TAG to inform the community about the Lower Fox River
investigations. To fulfill its obligations, CWAC developed a web site, printed
flyers and bumper stickers, paid for newspaper ads and paid technical advisors
to review EPA and WDNR-generated documents.

WDNR and EPA held numerous public meetings and availability sessions beginning
in summer 1997 to explain how and why the Site was proposed for the Superfund
NPL. In February 1999, a draft RI/FS (which did not identify a specific selected
remedy) was released with a 45-day public comment period, which was extended an
additional 60 days. Prior to and after the release of the draft RI/FS, WDNR and
EPA provided for extensive community and public participation, and kept
residents, local government officials, environmental organizations and other
interest groups apprised of the steps of the process. Well-attended public
meetings, small group discussions, meetings and presentations for local
officials, and informal open houses continued through 2001.

The public meetings and proposed plan availability were announced to the public
at a press conference on October 5, 2001, and received extensive coverage
through TV, radio and newspapers news stories. The draft RI/FS and proposed plan
were formally presented at public meetings held on October 29, 2001 in Appleton
and October 30, 2001 in Green Bay. Additionally, WDNR and EPA mailed meeting
reminders and proposed plan summaries to the 10,000 name Fox River mailing list.
Press releases pertaining to the proposed plan, comment period, and public
meetings were sent to newspapers and TV and radio stations throughout the Fox
Valley. Display ads announcing the proposed plan, comment period and public
meetings were also placed in Green Bay and Appleton newspapers. The
presentations and question and answer sessions at the public meetings, and all
public comments taken at the meetings, were recorded and transcribed. The
written transcripts of the public meetings are available in the information
repositories, the administrative record and on the WDNR Lower Fox River web
page.

More than 20 public meetings and availability sessions have been held regarding
the project. Cleanup and restoration activities, the status of pilot projects,
fish consumption advisories, and the February 1999 draft RI/FS released by WDNR
have been among the topics on which these meetings focused. Additionally, over
15 small group and one-on-one interview sessions have been held. Project staff
have also made more than 60 presentations to interested organizations and
groups. In addition, WDNR, EPA and their intergovernmental partners publish a
bimonthly newsletter, the Fox River Current, which is mailed to over 10,000
addresses. To date, 23 issues of the Fox River Current have been published.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Copies of the various supporting reports and the proposed plan were made
available to the public during a public comment period that began on October 5,
2001 and concluded on January 22, 2002. Approximately 4,800 written comments
were received via letter, fax and e-mail. A copy of the Responsiveness Summary
for these comments is attached to this ROD. Originally, the comment period was
for 60 days, ending on December 7, 2001. The announcement of the extension until
January 22 was published through newspaper advertisements and news releases on
October 25, 2001. Newspaper advertisements were placed in the Green Bay Press
Gazette and the Appleton Post Crescent announcing the availability of the plan
and its supporting documents, and a brief summary of the plan in the information
repositories. The proposed plan, the RI/FS and other supporting documents
containing information upon which the proposed alternative was based were also
made available on the Internet at
www.dnr.state.us/org/water/wm/lowerfox/index.html and at the EPA Region 5 web
site. All documents were also available as part of the Administrative Record
housed at WDNR offices in Madison, Wisconsin and Green Bay, Wisconsin and at the
EPA Region 5 office in Chicago, Illinois.

4. SCOPE AND ROLE OF RESPONSE ACTION

As with many Superfund sites, the problems at the Lower Fox River and Green Bay
Site are complex. As a result, WDNR and EPA organized the Site into five OUs
described in Section 1.1, above.

The Proposed Plan, issued October 2001, recommended a cleanup plan for all five
Operable Units at the Site. However, at this time, WDNR and EPA are issuing a
ROD for the Fox River OUs 1 and 2 only. WDNR and EPA expect to issue a ROD for
OUs 3, 4 and 5 at a later date.

The reasons for issuing a ROD at this time for only OUs 1 and 2, and not for OUs
3, 4 and 5, are as follows:

- -     OU 1 and 2 represent a smaller portion of the area within the Fox River
      where remediation is necessary. These two Operable Units represent
      approximately 6.5 percent of the PCB mass and 18 percent of the sediment
      volume in the Lower Fox River. Consequently, these two Operable Units
      represent a more manageable project than conducting all of the remediation
      at one time.

- -     Provide a phased approach to the remedial work. Work on upstream areas,
      OUs 1-2 can start before the downstream areas, OUs 3, 4, and 5. This is
      consistent with the EPA policy Memorandum by Marianne Horinko, "OSWER
      Directive 8258.6-08, Principles for Managing Contaminated Sediment Risks
      at Hazardous Waste Sites," dated February 12, 2002. Principles described
      in this memorandum include, "Control Sources Early," and "Use an Iterative
      Approach in a Risk Based Framework." Additionally, the NCP states at 300
      CFR Section 430(a)(1)(ii):

            "Program Management Principles. EPA generally should consider the
            following general principles of program management during the
            remedial process:

            Sites should generally be remediated in Operable Units when.....
            phased analysis and response is necessary or appropriate given the
            size or complexity of the site..."

- -     Planning for OUs 3, 4, and 5 may benefit from knowledge gained on the OUs
      1 and 2 project.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

The primary objective of this response action is to address the risks to human
health and the environment due to PCBs in the in-place sediments of OUs 1 and 2
in the Lower Fox River. PCB concentrations remain elevated in Fox River
sediments, in the water column and in the fish. Removal of the PCB-contaminated
sediments will result in reduced PCB concentrations in fish tissue, thereby
accelerating the reduction in future human health and ecological risks. In
addition, by addressing the sediments, the remediation will control a source of
PCBs to the water column, which contributes to fish tissue concentrations and
transports PCBs into downstream reaches of the River, Green Bay, and eventually
to Lake Michigan.

5. PEER REVIEW

To ensure the credibility of the scientific work conducted during the Remedial
Investigation/Feasibility Study (RI/FS), EPA conducted both forms of peer
involvement: peer input and peer review. Peer input was conducted through
internal Agency reviews, and reviews by other agencies and Tribes. Peer review
was also conducted, in accordance with EPA guidance outlined in the Peer Review
Handbook (dated December 1998, updated December 2000). The peer review was
conducted by independent expert's who were unaffiliated with EPA, WDNR, the FRG
or other Site stakeholders, and was undertaken on some of the major scientific
aspects that form the basis for this decision.

Two separate EPA-sponsored peer review panels were convened. The review process
consisted of each panel conducting an independent review by three panel members,
with technical and administrative support by an EPA-contractor. The EPA
contractor was responsible for convening the panels, consistent with the
"charge" given by EPA for the panel review. This peer review was undertaken
without influence by EPA, WDNR, the FRG or other interested parties. This was to
provide an independent analysis and comment on key documents and issues related
to development of a proposed remedy. Specifically, the panels were asked to
evaluate;

- -     Adequacy of data considered in the 1999 Draft Lower Fox River Remedial
      Investigation, relative to quality and quantity (RI Panel), and

- -     Natural recovery and environmental transformation, i.e., biological
      breakdown of PCBs (FS Panel). Natural recovery was defined by the panel as
      naturally occurring physical, chemical, or biological processes that
      reduce the risks associated with contaminants in sediments over time.

Each peer review panel was asked to address specific questions (i.e., the
"charge") regarding the report being reviewed, including key controversial
issues identified by EPA. The RI and FS panels issued reports October 7, 1999,
and September 28, 1999, respectively.

The following summarizes the major findings of each of the panels:

- -     Data are adequate to determine the distribution of contaminants (i.e., it
      can be decided where cleanups should take place), if all data sources are
      considered (i.e., the RI does not provide a complete record).

- -     Data from all available sources are adequate to support identification and
      selection of a remedy for those technologies (e.g., dredging and capping)
      that have been used on a large scale at other, similar sites. Data are
      insufficient for developing in situ bio-technologies that may be
      applicable to the Site.

- -     Substantial improvements or additions to the existing data set are not
      indicated.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

- -     The Draft FS should more fully evaluate natural recovery of sediments as a
      remedial alternative in comparison with other remedial options.

- -     The technical basis of the natural recovery analysis needs to be described
      in more detail to permit a review of the methodology used and to assess
      confidence in natural recovery predictions.

In the 2001 draft RI and FS and the Proposed Plan, WDNR and EPA considered the
recommendations by the peer review panels, and on that basis made modifications
to draft documents upon which the proposed plan was based.

In addition to EPA-sponsored peer reviews, the FRG sponsored peer reviews that
were technically consistent with EPA peer review policy, although they may not
have conformed to all aspects of the peer review process and documentation.
These reviews consisted of the following analysis for the Fox River:

- -     Fate and transport and bio-uptake modeling evaluations by WDNR and the
      FRG;

- -     Human Health Risk Assessments by WDNR and the FRG

- -     Ecological Risk Assessments by WDNR and the FRG.

Recommendations by both EPA-sponsored peer reviews as well as those by the FRG
were considered and incorporated into the 2001 draft RI/FS, which was a
significant part of the basis for the Proposed Plan.

6. SITE CHARACTERISTICS

6.1 CONCEPTUAL SITE MODEL

The conceptual site model for the Fox River PCBs Site describes the source to
receptor succession in simple terms and identifies the major contamination
sources, contaminant release mechanisms, secondary sources, pathways and
receptors of concern (see Figures 2 and 3). Figures 2 and 3 show both human and
ecological site models. The design of field investigations and human and
ecological risk assessments reflect the basic components of the conceptual site
model.

In the conceptual site model, historical PCB releases were from paper
manufacturing and recycling facilities that discharged into the Fox River.
Although current releases are insignificant, historical releases were from
discharge of wastewater containing PCBs. Contaminated sediment "hotspots"
contribute to the overall PCB load in the Fox River and Green Bay.

Once introduced into the River, the PCBs adhere to sediments, with some fraction
being carried in the water column. Physical, chemical and biological release
mechanisms allow PCBs in the sediment to become available for redistribution and
a source of PCB contamination to the water column. The sediments will continue
to release contamination to the water column and biota, through aquatic and
benthic food chains, as well as other not easily modeled processes such as boat
scour, ice rafting, and bioturbation, unless they are managed or remediated in
some manner. In addition, scour from water flowing over sediments during high
flow events will continue to redistribute sediments and re-expose contaminants.

Because the River is a dynamic system with varying energy regimes, generally
PCB-laden sediments are not sequestered or stable. Some PCB-contaminated
sediment is buried by deposition of cleaner sediments at times, but in other
places and at other times contaminants

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                  Fox River and Green Bay ROD for OU 1 and OU 2

are redistributed. This redistribution may be local or more regional depending
on the energy of flow events and/or physical type or size of the sediment
particles. The redistributed sediments release contamination to the water column
and high flow events (e.g., floods) further increase the bioavailability of
contaminants to organisms in the water column. Although scour during high flow
events is an important release mechanism PCBs in the surface water are also
routinely observed during periods of lower flows (see Section 6.2.3, "Water
Column," below). The conceptual site model shows that the fish ingestion pathway
is a completed exposure route for the Site. Receptors include humans (e.g.,
anglers and their families), piscivorous (i.e., fish eating) fish, piscivorous
birds (including threatened and endangered species) and mammals. Additional
information on the human and ecological receptor populations is provided in the
risk section (Section 8) of this document.

FIGURE 2 HUMAN HEALTH SITE CONCEPTUAL MODEL

                                     [MAP]

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                  Fox River and Green Bay ROD for OU 1 and OU 2

FIGURE 3 ECOLOGICAL SITE CONCEPTUAL MODEL

                                     [MAP]

6.2 RESULTS OF THE REMEDIAL INVESTIGATION

6.2.1 SITE OVERVIEW

The Lower Fox River is a large freshwater river that has been contaminated with
PCBs for nearly 50 years. The contaminated portions of the Lower Fox River
include variations in hydrology and river bed geology, which create complex
environmental setting with varying levels of PCB contamination.

6.2.2 SUMMARY OF SAMPLING RESULTS

WDNR's RI/FS evaluated data from numerous prior investigations conducted since
1971. These data have been incorporated into a single Fox River Database,
available at WDNR's Lower Fox River Web page. The data received as part of the
comments on the proposed plan have been added to the database. The current
database contains in excess of 500,000 analytical records captured from every
major substantial data collection activity since 1989 up until the time the
proposed plan was released and covers analysis of sediment, water, air, and
biota (e.g., fish and wildlife tissues).

6.2.3 NATURE OF CONTAMINATION

Contaminants representing the primary risk driver studied in the RI/FS are, by
definition, polychlorinated biphenyls. PCBs consist of a group of 209 distinct
chemical compounds, known as congeners, that contain one to ten chlorine atoms
attached to a biphenyl molecule, with the generic formula of C12H(10-X)Clx,
where x is an integer from one to ten. Homologue groups are identified based on
the number of chlorine atoms present. For example, monochlorobiphenyls contain
one chlorine atom, dichlorobiphenyls contain two chlorine atoms, and
trichlorobiphenyls contain three chlorine atoms. Some PCB congeners are
structurally and toxicologically similar to dioxin (sometimes called dioxin-like
PCBs).

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Commercially manufactured PCBs consisted of complex mixtures of congeners, known
under various trade names. These PCBs were marketed under the general trade name
"Aroclors." About 140 to 150 different congeners have been identified in the
various commercial Aroclors, with about 60 to 90 different congeners present in
each individual Aroclor.

The polychlorinated biphenyls (PCBs) used in the production of carbonless copy
paper by paper manufacturing facilities on the Fox River from 1954 to 1971,
consisted largely of the Aroclor identified as "1242." Carbonless copy paper
produced during this time contained approximately 3.4 percent PCBs by weight.

Other contaminants of potential concern (e.g., mercury, lead, arsenic, dieldrin,
DDT/DDE/DDD, furan, and dioxin) are also present, but are not significant risk
drivers due to relatively low concentrations.

SOURCES

Twenty paper mills are located along the portion of the Fox River included in
the Site. Among that group of companies, six engaged in the production or
de-inking of carbonless copy paper containing PCBs. As a result of those
processes, these mills discharged PCBs to the Lower Fox River. It is estimated
that the wastewater discharged by the paper mills either directly or indirectly
(through publicly owned treatment works) into the Fox River released an
estimated 690,000 pounds of PCBs into the Lower Fox River.

CONTAMINATED MEDIA

Sediment

Much of the volume of PCBs discharged into the Lower Fox River in the past has
already been transported throughout the system and is now concentrated in
sediment within specific areas. In general, the upper three River reaches can be
characterized as having discrete soft sediment deposits within inter deposit
areas that have little or no soft sediment. In contrast, the last River reach
from De Pere to Green Bay is essentially one large, continuous soft sediment
deposit. Because there were several points of PCB discharge along the entire
length of the Lower Fox River, PCB concentrations and mass distributions are
highly variable. Table 1 summarizes the distribution of PCBs within OU 1 and
OU 2 sediments.

TABLE 1 PCB DISTRIBUTION IN THE LOWER FOX RIVER OUs 1 AND 2



                                        SEDIMENT
                                         VOLUME           PCB MASS       PCB MASS IN
          RIVER REACHES                   (cy)              (kg)        TOP 100 cm(%)
- -----------------------------------     ---------        ---------      -------------
                                                               
OU 1 - Little Lake Butte des Morts      2,200,400            1,849                 98%
OU 2 - Appleton to Little Rapids          339,200              109                100%


Transport of PCBs in Fox River

Contaminant fate and transport in the Lower Fox River and Green Bay are largely
a function of deposition, suspension, and redeposition of the Chemicals of
Concern (COC) that are bound to sediment particles. The organic COCs (PCBs,
pesticides) exhibit strong affinities for organic material in the sediment. The
ultimate fate and transport of these organic compounds depends significantly on
the rate of flow and water velocities through the River and Bay. More sediment
becomes suspended and transported downstream during high-flow events like storms
and spring snowmelt. High-flow events occur approximately 15 to 20 percent of
the time, but can transport more than 50 to 60 percent of the PCB mass that
moves annually. In any event, less than 1 kilogram/year enters Little Lake Butte
des Morts from Lake Winnebago and 40 Kilograms (88 pounds)/year are resuspended
and transported-from Little Lake Butte des Morts to OU 2

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                  Fox River and Green Bay ROD for OU 1 and OU 2

(Little Rapids Reach). An estimated 64 kilograms (141 pounds)/year migrate from
OU 2 downstream. This estimate does not consider removal of the Deposit N or for
possible actions for Deposit DD. Other modes of contaminant transport, such as
volatilization, atmospheric deposition, and point source discharges, are
negligible when compared to sediment resuspension.

Changes in Sediment Bed Elevation

The Lower Fox River is an alluvial river that exhibits significant changes in
bed elevations over time in response to changing volumes of flow during annual,
seasonal, and storm events, changes in sediment load, and changes in its base
level, which is determined by Lake Michigan. Sediment in the riverbed is dynamic
and does not function as discrete layers. River sediment movement is in marked
contrast to the sediment dynamics found in a large quiescent body of water, such
as deep lakes, or the deeper portions of Green Bay. Scouring of the sediment bed
plays a significant role in the quantity of sediment and contaminants
transported through the River system. In response to comments received from the
FRG on the 1999 draft RI/FS to the effect that less than one inch of sediment
would be resuspended from the riverbed as a result of a 100-year storm event,
WDNR and EPA investigated changes in sediment bed elevation for the De Pere to
Green Bay River reach (OU 4). This work is partially relevant to OU 1 and OU 2,
but is informative regarding movement of Fox River sediments generally. This
work (see Technical Memo 2g of the Model Documentation Report) was completed by
a group called the FRG/WDNR Model Evaluation Workgroup as part of the 1997
agreement between the FRG and WDNR. Additional evaluation by EPA was consistent
with changes documented in Technical Memo 2g.

Results of these analyses indicate that sediment bed elevation changes occur in
the Lower Fox River over both short-and long-term time frames. Changes in
sediment bed elevation were observed both across the channel and downstream
profiles. These changes show little continuity. Since River flows have not
significantly changed in recent years, the complexity of these sediment bed
elevation changes reflects the prevailing hydrologic and sediment conditions
that occurred over a 22-year period from 1977 through 2000. The wide range of
discharges and sediment loads continuously reshapes the Lower Fox River sediment
bed. Short-term (e.g., annual and sub-annual) changes in average net sediment
bed elevations range from a decrease or scour of over 11 inches to an increase
or deposition of over 14 inches. Long-term (e.g., over several years) changes in
average net elevations range from a decrease of more than 39 inches to an
increase of nearly 17 inches. The changes documented are well supported by U.S.
Army Corps of Engineers (USACE) sediment volume calculations from pre-and
post-dredge sediment bed elevation surveys, as well as by results of a U.S.
Geological Survey (USGS) analysis of bed surveys performed at intermediate time
scales (e.g., 8 months to 45 months).

Surveys of the River bottom, conducted by several different groups, show
significant changes in sediment bed elevation. On average, sediment bed
elevation data from throughout the De Pere to Green Bay reach suggest that this
River reach is a net depositional zone. However, when examined at a finer scale,
the data show areas of sediment scour up to 14 ft. It should be noted that
during the survey period, there were no large storm events of a 10-year or
greater magnitude. It is unknown what the scour would be during larger events.

For OUs 1 and 2, PCBs are often high in surficial sediments. This is indicative
that higher concentrations of PCBs continue to be exposed or re-exposed.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

The Potential for Natural Biodegradation of PCBs

Responding to comments received from the EPA's peer review panel concerning
natural recovery, the viability of natural degradation as a potential remedial
action for the sediment-bound PCBs in the Lower Fox River and Green Bay was
evaluated. Two basic processes, both anaerobic (without oxygen) and aerobic (in
the presence of oxygen) degradation, must occur to completely decompose PCBs.
Based on evidence in the literature, anaerobic PCB degradation was demonstrated
to have occurred under field conditions at almost all the sites studied.
However, a reduction in PCB concentrations through anaerobic processes is
site-dependent. In the Lower Fox River, University of Wisconsin researchers
found only a 10 percent reduction that could be attributed to anaerobic
degradation processes in deposits with average PCB concentrations greater than
30 mg/kg. More importantly, no PCB reductions resulting from anaerobic processes
could be accounted for in deposits with average concentrations less than 30
mg/kg.

Other active treatment options might possibly promote dechlorination of the
sediment, making the PCBs more amenable to biological destruction. However, a
pilot-scale experiment conducted at the Sheboygan River, another site with
PCB-contaminated sediment, yielded inconclusive results regarding the viability
of enhanced biodegradation. In that study, PCB-contaminated sediment was removed
from the River and placed into a specially engineered treatment facility. The
sediment was seeded with microorganisms and nutrients and the sediment was
manipulated between aerobic and anaerobic conditions to optimize biological
degradation. Even under these conditions, the data were insufficient to conclude
that PCB decomposition was enhanced.

Effects of Time

The Fox River Database includes sediment and water test results for tissue
samples collected since 1971. During the 1970s, after PCB use in the
manufacturing of carbonless copy paper had ceased, PCB concentrations in fish
tissue showed significantly declining concentrations. Since the mid-1980s,
however, changes in PCB levels in fish have slowed, remained constant, or, in
some cases, increased.

Trends in PCB concentrations in the surface layer (i.e., top four inches) of
River sediment are not consistent, but concentrations generally appear to be
decreasing over time as more PCB mass is transported downstream. However, the
time trends showed that concentrations in the subsurface sediments do not appear
to be declining. This indicates that a considerable amount of PCB mass remains
within the sediments of the Lower Fox River. Any changes made to the current
lock and dam configuration on the River could result in increased scour and
resuspension of those underlying sediments, which could in turn result in
increases in fish tissue concentrations. In addition, soil eroded from the
watershed mixes with and may further dilute PCB concentrations in the sediment.

Modeling Effort for the Lower Fox River

Four interrelated models were used in the RI/FS to simulate the fate and
transport of PCBs in the Lower Fox River and Green Bay (Figure 4). They are
mathematical representations of the transport and transfer of PCBs between the
sediment, the water, and uptake into the River and Bay food webs. The models are
intended not only to provide information on the fate and transport of PCBs in an
unremediated River system, but also to compare the potential remedial
alternatives in the FS. The models tend to estimate concentrations lower than
the concentrations actually observed in the River. The relative differences
predicted by the model are considered to be reliable.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

FIGURE 4 RELATIONSHIP OF MODELS USED FOR RISK PROJECTIONS IN THE LOWER FOX RIVER
         AND GREEN BAY

                                    [IMAGE]

The modeling effort included:

      -     Bed mapping of the Lower Fox River to define sediment thickness,
            sediment physical properties (such as total organic carbon and bulk
            density), and total PCB concentrations;

      -     Use of the whole Lower Fox River Model (wLFRM) to simulate the
            movement of PCBs in the water column and sediment of the Lower Fox
            River from Little Lake Butte des Morts to the mouth of the River at
            Green Bay; and,

      -     Use of the Fox River Food Chain Model (FRFOOD) to simulate the
            uptake and accumulation of PCBs in the aquatic food chain in the
            Lower Fox River using model results from wLFRM.

Bed mapping provided the foundation for the modeling inputs. Total PCB
concentrations in surface sediment for the baseline and action levels serve as
inputs to wLFRM. This model projects total PCB concentrations in water and
sediment. The output from this model is in turn used in the bioaccumulation
model, FRFood, to project whole fish tissue concentrations of PCBs (Figure 4).
The output from all of the models is then compared to the remedial action levels
specified in the FS. This information is used in the FS to estimate the length
of time it would take for a receptor to achieve the acceptable fish tissue
concentration in response to a given action level.

Taken together, these models provide a method for evaluating the long-term
effects of different remedial alternatives and different action levels on PCB
concentrations in water, sediment, and aquatic biota in the Lower Fox River.
The models are then used to predict PCB concentrations in the aquatic
environment over a 100-year period under different remedial alternatives and
action levels. The modeling results are discussed in the FS, and a more detailed
discussion on modeling can be found in the Model Documentation Report. A
complete copy of that report is available on the WDNR's Lower Fox River Web
page.

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Water Column

The dominant current PCB source to the water column is sediments. Average River
surface water total concentrations are 54.6 parts per trillion (ppt), with
particulates and dissolved concentrations, 40.0 ppt and 14.6 ppt, respectively.
There are significant seasonal variations, particularly when the water
temperature drops below 40 degrees F. For example during the winter months of
December 1994 and February 1995, total PCB concentrations dropped to about 10
percent of the average concentration. Average Green Bay concentrations range
from 18.5 ppt for zone 2 to non-detect in zone 4.

Fish and Other Biota

PCB concentrations in fish are a result of the fish's exposure to PCBs in water
and surface sediment, through an aquatic food chain and/or a benthic food chain,
respectively. WDNR continues to collect and analyze fish tissue data from
locations in the Fox River and Green Bay.

A wide variety of fish and other species have been collected and analyzed for
the Fox River and Green Bay from 1971 to present. Generally, concentrations in
biota have been declining, although the rate of decline varies depending upon
the location and time.

Air

PCBs can enter the air via volatilization from PCB-contaminated water and soil
although volatilization of PCBs is generally considered to be limited. Air
monitoring during the 1999 SMU 56/57 dredging project demonstrated that even
under "worst case" conditions (i.e., when sediments are excavated and exposed to
the air) that volatilization of PCBs do not pose a significant risk to humans or
wildlife.

6.2.4 GEOCHEMISTRY AND MODELING CONCLUSIONS

In the RI/FS, EPA evaluated PCB contamination at the Site using a number of
tools. These tools include geochemical analyses of the water and sediment, "time
trends" (i.e., statistical) analyses, and analysis of biological monitoring
data, and synthesis of the data by the application of a set of complex
mathematical (i.e., computer) models. PCB physical/chemical transport and fate
and PCB bioaccumulation models were applied to predict future levels of PCBs in
the Fox River and Green Bay sediment, water and fish.

7. CURRENT AND POTENTIAL FUTURE SITE AND RESOURCE USES

As one of Wisconsin's great rivers, the Lower Fox River has played and will
continue to play a major role in the history, culture, and economy of the area.
The Fox River has played an important role in defining regional history and
culture. Current and reasonably anticipated future land use and surface water
use are described below.

7.1 CURRENT AND REASONABLY ANTICIPATED FUTURE LAND USE

Current land use includes a variety of residential, commercial, agricultural,
and industrial activities. Use of the River and lands surrounding the River are
projected to remain the same. At this time, no changes in future land use are
known, nor are any new uses expected. Table 2 below summarizes current land use
for OUs 1 and 2.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

TABLE 2 PREDOMINANT LAND USE BY OPERABLE UNIT



            OPERABLE UNIT                                       PREDOMINANT LAND USE
- --------------------------------------------    -----------------------------------------------------
                                             
1 - Little Lake Butte des Morts                 Residential, industrial, and commercial
2 - Appleton to Little Rapids                   Residential, industrial, commercial, and agricultural


Other uses of the River include parks, woodlands, and recreational. OUs 1 and 2
pass through Winnebago, Outagamie and Brown Counties.

7.2 SURFACE WATER USES

- -  Industrial and commercial purposes: Uses include generation of electrical
      power and industrial/commercial purposes.

- -  Residential/Domestic: Due to historic problems in the Lower Fox River, the
      main surface water sources for human consumption for the areas surrounding
      OU 1 and 2 is Lake Winnebago and groundwater (i.e., not the Fox River).

- -  Recreation: The Fox River supports a variety of water-based recreational
      activities including sport fishing, waterfowl hunting, swimming and
      boating. Boating (both power and non-power) is available on the River,
      particularly in Little Lake Butte des Morts. Tourism is popular and
      important to the local economy.

- -  Ecological Resources: The Fox River and Green Bay support many species of
      birds (e.g., tree swallow, Forsters and Common Tern, Double-crested
      Cormorants, Bald Eagles) fish (Rainbow Smelt, Alewife, Gizzard Shad,
      Shiner, Yellow Perch, Carp, Brown Trout and Walleye), and mammals (e.g.,
      mink), including sixteen (16) species of State or federally listed
      Threatened or Endangered species.

The Lower Fox River provides diverse habitats for all trophic levels of the
River and Bay ecosystem. Plants, plankton, aquatic invertebrates, fish,
amphibians, reptiles, birds and mammals use the Fox River for feeding,
reproduction and shelter. In addition to the aquatic communities associated with
the River, animals living in wetlands, floodplains and upland communities are
also dependent on the River.

Both federal and state freshwater wetlands exist in the Fox River region,
providing valuable habitat.

8. SUMMARY OF SITE RISKS

Baseline human health and ecological risk assessments were conducted to evaluate
the potential for current and future impacts of site-related contaminants on
receptors visiting, utilizing or inhabiting the Fox River and Green Bay in the
Baseline Human Health and Ecological Risk Assessment (BLRA). The BLRA for the
Lower Fox River and Green Bay was prepared as a companion document to the RI/FS
and was finalized in December 2002.

In the portion of the report covering Human Health Risk Assessment (HHRA),
cancer risks and non-cancer health hazards were evaluated for the Lower Fox
River and Green Bay. In the Ecological Risk Assessment (ERA) portion of the
report, ecological risks were evaluated for Lower Fox River and Green Bay. The
BLRA supports the selected remedy.

The BLRA concludes that:

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                 Fox River and Green Bay ROD for OU 1 and OU 2

- -     Human health and ecological receptors are at risk in each Operable Unit.

- -     Fish consumption is the exposure pathway representing the greatest level
      of risk for human and ecological receptors, other than the direct risks
      posed to benthic invertebrates via direct exposure to contaminated
      sediments.

- -     The primary contaminant of concern is PCBs.

8.1 IDENTIFICATION OF CHEMICALS OF CONCERN

The Site includes the contaminated sediment found within the Lower Fox River and
Green Bay. A Screening Level Risk Assessment (SLRA) was conducted to evaluate
which chemicals in the system pose the greatest degree of risk to people and
animals. Identified Chemicals of Concern (COCs) include PCBs, dioxins/furans,
the pesticide DDT and its metabolites (DDD and DDE), the pesticide dieldrin, and
arsenic, lead, and mercury.

8.2 HUMAN HEALTH RISK ASSESSMENT

8.2.1. SUMMARY OF SITE RISKS

The site-specific HHRA evaluated both cancer risks and non-cancer health hazards
from exposure to PCBs in the Fox River and Green Bay, as documented in the
Remedial Investigation and Feasibility Study (RI/FS). This discussion emphasizes
cancer risks and non-cancer health hazards due to PCBs in the Fox River and
Green Bay that exceed EPA's goals for protection. For cancer, regulatory
decisions are made ranging from risk levels of one in a million (10(-6)) to one
in 10,000 (10(-4)). A one in a 100,000 cancer risk level is commonly used in
federal and state regulatory decisions. For non-cancer, a hazard index (HI) of 1
is the most frequent basis for risk management decisions. Cancer risks and
non-cancer hazard indices in Green Bay were calculated to be generally similar
to the Fox River. The cancer risk and non-cancer hazard indices in the Fox River
and Green Bay are above EPA's levels of concern for fish consumption. Consistent
with Superfund policy and guidance, the Human Health Risk Assessment (HHRA) is a
baseline risk assessment and therefore assumes no actions (i.e., remediation) to
control or mitigate hazardous substance releases and no institutional controls,
such as the fish consumption advisories and fishing restrictions that are
currently in place, which are intended to control exposure to hazardous
substances. Cancer risks and non-cancer hazard indices were calculated based on
an estimate of the reasonable maximum exposure (RME) expected to occur under
current and future conditions at the Site. The RME is defined as an upper end
exposure that is reasonably expected to occur at a Site. EPA also estimated
cancer risks and non-cancer hazard indices based on central tendency (CT), or
average, exposures at the Site. For both the RME and CT exposures, average
contaminant (e.g., PCBs) levels in fish were exceeded. The following discussion
summarizes the HHRA with respect to the basic steps of the Superfund HHRA
process: 1) Data Collection and Analysis, 2) Exposure Assessment, 3) Toxicity
Assessment and 4) Risk Characterization.

8.2.2 DATA COLLECTION AND ANALYSIS

The HHRA utilizes documents relating to the nature and extent of PCB
contamination at the Site developed as part of the RI/FS. These RI/FS documents
provide both current and projected future concentrations of PCBs in air, fish,
sediments and river water. To calculate cancer risks and non-cancer hazard
indices, the information on concentrations in these media (Tables 3 and 4) are
combined with other information on exposure (see Section 8.2.3) and toxicity
(see Section 8.2.4).

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                 Fox River and Green Bay ROD for OU 1 and OU 2

TABLE 3 SUMMARY OF PCB DATA AND MEDIUM-SPECIFIC HUMAN EXPOSURE POINT
        CONCENTRATIONS FOR OU 1



                                         CONCENTRATION                EXPOSURE
                                          DETECTED       FREQUENCY      POINT
 EXPOSURE             CHEMICAL OF       ---------------     OF      CONCENTRATION   STATISTICAL
  POINT                CONCERN            MIN.   MAX.    DETECTION     (PPM)          MEASURE
- ---------------  ---------------------  ------- -------  ---------  -------------   -----------
                                                                  
Sediments        Total PCBs              0.002   222.7     539/661      3.70           mean
                                          ppm     ppm*

Surface                   particulate    0.13    40.16     34/41      1.66E-05         mean
Water            Total                   ng/L    ng/L
Direct           PCBs
Contact                   dissolved      1.4      19       40/46      1.11E-05
                                         ng/L    ng/L

Fish             Total PCBs             0.0989    3.8      11/13        1.16           mean
Tissue                                    ppm     ppm
(Walleye)


- ----------
ng/L - nannograms/Liter

ppm - parts per million

*     data submitted with comments from the responsible parties included data
      from LLBdM in excess of 360 ppm PCB.

Data sources:

Concentrations and detections for surface water - Rl Tables, 5-1, 5-16 and RA
Table 6-14. Point of exposures - RA Table 5-31, 6-8.

Table 4 SUMMARY OF PCB DATA AND MEDIUM-SPECIFIC HUMAN EXPOSURE POINT
        CONCENTRATIONS FOR OU 2



                                         CONCENTRATION                EXPOSURE
                                          DETECTED       FREQUENCY      POINT
 EXPOSURE             CHEMICAL OF       ---------------     OF      CONCENTRATION   STATISTICAL
  POINT                CONCERN            MIN.   MAX.    DETECTION     (PPM)          MEASURE
- ---------------  ---------------------  ------- -------  ---------  -------------   -----------
                                                                  
Sediments        Total PCBs              0 ppm  77.44     188/263       1.40           mean
                                                4 ppm

Surface                   particulate     0.01   52.17     34/41      1.19E-05         mean
Water            Total                    ng/L    ng/L
Direct           PCBs
Contact                   dissolved      0.026  18.86      84/85      4.84E-06
                                          ng/L   ng/L

Fish
Tissue           Total PCBs              1.431   3.90       4/4         2.74           mean
(Walleye)                                 ppm    ppm


- ----------
ng/L - nannograms/Liter

ppm - parts per million

Data sources:

Concentrations and detections for surface water - Rl Tables, 5-1, 5-16 and RA
Table 6-14.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Fish at the Site have been collected by the WDNR for approximately 35 years,
with fish advisories in effect since 1976. Fish samples have been analyzed for
PCBs (both total PCBs and selected congeners), Dioxins/furans (specifically,
2,3,7,8-TCDD and 2,3,7,8-TCDF), DDT (dichlorodiphenyltrichloroethane), a
pesticide, and its metabolites (DDD and DDE) Dieldrin (pesticide), arsenic, lead
and mercury. These non-PCB contaminants were found to present substantially less
risk compared to PCBs. Additionally, some of the other contaminants identified
in sediment have similar fate and transport properties, and are generally found
with PCBs. For this reason, a remedy that effectively addresses PCB exposure
will also address the other COCs (with lesser toxicities) in the sediment.

The conceptual site model identifies potential receptors for COCs and exposure
pathways. As discussed above, determination of PCB exposure provides a sound
basis for characterizing significant human health risks at the Site. Estimates
of the exposures allow a quantitative risk evaluation. This was done for fish,
sediment, drinking/river water, and air. Most Site risks were determined to
relate to fish consumption, with only minimal risk associated with other
potential exposures (e.g., inhalation, direct contact). Thus the discussion
below focuses on risks and exposures related to fish consumption.

Specifically, these quantitative risk calculations from fish consumption were
based on wet-weight PCB concentrations in fish fillets, as generated by WDNR's
bioaccumulation models, Fox River Food (FRFOOD) and Green Bay Food (GBFOOD). The
fillet represents the portion of the fish most commonly consumed. The fish
exposures were derived by weighting the model output by reported angler
preference for species consumption (i.e., weighting the modeled PCB
concentrations in fish to reflect the species caught and consumed by anglers)
and by averaging over location within the study area.

8.2.3 EXPOSURE ASSESSMENT

The exposure assessment evaluates exposure pathways by which people are or can
be exposed to the contaminants of concern in different media (e.g., fish, water,
and sediment). Factors relating to the exposure assessment include, but are not
limited to, the concentrations that people are or can be exposed to and the
potential frequency and duration of exposure.

Conceptual Site Model

Human exposure to PCBs through consumption of fish presented the greatest risk.
Other human exposure pathways such as inhalation, drinking contaminated water
or direct exposure presented no significant risk. The human health conceptual
site model is shown in Figure 2.

Exposed Populations

Recreational and high intake (i.e., subsistence) fish consumers are the most
likely population to have significant PCB exposures. Populations that may have
portions of their members engaged in subsistence fishing include Native
Americans, and Hmong (Laotians). Sensitive populations that were qualitatively
evaluated include highly exposed (i.e., subsistence) anglers and their families
as well as infants of mothers who ingest fish that are exposed in utero and/or
through consumption of breast milk. With respect to subsistence or highly
exposed angler populations in Wisconsin, review of the literature suggests that
these populations are likely to be adequately represented in the HHRA. With
respect to infants (less than one year old), exposure to PCBs in utero and via
ingestion of breast milk are known exposure routes that pose risks to fetal
development in the infant. Several ongoing studies are determining if it is
possible to develop quantitative relationships between fetal/infant PCB exposure
and developmental effects. Standard EPA default factors were used for angler
body weight [e.g., 72 (kilograms (kgs) for an adult].

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Fish Ingestion Rate

Several fish consumption surveys were used to evaluate fish intake rate for both
recreational and high intake fish consumers. Specific studies included: West
(1989, 1993) conducted in Michigan; Fiore (1989) conducted in Wisconsin;
Hutchinson and Kraft conducted in Wisconsin (1994) and Hutchinson (1999)
conducted in Wisconsin. The RME fish ingestion rate was determined to be 59
grams per day from the West studies while 81 grams was determined for high
intake fishes, using the findings from Hutchinson and Kraft (1994).

Exposure Duration

Values of 30 years for Central Tendency Exposure (CTE) and 50 years for the RME
scenario were established based on EPA published estimates of the years persons
live in the Lower Fox River and Green Bay area.

PCB Cooking Loss

PCB losses during cooking were assumed to be 50 percent, based on studies
reported in the literature. Potential PCB loss mechanisms include removing skin
and fat, draining cooking fluids from the fish and grilling to allow oil to drip
away from the fish.

Probabilistic Analysis

In addition to the point estimate (i.e., deterministic) analyses, a
probabilistic analysis was performed to provide a range of estimates of the
cancer risks and non-cancer health hazards associated with the fish ingestion
pathway. The probabilistic analysis helps to evaluate variability in exposure
parameters (e.g., differences within a population's fish ingestion rates, number
of years anglers are exposed, body weight, etc.) and uncertainty (i.e., lack of
complete knowledge about specific variables). The deterministic risk analyses
using point estimates to generate RME exposures and risks was found to compare
favorably to findings from the probabilistic approach.

8.2.4 TOXICITY

The toxicity assessment determines the types of adverse health effects
associated with PCB exposures and the relationship between the magnitude of
exposure (dose) and severity of adverse effects (response). Potential health
effects for PCBs include the risk of developing cancer over a lifetime. Other
non-cancer health effects, such as changes in the normal functions of organs
within the body (e.g., changes in the effectiveness of the immune system), are
also associated with PCB exposure. Some of the 209 PCB congeners are considered
to be structurally and mechanistically similar to dioxin and exert dioxin-like
effects.

Sources of Toxicity Information.

The HHRA used the current consensus toxicity values for PCBs from EPA's
Integrated Risk Information System (IRIS) in evaluating the cancer risk and
non-cancer health effects of PCBs. IRIS provides the primary database of
chemical-specific toxicity information used in Superfund risk assessments. More
recent toxicity data are provided in Appendix D of the BLRA. These data do not
change EPA's use of IRIS values. For the dioxin-like PCBs, the HHRA used
toxicity information for dioxin (2,3,7,8-TCDD) provided in EPA's 1997 Wealth
Effects Assessment Summary Tables.

Cancer

EPA has determined that PCBs cause cancer in animals and probably cause cancer
in humans (B2 classification or likely to cause cancer in humans). EPA's cancer
slope factors (CSFs) for PCBs represent plausible upper bound estimates, which
means that EPA is reasonably confident that the actual cancer risks will not
exceed the estimated risks calculated using the

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                  Fox River and Green Bay ROD for OU 1 and OU 2

CSFs. For fish ingestion, the pathway determined to be of greatest concern, CSFs
of 2 (mg/kg day)(-1) and 1 (mg/kg-day)(-1) were used for the RME and CT
(average) exposure, respectively. For dermal and inhalation exposures, a CSF of
2 (mg/kg-day)(-1) was used with a dermal absorption fraction of 14 percent,
consistent with the IRIS, chemical file. For inhalation, a CSF of 0.4
(mg/kg-day)(-1) was used. For the dioxin-like PCBs, the CSF for 2,3,7,8-TCDD of
150,000 (mg/kg-day) was used.

Non-Cancer Health Effects

Serious non-cancer health effects have been observed in animals exposed to PCBs.
Studies of Rhesus monkeys exposed through ingestion of PCBs (i.e., Aroclors 1016
and 1254) indicate a reduced ability to fight infection and reduced birth weight
in offspring exposed in utero. Studies of non-cancer health effects, including
neurobehavioral effects observed in children of mothers who consume
PCB-contaminated fish were summarized in the baseline risk assessment and-are
being evaluated by EPA as part of the Agency's IRIS process. The toxicity
assessment is an evaluation of the chronic (e.g., 7 years or more) adverse
health effects from exposure to PCBs. The chronic Reference Dose (RfD)
represents an estimate (with uncertainty spanning an order of magnitude or
greater) of a daily exposure level for the human population, including sensitive
populations (e.g., children), which is likely to be without an appreciable risk
of deleterious effects during a lifetime. Chemical exposures exceeding the RfD
do not predict specific disease. For the fish ingestion pathway, the oral RfD
for Aroclor 1254 of 2 x 10(-5) mg/kg-day was used for the RME and CT (average)
exposures, because the congener analysis of fish samples more closely resembled
Aroclor 1254 rather than 1016. For the sediment and water ingestion pathways,
the oral RfD for Aroclor 1016 of 7 x 10(-5) mg/kg-day was used because analyses
of sediment and water samples most closely resemble Aroclor 1016. For the dermal
contact pathway, dermal RfDs were extrapolated from the oral RfD for Aroclor
1016.

8.2.5 RISK CHARACTERIZATION

This final step in the HHRA combines the exposure and toxicity information to
provide a quantitative assessment of site risks. Exposures are evaluated based
on the potential risk for developing cancer and the potential for non-cancer
health hazards.

8.2.6 CANCER RISKS

Cancer risk is expressed as a probability. For example, a 10(-4) cancer risk
means a one in 10,000 excess cancer risk, or an increased risk of an individual
developing cancer of one in 10,000 as a result of exposure to site contaminants
under the conditions used in the Exposure Assessment Under Superfund, acceptable
exposures RME cancer risk must be defined with the range of 10(-4) to 10(-6)
(corresponding to a one in 10,000 to a one in 1,000,000 excess cancer risk).
Excess lifetime cancer risk is calculated from the following equation:

                                Risk = CDI x CSF

where: Risk = a unit less probability (e.g., 1 x 10(-3) of an individual
developing cancer)

      CDI = Chronic Daily Intake averaged over 70 years (mg/kg-day)

      CSF = Cancer Slope Factor, expressed as (mg/kg-day)(-1)

At this Site, cancer risks to the RME individual associated with ingestion of
fish are above EPA's generally acceptable levels, as shown below in Tables 5 and
6. In addition, cancer risks to the average (CT) individual associated with
ingestion of fish are above EPA's goal for protection. Tables 5 and 6 below
summarize key cancer risks from Tables 5-82 and 5-86 from the Human Health Risk
Assessment for the Site. Cancer risks from exposure to dioxin-like PCBs were

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                 Fox River and Green Bay ROD for OU 1 and OU 2

comparable to the cancer risks from the non-dioxin-like PCBs presented below for
fish ingestion.

TABLE 5 CANCER RISK FROM FISH INGESTION -- SUMMARY FOR OU 1



               PATHWAY                           RME CANCER RISK            CT (AVERAGE) CANCER RISK
- --------------------------------------   -----------------------------   -----------------------------
                                                                   
Recreational Angler
 All Fish                                5.2 x 10(-4) (5.2 in 100,000)   7.8 x 10(-5) (7.8 in 100,000)
 Walleye                                 1.5 x 10(-4) (1.5 in 10,000)    2.2 x 10(-5) (2.2 in 100,000)

High Intake (i.e., Subsistence) Angler
 All Fish                                7.2 x 10(-4) (7.2 in 10,000)    1.1 x 10(-4) (1.1 in 10,000)
 Walleye                                 2.0 x 10(-4) (2.0 in 10,000)    3.2 x 10(-5) (3.2 in 100,000)


TABLE 6 CANCER RISK FROM FISH INGESTION -- SUMMARY FOR OU 2



               PATHWAY                           RME CANCER RISK            CT (AVERAGE) CANCER RISK
- --------------------------------------   -----------------------------   -----------------------------
                                                                   
Recreational Angler
 All Fish                                4.9 x 10(-4) (4.9 in 10,000)    7.4 x 10(-5) (7.4 in 100,000)
 Walleye                                 1.6 x 10(-4) (1.6 in 10,000)    2.4 x 10(-5) (2.4 in 100,000)

High Intake (i.e., Subsistence Angler)
 All Fish                                6.8 x 10(-4) (6.8 in 10,000)    1.1 x 10(-4) (1.1 in 10,000)
 Walleye                                 2.3 x 10(-4) (2.3 in 10,000)    3.5 x 10(-5) (3.5 in 100,000)


8.2.7 NON-CANCER HEALTH HAZARDS

The potential for non-cancer health effects is evaluated by comparing an
exposure level over a specified time period (e.g., 7 years) with Reference Dose
(RfD) derived for a similar exposure period. An RfD represents a level that an
individual may be exposed to that is not expected to cause any deleterious
effect. The ratio of exposure to toxicity is called a Hazard Quotient (HQ). An
HQ less than 1 indicates that a receptor's dose of a single contaminant is less
than the RfD, and that toxic non-carcinogenic effects from that chemical are
unlikely. A Hazard Index (HI) represents the sum of the individual exposure
levels for different chemicals and different media (e.g., fish, water, sediment)
compared to their corresponding RfDs (i.e., HI is the sum of HQs for an
individual). The key concept of a non-cancer HI is that a threshold level
(measured as an HI of 1) exists below which non-cancer health effects are not
expected to occur. Under the federal Superfund program, EPA's goal for
protection for non-cancer health hazards is an HI equal or less than 1 for the
RME individual.

The HQ is calculated as follows:

                             Non-cancer HQ = CDI/RfD

where:  CDI = Chronic daily intake (mg/kg-day)
        RfD = Reference dose (mg/kg-day)

CDI and RfD are expressed in the same units and represent the same exposure
period (i.e., chronic).

At this Site, all non-cancer RME hazard indices from the consumption of PCBs in
fish are above EPA's generally acceptable levels, as shown below (see also Table
6). Risk to children is

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                  Fox River and Green Bay ROD for OU 1 and OU 2

particularly elevated. Tables 7 and 8 below summarize key non-cancer risks from
Tables 5-84, 5-85, from the Human Health Risk Assessment for the Site. In
addition, non-cancer hazard indices to the average (CT) individual are above
EPA's generally acceptable levels. Non-cancer hazard indices for dioxin-like
PCBs were not evaluated quantitatively due to EPA's ongoing evaluation of dioxin
toxicity.

TABLE 7 NON-CANCER HEALTH HAZARD FROM FISH INGESTION -- SUMMARY FOR OU 1



                                                             CT (AVERAGE) NON-CANCER
                PATHWAY                  RME NON-CANCER HI             HI
- --------------------------------------   -----------------   -----------------------
                                                       
RECREATIONAL ANGLER
 All Fish                                       20                      5
 Walleye                                       5.5                    1.4

HIGH INTAKE (I.E., SUBSISTENCE) ANGLER
 All Fish                                       27                      7
 Walleye                                         8                      2

HIGH INTAKE RECREATIONAL CHILD
 All Fish                                       47                     12
 Walleye                                        13                      3

HIGH INTAKE SUBSISTENCE CHILD
 All Fish                                       65                     17
 Walleye                                        19                      5


TABLE 8 NON-CANCER HEALTH HAZARD FROM FISH INGESTION -- SUMMARY FOR OU 2



                                                                 CT (AVERAGE) NON-
                PATHWAY                  RME NON-CANCER HI           CANCER HI
- --------------------------------------   -----------------   -----------------------
                                                       
Recreational Angler                             84                     21
High Intake (i.e., subsistence) Angler         115                     30


8.2.8 PROBABILISTIC ANALYSIS

In addition to the deterministic calculations discussed above, EPA calculated
risks for ingestion of fish in the Fox River and Green Bay using a probabilistic
analysis, consistent with EPA guidance on probabilistic risk assessments (EPA,
1999). This analysis supports and complements the point estimates of risks and
hazard indices calculated in evaluations of exposure to PCBs in fish.

Deterministic RME estimates of risk and hazard index provided in the
probabilistic evaluation are generally consistent within the 90th to 95th
percentiles of the respective probability distributions of risk and hazard
indices. This is consistent with the interpretation provided by EPA (EPA, 1999)
of the RME as a plausible high-end risk or hazard index for the exposed
population.

Deterministic CTE estimates of risk and hazard index are generally close to the
means of probability distributions of risk and hazard index. This is consistent
with the interpretation of the CTE as the average risk or hazard index for the
exposed population.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

8.2.9 UNCERTAINTY

The process of evaluating human health cancer risks and non-cancer hazard
indices involves, multiple steps. Inherent in each step of the process are
uncertainties that ultimately affect the final cancer risks and non-cancer
hazard indices. Important sources of uncertainty in the HHRA are discussed
below:

The use of a bioaccumulation model to generate future concentrations of PCBs in
fish if no action occurs were used in the HHRA calculations. WDNR minimized
this uncertainty to the extent possible by developing a bioaccumulation model
specifically for the Fox River Fox River and Green Bay (i.e., "FRFOOD" and
"GBFOOD", respectively), calibrating the model to the extensive database for
the Fox River and Green Bay. Additionally the model was revised based on a peer
review sponsored by the Fox River Group. Based on the model calibration (i.e.,
the ability of the fish bioaccumulation model to capture the historical
observed lipid-normalized PCB measurements in fish), and the feedback received
from the peer review, the model uncertainty is not sufficient to change the
overall conclusion of the HHRA that cancer risks and non-cancer hazard indices
due to ingestion of fish are above acceptable levels.

Time Trends

Although concentrations in fish may be decreasing over time for some fish
species in OU 1 and OU 2 these trends were not consistent with all species. In
addition, trends in the surficial sediment layer are not consistent and
concentrations in deeper sediments are not decreasing. Additionally, events
that may scour sediments may cause declining trends currently observed to
either slow or reverse.

Fish Ingestion Rate

This uncertainty in the fish ingestion rate was minimized by relying on a
number of surveys. These included Michigan angler surveys for recreational
anglers by West et al., 1989 and 1993, and a Wisconsin angler survey by Fiore,
1989. For high intake fish consumers, surveys by West et al., 1993, Peterson,
1994 and Hutchison and Kraft, 1994, Hutchison, 1994, and Hutchison, 1999 were
also considered. In addition, the sensitivity/uncertainty analysis conducted
for the probabilistic analysis showed that, despite the use of different fish,
the overall conclusion of the HHRA -- that cancer risks and non-cancer hazard
indices due to ingestion Of fish are above levels of concern, essentially
remains the same.

PCB Toxicity

EPA describes the uncertainty in the cancer toxicity values as extending in
both directions (i.e., contributing to possible underestimation or
overestimation of cancer slope factors (CSF)). However, the CSFs were developed
to represent plausible upper bound estimates, which means that EPA is
reasonably confident that the actual cancer risk will not exceed the estimated
risk calculated using the CSF. The CSFs used in the HHRA were externally peer
reviewed and supported by the panel of expert scientists and are the most
current values recommended by EPA in IRIS. Non-cancer toxicity values also have
uncertainty. The current oral RfDs for Aroclor 1016 and 1254, which were used
in the HHRA, have uncertainty factors of 100 and 300, respectively in order to
provide for protection of public health. The RfD for Aroclor 1016 was
externally peer-reviewed and supported by the panel of scientists. The RfD for
Aroclor 1254 was developed using the same methodology as Aroclor 1016 and was
internally peer-reviewed. Since these RfDs were developed, a number of recent
national and international studies have reported possible associations between
developmental and neurotoxic effects in children from prenatal or postnatal
exposures to PCBs. In light of these new studies, the current RfDs are
currently being evaluated as part of the IRIS process. It would be
inappropriate to prejudge the results of the IRIS evaluation at this time.

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                  Fox River and Green Bay ROD for OU l and OU 2

PCB Body Burden

The fact that any previous exposures (either background or past consumption of
PCB-contaminated fish) may still be reflected in an individual's body burden
today is an additional source of uncertainty and may result in an underestimate
of non-cancer hazard indices and cancer risks.

PCB Bioaccumulation Modeling

The use of a bioaccumulation model to generate estimations of future
concentrations of PCBs in fish if no action occurs were used in the HHRA
calculations. WDNR minimized this uncertainty to the extent possible by
developing a bioaccumulation model specifically for the Fox River and Green Bay
(i.e., FRFOOD and GBFOOD, respectively), calibrating the model to the extensive
database for the Fox River and Green Bay. Additionally the model was revised
based on a peer review sponsored by the Fox River Group. Based on the model
calibration (i.e., the ability of the fish bioaccumulation model to capture the
historical observed lipid-normalized PCB measurements in fish), and the feedback
received from the peer review, the model uncertainty is not sufficient to change
the overall conclusion of the HHRA that cancer risks and non-cancer hazard
indices due to ingestion of fish are above acceptable levels.

8.3 ECOLOGICAL RISK ASSESSMENT

The Lower Fox River and Green Bay provide habitat function for a variety of
invertebrates, fish, birds, and mammals that inhabit or use this watershed for
foraging, reproducing, rearing young and other life cycle requirements. The
Lower Fox River basin and Green Bay varies considerably in its potential to
provide and support different kinds of wildlife habitat and this variability
affects the wildlife diversity and populations. The BLRA focuses primarily on
aquatic, or aquatic-dependent species. Aquatic habitats within the area are
wetland (e.g., Lower Fox River and Southern Green Bay), and riverine (e.g.,
Lower Fox River).

The significant groups of wildlife found within these habitats include the
following:

      -     Both pelagic and benthic aquatic invertebrate species form the
            primary prey in the food webs of the River and Bay. Species of
            oligochaetes and chironomids (e.g., worms and midges) are typically
            most abundant and are found throughout the Lower Fox River and Green
            Bay. Amphipods, crayfish, snails, and mussels are also present in
            the River and Bay. Zebra mussels, an exotic species, are present
            throughout Green Bay and the River.

      -     Fish of the region include salmon/trout; game fish, including
            walleye, yellow perch, and northern pike; and pelagic and benthic
            non-game fish. A discussion of the significant fish species within
            the study area is presented later in this section.

      -     Birds of the region include raptors, gulls/terns, diving birds,
            migratory waterfowl, passerines, shorebirds, and wading birds. A
            listing of the significant bird species within the study area is
            presented later in this section. These animals are found nesting,
            feeding, and living in both terrestrial and aquatic habitat
            environments.

      -     Mammals of the region include large and small game animals that
            generally live in open or wooded habitat, as well as fur-bearing
            animals that may forage or live within or near aquatic environments.
            The small and large game animals include rabbits, squirrels, and
            deer. The fur-bearing animals include beaver, red fox, mink,
            raccoon, muskrat, and otter. Additionally, bats feed on insects in
            the vicinity of Lake Winnebago and near the communities along the
            Fox River. Few of the mammals will be discussed in detail within
            this document. Mink are the principal species discussed in the BLRA.

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      -    Reptiles and amphibians, including snakes, turtles, frogs, and toads
           are present in the region (Exponent, 1998). Typically, the frogs and
           turtles confine themselves to the wetland and near shore areas while
           several snake species and toads are found in association with both
           terrestrial and aquatic habitats. Frogs and toads that dwell in
           wetlands or near shore areas are fed upon by wading birds of the
           region.

Through the mid-1970s the population levels of fish species, such as walleye and
perch, were low within the Lower Fox River and southern Green Bay ecosystems.
Contaminants, along with low dissolved oxygen (DO) conditions brought about by
uncontrolled and untreated wastewater dumped into the River, were believed to be
a contributing factor causing low population levels. Principal species found
within the system were those that could tolerate these conditions, especially
bullhead and carp.

With the institution of water quality controls in the mid-1970s, contaminants
and DO conditions improved. The WDNR undertook a program to reintroduce walleye
into the River and Bay through a stocking program beginning in 1973. That
program was very successful; self-sustaining populations of walleye now exist
within the River and Bay. Recent electro-fishing catch data for walleye from De
Pere dam to the mouth of the Lower Fox River are shown on Figure 2-15 of the
BLRA.

In addition to walleye, a number of other species were reestablished in the
Lower Fox River and Green Bay, including white and yellow perch, alewife, shad,
bass, and other species. Historical anecdotal data from the Oneida tribe and
more recent creel survey data from the WDNR indicate that Duck Creek and Suamico
tributaries to southern Green Bay were used by numerous fish species (Nelson,
1998).

The WDNR has completed extensive fish surveys in the Lower Fox River and inner
Green Bay. However, due to the numerous factors that may effect fish
populations, simply reviewing and comparing the population survey results from
various years is not valid. Year-to-year fish populations do not necessarily
indicate whether conditions within the River/Bay are degraded or improving
because other environmental, physical, or biological factors may be impacting
select fish species at any given time. Selected fish surveys for the Lower Fox
River have been reviewed to provide data on the types of fish present within the
system at given points in time. However, no in-depth analysis of whether these
population surveys indicate declining or improving conditions is included. No
Green Bay fish surveys are included in this discussion. Rather, the personal
observations from WDNR and MDNR personnel familiar with both the commercial and
sport fisheries of Green Bay are used.

8.3.1 SCREENING ECOLOGICAL RISK ASSESSMENT

The Screening Ecological Risk Assessment (SERA) for the Lower Fox River and
Green Bay focused on the potential for ecological risks associated with
chemicals in sediments, surface waters, and biota. The SERA was conducted using
conservative exposure and effects scenarios in an effort to identify which of
the over 300 contaminants previously identified potentially posed risks to
ecological receptors. Data from 16 separate comprehensive studies conducted on
the Fox River and Green Bay by state, federal, university, and private parties
were used to assess risk. The objective of the screening was to identify a
smaller list of contaminants that would be carried through to the baseline risk
assessment.

As defined in the Superfund Risk Assessment Guidance (EPA, 1997a), following the
completion of the SERA, a Scientific Management Decision Point (SMDP) was
necessary to review the results of the SERA. The technical team of risk managers
and risk assessors, collectively

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referred to as the Biological Technical Assistance Group (BTAG), were assembled
during the SERA process to specifically address SMDPs and provide technical
review.

The SMDP was formalized in a memo from WDNR dated August 3, 1998 (Appendix A-RA)
The memo identified and justified which chemicals should be carried forward into
the RA, based on the potential for either human health or ecological risk. Of
the 75 chemicals that were above screening level risk criteria, only those with
the most potential for adverse risk were carried forward as BLRA contaminants of
potential concern (COPCs).

The retained COPCs include: PCBs (expressed as total and PCB coplanar
congeners), dioxin and furan congeners, DDT and its metabolites DDE, and DDD,
dieldrin, arsenic, lead, and mercury. Sediment HQs were greatest for PCBs based
on both human heath and ecological risk-based screening levels.

8.3.2 BASELINE ECOLOGICAL RISK ASSESSMENT

The overall ecological goals of the Baseline Risk Assessment (BLRA) for the
Lower Fox River and Green Bay were to:

      -     Examine how the contaminants of potential concern (COPCs) carried
            forward from the Screening Level Risk Assessment (SLRA) (RETEC,
            1998b) move from the sediment and water into ecological receptors
            within the Lower Fox River and Green Bay.

      -     Quantify the current (or baseline) ecological risk associated with
            the COPCs.

      -     Distinguish those COPCs, which pose the greatest potential for risk
            to the environment and should be carried forward as contaminants of
            concern (COCs) in the FS.

      -     Determine which exposure pathways lead to the greatest risks.

      -     Support the selection of a remedy, which eliminates, reduces, and/or
            controls identified risks by calculating sediment quality thresholds
            (SQTs).

Consistent with Superfund policy and guidance, the BLRA is a baseline risk
assessment and, therefore, assumes no actions (remediation) to control or
mitigate hazardous substance releases. The following discussion summarizes the
BLRA with respect to the four basic steps of the Superfund Ecological Risk
Assessment process: 1) Problem Formulation, 2) Exposure Assessment, 3) Effects
Assessment, and 4) Risk Characterization.

PROBLEM FORMULATION

Chemicals of Concern

PCBs were carried forward in the BLRA as the primary COPC because
SLRA-calculated sediment hazard quotients (HQs) ranged from 1,514 to 5,872,
generally several orders of magnitude greater than HQs for other COPCs. Although
2,3,7,8-TCDD is the most toxic dioxin congener, all structurally related dioxin
and furan congeners were evaluated for toxicity based on the toxicity
equivalency method, further described in Section 6.3.2 of the BLRA. The dioxin
and furan congeners that will be evaluated are those that have been measured in
Site media and those that have toxic equivalency factors (TEFs). The only PCB
congeners that were evaluated for dioxin-like toxicity are those that most
structurally resemble dioxin and have the greatest potential for
bioaccumulation: congeners 77, 81, 105, 118, 126, and 169, as further discussed
in Section 6.3.3 of the BLRA.

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The electronic Fox River Database (FRDB) currently contains more than 500,000
records representing contaminant data from sediment, water, and tissue data.
Total PCBs are the most frequently found analyte in the database. 1989 was used
as a cut-off date for inclusion of data for the evaluation of risk for several
reasons: 1) the contribution of these data towards assessing risk was
considered to be less advantageous than the greater accuracy obtained by
evaluating risk based on more current data; 2) no data collected prior to 1989
were validated, and 3) although data collected in 1989 were not validated, the
total number of samples collected in this year is more than 30 percent of all
samples collected.

Complete Exposure Pathways

Currently, the principal source for COPCs is the contaminated sediment deposits
found throughout the system. The principal transport mechanism is sediment
resuspension, with transport occurring by downstream currents in the Lower Fox
River, and by discrete resuspension transport and deposition events within Green
Bay (WDNR, 1998b, 1998c). The fate of these contaminants, following their
release into the water column, depends on the chemical properties of the
contaminant, abiotic factors within the receiving environment (e.g., organic
carbon in sediments, pH, surface water hardness), and interaction with the
biotic environment. This interaction can result in degradation, transformation,
or bioconcentration of the contaminant. The fate of a contaminant is not fixed,
and the degree of contaminant exchange between surface water, sediment, sediment
pore water, and biota varies.

Aquatic organisms can be exposed to COPCs through the water column, through
ingesting sediments, and through consumption of contaminated prey. Water column
organisms are exposed to dissolved and particulate-based COPCs through
respiration, ingestion and direct contact. Benthic invertebrates are exposed
through direct contact and ingestion of contaminated sediments. Benthic fish,
carnivorous birds and carnivorous mammals can incidentally ingest sediments
during feeding on prey species. All of the COPCs have the potential to
biomagnify up the food chain except for lead and arsenic, which can
bioconcentrate. Therefore, benthic invertebrates, fish, birds and mammals are
all exposed to COPCs by consuming contaminated food.

PCBs in the environment are stable and persistent; cycling rather than
degradation represents the predominant fate. PCBs are highly lipophilic and,
therefore, more readily bind to sediments or accumulate in tissues rather than
remain in the water column. Aquatic organisms can be exposed to PCBs through the
water column, through ingesting sediments, and through consuming prey. For
invertebrates, both aquatic and benthic, exposure to PCBs through contact with
the water column or pore water contributes significantly to the total body
burden of total PCBs. For most species, however, particularly those at high
trophic levels, prey consumption is likely the primary route of exposure.
Biological uptake of PCBs by aquatic organisms appears to be species-specific.
Rates of accumulation vary depending on species, age, sex, and size. Generally,
when equally exposed, fish accumulate two to three times more PCBs than aquatic
invertebrates.

Bioaccumulation of non-polar organic compounds occurs as a result of uptake by a
receptor, followed by partitioning of the compounds into the receptor's organic
carbon compartment-the lipids. Once chemicals are accumulated within an
organism's lipid fraction, biomagnification may occur when organisms at lower
trophic levels are preyed upon by receptors higher in the food chain. The net
result is an aggregate increase in tissue body burdens of the chemicals at
higher trophic levels.

Animals and plants living in or near the River, such as invertebrates, fish,
amphibians, and water-dependent reptiles, birds, and mammals, are or can be
exposed to PCBs directly and/or indirectly through the food chain. Ecological
exposure to PCBs is primarily an issue of bioaccumulation through the food chain
rather than direct toxicity, because PCBs bioaccumulate

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in the environment by bioconcentrating (i.e., being absorbed from water and
accumulated in tissue to levels greater than those found in surrounding water)
and biomagnifying (i.e., increasing in tissue concentrations as they go up the
food chain through two or more trophic levels). As a result, the ecological risk
assessment emphasizes indirect exposure at various levels of the food chain to
address PCB-related risks at higher trophic levels. The ecological conceptual
model is provided in Figure 3.

Assessment Endpoints

Appropriate selection and definition of assessment endpoints, which focus the
risk assessment design and analysis, are critical to the utility of risk
assessment. It is not practical, nor possible, to directly evaluate risks to all
of the individual components of the ecosystem at the Site. Assessment endpoints
were selected for the risk assessment based on particular components of the
ecosystem that could be adversely affected by the contaminants present. Eight
assessment endpoints were developed to evaluate the risk of contaminants in the
Lower Fox River and Green Bay. They include the functioning of water column and
benthic invertebrate populations, benthic and pelagic fish survival and
reproduction, insectivorous, piscivorous, and carnivorous bird survival and
reproduction, and piscivorous mammal survival and reproduction. By evaluating
and protecting these assessment endpoints, it is assumed that this ecosystem as
a whole would also be protected.

Conceptual Model

The biological conceptual model identifies where contaminant interactions with
biota can occur, describes the uptake of Site contaminants into the biological
system (in this case, the water and sediments of the Lower Fox River and Green
Bay), and diagrams key receptor contaminant exposure pathways. Due to the large
area being assessed for risk, more than one conceptual model was necessary. The
Lower Fox River, from the mouth of Lake Winnebago to the De Pere dam, was
evaluated using the same conceptual model (Figure 3).

Measurement Endpoints

Risk questions are assessed using measurement endpoints. Types of measurement
endpoints used in the risk assessment process fall generally into four
categories: 1) comparison of estimated or measured exposure levels of COPCs to
levels known to cause adverse effects, 2) bioassay testing of site and reference
media, 3) in-situ toxicity testing of Site and reference media, and 4)
comparison of observed effects on-site with those observed at a reference site.
Measurement endpoints selected for assessment endpoint evaluation in this risk
assessment consistently fell in to the first category of measurement endpoints
and are presented in Table 6-2 from BLRA. Only existing data were evaluated as
part of this assessment. As such, the measurement endpoints were fashioned
around the existing data. Where the data did not already exist to fulfill the
measurement endpoint, it was modeled based on the existing data.

EXPOSURE ASSESSMENT

The exposure assessment includes a quantitative evaluation of contaminant
release, migration, and fate; characterization of exposure parameters; and
measurement or estimation of exposure point concentrations. Complete exposure
pathways and exposure parameters (e.g., body weight, prey ingestion rate, home
range) used to calculate the concentrations or dietary doses to which the
receptors of concern may be exposed were obtained from EPA references, the
scientific literature and directly from researchers. In the FRDB, data were
generally lacking for piscivorous and carnivorous birds, and no data were
available for piscivorous mammals, therefore, ecological modeling was used to
estimate COPC exposure to these receptors.

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Description of Groups of Key Species

Invertebrate communities constitute a vast portion of the basis of the food
chain in aquatic ecosystems. Since invertebrates process organic material and
are prey items for other invertebrates, fish, and birds, they are important in
nutrient and energy transfer in an aquatic ecosystem. Alterations in
invertebrate functions may consequently affect nutrient and energy transfer, and
bird and fish populations. Also, COPCs in invertebrates may be passed along
through the food chain. Therefore, upper trophic levels can be affected not only
by reduced prey abundance, but also by trophic transfer of accumulated
contaminants in invertebrate prey. Examples of important benthic invertebrates
in the Lower Fox River system include chironomids (e.g., midges) and
oligochaetes (e.g., segmented worms).

Fish have many roles in the aquatic ecosystem, including the transfer of
nutrients and energy, and are prey for mammals, birds, and predatory fish. In
fact, several predators rely solely, or primarily, on fish for survival. Fish
typically constitute a large proportion of the biomass in aquatic systems.
Additionally, fish have social and economic value; impaired fish communities
would adversely affect commercial and recreational fishing. Benthic fish are
those fish that live in contact with and forage for food directly in the
sediments. As such they represent a unique exposure pathway because of their
foraging behavior (i.e., high exposure to sediments) and prey items (i.e.,
predominately benthic invertebrates). Examples of benthic fish in the Lower Fox
River include carp, catfish, and bullhead. Pelagial fish are those species that
live and feed principally in the water column (as opposed to being in direct
contact with sediment). Pelagial fish represent many trophic levels with prey
items predominately in the water column (e.g., zooplankton and other fish).
Examples of important pelagial fish in the Lower Fox River include shiners,
shad, alewife, perch, and walleye. Pelagial fish important to Green Bay include
the same species as are found in the River, in addition to lake trout and other
salmonids in the upper Bay.

Bird populations, in general, present one of the most significant biological
components of the River/Bay system and occupy several trophic levels. Given the
potential for some contaminants to biomagnify, birds, as upper trophic level
receptors, may concentrate, and be affected by, contaminants in their tissues to
a greater degree than lower trophic level species. In addition to their
ecological importance, birds are socially valued because of recreational
activities and aquatic aesthetics. Insectivorous birds rely predominately on
insects (e.g., benthic invertebrates) for food. Examples of insectivorous birds
in the Lower Fox River and Green Bay region include swallows and blackbirds.
Piscivorous birds rely primarily on fish for food. Of the bird populations
present at the Site, piscivorous birds represent a high trophic level and,
therefore, are more at risk than insectivores from contaminants transferred
through the food chain. Examples of piscivorous birds on the Lower Fox River and
Green Bay include cormorants and terns. Carnivorous birds were selected for
evaluation because of their diverse forage, which can include consumption of
fish, piscivorous birds, or even small mammals. Examples of carnivorous birds on
the Lower Fox River and Green Bay include eagles, osprey, and other raptors.

Piscivorous mammals represent the upper trophic level of the riverine corridor
ecosystem and, therefore, are potentially highly exposed to contaminants that
bioaccumulate or biomagnify. Piscivorous mammals rely primarily on fish as food,
but may also consume amphibians, invertebrates, crayfish, clams, and mussels.
The foraging behavior of these mammals represents a pathway through which energy
is transferred from the aquatic to terrestrial ecosystem. Mink are piscivorous
mammals found in the Lower Fox River and Green Bay area.

A number of different animals have been or are currently on the Wisconsin,
Michigan, or Federal Endangered and Threatened Species lists. Listed animals
which have historically been found in the vicinity of the Lower Fox River or
Green Bay include: osprey, common tern, Forsters tern, Caspian tern, and great
egret (Matteson et al., 1998). The osprey, common tern,

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and Forsters tern have nested along the Lower Fox River as well as at upstream
locations in Lake Winnebago, Little Lake Butte des Morts, and Lake Poygan.
Osprey have been sighted near Kaukauna and have attempted to nest in the
vicinity of Combined locks, while terns have been observed farther upstream.
Additionally, Caspian tern and great egret have nested on some of the islands
located in Green Bay. Very few nesting pairs have been observed over the past
few years and recovery of these populations is slow (Matteson et al., 1998).

In addition to these birds, the WDNR reported a bed of clams or mussels, which
may be threatened. The sediment bed, which these clams/mussels inhabit, is
approximately 6 meters (20 feet) wide and 30.5 meters (100 feet) long and is
located near the mouth of Mud Creek in the Lower Fox River (Szymanski, 1998,
2000).

As mentioned above, populations of both eagles and the double crested cormorants
have recovered to the point where both birds have been removed from the
Wisconsin endangered species list. Other populations, specifically, wild mink
and otter, have been found to be declining around the Lower Fox River and Green
Bay, yet they are not currently listed by state or federal agencies. The
endangered and threatened fish and birds of the region were listed on Tables
2-11 and 2-12 of the BLRA. The endangered and threatened mammals of the region
are listed in Table 2-14 of the BLRA.

DERIVATION OF EXPOSURE POINT CONCENTRATIONS

All COPCs

Tables 9 through 13 show the exposure point concentrations for chemicals where
risk was indicated. For calculation of exposure values, one-half of the sample
quantitation limit was used for undetected values (EPA, 1991b). The 95 percent
UCL of the mean is the value that a mean, calculated repeatedly from subsamples
of the data population, will not exceed 95 percent of the time. Therefore, there
is a 95 percent probability that the true mean of the population does not exceed
the 95 percent UCL. The 95 percent UCL was calculated from the sample values
depending on whether the data were normally, log-normally, or not normally
distributed. When the data distribution fit neither a normal nor log-normal
distribution pattern, the 95 percent UCL selected was the greater of the two
calculated 95 percent UCLs (normal and log-normal). In cases where data was
limited, or where the variability in the data was high, the calculated 95
percent UCL can exceed the maximum detected concentration. The RME is defined as
the lesser of the calculated 95 percent UCL, or the maximum detected value.

As an estimate of risk, both the arithmetic mean concentration and the RME
concentration are used as exposure point concentrations. The RME is an estimate
of the highest average exposure expected to occur at a Site. The intent of the
RME is to provide an estimate of exposure that is above average, yet still
within the range of most exposures. The RME thus provides a degree of
protectiveness that encompasses the individual receptors that have a higher
likelihood of exposure.

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TABLE 9 SUMMARY OF CHEMICALS OF CONCERN AND MEDIUM-SPECIFIC EXPOSURE POINT
        CONCENTRATIONS FOR WATER COLUMN INVERTEBRATES

SCENARIO TIME FRAME:   CURRENT
MEDIUM:                WATER
EXPOSURE MEDIUM:       SURFACE WATER



                                                   CONCENTRATION
                                                   DETECTED(NG/L)
                                                   --------------   FREQUENCY OF     EXPOSURE POINT
EXPOSURE POINT           CHEMICAL OF CONCERN        MIN.    MAX.     DETECTION     CONCENTRATION (NG/L)   STATISTICAL MEASURE
- --------------------   -------------------------   -----   ------   ------------   --------------------   --------------------
                                                                                        
Surface Water (OU 1)   Mercury (unfiltered)         0.2     7140          5/6               7140                    max

                                                                                            2237                   mean

                       Total PCBs (filtered)        1.4       19        40/46               15.3                95% UCL

                                                                                            11.1                   mean

                       Total PCBs (unfiltered)       na       na          0/6

                       Total PCBs (particulates)    0.1     40.2        34/41               40.2                    max

Surface water (OU 2)   Total PCBs (particulate)    0.01     52.2        82/86               52.2                    max

                                                                                            11.9                   mean

                                                                                            16.6                   mean


na = not applicable

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TABLE 10 SUMMARY OF CHEMICALS OF CONCERN AND MEDIUM-SPECIFIC EXPOSURE POINT
         CONCENTRATIONS FOR BENTHIC INVERTEBRATES

SCENARIO TIME FRAME:   CURRENT
MEDIUM:                SEDIMENT
EXPOSURE MEDIUM:       SEDIMENT




                                            CONCENTRATION
                                              DETECTED
    EXPOSURE           CHEMICAL OF       -------------------                  FREQUENCY OF       EXPOSURE POINT
      POINT              CONCERN            MIN        MAX       DETECTION    CONCENTRATION    STATISTICAL MEASURE
- -----------------   ------------------   --------   --------   ------------   --------------   -------------------
                                                                             
Sediments (OU 1)    Lead (mg/kg)              3.8        522        27/27             172              mean

                                                                                      522               max

                    Mercury (mg/kg)           0.2        3.3        71/86             1.4           95% UCL

                                                                                        1              mean

                    2,3,7,8-TCDD

                    (ug/kg)              1.80e-03   5.40e-03          4/5        4.30e-03           95% UCL

                                                                                 2.50e-03              mean

                    Total PCBs(ug/kg)          25    130,000                       22,848           95% UCL

                                                                                   10,724              mean

                    DDD (ug/kg)               4.7         19         4/23              19               max

                                                                                     17.8              mean

                    DDT (ug/kg)                13         50         2/20              50               max

Sediments (OU 2)    Lead (mg/kg)               44        130        10/10            88.9           95% UCL

                                                                                     75.6              mean

                    Mercury (mg/kg)           0.2        2.1        10/10             1.7           95% UCL

                                                                                      0.8              mean

                    Total PCBs (ug/kg)   3.50e+01   7.42e+04      122/131        1.53e+04           95% UCL

                                                                                 6.75e+03              mean


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TABLE 11 SUMMARY OF CHEMICALS OF CONCERN AND MEDIUM-SPECIFIC EXPOSURE POINT
         CONCENTRATIONS FOR FISH

SCENARIO TIME FRAME:   CURRENT
MEDIUM:                FISH
EXPOSURE MEDIUM:       FISH



                                                     CONCENTRATION DETECTED   FREQUENCY     EXPOSURE
                                    CHEMICAL OF      ----------------------      OF          POINT
        EXPOSURE POINT                CONCERN           MIN          MAX      DETECTION   CONCENTRATION   STATISTICAL MEASURE
- ---------------------------------   ------------     ---------   ----------   ---------   -------------   -------------------
                                                                                        
          OU 1

whole fish  tissue (carp)           PCBs ((mu)g/kg)     245        11,400       30/30           2957             95% UCL

                                                                                                1992                mean

whole fish tissue (gizzard shad)    PCBs ((mu)g/kg)      54           530         4/4            530                 max

                                                                                                 296                mean

whole fish tissue (golden shiner)   PCBs ((mu)g/kg)     845          1140         2/2           1140                 max

                                                                                                 993                mean

whole fish tissue (yellow perch)    PCBs ((mu)g/kg)     363            na         1/1            363                 max

whole fish tissue (walleye)         PCBs ((mu)g/kg)    98.9          3800       11/13           3800                 max

                                                                                                1159                mean
OU 2

whole fish tissue (carp)            PCBs ((mu)g/kg)     160          6600       12/12           3606             95% UCL

                                                                                                2581                mean

whole fish tissue (yellow perch)    PCBs ((mu)g/kg)     425          1298         4/4           1219             95% UCL

                                                                                                 779                mean

whole fish tissue (walleye)         PCBs ((mu)g/kg)    1431          3900         4/4           3900                 max

                                                                                                2737                mean


na = not applicable

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TABLE 12 SUMMARY OF CHEMICALS OF CONCERN AND MEDIUM-SPECIFIC EXPOSURE POINT
         CONCENTRATIONS FOR BIRDS

SCENARIO TIME FRAME:  CURRENT
MEDIUM                PREY ITEMS
EXPOSURE MEDIUM:      PREY ITEMS



                                                                  CONCENTRATION
                                                                    DETECTED
                                                                  --------------   FREQUENCY    EXPOSURE POINT
         EXPOSURE POINT               CHEMICAL OF CONCERN           MIN     MAX   OF DETECTION   CONCENTRATION  STATISTICAL MEASURE
- ----------------------------------  -------------------------     -------  -----  ------------  --------------  -------------------
                                                                                              
OU 1

Tree swallow egg                    PCBs ((mu)g/kg)                1790     4030      5/5           3732               95% UCL

                                                                                                    2924                mean

Tree swallow whole body             PCBs ((mu)g/kg)                  79     7400    24/24           5254               95% UCL

                                                                                                    2135                mean

Common tern ingestion               mercury ((mu)g/kg)               na       na       na            1.5                mean

                                                                                                     1.6                 RME

                                    mercury ((mu)g/kg -BW/day)       na       na       na           12.5                 mean

                                                                                                    13.1                 RME

                                    total PCBs ((mu)g/day)           na       na       na           17.4                 mean

                                                                                                    31.2                 RME

                                    total PCBs ((mu)g/kg-BW/day)     na       na       na            145                 mean

                                                                                                     260                 RME

Forster's tern ingestion            mercury ((mu)g/kg)               na       na       na            1.8                 mean

                                                                                                     1.9                 RME

                                    mercury ((mu)g/kg-BW/day)        na       na       na           11.5                 mean

                                                                                                    12.1                 RME

                                    total PCBs ((mu)g/kg)            na       na       na           21.2                 mean

                                                                                                    37.9                 RME

                                    total PCBs ((mu)g/kg-BW/day)     na       na       na            134                 mean

                                                                                                     240                 RME

Double Crested Cormorant ingestion  mercury ((mu)g/kg)               na       na       na            8.1                 mean

                                                                                                     8.6                 RME


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                 Fox River and Green Bay ROD for OU 1 and OU 2

TABLE 12 SUMMARY OF CHEMICALS OF CONCERN AND MEDIUM-SPECIFIC EXPOSURE POINT
         CONCENTRATIONS FOR BIRDS

SCENARIO TIME FRAME:  CURRENT
MEDIUM:               PREY ITEMS
EXPOSURE MEDIUM:      PREY ITEMS



                                                          CONCENTRATION
                                                            DETECTED
                                                          -------------     FREQUENCY    EXPOSURE POINT
    EXPOSURE POINT            CHEMICAL OF CONCERN          MIN     MAX    OF DETECTION   CONCENTRATION    STATISTICAL MEASURE
- -------------------------   -------------------------     -----   -----   ------------   --------------   -------------------
                                                                                        
                            mercury ((mu)g/kg-BW/day)       na      na          na              4.8                mean

                                                                                                5.1                 RME

                            total PCBs ((mu)g/kg)           na      na          na             94.1                mean

                                                                                                168                 RME

                            total PCBs ((mu)g/kg-BW)        na      na          na               56                mean

                                                                                                100                 RME

bald eagle                  total PCBs ((mu)g/kg)           na      na          na              963                mean

                                                                                               1647                 RME

                            total PCBs ((mu)g/kg-BW)        na      na          na              207                mean

                                                                                                354                 RME

OU 2

common tern ingestion       mercury ((mu)g/kg)              na      na          na              1.5                mean

                                                                                                1.5                 RME

                            mercury ((mu)g/kg-BW/day)       na      na          na             12.3                mean

                                                                                               12.3                 RME

                            total PCBs ((mu)g/kg)           na      na          na             45.8                mean

                                                                                               71.6                 RME

                            total PCBs ((mu)g/kg-BW/day)    na      na          na              382                mean

                                                                                                597                 RME

Forster's tern ingestion    mercury ((mu)g/kg)              na      na          na              1.8                mean

                                                                                                1.8                 RME

                            mercury ((mu)g/kg-BW/day)       na      na          na             11.3                mean

                                                                                               11.3                 RME

                            total PCBs ((mu)g/kg)           na      na          na             55.6                mean

                                                                                                 87                 RME


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                 Fox River and Green Bay ROD for OU 1 and OU 2

TABLE 12 SUMMARY OF CHEMICALS OF CONCERN AND MEDIUM-SPECIFIC EXPOSURE POINT
         CONCENTRATIONS FOR BIRDS

SCENARIO TIME FRAME:  CURRENT
MEDIUM:               PREY ITEMS
EXPOSURE MEDIUM:      PREY ITEMS



                                                         CONCENTRATION
                                                            DETECTED
                                                         -------------     FREQUENCY    EXPOSURE POINT
    EXPOSURE POINT            CHEMICAL OF CONCERN         MIN     MAX    OF DETECTION   CONCENTRATION    STATISTICAL MEASURE
- ------------------------   -------------------------     -----   -----   ------------   --------------   -------------------
                                                                                       
                           total PCBs ((mu)g/kg-BW/day)    na       na         na              352                mean

                                                                                               551                 RME

double crested cormorant   mercury ((mu)g/kg)              na       na         na                8                mean

                                                                                                 8                 RME

                           mercury ((mu)g/kg-BW/day)       na       na         na              4.7                mean

                                                                                               4.7                 RME

                           total PCBs ((mu)g/kg)           na       na         na              249                mean

                                                                                               388                 RME

                           total PCBs ((mu)g/kg-BW/day)    na       na         na              148                mean

                                                                                               231                 RME

bald eagle ingestion       mercury ((mu)g/kg)              na       na         na               40                mean

                                                                                              67.4                 RME

                           mercury ((mu)g/kg-BW/day)       na       na         na              8.6                mean

                                                                                              14.5                 RME

                           total PCBs((mu)g/kg)            na       na         na             1376                mean

                                                                                              1930                 RME

                           total PCBs ((mu)g/kg-BW/day)    na       na         na              296                mean

                                                                                               415                 RME

bald eagle egg             total PCBs ((mu)g/kg)           na    36000        1/1            36000                 max


na = not applicable
RME = reasonable maximum exposure
BW = body weight

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                 Fox River and Green Bay ROD for OU 1 and OU 2

TABLE 13 SUMMARY OF CHEMICALS OF CONCERN AND MEDIUM-SPECIFIC EXPOSURE POINT
         CONCENTRATIONS FOR MAMMALS

SCENARIO TIME FRAME:    CURRENT
MEDIUM:                 PREY ITEMS
EXPOSURE MEDIUM:        PREY ITEMS



                                                         CONCENTRATION
                                                            DETECTED                      EXPOSURE
                                                         -------------   FREQUENCY OF       POINT
   EXPOSURE POINT              CHEMICAL OF CONCERN        MIN     MAX     DETECTION     CONCENTRATION    STATISTICAL MEASURE
- ------------------------   -------------------------     -----   -----   ------------   -------------    -------------------
                                                                                       
Mammal ingestion (OU 1)       total PCBs ((mu)g/day)       na      na          na             348                mean

                                                                                              544                 RME

                              total PCBs ((mu)g/kg-
                                   BW/day)                 na      na          na             435                mean

                                                                                              680                 RME

Mammal ingestion (OU 2)       total PCBs ((mu)g/day)       na      na          na             422                mean

                                                                                              613                 RME
                              total PCBs ((mu)g/kg-
                                   BW/day)                 na      na          na             527                mean

                                                                                              766                 RME


na  = not applicable
RME = reasonable maximum exposure
BW  = body weight

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                 Fox River and Green Bay ROD for OU 1 and OU 2

PCB-SPECIFIC EXPOSURE POINT CONCENTRATIONS

Water

Filtered and particulate concentrations of PCBs were detected in all River
reaches and Green Bay zones and these concentrations were summed to estimated
total water concentrations of total PCBs. Estimated mean, 95 percent UCL, and
maximum total PCB concentrations in water are presented on Figure 6-6 of the
BLRA. Estimated mean total PCB concentrations were greatest in Green Bay Zone 1
(60.9 ((mu)g/L) and represented an increase of 2.2 times over the estimated mean
total PCB concentrations in Little Lake Butte des Morts (27.6 ((mu)g/L).

Sediment

Total PCBs were detected frequently in all River reaches and Green Bay zones.
Measured concentrations are reported in three different ways: non-interpolated,
interpolated (I(0)), and interpolated (I(d)) for all of the River reaches, but,
as discussed in Section 6.4.1 of the BLRA, I(0) concentrations are not presented
for zones 2, 3A, 3B, or 4 of Green Bay. In contrast to metals, PCB
concentrations generally decreased moving down the River and into the Bay. The
mean total PCB concentration ranged from 82.9 ((mu)g/kg (Green Bay Zone 4) to
10,724 ((mu)g/kg (Little Lake Butte des Morts). Mean, 95 percent UCL, and
maximum concentrations of PCBs are presented on Figure 6-8 of the BLRA.

Fish

Total PCBs were detected frequently in all River reaches and Green Bay zones.
The range of detection frequency was 85 to 100 percent. The mean total PCB
concentration ranged from 79.8 ((mu)g/kg (yellow perch from Green Bay Zone 4) to
6,637 ((mu)g/kg (carp from Green Bay zones 1 and 2): Mean, 95 percent UCL, and
maximum total PCB concentrations in yellow perch, carp, and walleye are
presented on Figure 6-11 of the BLRA. Mean, 95 percent UCL, and maximum total
PCB concentrations in forage fish species (gizzard shad, alewife, shiner
species, and rainbow smelt) are presented on Figure 6-12 of the BLRA.

Birds

Where they were analyzed, total PCBs were detected at a frequency of 100
percent, except for Green Bay Zone 3B where they were detected at a frequency of
95 percent. The mean total PCB concentration ranged from 2,135 ((mu)g/kg (whole
tree swallow from Little Lake Butte des Morts) to 11,026 ((mu)g/kg (whole
double-crested cormorants from Green Bay Zone 2). Measured total PCB
concentrations in birds are presented on Figure 6-15 of the BLRA. As indicated
by this figure, the area where the most bird species were sampled was Green Bay
Zone 2. This area also contained the highest concentrations of total PCBs, found
in double-crested cormorants.

Mammals

LLBdM: The mean estimated exposure concentration for total PCBs (N), total PCBs
(I(0)), and total PCBs (I(d)) were 435, 397, and 400 ((mu)g/kg-BW/day,
respectively. Appleton-LR: The mean estimated exposure concentration for total
PCBs (N), total PCBs (I(0)), and total PCBs (I(d)) were 527, 494, and 501
((mu)g/kg-BW/day, respectively.

Summary of Field Studies

Within the Lower Fox River and Green Bay system, there have been numerous field
studies on a variety of different species. Many of the species studied were also
evaluated in the BLRA as receptor species that represented the assessment
endpoints in the BLRA. While not specifically included in the risk
characterization, the studies are presented in BLRA Section 6.5.4 to provide the
risk managers with an integrated tool for decision-making.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

EFFECTS ASSESSMENT

Toxic effects of all COPCs were evaluated in the BLERA. Section 6.3 of the BLRA
provides details of the effects of all the COPCs on the assessment endpoints.
The rest of the discussion below focuses on effects of PCBs only.

PCBs have been shown to cause lethal and sub-lethal reproductive, developmental,
immunological and biochemical effects. The risk assessment limited its focus to
adverse impacts on survival, growth and reproduction. The ecological effects
assessment includes literature reviews, field studies and toxicity tests that
correlate concentrations of PCBs to effects on ecological receptors. Toxic
equivalency factors, based on the toxicity of dioxin, have been developed for
the dioxin-like PCB congeners. The effects of PCBs on Great Lakes fish and
wildlife have been extensively documented. PCB-induced reproductive impairment
has been demonstrated for several fish species (Mac, 1988; Ankley et al., 1991;
Walker and Peterson, 1991; Walker et al., 1991a, 1991b; Williams and Giesy,
1992), a number of insectivorous and piscivorous birds (Kubiak et al., 1989;
Gilbertson et al., 1991; Tillitt et al., 1992) and mink (Aulerich et al., 1973,
Aulerich and Ringer, 1977; Bleavins et al., 1980; Wren, 1991; Giesy et al.,
1994c; Heaton et al., 1995a, 1995b; Tillitt et al., 1996).

DERIVATION OF TRVs

In order to derive toxicity reference values (TRVs), a comprehensive literature
search was performed for all COPCs. A variety of databases were searched for
literature references containing toxicological information. Some of these
literature sources included Biological Abstracts, Applied Ecology Abstracts,
Chemical Abstract Services, Medline, Toxline, BIOSIS, ENVIROLINE, Current
Contents, Integrated Risk Information System (IRIS), the Aquatic Information
Retrieval Database (AQUIRE) maintained by the EPA, and the Environmental Residue
Effects Database (ERED) maintained by the EPA and U.S. Army Corps of Engineers.
The TRVs selected for this assessment were discussed with and agreed upon by
BTAG members. Importantly, the consensus on the TRVs are for site-specific use
only and are not intended to be used at other sites (Table 6-5 of the BLRA).

TRVs were used to estimate the potential for ecological risk at the Site. The
selected TRVs were either Lowest Observed Adverse Effects Levels (LOAELs) and/or
No Observed Adverse Effects Levels (NOAELs) from laboratory and/or field based
studies reported in the scientific literature. LOAELs are the lowest values at
which adverse effects have been observed, and NOAELs are the highest values at
which adverse effects were not observed.

The PCB and dioxin-like PCB congener TRVs for fish, birds and mammals are based
on effects on survival, growth, and reproduction of fish and wildlife species
in the Fox River. Reproductive effects (e.g., egg maturation, egg hatchability
and survival of juveniles) were generally the most sensitive endpoints for
animals exposed to PCBs.

RISK CHARACTERIZATION

Hazard Quotient Calculations

Risk characterization for each assessment endpoint was based upon the calculated
HQs and, as available, population or field study data. Hazard quotients
calculated based on literature values, provide one line of evidence for
characterizing ecological effects. Field studies were evaluated, where
appropriate, as a supplement to the risk evaluation, particularly when the
contamination has a historical basis (EPA, 1994b, 1997a).

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                 Fox River and Green Bay ROD for OU 1 and OU 2

While HQs and other lines of evidence (i.e., field studies and other data types)
cannot be quantitatively combined, each can inform risk managers on the presence
of risk and how these risks may be reduced. Therefore, this risk
characterization process did not result in the distillation of a single
conclusive statement regarding overall risk to each assessment endpoint.
Consideration of the magnitude of uncertainty, discussed in Section 6.6 of the
BLRA, is also a key component of the risk interpretation process.

For this risk assessment it was agreed by BTAG that degree of risk would be
determined based on three categories: "no" risk was concluded when both the
NOAEC and LOAEC HQs evaluated were less than 1.0, "potential" risk was concluded
when the NOAEC HQ exceeded 1.0 but the LOAEC HQ was less than 1.0, and risk
("yes") was concluded when both the NOAEC and LOAEC HQs evaluated were greater
than 1.0. When constituents were analyzed but not detected, it was concluded
that no risk existed.

OU 1 - LITTLE LAKE BUTTE DES MORTS SUMMARY. In summary, the results suggest that
only measured or estimated concentrations of total PCBs are at sufficient levels
to cause risk to benthic invertebrates, and piscivorous mammals. Potential risks
from total PCBs are indicated for water column invertebrates, benthic and
pelagic fish, and insectivorous, piscivorous, and carnivorous birds. Measured or
estimated concentrations of mercury are found to be at sufficient concentrations
to cause or potentially cause risk to water column and benthic invertebrates,
and piscivorous birds. Concentrations of 2,3,7,8-TCDD, DDD, and DDT are only
sufficient to be of risk to benthic invertebrates. Sediment concentrations of
elevated PCBs are widespread and persistent throughout the reach. Concentrations
of arsenic, dieldrin, and all o,p'- isomers of DDT and its metabolites are not
found to pose risk to any assessment endpoint.

OU 2 - APPLETON TO LITTLE RAPIDS SUMMARY. In summary, the results taken in total
suggest that measured or estimated concentrations of total PCBs are at
sufficient levels to cause risk to benthic invertebrates, carnivorous birds, and
piscivorous mammals. Potential risks are indicated for all other receptors
except insectivorous birds, for which there are no data. Measured or estimated
concentrations of mercury were found to be at sufficient concentrations to cause
risk to benthic invertebrates, piscivorous birds, and carnivorous birds.
Concentrations of lead are only of risk to benthic invertebrates. Concentrations
of all chlorinated pesticides are not found to pose risk to any assessment
endpoint. Surface sediment concentrations of elevated PCBs indicate reach-wide
effects, but are likely limited to specific deposits.

Major Findings

A summary of the risk to each assessment endpoint in each reach and zone is
presented in Table 6-134 of the BLRA. OU 1 and OU 2 are discussed below and
summarized in Table 14. Risk assessment summaries will be provided for OU 3, OU
4 and OU 5 in subsequent RODs.

The principle findings of the ecological risk assessment are:

     -    Total PCBs cause, or potentially cause risk to all identified
          receptors. The exception is insectivorous birds where the weight of
          evidence suggests that these receptors are not at risk from PCB
          concentrations. Not all receptors at risk or potentially at risk from
          PCBs are at risk in all River reaches or Bay zones.

     -    Mercury poses a risk in all River reaches and zones, but not to all
          receptors. Mercury was not identified as a risk for benthic fish,
          insectivorous birds, or piscivorous mammals.

     -    DDT or its metabolites poses a risk to benthic invertebrates in OU 1
          (i.e., Little Lake Butte des Morts Reach).

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                  Fox River and Green Bay ROD for OU 1 and OU 2

TABLE 14        ECOLOGICAL RISK SUMMARY





         WATER COLUMN       BENTHIC       BENTHIC   PELAGIC   INSECTIVOROUS   PISCIVOROUS   CARNIVOROUS   PISCIVOROUS
 OU     INVERTEBRATES    INVERTEBRATES     FISH      FISH         BIRD           BIRD          BIRD          MAMMAL
- ----    -------------    -------------    -------   -------   -------------   -----------   -----------   ------------
                                                                                  
   1    -  Mercury      -  PCBs, lead,    ++ PCBs   ++ PCBs    # PCBs         ++ mercury,    ## PCBs      - PCBs
        ++  PCBs            mercury,                                               PCBs
                            DDD,DDT,
                           2,3,7,8TCD
                               D
   2    ++  PCBs        -    lead,        ++ PCBs   ++ PCBs       NA          ++ mercury,    ##  PCBs      - PCBs
                            mercury,                                               PCBs       mercury
                             PCBs


NOTES:

     NA = no data available

 RISK CONCLUSIONS BASED ON HQS

           = No risk
     -     = Risk
     ++    = Potential Risk

RISK CONCLUSIONS BASED ON WEIGHT OF EVIDENCE

     #     =   Site specific receptor data suggest that there is no risk

     ##    =   Because of the Federal listing of the bald eagle as threatened,
               it is concluded that potential risk is actual risk

Uncertainty

The goal of this uncertainty analysis is to both qualitatively, and
quantitatively to the degree possible, define the degree of confidence that
exists with the estimations of effects from exposure to hazardous chemicals in
toxic amounts. Bounding the certainty of risk estimates is a developing science.
EPA's Superfund Ecological Risk Assessment Guidance (EPA, 1997a) and the
Guidelines for Ecological Risk Assessment (EPA, 1998b) provide general
instructions on what should be addressed in an uncertainty analysis.

Conceptual Site Model

Qualitatively, there is a high degree of certainty that factors (such as fate
and distribution, downstream transport, biological uptake, effects on field
populations, habitat and life histories of important fish, birds, and mammals
within the River and Bay) are well understood and adequately characterized in
the conceptual site model. There remains, however, some uncertainty as to
whether the receptors identified within the conceptual site model adequately
represent the ecosystem and other species potentially at risk within the Lower
Fox River. The selection of the important receptor species was done in
consultation with biologists both within the WDNR and the USFWS. In addition,
input on the receptor species was given by biologists and resource managers
within EPA, NOAA, and the Oneida and Menominee Nations through the USEPA
Biological and Technical Assistance Group (BTAG) process. However, despite this,
there remains a class of organisms and a threatened species that was not
addressed in this BLRA. Reptile and amphibian species were not evaluated for
risk because there are no data within the FRDB to evaluate this receptor group,
and there are no uptake models to estimate risk for frogs or other amphibians.
For the fish species sturgeon, listed as a threatened species in Michigan, but
not in Wisconsin, there are also too few data points within the FRDB to evaluate
potential risks.

Data

The FRDB represents numerous separate data collection efforts with over 500,000
discrete data records of air, water, sediments, and tissue from throughout the
Lower Fox River and Green Bay. A rigorous evaluation of the quality of the data
was undertaken, and only data for which at least partial QA packages could be
reviewed were placed into the FRDB. Of the studies between 1971 and 1991, only
partial packages could be reviewed, and so those data were used

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                 Fox River and Green Bay ROD for OU l and OU 2

as supporting evidence within the BLRA. There have been several studies
completed on the Fox River in the 1990s. All studies conducted after 1992 have
fully validated data packages. Given the temporal and spatial density of the
data within the Lower Fox River, there are good reasons to assume that the
overall quality of the data is high, and thus the related degree of data
uncertainty is low. There were no significant biases or gaps observed within the
sediment, fish, or bird sample data.

Another data gap within the BLRA is that there are limited measurements of
metals and the organochlorine pesticides in the surface water. However, this
impacts only the ability to assess risks to pelagic invertebrate communities,
and the remaining assessment endpoints could be addressed through the other
media (e.g., bird tissues) for which data were judged adequate. Finally, there
are relatively too few data on all PCB congeners for all media within the Lower
Fox River and Green Bay to make conclusive assessments or predictions of risk.
While the FRDB contains numerous congener-specific data points, until relatively
recently all of the dioxin-like congeners have not been adequately assessed. For
example, while PCB congener 169 has been detected in the fish and birds of the
River and Bay, there have been too few measurements taken in sediments or water.

Temporal

A time trends analysis was undertaken to specifically address the question of
losses or gains in PCB concentrations over time in sediments and fish. For
sediments, a large fraction of analyses provided little useful information for
projecting future trends because of the lack of statistical significance and
the wide confidence limits observed. This is especially true for sediments below
the top 4 inches; changes in the sediment PCB concentrations cannot be
distinguished from zero-or no change. Generally over time, however, the surface
sediment concentrations (i.e., top 10 cm) of PCBs have been steadily decreasing,
but the rate of change in surface sediments is both reach- and deposit-
specific. The change averages an annual decrease of 15 percent, but ranges from
an increase of 17 percent to a decrease of 43 percent. Given these conditions,
the sediment data used may over- or under-evaluate the risks dependent upon how
much older data were used in the point estimates or interpolated bed maps.

Like sediment PCB concentrations, fish tissue PCB concentrations showed a
significant but slow rate of change throughout the Lower Fox River and Green
Bay. In all of the reaches of the River and in Zone 2, there were steep declines
in fish tissue PCB concentrations from the 1970s, but with significant
breakpoints in declines beginning around 1980. After the breakpoint, depending
upon the fish species, the additional apparent declines were either not
significantly different from zero, or were relatively low (i.e., 5 to 7 percent
annually). In addition, there are some increases in fish tissue PCB
concentrations. Walleye in Little Lake Butte des Morts show a non-significant
increase of 22 percent per year since 1987. Likewise, gizzard shad in Zone 2
show a non-significant increase of 6 percent per year into 1999. These data,
taken collectively, suggest that since the breakpoint for tissue declines
occurred in the early 1980s and the changes in fish tissue concentrations were
no greater than 4 to 7 percent annually, aggregating fish tissue from 1989 does
not likely result in any significant biasing of the risk estimations. At worst,
the tissue point estimates might overestimate risks by 50 percent (i.e., average
of 5 percent per year over 10 years), but given that at least some fish tissue
concentrations increased, it is reasonable to suggest that some risks were
underestimated by at least an equivalent amount.

Spatial Variability

Uncertainty in the spatial variability refers principally to where sediment
samples were collected from within the Lower Fox River and Green Bay. Within the
River, most sampling efforts are concentrated in areas where there were thick
sediment deposits (e.g. A, POG, N, GG/HH, and

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                  Fox River and Green Bay ROD for OU 1 and OU 2

the SMUs below De Pere). There were no systematic sampling efforts to define PCB
concentrations throughout the River. Within the Bay, systematic grid sampling
was employed, but the spatial uncertainty is higher because of the large
distance between sampling points. Sediment concentrations used in the risk
assessment were based on both non-interpolated and interpolated concentration
estimation methods so that the differences in risk estimates could be compared.
The calculations demonstrate that in general, using the interpolated sediment
yields a lower estimation of sediment-based risk than use of the
non-interpolated data.

Toxic Exposure

Point estimates of exposure concentrations were compared in the BLRA point
estimates of toxicity in the literature to yield the hazard quotients. While the
rationale used to select the most representative value from the literature was
presented in Section 6.3, there remain uncertainties associated with effects
concentrations above or below the selected TRV, selection of TRVs from one
species and applying to another, interpretation between NOAECs and LOAECs based
on application of uncertainty factors, or application of different sets of
toxicity equivalent factors from the literature. For PCBs, risk estimation
uncertainty was reduced by determining risk potential on a total PCB basis and a
PCB congener basis for receptors where both exposure and effects data were
available (i.e., fish and birds).

Alternative Exposure Points

The principle exposure point concentration used for risk evaluation in the BLRA
was the RME (i.e., the lower of either the 95 percent UCL or the maximum
concentration) for all media and receptors evaluated. In order to determine the
degree to which risk may have been under or overestimated, 90th percentile
concentrations were estimated and evaluated for risk for two representative
species; walleye and double crested cormorants.

For walleye, results of this comparison indicated that risk evaluation of the
90th percentile concentrations would result in only two changes to the risk
conclusions. Hazard quotients for the total PCB NOAEL for walleye in Green Bay
Zone 1 increase from 10 to 14 using the 90th percentile. The risk determination
for walleye from total PCBs would change from "potential risk" to "likely risk"
in Green Bay zones 1 and 2, and risk from mercury in Green Bay Zone 4 would
change from "no risk" to "potential risk". The net conclusions of the ecological
risk assessment for piscivorous fish would be negligibly affected by using the
90th percentile.

For double-crested cormorants, risk evaluation of the 90th percentile
concentrations would result in only one change to the risk conclusions. Risk to
double-crested cormorants from p,p'-DDE would change from "potential risk" to
"likely risk" in Green Bay Zone 3B. Because of the limited 90th percentile data
in fish appropriate as prey for double-crested cormorants, dietary
concentrations could not be modeled. However, use of the 90th percentile would
not appreciably affect the risk determinations for piscivorous birds.

Population Data

As noted previously, while population level endpoints can be an appropriate tool
to assess risk, the population data discussed in the BLRA were not collected
specifically for risk assessment. There is some uncertainty introduced given the
potential for other confounding environmental factors that may affect the
absence or abundance of receptors within the Lower Fox River and Green Bay.
These can include such things as immigration, emigration, food availability,
habitat suitability and availability, species competition, predation, and
weather. For example, while the risk assessment concludes that PCBs are at
sufficient concentrations to affect mink reproduction within the River and Bay,
Section 2 documented that there is limited habitat for mink, especially along
the River. While contaminant conditions exist that potentially would jeopardize
mink health along the River corridor, the absence of mink due to absence of
habitat must be considered.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Likewise, the apparent increase in populations of walleye and cormorants suggest
little or no current risks to these species. Increases in walleye populations
have occurred since the 1980s, and are directly linked to improvement in water
quality and habitat in the Lower Fox River, and not necessarily to decreases in
contaminants. Evidence that some risks persist is evidenced in the apparent
presence of pre-cancerous lesions. Cormorant population increases may be related
to decreases in contaminant concentrations, but are also likely tied to
increases in available prey (fish). Like walleye, sublethal conditions appear to
persist within the cormorant population. Given a shift in food or habitat
conditions, those risks could be potentially of greater concern.

Quantitative Analysis

Only the data for benthic infauna for the Lower Fox River were thought to be
amenable to a quantitative analysis. This analysis involved using of a range of
toxicity values as listed in the literature rather than the single point
estimate for toxicity that was used in the main body of the BLRA. This
re-analysis was done for each River reach and Green Bay zone.

- -    LLBdM: There is a high probability (70 to 80 percent) that PCBs are widely
     distributed throughout the reach at sufficiently high concentrations to
     moderately effect benthic infaunal populations, and at least a 40 to 50
     percent probability of encountering PCB concentrations associated with
     extreme effects.

- -    Appleton-LR: For this reach, the probability of infaunal organisms
     encountering levels of PCBs associated with toxic effects is low (5 to 10
     percent).

Concluding Statement

The evaluation of uncertainties did not change the general conclusions drawn
from the BLRA, which are that:

     -    Fish consumption by other fish, birds and mammals is the exposure
          pathway that represents the greatest level of risk for receptors
          (other than direct risk to benthic invertebrates).

The primary COC is PCBs, and other COCs carried forward for remedial evaluation
and long-term monitoring are mercury and DDE.

8.4 DERIVATION OF SQTS

Sediment Quality Thresholds (SQTs) are sediment concentrations that have been
linked to a specific magnitude of risk. SQTs were developed for each pathway and
receptor identified as important in the BLRA by the response agencies of the
Lower Fox River and Green Bay (e.g., sport fishing consumption, bald eagles).
The SQTs themselves are not cleanup criteria, but were used to evaluate levels
of PCBs in the Feasibility Study. The final selection of the remedial action
levels is a policy decision left to the response agencies.

SQTs were estimated for PCBs with the assumption that a remedy that reduces PCB
exposure would also address the other co-located COCs. Risk-based concentrations
in fish for human and ecological receptors were determined based on:

     -    Human health cancer risk levels of 10(-4), 10(-5), and 10(-6), and a
          noncancer hazard index of 1.0 for risk in recreational anglers and
          high-intake consumers

     -    The NOAECs and LOAECs for species of benthic invertebrates, fish,
          birds, and riverine mammals found in the River and Bay.

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8.5 BASIS FOR ACTION

The excess cancer risk and non-cancer health hazards associated with human
ingestion of fish, as well as the ecological risks associated with ingestion of
fish by birds, fish and mammals, are above acceptable levels under baseline
conditions. The response action selected in this ROD is necessary to protect the
public health or welfare and the environment from actual releases of hazardous
substances into the environment.

9. REMEDIAL ACTION OBJECTIVES

Consistent with the NCP and RI/FS Guidance, WDNR and EPA developed remedial
action objectives (RAOs) for the protection of human health and the environment.
The RAOs specify the contaminants and media of concern, exposure routes and
potential receptors, and an acceptable concentration limit or range for each
contaminant for each of the various media, exposure routes and receptors. RAOs
were then used to establish specific Remedial Action Levels (RAL) for the Site.
Action Levels were established after review of both the preliminary
chemical-specific ARARs and risk-based concentrations and serve to focus the
development of alternatives or remedial technologies that can achieve the
remedial goals. Although this ROD only addresses remediation of OUs 1 and 2, the
RAOs were developed for the entire Lower Fox River and Green Bay and are
therefore discussed here. Additional activities as they relate to these RAOs for
OUs 3 through 5 will be discussed in a subsequent ROD or RODs.

The FS brought together the four major components used to evaluate risk,
remedial goals, and alternative technologies in its analysis of remedial
options. These components are briefly described below, then discussed in more
detail on the following pages.

- -    REMEDIAL ACTION OBJECTIVES. RAOs are site-specific goals for the protection
     of human and ecological health, Five RAOs were developed; all five apply to
     the River, while RAOs 1, 2, 3, and 5 apply to Green Bay.

- -    REMEDIAL ACTION LEVELS. A range of action levels were considered for the
     River and Bay; action levels were chosen based in part on Sediment Quality
     Thresholds (SQTs), which link risk in humans, birds, mammals, and fish with
     safe threshold concentrations of PCBs in sediment. The SQTs were developed
     in the human health and ecological risk assessments.

- -    OPERABLE UNITS. The four reaches (OU 1 through OU 4) and Green Bay (OU 5)
     were identified based on geographical similarities for the purpose of
     analyzing remedial actions.

- -    REMEDIAL ALTERNATIVES. Following a screening process detailed in the FS,
     six remedial alternatives (A-F) were retained for the Lower Fox River and
     seven (A-G) were retained for Green Bay.

For each River reach, six possible remedial alternatives were applied to each of
five possible action levels and evaluated against each of five remedial action
objectives. For each Green Bay zone, seven possible remedial alternatives were
applied to each of three possible action levels and evaluated against each of
four remedial action objectives. The steps in this process are described in more
detail below. Cost estimates were also prepared for each combination of River
reach/Bay zone, remedial alternative, and action level.

9.1 REMEDIAL ACTION OBJECTIVES

RAOs address the protection of human health and protection of the environment.
The following five RAOs have been established for the Fox River and Green Bay
Site.

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- -    RAO 1. ACHIEVE, TO THE EXTENT PRACTICABLE SURFACE WATER QUALITY CRITERIA
     THROUGHOUT THE LOWER FOX RIVER AND GREEN BAY. This RAO is intended to
     reduce PCB concentration in surface water as quickly as possible. The
     current water quality criteria for PCBs are 0.003 ng/L for the protection
     of human health and 0.012 ng/L for the protection of wild and domestic
     animals. Water quality criteria incorporate all routes of exposure assuming
     the maximum amount is ingested daily over a person's lifetime.

- -    RAO 2. PROTECT HUMANS WHO CONSUME FISH FROM EXPOSURE TO COCS THAT EXCEED
     PROTECTIVE LEVELS. This RAO is intended to protect human health by
     targeting removal of fish consumption advisories as quickly as possible.
     DNR and EPA defined the expectation for the protection of human health as
     the likelihood for recreational anglers and high-intake fish consumers to
     consume fish within 10 years and 30 years, respectively, at an acceptable
     level of risk or without restrictions following completion of a remedy.

- -    RAO 3. PROTECT ECOLOGICAL RECEPTORS FROM EXPOSURE TO COCS ABOVE PROTECTIVE
     LEVELS. RAO3 is intended to protect ecological receptors like
     invertebrates, birds, fish, and mammals. DNR and EPA defined the ecological
     expectation as the likelihood of achieving safe ecological thresholds for
     fish-eating birds and mammals within 30 years following remedy completion.
     Although the FS did not identify a specific time frame for evaluating
     ecological protection, the 30-year figure was used as a measurement tool.

- -    RAO 4. REDUCE TRANSPORT OF PCBS FROM THE LOWER FOX RIVER INTO GREEN BAY AND
     LAKE MICHIGAN. The objective of this RAO is to reduce the transport of PCBs
     from the River into Green Bay and Lake Michigan as quickly as possible. DNR
     and EPA defined the transport expectation as a reduction in loading to
     Green Bay and Lake Michigan to levels comparable to the loading from other
     Lake Michigan tributaries. This RAO applies only to River reaches.

- -    RAO 5. MINIMIZE THE DOWNSTREAM MOVEMENT OF PCBS DURING IMPLEMENTATION OF
     THE REMEDY. A remedy is to be completed within 10 years.

No numeric cleanup standards have been promulgated by the federal government or
the State of Wisconsin for PCB-contaminated sediment. Therefore, site-specific
RAOs to protect human and ecological health were developed based on available
information and standards, such as applicable or relevant and appropriate
requirements (ARARs), to be considered non-promulgated guidelines (TBC), and
risk-based levels established using the human and ecological RAs. The following
RAOs were established for the Site:

Remedial Action Levels - PCB remedial action levels were developed based on the
Sediment Quality Thresholds (SQTs) derived in the RA for the Lower Fox River and
Green Bay. SQTs are estimated concentrations that link risk in humans, birds,
mammals, and fish with safe threshold concentrations of PCBs in sediment. The
PCB RALs considered are 0.125, 0.25, 0.5, 1.0, and 5.0 parts per million (ppm)
for the Lower Fox River and 0.5, 1.0. and 5.0 ppm for Green Bay.

A range of RALs was considered in order to balance the feasibility as determined
by implementability, effectiveness, duration, and cost of removing
PCB-contaminated sediment down to each action level against the residual risk to
human and ecological receptors after remediation. For each River reach or Bay
zone, all of the sediment with PCB concentrations greater than the selected RAL
is to be remediated. One of the outcomes of applying a specific RAL to a suite
of active remedial alternatives is the recognition that Monitored Natural
Recovery (MNR) may also be a component of the remedy. This was considered
because when sediment is removed to a specific action level, some sediment with
PCB concentrations above the SQTs will likely be left in place. MNR can also be
a stand-alone remedy if it is determined to achieve sufficient protection within
a reasonable time frame. As a result, each action level and each remedial
alternative has an MNR component.

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9.2 APPLICABLE OR RELEVANT AND APPROPRIATE REQUIREMENTS (ARARS)

Section 121 (d) of CERCLA requires that Superfund remedial actions meet ARARs.
In addition to applicable requirements, the ARARs analysis that was conducted
considered criteria, and relevant and appropriate standards that were useful in
evaluating remedial alternatives. These non-promulgated guidelines and criteria
are known as To Be Considered (TBCs). In contrast to ARARs, which are
promulgated cleanup standards, standards of control, and other substantive
environmental protection requirements, criteria or limitations; TBCs are
guidelines and other criteria that have not been promulgated.

Location-specific ARARs establish restrictions on the management of waste or
hazardous substances in specific protected locations, such as wetlands,
floodplains, historic places, and sensitive habitats.

Action-specific ARARs are technology-based or activity-based requirements or
limitations on actions taken with respect to remediation. These requirements are
triggered by particular remedial activities that are selected to accomplish the
remedial objectives. The action-specific ARARs indicate the way in which the
selected alternative must be implemented as well as specify levels for
discharge. See table 4-2 of the FS. Chemical specific ARARs are health- or
risk-based numerical values or methodologies that establish concentration or
discharge limits, or a basis for calculating such limits, for particular
substances, pollutants or contaminants.

In addition to the water quality criteria, substantive requirements of National
Pollutant Discharge Elimination System (NPDES), as implemented under Wisconsin
administrative rules, would also be applicable to wastewaters that are planned
to be discharged to the Fox River, which will require treatment. These
wastewaters include liquids generated during construction activities such as
dewatering liquids, excavation area liquids, and liquids generated during
construction of any on-site consolidation area. Discharges to Publicly Owned
Treatment Works (POTWs) may be pursued as an alternative discharge location.
However, such discharges must also comply with limitations to ensure acceptable
discharge from the POTW after treatment. The specific discharge levels will be
determined during the design stage in coordination with WDNR.

Sediments removed from the Fox River may contain PCBs equal to or greater than
50 ppm. PCS sediment with concentrations less than 50 ppm will be managed as a
solid waste in accordance with statutes and rules governing the disposal of
solid waste in Wisconsin. PCB sediment with concentrations equal to or greater
than 50 ppm will be managed in accordance with the Toxic Substances Control Act
(TSCA) of 1976 (Appendix E of the Feasibility Study). The determination that
material is subject to regulation under TSCA will be made post-removal but
pre-disposal. Presently TSCA compliance would be achieved through the extension
of the January 24, 1995 approval issued by EPA to WDNR pursuant 40 CFR
761.60(a)(5) under the authority of TSCA. This TSCA approval, granted by EPA
Region 5, states that the disposal of PCB-contaminated sediment with
concentrations equal to or greater than 50 ppm into an NR 500, WAC landfill that
is also in compliance with the conditions of the TSCA approval, provides
adequate protection to human health and the environment as required by 40 CFR
761.60(a)(5); and, will provide the same level of protection required by EPA,
Region 5 and therefore is no less restrictive than TSCA. However, should other
administrative rules pertaining to disposal under TSCA be in effect at the time
that TSCA compliance decisions are made for the Fox River sediment, then
compliance with those rules will be achieved.

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10. DESCRIPTION OF ALTERNATIVES

Following development of the RAOs, WDNR conducted a rigorous screening and
evaluation process in accordance with CERCLA and the NCP. First, potentially
applicable remedial technologies or process options for addressing
PCB-contaminated sediments in the Fox River and Green Bay were identified and
screened (evaluated) based on effectiveness and technical implementability at
the Site. Retained technologies were then evaluated in a second screening based
on effectiveness, implementability and cost. After the second screening, the
following four technologies were retained for consideration in the analysis of
remedial alternatives: 1) no action, evaluation of which is required by the
NCP; 2) Monitored Natural Recovery (MNR); 3) capping to the maximum extent
practicable with dredging in areas where capping was not appropriate; and 4)
removal/dredging (i.e., environmental dredging) followed by MNR.

Process options for treatment and disposal that were retained include
dehalogenation, physical separation and solidification, vitrification and
high-pressure oxidation.

After the technology screening, WDNR and EPA developed and screened remedial
alternatives. A specified "cleanup value" or "action level" for PCBs in sediment
was not developed for purposes of evaluating remedial alternatives. Because
consumption of fish is the major pathway of concern, WDNR and EPA developed
remedial goals based on PCB concentrations in fish (see Section 9). Therefore,
remedial alternatives were evaluated based on their ability to reduce PCB
concentrations in fish. PCB concentrations in fish are controlled by PCB
concentrations in both the sediment and the water column and, therefore,
sediment cleanup is considered the means to the goal of protecting human health
and the environment.

For the capping alternative, locations where it was feasible were considered in
determining where this technology could be applied based on criteria identified
in section 6.4.4 of the Feasibility Study. For excavation alternatives, WDNR and
EPA evaluated the following action levels for the Fox River: PCB concentrations
of 0.125 ppm, 0.25 ppm, 0.5 ppm, 1.0 ppm, 5.0 ppm, and no action. These results
were then compared to the RAOs, particularly RAOs 2 and 3, which deal with
protection of human health and the environment. On the basis of that analysis
and to achieve the risk reduction objectives using a consistent action level,
1.0 ppm was agreed upon as the appropriate remedial action level. In making this
determination, the agencies relied on projections of the time necessary to
achieve the risk reduction, the post-remediation surface-weighted average
concentration (SWAC), and cost.

Table 15 shows that for the selected Action Level of 1.0 ppm, time to acceptable
fish tissue concentrations for walleye, would be achieved within one year in
OU 1. This compares to more than 50 years under a No Action alternative also
shown in the table.

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TABLE 15 YEARS TO HUMAN HEALTH AND ECOLOGICAL THRESHOLDS FOR LOWER FOX RIVER AT
1 PPM PCB ACTION LEVEL AND NO ACTION IN OU 1



                                                                                 ESTIMATED YEARS        ESTIMATED
                                                                              (FOR 1.0 PPM ACTION     YEARS (FOR NO
FISH                 RISK LEVEL                    RECEPTOR                         LEVEL)               ACTION)
- ----------  ----------------------------       ---------------------------    -------------------     -------------
                                                                                          
Walleye(1)  RME(2) hazard index of 1.0         Recreational Angler                   <1                      51
Walleye     RME hazard index of 1.0            High-intake fish consumer              4                      65
Walleye     RME 10(-5) cancer risk level       Recreational Angler                    9                      84
Walleye     RME 10(-5) cancer risk level       High-intake fish consumer             14                     100
Carp        NOAEC(3)                           Carnivorous bird deformity            14                     100
Carp        NOAEC                              Piscivorous mammal                    29                     100+


1.    Shaded row represents removal of fish advisories.

2.    RME indicates the reasonable maximum exposure.

3.    NOAEC is the no observed adverse effect concentration.

It is estimated that it would take 40 years to remove fish advisories for OU 2,
under the selected remedy, Monitored Natural Recovery. However, the removal of
Deposit N (completed in a dredging demonstration project during 1998 and 1999)
and Deposit DD (under consideration for remediation in the ROD for OU s 3-5) is
not considered in the modeling upon which this estimate was made.

The SWAC is a measure of the surface (upper 10 cm) concentration against a given
area. In terms of the Lower Fox River, this would be the average residual
contaminant concentration in the upper 10 cm divided by the area of the Operable
Unit. The SWAC calculation includes interdeposit areas. The estimated
post-removal SWAC value for OU 1 at an action level of 1 ppm is 185 (mu)/kg.

The SWAC value provides a number that can be compared to the SQTs developed in
the RA. SQTs are estimated concentrations that link risk in humans, birds,
mammals, and fish with safe threshold concentrations of PCBs in sediment. Human
health and ecological SQTs for carp and walleye are listed in Tables 16 and 17,
respectively.

TABLE 16 HUMAN HEALTH SEDIMENT QUALITY THRESHOLD (SQT) VALUES



                                 RECREATIONAL ANGLER       HIGH-INTAKE FISH CONSUMER
                                 -------------------       -------------------------
                                  RME(1)      CTE(2)          RME              CTE
                                 (mu)g/kg   (mu)g/kg       (mu)g/kg         (mu)g/kg
                                 --------   --------       --------         --------
                                                                
Cancer Risk at 10(-5)
  Carp                              16         180            11               57
  Walleye                           21         143            14               75
NON-CANCER RISK (HI =1)
  Carp                              44         180            28               90
  Walleye                           58         238            37              119


1.    RME indicates the reasonable maximum exposure;

2.    CTE is the central tendency exposure.

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TABLE 17 ECOLOGICAL SEDIMENT QUALITY THRESHOLD (SQT) VALUES



                                                   NOAEC((mu)g/kg)
                                                   ---------------
                                                
Carp - fry growth and mortality                           363
Walleye - fry growth and mortality                        176
Common Tern - hatching success                          3,073
Common Tern - deformity                                   523
Cormorant - hatching success                              997
Cormorant - deformity                                     170
Bald Eagle - hatching success                             339
Bald Eagle - deformity                                     58
Mink - reproduction and kit survival                       24


The volume of sediment and PCB mass that would be removed, as well as the cost
to implement the remedy at the 1.0 ppm action level, were also considered. For
OU 1 an estimated 784,200 cubic yards and 1,715 kilograms of PCBs would be
removed. The cost for remediation of OU 1 is estimated to be $66.2 million.

WDNR and EPA selected six remedial alternatives for detailed analysis: No
Action, Monitored Natural Recovery and Institutional Controls, Dredge and
Off-Site Disposal, Dredge to a Confined Disposal Facility (CDF), Dredge and
Vitrification, and In-situ Capping. These alternatives cover the range of viable
approaches to remedial action and include a no-action alternative, as required
by the NCP.

10.1 DESCRIPTION OF ALTERNATIVE COMPONENTS

Remedial Alternatives - WDNR and U.S. EPA evaluated several alternatives to
address contamination in the Lower Fox River and Green Bay. Because the level of
contamination and size of the OUs vary, a specific proposed cleanup plan was
developed for each OU. The FS outlines the process used to develop and screen
appropriate technologies and alternatives for addressing PCB-contaminated
sediment and provides detailed descriptions of the remedial alternatives. The
suite of remedial alternatives is intended to represent the remedial
alternatives that are available, not to be inclusive of all possible approaches.
The proposed alternative for an Operable Unit may consist of any combination of
the alternatives described below. Other implementable and effective
alternatives could theoretically be used; however, a ROD amendment or
Explanation of Significant Difference (ESD) would be required before another
alternative could be substituted for the selected remedy.

ALTERNATIVE A: NO ACTION - A No Action alternative is included for all River
reaches and Bay zones. This alternative involves taking no action. The No Action
alternative is required by the National Contingency Plan, because it provides a
basis for comparison with the alternatives for active remediation.

ALTERNATIVE B: MONITORED NATURAL RECOVERY - Similar to Alternative A, the MNR
alternative relies on naturally occurring degradation, dispersion, and burial
processes to reduce the toxicity, mobility, and volume of contaminants. However,
the MNR option also includes a 40-year, long-term monitoring program for
measuring PCB and mercury levels in water, sediment, invertebrates, fish, and
birds to effectively determine achievement of and progress toward the RAOs.
Until the RAOs are achieved, institutional controls are necessary to prevent
exposure of human and biological receptors to contaminants. Land and water use
restrictions, fishing restrictions and access restrictions may require local or
state legislative action to prevent development or inappropriate usage of
contaminated areas of the River. Institutional controls

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include measures that restrict access to or uses of a site. They typically
consist of some combination of physical restraints (such as fences to limit
access), legal restrictions (such as local ordinances and restrictive covenants
that limit land development), and outreach activities (such as public education
programs and health advisories).

ALTERNATIVE C: DREDGE AND OFF-SITE DISPOSAL - Alternative C includes the removal
of sediment having PCB concentrations greater than the remedial action level
using a hydraulic or mechanical dredge, dewatering the sediment either passively
or mechanically, treating the water before discharging it back to the River, and
then disposing of the sediment off site, transporting it by truck. Sediment
disposal would be at a local landfill in compliance with the requirements of NR
500 Wisconsin Administrative Code (WAC), which regulates the disposal of waste
and the WDNR's TSCA approval issued by EPA. EPA issued this approval under the
authority of the federal TSCA. This approval allows for the disposal of
PCB-contaminated sediment with concentrations equal to or greater than 50 mg/kg
(ppm) in landfills that are licensed under the NR 500 rule series, WAC provided
that certain requirements are met.

ALTERNATIVE D: DREDGE TO A CONFINED DISPOSAL FACILITY (CDF) - Alternative D
includes the removal of sediment having PCB concentrations greater than the
remedial action level to an on-site CDF for long-term disposal. A CDF is an
engineered containment structure that provides both dewatering and a permanent
disposal location for contaminated sediment. A CDF can be located in the water
adjacent to the shore or at an upland location near the shore. Sediment with PCB
concentrations equal to or greater than 50 mg/kg would not be disposed of in a
CDF. Such sediments would be mechanically dredged for solidification and
disposal at a solid waste landfill conforming to requirements defined by the
state in the NR 500 rule series and WDNR's TSCA approval. Conceptual near-shore
CDF locations were identified in OU 1.

ALTERNATIVE E: DREDGE AND VITRIFICATION - This alternative is similar to
Alternative C except that all the dewatered sediment would be thermally treated
using a Vitrification process. Alternative E assumes that the residual material
would be available for possible beneficial reuse after vitrification.
Vitrification has been used as a representative thermal treatment process option
and was included as an alternative due to a recently completed pilot-scale
evaluation.

ALTERNATIVE F: IN-SITU (IN-PLACE) CAPPING - Alternative F includes primarily
sand capping to the maximum extent possible. The maximum extent of the capping
action was defined in each River reach on the basis of site specific conditions
such as water depth, average river current, river current under flood
conditions, wave energy, ice scour, and boat traffic. Using these criteria, it
was determined that capping alone is not a viable option to achieve the site
RAOs. Where capping is viable, a 20-inch sand cap overlaid by 12 inches of
graded armor stone was selected. Sediment that is not capped but still exceeds
the action level would be hydraulically dredged to an on-site CDF, similar to
Alternative D. In the FS, several cap designs were retained for possible
application; design factors that influence the final selection of an in-situ cap
include an evaluation of capping materials and cap thickness when applied in the
field. In general, sandy sediment is a suitable capping material, with the
additional option of armoring at locations with the potential for scouring and
erosion. Laboratory tests developed in the past indicate that a minimum in-situ
cap thickness of 12 inches (30 cm) is required to isolate contaminated sediment,
as indicated in FS Section 7.1, page 7-4 to 7-5. Full-scale design would require
consideration of currents during storm events, wave energy, and ice scour. A
minimum river depth of 6 feet would be required (FS Section 7.1.1, page 7-5) for
any location where a cap is proposed. Institutional controls and monitoring and
maintenance are also components of this alternative. Institutional controls may
be necessary to ensure the long-term integrity of the cap. Monitoring and
maintenance would be required in perpetuity to ensure the integrity of the cap
and the permanent isolation of the contaminants. Alternative F was determined
not feasible for OU 2.

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In evaluating the alternatives, WDNR and EPA considered the level of protection
that would satisfy the concern of the natural resource trustees that future
natural resource injuries be minimized. Many of the natural resource trustees
cooperated in the development of the proposed plan and agreed with the
combination of active remediation to a proposed cleanup level of 1.0 ppm PCBs
and the use of Monitored Natural Recovery in areas where active remediation will
not occur.

10.2 KEY/COMMON ELEMENTS

The following discussion applies primarily to the dredging or dredging and
capping alternatives.

PHASING - The first construction season of remedial dredging will include an
extensive monitoring program of all operations. Monitoring data will be compared
to performance standards developed during remedial design. Performance standards
are likely to address (but may not be limited to) resuspension rates during
dredging, production rates, and residuals after dredging, and community impacts
(e.g., noise, air quality, odor, navigation). Data gathered will enable WDNR to
determine if adjustments are needed to operations in the succeeding phase of
dredging, or if performance standards need to be reevaluated. WDNR will make the
data, as well as its final report evaluating the work with respect to the
performance standards, available to the public.

INSTITUTIONAL CONTROLS - Institutional controls (fish consumption advisories
and fishing restrictions) would be utilized with the Monitored Natural
Recovery, capping and removal alternatives. Institutional Controls are
considered to be limited action alternatives, and therefore are not included in
the No Action alternative.

SOURCE CONTROL - Point sources of contaminants to the Fox River have been
effectively addressed by water discharge permits for the Fox River. Thus, no
additional actions related to source control are necessary.

MONITORED NATURAL RECOVERY - Natural recovery refers to the beneficial effects
of natural processes that reduce surface sediment concentrations of PCBs. These
processes include biodegradation, diffusion, dilution, sorption, volatilization,
chemical and biochemical stabilization of contaminants, and burial by natural
deposition of cleaner sediments. The primary mechanisms for natural recovery in
the Fox River and Green Bay are desorption and dispersion in the water column
(i.e., as a dissolved constituent), burial, and sediment resuspension and
transport. Biodegradation is a negligible contributor to the lowering of PCB
concentrations and is not a factor for mercury. The relative importance of each
of these mechanisms in reducing PCB concentrations in the Fox River and Green
Bay is not easily estimated based on available data. Some or all of these
processes may be occurring at varying rates at any given time and location
within the River or Bay. During the design phase, a monitoring program will be
developed to measure the net effects of the natural attenuation processes after
remedial activities are completed until the remediation goals are reached.

SEDIMENT CONCENTRATIONS - Sediments that may significantly contribute to the PCB
levels in fish, both now and in the future, are considered principal threats.
The determination of the significance of the sediment contribution to fish is
based primarily on model projections, in conjunction with geochemical and
statistical analyses. The model projections indicate that the significance of
the sediment contribution to PCB fish tissue levels varies by Operable Unit;
therefore, the sediment levels that are considered principal threats will
correspondingly vary by Operable Unit.

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TREATMENT - Conventional treatment technologies, such as thermal desorption, are
technically feasible; however, the associated costs would he substantially
greater than off-site landfill disposal. However, vitrification of sediments is
feasible and as such is considered a possible alternative to the current plans
for conventional disposal in an approved, licensed landfill. Materials that
would be processed using vitrification technology could be beneficially re-used.

SEDIMENT PROCESSING/TRANSFER FACILITIES - It is expected that sediment
processing/transfer facilities would be established to handle materials from the
environmental dredging process. The locations of these facilities will be
determined during the remedial design phase of the remedy considering
engineering issues (such as those associated with the type of dredging
selected), property issues, noise, air impacts and other appropriate factors.
Although it is projected that these facilities would be land-based, water-based
facilities will also be evaluated.

Dredged sediments will be mechanically dewatered and loaded onto trucks for
transport to disposal facilities.

Water that is separated from the dredged sediment will undergo treatment to
remove fine sediment particles and dissolved PCBs. Ultimately, the water will be
discharged back into the Fox River in compliance with the substantive
requirements of the State of Wisconsin Pollutant Discharge Elimination System,
which is an ARAR for this Site.

TRANSPORTATION - Dredged materials will be transported from the dredging site to
the sediment processing/transfer facilities by barge or in-river pipeline.
Transportation from the sediment processing/transfer facilities to disposal
facilities will be by truck.

DISPOSAL - Disposal of PCB contaminated sediment from OU 1 will be to either an
existing upland landfill or into a newly constructed or modified landfill
designed to receive the dewatered sediment. ARARs/TBCs specific to the landfill
option include the siting requirements for a landfill (Chapter 289, Wisconsin
Statutes) and the technical requirements for construction, operation, and
closure of a landfill in the NR 500 rule series, WAC.

Sediments removed from the Fox River may contain PCBs equal to or greater than
50 ppm. PCB sediment with concentrations less than 50 ppm will be managed as a
solid waste in accordance with statutes and rules governing the disposal of
solid waste in Wisconsin. PCB sediment with concentrations equal to or greater
than 50 ppm will be managed in accordance with the Toxic Substances Control Act
of 1976 (Appendix E of the Feasibility Study). Presently TSCA compliance would
be achieved through the extension of the January 24,1995 approval issued by EPA
to WDNR pursuant 40 CFR 761.60(a)(5) under the authority of TSCA. This TSCA
approval, granted by EPA Region 5, states that the disposal of PCB-contaminated
sediment with concentrations equal to or greater than 50 ppm into an NR 500, WAC
landfill that is also in compliance with the conditions of the TSCA approval,
provides adequate protection to human health and the environment as required by
40 CFR 761.60(a)(5); and, will provide the same level of protection required by
EPA, Region 5 and therefore is no less restrictive than TCSA. However, should
other administrative rules pertaining to disposal under TSCA be in effect at the
time that TSCA compliance decisions are made for the Fox River sediment, then
compliance with those rules will be achieved.

Therefore, this disposal method meets the TSCA regulatory requirement 40 GFR
761.61(c) that the risk-based method for disposal of PCB remediation waste does
not pose an unreasonable risk of injury to health and the environment.

Although off-site landfilling is anticipated, vitrification and beneficial
re-use of dredged excavated sediments will be evaluated during the design phase.
Value engineering to reduce waste

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                  Fox River and Green Bay ROD for OU 1 and OU 2

volumes (that will also reduce costs) will be explored and, if appropriate,
finalized during remedial design.

MONITORING - Short- and long-term (i.e., pre-, during, and post-construction)
monitoring programs will be developed to ensure compliance with performance
standards and protection of human health and the environment. The types and
frequency of pre-construction monitoring will be developed during remedial
design. Plans for monitoring during and after construction will be developed
during the remedial design and modified during and after construction as
appropriate. This approach is consistent with the NRC Report recommendation that
long-term monitoring evaluate the effectiveness of the remedial action as well
as ensure protection of public health and the environment.

11. COMPARATIVE ANALYSIS OF ALTERNATIVES

In selecting a remedy for a site, WDNR and EPA consider the factors set forth in
CERCLA Section 121, 42 U.S.C. Section 9621, by conducting a detailed analysis of
the viable remedial alternatives pursuant to the NCP, 40 CFR Section
300.430(e)(9), EPA's Guidance for Conducting Remedial Investigations and
Feasibility Studies, OSWER Directive 9355.3-01, and EPA's 'A Guide to Preparing
Superfund Proposed Plans, Records of Decision, and Other Remedy Selection
Decision Documents, OSWER 9200.1-23.P. The detailed analysis consists of an
assessment of the individual alternatives against each of nine evaluation
criteria (two threshold, five primary balancing and two modifying criteria) and
a comparative analysis focusing upon the relative performance of each
alternative against those criteria.

THRESHOLD CRITERIA

1.    OVERALL PROTECTION OF HUMAN HEALTH AND THE ENVIRONMENT addresses whether a
      remedy provides adequate protection of human health and the environment
      and describes how risks posed through each exposure pathway are
      eliminated, reduced or controlled through treatment, engineering, or
      institutional controls. The selected remedy must meet this criterion.

2.    COMPLIANCE WITH APPLICABLE OR RELEVANT AND APPROPRIATE REQUIREMENTS
      (ARARS) addresses whether a remedy will meet applicable or relevant and
      appropriate federal and state environmental laws and/or justifies a waiver
      from such requirements. The selected remedy must meet this criterion or a
      waiver of the ARAR must be attained.

PRIMARY BALANCING CRITERIA

3.    LONG-TERM EFFECTIVENESS AND PERMANENCE refers to expected residual risk
      and the ability of a remedy to maintain reliable protection of human
      health and the environment over time, once cleanup levels have been met.

4.    REDUCTION OF TOXICITY, MOBILITY, OR VOLUME THROUGH TREATMENT addresses the
      statutory preference for selecting remedial actions that employ treatment
      technologies that permanently and significantly reduce toxicity, mobility,
      or volume of the hazardous substances as their principal element. This
      preference is satisfied when treatment is used to reduce the principal
      threats at the site through destruction of toxic contaminants, reduction
      of the total mass of toxic contaminants, irreversible reduction in
      contaminant mobility, or reduction of total volume of contaminated media.

5.    SHORT-TERM EFFECTIVENESS addresses the period of time needed to achieve
      protection and any adverse impacts on human health and the environment
      that may be posed, until cleanup levels are achieved.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

6.    IMPLEMENTABILITY is the technical and administrative feasibility of a
      remedy, including the availability of materials and services needed to
      implement a particular option.

7.    COST includes estimated capital costs, annual operation and maintenance
      costs (assuming a 30-year time period), and net present value of capital
      and operation and maintenance costs.

MODIFYING CRITERIA

8.    AGENCY ACCEPTANCE considers whether the support agency, EPA in this
      instance, concurs with the lead agency's remedy selection and the analyses
      and recommendations of the RI/FS and the proposed plan.

9.    COMMUNITY ACCEPTANCE addresses the public's general response to the
      remedial alternatives and proposed plan. The ROD includes a responsiveness
      summary that presents public comments and the WDNR and EPA responses to
      those comments. The level of community acceptance of the selected
      alternative is outlined in the Responsiveness Summary (see Appendix A).

11.1 OPERABLE UNIT 1 (LITTLE LAKE BUTTE DES MORTS)

Table 18 summarizes the evaluation for OU 1 alternatives and how each
alternative meets, or does not meet requirements for each of the nine criteria
described above. A detailed comparative analysis for all alternatives follows.

TABLE 18 OPERABLE UNIT 1. LITTLE LAKE BUTTE DES MORTS ALTERNATIVES




                                                                      SELECTED
    Yes = Fully meets                                 Alternative    ALTERNATIVE     Alternative
         criteria                       Alternative        C1        Alternative         D         Alternative
    Partial = Partially                      B           Dredge           C2          Dredge to          E         Alternative
      meets criteria      Alternative    Monitored      with off       Dredging      a Confined       Dredge           F
   No = Does not meet         A           Natural         site      with off site     Disposal         and          In Situ
         criteria         No Action      Recovery       disposal       disposal       Facility     Vitrification    Capping
- -----------------------   -----------   -----------   -----------   -------------   ------------  --------------  -----------
                                                                                             
1.  Overall protection
    of human health and
    the environment           No            No            Yes           Yes            Yes            Yes             Yes
2.  Compliance with
    Applicable or
    Relevant &
    Appropriate
    Requirements              No         Partial          Yes           Yes            Yes            Yes             Yes
3.  Long-term
    Effectiveness and
    Permanence                No            No            Yes           Yes            Yes            Yes           Partial
4.  Reduction of
    Contaminant
    Toxicity,
    Mobility, or
    Volume through
    Treatment                 No            No            Yes           Yes            Yes            Yes           Partial
5.  Short-term
    Effectiveness             No            No            Yes           Yes          Partial        Partial         Partial


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                  Fox River and Green Bay ROD for OU 1 and OU 2



                                                                    SELECTED
 Yes = Fully meets                                   Alternative   ALTERNATIVE   Alternative
    criteria                            Alternative      C1        Alternative        D        Alternative
Partial = Partially                          B         Dredge          C2         Dredge to        E         Alternative
  meets criteria           Alternative   Monitored    with off      Dredging     a Confined      Dredge           F
No = Does not meet             A          Natural       site      with off site    Disposal       and          In Situ
    criteria                No Action    Recovery     disposal      disposal      Facility    Vitrification    Capping
- -------------------       ------------  -----------  -----------  -------------  -----------  -------------  -----------
                                                                                        
6. Implementability            Yes            Yes          Yes         Yes         Partial       Partial       Partial

7. Cost (millions of $)       $4.5           $9.9       $116.7       $66.2           $68.0       $63.6.0         $90.5

8. Agency Acceptance      The WDNR has been the lead agency in developing the RI/FS and the ROD. Both WDNR and EPA
                          support the selected alternative for this OU at the 1.0 ppm action level.

9. Community              The level of community acceptance of the selected alternative is outlined in the
   Acceptance             Responsiveness Summary.


11.1.1 THRESHOLD CRITERIA FOR OPERABLE UNIT 1

PROTECTION OF HUMAN HEALTH AND THE ENVIRONMENT

The primary risk to human health associated with the contaminated sediment is
consumption of fish. The primary risk to the environment is the bioaccumulation
of PCBs from the consumption of fish or, for invertebrates, the direct
ingestion/consumption of sediment. Protection of human health and the
environment were evaluated by residual risk in surface sediment using five lines
of evidence:

      -     Residual PCB concentrations in surficial sediment using
            surface-weighted averaging after completion of a remedy;

      -     Average PCB concentrations in surface water;

      -     The projected number of years required to reach safe consumption of
            fish;

      -     The projected number of years required to reach a surface sediment
            concentration protective of fish or other biota, and

      -     PCB loadings to downstream areas and total mass contained or
            removed.

Each of these is discussed below.

Residual PCB concentrations in surficial sediment and surface water

As shown in Table 19 below, substantial reductions in the average concentration
of surficial sediment and in surface water for OU 1 is achieved by all active
remediation alternatives (C1, C2, D, E and F) when compared to the No Action and
MNR alternatives (A and B). The implementation of active remediation
alternatives results in a 95 percent reduction in residual PCB concentrations in
surface sediment using surface-weighted averaging after completion of the
Alternatives C1, C2, D, E or F, when compared to the No Action or MNR
Alternatives, respectively (i.e., 3.699 versus 0.185 ppm, respectively -- see
Table 19). Similarly, the estimated surface water concentrations 30-years after
remediation is reduced 94 percent for active remediation alternatives (B, C1,
C2, D, E and F), relative to No Action and Monitored Natural Recovery (A, and B,
respectively) - i.e., 2.99 versus 0.18 ppm, respectively - see Table 19.

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TABLE 19 POST-REMEDIATION SEDIMENT AND SURFACE WATER CONCENTRATIONS IN OU 1



                           AVERAGE PCB CONCENTRATIONS IN    ESTIMATED SURFACE WATER CONCENTRATIONS
ALTERNATIVE                  SURFICIAL SEDIMENTS (PPM)         30-YEARS AFTER REMEDIATION (NG/L)
- ----------------------    -------------------------------   --------------------------------------
                                                      
A,B                                   3.699                                   2.99
C1, C2, D, E, F                       0.185                                   0.18


Data is from FS Tables 5-4, and 8-5B.

Time to reach acceptable fish tissue concentrations

Substantial reductions in the time when humans could safely consume fish are
achieved by active remediation alternatives (C1, C2, D, E, and F), when compared
to the No Action and Monitored Natural Recovery (MNR) alternatives (A and B).
The implementation of active remediation alternatives results in an 86 percent
to 99 percent reduction in the time required to reach acceptable fish tissue
concentrations in walleye when compared to the No Action or MNR alternatives
(i.e., 1 to 14 years for active remediation versus 51 to 100 years for No Action
or MNR - see Table 20). Recovery times for additional human health receptors are
presented the FS, Chapter 8, Table 8-6.

TABLE 20 TIME ACHIEVE ACCEPTABLE FISH TISSUE CONCENTRATIONS FOR WALLEYE IN OU 1



                                                                                ESTIMATED YEARS TO ACHIEVE
                                                                               ----------------------------
                                                                               ALTERNATIVES
                                                                               C1, C2, D, E,    ALTERNATIVES
 FISH             RECEPTOR                      RISK LEVEL GOAL                     F               A, B
- --------   ---------------------------     --------------------------------    -------------    ------------
                                                                                   
Walleye    Recreational Angler             RME Hazard Index of 1.0                  <1              51
Walleye    High Intake Fish Consumer       RME Hazard Index of 1.0                   4              65
Walleye    Recreational Angler             RME 10(-5) cancer risk level              9              84
Walleye    High Intake Fish Consumer       RME 10(-5) cancer risk level             14             100


Data is from FS Table 8-14.

Time required to achieve surface sediment concentration protective of fish or
other biota

Substantial reductions in the time required to reach protective levels for
ecological receptors are achieved by all active remediation alternatives (C1,
C2, D, E, and F) relative to the No Action and MNR alternatives. For receptors
representative of fish or other biota, implementation of active remediation
alternatives results in a 40 percent to 86 percent reduction relative to No
Action or MNR (i.e., 14 to 60 years for active remediation versus 100 years or
more for No Action and MNR, shown in Table 21, below). Recovery times for
additional ecological receptors are presented in the FS, Chapter 8, Table 8-6.

TABLE 21 TIME REQUIRED TO ACHIEVE PROTECTIVE LEVELS IN SEDIMENTS FOR
REPRESENTATIVE ECOLOGICAL RECEPTORS IN OU 1



                                                                ESTIMATED YEARS TO ACHIEVE
                                                             --------------------------------
                                                             ALTERNATIVES C1,    ALTERNATIVES
  FISH              RECEPTOR              RISK LEVEL GOAL       C2, D ,E, F          A, B
- --------    --------------------------    ---------------    ----------------    ------------
                                                                     
Carp        Carnivorous bird                   NOAEC                14               100
Carp        Piscivorous mammal                 NOAEC                29              >100
Sediment    Sediment invertebrate               TEL                 60              >100


Data is from FS Table 8-16.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

PCB loadings to downstream areas and total mass contained or removed

Reduction of the PCB load transported over the Appleton Dam into the downstream
areas of the Fox River is a measure of the overall protection of human health
and the environment. Reduced PCB loading from OU 1 will ultimately contribute to
downstream reduction of concentrations of PCBs in sediment, water and fish, and
thereby reduce risk to humans and ecological receptors in the Fox River. After
implementation of active remedial alternatives (C1, C2, D, E, and F) estimates
for releases over the Appleton Dam would be reduced from 88 pounds/year
presently to 1.5 pounds/year 30 years after completion of remediation, compared
to 25 pounds for the No Action and MNR alternatives (also after 30 years). Thus
the active remedial alternatives would give a 94 percent reduction in loadings
relative to No Action and MNR.

SUMMARY

The active remediation alternatives provide a substantially more protective
remedy than the No Action and MNR alternatives. The No Action and MNR
Alternatives are not protective of human health and the environment.

Compliance with Applicable or Relevant and Appropriate Requirements (ARARs)
Section 121 (d) of CERCLA and NCP Section 300.430(f)(1)(ii)(B) requires that
remedial actions at CERCLA sites attain legally applicable or relevant and
appropriate Federal and State requirements, standards, criteria and limitations
which are collectively referred to as "ARARs," unless such ARARs are waived
under CERCLA section 121(d)(4).

Compliance with ARARs addresses whether a remedy will meet all of the applicable
or relevant and appropriate requirements of other Federal and State
environmental statutes or provides a basis for invoking a waiver.

The ARAR discussion, below, is divided by the different operational components
of the alternatives (Table 22, and discussion below), as various components are
utilized in an essentially the same manner for some alternatives and apply
equally to those alternatives with a common component. There is also additional
discussion of ARARs in Section 14.2.

TABLE 22 OPERATIONAL COMPONENTS FOR OU 1 ALTERNATIVES



                                                            ALTERNATIVES
                                      -------------------------------------------------------
                                        A      B      C1      C2      D         E         F
                                      -----  -----  ------  ------  -----  -----------  -----
                                                                   
Removal                                               X       X       X         X         X
Dewatering      Mechanical                                    X
                Passive                               X               X         X         X
Sediment Treatment                                    *       *                 X         *
Water Treatment                                       X       X       X         X         X
Trucking or Rail Transportation                       X       X       X         X         X
Disposal        Upland                                X       X       X**  (residuals)    X
                In-water CDF                                          X
Capping                                                                                   X


- ----------
X:    Required activity for alternative.

*     Possible supplement.

**    Upland disposal for this alternative would only be for sediments with PCB
      concentrations equal to or greater than 50 ppm (16,165 cubic yards of
      800,357). Sediments with concentrations less than 50 ppm (784,192 cubic
      yards) would be disposed in an in-water CDF.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

A description of the components listed in Table 22, above follows:

- -     REMOVAL. The removal technology utilized for active remedial alternatives
      Alternatives C1, C2, D, E, and F is dredging (although Alternative F also
      includes capping). The ARARs that directly relate to the removal of
      sediment from the Lower Fox River and Green Bay concern the protection of
      surface water (NR 322, 200, and 220 through 297). The surface water ARARs
      limit the discharge of PCBs into the receiving water bodies so that water
      quality is not adversely affected. These ARARs will be achieved by all
      active remedial alternatives.

- -     DEWATERING AND WATER TREATMENT.

      -     Mechanical dewatering would be utilized for Alternative C2.
            Discharge requirements (NR 200 and 220 through 297, WAC) are set
            forth for the discharge of water to publicly owned treatment works
            (POTWs) and to navigable waters such as the Lower Fox River (NR 105
            and 106, WAC). Discharges from prior remedial activities on the
            Lower Fox River provide an indication of the treatment requirements
            for discharging effluent water to the Lower Fox River or to a POTW.
            Another requirement covers stormwater discharge. A potentially
            important ARAR (NR 108, WAC) relates to the construction of a
            wastewater treatment facility specifically to treat water from
            remedial activities.

      -     Passive dewatering ponds would be part of Alternative C2, D, E and F
            and would be constructed under the wastewater ARAR (NR 213, WAC),
            which associated with wastewater treatment lagoons. Based on
            previous experience gained during the SMU 56/57 pilot dredging
            project, ARARs associated with passive dewatering lagoons are
            achievable.

- -     EX-SITU (OFF-SITE) TREATMENT. ARARs specific to vitrification technology
      (Alternative E) relate to the air emission and permitting requirements of
      thermal treatment units (40 CFR 701 and NR 400 through 499). In addition,
      the thermal unit must meet performance requirements in NR 157 for the
      efficient treatment of PCB sediment. These ARARs would be met.

- -     TRANSPORTATION. The likely method for transporting PCB sediment to upland
      disposal locations for Alternatives C1, C2, and F is by trucking to the
      disposal facility, although other transportation methods could be used if
      it is determined during design that there are better methods. ARARs and
      TBCs important to this process option include the requirements to prevent
      spills and releases of PCB materials (NR 140 and 157, WAC). Two ARARs
      applicable only to the trucking method include Wisconsin Department of
      Transportation (WDOT) requirements for the shipping of PCB materials and
      NR 157 shipping requirements. ARARs and TBCs related to in-water
      transportation activities (i.e., piping) include the protection of surface
      water (NR 322, 200, and 220 through 297, WAC). Alternatives C1, C2 and F
      will comply with these ARARs.

- -     DISPOSAL. For Alternatives C1, C2, and F, disposal of contaminated
      sediment removed (i.e., dredged) from OU 1 will be disposed at either an
      existing upland landfill or in a newly constructed or modified landfill
      designed to receive the dewatered sediment. ARARs specific to this process
      option include the siting requirements for a landfill (Chapter 289,
      Wisconsin Statutes) and the technical requirements for construction,
      operation, and closure of a landfill in the NR 500 rule series, WAC. For
      contaminated sediments with PCB concentrations equal to or greater than 50
      ppm, disposal will comply with the Toxic Substances Control Act, 40CFR
      Part 761. Alternative D would also have a relatively small portion (i.e.,
      2 percent) of dredged materials with concentrations equal to or greater
      than 50 ppm that would also be disposed at a TSCA compliant upland
      landfill. General disposal requirements for PCB-containing sediments are
      simplified by the EPA's current approval requirements for placing
      TSCA-level PCB-containing material in a state-licensed landfill. In

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                  Fox River and Green Bay ROD for OU 1 and OU 2

      all cases, for sediment to be disposed of at a local landfill, the
      landfill must be in compliance with the requirements of the NR 500 WAC
      series regulating the disposal of waste and WDNR's TSCA approval issued by
      EPA. This EPA approval currently allows for the disposal of
      PCB-contaminated sediment with concentrations equal to or greater than 50
      mg/kg in landfills licensed under the NR 500 rule series, WAC, provided
      that certain technical and administrative requirements are met. These
      ARARs will be met by alternatives C1, C2 and F.

- -     CAPPING. For Alternative F, some sediments would be capped in-place,
      primarily in the central (deeper water) portions of OU 1. This would
      require compliance with Section 10 of the Rivers and Harbor Act of 1899
      (22 CFR 403), and may require compliance with the Wisconsin Statutes
      Chapter 30 (defining riparian rights of upland owners which extend to the
      center of a stream). If the capping area is considered to be located in a
      lake, then the State, through the Board of Commissioners of Public Lands,
      may lease "rights of the beds of lakes and rights to fill in beds of lakes
      or navigable streams." It is expected that these ARARS would be met.

11.1.2 BALANCING CRITERIA FOR OPERABLE UNIT 1

LONG-TERM EFFECTIVENESS AND PERMANENCE

Reduction of Residual Risk

The No Action and MNR alternatives result in a continuation of the degraded
condition of the sediments and surface water quality of Little Lake Butte des
Mort (OU 1), for at least several decades. The No Action and MNR Alternatives do
not eliminate PCBs from the River and do not reduce PCB levels in fish to
acceptable levels for the foreseeable future.

Alternatives C1, C2, D, E and F reduce residual risk through removal or
containment of 800,357 cubic yards of sediments containing approximately 1715 kg
(about 3800 pounds) of PCBs over an area of 526 acres. The reduction in the time
required to reach acceptable fish tissue concentrations ranges from 86 percent
to 99 percent (i.e., 1 to 14 years for active remediation and 51 to 100 years
for No Action/MNR - see Table 20).

Adequacy of Controls

The No Action and MNR alternatives do not produce reduction in human risk and
exposure in the foreseeable future, unlike active engineering controls.
Additionally, fish consumption surveys indicate that 50 percent of anglers do
not follow fish advisories. Therefore, existing institutional controls do not
adequately reduce human exposure to PCBs from consumption of contaminated fish.
In addition, institutional controls are not protective for ecological receptors
(e.g., the birds, mammals and fish). Given the survey data, it is unlikely that
sole reliance on these types of controls would be reliable in the long term to
ensure human health and ecological protection.

The active remediation alternatives (C1, C2, D, and E) provide for the removal
of most of the PCB-contaminated sediments in OU 1. Alternative F also removes a
large portion of PCB-contaminated sediments and provides for an engineered cap
over approximately 20 percent of contaminated deposits in OU 1. Like the MNR
alternative, Alternative F also requires institutional controls such as Site
use restrictions in capped areas (e.g., prohibition of sediment disturbance
activities). Although institutional controls would still be required for the two
removal alternatives, the risk to consumers of fish would be greatly reduced by
these alternatives. All alternatives would require institutional controls, such
as the fish consumption advisories and fishing restrictions until remedial
action objectives were met at a future date, but they are unlikely to require
additional Site use restrictions after removal activities are completed.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

All alternatives will require some degree of monitoring. Monitoring programs
will be developed, as appropriate, for all phases of the project.

Alternatives C1, C2, D and F rely on engineering controls at the disposal
facility. Properly designed and managed landfills provide proven, reliable
controls for long-term disposal for Alternatives C1, C2 and F (which have
off-site landfill disposal). Alternative F would also require a long-term
operation and maintenance plan to ensure containment of PCBs in perpetuity.
Alternative D would require on-site engineering controls at an in-water disposal
facility. Long-term monitoring and maintenance are included in operation of the
landfill and confined disposal facility. The final disposition of contaminated
sediments is listed in the following table.

TABLE 23 FINAL DISPOSITION OF CONTAMINATED SEDIMENTS IN OU 1



                                                                ALTERNATIVES (CUBIC YARDS)
                                              ----------------------------------------------------------
                                                A        B       C1/C2        D          E          F
                                              -----    -----    -------    -------    -------    -------
                                                                               
Treated and residual disposal                   0        0            0          0    784,192          0
Removed and disposed at upland landfill         0        0      784,192     16,165          0     16,645
Removed and disposed at in-water
CDF (on-site)                                   0        0            0    768,027          0    619,381
Capped in-place                                 0        0            0          0          0    148,646


Data is from FS Table 7-2.

Reliability of Controls

For the active remedies (Alternatives C1, C2, D, E and F), and MNR, fish
consumption advisories and fishing restrictions will continue to provide some
protection of human health until PCB concentrations in fish are reduced to the
point where the fish consumption advisories and fishing restrictions can be
relaxed or lifted. However, in the interim, these controls will only provide an
uncertain measure of protection. Among the active alternatives, sediment
capping, sediment removal (dredging and excavation), and off-site
disposal/treatment of removed sediments are all established technologies.

The capping portion of Alternative F relies upon proper design, placement and
maintenance of the cap in perpetuity for its effectiveness, continued
performance and reliability. A cap integrity monitoring and maintenance program
would provide reasonable reliability, although there are inherent challenges in
monitoring and maintaining a cap in the Fox River riverine environment. The
capping portion of Alternative F (see Table 23, above for the volume of capped
contaminated sediments) may not be as reliable as the removal alternatives due
to the unknown potential for damage to the cap, potentially exposing PCBs. In
addition, the capping component of Alternative F is vulnerable to a catastrophic
flow event, such as might be seen during a 500-year flood or a dam failure.
However, with proper design and maintenance, these risks can be minimized.

In general, Alternatives C1 and C2, D and E are the most reliable, as there is
little or no long-term additional on-site maintenance associated with the
remedial work. These Alternatives permanently remove the greatest amount of
contaminated sediment and PCBs from the River, and achieve the greatest
reduction of the potential scour-driven resuspension of PCB-contaminated
sediments. However, Alternative F is also considered to be sufficiently
reliable.

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                   Fox River and Green Bay ROD for OU 1 and OU 2

Summary

Based on the above analysis of reduction in residual risk and adequacy and
reliability of controls, the five active remediation alternatives (C1, C2, D, E
and F) are superior to the No Action and MNR alternatives due to the greater
risk reduction and mass of PCBs removed from the River. The five active
remediation alternatives are similar to each other in terms of risk reduction
with C1, C2, and E being the most effective over time. EPA's analysis of
residual risk for each alternative is consistent with the National Research
Council (NRC) report recommendation to consider options to reduce risk and to
consider residual risks associated with material left behind.

Reduction of Toxicity, Mobility, and Volume

Reduction in Toxicity, Mobility, or Volume of Contaminants through Treatment
evaluates an alternative's use of treatment to reduce the harmful effects of
principal contaminants, their ability to move in the environment and the amount
of contamination present.

The No Action and MNR alternatives do not involve any containment or removal of
contaminants from Little Lake Butte des Morts sediments. The No Action and MNR
alternatives rely on natural attenuation processes such as burial by cleaner
sediments, biodegradation, bioturbation and dilution to reduce concentrations of
PCBs in sediments and surface water.

Natural degradation processes were not found to be effective in reducing PCB
concentrations or toxicity in Fox River sediments (FS Appendix F,
"Dechlorination Memorandum"). Nevertheless, concentrations of PCBs in fish
populations will respond slowly over time to slow natural decreases in
concentrations in sediments and surface water due primarily to dilution and the
burial of contaminated sediments by cleaner sediments.

For Alternative F, the mobility of the PCBs in capped areas (approximately 135
acres) would be reduced because these PCBs are sequestered under the cap.
However, capping does not satisfy the CERCLA statutory preference for treatment.
In addition, there is no reduction in the toxicity or volume of the PCBs under
the cap. Under this alternative, the mass of PCBs and the volume of contaminated
sediments within Little Lake Butte des Morts are permanently reduced because
approximately 620,000 cubic yards of sediment would be removed, and
approximately 150,000 cubic yards would be contained under a cap in OU 1. A
total of approximately 1715 kg (about 3770 Ibs) of total PCBs would be removed
or isolated from the ecosystem by this alternative. In addition, after
construction of the remedy is completed, natural attenuation processes could
provide additional reductions in PCB concentrations in the remaining sediments
and surface water.

For Alternatives C1, C2, D, and E, the mass of PCBs and volume of contaminated
sediments in Little Lake Butte des Morts are permanently reduced because
sediment volumes of approximately 784,000 cubic yards of contaminated sediment,
containing a mass of total PCBs of approximately 1715 kg (about 3770 Ibs) would
be removed from the ecosystem. Also, as stated for Alternative F, after
construction of the remedy is completed, natural attenuation processes would
provide additional reductions in PCB concentrations in the remaining sediments
and surface water.

While the active remedial alternatives (Alternatives C1, C2, D and F) would
permanently remove large volumes of PCBs from the River (thereby reducing their
mobility), they do not satisfy the statutory preference for treatment as a
principal element of the remedy. Given the volume of material to be removed,
treatment of the dredged material prior to off-site disposal may not be
cost-effective, other than the stabilization of the sediments for handling
purposes. During remedial design, WDNR will further consider the
cost-effectiveness of vitrification for dredged material. Alternative E in the
FS has been revised to consider vitrification. Vitrification would

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                 Fox River and Green Bay ROD for OU 1 and OU 2

reduce toxicity, mobility, and volume, and the glass aggregate product would be
available for beneficial re-use.

Short-Term Effectiveness

Short-term Effectiveness relates to the length of time needed to implement an
alternative and the risks the alternative poses to workers, residents and the
environment during implementation up until the time that remediation levels are
achieved.

Length of Time Needed to Implement the Remedy

The implementation times for the active alternatives are approximately 6 years
for Alternatives C1 and C2, D, E and approximately 5 years for Alternative F.
This represents the estimated time required for mobilization, operation and
demobilization of the remedial work, but does not include the time required for
long-term monitoring or O&M. The No Action and MNR alternatives do not involve
any active remediation and therefore require no time to implement.

Protection of the Community and Workers During Remedial Action

No construction activities are associated with the remediation of sediments for
the No Action and MNR alternatives, so neither alternative increases or
decreases the short-term potential for direct contact with or ingestion and
inhalation of PCBs from the surface water and sediments.

COMMUNITY PROTECTION. Access to sediment processing/transfer facilities and
process and treatment areas under the active remediation alternatives (C1, C2,
D, E and F) will be restricted to authorized personnel. Controlling access to
the dredging locations and sediment processing/transfer facilities along with
monitoring and engineering controls developed during the design phase will
minimize potential short-term risks to the community. The design will also
provide for appropriate control of air emissions, noise and light through the
use of appropriate equipment that meets all applicable standards. Compliance
with these design provisions will be monitored during construction, operation
and demobilization. Vehicular traffic will increase due to workers and supply
deliveries at the sediment processing and transfer facilities. These effects are
likely to be minimal, in part because the transportation of sediments for
disposal will take place within the Fox River area. If a beneficial use of some
portion of the dredged material is arranged, then an appropriate transportation
method will be determined (e.g, rail, truck, or barge).

For the active remediation alternatives (Alternative C1, C2, D, E and F), work
in the River will also be designed with provisions for control of air emissions,
noise and light. Work areas will be isolated (access-restricted), with an
adequate buffer zone so that pleasure craft can safely avoid these areas.
Environmental dredging in the River will be conducted at times and in ways to
minimize disruption to river traffic. Targeted dredging will be sequenced and
directed to ensure minimal impacts to navigation within the River. To help
ensure that navigation is not impeded, WDNR and EPA will consult with the local
authorities during remedial design and construction phases on issues related
River usage, and other remedy-related activities within Little Lake Butte des
Morts. Discrete areas of the River will be subject to dredging and related
activities only over short periods of time; once an area is dredged, dredging
equipment will move to another area, thereby minimizing locational impacts.

Based on air monitoring for the SMU 56/57 demonstration project, air emissions
at dredging sites and at land-based facilities are expected to be minimal.
Action levels will be established, monitoring conducted as required, and
appropriate engineering control measures employed to ensure that any air
releases do not exceed acceptable levels.

Vehicles used for the transportation of hazardous waste will be designed and
operated in conformance with State and local regulations. WDNR and EPA will
provide the community and

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                  Fox River and Green Bay ROD for OU 1 and OU 2

local government the opportunity to have input on plans related to the off- Site
transportation of hazardous wastes. This approach is consistent with the NRC
recommendation to involve the local communities in risk management decisions.

WDNR and EPA believe that implementation of any of the active remediation
alternatives (C1, C2, D, E and F) will have little if any adverse impact on
local businesses or recreational opportunities. Indeed, WDNR and EPA believe
that the remedy will have substantial positive economic impacts on local
communities and will facilitate enhanced recreational activities in and along
the River. To the extent that any adverse local impacts do occur, WDNR and EPA
expect that they will be short-term and manageable. Moreover, the Agencies
believe that any such impacts will far outweigh the long-term benefits of the
remediation on human health and the environment.

WORKER PROTECTION. For the No Action and MNR alternatives, occupational risks to
persons performing the sampling activities (for the 5-year reviews) will be
unchanged from current levels. There is some minimal increase in occupational
risk associated with the MNR alternative due to the greater degree of sampling
involved in the River.

For the five active remediation alternatives (C1, C2, D, E and F), potential
occupational risks to Site workers from direct contact, ingestion and inhalation
of PCBs from the surface water and sediments, as well as routine physical
hazards associated with construction work and working on water, are higher than
for the No Action and MNR alternatives. For these alternatives, as well as the
No Action and MNR alternatives, personnel will follow a site-specific health and
safety plan and OSHA health and safety procedures and wear the necessary
personal protective equipment; thus, no unacceptable risks would be posed to
workers during the implementation of the remedies.

In summary, the active remedial alternatives would not pose significant risk to
the nearby communities. A short-term risk to the community and site workers may
be possible as a result of potential air emissions and noise from construction
equipment, dewatering operations, and hauling activities. However, as
successfully shown during the Lower Fox River demonstration dredging projects,
these risks can be effectively managed/minimized by: (1) coordinating with and
involving the community; (2) limiting work hours; and (3) establishing buffer
zones around the work areas; as well as through (4) using experienced
contractors who would assist project design.

Environmental Impacts of Remedy and Controls

Environmental impacts consist of PCB releases from removed sediment into the air
and water. As successfully shown during the Lower Fox River demonstration
dredging projects, environmental releases will be minimized during remediation
by (1) treating water prior to discharge; (2) controlling storm water run-on and
runoff from staging and work areas; and (3) utilizing removal techniques that
minimize losses; as well as through (4) the possible use of silt curtains where
necessary to reduce the potential downstream transport of PCBs.

Habitat impacts from active remedial activities (Alternatives C1, C2, D, E and
F) are expected to be minimal, as the benthic community should recover
relatively quickly (see White Paper Number 8 for details) from dredging
activities. Additionally, dredging remediation can result in collateral benefits
in the course of mitigation, including removal of nuisance species,
reintroduction of native species, aeration of compacted and anaerobic soils and
other enhancements of submerged habitats. For the capping portion of Alternative
F, there could be similar effects on aquatic vegetation and benthic invertebrate
and fish communities, but recovery of benthic invertebrate communities would
likely be slower (relative to recovery from

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                  Fox River and Green Bay ROD for OU 1 and OU 2

dredging) due to changes in the sub aqueous habitat to sand and rock as well as
decreases in organic content of the sediment decreasing the organic content of
the sediment.

Potential Adverse Environmental Impacts During Construction

No construction activities associated with the River sediments are conducted for
the No Action and MNR alternatives. Neither continuation of the existing limited
sampling activities for the No Action alternative nor the increased monitoring
program for the MNR alternative is anticipated to have any adverse effect on
the environment, beyond that already caused by the PCB contamination of the
sediments and the ongoing releases of PCBs from those sediments in Little Lake
Butte des Morts. For the five active remediation alternatives (C1, C2, D, E and
F), the release of PCBs from the contaminated sediments into the surface water
during construction (dredging and cap placement), will be controlled by
operational practices (e.g., control of sediment removal rates, use of
environmental dredges and possible use of sediment barriers). Although
precautions to minimize resuspension will be taken, it is likely that there
could be a localized temporary increase in suspended PCB concentrations in the
water column and possibly in fish PCB body burdens. Analysis of results from
projects on Deposit N and SMU 56/57, and comparison to yearly sediment
resuspension rates, as well as resuspension quantities during yearly high flow
events, shows the expected resuspension due to dredging to be well within the
variability that normally occurs on a yearly basis. Analysis of results from
other dredging projects indicates that releases from environmental dredging are
relatively insignificant (substantially less than 1 percent of the mass of
contaminants). The performance standards and attendant monitoring program
developed during design will ensure that dredging operations are performed
consistent with the environmental and public health goals of the project. This
was readily achieved on the Deposit N and SMU 56/57 projects and is expected to
be feasible for other River dredging activities.

Dredging activities may result in short-term temporary impacts to aquatic and
wildlife habitat of the Little Lake Butte des Morts, but as discussed below, and
in White Paper 8, "Habitat and Ecological Considerations as a Remedy Component
for the Lower Fox River", it is expected that recovery would be rapid.

For the active remediation alternatives (C1, C2, D, E and F), there is the
potential transient impact from the temporary exposure of deeper, more highly
contaminated sediments during excavation activities. This impact would be
minimized by the quick completion of removal activities, and (if needed)
placement of a post-dredging sand cover as soon as practicable after the removal
operations are complete.

IMPLEMENTABILITY

Implementability addresses the technical and administrative feasibility of a
remedy from design through construction and operation. Factors such as
availability of services and materials, administrative feasibility and
coordination with other governmental entities are also considered.

Technical Feasibility

Both the No Action and MNR alternatives are technically feasible because no
active measures other than continued sampling would be taken. Technical
feasibility for the active remediation alternatives is discussed below in terms
of the main components of the alternatives. Additional information is provided
in the FS.

SEDIMENT PROCESSING/TRANSFER FACILITIES. Alternatives C1, C2, D, E and F require
sediment processing/transfer facilities. At these facilities, the transfer,
dewatering and stabilization of dredged material would be conducted. Each of
these activities is considered a readily

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                 Fox River and Green Bay ROD for OU 1 and OU 2

implementable, commonly engineered activity. Design of sediment
processing/transfer facilities will include requirements for the control of
light, noise, air emissions, and water discharges.

WDNR and EPA have not determined the location of the sediment
processing/transfer facilities. Preliminary criteria were utilized to establish
a list of preliminary candidate sites to allow for the preparation of a cost
estimate. In preparing the cost estimate in the Feasibility Study, WDNR and EPA
assumed upland staging area in the vicinity of Arrowhead Park, at the southern
end of Little Lake Butte des Morts. This facility (wherever located) would be
temporary and removed after completion of the active remedial activities.

REMOVAL. Alternatives C1, C2, D, E, and F require the dredging of contaminated
sediments. Dredging of sediments is a readily implementable and environmentally
effective engineering activity. Two concerns are relevant to whether sediments
can be dredged effectively: 1) resuspension and releases during dredging and, 2)
resulting residual contaminant concentrations that may remain in sediments after
dredging is completed. Regarding resuspension, as discussed above environmental
dredges have been shown to generally not release significant quantities of
contaminants during removal operations. The type of dredging equipment
(mechanical and/or hydraulic) will be selected during the remedial design, using
the most appropriate equipment for the specific conditions in the River. The use
of silt screens or other barriers, as appropriate, could further assist in
limiting downstream migration of PCBs and may be used as well. Regarding
post-dredging residual contaminant concentrations comparable projects indicate
that achieving the 1 ppm Action Level in remaining sediments is readily
achievable. The Fox River SMU 56/57 dredging project achieved a 96 percent
reduction in the average concentration of contaminated sediments targeted for
removal in that project. This is consistent with results for other dredging
projects having similar site conditions (see Appendix B of the FS, and Hudson
River White Paper ID 312663, Post-Dredging PCB Residuals).

DEWATERING. Alternatives C1, C2, D, E and F would require removal of excess
water from dredged sediments. Either mechanical or passive dewatering would be
used for this purpose. These are conventional, commonly utilized proven
technologies, and are readily implementable and effective.

WATER TREATMENT. Conventional water treatment technologies for dredge water have
been proven commonly reliable, and are readily implementable and effective.

CAPPING. Alternative F includes some capping of areas that meet the criteria for
areas that are acceptable for capping. The placement of capping materials is a
readily implementable engineering activity. Sand, gravel and/or fine materials
may be utilized for capping. Clean sand could be placed over contaminated
deposits to give a surficial concentration in the capped areas that is
essentially without contamination. The type (e.g., texture/size and sorting) of
cap material will be determined on a location specific basis.

POST-DREDGING SAND COVER. The selected alternative envisions an option of
limited backfilling if required. The placement of backfill is a readily
implementable engineering activity. Sand or other materials, as appropriate may
be utilized for backfill.

TRANSPORTATION. Dredged materials may be transported in-river to sediment
processing / transfer facilities using barges or pipelines. These are considered
readily implementable engineering activities. Transportation via pipeline is
limited to certain distances because of pumping and right-of-way limitations.
Consequently, in some areas of the River, pipelines may not be implementable.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Off-site transportation of dredged materials to disposal facilities will be by
truck, rail and/or barge. These forms of transportation are routine engineering
activities that have been employed at many Superfund sites and are technically
implementable. WDNR and EPA will comply with all legal regulatory requirements
for transporting both hazardous and non-hazardous wastes.

DISPOSAL. Off-site disposal is a common activity at many Superfund sites. The
number and location of off-site disposal facilities will be based on dredged
material volume, transportation and cost considerations. It is expected that
appropriate disposal will be in the Fox Valley area.

Alternatives C1, C2 and F all include disposal options. Alternative D uses an
in-water confined disposal facility for disposal. These are conventional
technologies and readily implementable. Under Alternative F, approximately 20
percent of the sediments will be capped in-situ (see Table 23, above). For the
areas that will be capped, it is considered technically achievable. It should be
noted that certain areas are not amenable to capping and are thus "off limits"
for capping. This is because these areas fail to meet certain criteria for
capping (e.g., sufficient water depth).

An ex-situ treatment alternative (Alternative E), vitrification, was determined
to be technically feasible. This does require reuse of residual materials after
treatment.

TREATMENT. Alternative E includes thermal treatment by vitrification, and is
technically implementable to meet cleanup goals.

Administrative Feasibility

Both No Action and MNR require no active measures. All alternatives, except No
Action include an administrative requirement for fish consumption advisories.
Since fish consumption advisories are already in place, this alternative
requirement is already met and would continue even under the No Action
alternative. The active remedial measures are somewhat more difficult to
implement from an administrative feasibility perspective due to the need for
siting the sediment processing/transfer facilities and addressing the associated
real property issues, and the need to make arrangements to utilize the River
with minimal interruption of boat traffic.

SEDIMENT PROCESSING/TRANSFER FACILITIES. For the active remediation alternatives
(Alternatives C1, C2, D, E and F), the transfer facilities, constructed on land
adjacent to the River, or in-river, are considered "on-site" for the purposes of
the permit exemption under CERCLA Section 121(e), although any such facilities
will comply with the substantive requirements of any otherwise necessary Federal
or State permits.

REMOVAL. Operations under these alternatives will have to be performed in
conformance with the substantive requirements of regulatory programs implemented
by the U.S. Army Corps of Engineers under Section 10 of the Rivers and Harbors
Act and Section 404 of the Clean Water Act. In addition, discharges during
remediation will conform to Wisconsin Statutes and substantive WDNR regulations
related to dredging and maintaining water quality.

DISPOSAL. Identifying a local landfill for disposal of sediments dredged from
Little Lake Butte des Morts is feasible. This would have to be coordinated with
local authorities, consistent with appropriate ARARs.

CAPPING AND CDF. For Alternative D and F, a lake bed grant would likely be
required from the Wisconsin legislature to construct a cap or in-water CDF. If
riparian rights exist, agreements with landowners with riparian rights would be
required. These considerations would be addressed during design.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

TREATMENT. Alternative E is administratively feasible. Air emissions permits
would be required if sediments are treated off-site.

AVAILABILITY OF SERVICES AND MATERIALS. For the No Action and MNR alternatives,
all needed services and materials are available. For the active remediation
alternatives (Alternatives C1, C2, D, E and F), equipment and personnel related
to dredging and materials handling (e.g., sediment dewatering) are commercially
available. Technology and associated goods and services for capping or a
post-dredging sand cover, upland landfill or CDF construction are locally
available.

Cost

Cost includes estimated capital and annual operation and maintenance costs, as
well as total capitol cost. Present worth cost is the total capital cost and
operation and maintenance costs of an alternative over time in today's dollar
value. Cost estimates are expected to be accurate within a range of +50 to -30
percent. (This is a standard assumption in accordance with EPA CERCLA guidance.)

The net present worth of the remedial alternatives range from $4.5 million for
No Action to $116.7 million for Alternative C1. For the active remedial
alternatives, the present worth of the capital and present worth of operation
and maintenance costs which range from approximately $63.6 million for
Alternative E to $116.7 million for Alternative C1. Capital costs, present worth
of operation and maintenance costs, and the total costs are listed in Table 24,
below.

TABLE 24 COMPARISON OF PRESENT WORTH COSTS FOR OU 1 ALTERNATIVES AT THE 1 PPM
RAL



                                     ESTIMATED
                                       VOLUME       ESTIMATED                                    PRESENT
                                    REMOVED OR      PCB MASS       CAPITAL                     WORTH TOTAL
                                   CONTAMINATED    REMEDIATED       COSTS        O&M COST         COST
                                   (CUBIC YARDS)    (POUNDS)    ($ MILLIONS)   ($ MILLIONS)   ($ MILLIONS)
                                   -------------   ----------   ------------   ------------   ------------
                                                                               
A - No Action                               0            0             0          4.5            4.5
B - Monitored Natural
  Recovery                                  0            0             0          9.9            9.9
C1 - Dredging/passive
  dewatering/off-site
  disposal                            784,000         3770         112.2          4.5          116.7
C2- Dredging/mechanical
  dewatering/off-site
  disposal                            784,000         3770          61.7          4.5           66.2
D - Dredge to a Confined
  Disposal Facility                   784,000         3770          63.5          4.5           68.0
E - Dredge and
  Vitrification                       784,000         3770          59.1          4.5           63.6
F - Dredging and Capping
  to Maximum extent
  practicable                         635,500         3770          86.0          4.5           90.5


From Section 7 and Appendix H of the FS.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

11.1.3 AGENCY AND COMMUNITY CRITERIA FOR OPERABLE UNIT

Agency Acceptance

The State of Wisconsin has been actively involved in managing the resources of
the Lower Fox River since before there was a federal Superfund law. These
efforts have led to significant state knowledge and understanding of the River
and Bay and of the contamination problems within those areas. As a result of
this expertise, WDNR has served as the lead agency responsible for assessing
risks and conducting the RI/FS, which forms the basis for the Proposed Plan and
Record of Decision (ROD). As the lead agency, WDNR has worked closely with EPA
to cooperatively develop this ROD. Both WDNR and EPA support the selection of
this remedy as is evidenced by the joint issuance of this ROD by both WDNR and
EPA.

Community Acceptance

Community Acceptance considers whether the local community agrees with EPA's
analyses and preferred alternative. Comments received on the Proposed Plan are
an important indicator of community acceptance. Community acceptance of the
Proposed Plan was evaluated based on comments received at the public meetings
and during the public comment period. There were more than 4800 comments
concerning the Proposed Plan. This ROD includes a responsiveness summary,
Appendix B, which addresses public comments.

11.2 OPERABLE UNIT 2 (APPLETON TO LITTLE RAPIDS)

Table 25 below summarizes the comparative analysis for OU 2 alternatives and how
each alternative meets, or does not meet requirements for each of the nine
criteria, described above.

A detailed comparative analysis for four of the nine criteria, Protection of
Human Health and the Environment, Long-term Effectiveness and Permanence,
Implementability and Cost are discussed below for all alternatives. A comparison
for five of the nine criteria (Compliance with Applicable or Relevant and
Appropriate Requirements, Reduction of Contaminant Toxicity, Mobility, or Volume
through Treatment, Short-term Effectiveness, Agency Acceptance and Community
Acceptance) is substantially the same as Alternatives discussed in OU 1 and are
therefore not repeated. Similar to the OU 1, Alternatives C and E for OU 2 are
also considered "Active Remediation Alternatives."

The major differences between OU 1 and OU 2 that relate to this comparative
analysis of alternatives are the following:

      1)    Mass of PCB contaminants in OU 2 is relatively small and potential
            for downstream release proportionally less, and result in a
            relatively faster time to recovery,

      2)    Bedrock immediately underlies contaminated sediment in the upper
            portion of the OU 2, where most of the deposits are located; this
            makes complete removal of contaminated materials impracticable,

      3)    Locks, dams, and the urban/residential setting of a considerable
            portion of OU 2 make access more difficult than in OU 1.

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                  Fox River and Green Bay ROD for OU 1 and OU 2

TABLE 25 OPERABLE UNIT 2. APPLETON TO LITTLE RAPIDS ALTERNATIVES



   Yes = Fully meets                       SELECTED
       criteria                           ALTERNATIVE
  Partial = Partially                    Alternative B
    meets criteria                         Monitored      Alternative C    Alternative E
  No = Does not meet     Alternative A      Natural      Dredge with off    Dredge and
       criteria            No Action       Recovery       site disposal    Virtification
- -----------------------  -------------   -------------   ---------------   -------------
                                                               
1.  Overall protection
of human health and
the environment          No              Partial         Partial           Partial

2. Compliance with
Applicable or
Relevant &
Appropriate
Requirements             No              Partial         Yes               Partial

3. Long-term
Effectiveness and
Permanence               No              Partial         Yes               Yes

4. Reduction of
Contaminant
Toxicity, Mobility, or
Volume through
Treatment                No              No              Yes               Yes

5. Short-term            No              Partial         Partial           Partial
Effectiveness

6. Implementability      Yes             Yes             Partial           Partial

7. Cost (millions of $)  $ 4.5           $ 9.9           $ 16.5 to 38.3    $15.2 to 26.2

8. Agency Acceptance     The WDNR has been the lead agency in developing the RI/FS and the ROD.
                         Both WDNR and EPA support the selected alternative of Monitored Natural
                         Recovery for this OU.

9. Community             The level of community acceptance of the selected alternative is outlined
Acceptance               in the Responsiveness Summary.


11.2.1 THRESHOLD CRITERIA FOR OPERABLE UNIT 2

PROTECTION OF HUMAN HEALTH AND THE ENVIRONMENT

The primary risk to human health associated with the contaminated sediment is
consumption of fish. The primary risk to the environment is the bioaccumulation
of PCBs from the consumption of fish or, for invertebrates, the direct
ingestion/consumption of sediment. Similar to the evaluation for OU 1,
protection of human health and the environment was evaluated using five lines of
evidence:

      -     Residual PCB concentrations in surficial sediment using
            surface-weighted averaging after completion of a remedy;

      -     Average PCB concentrations in surface water,

      -     The projected number of years required to reach safe consumption of
            fish;

      -     The projected number of years required to reach a surface sediment
            concentration protective of fish or other biota, and

      -     PCB loadings to downstream areas and total mass contained or
            removed.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

These are discussed below.

Residual PCB concentrations in surficial sediment and surface water

Alternatives C and E for OU 2 could achieve greater reductions in average
concentration of contaminants in surficial sediment and in surface water
relative to the No Action and MNR Alternatives (Alternatives A and B,
respectively) - see Table 26 below. Alternatives C and E produce a reduction
in residual PCB concentrations in surface sediment using surface-weighted
averaging after completion, when compared to the No Action or MNR Alternatives.
The estimated surface water concentrations 30-years after remediation is reduced
93 percent for Alternatives C or E relative to No Action and Monitored Natural
Recovery (i.e., 0.19 ng/L versus 2.76 ng/L in Table 26, below). It should be
noted that these estimates do not take into account the already completed
removal of Deposit N that occurred during 1998-1999. Deposit N comprised 32
percent of the mass (i.e., 65 pounds) of PCBs in OU 2. More recent calculation
estimated the average SWAC for OU 2 is 0.61 ppm with the PCB mass from Deposit N
and O removed.

TABLE 26 POST-REMEDIATION SEDIMENT AND SURFACE WATER CONCENTRATIONS IN OU 2



                                                                    ESTIMATED SURFACE WATER
                               AVERAGE PCB CONCENTRATIONS IN     CONCENTRATIONS 30-YEAR'S AFTER
      ALTERNATIVE                SURFICIAL SEDIMENTS (PPM)           REMEDIATION (NG/L)(3)
- -----------------------        -----------------------------     ------------------------------
                                                           
A, B                                       0.61(1)                            2.76
C, E                                      0.066(2)                            0.19

- ----------
1.    Value is from November 14, 2002 email from RETEC to WDNR on SWAC values in
      OUs 1 - 4

2.    Value is from FS Tables 5-4

3.    Values are from Table 8-5 B

Time to Reach Acceptable Fish Tissue Concentrations

Reductions in the time required to reach levels safe for human consumption of
fish after implementation of Alternatives C and E relative to the No Action and
Monitored Natural Recovery (MNR) alternatives are listed in Table 27 below.
Recovery times for other human health receptors are presented in the FS, Chapter
8, Table 8-7. Again, these calculations do not consider the removal of Deposit
N, completed by WDNR during 1998-1999.

TABLE 27 TIME TO ACHIEVE ACCEPTABLE FISH TISSUE CONCENTRATIONS FOR WALLEYE IN OU
2 AT 1 PPM



                                                                             ESTIMATED YEARS TO ACHIEVE
                                                                            -----------------------------
                                                                            ALTERNATIVES    ALTERNATIVES
  FISH                RECEPTOR                    RISK LEVEL GOAL               C, E            A, B
- -------    ---------------------------    ------------------------------    ------------    -------------
                                                                                
Walleye    Recreational Angler            RME Hazard Index of 1.0                 4*              40
Walleye    High Intake Fish Consumer      RME Hazard Index of 1.0                 7*              55
Walleye    Recreational Angler            RME 10(-5) cancer risk level           70*              42
Walleye    High Intake Fish Consumer      RME 10(-5) cancer risk level           89*              65


- ----------
*     Does not consider removal of Deposit N.

Data is from FS Table 8-14.

Time to Surface Sediment Concentration Protective of Fish or Other Biota

Alternatives C and E would achieve reductions in the time required to reach
protective levels for ecological receptors, relative to the No Action and MNR
alternatives. For representative receptors, implementation of active remediation
alternatives results in time reduction relative to

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                  Fox River and Green Bay ROD for OU 1 and OU 2

No Action or MNR as is shown in Table 28, below. Recovery times for additional
ecological receptors and recovery times are presented in the FS, Chapter 8,
Table 8-7. These calculations do not consider removal of Deposit N that occurred
during 1998-1999.

TABLE 28 TIME TO PROTECTIVE LEVELS IN SEDIMENTS FOR REPRESENTATIVE ECOLOGICAL
RECEPTORS IN OU 2.



                                                                              ESTIMATED YEARS TO ACHIEVE
                                                                             ------------------------------
                                                                             ALTERNATIVES      ALTERNATIVES
    FISH                 RECEPTOR                   RISK LEVEL GOAL              C, E              A, B
- -----------    ---------------------------    ---------------------------    ------------      ------------
                                                                                   
Carp           Carnivorous bird               NOAEC                              17*                71
Carp           Piscivorous mammal             NOAEC                              34*               100
Sediment       Sediment invertebrate          TEL                                28*                81


*   Does not consider removal of Deposit N.

Data is from FS Table 8-16.

PCB loadings to downstream areas and total mass contained or removed

Reduction of the PCB load transported over the Little Rapids Dam into the
downstream areas of the Fox River is a measure of the overall protection of
human health and the environment. Reduced PCB loading from OU 2 will ultimately
contribute to reduction of concentrations of PCBs in sediment, water and fish,
and thereby reduce risk to humans and ecological receptors in the Fox River.
Alternatives C or E provide for improvement relative to No Action and MNR.

Summary

No Action and MNR may take 40 to 70 years to reach acceptable fish tissue
concentrations for recreational anglers and may take more than 80 years to reach
safe ecological levels for carp. Surface water WQS will not be met in 100 years.
However, the recovery times may be overestimated, as these estimates do not
consider the removal of Deposit N, which occurred during 1998-1999. Finally,
although Alternatives C or E provide a more protective remedy than the No Action
and MNR alternatives, risks would only be moderately reduced.

The comparative analysis for compliance with Applicable or Relevant and
Appropriate Requirements is substantially the same as discussed for the OU 1
evaluation and is not repeated.

11.2.2 BALANCING CRITERIA FOR OPERABLE UNIT 2

LONG-TERM EFFECTIVENESS AND PERMANENCE

Reduction of Residual Risk

The No Action and MNR alternatives result in a continuation of the degraded
condition of the sediments and surface water quality of OU 2, for at least
several decades. Nevertheless, modeling demonstrates that OU 2 will eventually
recover, due to slow natural decreases in PCB concentrations, primarily due to
burial and dilution.

Alternatives C and E would reduce residual risk through removal of 46,200 cubic
yards of sediments containing approximately 92 kg (about 200 pounds) of PCBs
over an area of 34 acres at the 1 ppm RAL for OU 1. This does result in a
reduction in time required to reach safe human fish consumption rates when
compared to the No Action and MNR Alternatives. However, based on results
already achieved at the Deposit N project with conditions representative of
those present in the remainder of OU 2 (bedrock underlying contaminated

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                  Fox River and Green Bay ROD for OU 1 and OU 2

sediments), it may not be possible to consistently meet the RAL of 1 ppm. The
Deposit N pilot project demonstrated that a significant percentage of PCB
contaminated sediment could be removed, although it did not nor was it designed
to, demonstrate that a consistent reduction in contaminant concentration in
residual sediments was feasible. This is especially true for the portions of OU
2 where "there is bedrock underlying contaminated sediments.

Reliability of Controls

For Alternatives C and E, No Action and MNR, fish consumption advisories and
fishing restrictions can provide limited protection to humans until PCB
concentrations in fish are reduced to the point where the fish consumption
advisories and fishing restrictions can be relaxed or discontinued entirely.

Alternatives C and E permanently remove contaminated sediment from the River,
and can achieve risk reduction as well as reduce the potential of releases by
scour of PCB-contaminated sediments. Alternatives C and E utilize established
technologies and are considered in part to be sufficiently reliable. As
discussed below, dredging does not work well with bedrock underlying shallow
sediment deposits (as is present for most of the sediment deposits in OU 2).

Summary

Based on the above analysis of reduction in residual risk and adequacy and
reliability of controls, Alternative's C and E are marginally better than the No
Action and MNR alternatives but are likely to have difficulty in consistently
achieving the 1 ppm RAL.

IMPLEMENTABILITY

Implementability addresses the technical and administrative feasibility of a
remedy from design through construction and operation. Factors such as
availability of services and materials, administrative feasibility and
coordination with other governmental entities are also considered.

Both the No Action and MNR alternatives are technically feasible, as no active
measures would be taken for the PCB-contaminated sediments.

Technical feasibility for the active remediation alternatives is discussed below
for operational aspects of the alternatives that differ from OU 1.

SEDIMENT PROCESSING/TRANSFER FACILITIES - WDNR and EPA have not determined the
location of the sediment processing/transfer facilities for Alternatives C and
E. Preliminary criteria were utilized to establish a list of preliminary
candidate sites to allow for the preparation of a cost estimate. This analysis
indicates that several access locations would be required due to navigation
impediments by numerous dams and locks between the Appleton dam and Little
Rapids dam. For cost purposes, access locations were assumed in Kimberly, near
Wrightstown and near the Little Rapids dam. Due to the number of access
locations required and the physical barriers presented by the many locks and
dams in this Operable Unit, access limitations would make implementation more
difficult or could require modifications to conventional dredging technologies.

REMOVAL - Alternatives C and E require the dredging of contaminated sediments.
For the majority of OU 2, bedrock underlying contaminated sediments may make
complete removal of contaminated sediment and achieving the Action Level
objective of 1 ppm impracticable. Additionally, due to higher water velocities
for this Operable Unit, a post-dredging sand cover would likely not be effective
in reliably covering post-dredging high concentrations of residual PCBs due to
the greater water velocities.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

Summary

Alternatives C and E may be difficult to effectively implement due to site
conditions with bedrock underlying contaminated sediments, and the large number
of locks and dams which would limit river access and navigation. Administrative
implementability would be consistent with OU 1.

Cost

Cost includes estimated capital and annual operation and maintenance costs, as
well as total capitol cost. Present worth cost is the total capital cost and
operation and maintenance costs of an alternative over time in today's dollar
value. Cost estimates are expected to be accurate within a range of +50 to -30
percent (This is a standard assumption in accordance with EPA CERCLA guidance.)

The net present worth of the remedial alternatives range from $4.5 million for
No Action to $20.1 million for Alternative C (see Table 29, below).

The comparative analysis for Reduction of Contaminant Toxicity, Mobility, or
Volume through Treatment, and Short-term Effectiveness is substantially the same
as for the OU 1 evaluation and are not repeated.

11.2.3 AGENCY AND COMMUNITY CRITERIA FOR OPERABLE UNIT 2

The comparative analysis for Agency Acceptance and Community Acceptance is
substantially the same as discussed for the OU 1 evaluation and is not repeated.

TABLE 29 COMPARISON OF PRESENT WORTH COSTS FOR OU 2 ALTERNATIVES AT A 1 PPM RAL



                                                    ESTIMATED
                                                      VOLUME       ESTIMATED                                PRESENT-
                                                    REMOVED OR     PCB MASS      CAPITAL                  WORTH TOTAL
                                                    CONTAINED     REMEDIATED     COSTS        O&M COST       COST
                                                   (CUBIC YARDS)   (POUNDS)   ($ MILLIONS)  ($ MILLIONS)  ($ MILLIONS)
                                                   -------------  ----------  ------------  ------------  ------------
                                                                                           
A - NO ACTION                                            0             0              0           4.5           4.5
B - MONITORED NATURAL RECOVERY                           0             0              0           9.9           9.9
C - DREDGING/PASSIVE DEWATERING/OFF-SITE DISPOSAL   46,200           200           33.8           4.5          20.1
E - DREDGE AND  VITRIFICATION                       46,200           200           21.7           4.5          17.1


From Section 7 and Appendix H of the FS.

12. PRINCIPAL THREAT WASTES

The National Contingency Plan (NCP) establishes an expectation that treatment
will be used to address the principal threats at a site whenever practical.
Engineering controls, such as on-site or off-site containment, may be used for
wastes that pose a relatively low long-term threat or where treatment is
impractical (NCP Section 300.430(a)(1)(iii) and Superfund Publication
9380.3-06FS, November 1991 "A Guide to Principal Threat and Low Level Threat
Wastes").

The concept of principal threat and low-level threat wastes is applied on a
site-specific basis when characterizing source material. Source material is
defined as material that includes or contains hazardous substances, pollutants,
or contaminants that act as a reservoir for migration of contamination to
groundwater, to surface water, to air, or acts as a source for direct

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                 Fox River and Green Bay ROD for OU 1 and OU 2

exposure. In the Lower Fox River and Green Bay Site, the contaminated sediment
are source materials.

Principal threat wastes are those source materials considered to be highly toxic
or highly mobile which cannot be reliably contained or that would present a
significant risk to human health or the environment should exposure occur. The
manner in which principal threats are addressed generally will determine whether
the statutory preference for treatment as a principal element is satisfied.
Although USEPA has not established a threshold level of toxicity/risk to
identify a principal threat waste, generally where toxicity and mobility of
source material combine to pose a potential risk of 10(-3) or greater the
source material is considered principal threat waste.

With respect to the Fox River sediments in OU 1, some PCB concentrations create
a risk in the range of 10(-3) or more. The preference for treatment outlined
above applies to these particular sediments. However, it would be impracticable
to closely identify, isolate and treat these principal threat wastes
differently than the other PCB sediments in OU 1. The dredging technology that
will be employed to accomplish the OU 1 remedy does not distinguish among
gradations of contamination in source materials. Nevertheless, at the conclusion
of the OU 1 remedy the source materials (and principal threat wastes) will have
been removed from the River, dewatered, and deposited in a landfill. In so doing
the mobility of the principal threat wastes will have been greatly reduced.

13. SELECTED REMEDY

13.1 THE SELECTED REMEDY

The selected remedy for OU 1 is alternative C2. This remedy includes removal,
dewatering, and off-site disposal of an estimated 784,200 cubic yards of
PCB-contaminated sediment from OU 1 (Little Lake Butte des Morts) with PCB
concentrations greater than 1 ppm. These sediments are estimated to contain
approximately 1,715 kg (about 3,770lbs) of PCBs, or approximately 90 percent of
the total PCB mass in OU 1.

The selected remedy for OU 2 is Alternative B, Monitored Natural Recovery and
Institutional Controls.

Summary and Description of the Rationale for the Selected Remedy

The summary of the rationale for the selected remedy will be addressed for each
Operable Unit. The following sections discuss specifics of how the selected
alternative would be implemented at each OU. Five-year reviews will be conducted
of remedial activities at each OU to determine remedy effectiveness.

OPERABLE UNIT 1 - LITTLE LAKE BUTTE DES MORTS, ALTERNATIVE C2 - Alternative C2
includes the removal of sediment with PCB concentrations greater than the 1.0
ppm remedial action level (RAL) using an environmental dredge, followed by
dewatering and off-site disposal of the sediment. The total volume of sediment
to be dredged in this alternative is approximately 784,200 cy.

- -     SITE MOBILIZATION AND PREPARATION. The staging area for this OU will be
      determined during the design stage. Site preparation at the staging area
      will include collecting soil samples, securing the onshore property area
      for equipment staging, and constructing the mechanical sediment dewatering
      facility, water treatment facilities, and sediment storage and truck
      loading areas. A docking facility for dredging may need to be constructed.
      Assuming a

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                       Fox River and Green Bay ROD for OU 1 and OU 2

      staging area can be found south of the railroad bridge, a separate staging
      area for the dredge when operating north of the railroad bridge may be
      needed. This facility would be used solely for the purpose of docking
      dredging equipment -- any dredge slurry will be pumped to southern staging
      area.

- -     SEDIMENT REMOVAL. Sediment removal will be conducted using a dredge (e.g.,
      cutterhead or horizontal auger or other method). Given the volumes and
      operating assumptions described in the FS, completing the removal effort
      is estimated to take approximately six years for OU 1. For a dredging
      removal, in-water pipelines will carry the slurry from the dredging area
      to the staging area for dewatering. For longer pipeline runs, it would be
      necessary to utilize in-line booster pumps to pump the slurry to the
      dewatering facility. If necessary, silt curtains around the dredging area
      may be used to minimize sediment resuspension downstream of the dredging
      operation. Buoys and other waterway markers will be installed around the
      perimeter of the work area. Other activities associated with sediment
      removal will be water quality monitoring, post-removal sediment surveys,
      and site restoration.

- -     SEDIMENT DEWATERING. Removal using dredging technologies will require
      mechanical dewatering requiring land purchase or access, site clearing,
      and possibly construction of temporary holding ponds. Dewatering
      techniques would likely be similar to the mechanical processes used for
      both Lower Fox River demonstration projects, including a series of shaker
      screens, hydrocyclones, and belt filter presses.

- -     WATER TREATMENT. Water treatment will require the purchase of equipment
      and materials for flocculation, clarification, and sand filtration. Water
      treatment will be conducted 24 hours per day, 7 days per week during the
      dredging season. Discharge water for hydraulic dredging is estimated at
      570,000 gallons per day. Daily discharge water quality monitoring is
      included in the cost estimate. Treated water will be sampled and analyzed
      to verify compliance with the appropriate discharge requirements. Carbon
      filtration will likely be necessary.

- -     SEDIMENT DISPOSAL. Sediment disposal includes the loading and
      transportation of the sediment to an NR 500 landfill with TSCA approval
      (needed for sediment if concentrations are over 50 mg/kg PCB) after
      mechanical dewatering. The sediment will be loaded using a front-end
      loader into tractor-trailer end dumps fitted with bed liners or sealed
      gates. Each load will be manifested and weighed. The haul trucks will pass
      through a wheel wash prior to leaving the staging area to prevent the
      tracking of soil onto nearby streets and highways.

- -     DEMOBILIZATION AND SITE RESTORATION. Demobilization and site restoration
      will involve removing all equipment from the staging and work areas and
      restoring the site to, at a minimum, its original condition.

- -     INSTITUTIONAL CONTROLS AND MONITORING. Baseline monitoring will include
      pre- and post-remedial sampling of water, sediment, and biological
      tissue. Monitoring during implementation will include air and surface
      water sampling. Verification monitoring to confirm that PCB contamination
      has been removed to the RAL may include surface and subsurface sediment
      sampling. Long-term monitoring will include surface water, biological
      tissue, and possibly surface sediment sampling. The types and frequency of
      pre-construction monitoring will be developed during remedial design.
      Plans for monitoring during and after construction will be developed
      during the remedial design and modified during and after construction as
      appropriate. Institutional controls may include access restrictions, land
      use or water use restrictions, dredging moratoriums, fish consumption
      advisories, and domestic water supply restrictions. Land and water use
      restrictions and access restrictions may require local or state
      legislative action to prevent inappropriate use or development of
      contaminated areas.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

- -     ACHIEVEMENT OF REMEDIAL ACTION LEVEL OBJECTIVE. The mass and volume to be
      remediated will be based on setting a dredge elevation based on a RAL of 1
      ppm while achieving a SWAC of 0.25 ppm for OU 1. The success of the
      selected remedy for OU 1 will be evaluated based_on a SWAC of 0.25 ppm
      with samples taken from 0-10 cm depth. This is discussed further in
      section 13.3.

OPERABLE UNIT 2 - APPLETON TO LITTLE RAPIDS, ALTERNATIVE B - The MNR alternative
will include a 40-year monitoring program as is discussed in the FS for
measuring PCB and mercury levels in water, sediment, invertebrates, fish, and
birds. The monitoring program will be developed to effectively measure
achievement of and progress toward the RAOs. In summary, the monitoring program
will include:

- -     Surface water quality sampling to determine the downstream transport of
      PCB mass into Green Bay;

- -     Fish and waterfowl tissue sampling to determine the residual risk of PCB
      and mercury consumption to human receptors;

- -     Fish, bird, and zebra mussel tissue sampling to determine the residual
      risk of PCB uptake to environmental receptors;

- -     Population studies of bald eagles and double-crested cormorants to assess
      the residual effects of PCBs and mercury on reproductive viability; and

- -     Possible surface sediment sampling in MNR areas to assess potential
      recontamination from upstream sources and the status of natural recovery.

The types and frequency of pre-construction monitoring will be developed during
MNR long term monitoring plan design. Plans for monitoring will be developed
during the remedial design and modified during and after the upstream
construction in OU 1, as appropriate.

Until the RAOs have been achieved, existing institutional controls will have to
be maintained to help prevent exposure of human receptors to contaminants.
Institutional controls may include access restrictions, land use or water use
restrictions, dredging moratoriums, fish consumption advisories, and domestic
water supply restrictions. Land and water use restrictions and access
restrictions may require local or state legislative action to prevent
inappropriate use or development of contaminated areas. Deposit DD, an area in
OU 2 of greater contamination, will be addressed as part of the active
remediation at adjacent OU 3.

13.2 SUMMARY OF THE ESTIMATED COSTS OF THE SELECTED REMEDY

The total estimated present-worth cost of the selected remedy is $76.1 million.
This is an engineering cost estimate that is expected to be within +50 to -30
percent of the actual project cost (based on year 2001 dollars). Changes in the
cost elements are likely to occur as a result of new information and data
collected during the remedial design. Major changes may be documented in a
memorandum in the administrative record, an Explanation of Significant
Difference (ESD), or a ROD amendment.

13.3 CLEANUP STANDARDS AND OUTCOMES FOR THE SELECTED REMEDY

The selection of a remedy was accomplished through the evaluation of the nine
criteria as specified in the NCP. A remedy selected for a site must be
protective of human health and the environment, comply with ARARs (or justify a
waiver) and offer the best balance of tradeoffs with respect to the balancing
and modifying criteria in the NCP.

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Through the analyses conducted for the RI/FS, WDNR and EPA have determined that
there is an unacceptable risk to human health and the environment from the
consumption of fish from the Fox River. It has also been determined that the
unacceptable risk will continue for many decades without active remediation of
the PCB-contaminated sediments in OU 1.

13.3.1 ACHIEVING CLEANUP STANDARDS

WDNR and EPA believe the removal of sediments with PCB concentrations greater
than the 1.0 ppm RAL in OU 1 is important to achieving the timely reduction of
risks to an acceptable level. WDNR and EPA envision that all sediment
contaminated at concentrations above the RAL in OU 1 will be removed. Therefore,
this ROD provides that under certain circumstances a sand cover may be used to
supplement the primary dredging remedy in order to reach the risk reduction
targets. Pre-remediation sampling and characterization efforts will define a
spatial "footprint" (both horizontally and vertically) of the sediment in OU 1
that has a concentration of PCBs greater than 1 ppm. It is this footprint that
is targeted for removal by dredging. If dredging is able to achieve this result
(i.e., remove all sediments with PCB concentrations greater than 1 ppm), the
active remediation portion of the OU 1 remedy will be complete.

However, if after dredging is completed for OU 1, sampling shows that the 1 ppm
RAL has not been achieved, a SWAC of 0.25 ppm may be used to assess the
effectiveness of PCB removal. If that SWAC of 0.25 ppm has not been achieved for
OU 1, then the remedy provides certain options to further reduce risk. The first
option is that additional dredging may be undertaken to ensure that all
sediments with PCB concentrations greater than the 1 ppm RAL are removed
throughout the particular deposit. A second option would be to place a sand
cover on dredged areas to reduce surficial concentrations such that a SWAC of
0.25 ppm for OU 1 is achieved.

EXPLANATION OF REMEDIAL ACTION LEVEL, SURFACE WEIGHTED AVERAGE CONCENTRATION AND
SEDIMENT QUALITY THRESHOLD.

The term Remedial Action Level ("RAL") refers to a PCB concentration in sediment
used to define an area or volume of contaminated sediment that is targeted for
remediation. In other words, this ROD calls for the removal by dredging of all
sediment in OU 1 that has a PCB concentration of greater than 1 ppm. If all
sediment with a concentration greater than the 1 ppm RAL is removed, then it is
expected that the residual Surface Weighted Average Concentration ("SWAC") of
sediment will be 0.19 ppm in OU 1. The SWAC in this instance is less than the
RAL because the SWAC is calculated as an average concentration over the entire
OU 1, after the removal of sediment from discrete areas ("deposits") which are
above the RAL and includes averaging over areas in which there are surface
concentrations less that the RAL. SWAC calculations are discussed in section 5
of the FS.

The term "Sediment Quality Threshold" (SQT) refers to the PCB concentration in
the sediment that is protective of specified human and ecological receptors.
SQTs vary depending on the sensitivity of the particular receptor (e.g.,
recreational anglers, "high intake" fish consumers, walleye, mink, etc.). Put
another way, if the remediation called for in this ROD results in a sediment
concentration at or below the SQT, then the risk to specified human and
ecological receptors will have been reduced to a safe level. It is important to
understand that immediately upon the completion of the dredging, it is not
expected that the SQT will be achieved. Instead, it is contemplated that the SQT
will be met only after the river is allowed a certain amount of time to
"recover" through natural processes following active dredging.

13.3.2 EXPECTED OUTCOMES OF SELECTED REMEDY AND RAL RATIONALE

RAOs were developed to provide relative comparisons for different remedial
alternatives. RAO 1 relates to achieving surface water quality standards. RAOs 2
and 3 relate to protectiveness for human and ecological receptors. RAO 4
evaluates long-term relative releases to Green

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Bay and Lake Michigan, and RAO 5 considers short term releases from potential
remedies themselves.

RAO 1 may not be achieved in the foreseeable future due to the very stringent
goals for PCBs acceptable in surface waters, but nevertheless significant risk
reduction will occur (Table 13). Recovery times estimated for RAOs 2 (i.e.,
protection of human health) and 3 (i.e., protection of ecological receptors)
indicate that they will be met well within the defined goals. RAO4 relates to
loading of Green Bay and Lake Michigan and indirectly relate to OUs 1 and 2.
However, reductions of loadings from removal of contaminants in OU 1 will
significantly reduce contaminant migration downstream and will therefore
contribute to achieving RAO4. RAO5 is achievable with conventional removal
environmental removal technologies for OU 1 and does not apply to OU 2.

RAOs 2 and 3 are evaluated in the alternative-specific Risk Assessment in the
FS by estimating the time required to reach the protectiveness criteria
for-human health (i.e., removal of fish advisories) and the time required to
reach the protectiveness criteria for ecological receptors for no removal and
for different remedial action levels for contaminant removal.

A PCB concentration of 1 ppm has been selected as the appropriate Remedial
Action Level based on the its ability to achieve Remedial Action Objectives
(RAOs) in surface water and for human health and ecological receptors within a
reasonable timeframe relative to the anticipated costs. Exposures to PCB
sediment concentrations above 1 ppm must be eliminated in order to achieve a
protective Surface Weighted Average Concentration (SWAC) within a reasonable
timeframe. This RAL will also reduce and minimize surface water concentrations
and the release of contaminants to downstream areas of the Fox River. Studies
conducted as part of the Lower Fox River and Green Bay RI/FS indicate that a 1
ppm RAL shows the greatest decrease in projected surface water concentrations
relative to the other action levels.

PCB RALs of No Action, 5.0 ppm, 0.5 ppm, 0.25 ppm, and 0.125 ppm were also
evaluated. However, those RALs greater than 1 ppm would require a significant
amount of additional time to achieve the RAOs for the Site. For those RALs less
than 1 ppm: the RAOs would not necessarily be achieved sooner than the 1 ppm
RAL. The RAOs considered in determination of the RAL are discussed below for
Operable Units 1 and 2. It is important to note that the absolute numbers have
uncertainty inherent with model predictions, however relative differences among
the RALs are reliable

Justification for Operable Unit 1 Remedial Action Level of 1.0 ppm

Figure 5 shows our modeling analysis of sediment RALs in comparison with the
Surface Weighted Average Concentrations (SWACs) which will result from the
cleanup at the selected 1 ppm RAL. Modeling suggests that a 1 ppm RAL can
achieve an estimated 0.185 ppm PCB SWAC for OU 1 (Figure 5 below). Selecting a
sediment RAL of 1 ppm clearly stands out as the most effective RAL because the
risk declines significantly in a reasonable time period (see figures 6 and
figure 7). This will result in reaching risk reductions in the years estimated
in Table 30, below.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

FIGURE 5 REMEDIAL ACTION LEVELS AND ESTIMATED SWACS FOR EVALUATED RALs FOR OU 1
         (FROM FS TABLE 5-4)

                                 ACTION LEVELS &
                                   OU 1 SWACs

                                 [LINE GRAPH]

                        POTENTIAL REMEDIAL ACTION LEVELS

As shown in Table 30 below, modeling suggests that a sediment RAL of 1.0 ppm,
and a SWAC of 0.185 ppm will lead to fairly rapid declines in PCB fish tissue
concentrations. Using the 1 ppm RAL, Table 30 projects the number of years until
the risk of fish ingestion/consumption declines to acceptable levels for
different consumers.

TABLE 30 ESTIMATED YEARS TO REACH HUMAN HEALTH AND ECOLOGICAL THRESHOLDS TO
         ACHIEVE RISK REDUCTION FOR THE OPERABLE UNIT 1 AT A RAL OF 1.0 PPM



                                                                   ESTIMATED
   FISH            RECEPTOR                  RISK LEVEL GOAL         YEARS
- ----------  -------------------------  --------------------------  ---------
                                                          
Walleye     Recreational Angler        RME Hazard Index of 1.0         <1

Walleye     High Intake Fish Consumer  RME Hazard Index of 1.0          4

Walleye     Recreational Angler        RME 10(-5) cancer risk level     9

Walleye     High Intake Fish Consumer  RME 10(-5) cancer risk level    14

Carp        Carnivorous bird           NOAEC                           14

Carp        Piscivorous mammal         NOAEC                           29


A 1 ppm RAL shows the greatest decrease in projected surface water
concentrations. Figure 6 shows model estimates for PCB surface water
concentration 30 years after remediation are 2.99 ng/L for No Action, 1.67 ng/L
for 5 ppm, and 0.18 ng/L for 1 ppm, which is the largest relative drop.
Additional declines for projected surface water concentrations for RAL less than
1 ppm are relatively minimal: 0.13 ng/L, 0.05 ng/L and 0.04 ng/L, respectively
for 0.5 ppm, 0.25 ppm and 0.125 ppm RALs. In other words, selection of an RAL
less than 1 ppm would only marginally reduce the SWAC and would only marginally
reduce surface water concentrations. Thus, a comparison of various RALs shows
the 1 ppm RAL has the greatest relative post-remediation decrease in surface
water concentrations.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

FIGURE 6 ESTIMATES OF SURFACE WATER PCB CONCENTRATIONS FOR THE EVALUATED RALs 30
         YEARS AFTER COMPLETION OF REMEDIAL ACTIVITIES FOR OU 1

                        SURFACE WATER PCB CONCENTRATIONS
                                     FOR OU 1
                            30 YEARS POST-REMEDIATION

                                 [BAR GRAPH]

As shown in Figure 7, a 1 ppm RAL shows similar relative decreases in relation
to acceptable fish tissue concentrations for walleye. Figure 7 shows that for
RAL concentrations greater than 1 ppm, significantly more years will elapse
before the risk of fish consumption declines to acceptable levels. The time that
it would take to acceptable fish tissue concentrations are 51 years for No
Action, 29 years at a RAL of 5 ppm and less than 1 year for a RAL of 1 ppm. The
time needed to reach acceptable fish tissue concentrations for RALs less than 1
ppm (0.5 ppm, 0.25 and 0.125 ppm) are almost indistinguishable from the 1 ppm
level. Other species of fish show similar reductions and are discussed in detail
in the Feasibility Study Chapter 8. Figure 7 clearly shows that there is limited
risk reduction achieved by selecting an RAL of less than 1 ppm.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

FIGURE 7 TIME TO ACHIEVE ACCEPTABLE FISH TISSUE CONCENTRATIONS FOR OU 1

                     TIME TO ACHIEVE ACCEPTABLE FISH TISSUE
                                LEVELS FOR OU 1

                                  [BAR GRAPH]

Safe fish consumption by birds showed similar relative reductions for 1 ppm
versus other potential cleanup levels (Figure 8). For fish eating birds, the
time needed to reach safe fish consumption is 100 years for No Action, 67 years
for a 5 ppm RAL, 14 years for a 1 ppm RAL (the greatest relative reduction in
time), and 9 years for 0.5 ppm RAL. Thus, similar to the earlier figures, the 1
ppm RAL provides the greatest relative reduction of time to ecosystem recovery.

FIGURE 8 TIME TO SAFE FISH CONSUMPTION BY BIRDS IN OU 1

                          TIME TO SAFE FISH CONSUMPTION
                          FOR OU 1 (FISH EATING BIRDS)

                                  [BAR GRAPH]

A 1 ppm RAL is also the most protective based on estimates of downstream
loadings (i.e., movement and migration of PCBs into other areas of the River
and eventually Green Bay). Downstream loadings of PCBs from OU 1 relative to
remedial activities, are as follows: No

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                       Fox River and Green Bay ROD for OU 1 and OU 2

Action - 11.33 kg/year, 5 ppm - 6.35 kg/year, 1 ppm - 0.66 kg/year, 0.5 ppm -
0.49 kg/year, 0.25 ppm - 0.18 kg/year, 0.125 ppm - 0.15 kg/year (Figure 9). The
RAL of 1 ppm provides the greatest decrease in downstream loadings relative to
the other RALs. Like earlier Figures, Figure 9 shows clearly that, with respect
to downstream loadings, the 1 ppm RALs level achieves the most reduction.

FIGURE 9 RALs AND DOWNSTREAM LOADINGS IN OU 1

                                 ACTION LEVELS &
                            OU 1 DOWNSTREAM LOADINGS

                                  [BAR GRAPH]

                         POTENTIAL REMEDIAL ACTION LEVEL

In summary, the 1 ppm RAL shows the greatest relative improvement for all the
pertinent RAOs resulting in a protective and cost effective cleanup level for
OU 1.

Justification for Monitored Natural Recovery for OU 2

WDNR and EPA have determined that Monitored Natural Recovery (MNR) for OU 2 is
sufficiently protective of human health and the environment. However, because of
Deposit DD proximately to OU 3, the decision on whether to remediate this
deposit will be deferred until the ROD for OU 3 is prepared.

The mass of PCBs and volume of contaminated sediments in OU 2 is approximately
109 kg and 339,200 cubic yards, respectively, for all deposit and interdeposit
sediments. This is a small portion (2.4 percent) of the PCB mass and sediment
volume in the entire 39 miles of the Lower Fox River, which includes 29,855 kg
(66,050 pounds) and 14,061,100 cy, respectively. The 20-miles River reach of OU
2 is a relatively long stretch of the River and includes 22 deposits with
relatively small sediment volume and PCB mass. Within OU 2, the deposits with
the two largest masses are Deposit N (30 kg [65 pounds]) and Deposit DD (34 kg
[74 pounds]). These two deposits account for 58 percent of the total PCB mass in
this reach; a majority of the PCB mass at Deposit N was removed during the pilot
project at that location, and the agencies will evaluate the feasibility of
remediating Deposit DD as part of the OU 3 ROD. Because the removal of all the
material from Deposit N is not reflected in the volume estimates in the RI/FS,
risk for this reach may be overestimated. An evaluation of sediment volumes
within individual deposits in OU 2 shows there are no deposits with a sediment
volume greater than 10,000 cy having a PCB concentration above the 1.0 ppm
action level. This demonstrates that the areas within this Operable Unit needing
remediation are relatively few and that the risk of exposure from one of

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                       Fox River and Green Bay ROD for OU 1 and OU 2

these areas with higher concentration is low. In addition, the SWAC for OU 2,
with no active remediation, is 0.61 ppm. This existing SWAC is close to the 0.25
ppm SWAC goal of OU 1.

In addition to the small physical size and the small quantity of PCB mass within
the deposits in this reach, there are numerous impediments, such as the presence
of several dams, the physical characteristics of the River in this reach, and
the lack of good staging areas, that would cause difficulties in implementation
and in mobilizing and operating dredging equipment. These same features also
limit the ability to effectively cap the areas within this reach. These
impediments would necessitate multiple staging areas. The cost estimate for
dredging within this reach at the 1.0 ppm action level is $20.2 million to
remove 46,200 cy of contaminated sediment. The cost to remediate this river
sediment would be almost $440 /cy.

In addition to the above practical considerations, achieving of contaminant
concentration (i.e., risk) reductions would be more difficult for dredging areas
where bedrock immediately underlies contaminated sediment. Results on projects
such as Deposit N or projects with similar conditions (e.g., Manistique
River/Harbor) support the idea that achieving reductions in contaminant
concentrations would be difficult. Thus, a dredging remedy for a large portion
of this reach would be expected to be less effective and could be more costly
for likely only modest risk reduction.

13.4 CONTINGENT REMEDY-IN SITU CAPPING (I.E., "PARTIAL CAPPING" OR "SUPPLEMENTAL
CAPPING")

WDNR and EPA have selected alternative C as identified in the proposed plan and
the RIFS as the selected alternative. However, during the RIFS public comment
period, the Agencies received numerous comments relating to the viability of
capping as a possible remedy. Based on these public comments, WDNR and EPA have
developed this contingent remedy that may supplement the selected remedy in
certain circumstances. This contingent remedy may only be implemented if it
meets the following requirements:

1.    The contingent remedy, consisting of a combination of dredging and
      capping, shall provide the same level of protection to human health and
      the environment as the selected remedy,

2.    This contingent remedy must be less costly than the selected remedy to be
      implemented,

3.    This contingent remedy shall not take more time to implement than the
      selected remedy,

4.    This contingent remedy shall comply with all necessary regulatory,
      administrative and technical requirements discussed below, and

5.    The capping contemplated in this contingent remedy will not be permitted
      in certain areas of OU 1:

            -     No capping in areas of navigation channels (with an
                  appropriate buffer zone).

            -     No capping in areas of infrastructure such as pipelines,
                  utility easements, bridge piers, etc (with appropriate buffer
                  zone).

            -     No capping in areas with PCB concentrations exceeding TSCA
                  levels.

            -     No capping in shallow water areas (bottom elevations which
                  would result in a cap surface at elevation greater than -3 ft
                  chart datum for OU 1 without prior dredging to allow for cap
                  placement.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

13.5 BASIS FOR IMPLEMENTING THE CONTINGENT REMEDY (OU 1)

Use of this contingent remedy may be employed in OU 1 to supplement the selected
dredging remedy if one or both of the following criteria are demonstrated. The
decision as to whether one or both of the criteria below have been met will be
determined solely by the EPA and WDNR.

1)    Based on sampling results taken after a sufficient amount of OU 1 dredging
      of contaminated sediment deposits (e.g., dredging of deposits A/B, C, and
      POG), it can be predicted with a high degree of certainty that a PCB SWAC
      of 0.25 ppm would not be achieved for OU 1 by dredging alone, or

2)    Capping would be less costly than dredging in accordance with the
      protectiveness provisions and the nine criteria in the National
      Contingency Plan (40 CFR 300.430).

In addition to capping areas of OU 1 the selected dredging remedy would still be
completed in areas not capped. Based on estimates in the Feasibility Study, and
due to limitations on where capping could be done, capping would be limited to
less than 25 percent of the total volume of contaminated sediments in OU 1.
Selection and implementation of this contingency would be documented in an
Explanation of Significant Differences (ESD).

It should be noted that if dredging alone achieves cleanup standards; and the
contingent remedy is not shown to be more cost-effective than dredging alone,
then capping would not be implemented.

13.6 DESCRIPTION OF CONTINGENT REMEDY

the Contingent Remedy which may supplement the selected remedy, consists of the
following components:

- -     CAP DESIGN. Cap construction specifications would be determined during
      design. Although the Feasibility Study envisioned a cap composed of 20
      inches of sand overlain with 12 inches of large cobble "armor" to provide
      erosion protection, the final cap design would be based on predicted
      performance. The final cap design must have sufficient thickness to ensure
      containment of contaminants, resistance to burrowing organisms, and
      "armoring" to provide sufficient permanence and resistance to erosion and
      scour.

- -     DEMOBILIZATION AND SITE RESTORATION. Demobilization and Site restoration
      would require removing all capping-related equipment, fencing, facilities,
      etc., from staging and work areas.

- -     MONITORING. Operation and maintenance monitoring would be required to
      ensure proper placement, maintenance of cap integrity, and isolation and
      containment of contaminants. For this type of capping, monitoring would be
      performed to ensure that the cap is placed as intended, necessary capping
      thickness is maintained, and contaminants are contained and do not become
      bioavailable. In addition to other dredging-related monitoring, cap
      monitoring would include bathymetric or side-scan sonar profiling,
      sediment and cap sampling, and capture and analysis of pore water that may
      migrate through the cap, as well as diver inspections to ensure that the
      cap is intact and containing contaminants.

- -     INSTITUTIONAL CONTROLS. Institutional controls may include deed
      restrictions, Site access and anchoring limitations, and continuation of
      fish and waterfowl consumption advisories as appropriate. Access
      restrictions could include limitation on the use or development of capped
      areas, possibly requiring local or State legislative action. These
      controls and limitations are intended to ensure the permanence of the cap
      and to minimize re-exposure and/or migration of contaminants.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

13.7 ESTIMATED COSTS OF THE CONTINGENT REMEDY

Costs would be determined prior to implementation of capping. Estimates of
capping costs would be documented in an Explanation of Significant Difference
(ESD).

14. STATUTORY DETERMINATIONS

Under CERCLA Section 121 and the NCP, the remedies that are selected for
Superfund sites must be protective of human health and the environment, comply
with applicable or relevant and appropriate requirements (unless a statutory
waiver is justified), be cost effective, and utilize permanent solutions and
alternative treatment technologies or resource recovery technologies to the
maximum extent practicable. In addition, CERCLA includes a preference for
remedies that employ treatment that permanently and significantly reduces the
volume, toxicity or mobility of hazardous wastes as a principal element and a
bias against off-site disposal of untreated wastes. The following sections
discuss how the selected remedy meets these statutory requirements.

14.1 PROTECTION OF HUMAN HEALTH AND THE ENVIRONMENT

Implementation of the selected remedy will adequately protect human health and
the environment through the removal and off-site disposal of PCB-contaminated
sediment and the monitoring of the natural recovery of PCB contaminated sediment
that is left in place. The selected remedy will target a sediment clean up level
of 1.0 ppm in OU 1. This residual risk posed by this action level in OU 1 in
years to reach human health and ecological thresholds are presented in Table 30
above. This table indicates that for the selected Action Level of 1.0 ppm, fish
advisories for acceptable fish tissue concentrations in walleye would be
achieved in 1 to 14 years.

The SWAC value in OU 2 will be 0.61 ppm. Implementation of the selected
alternative in OU 1 and OU 2 will result in PCB concentrations within acceptable
risk ranges over time. The selected remedy does not pose unacceptable short-term
risk.

14.2 COMPLIANCE WITH ARARs

Section 121(d) of CERCLA requires that Superfund remedial actions meet ARARs.
The selected remedy will comply with the ARARs listed in Table 31.

14.2.1 POTENTIAL CHEMICAL-SPECIFIC ARARs

Toxic Substances Control Act (TSCA)

TSCA establishes requirements for the handling, storage, and disposal of
PCB-containing materials equal to or greater than 50 ppm. TSCA is an ARAR at the
Site with respect to any PCB-containing materials with PCB concentrations equal
to or greater than 50 ppm that are removed from the Site.

Clean Water Act

Federal surface water quality standards are adopted under Section 304 of the
Clean Water Act where a state has not adopted standards. These federal
standards, if any, are ARARs for point discharges to the River. Related to these
standards are the federal ambient water quality criteria. These criteria are
non-enforceable guidelines that identify chemical levels for surface

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                 Fox River and Green Bay ROD for OU 1 and OU 2

waters and generally may be related to a variety of assumptions such as use of a
surface water body as a water supply. These criteria may be TBCs for this Site.

Ground-water Quality Standards

State ground-water quality standards for various substances are set forth in
chapter NR 140, Wisconsin Administrative Code (WAC). In general, sections NR
140.24 and NR 140.26 require preventive action limits (PALs) to be achieved to
the extent it is technically and economically feasible to do so. In the
remediation context, the NR 140 groundwater quality standards are to be achieved
within a reasonable timeframe. Natural attenuation is allowed as a remedial
method where source control activities have been undertaken and where
groundwater quality standards will be achieved within a reasonable period of
time. The ground-water quality standards constitute ah ARAR

Soil Cleanup Standards

The State of Wisconsin has adopted generic, site-specific, and performance-based
soil cleanup standards. These regulations allow the party conducting the
remedial action to select which approach to apply. The generic soil standards
are divided into those necessary to protect the ground-water quality and those
necessary to prevent unacceptable, direct contact exposure. Generic soil
standards, based on conservative default values and assumptions, have been
adopted only for a few substances, none of which are relevant to the Site.
Site-specific soil standards depend upon a variety of factors, including local
soil conditions, depth to groundwater, type of chemical, access restrictions,
and current and future use of the property. These site-specific soils standards
also may be adjusted based on an assessment of the site-specific risk presented
by the chemical constituents of concern. With respect to the Site, the soil
standards constitute an ARAR.

Surface Water Quality Standards

The State of Wisconsin has promulgated water quality standards that are based on
two components: 1) use designation for the water body; and, 2) water quality
criteria. These standards, designations, and criteria are set forth in chapters
NR 102 to NR 105, WAC. The state also has rules for applying the water quality
standards when establishing water-quality-based effluent limits (chapters NR
106 and NR 207, WAC). The state water quality standards are used in making water
management decisions and controlling municipal, business, land development, and
agricultural activities (section NR 102.04, WAC). In the remediation context,
surface water quality standards are applicable to point source discharges that
may be part of the remedial action. Further, to the extent that the remedial
work is conducted in or near a water body, such work is to be conducted so as to
prevent or minimize an exceedance of a water quality criterion (in chapters NR
102 to 105, WAC).

As recognized in the WDNR's sediment guidance (1995), the water quality
standards are goals to be used in guiding the development of the sediment
remediation work. As a goal, but not a legal requirement, the water quality
standards as applied to the remediation of sediment contamination constitute a
TBC.

In addition, the NCP states that, in establishing Remedial Action Objectives
(RAOs), water , quality criteria established under the Clean Water Act (WQSs in
Wisconsin), shall be attained where "relevant and appropriate under the
circumstances of the release." 40 CFR 300.430(e)(2)(I)(E).

WDNR and EPA have determined that WQSs, while relevant to sediment clean up
RAOs, are not appropriate for direct application at this time. Calculating a
site-specific sediment quality standard from a WQS using current scientific
methods such as equilibrium partitioning is very uncertain. Moreover, the EPA's
1996 Superfund PCB clean up guidance directly addresses

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                 Fox River and Green Bay ROD for OU 1 and OU 2

sediment clean up targets using water quality criteria. The guidance suggests
using equilibrium partitioning to develop a sediment criteria and then compare
it to risk based clean up numbers for establishing an RAO. If the guidance
considered a derived sediment quality number to be an ARAR, it would be directly
applied to each alternative as a threshold criteria. Therefore, WQSs are not
ARARs and are not a threshold criteria for selecting an alternative for the
Site.

14.2.2 POTENTIAL ACTION-AND LOCATION-SPECIFIC ARARS

Wisconsin Statutes Chapter 30

Chapter 30 of the Wisconsin Statutes requires permits for work performed in
navigable waterways, or on or near the bank of such a waterway. For remediation
that is conducted under CERCLA, only the substantive provisions set forth in
Chapter 30 (but not the procedural requirements for obtaining a permit) must be
satisfied. In general, the substantive provisions address minimizing any adverse
effects on the waterway that may result from the work. This includes chapter NR
116, Wisconsin's Floodplain Management Program. The substantive provisions are
action-specific ARARs.

Section 10 - Rivers and Harbors Act; Section 404

CLEAN WATER ACT. Section 404 of the Clean Water Act requires approval from the
USACE for discharges of dredged or fill material into waters of the United
States, and Section 10 of the Rivers and Harbors Act requires approval from the
USACE for dredging and filling work performed in navigable waters of the United
States. As the Fox River is a water of the United States, these statutes might
implicate action-specific ARARs for dredging/filling work that may be conducted
in the River. Under the Fish and Wildlife Coordination Act, the USACE must
coordinate with the Fish and Wildlife Service regarding minimization Of effects
from such work. The work would be subject to the substantive environmental law
aspects of permits under these statutes, which would be ARARs. Permits are not
required for remediation that is implemented under the authority of CERCLA.

Floodplain and Wetland Regulations and Executive Orders 11988 and 11990

The requirements of 40 CFR section 264.18 (b) and Executive Order 11988,
Protection of Flood Plains, are relevant and appropriate to action on the Site.
Executive Order 11990 (Protection of Wetlands) is an applicable requirement if
there are any wetlands present in the areas to be remediated.

National Historic Preservation Action (NHPA), 16 U.S.C. 470 et seq

The National Historic Preservation Act (NHPA) provides protections for historic
properties (cultural resources) on or eligible for inclusion on the National
Historic Register of Historic Places (see 36 CFR Part 800). In selecting a
remedial alternative, adverse effects to such properties are to be avoided. If
any portion of the Site is on or eligible for the National Historical Register,
the NHPA requirements would be ARARs.

Endangered Species

Both State and Federal law have statutory provisions that are intended to
protect threatened or endangered species [i.e., Endangered Species Act (Federal)
and Fish and Game (State)]. In general, these laws require a determination as to
whether any such species (and its related habitat) reside within the area
where an activity under review by governmental authority may take place. If the
species is present and may be adversely affected by the selected activity, where
the adverse effect cannot be prevented, the selected action may proceed. If
threatened or endangered species exist in certain areas of the Fox River, these
laws may constitute an action-specific ARAR. At the Site, the queen snake as
well as several plant species were noted by WDNR to be endangered/rare resources
occurring within or near the Site.

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                       Fox River and Green Bay ROD for OU 1 and OU 2

Management of PCBs and Products Containing PCBs

Wisconsin regulations (i.e., Chapter NR 157, WAC, "Management of PCBs and
Products Containing PCBs" that was adopted pursuant to section 299.45. Wisconsin
Statutes) which establish procedures for the storage, collection, transport, and
disposal of PCB-containing materials also apply to remedial actions taken at the
Site.

Solid Waste Management Statutes and Rules (Chapter 289, Wisconsin Statutes and
chapters NR 500-520 & NR 600-685, WAC) establish standards that apply to the
collection, transportation, storage and disposal of solid and hazardous waste.

It is not expected that federal Resource Conservation and Recover Act (RCRA) or
state regulations governing hazardous waste management will be applicable at
this Site.

TSCA - Disposal Approval

TSCA regulations for the disposal of PCB remediation waste (40 CFR 761.61) are
applicable to the selection of the clean up alternative for remediation of PCBs
in sediments at the Lower Fox River Site, and to the disposal of removed
sediments at a State licensed landfill. These regulations provide cleanup and
disposal options for PCB remediation waste. The three options include
self-implementing, performance-based and risk-based disposal approvals. The
risk-based disposal approval option is allowed if it will not pose an
unreasonable risk of injury to health and the environment.

The current situation in the Lower Fox River, as identified in RA conducted as
part of the RI/FS, is that PCB contaminated sediment pose an unacceptable level
of risk in the River at this time. Remediation of PCB contaminated sediment via
the selected remedy will reduce risks to human health and the environment.

Sediments removed from the Fox River may contain PCBs equal to or greater than
50 ppm. PCB sediment with concentrations less than 50 ppm will be managed as a
solid waste in accordance with statutes and rules governing the disposal of
solid waste in Wisconsin. PCB sediment with concentrations equal to or greater
than 50 ppm will be managed in accordance with the Toxic Substances Control Act
of 1976 (Appendix E of the Feasibility Study). Presently TSCA compliance would
be achieved through the extension of the January 24,1995 approval issued by EPA
to WDNR pursuant 40 CFR 761.60(a)(5) under the authority of TSCA. This TSCA
approval, granted by EPA Region 5, states that the disposal of PCB-contaminated
sediment with concentrations equal to or greater than 50 ppm into an NR 500, WAC
landfill that is also in compliance with the conditions of the TSCA approval,
provides adequate protection to human health and the environment as required by
40 CFR 761.60(a)(5); and, will provide the same level of protection required by
EPA, Region 5 and therefore is no less restrictive than TSCA. However, should
other administrative rules pertaining to disposal under TSCA in effect at the
time that TSCA compliance decisions are made for the Fox River sediment, then
compliance with those rules will be achieved.

14.2.3 ADDITIONAL TO BE CONSIDERED INFORMATION

Section 303(d), Clean Water Act

Under Section 303(d) of the Federal Clean Water Act, states are required, on a
periodic basis, to submit lists of "impaired waterways" to EPA. In December
1996, WDNR submitted its first list of impaired waters under Section 303(d). The
Fox River was included on the initial list. WDNR has taken no further action
with respect to the listing, nor has it developed a total maximum daily load
(TMDL) for the River. Currently, a State-wide watershed committee is advising
WDNR on the steps to be taken in this process, and the listing process is being
reviewed by the

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                 Fox River and Green Bay ROD for OU 1 and OU 2

Wisconsin Natural Resources Board. The listing of the Fox River under Section
303(d) is a TBC.

Great Lakes Water Quality Initiative, Part 132, Appendix E

The Great Lakes Water Quality Initiative set forth guidance to the states
bordering the Great Lakes regarding their wastewater discharge programs. For
remedial actions, the guidance states that any remedial action involving
discharges should, in general, minimize any lowering of water quality to the
extent practicable. The concepts of the guidance have been incorporated into
chapters NR102 to NR 106, WAC. The Great Lakes Water Quality Initiative
constitutes a TBC.

Sediment Remediation Implementation Guidance

Part of the Strategic Directions Report of WDNR approved by Secretary Meyer in
1995 addressed the sediment remediation approach to be followed by WDNR. This
approach includes meeting water quality standards as a goal of sediment
remediation projects. In developing a remedial approach, the guidance calls for
use of a complete risk management process in consideration of on-site and
off-site environmental effects, technological feasibility, and costs. The
guidance constitutes a TBC.

Great Lakes Water Quality Agreement

The Great Lakes Water Quality Agreement calls for the identification of "Areas
of Concern" in ports, harbors, and River mouths around the Great Lakes. Remedial
goals to improve water quality are to be established in conjunction with the
local community. In the case of the Fox River, a Remedial Action Plan (RAP) has
been prepared and finalized. The RAP lists a series of recommendations ranging
from addressing contaminated sediments to controlling non-point source runoff.
This RAP is a TBC.

Fox River Basin Water Quality Management Plan

This plan was developed by WDNR and lists management objectives for improving
water quality in the Fox River Basin. The Fox River Basin Water Quality
Management Plan is a TBC.

TABLE 31 FOX RIVER ARARs



Act / Regulation                            Citation
- ----------------------------------------    ------------------------------------
                                         
FEDERAL CHEMICAL-SPECIFIC ARARs

TSCA                                        40 CFR 761.60(a)(5)-761.79 and
                                            U.S. EPA Disposal Approval

Clean Water Act - Federal Water Quality     40 CFR 131 (if no Wisconsin
Standards                                   regulation) and 33 CFR 323

FEDERAL ACTION-/LOCATION-SPECIFIC ARARs

Fish and Wildlife Coordination Act          16 USC 661 et seq.
                                            33 CFR 320-330-Rivers and Harbors
                                            Act
                                            40 CFR 6.304

Endangered Species Act                      16 USC 1531 et seq.
                                            50 CFR 200
                                            50 CFR 402

Rivers and Harbor Act                       33 USC 403; 33 CFR 322, 323

National Historic Preservation Act          15 USC 470; et seq. 36 CFR Part 800

Floodplain and Wetlands Regs & Executive    40 CFR 264.18 (b) and Executive
Orders                                      Order 11988


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                 Fox River and Green Bay ROD for OU l and OU 2



Act / Regulation                            Citation
- ----------------------------------------    ------------------------------------
                                         
STATE CHEMICAL-SPECIFIC ARARs

TSCA-Disposal Approval                      U.S. EPA Approval

Surface Water Quality Standards             NR 102, 105 and 207
                                            NR 722.09 1-2

Ground-Water Quality Standards              NR 140

Soil Cleanup Standards                      NR 720 and 722

Hazardous Waste Statutes and Rules          NR 600 - 685

STATE ACTION- / LOCATION-SPECIFIC ARARs

Management of PCBs and Products             NR 157
Containing PCBs

Wisconsin's Floodplain Management           NR 116
Program

Solid Waste Management                      NR 500-520

Navigable Waters, Harbors, and Navigation   Chapter 30 - Wisconsin Statutes

Fish and Game                               Chapter 29.415 - Wisconsin Statutes


14.3 COST-EFFECTIVENESS

WDNR and EPA have determined that the selected remedy is cost effective. Section
300.430(f)(1)(ii)(D) of the NCP requires that all the alternatives that meet
the threshold criteria (protection of human health and the environment and
compliance with ARARs) must be evaluated by comparing their effectiveness to the
three balancing criteria (long-term effectiveness and permanence, reduction of
toxicity, mobility or volume through treatment, and short-term effectiveness).
The selected remedies meet these criteria by achieving a permanent protection of
human health and the environment at low risk to the public, and provide for
overall effectiveness in proportion to their cost.

The Superfund program does not mandate the selection of the least costly cleanup
alternative. The least costly effective remedy is not necessarily the remedy
that provides the best balance of tradeoffs with respect to the remedy selection
criteria nor is it necessarily the least-costly alternative that is both
protective of human health and the environment and ARAR-compliant. Cost
effectiveness is concerned with the reasonableness of the relationship between
the effectiveness afforded by each alternative and its costs compared to other
available options.

The total net present worth of the selected remedy for OU 1 and OU 2 is $76.5
million.

14.4 UTILIZATION OF PERMANENT SOLUTIONS AND ALTERNATIVE TREATMENT TECHNOLOGIES
OR RESOURCE RECOVERY TECHNOLOGIES TO THE MAXIMUM EXTENT PRACTICABLE

WDNR and EPA believe that the selected remedy represents the maximum extent to
which permanent solutions and treatment technologies can be utilized in a
cost-effective manner for the Fox River Site. The selected remedy does not pose
excessive short-term risks. There are no special implementability issues that
set the selected remedy apart from the other alternatives evaluated.

14.5 PREFERENCE FOR TREATMENT AS A PRINCIPAL ELEMENT

Based on current information, WDNR and EPA believe that the selected remedy is
protective of human health and the environment and utilizes permanent solutions
to the maximum extent

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                 Fox River and Green Bay ROD for OU 1 and OU 2

possible. The remedy, however, does not satisfy the statutory preference for
treatment of the hazardous substances present at the Site as a principal element
because such treatment was not found to be practical or cost effective.

14.6 FIVE-YEAR REVIEW REQUIREMENTS

The NCP, at 40 CFR Section 300.430(f)(4)(ii), requires a five-year review if
the remedial action results in hazardous substances, pollutants, or contaminants
remaining on site above levels that allow for unlimited use and unrestricted
exposure. Because this remedy will result in hazardous contaminants remaining on
site above levels that allow for unlimited exposure, a statutory review will be
conducted within five years after initiation of the remedial action to ensure
that the remedy is, or will be, protective of human health and the environment.

15. DOCUMENTATION OF SIGNIFICANT CHANGES FROM PREFERRED ALTERNATIVE OF PROPOSED
PLAN

To fulfill the requirements of CERCLA 117(b) and NCR [40 CFR Section.
300.430(f)(5)(iii)(B) and 300.430(f)(3)(ii)(A)], a ROD must document and discuss
the reasons for any significant changes made to the Proposed Plan.

The Proposed Plan was released for public comment in October 2001. It identified
a PCB sediment clean up target of 1.0 ppm in OU 1 with monitored natural
recovery in OU 2.

In the selection of the remedy for OU 1 and OU 2, the WDNR and EPA considered
information submitted during the public comment period re-evaluated portions of
the proposed alternative.

New Information obtained during the Public Comment Period

WDNR and EPA considered alternative proposals for OU 1 submitted as comments. As
a result of consideration of these comments, the following were incorporated
into this Record of Decision: 1) If dredging is unable to reduce exposed
contaminants PCB concentrations, a sand cover will be employed to further reduce
risks, rather than continue with dredging removal operations (Section 13.3); and
2) if it is predicted, based on results from partial completion of dredging OU
1, that concentrations may not sufficiently reduce risks, or if capping is shown
to be less costly than complete dredging, then capping may be employed for some
areas not yet dredged (Section 13.4).

These proposals may be given further consideration prior to implementation of
remedial actions. However if these proposals cause a fundamental change to the
alternatives described in this decision (e.g., changing the remedy from removal
to containment), then WDNR and EPA would issue a new, revised Proposed Plan and
would have a public comment period after which a ROD Amendment would be
finalized. If the change is not "fundamental," but "significant" (e.g.,
modification of volumes to be removed), then an Explanation of Significant
Difference would be issued, and there would be limited public comment.

                                  Page 97 of 97

                            CONSENT DECREE APPENDIX I

         STATEMENT OF WORK FOR REMEDIAL ACTION, INSTITUTIONAL CONTROLS,
                OPERATION & MAINTENANCE, AND LONG TERM MONITORING
                       LOWER FOX RIVER AND GREEN BAY SITE
  OPERABLE UNIT 1 (LITTLE LAKE BUTTE DES MORTS), WINNEBAGO AND OUTAGAMIE COUNTY

I. PURPOSE

1. This Statement of Work ("SOW") sets forth the requirements for the Remedial
Action ("RA"), Institutional Controls, and Operation & Maintenance ("O&M") and
Long Term Monitoring for the selected remedy and the contingent remedy set forth
in the Record of Decision ("ROD") for Operable Unit 1 ("OU1") of the Lower Fox
River and Green Bay Site (the "Site").(1) While the ROD addresses both OU1 and
Operable Unit 2 at the Site, this SOW addresses only OU1, and, more
specifically, only the RA and the other Response Work required for OU1, aside
from the Remedial Design ("RD").(2) The RD for OU1 is addressed in the
Administrative Order on Consent between WTM I Company, EPA, and WDNR, captioned
In the matter of the Lower Fox River and the Green Bay Site, Docket No.
V-W-'03-C-745 (the "July 2003 AOC") and in the RD SOW attached to the July 2003
AOC.

      2. The Settling Defendants are required to implement the RA and the other
Response Work subject to the funding limitations and special reservations of
rights provided in the Consent Decree to which this SOW is attached. The
Settling Defendants shall perform the RA and the other Response Work in
accordance with the Consent Decree, the ROD, the RD approved by the Response
Agencies, and this SOW. The Settling Defendants shall also comply with EPA
Superfund Remedial Design and Remedial Action Guidance and any additional
relevant guidance provided by the Response Agencies in implementing and
submitting deliverables for the RA and the other Response Work.

II. DESCRIPTION OF THE REMEDIAL ACTION AND THE OTHER RESPONSE WORK

      1. Subject to the funding limitations and special reservations of rights
provided in the Consent Decree, the Settling Defendants shall implement the RA
such that the Performance

- ----------
(1)   "Operable Unit 1" or "OU1" shall mean the Little Lake Butte des Morts
      reach of the Lower Fox River, as delineated by the Record of Decision
      signed by WDNR and EPA in December 2002. More specifically, OU1 is the
      portion of the Lower Fox River (and the underlying River sediment)
      starting at the outlet of Lake Winnebago at the Neenah Dam and the Menasha
      Dam downstream to the Upper Appleton Dam, including sediment deposits A
      through H and POG. As so defined, OU1 is depicted in Figure 7-9 of the
      December 2002 Final Feasibility Study, a copy of which is attached to the
      Consent Decree as Attachment G.

(2)   Operable Units 3, 4, and 5 of the Lower Fox River and Green Bay Site have
      been addressed in a separate Record of Decision.

                              Appendix I - Page 1



Standards are achieved. As defined by Paragraph 4 of the Consent Decree,
"Performance Standards" shall mean the selected remedy requirements, contingent
remedy requirements, and cleanup standards for measuring the achievement of the
goals of the RA, as set forth in Sections 13.1, 13.3.1, and 13.4 through 13.6 of
the ROD and Section II this SOW. OU1 is a multi-deposit aquatic environment and
the RA will stretch over a number of years, so this SOW is intended to provide
flexibility concerning the approach to be taken to achieve the Performance
Standards and to implement the RA and the other Response Work, consistent with
legal and administrative requirements. The RA may therefore be conducted in
phases, may incorporate features of the contingent remedy as permitted by the
ROD, and may include other refinements proposed by the Settling Defendants, if
such refinements are approved by the Response Agencies.

      2. The selected remedy (ROD Alternative C2) includes the removal of
sediment with PCB concentrations greater than the 1 ppm remedial action level
("RAL"), followed by dewatering and off-site disposal of the sediment.

- -     SITE MOBILIZATION AND PREPARATION. The staging area(s) for OU1 will be
      determined during the RD. Site preparation at the staging area(s) will
      include collecting soil samples, securing the onshore property area for
      equipment staging, and constructing the sediment dewatering facility,
      water treatment facilities, and sediment storage and truck loading areas.

- -     SEDIMENT REMOVAL. Sediment removal will be conducted using a dredge (e.g.,
      cutterhead or horizontal auger or other method) or other suitable sediment
      removal equipment.

- -     SEDIMENT DEWATERING. Sediment that is removed will require dewatering.

- -     WATER TREATMENT. Unless other arrangements can be made, water treatment
      will consist of flocculation, clarification, sand filtration, and
      treatment through activated carbon filters.

- -     SEDIMENT DISPOSAL. Sediment disposal includes the loading and
      transportation of the sediment to an NR 500 landfill with Toxic Substances
      Control Act ("TSCA") approval, if needed.

- -     DEMOBILIZATION AND SITE RESTORATION. Demobilization and site restoration
      will involve removing all equipment from the staging and work areas and
      restoring the site to, at a minimum, its original condition before
      construction of the staging area commenced.

- -     INSTITUTIONAL CONTROLS AND LONG TERM MONITORING. Baseline monitoring will
      include pre-and post-remedial sampling of water, sediment, and biological
      tissue. Monitoring during implementation will include air and surface
      water sampling. Plans for monitoring during and after construction will be
      developed during the Remedial Design and modified during and after
      construction, as appropriate. Institutional controls may include access
      restrictions, land use or water use restrictions, dredging moratoriums,
      fish consumption advisories, and domestic water supply restrictions. Land
      and water use restrictions and

                              Appendix I - Page 2



      access restrictions may require local or state legislative action to
      prevent inappropriate use or development of contaminated areas.

- -     ACHIEVEMENT OF RAL OBJECTIVE. As more precisely described in Paragraph
      II.3 of this SOW, the mass and volume of contaminated sediment to be
      removed will be determined by (1) establishing a removal elevation based
      on the 1 ppm RAL or, (2) if sampling conducted after sediment removal is
      completed shows that the 1 ppm RAL has not been achieved, by achieving a
      Surface Weighted Average Concentration ("SWAC") of 0.25 ppm.

      3. Pre-remediation sampling and characterization efforts will define
spatial "footprint(s)" (both horizontally and vertically) of OU1 sediment that
contains PCBs at concentrations in excess of the 1 ppm RAL. The RD will specify
those footprints to be removed during the RA, and any areas where supplemental
capping is appropriate under the contingent remedy specified by ROD Sections
13.4 through 13.6 and approved by the Response Agencies. After completion of all
sediment removal and any supplemental capping specified by the RD, the Settling
Defendants shall sample the footprints to determine whether the 1 ppm RAL has
been achieved. If the sampling demonstrates that those sediments with PCB
concentrations in excess of 1 ppm have been removed or capped, the active
remediation portion of the OU1 RA will be complete. If the sampling shows that
those sediments with PCB concentrations in excess of 1 ppm have not been removed
or capped, then an OU1 SWAC of 0.25 ppm may be used to assess the effectiveness
of the work. If the 0.25 ppm SWAC has not been achieved for OU1, then the ROD
provides several options. One option is that additional sediment removal may be
undertaken to remove remaining sediments with PCB concentrations in excess of
the 1 ppm RAL. Another option would be to place a cap on certain areas to reduce
surficial concentrations such that the 0.25 ppm SWAC can be achieved. SWAC
contribution from a properly placed cap or sand cover would be 0.0 ppm, if
installed as part of the contingent remedy or as part of a SWAC reduction
effort. As specified by ROD Section 13.5, selection and implementation of the
supplemental capping contingent remedy would be documented in an Explanation of
Significant Differences issued by the Response Agencies. Capping as part of any
SWAC reduction effort also would require the Response Agencies' approval.

III. SCOPE OF REMEDIAL ACTION AND RESPONSE WORK

      The RA to be conducted by the Settling Defendants shall include five major
tasks, which are detailed below. Each task shall be completed by the Settling
Defendants in accordance with the schedules set forth in the Section V of this
SOW (Summary and Compliance Schedule). All plans are subject to approval by the
Response Agencies, as provided by the Consent Decree.

      Task I:     Remedial Action Work Plan ("RA Work Plan"). The RA Work Plan
                  submittals fall into three categories based on the particular
                  submittal's status in the remedial design phase. The first
                  category of submittals will be approved in final form as part
                  of the Final (100%) Design. The RA Work Plan is to include
                  refinements, if any, to these submittals. The second category
                  of submittals will be in draft form for the approved Final

                              Appendix I - Page 3



                  (100%) Design and will be submitted in final form in the RA
                  Work Plan. The third category of RA Work Plan submittals are
                  not included with the RD submittals.

                  Category 1:

                  -     Final Health & Safety Plan

                  -     Final Contingency Plan

                  -     Final Sediment Removal Verification Plan

                  -     Capital and Operation & Maintenance Cost Estimate

                  -     Final Project Schedule

                  Category 2:

                  -     Final Construction Quality Assurance Project Plan
                        ("CQAPP")

                  -     Final Operation & Maintenance Plan (including a plan for
                        long-term monitoring)

                  Category 3:

                  -     Quality Assurance Project Plan for Operation &
                        Maintenance Plan

                  -     Institutional Controls Plan

                  -     Schedule for submitting any other RA plans

                  -     Identification of initial RA Project Team

      Task II:    Other Reports and Submissions

      Task III:   Remedial Action Construction

      Task IV:    Completion of the Remedial Action for OU1

      Task V:     Completion of Response Work for OU1

      TASK I: REMEDIAL ACTION WORK PLAN

      Within 90 days after the Response Agencies approve the Final (100%) Design
(the final Remedial Design deliverable under the July 2003 AOC), the Settling
Defendants shall submit the RA Work Plan for construction and implementation of
the remedy such that the Performance Standards will be achieved. The RA Work
Plan shall outline the overall management strategy for performing the
construction, operation, maintenance and monitoring of the RA. The RA Work Plan
shall include a project schedule for each major activity and submission of
deliverables generated during the RA as well as a schedule for completion of the
RA. Settling Defendants shall thoroughly review the approved RD and shall, as
part of their proposed RA Work Plan, provide to the Response Agencies a list of
any questions or concerns requiring clarification of the design requirements and
specifications.

      1.1 The RA Work Plan shall include refinements, if any, to the following
components of the approved Final (100%) Design:

                              Appendix I - Page 4



            (a)   Final Health and Safety Plan. The Settling Defendants shall
                  review and modify, if necessary, the Health and Safety Plan
                  developed during the RD to address the activities to be
                  performed at the Site during the RA.

            (b)   Final Contingency Plan. The Final Contingency Plan shall
                  describe mitigation procedures to be used in the event of an
                  accident or emergency.

            (c)   Final Sediment Removal Verification Plan.

            (d)   Capital and Operation & Maintenance Cost Estimate.

            (e)   Final Project Schedule. The Final Project Schedule shall
                  identify timing for initiation and completion of all critical
                  path tasks, and shall specify dates for completion of all
                  phases of the project and major interim milestones. The Final
                  Project Schedule shall be consistent with and designed to
                  achieve the deadlines contained in Section V of this SOW
                  (Summary and Compliance Schedule).

      1.2 The RA Work Plan shall include the following documents which will be
submitted in draft form in the approved Final (100%) Design:

            (a)   Final Construction Quality Assurance Project Plan. The CQAPP
                  is a site-specific document that must be submitted to the
                  Response Agencies for approval prior to the start of the
                  construction. The CQAPP outlined in the RD shall be used as a
                  basis for preparation of the CQAPP required under this SOW.
                  Upon EPA approval of the CQAPP, the Settling Defendants shall
                  construct and implement the RA in accordance with the RD, the
                  Final Project Schedule, and the CQAPP. At a minimum, the CQAPP
                  shall include the following elements:

                  1.    The responsibility and authority of each organization
                        (i.e., technical consultants, construction firms, etc.)
                        and key personnel involved in the construction of the RA
                        shall be described fully in the CQAPP. The Settling
                        Defendants shall also identify a joint CQA officer and
                        the necessary supporting inspection staff.

                  2.    The qualifications of the CQA officer and supporting
                        inspection personnel shall be presented in the CQAPP to
                        demonstrate that they possess the training and
                        experience necessary to fulfill their identified
                        responsibilities. If EPA finds that the qualifications
                        of any of the CQA personnel are not suitable to the
                        performance of the RA, the Settling Defendants shall
                        submit qualifications for new personnel prior to EPA
                        approval of the CQAPP.

                              Appendix I - Page 5



                  3.    Protocols for sampling and testing used to monitor the
                        RA and determine post-sediment removal PCB
                        concentrations in residual sediments, including
                        identification of proposed quality assurance sampling
                        activities including the sample size, locations,
                        frequency of testing, acceptance and rejection data
                        sheets, problem identification and corrective measures
                        reports, evaluation reports, acceptance reports, and
                        final documentation.

                  4.    Reporting requirements for CQAPP activities shall be
                        described in detail in the CQAPP. This shall include
                        such items as daily summary reports, inspection data
                        sheets, problem identification and corrective measures
                        reports, and design acceptance reports, and final
                        documentation. Provisions for the final storage of all
                        OU1 cleanup reports shall be presented in the CQAPP.

            (b)   Final O&M Plan. The Final O&M Plan shall include a plan for
                  O&M and Long Term Monitoring.

      1.3 The following new submittals shall be included in the RA Work Plan:

            (a)   QAPP for Final O&M Plan. In addition to submitting the Final
                  Operation & Maintenance Plan (which is to include a plan for
                  long-term monitoring), the Settling Defendants shall submit a
                  QAPP to cover sampling, analysis and data handling for samples
                  collected under the Final O&M Plan. Within 21 days after
                  approval of the Final (100%) Design, Settling Defendants shall
                  contact the Response Agencies to arrange a pre-QAPP meeting to
                  identify all monitoring and data quality objectives for the
                  O&M QAPP. The QAPP shall be consistent with the requirements
                  of the EPA Contract Laboratory Program (CLP) for laboratories
                  proposed outside CLP.

                  1.    At a minimum, the QAPP shall include the following:

                  -     Statement of Purpose

                  -     Project Description

                  -     Project Organization and Responsibility

                  -     Sampling Procedures and Objectives

                  -     Sample Custody and Document Control

                  -     Calibration Procedures and Frequency

                  -     Analytical Procedures, Data Reduction, Validation,
                        Assessment, and Reporting

                  -     Internal Quality Control Checks and Frequency

                  -     Performance System Checks and Frequency

                  -     Preventive Maintenance Procedures and Frequency

                              Appendix I - Page 6



                  -     Data Precision, Accuracy and Completeness Assessment
                        Procedures

                  -     Corrective Action

                  -     Quality Assurance Reporting

                  2.    The QAPP shall also include the following information:

                  -     Description of sampling/O&M monitoring tasks required
                        under the Final O&M Plan

                  -     Description of required laboratory tests and their
                        interpretation

                  -     Required data collection

                  -     Location of sampling/O&M monitoring points

                  -     Schedule of sampling/O&M monitoring frequency and
                        date(s), if appropriate, when monitoring frequency may
                        change or cease.

            (b)   Institutional Controls Plan.

            (c)   Schedule for submitting any other RA plans.

            (d)   Identification of the initial RA Project Team. The RA Work
                  Plan shall also include a description of qualifications of key
                  personnel directing the RA, including contractor personnel.

      TASK II: OTHER REPORTS AND SUBMISSIONS

      Unless otherwise specified by the Response Agencies, two (2) copies of all
submittals shall be provided by Settling Defendants to the EPA and two (2)
copies of all submittals shall be provided to the WDNR for review. One copy of
each submittal sent to EPA and the WDNR must be an unbound copy that is suitable
for reproduction on standard 8 1/2" x 11" paper, or, as necessary, 11" x 17"
paper. At the same time, the Settling Defendants shall submit an additional copy
to each of the Response Agencies in electronic format. In addition, two (2)
copies of all documents are to be submitted to the Response Agencies' oversight
contractor identified by EPA and/or WDNR.

      2.1 Monthly RD/RA Progress Reports. The Settling Defendants shall provide
the Response Agencies with progress reports no later than the tenth day of each
month covering the previous calendar month, starting with the first month after
the Date of Lodging of the Consent Decree, and until issuance of Certification
of Completion of the RA by EPA. The Monthly RD/RA Progress Reports to be
submitted pursuant to this paragraph shall be signed by the Project Coordinator
for the Settling Defendants and shall, at a minimum:

            (a)   describe the actions which have been taken toward achieving
                  compliance with the Consent Decree during the previous month;

                              Appendix I - Page 7



            (b)   include a summary of all results of sampling and tests and all
                  other data received or generated by Settling Defendants or
                  their contractors or agents in the previous month;

            (c)   identify all work plans, plans and other deliverables required
                  by the Consent Decree completed and submitted during the
                  previous month;

            (d)   describe all actions, including, but not limited to, data
                  collection and implementation of work plans, which are
                  scheduled for the next month and provide other information
                  relating to the progress of construction, including, but not
                  limited to, critical path diagrams, Gantt charts and Pert
                  charts;

            (e)   include information regarding percentage of completion,
                  unresolved delays encountered or anticipated that may affect
                  the future schedule for implementation of the Response Work,
                  and a description of efforts made to mitigate those delays or
                  anticipated delays;

            (f)   include any modifications to the work plans or other schedules
                  that Settling Defendants have proposed to the Response
                  Agencies or that have been approved by the Response Agencies;
                  and

            (g)   describe all activities undertaken in support of the Community
                  Relations Plan during the previous month and those to be
                  undertaken in the next month.

During the performance of the Remedial Design, the Monthly RD/RA Progress
Reports shall include all information required by Paragraph 38 of the July 2003
AOC and shall satisfy the monthly progress report requirements of the July 2003
AOC, the Consent Decree and this SOW.

      2.2 Quarterly Reports. The Settling Defendants shall submit Quarterly
Reports on a quarterly basis starting with the second quarter of 2004 and
continuing until Certification of Completion of the RA by EPA. For a given
calendar year, the report for the first calendar quarter shall be submitted by
no later than May 1 of that calendar year, the report for the second calendar
quarter shall be submitted by no later than August 1 of that calendar year, the
report for the third calendar quarter shall be submitted by no later than
November 1 of that calendar year, and the report for the fourth calendar quarter
shall be submitted by no later than February 1 of the next calendar year. Each
Quarterly Report shall:

            (a)   provide a complete and accurate written cost summary of all
                  Allowable RD/RA Costs submitted to the Escrow Agent for
                  payment from the Escrow Account during the reporting period;

            (b)   specify any amount requested for the reporting period as a
                  quarterly reimbursement from the Disbursement Special Account;

                              Appendix I - Page 8



            (c)   provide a complete and accurate written cost summary of all
                  Allowable Restoration Work Costs submitted to the Escrow Agent
                  for payment from the Escrow Account during the reporting
                  period;

            (d)   list and total all amounts requested and/or disbursed during
                  the reporting period as payments or reimbursements from the
                  Escrow Account;

            (e)   indicate the approximate balance of the Escrow Account at the
                  end of the reporting period;

            (f)   summarize all Response Work and all Approved Restoration Work
                  funded and performed under the Consent Decree during the
                  reporting period;

            (g)   project whether the total balance remaining in the
                  Disbursement Special Account and, the Escrow Account is likely
                  to be sufficient to fund the completion of the RA, after
                  making all other payments and reimbursements from those
                  Accounts that are required under the Consent Decree; and

            (h)   contain the following certification signed by the Chief
                  Financial Officer of a Settling Defendant or by an Independent
                  Certified Public Accountant retained by the Settling
                  Defendants:

                        "To the best of my knowledge, after thorough
                        investigation and review of Settling Defendants'
                        documentation of unreimbursed costs incurred and paid
                        for the work summarized in this report that was
                        performed pursuant to the Consent Decree, I certify that
                        the information contained in or accompanying this
                        Quarterly Report is true, accurate, and complete. I am
                        aware that there are significant penalties for knowingly
                        submitting false information, including the possibility
                        of fine and imprisonment."

                  and include a list of the cost documents that the certifying
                  individuals reviewed in support of the Quarterly Cost Summary
                  Report. Upon request by the Plaintiffs, Settling Defendants
                  shall provide the Plaintiffs any additional information that
                  the Plaintiffs deem necessary for review of a Quarterly
                  Report.

      TASK III: REMEDIAL ACTION CONSTRUCTION

      After approval of the RA Work Plan (including the CQAPP) by the Response
Agencies and the Pre-Construction Inspection required below, and within 10
calendar days after receipt of notice of authorization to proceed from the
Response Agencies, the Settling Defendants shall construct and implement the RA
in accordance with the RD, the Final Project Schedule, the RA

                              Appendix I - Page 9



Work Plan and the CQAPP, subject to the funding limitations and special
reservations of rights provided in the Consent Decree. Unless otherwise directed
by the Response Agencies, Settling Defendants shall not commence physical RA
activities at OU1 prior to approval of the RA Work Plan, the Pre-Construction
Inspection, or receipt of notice of authorization to proceed.

      3.1 Pre-Construction Inspection. Before commencing the on-site
construction work, the Settling Defendants shall conduct a Pre-Construction
Inspection with the Response Agencies to: (1) review methods for documenting and
reporting inspection data; (2) review methods for distributing and storing
documents and reports; (3) review work area security and safety protocol; (4)
discuss any appropriate modifications of the CQAPP to ensure that site-specific
considerations are addressed; and (5) conduct a site tour. The Pre-Construction
Inspection and meeting shall be documented by a designated person and minutes
shall be transmitted to all parties.

      3.2 Oversight by the Response Agencies. The Response Agencies shall
monitor and oversee the Settling Defendants' construction of the RA, and the
Settling Defendants shall provide briefings and information concerning their
progress, as requested by the Response Agencies.

      3.3 Monitoring During RA Construction. Specific plans for monitoring
during construction will be developed during the RD and modified during
construction, as appropriate.

      3.4 Pre-Completion Inspection. At least 90 days before the anticipated
completion of all phases of construction specified by the RD, and before final
demobilization and site restoration efforts, the Settling Defendants shall
conduct a Pre-Completion Inspection with the Response Agencies. The
Pre-Completion Inspection should consist of a site tour by the Settling
Defendants and the Response Agencies and a discussion regarding the Settling
Defendants' plans for: (1) completing construction of the RA; (2) conducting
post-construction sampling to determine whether the 1 ppm RAL and/or the 0.25
ppm SWAC have been achieved; (3) demobilizing and restoring the site; (4)
performing O&M, Long Term Monitoring, and Institutional Controls; and (4) taking
any other steps required to ensure completion of the RA such that the
Performance Standards are achieved.

      TASK IV: COMPLETION OF THE REMEDIAL ACTION FOR OU1

      4.1 Construction Completion Inspection. Within 90 days after completion of
all phases of construction specified by the RD and after conducting
post-construction sampling to determine whether the 1 ppm RAL and/or the 0.25
ppm SWAC have been achieved, the Settling Defendants shall send the Response
Agencies written notice for the purpose of scheduling and conducting a
Construction Completion Inspection. The Construction Completion Inspection
should consist of a site tour by the Settling Defendants and the Response
Agencies, a review of the post-construction sampling data, and a discussion
regarding the Settling Defendants' plans for: (1) performing O&M, Long Term
Monitoring, and Institutional Controls; and (2) taking any additional steps
required to ensure completion of the RA such that the Performance Standards are
achieved.

                              Appendix I - Page 10



      4.2 RA Completion Plan. If the Performance Standards have not been
achieved by the time of the Construction Completion Inspection, then the written
notice sent to the Response Agencies shall indicate that the Construction
Completion inspection will not serve as a Pre-Certification Inspection under
Consent Decree Subparagraph 44.a. Within 60 days after confirmation at the
Construction Completion Inspection that the Performance Standards have not been
achieved, Settling Defendants shall submit an RA Completion Plan. The RA
Completion Plan shall include a description of the characteristics of areas that
do not comply with the Performance Standards and a detailed description (e.g.,
map, data tables and location information) showing areas in compliance or not in
compliance with Performance Standards. Sampling and locational information
should be provided in both hardcopy and EPA Superfund's designated digital
format (i.e., Superfund Electronic Data Deliverable, Specification Manual 1.05,
website address: http://www.epa.gov/region5superfund/edman/). In addition to
describing noncompliance areas, the RA Completion Plan shall outline any
additional RA construction work required to achieve Performance Standards, a
schedule for completing any additional RA construction work, and a proposed date
for a Construction Completion Re-Inspection. The Settling Defendants shall
implement the RA Completion Plan as approved by the Response Agencies.

      4.3 RA Pre-Certification Inspection. If the Settling Defendants believe
that the RA has been fully performed such that the Performance Standards have
been achieved, then the written notice sent to the Response Agencies shall
indicate that the Construction Completion Inspection will also serve as an RA
Pre-Certification Inspection under Consent Decree Subparagraph 44.a. If, after
the RA Pre-Certification Inspection, the Settling Defendants still believe that
the RA has been fully performed such that the Performance Standards have been
achieved, Settling Defendants shall submit an RA Certification of Completion
Report within 60 days after the RA Pre-Certification Inspection. In the RA
Certification of Completion Report, a registered professional engineer and the
Project Coordinator of the Settling Defendants shall certify that the RA has
been completed in full satisfaction of the requirements of the Consent Decree.
The Report shall also contain the following statement, signed by a responsible
corporate official of each Settling Defendant or Settling Defendants' Project
Coordinator:

                  "To the best of my knowledge, after thorough investigation, I
                  certify that the information contained in or accompanying this
                  submission is true, accurate and complete. I am aware there
                  are significant penalties for submitting false information,
                  including the possibility of fine and imprisonment for knowing
                  violations."

The Report shall document that the RA has been performed such that the
Performance Standards have been achieved. The Report shall include, but shall
not be limited to, the following elements:

            (a)   Introduction;

            (b)   Chronology of events;

            (c)   Summary of construction activities;

                              Appendix I - Page 11



            (d)   Summary of the RA Pre-Certification Inspection;

            (e)   Record drawings signed and stamped by a professional engineer;

            (f)   Explanation of any modifications to the plans and why these
                  were necessary for the project;

            (g)   Verification that the RA has been completed such that the
                  Performance Standards have been achieved;

            (h)   Listing of the criteria, established before the construction
                  was initiated, for judging the functioning of the RA and also
                  explaining any modification to these criteria;

            (i)   Results of site monitoring, indicating that the RA meets or
                  exceeds the Performance Standards;

            (j)   Explanation of the O&M taking place at the site and any
                  changes in the Final O&M Plan that were required based on
                  modification of site plans during construction; and

            (k)   Summary of project costs.

      4.4   EPA Response to RA Certification of Completion Report.

            (a)   If, after completion of the RA Pre-Certification Inspection
                  and receipt and review of the RA Certification of Completion
                  Report, EPA, after reasonable opportunity to review and
                  comment by the State, determines that the RA or any portion
                  thereof has not been completed in accordance with the Consent
                  Decree such that the Performance Standards have not been
                  achieved, EPA will notify Settling Defendants in writing of
                  the activities that must be undertaken by Settling Defendants
                  pursuant to Consent Decree Subparagraph 44.a to complete the
                  RA such that the Performance Standards are achieved. EPA will
                  set forth in the notice a schedule for performance of such
                  activities consistent with the Consent Decree and this SOW or
                  require the Settling Defendants to submit an RA Completion
                  Plan pursuant to Task IV, Subparagraph 4.2.

            (b)   If EPA concludes, based on the RA Pre-Certification Inspection
                  and the RA Certification of Completion Report, and after a
                  reasonable opportunity for review and comment by the State,
                  that the RA has been performed in accordance with the Consent
                  Decree such that the Performance Standards have been achieved,
                  EPA will so certify in writing to Settling Defendants. This
                  certification shall constitute the Certification of Completion
                  of the RA for purposes of the Consent Decree.

      TASK V: COMPLETION OF RESPONSE WORK FOR OU1

      5.1. Response Work Pre-Certification Inspection. Within 90 days after
Settling Defendants conclude that all phases of the Response Work have been
fully performed, Settling Defendants shall send written notice to the Response
Agencies for the purpose of scheduling and conducting a Response Work
Pre-Certification Inspection to be attended by Settling Defendants

                              Appendix I - Page 12



and the Response Agencies. The purpose of the inspection is to determine whether
the O&M, the Long Term Monitoring, and the Institutional Controls have been
fully performed, as required by the Institutional Controls Plan and the Final
O&M Plan.

      5.2 Continuation of Response Work. If, after the Response Work
Pre-Certification Inspection, EPA determines (after a reasonable opportunity for
review and comment by the State) that the Response Work or any portion thereof
has not been fully performed, the Settling Defendants shall continue to perform
O&M, Institutional Controls, and Long Term Monitoring as required by the
Institutional Controls Plan and the Final O&M Plan. The Settling Defendants
shall continue the Response Work pursuant to a schedule approved by EPA, after
reasonable opportunity for review and comment by the State.

      5.3 Response Work Certification of Completion Report. If, after the
Response Work Pre-Certification Inspection, the Settling Defendants believe that
the Response Work has been fully performed, the Settling Defendants shall submit
a Response Work Certification of Completion Report within 60 days after the
Response Work Pre-Certification Inspection. In the Response Work Certification
of Completion Report, a registered professional engineer and the Project
Coordinator of the Settling Defendants shall certify that the Response Work has
been completed in full satisfaction of the requirements of the Consent Decree.
The Report shall also contain the following statement, signed by a responsible
corporate official of each Settling Defendant or Settling Defendants' Project
Coordinator:

                  "To the best of my knowledge, after thorough investigation, I
                  certify that the information contained in or accompanying this
                  submission is true, accurate, and complete. I am aware there
                  are significant penalties for submitting false information,
                  including the possibility of fine and imprisonment for knowing
                  violations."

The report shall document that the Response Work has been fully performed. The
report shall include, but not be limited to, the following elements:

            (a)   Introduction;

            (b)   Chronology of events beginning with the Certification of
                  Completion of the RA;

            (c)   Summary of inspections for completion of Response Work;

            (d)   Record drawings signed and stamped by a professional engineer
                  for any additional work completed since the Certification of
                  Completion of the RA;

            (e)   Explanation of any modifications to the plans and why these
                  were necessary for the project;

            (f)   Verification that the Response Work is complete;

            (g)   Listing of the criteria, established before the construction
                  was initiated, for judging the functioning of the RA and also
                  explaining any modification to these criteria;

                              Appendix I - Page 13



            (h)   Results of site monitoring, indicating that the Response Work
                  is complete;

            (i)   Explanation of any changes in the Final O&M Plan after the
                  Certification of Completion of the RA;

            (j)   Summary of project costs after the Certification of Completion
                  of the RA.

      5.4   EPA Response to Response Work Certification of Completion Report.

            (a)   If, after completion of the Response Work Pre-Certification
                  Inspection and receipt and review of the Response Work
                  Certification of Completion Report, EPA, after reasonable
                  opportunity to review and comment by the State, determines
                  that the Response Work or any portion thereof has not been
                  fully performed, EPA will notify Settling Defendants in
                  writing of the activities that must be undertaken by Settling
                  Defendants pursuant to Consent Decree Subparagraph 45.a to
                  complete the Response Work. EPA will set forth in the notice a
                  schedule for performance of such activities consistent with
                  the Consent Decree and this SOW or require the Settling
                  Defendants to submit an a schedule for continuation of the
                  Response Work pursuant to Task V, Subparagraph 5.2.

            (b)   If EPA concludes, based on the Response Work Pre-Certification
                  Inspection and the Response Work Certification of Completion
                  Report, and after a reasonable opportunity for review and
                  comment by the State, that the Response Work has been fully
                  performed in accordance with the Consent Decree, EPA will so
                  certify in writing to Settling Defendants. This certification
                  shall constitute the Certification of Completion of the
                  Response Work for purposes of the Consent Decree.

IV. MISCELLANEOUS REQUIREMENTS

      1. Community Relations Support. The Response Agencies shall implement a
community relations program. The Settling Defendants shall cooperate with the
Response Agencies and at the request of the Response Agencies, shall participate
in the preparation of appropriate information to be disseminated by the Response
Agencies to the public. At the request of the Response Agencies, Settling
Defendants shall participate in public meetings that may be held or sponsored by
the Response Agencies to explain activities at or concerning OU1. Community
relations support will be consistent with Superfund community relations policy,
as stated in the "Guidance for Implementing the Superfund Program" and Community
Relations in Superfund - A Handbook.

      2. Access. If any property where access is needed to implement the Consent
Decree is owned or controlled by any of the Settling Defendants, such Settling
Defendants shall provide the Response Agencies and their contractors with access
at all reasonable times to such property as provided by Consent Decree Paragraph
25. If any property where access is needed to implement the Consent Decree is
owned or controlled by persons other than the Settling

                              Appendix I - Page 14




Defendants, the Settling Defendants shall use best efforts to secure access from
such persons as provided by Consent Decree Paragraph 26.

V. SUMMARY AND COMPLIANCE SCHEDULE

      A summary of the due dates for major deliverables and milestones under
this SOW is presented below. The due dates may be adjusted with the Response
Agencies' advance written approval to account for changes arising from the
nature of the RA and the other Response Work.



        DELIVERABLE/MILESTONE                                          DUE DATE
- ---------------------------------------    -----------------------------------------------------------
                                        
Pre-QAPP meeting to identify all           Within 21 calendar days after approval of Final
monitoring and data quality objectives     (100%) Design, Settling Defendants shall contact the
for the O&M QAPP                           Response Agencies to arrange pre-QAPP meeting

RA Work Plan                               Within 90 calendar days after approval of Final
                                           (100%) Design

Revised RA Work Plan                       Within 30 calendar days after receipt of the
                                           Response Agencies' comments on the RA Work Plan

Pre-Construction Inspection                Within 21 calendar days after the Response Agencies'
                                           approval of the RA Work Plan

Initiate Remedial Action Construction      Within 10 calendar days after receipt of notice of
                                           authorization to proceed from the Response
                                           Agencies, to be issued after the Pre-Construction
                                           Inspection

Pre-Completion Inspection                  At least 90 days before the anticipated completion
                                           of all phases of construction specified by the RD,
                                           and before final demobilization and site restoration
                                           efforts

Complete Remedial Action Construction      Within 6 calendar years after receipt of notice of
                                           authorization to proceed from the Response Agencies,
                                           or as approved by the Response Agencies in the Final
                                           Project Schedule

Construction Completion Inspection/        Within 90 days after completion of all phases of
RA Pre-Certification Inspection            construction specified by the RD and after conducting
                                           post-construction sampling to determine whether the 1
                                           ppm RAL and/or the 0.25 ppm SWAC have been achieved;
                                           a Construction Completion Inspection will also serve as
                                           an RA Pre-Certification Inspection if the Settling
                                           Defendants believe that the RA has been performed
                                           such that the Performance Standards have been achieved

RA Certification of Completion Report      Within 60 days after an RA Pre-Certification Inspection,
                                           provided Settling Defendants still believe Performance
                                           Standards have been achieved

Revised RA Certification of                30 calendar days after receipt of the Response Agencies'
Completion Report                          comments on the Report


                              Appendix I - Page 15





        DELIVERABLE/MILESTONE                                          DUE DATE
- ---------------------------------------    -----------------------------------------------------------
                                        
Certification of Completion of the RA      Upon EPA's approval of the RA Certification of Completion
                                           Report

Response Work Pre-Certification            Within 90 days after Settling Defendants conclude that all
Inspection                                 phases of Response Work are completed

Response Work Certification of             Within 60 days after Response Work Pre-Certification
Completion Report                          Inspection, provided Settling Defendants believe Response
                                           Work has been fully performed

Revised Response Work Certification        30 calendar days after receipt of the Response Agencies'
of Completion Report                       comments on the Report

Issuance of Certification of Completion    Upon EPA's approval of the Response Work Certification of
of Response Work                           Completion Report

Monthly Progress Reports                   By the 10th of each month from the Date of Lodging of the
                                           Consent Decree for so long as the RA continues, until
                                           Certification of Completion of the RA

Quarterly Reports                          Quarterly basis for so long as the RA continues under the
                                           Consent Decree, until Certification of Completion of the RA


                              Appendix I - Page 16

EX-10.3.(B)

                          UNITED STATES DISTRICT COURT
                      FOR THE EASTERN DISTRICT OF WISCONSIN

UNITED STATES OF AMERICA
and the STATE OF WISCONSIN
                                               CIVIL ACTION NO. 03-C-0949

             Plaintiffs,

                  v.

                                               The Honorable Lynn Adelman

P. H. GLATFELTER COMPANY
and
WTM I COMPANY
(f/k/a Wisconsin Tissue Mills Inc.),

             Defendants.

                       AGREED SUPPLEMENT TO CONSENT DECREE

     The Plaintiffs and Defendants in this action have entered into this Agreed
Supplement to Consent Decree (the "Agreed Supplement") in order to memorialize
an agreement reached in accordance with Subparagraph 98.d of the existing
Consent Decree. As explained below, this Agreed Supplement sets forth the
Defendants' agreement to commit additional funds for performance of their
obligations under the Consent Decree, as envisioned by Decree Subparagraph 98.d.
The United States is filing this Agreed Supplement with the Court to make it
part of the public record concerning the Consent Decree, but the Court need not
take any action on this filing.

     1. The Plaintiffs filed this action on October 1, 2003, alleging that the
Defendants are among the parties liable for environmental contamination at the
Lower Fox River and Green Bay Site (the "Site") pursuant to the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. Sections
9601-9675. At the same time, the United States lodged with the



Court a proposed Consent Decree between the Plaintiffs and Defendants. After a
public comment period, the Court approved and entered the Consent Decree in a
Decision and Order dated April 12, 2004.

     2. The Consent Decree requires the Defendants to perform sediment
remediation work at the portion of the Site that has been designated as Operable
Unit 1 ("OU1"). The Defendants began remedial work, including removing sediment
from OU1, in 2004, and the active remediation phase of that response work has
not yet been completed. The work is being overseen by the U.S. Environmental
Protection Agency ("EPA") and the Wisconsin Department of Natural Resources
("WDNR").

     3. The Defendants are paying for the response work that they are performing
in OU1 using funds deposited in a dedicated escrow account established under the
Consent Decree (the "Escrow Account"). If EPA, in consultation with WDNR,
determines at any time that the funds remaining in that Escrow Account are not
sufficient to finance the completion of the response work, EPA has certain
rights that can lead to termination of the Consent Decree. As an alternative to
that course of action, Consent Decree Subparagraph 98.d affords the Defendants
an opportunity to "deposit additional funds in the Escrow Account, in order to
avoid an Insufficiency Determination."

     4. The Plaintiffs recently notified the Defendants that EPA was considering
making a formal finding that the fund balance remaining in Escrow Account was
likely to be insufficient to fund the completion of the response work. The
parties have agreed to address that potential shortfall in the Escrow Account as
set forth in the following Paragraph.


                                        2



     5. In accordance with Consent Decree Subparagraph 98.d, the parties hereby
agree that the Defendants shall deposit additional funds in the Escrow Account
established under the Consent Decree, as follows:

          a. Defendant WTM I Company ("WTM I") shall deposit an additional $6
     million in the Escrow Account. That total amount shall be paid in three
     equal installments: (i) $2 million shall be payable on or before April 10,
     2007; (ii) an additional $2 million shall be payable on or before July 10,
     2007; and (iii) the final $2 million shall be payable on or before January
     10, 2008. All three payments shall be deposited in a separate sub-account
     within the Escrow Account (the "WTM I Sub-account"), so that those funds
     can be distinguished from the other funds in the Escrow Account (the
     "Existing Funds").

          b. By no later than April 10, 2007, Defendant P.H. Glatfelter Company
     ("Glatfelter") shall obtain a $6 million irrevocable letter of credit
     payable to the Escrow Account. The irrevocable letter of credit shall be
     issued by a financial institution that has the authority to issue letters
     of credit and whose letter of credit operations are regulated and examined
     by an agency of the United States Government. The financial institution
     shall have surplus and reserves in excess of $500 million. The irrevocable
     letter of credit shall identify EPA as the beneficiary and the full $6
     million shall immediately be payable to the Escrow Account: (i) at any time
     before April 10, 2008, upon EPA's written certification that the Existing
     Funds balance in the Escrow Account is below $2 million (by a letter in the
     form attached hereto as Exhibit A); or (ii) on April 10, 2008, if payment
     has not already been made by that date. The payment under the irrevocable
     letter of credit shall be deposited in a separate sub-account within the
     Escrow Account (the


                                        3



     "Glatfelter Sub-account"), so that those funds can be distinguished from
     the Existing Funds. At least five business days before finalizing the
     letter of credit, Glatfelter shall afford the Plaintiffs and WTM I an
     opportunity to review the proposed letter of credit to assess whether it
     conforms to the requirements of this Subparagraph. Notwithstanding the
     requirement that the letter of credit be irrevocable, at any time prior to
     payment under the irrevocable letter of credit, Glatfelter may deposit $6
     million into the Glatfelter Sub-account," at which time, Glatfelter may
     cancel the letter of credit.

          c. The Defendants shall direct the Escrow Account manager as follows:
     All Existing Funds shall be exhausted before disbursement of any amounts
     from the separate sub-accounts established and funded under the preceding
     Subparagraphs of this Agreed Supplement. After the Existing Funds are
     exhausted, the WTM I and Glatfelter Sub-accounts shall each be drawn upon
     in equal amounts, on a 50/50 basis, to pay for response work.

          d. The parties hereby agree that the additional funds to be paid into
     the Escrow Account under the preceding Subparagraphs of this Agreed
     Supplement fall within the definition of the "OU1 Response Activities and
     Costs" specified by Consent Decree Subparagraph 83.b.

     6. Pursuant to Consent Decree Section XXX (Retention of Jurisdiction), the
Court has jurisdiction to enforce compliance with the terms of this Agreed
Supplement because the Court retained jurisdiction over both the subject matter
of the Consent Decree and the Settling Defendants for the duration of the
performance of the terms and provisions of the Consent Decree for the purpose of
enabling any of the parties to apply to the Court at any time for such further
order, direction, and relief as may be necessary or appropriate for the
construction or


                                        4



modification of the Consent Decree, or to effectuate or enforce compliance with
its terms, or to resolve disputes in accordance with Consent Decree Section XX
(Dispute Resolution).

     IT IS SO STIPULATED AND AGREED.


                                        5



Signature Page for Agreed Supplement to Consent Decree in United States and the
State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No.
03-C-0949 (E.D. Wis.)

                                       FOR THE UNITED STATES OF AMERICA

                                       MATTHEW J. McKEOWN
                                       Acting Assistant Attorney General
                                       Environment and Natural Resources
                                       Division


3/28/07                                /s/ Randall M. Stone
Date                                   -----------------------------------------
                                       RANDALL M. STONE
                                       Senior Attorney
                                       Environmental Enforcement Section
                                       U.S. Department of Justice
                                       P.O. Box 7611
                                       Washington, DC 20044-7611

                                       Phone: (202) 514-1308
                                       Fax: (202) 616-6584
                                       E-Mail: Randall.Stone@USDOJ.GOV

                                       STEVEN M. BISKUPIC
                                       United States Attorney

                                       MATTHEW V. RICHMOND
                                       Assistant United States Attorney
                                       Eastern District of Wisconsin
                                       U.S. Courthouse and Federal Building -
                                       Room 530
                                       517 E. Wisconsin Avenue
                                       Milwaukee, WI 53202


3/26/07                                /s/ Richard Murawski
Date                                   -----------------------------------------
                                       RICHARD MURAWSKI
                                       Associate Regional Counsel
                                       U.S. Environmental Protection Agency
                                       Region 5
                                       77 West Jackson Boulevard
                                       Chicago, IL 60604


                                        6



Signature Page for Agreed Supplement to Consent Decree in United States and the
State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No.
03-C-0949 (E.D. Wis.)

                                       FOR THE STATE OF WISCONSIN


3/26/07                                /s/ Bruce Baker
Date                                   -----------------------------------------
                                       BRUCE BAKER
                                       Deputy Administrator, Division of Water
                                       Wisconsin Department of Natural Resources
                                       101 South Webster Street
                                       Madison, WI  53703


3/27/07                                /s/ Jerry L. Hancock
Date                                   -----------------------------------------
                                       JERRY L. HANCOCK
                                       Assistant Attorney General
                                       Wisconsin Department of Justice
                                       17 West Main Street
                                       Madison, WI 53702


                                        7



Signature Page for Agreed Supplement to Consent Decree in United States and the
State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No.
03-C-0949 (E.D. Wis.)


                                       FOR P. H. GLATFELTER COMPANY


3/28/07                                Signature: /s/ Jeffrey J. Norton
Date                                              ------------------------------
                                       Name (print): Jeffrey J. Norton
                                       Title: Vice President, General Counsel
                                              and Secretary
                                       Address:
                                                --------------------------------
                                                --------------------------------
                                                --------------------------------
                                                --------------------------------


                                        8



Signature Page for Agreed Supplement to Consent Decree in United States and the
State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No.
03-C-0949 (E.D. Wis.)

                                       FOR WTM I COMPANY


March 27, 2007                         Signature: /s/ J.P. Causey Jr.
Date                                              ------------------------------
                                       Name (print): J.P. Causey Jr.
                                       Title: Vice President
                                       Address: WTM I Company
                                                Box 2350
                                                Richmond, VA 23218-2350


                                        9



EXHIBIT A TO AGREED SUPPLEMENT TO CONSENT DECREE
(PRESCRIBED FORM OF LETTER DIRECTING PAYMENT UNDER LETTER OF CREDIT BEFORE APRIL
10, 2008)

                                     [Date]

[Name and Address of Letter of Credit Issuer]

     Payment Directive Under Letter of Credit No. ________________

Sir or Madam:

     I am writing in my capacity as the authorized representative of the U.S.
Environmental Protection Agency ("EPA"), the designated beneficiary under the
above-referenced letter of credit. The letter of credit was established pursuant
to an "Agreed Supplement to Consent Decree" in the case captioned United States
and the State of Wisconsin v. P.H. Glatfelter Co. and WTM I Co., Case No.
03-C-949 (E.D. Wis.), and Subparagraph 5.b of that Agreed Supplement to Consent
Decree specified certain conditions for requesting payment under the letter of
credit before April 10, 2008.

     EPA hereby certifies that the conditions for payment under Subparagraph 5.b
of the Agreed Supplement to Consent Decree have been satisfied, and EPA
therefore directs your institution to pay the full amount due under the letter
of credit ($6,000,000.00), as specified herein. Payment should be made by wire
transfer in accordance with the following payment instructions:

     Payment Amount: $6,000,000.00

     Payee:          Fox River OU1 Escrow Account
                     c/o Deutsche Bank Trust Company Americas
                     Account No. 252080

     [insert wire transfer instructions]


                                       -----------------------------------------
                                       Superfund Division Director
                                       U.S. Environmental Protection Agency,
                                       Region 5



                             CERTIFICATE OF SERVICE

     Pursuant to Paragraph 124 of the Consent Decree in this action, I hereby
certify that copies of the foregoing Agreed Supplement to Consent Decree were
served on this date by first-class mail, postage prepaid, upon the following
individuals:

Nancy K. Peterson
Quarles & Brady LLP
411 East Wisconsin Avenue, Suite 2040
Milwaukee, WI 53202-4497

J.P. Causey Jr.
Vice President & Corporate Secretary
WTM I Company
c/o Chesapeake Corporation
1021 E. Gary Street
Box 2350
Richmond, VA 23218-2350

Patrick H. Zaepfel
Meyer, Unkovic & Scott, LLP
110 East King Street
Lancaster, PA 17602

David G. Mandelbaum
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599

Jerry L. Hancock
Assistant Attorney General
Wisconsin Department of Justice
P.O. Box 7857
Madison, WI 53707-7857

Matthew V. Richmond
Assistant United States Attorney
Eastern District of Wisconsin
U.S. Courthouse and Federal Building - Room 530
517 E. Wisconsin Avenue
Milwaukee, WI 53202

Richard Murawski
Associate Regional Counsel (C-14J)
U.S. Environmental Protection Agency
77 W. Jackson Blvd.
Chicago, IL 60604

Douglas P. Dixon and Joshua Epstein
U.S. Environmental Protection Agency
Ariel Rios Building - Mail Code 2272A
1200 Pennsylvania Avenue, N.W.
Washington, DC 20460


Dated: March 29, 2007                    s/ Randall M.  Stone
                                         ---------------------------------------

EX-10.3.(C)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF WISCONSIN

UNITED STATES OF AMERICA
and the STATE OF WISCONSIN
Plaintiffs,	CIVIL ACTION NO. 03-C-0949
v.
P. H. GLATFELTER COMPANY	The Honorable Lynn Adelman
and
WTM I COMPANY
(f/k/a Wisconsin Tissue Mills Inc.),
Defendants.

SECOND AGREED SUPPLEMENT TO CONSENT DECREE

     The Plaintiffs and Defendants in this action — together with one additional potentially responsible party, Menasha Corporation — (collectively the “Parties”) have entered into this Second Agreed Supplement to Consent Decree (the “Second Agreed Supplement”) in order to memorialize an agreement reached in accordance with Subparagraph 98.d of the existing Consent Decree. As explained below, this Second Agreed Supplement sets forth an agreement to commit additional funds for performance of the obligations under the Consent Decree, as envisioned by Decree Subparagraph 98.d. A corrected version of an earlier Agreed Supplement was filed with the Court on September 13, 2007. This Second Agreed Supplement augments, and does not supersede, the earlier Agreed Supplement. The United States is filing this Second Agreed Supplement with the Court to make it part of the public record concerning the Consent Decree, but the Court need not take any action on this filing.

     1. The Plaintiffs filed this action on October 1, 2003, alleging that the Defendants are among the parties liable for environmental contamination at the Lower Fox River and Green Bay Site (the “Site”) pursuant to the Comprehensive Environmental Response, Compensation, and Liability Act, 42 U.S.C.§§ 9601-9675 (“CERCLA”). At the same time, the United States lodged with the Court a proposed Consent Decree between the Plaintiffs and Defendants. After a public comment period, the Court approved and entered the Consent Decree in a Decision and Order dated April 12, 2004.

     2. The Consent Decree requires the Defendants to perform sediment remediation work at the portion of the Site that has been designated as Operable Unit 1 (“OU1”). The Defendants began removing contaminated sediment from OU 1 in 2004, and the active remediation phase of that response work has not yet been completed. The work is being overseen by the U.S. Environmental Protection Agency (“EPA”) and the Wisconsin Department of Natural Resources (“WDNR”).

     3. The Defendants are paying for the response work that they are performing in OU1 using funds deposited in a dedicated escrow account established under the Consent Decree (the “Escrow Account”). If EPA, in consultation with WDNR, determines at any time that the funds remaining in that Escrow Account are not sufficient to finance the completion of the response work, EPA has certain rights that can lead to termination of the Consent Decree. As an alternative to that course of action, Consent Decree Subparagraph 98.d affords an opportunity to “deposit additional funds in the Escrow Account, in order to avoid an Insufficiency Determination.” The Plaintiffs have informally notified the Defendants that they believe the fund balance remaining in the Escrow Account was likely to be insufficient to fund the completion of the response work.

2

     4. EPA and WDNR have notified Menasha Corporation (“Menasha”) that EPA and WDNR believe that Menasha has potential CERCLA liability for the Site, including by issuing Menasha formal notices of potential liability in 2003 and 2007. Menasha formerly owned and operated a paper production facility in Menasha, Wisconsin, and wastewater from that facility was discharged to OU 1.

     5. EPA and WDNR are considering proposing a Record of Decision Amendment for OU 1 that would be similar to the Record of Decision Amendment for OUs 2-5 of the Site that EPA and WDNR finalized in June 2007. The Parties also have begun discussing: (i) the potential need to amend the existing Consent Decree in this case, if the OU 1 Record of Decision is amended; and (ii) the need for interim arrangements, at a minimum, for continuation of the work in OU 1 under the existing Record of Decision and Consent Decree, pending consideration of a possible Record of Decision Amendment for OU 1. This Second Agreed Supplement memorializes certain of those interim arrangements.

     6. The Parties have agreed to address a potential near-term shortfall in the Escrow Account as set forth herein. In accordance with Consent Decree Subparagraph 98.d, the Parties hereby agree that additional funds shall be deposited and managed in the Escrow Account established under the Consent Decree, as follows:

     a. Menasha shall deposit an additional $7 million in the Escrow Account on or before April 1, 2008. That total amount shall be deposited in the general account within the Escrow Account (the “Existing Funds”), so that it can be distinguished from the other funds in certain sub-accounts (i.e., the “Glatfelter Sub-Account” and the “WTM I Sub-Account”).

3

     b. The $7 million payment into the Escrow Account made pursuant to Subparagraph 6.a of this Second Agreed Supplement shall be used to pay for performance of response activities in OU 1, in accordance with the Consent Decree in this matter (and/or any Consent Decree Amendment).

     c. The Defendants shall direct the Escrow Account manager to disburse funds to pay for response work as follows: (i) first from the Existing Funds until the entire amount of the Existing Funds, including all interest and income earned on the Existing Funds, have been full expended, and then (ii) from the WTM I Sub-Account and the Glatfelter Sub-Account in equal amounts, on a 50/50 basis. In the event Existing Funds are fully expended such that the WTM I Sub-Account and Glatfelter Sub-Account must be accessed, but thereafter additional monies also characterized as Existing Funds become available (as, for example, with the Menasha payment required by Subparagraph 6.a. above), then all pending and future payments will once again be drawn from the Existing Funds first until the entire amount of the Existing Funds, including all interest and income earned on the Existing Funds, have been fully expended again, and then from the WTM I Sub-Account and the Glatfelter Sub-Account in equal amounts, on a 50/50 basis.

     d. The Parties hereby agree that the additional funds to be paid into the Escrow Account under the preceding Subparagraphs of this Second Agreed Supplement fall within the definition of the “OU1 Response Activities and Costs” specified by Consent Decree Subparagraph 83.b.

     7. The Parties acknowledge that the Plaintiffs shall recognize that Menasha is entitled to full credit, applied against its liabilities for response costs at the Site, for the $7

4

million payment into the Escrow Account made pursuant to Subparagraph 6.a of this Second Agreed Supplement, upon receipt of such payment by the Escrow Agent; provided, however, that the credit ultimately recognized shall take into account and shall not include the amount of any recoveries by Menasha of any portion of such payment from other liable persons, such as through a recovery under Sections 107 and 113 of CERCLA, 42 U.S.C. §§ 9607 and 9613.

     8. Menasha hereby covenants not to sue and agrees not to assert any claims or causes of action against the United States or the State with respect to the $7 million payment into the Escrow Account made pursuant to Subparagraph 6.a of this Second Agreed Supplement, including, but not limited to:

     a. any direct or indirect claim for reimbursement from the Hazardous Substance Superfund (established pursuant to the Internal Revenue Code, 26 U.S.C. § 9507) through CERCLA Sections 106(b)(2), 107, 111, 112, 113 or any other provision of law;

     b. any claims against the United States (including any department, agency or instrumentality of the United States) or State (including any department, agency or instrumentality of the States) under CERCLA Sections 107 or 113, 42 U.S.C. §§ 9607 or 9613, related to the $7 million payment into the Escrow Account made pursuant to Subparagraph 6.a of this Second Agreed Supplement;

     c. any claims against the United States (including any department, agency or instrumentality of the United States) or State (including any department, agency or instrumentality of the States) under the United States Constitution, the Wisconsin Constitution, the Tucker Act, 28 U.S.C. § 1491, the Equal Access to Justice Act, 28 U.S.C. § 2412, as amended, or at common law, related to the $7 million payment into

5

the Escrow Account made pursuant to Subparagraph 6.a of this Second Agreed Supplement;

     d. any direct or indirect claim for disbursement from the Disbursement Special Account established pursuant to the Consent Decree; or

     e. any direct or indirect claim for disbursement from the Fox River Site Special Account.

This covenant not to sue shall not apply in the event that the United States or the State brings a judicial action against or issues an order to Menasha for response actions or response costs at the Site.

     9. Pursuant to Consent Decree Section XXX (Retention of Jurisdiction), the Court has jurisdiction to enforce compliance with the terms of this Agreed Supplement because the Court retained jurisdiction over both the subject matter of the Consent Decree and the Settling Defendants for the duration of the performance of the terms and provisions of the Consent Decree for the purpose of enabling any of the Parties to apply to the Court at any time for such further order, direction, and relief as may be necessary or appropriate for the construction or modification of the Consent Decree, or to effectuate or enforce compliance with its terms, or to resolve disputes in accordance with Consent Decree Section XX (Dispute Resolution).

     IT IS SO STIPULATED AND AGREED.

6

Signature Page for Second Agreed Supplement to Consent Decree in United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No. 03-C-0949 (E.D. Wis.)

	FOR THE UNITED STATES OF AMERICA
	RONALD J. TENPAS
	Acting Assistant Attorney General
	Environment and Natural Resources Division
11/6/07	/s/ RANDALL M. STONE
Date	RANDALL M. STONE
	Senior Attorney
	Environmental Enforcement Section
	U.S. Department of Justice
	P.O. Box 7611
	Washington, DC 20044-7611
	Phone:(202) 514-1308
	Fax:      (202) 616-6584
	E-Mail: Randall.Stone@USDOJ.GOV
	STEVEN M. BISKUPIC
	United States Attorney
	MATTHEW V. RICHMOND
	Assistant United States Attorney
	Eastern District of Wisconsin
	U.S. Courthouse and Federal Building — Room 530
	517 E. Wisconsin Avenue
	Milwaukee, WI 53202
10/31/07	/s/ RICHARD MURAWSKI
Date	RICHARD MURAWSKI
	Associate Regional Counsel
	U.S. Environmental Protection Agency
	Region 5
	77 West Jackson Boulevard
	Chicago, IL 60604

7

Signature Page for Second Agreed Supplement to Consent Decree in United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No. 03-C-0949 (E.D. Wis.)

	FOR THE STATE OF WISCONSIN
11/6/07	/s/ BRUCE BAKER
Date	BRUCE BAKER
	Deputy Administrator, Division of Water
	Wisconsin Department of Natural Resources
	101 South Webster Street
	Madison, WI 53703
11/6/07	/s/ JERRY L. HANCOCK
Date	JERRY L. HANCOCK
	Assistant Attorney General
	Wisconsin Department of Justice
	17 West Main Street
	Madison, WI 53702

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Signature Page for Second Agreed Supplement to Consent Decree in United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No. 03-C-0949 (E.D. Wis.)

	FOR P. H. GLATFELTER COMPANY
10/28/07	Signature:	/s/ John P. Jacunski
Date	Name (print):	John P. Jacunski
	Title:	Senior Vice President and CFO
	Address:

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Signature Page for Second Agreed Supplement to Consent Decree in United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No. 03-C-0949 (E.D. Wis.)

	FOR WTM I COMPANY
10/23/07	Signature:	/s/ J. P. Causey Jr.
Date	Name (print):	J. P. Causey Jr.
	Title:	Vice President
	Address:

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Signature Page for Second Agreed Supplement to Consent Decree in United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company, Case No. 03-C-0949 (E.D. Wis.)

	FOR MENASHA CORPORATION
10/24/07	Signature:	/s/ James N. Sarosiek
Date	Name (print):	James N. Sarosiek
	Title:	Vice President
	Address:

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CERTIFICATE OF SERVICE

     Pursuant to Paragraph 124 of the Consent Decree in this action, I hereby certify that copies of the foregoing Second Agreed Supplement to Consent Decree were served on this date by first-class mail, postage prepaid, upon the following individuals:

Nancy K. Peterson
Quarles & Brady LLP
411 East Wisconsin Avenue, Suite 2040
Milwaukee, WI 53202-4497

J.P. Causey Jr.
Vice President & Corporate Secretary
WTM I Company
c/o Chesapeake Corporation
1021 E. Cary Street
Box 2350
Richmond, VA 23218-2350

Patrick H. Zaepfel
Kegel Kelin Almy & Grimm LLP
24 North Lime Street
Lancaster, PA 17602-2913

David G. Mandelbaum
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51^st Floor
Philadelphia, PA 19103-7599

Linda L. Rockwood
Faegre & Benson LLP
3200 Wells Fargo Center
1700 Lincoln Street
Denver, CO 80203-4532

Jerry L. Hancock and Thomas J. Dawson
Assistant Attorneys General
Wisconsin Department of Justice
P.O. Box 7857
Madison, WI 53707-7857

Matthew V. Richmond
Assistant United States Attorney
Eastern District of Wisconsin
U.S. Courthouse and Federal Building
Room 530
517 E. Wisconsin Avenue
Milwaukee, WI 53202

Richard Murawski
Associate Regional Counsel (C-14J)
U.S. Environmental Protection Agency
77 W. Jackson Blvd.
Chicago, IL 60604

Douglas P. Dixon
U.S. Environmental Protection Agency
Ariel Rios Building — Mail Code 2272A
1200 Pennsylvania Avenue, N. W.
Washington, DC 20460

Dated: November 13, 2007 /s/ Randall M. Stone  

EX-10.3.(D)

UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF WISCONSIN

UNITED STATES OF AMERICA and the STATE OF WISCONSIN
Plaintiffs,
v.	CIVIL ACTION NO. 03-C-0949
P. H. GLATFELTER COMPANY and WTM I COMPANY (f/k/a Wisconsin Tissue Mills Inc.),	The Honorable Lynn Adelman
Defendants.

AMENDED CONSENT DECREE
FOR REMEDIAL DESIGN AND REMEDIAL ACTION AT OPERABLE UNIT 1 OF
THE LOWER FOX RIVER AND GREEN BAY SITE

TABLE OF CONTENTS

I. BACKGROUND	1
II. JURISDICTION	4
III. PARTIES BOUND	4
IV. DEFINITIONS	5
V. GENERAL PROVISIONS	13
VI. ESTABLISHMENT AND USE OF CERTAIN SITE-SPECIFIC ACCOUNTS	15
VII. PERFORMANCE OF THE RESPONSE WORK BY SETTLING DEFENDANTS	19
VIII. POST-REMEDY RESPONSE WORK AND REMEDY REVIEW	26
IX. QUALITY ASSURANCE, SAMPLING, AND DATA ANALYSIS	28
X. ACCESS AND INSTITUTIONAL CONTROLS	31
XI. REPORTING REQUIREMENTS	36
XII. RESPONSE AGENCIES’ APPROVAL OF PLANS AND OTHER SUBMISSIONS	41
XIII. PROJECT COORDINATORS	44
XIV. CERTIFICATION OF COMPLETION	45
XV. EMERGENCY RESPONSE	48
XVI. NATURAL RESOURCE RESTORATION EFFORTS	49
XVII. PAYMENTS	51
XVIII. INDEMNIFICATION AND INSURANCE	61
XIX. FORCE MAJEURE EVENTS	64
XX. DISPUTE RESOLUTION	66
XXI. STIPULATED PENALTIES AND STIPULATED DAMAGES	71
XXII. COVENANTS NOT TO SUE BY PLAINTIFFS	77
XXIII. COVENANTS BY SETTLING DEFENDANTS	83
XXIV. [DELETED]	86
XXV. EFFECT OF SETTLEMENT AND CONTRIBUTION PROTECTION	86
XXVI. ACCESS TO INFORMATION	89
XXVII. RETENTION OF RECORDS	90
XXVIII. NOTICES AND SUBMISSIONS	92
XXIX. EFFECTIVE DATE	94
XXX. RETENTION OF JURISDICTION	94
XXXI. APPENDICES	95
XXXII. COMMUNITY RELATIONS	95
XXXIII. MODIFICATION	96
XXXIV. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT	96
XXXV. SIGNATORIES/SERVICE	97
XXXVI. FINAL JUDGMENT	98

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TABLE OF APPENDICES

Appendix A	Trustee Council Resolution relating to this Consent Decree
Appendix B	Appendix addressing Management of the Disbursement Special Account
Appendix C	Appendix addressing Escrow Account Management
Appendix D	Form of Escrow Agreement (including Amendments thereto)
Appendix E	Appendix addressing Special Procedures for Restoration Work
Appendix F	Administrative Order on Consent between WTM I Company, EPA, and WDNR, captioned In the matter of the Lower Fox River and the Green Bay Site, Docket No. V-W’03-C-745 (including the Statement of Work for Remedial Design)
Appendix G	Map of Operable Unit 1
Appendix H	Record of Decision for Operable Units 1 and 2 and Record of Decision Amendment for Operable Unit 1
Appendix I	Statement of Work for the Remedial Action
Appendix J	Form of EPA Payment Directive

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AMENDED CONSENT DECREE
FOR REMEDIAL DESIGN AND REMEDIAL ACTION AT OPERABLE UNIT 1 OF
THE LOWER FOX RIVER AND GREEN BAY SITE

I. BACKGROUND

     A. The United States of America (“United States”), on behalf of the Administrator of the United States Environmental Protection Agency (“EPA”), and the State of Wisconsin (the ”State”), on behalf of the Wisconsin Department of Natural Resources (“WDNR”), filed a Complaint in this matter pursuant to Sections 106 and 107 of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”), 42 U.S.C. §§ 9606 and 9607.

     B. The Plaintiffs’ Complaint seeks, inter alia: (i) reimbursement of certain costs incurred by the United States and the State for response actions at the Lower Fox River and Green Bay Site (the “Site,” as defined below) in Northeastern Wisconsin, together with accrued interest; and (ii) performance of response work by the defendants at Operable Unit 1 (“OU1,” as defined below) of the Site consistent with the National Contingency Plan, 40 C.F.R. Part 300 (as amended) (the “NCP”).

     C. In accordance with the NCP and Section 121(f)(1)(F) of CERCLA, 42 U.S.C. § 9621(f)(1)(F), the State was notified of negotiations with potentially responsible parties regarding the implementation of the remedial design and the remedial action for OU1. The State has been an active participant in such negotiations and is a party to this Consent Decree.

     D. In accordance with Section 122(j)(1) of CERCLA, 42 U.S.C. § 9622(j)(1), EPA has notified the appropriate natural resource trustees (the “Trustees”), as represented by the Fox River/Green Bay Natural Resource Trustee Council, of negotiations with potentially responsible parties regarding the releases of hazardous substances that may have resulted in injuries to

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natural resources under Federal, State, and Tribal trusteeship at the Site. The Trustees have participated in the negotiation of this Consent Decree, and support this Consent Decree, as indicated by the Trustee Council Resolution attached to this Consent Decree as Appendix A.

     E. EPA, WDNR, and the Trustees are parties to several Site-specific Memoranda of Agreement, as “Inter-Governmental Partners” sharing a “mutual goal of remediating and/or responding to hazardous substances releases and threats of releases to, and restoring injured and potentially injured natural resources in, [the Site area].” The Inter-Governmental Partners’ founding Memorandum of Agreement recognized that WDNR would have “a leadership role, in full partnership with EPA, in exercising response authority” at the Site, and the Plaintiffs intend to continue that cooperative relationship as to actions required under this Consent Decree.

     F. The defendants that have entered into this Consent Decree (“Settling Defendants,” as defined below) do not admit any liability to the Plaintiffs, to the Trustees, or to any other party arising out of the transactions or occurrences alleged in the Complaint, nor do they acknowledge that the release or threatened release of hazardous substance(s) at or from the Site constitutes an imminent or substantial endangerment to the public health or welfare or the environment.

     G. In response to a release or a substantial threat of a release of a hazardous substance(s) at or from the Site, WDNR in 1998 commenced a Remedial Investigation and Feasibility Study (“RI/FS”) for the Site pursuant to 40 C.F.R. § 300.430, with funding and technical assistance from EPA. In December 2002, WDNR completed a Remedial Investigation (“RI”) Report and a Final Feasibility Study (“FS”) for the Site.

     H. Pursuant to Section 117 of CERCLA, 42 U.S.C. § 9617, notice of the completion of the FS and of the proposed plan for remedial action was published in major local newspapers of general circulation in the Fox River Valley. WDNR and EPA provided an opportunity for

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written and oral comments from the public on the proposed plan for remedial action. A copy of the transcript of the public meeting is available to the public as part of the administrative record upon which WDNR and EPA based the selection of the response action.

     I. The decision by WDNR and EPA on the remedial action to be implemented at OU1 at the Site is embodied in a Record of Decision, executed by WDNR and EPA in December 2002 (the “2002 ROD”) and a Record of Decision Amendment, executed by WDNR and EPA in June 2008 (the “2008 ROD Amendment”). The 2002 ROD and the 2008 ROD Amendment both include an explanation of significant differences between the final remedial action plan and the proposed plan as well as a responsiveness summary to the public comments. Notice of the 2002 ROD and the 2008 ROD Amendment was published in accordance with Section 117(b) of CERCLA. As specified below, the 2002 ROD and the 2008 ROD Amendment are collectively referred to herein as the “ROD.”

     J. Based on the information presently available to EPA and WDNR, EPA and WDNR believe that the Response Work (as defined below) will be properly and promptly conducted by the Settling Defendants if conducted in accordance with the requirements of this Consent Decree and its appendices.

     K. Solely for the purposes of Section 113(j) of CERCLA, the remedial action selected by the ROD and the Response Work to be performed by the Settling Defendants shall constitute a response action taken or ordered by the President.

     L. The Parties recognize, and the Court by entering this Consent Decree finds, that this Consent Decree has been negotiated by the Parties in good faith and implementation of this Consent Decree will expedite the cleanup of OU1 and will avoid prolonged and complicated

3

litigation between the Parties, and that this Consent Decree is fair, reasonable, and in the public interest.

     NOW, THEREFORE, it is hereby Ordered, Adjudged, and Decreed:

II. JURISDICTION

     1. This Court has jurisdiction over the subject matter of this action pursuant to 28 U.S.C. §§ 1331 and 1345, and 42 U.S.C. §§ 9606, 9607, and 9613(b). This Court also has personal jurisdiction over the Settling Defendants. Solely for the purposes of this Consent Decree and the underlying Complaint, Settling Defendants waive all objections and defenses that they may have to jurisdiction of the Court or to venue in this District. Settling Defendants shall not challenge the terms of this Consent Decree or this Court’s jurisdiction to enter and enforce this Consent Decree.

III. PARTIES BOUND

     2. This Consent Decree applies to and is binding upon the United States and the State and upon Settling Defendants and their successors and assigns. Any change in ownership or corporate status of a Settling Defendant including, but not limited to, any transfer of assets or real or personal property, shall in no way alter such Settling Defendant’s responsibilities under this Consent Decree.

     3. Settling Defendants shall provide a copy of this Consent Decree to each contractor hired to perform the Response Work required by this Consent Decree and to each person representing any Settling Defendant with respect to OU1 or the Response Work and shall condition all contracts entered into hereunder upon performance of the Response Work in conformity with the terms of this Consent Decree. Settling Defendants or their contractors shall provide written notice of the Consent Decree to all subcontractors hired to perform any portion

4

of the Response Work required by this Consent Decree. Settling Defendants shall nonetheless be responsible for ensuring that their contractors and subcontractors perform the Response Work contemplated herein in accordance with this Consent Decree. With regard to the activities undertaken pursuant to this Consent Decree, each contractor and subcontractor shall be deemed to be in a contractual relationship with the Settling Defendants within the meaning of Section 107(b)(3) of CERCLA, 42 U.S.C. § 9607(b)(3).

IV. DEFINITIONS

     4. Unless otherwise expressly provided herein, terms used in this Consent Decree which are defined in CERCLA or in regulations promulgated under CERCLA shall have the meaning assigned to them in CERCLA or in such regulations. Whenever terms listed below are used in this Consent Decree or in the appendices attached hereto and incorporated hereunder, the following definitions shall apply:

     “CERCLA” shall mean the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended, 42 U.S.C. §§ 9601-9675.

     “Consent Decree” shall mean this Amended Consent Decree and all appendices attached hereto (listed in Section XXXI). In the event of conflict between this Amended Consent Decree and any appendix, this Amended Consent Decree shall control.

     “Day” shall mean a calendar day unless expressly stated to be a working day. “Working day” shall mean a day other than a Saturday, Sunday, or Federal holiday. In computing any period of time under this Consent Decree, where the last day would fall on a Saturday, Sunday, or Federal holiday, the period shall run until the close of business of the next working day.

5

     “Date of Lodging” shall mean October 1, 2003, the day on which the original version of the Consent Decree was lodged with the Court. “Date of Lodging of the Amended Consent Decree” shall mean the day on which the Amended Consent Decree is lodged with the Court.

     “DOI” shall mean the United States Department of the Interior and any successor departments or agencies of the United States.

     “DOI Past Cost Payments” shall mean the payments to be made to the DOI NRDAR Fund under Subparagraph 52.a.(ii) (Initial Payments to the United States) of this Consent Decree to reimburse DOI for a portion of its past natural resource damage assessment costs related to the Site.

     “DOJ” shall mean the United States Department of Justice and any successor departments or agencies of the United States.

     “Effective Date” shall be the effective date of this Consent Decree as provided by Section XXIX.

     “EPA” shall mean the United States Environmental Protection Agency and any successor departments or agencies of the United States.

     “EPA Past Cost Payments” shall mean the payments to be made to the Fox River Site Special Account within the EPA Hazardous Substance Superfund under Subparagraph 52.a.(i) (Initial Payments to the United States) of this Consent Decree to reimburse EPA for a portion of its past response costs related to the Site.

     “Force Majeure Event,” for purposes of this Consent Decree, shall mean any event arising from causes beyond the control of the Settling Defendants, of any entity controlled by Settling Defendants, or of Settling Defendants’ contractors or subcontractors, that delays or prevents the performance of any obligation under this Consent Decree despite Settling

6

Defendants’ best efforts to fulfill the obligation. The requirement that the Settling Defendants exercise “best efforts to fulfill the obligation” includes using best efforts to anticipate any potential Force Majeure Event and best efforts to address the effects of any potential Force Majeure Event (i) as it is occurring and (ii) following the potential Force Majeure Event, such that the delay is minimized to the greatest extent possible.

     “Fox River OU1 Disbursement Special Account” or the “Disbursement Special Account” shall mean the disbursement special account established for OU1 by EPA pursuant to Section 122(b)(3) of CERCLA, 42 U.S.C. § 9622(b)(3), and this Consent Decree.

     “Fox River Site Special Account” shall mean the special account established for the Site by EPA pursuant to Section 122(b)(3) of CERCLA, 42 U.S.C. § 9622(b)(3).

     “Fox River OU1 Escrow Account” or the “Escrow Account” shall mean the escrow account trust fund established for OU1 by the Settling Defendants pursuant to this Consent Decree.

     “Institutional Controls” shall mean all response activities to implement institutional control requirements under the ROD.

     “Interest” shall mean interest at the rate specified for interest on investments of the EPA Hazardous Substance Superfund established by 26 U.S.C. § 9507, compounded annually on October 1 of each year, in accordance with 42 U.S.C. § 9607(a). The applicable rate of interest shall be the rate in effect at the time the interest accrues. The rate of interest is subject to change on October 1 of each year.

     “Interest Earned” shall mean interest earned on amounts in the Disbursement Special Account, which shall be computed monthly at a rate based on the annual return on investments

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of the Hazardous Substance Superfund. The applicable rate of interest shall be the rate in effect at the time the interest accrues.

     “July 2003 AOC” shall mean the Administrative Order on Consent between WTM I Company, EPA, and WDNR, captioned In the matter of the Lower Fox River and the Green Bay Site, Docket No. V-W-’03-C-745 (the “July 2003 AOC”). The July 2003 AOC is attached hereto as Appendix F.

     “Long Term Monitoring” shall mean all response activities to implement long term monitoring requirements under the ROD.

     “National Contingency Plan” or “NCP” shall mean the National Oil and Hazardous Substances Pollution Contingency Plan promulgated pursuant to Section 105 of CERCLA, 42 U.S.C. § 9605, codified at 40 C.F.R. Part 300, and any amendments thereto.

     “NRD Commitment” shall mean the $3,000,000 committed to natural resource restoration efforts under Paragraph 52 (Initial Payments to Plaintiffs) and Paragraph 53 (Subsequent Payments for Natural Resource Restoration).

     “NRDAR Fund” shall mean DOI’s Natural Resource Damage Assessment and Restoration Fund.

     “Operation and Maintenance” or “O & M” shall mean all activities required to maintain the effectiveness of the Remedial Action as required under the Operation and Maintenance Plan approved or developed by the Response Agencies pursuant to this Consent Decree and the Statements of Work.

     “Operable Unit 1” or “OU1” shall mean the Little Lake Butte des Morts reach of the Lower Fox River, as delineated by the Record of Decision signed by WDNR and EPA in December 2002. More specifically, OU1 is the portion of the Lower Fox River (and the

8

underlying River sediment) starting at the outlet of Lake Winnebago at the Neenah Dam and the Menasha Dam downstream to the Upper Appleton Dam, including sediment deposits A through H and POG. As so defined, OU1 is depicted in Figure 7-9 of the December 2002 Final Feasibility Study for the Site, a copy of which is attached hereto as Appendix G.

     “Paragraph” shall mean a portion of this Consent Decree identified by an Arabic numeral or an upper case letter.

     “Parties” shall mean the United States, the State of Wisconsin, and the Settling Defendants.

     “Performance Standards” shall mean the selected remedy requirements and cleanup standards for measuring the achievement of the goals of the Remedial Action, as set forth in Section XI of the 2008 ROD Amendment and Section II of the SOW for Remedial Action.

     “Plaintiffs” shall mean the United States and the State of Wisconsin.

     “Post-Remedy Institutional Controls Work” shall mean all response activities to implement institutional controls requirements under the ROD and the Institutional Controls Plan after Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b.

     “Post-Remedy Monitoring” shall mean all response activities to implement Long Term Monitoring requirements under the ROD and the Final Operation and Maintenance Plan after Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b.

     “RCRA” shall mean the Solid Waste Disposal Act, as amended, 42 U.S.C. §§ 6901 et seq. (also known as the Resource Conservation and Recovery Act).

     “Record of Decision” or “ROD” shall mean, collectively: (i) the Record of Decision relating to OU1 at the Site signed in December 2002 by the Deputy Administrator of the Water Division of WDNR and by the Director of the Superfund Division of EPA Region 5, and all

9

attachments thereto (hereinafter referred to as the “2002 ROD”); and (ii) the Record of Decision Amendment relating to OU1 at the Site signed in June 2008 by the Deputy Administrator of the Water Division of WDNR and by the Director of the Superfund Division of EPA Region 5, and all attachments thereto (hereinafter referred to as the “2008 ROD Amendment”). A copy of the 2002 ROD (excluding the ROD Appendices) is attached as Appendix H and a copy of the 2008 ROD Amendment (excluding the ROD Appendices) is attached as Appendix H1. To the extent that there is any inconsistency between the 2002 ROD and the 2008 ROD Amendment, the 2008 ROD Amendment shall govern.

     “Remedial Action” shall mean those activities (except for Operation and Maintenance, Post-Remedy Institutional Controls Work, and Post-Remedy Monitoring), to be undertaken by the Settling Defendants to implement the ROD requirements for OU1, in accordance with the SOW, the final Remedial Design Work Plan, the final Remedial Action Work Plan, and other plans approved by the Response Agencies. For the purpose of this Consent Decree, Remedial Action shall not include any response action required solely under Section XV (Emergency Response).

     “Remedial Action Work Plan” shall mean the document developed pursuant to Paragraph 14 of this Consent Decree and approved by the Response Agencies, and any amendments thereto.

     “Remedial Design” shall mean those activities to be undertaken by Settling Defendant WTM I Company to conduct predesign investigations and to develop the final plans and specifications for the Remedial Action for OU1 pursuant to the July 2003 AOC and the Remedial Design Work Plan.

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     “Remedial Design Work Plan” shall mean the document described by Paragraph 12 of this Consent Decree and approved by the Response Agencies, and any amendments thereto.

     “Response Agencies” shall mean WDNR and EPA.

     “Response Work” shall mean all activities Settling Defendants are required to perform under this Consent Decree, except those required by Section XVI (Natural Resource Restoration Efforts) and Section XXVII (Retention of Records).

     “Section” shall mean a portion of this Consent Decree identified by a roman numeral.

     “Settling Defendants” shall mean P. H. Glatfelter Company and WTM I Company.

     “Settling Defendants’ Related Parties” shall mean: (i) Settling Defendants’ successors, but only to the extent that the alleged liability of such person is based on the alleged liability of a Settling Defendant; (ii) Settling Defendants’ former or current officers, directors, employees, or shareholders, but only to the extent that the alleged liability of such person is based on acts and/or omissions which occurred in the scope of the person’s employment or capacity as an officer, director, employee, or shareholder of a Settling Defendant.

     “Site” shall mean the Lower Fox River and Green Bay Site in Northeastern Wisconsin.

     “Specified Future Response Costs” shall mean all costs, including, but not limited to, direct and indirect costs, that the United States and the State incur after July 1, 2003 in reviewing or developing plans, reports and other items pursuant to the July 2003 AOC and this Consent Decree, in verifying the Response Work, in implementing O&M, Institutional Controls, and Long Term Monitoring requirements required under the ROD and the SOW, or in otherwise implementing, overseeing, or enforcing this Consent Decree, including, but not limited to, payroll costs, contractor costs, travel costs, laboratory costs, the costs incurred pursuant to Paragraph 19 of Section VIII, Section X (including, but not limited to, the cost of attorney

11

time and any monies paid to secure access and/or to secure or implement Institutional Controls including, but not limited to, the amount of just compensation), Section XV, and Paragraph 90 of Section XXII.

     “State” shall mean the State of Wisconsin.

     “State Past Cost Payments” shall mean the $10,000 payment to be made to the State under Subparagraph 52.b (Initial Payments to the State) of this Consent Decree to reimburse the State for a portion of its past response costs related to the Site.

     “Statements of Work” or “SOW” shall mean: (i) the statement of work for implementation of the Remedial Design, as set forth at Appendix F to this Consent Decree, and any modifications made in accordance with the July 2003 AOC and this Consent Decree; and/or

     (ii) the statement of work for implementation of the Remedial Action, Institutional Controls, Long Term Monitoring, and Operation and Maintenance at the Site, as set forth in Appendix I to this Consent Decree and any modifications made in accordance with this Consent Decree.

     “Supervising Contractor” shall mean the principal contractor retained by the Settling Defendants to supervise and direct the implementation of the Response Work under this Consent Decree.

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

     “Unresolved DOI Past Costs” shall mean the unreimbursed natural resource damage assessment costs that the United States has paid at or in connection with the Site (or any portion of the Site) through July 1, 2003.

12

     “Unresolved EPA Past Costs” shall mean the unreimbursed response costs, including, but not limited to, direct and indirect costs, that the United States has paid at or in connection with the Site (or any portion of the Site) through July 1, 2003.

     “Unresolved State Past Costs” shall mean the unreimbursed response costs, including, but not limited to, direct and indirect costs, that the State has paid at or in connection with the Site (or any portion of the Site) through July 1, 2003.

     “Waste Material” shall mean: (i) any “hazardous substance” under Section 101(14) of CERCLA, 42 U.S.C. § 9601(14); (ii) any pollutant or contaminant under Section 101(33), 42 U.S.C. § 9601(33); (iii) any “solid waste” under Section 1004(27) of RCRA, 42 U.S.C. § 6903(27); and (iv) any “hazardous substance” under Wis. Stat. § 292.01.

     “WDOJ” shall mean the Wisconsin Department of Justice and any successor departments or agencies of the State.

     “WDNR” shall mean the Wisconsin Department of Natural Resources and any successor departments or agencies of the State.

V. GENERAL PROVISIONS

     5. Objectives of the Parties. The objectives of the Parties in entering into this Consent Decree are to protect public health and welfare and the environment by the design and implementation of certain response actions at OU1 by the Settling Defendants, to reimburse a portion of the EPA and State past costs and to reimburse all Specified Future Response Costs, to provide partial compensation for natural resource damages, and to resolve the claims of Plaintiffs against Settling Defendants as provided in this Consent Decree.

     6. Commitments by Settling Defendants. Settling Defendants shall finance and perform the Response Work in accordance with this Consent Decree, the ROD, the SOW, and all

13

work plans and other plans, standards, specifications, and schedules set forth herein or developed by Settling Defendants and approved by the Response Agencies pursuant to this Consent Decree. Settling Defendants shall also reimburse EPA and the State for a portion of their past response costs and shall reimburse EPA and the State for future response costs, as provided by this Consent Decree. Settling Defendants shall also provide partial compensation for natural resource damages, as provided herein.

     7. Compliance With Applicable Law. All activities undertaken by Settling Defendants pursuant to this Consent Decree shall be performed in accordance with the requirements of all applicable federal and state laws and regulations. Settling Defendants must also comply with all applicable or relevant and appropriate requirements of all Federal and state environmental laws as set forth in the ROD and the SOW, unless the Response Agencies determine that there are grounds for invoking a waiver under 40 C.F.R. § 300.430(f)(1)(ii)(C).

     The activities conducted pursuant to this Consent Decree, if approved by the Response Agencies, shall be considered to be necessary and consistent with the NCP.

     8. Permits.

          a. As provided in Section 121(e) of CERCLA and Section 300.400(e) of the NCP, no permit shall be required for any portion of the Response Work conducted entirely on-site (i.e., within the areal extent of contamination or in very close proximity to the contamination and necessary for implementation of the Response Work). Where any portion of the Response Work that is not on-site requires a federal or state permit or approval, Settling Defendants shall submit timely and complete applications and take all other actions necessary to obtain all such permits or approvals.

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          b. The Settling Defendants may seek relief under the provisions of Section XIX (Force Majeure Events) of this Consent Decree for any delay in the performance of the Response Work resulting from a failure to obtain, or a delay in obtaining, any permit required for the Response Work.

          c. This Consent Decree is not, and shall not be construed to be, a permit issued pursuant to any federal or state statute or regulation.

VI. ESTABLISHMENT AND USE OF CERTAIN SITE-SPECIFIC ACCOUNTS

     9. Generally. As provided by this Section and Appendices B and C, two separate Site-specific accounts B to be known as the Fox River OU1 Disbursement Special Account (the “Disbursement Special Account”) and the Fox River OU1 Escrow Account (the “Escrow Account”) B shall be established and managed to provide sources of funds for payment and reimbursement of particular categories of Site-related response costs and natural resource restoration costs, as specified by Paragraphs 10 and 11. The Escrow Account may be established as several accounts or sub-accounts to address the different sources and uses of the funds paid into the Escrow Account. The response costs to be paid and reimbursed from the Disbursement Special Account and the Escrow Account are expected to include, but will not be limited to, certain costs incurred by the Settling Defendants that are defined herein as “Allowable RD/RA Costs.” The natural resource restoration costs to be paid and reimbursed from the Escrow Account may include, but will not be limited to, certain costs incurred by the Settling Defendants that are defined herein as “Allowable Restoration Work Costs.” The Escrow Account shall serve as a form of financial assurance for performance of Settling Defendants’ obligations under this Consent Decree, but Settling Defendants’ performance obligations shall not be limited by the availability of funds in the Escrow Account at any time.

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          a. Allowable RD/RA Costs. Solely for the purpose of this Consent Decree, the term “Allowable RD/RA Costs” is defined as necessary response costs incurred and paid by Settling Defendants for the Remedial Design and the Remedial Action, excluding the following costs that shall not be eligible for payment or reimbursement as Allowable RD/RA Costs:

     (1) any costs exceeding $2 million for the contaminant delineation investigation and Remedial Design components of the Response Work, as provided by Subparagraph 8.a of Appendix C;

     (2) response costs incurred or paid by the Settling Defendants pursuant to Section XV (Emergency Response);

     (3) any other payments made by Settling Defendants to the Plaintiffs pursuant to this Consent Decree, including, but not limited to: (i) any direct payments to Plaintiffs under Section XVII; and (ii) any interest, stipulated penalties, or stipulated damages paid pursuant to Section XXI;

     (4) attorneys’ fees and costs;

     (5) costs of any response activities Settling Defendants perform that are not required under, or approved by the Response Agencies pursuant to this Consent Decree;

     (6) costs related to Settling Defendants’ litigation, settlement, development of potential contribution claims or identification of defendants;

     (7) internal costs of Settling Defendants, including but not limited to, salaries, travel, or in-kind services, except for those costs that represent the work of employees of Settling Defendants directly performing the Remedial Design or the Remedial Action;

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     (8) any costs incurred by Settling Defendants prior to the Effective Date, except for: (i) Remedial Design work approved by the Response Agencies; or (ii) other costs of Response Work required by this Consent Decree after the Date of Lodging; or

     (9) any costs incurred by Settling Defendants pursuant to Section XX (Dispute Resolution).

          b. Allowable Restoration Work Costs. Solely for the purpose of this Consent Decree, the term “Allowable Restoration Costs” is defined as necessary restoration costs incurred and paid by Settling Defendants for Approved Restoration Work (as defined by Paragraph 48), excluding the following costs that shall not be eligible for payment or reimbursement as Allowable Restoration Work Costs:

     (1) any costs for work other than Approved Restoration Work;

     (2) any costs exceeding the pre-approved cost ceiling set by the Statement of Work for Approved Restoration Work;

     (3) any other payments made by Settling Defendants to the Plaintiffs pursuant to this Consent Decree, including, but not limited to: (i) any direct payments to Plaintiffs under Section XVII; and (ii) any interest, stipulated penalties, or stipulated damages paid pursuant to Section XXI;

     (4) attorneys’ fees and costs;

     (5) costs of any restoration activities Settling Defendants perform that are not required under, or approved by the Plaintiffs pursuant to, this Consent Decree;

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     (6) costs related to Settling Defendants’ litigation, settlement, development of potential contribution claims or identification of defendants;

     (7) internal costs of Settling Defendants, including but not limited to, salaries, travel, or in-kind services, except for those costs that represent the work of employees of Settling Defendants directly performing Approved Restoration Work;

     (8) any costs incurred by Settling Defendants prior to the Effective Date, except for Approved Restoration Work completed pursuant to this Consent Decree; or

     (9) any costs incurred by Settling Defendants pursuant to Section XX (Dispute Resolution).

     10. Establishment and Management of the Disbursement Special Account. In accordance with the procedures and requirements established by the December 2001 Consent Decree in the matter captioned United States and the State of Wisconsin v. Appleton Papers Inc. and NCR Corporation, Case No. 01-C-0816 (E.D. Wis.) (the “API/NCR Decree”), the Plaintiffs shall use their best efforts to have $10 million available for funding response action projects under the API/NCR Decree deposited in the Disbursement Special Account after the Effective Date. EPA shall establish the Disbursement Special Account as a new special account within the EPA Hazardous Substance Superfund. Subject to the terms and conditions set forth in this Consent Decree, EPA agrees to make those funds in the Disbursement Special Account, including Interest Earned on those funds in the Special Account, available for disbursement to the Escrow Account as partial reimbursement of certain Allowable RD/RA Costs. The

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Disbursement Special Account shall be managed as set forth in Appendix B to this Consent Decree, which is incorporated herein by reference.

     11. Establishment and Management of the Escrow Account. By no later than March 31, 2004, the Settling Defendants shall establish and maintain financial security in the form of the Escrow Account trust fund, from which funds shall be disbursed for payment and reimbursement of particular categories of Site-related response costs and natural resource restoration costs. The Settling Defendants shall establish and maintain the Escrow Account with the funds required to be paid pursuant to Section XVII (Payments) below. The Escrow Account shall be managed as set forth in Appendix C to this Consent Decree, which is incorporated herein by reference. The escrow agreement establishing the Escrow Account shall be in substantially the form attached hereto as Appendix D and shall identify the manager for the Escrow Account (the “Escrow Agent”). The Settling Defendants may establish the Escrow Account (or an account or sub-account within the Escrow Account) as a Qualified Settlement Fund (or “QSF”) within the meaning of 468B-1 of the Treasury Regulations.

VII. PERFORMANCE OF THE RESPONSE WORK BY SETTLING DEFENDANTS

     12. OU1 Remedial Design.

          a. Settling Defendant WTM I Company shall perform the Remedial Design components of the Response Work (including predesign investigations) in accordance with the July 2003 AOC and the 2008 ROD Amendment. A copy of the July 2003 AOC is attached as Appendix F to this Consent Decree, is incorporated herein by this reference, and all requirements under the July 2003 AOC are hereby made enforceable requirements of this Consent Decree, but only as to Settling Defendant WTM I Company.

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          b. Settling Defendant WTM I Company shall submit the following plans and reports to the Response Agencies pursuant to the July 2003 AOC and this Paragraph: (i) a Pre-Design Sampling Work Plan; (ii) a Remedial Design Work Plan; (iii) a Basis of Design Report; (iv) a Preliminary (50%) Design; (v) a Pre-Final (90%) Design; and (vi) a Final (100%) Design. Upon approval by the Response Agencies, all submittals required by the July 2003 AOC and this Paragraph 12 shall be incorporated into and become enforceable under this Consent Decree.

          c. Settling Defendant WTM I Company shall provide Settling Defendant P. H. Glatfelter Company with copies of the plans and reports identified in the preceding Subparagraph contemporaneously with their submission to the Response Agencies. Within 15 days of the date of submission, Settling Defendant P. H. Glatfelter may submit written comments on the relevant plan or submission; provided, however, that nothing in this Paragraph shall be construed as affording Settling Defendant P. H. Glatfelter Company a right to invoke or participate in any dispute resolution process under Section XX (Dispute Resolution) concerning any submittal under the July 2003 AOC.

     13. Selection of Supervising Contractor.

          a. All Remedial Design components of the Response Work to be performed by Settling Defendant WTM I Company pursuant to Paragraph 12 of this Consent Decree shall be under the direction and supervision of WTM I Company’s Project Coordinator designated pursuant to the July 2003 AOC. All other aspects of the Response Work to be performed by Settling Defendants pursuant to Sections VII (Performance of the Response Work by Settling Defendants), VIII (Post-Remedy Response Work and Remedy Review), IX (Quality Assurance, Sampling and Data Analysis), and XV (Emergency Response) of this Consent Decree shall be under the direction and supervision of the Settling Defendants’ Supervising Contractor,

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the selection of which shall be subject to disapproval by the Response Agencies. Within 10 days after Settling Defendant WTM I Company’s submittal of the Pre-Final (90%) Design, Settling Defendants shall notify the Response Agencies in writing of the name, title, and qualifications of any contractor proposed to be the Supervising Contractor. The Response Agencies will issue a notice of disapproval or an authorization to proceed. If at any time thereafter, Settling Defendants propose to change a Supervising Contractor, Settling Defendants shall give such notice to the Response Agencies and must obtain an authorization to proceed from the Response Agencies before the new Supervising Contractor performs, directs, or supervises any Response Work under this Consent Decree.

          b. If the Response Agencies disapprove a proposed Supervising Contractor, the Response Agencies will notify Settling Defendants in writing. Settling Defendants shall submit to the Response Agencies a list of contractors, including the qualifications of each contractor, that would be acceptable to them within 30 days of receipt of the Response Agencies’ disapproval of the contractor previously proposed. The Response Agencies will provide written notice of the names of any contractors that they disapprove and an authorization to proceed with respect to any of the other contractors. Settling Defendants may select any contractor from that list that is not disapproved and shall notify the Response Agencies of the name of the contractor selected within 21 days of the Response Agencies’ authorization to proceed.

          c. If the Response Agencies fail to provide written notice of their authorization to proceed or disapproval as provided in this Paragraph and this failure prevents the Settling Defendants from meeting one or more deadlines in a plan approved by the Response Agencies pursuant to this Consent Decree, Settling Defendants may seek relief under the provisions of Section XIX (Force Majeure Events).

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     14. OU1 Remedial Action. The Settling Defendants shall perform all requirements under this Paragraph 14 until the Performance Standards are achieved and for so long thereafter as is otherwise required under this Consent Decree. The Settling Defendants shall commence and continue performance of the Remedial Action in accordance with the 2008 ROD Amendment upon the Date of Lodging of the Amended Consent Decree.

          a. The requirements under this Paragraph 14 shall be performed by Settling Defendants with funding from the following sources:

     (1) To the extent such funds are available in the Disbursement Special Account, the Settling Defendants shall be entitled to seek disbursement from the Disbursement Special Account for reimbursement of Allowable RD/RA Costs.

     (2) To the extent such funds are available in the Escrow Account and not earmarked or disbursed for other purposes under this Consent Decree, the Settling Defendants shall be entitled to seek disbursements from the Escrow Account for payment or reimbursement of Allowable RD/RA Costs.

     (3) If funds are not available in the Escrow Account, or if all funds in the Escrow Account have been earmarked or disbursed for other purposes under the Consent Decree, Settling Defendants shall continue to fund and perform all requirements under this Paragraph 14 until the Performance Standards are achieved and for so long thereafter as is otherwise required under the Consent Decree.

          b. Within 90 days after the approval of the Final Design submittal described by the Statement of Work appended to the July 2003 AOC, but no earlier than 30 days after the Effective Date, the Settling Defendants shall submit to the Response Agencies a work plan for

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the performance of the Remedial Action (the “Remedial Action Work Plan”). The Remedial Action Work Plan shall provide for construction and implementation of the remedy set forth in the ROD such that the Performance Standards will be achieved, in accordance with this Consent Decree, the ROD, the SOW, and the design plans and specifications developed by Settling Defendant WTM I Company under Paragraph 12 and approved by the Response Agencies. Upon its approval by the Response Agencies, the Remedial Action Work Plan shall be incorporated into and become enforceable under this Consent Decree.

          c. The Remedial Action Work Plan shall include the following: (i) an updated schedule for implementing all Remedial Action tasks identified in the final design submittal, incorporating any refinements to the Final Project Schedule submitted under the July 2003 AOC and Paragraph 12; (ii) any refinements to the Final Health and Safety Plan, the Final Contingency Plan, the Final Sediment Removal Verification Plan, and the Capital and Operation and Maintenance Cost Estimate submitted under the July 2003 AOC and Paragraph 12; (iii) a Final Construction Quality Assurance Project Plan; (iv) an Institutional Controls Plan; (v) a Final Operation and Maintenance Plan (including a plan for Long Term Monitoring); (vi) a schedule for submitting any other Remedial Action Plans; and (vii) the initial formulation of the Settling Defendants’ Remedial Action Project Team (including, but not limited to, the Supervising Contractor).

          d. Upon approval of the Remedial Action Work Plan by the Response Agencies, Settling Defendants shall perform the activities required under the Remedial Action Work Plan. The Settling Defendants shall submit to the Response Agencies all plans, submittals, or other deliverables required under the approved Remedial Action Work Plan in accordance with the approved schedule for review and approval pursuant to Section XII (Response Agencies’

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Approval of Plans and Other Submissions). Unless otherwise directed by the Response Agencies, Settling Defendants shall not commence physical Remedial Action activities at OU1 prior to approval of the Remedial Action Work Plan. The Settling Defendants shall implement the Remedial Action as set forth in the approved Remedial Action Work Plan until the Performance Standards are achieved.

          e. After Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b, the Settling Defendants shall continue to implement the Institutional Controls Plan and the Final Operation and Maintenance Plan for so long as required by those plans.

     15. Modification of the SOW or Related Work Plans.

          a. Subject to Subparagraph 15.c below, if the Response Agencies determine that modification to the work specified in the SOW and/or in work plans developed pursuant to the SOW is necessary to achieve and maintain the Performance Standards or to carry out and maintain the effectiveness of the remedy set forth in the ROD, the Response Agencies may require that such modification be incorporated in the SOW and/or such work plans; provided, however, that a modification may only be required pursuant to this Paragraph to the extent that it is consistent with the scope of the remedy selected in the ROD.

          b. For the purposes of this Paragraph 15 and Paragraph 44 only, the “scope of the remedy selected in the ROD” is, as described by Section XI of the 2008 ROD Amendment: (i) remediating sediment in OU1 with PCB concentrations greater than the 1.0 ppm remedial action level (“RAL”) or achieving a surface weighted average concentration (“SWAC”) of 0.25 ppm or less for all of OU1 after addressing such sediment either by the primary remedial approach (sediment removal by dredging) or by one of the alternate remedial

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approaches (engineered cap or sand cover) if the eligibility criteria specified by Section XI of the 2008 ROD Amendment will be met; (ii) dewatering of the sediment that is removed; (iii) treatment of the water collected during the dewatering process; (iv) off-Site disposal of the removed sediment after dewatering; (v) demobilization and site restoration; (vi) Operation and Maintenance activities (including cap maintenance); and (vii) Institutional Controls and Long Term Monitoring.

          c. If Settling Defendants object to any modification determined by the Response Agencies to be necessary pursuant to this Paragraph, they may seek dispute resolution pursuant to Section XX (Dispute Resolution), Paragraph 65 (record review). The SOW and/or related work plans shall be modified in accordance with final resolution of the dispute.

          d. Settling Defendants shall implement any work required by any modifications incorporated in the SOW and/or in work plans developed pursuant to the SOW in accordance with this Paragraph.

          e. Nothing in this Paragraph shall be construed to limit the Response Agencies’ authority to require performance of further response actions as otherwise provided in this Consent Decree.

     16. Settling Defendants acknowledge and agree that nothing in this Consent Decree, the SOW, the Remedial Design Work Plan, or Remedial Action Work Plan constitutes a warranty or representation of any kind by Plaintiffs that compliance with the work requirements set forth in the SOW and the Work Plans will achieve the Performance Standards.

     17. Settling Defendants shall, prior to any off-Site shipment of Waste Material from the Site to an out-of-state waste management facility, provide written notification to the appropriate state environmental official in the receiving facility’s state and to the Response

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Agencies’ Project Coordinators of such shipment of Waste Material. However, this notification requirement shall not apply to any off-Site shipments when the total volume of all such shipments will not exceed 10 cubic yards.

          a. The Settling Defendants shall include in the written notification the following information, where available: (i) the name and location of the facility to which the Waste Material is to be shipped; (ii) the type and quantity of the Waste Material to be shipped; the expected schedule for the shipment of the Waste Material; and (iv) the method of transportation. The Settling Defendants shall notify the state in which the planned receiving facility is located of major changes in the shipment plan, such as a decision to ship the Waste Material to another facility within the same state, or to a facility in another state.

          b. The identity of the receiving facility and state will be determined by the Settling Defendants following the award of the contract for Remedial Action construction. The Settling Defendants shall provide the information required by Subparagraph 17.a as soon as practicable after the award of the contract and before the Waste Material is actually shipped.

VIII. POST-REMEDY RESPONSE WORK AND REMEDY REVIEW

     18. O&M and Post-Remedy Institutional Controls. After Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b, Settling Defendants shall perform O&M and Post-Remedy Institutional Controls Work as required by the ROD, the Final Operation and Maintenance Plan, and the Institutional Controls Plan. In the event that Settling Defendants fail to perform O&M and Post-Remedy Institutional Controls Work as required by this Paragraph, and EPA or, as appropriate, the State takes such action instead, Settling Defendants shall reimburse EPA and the State for all costs of the response action not inconsistent with the NCP pursuant to Paragraph 54 (Payment of Specified Future Response Costs).

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     19. Periodic Remedy Review and Post-Remedy Monitoring. Settling Defendants shall conduct any studies and investigations as requested by the Response Agencies, in order to permit the Response Agencies to conduct reviews of whether the Remedial Action is protective of human health and the environment at least every five years as required by Section 121(c) of CERCLA and any applicable regulations. Such studies and investigations shall include, but shall not be limited to, Post-Remedy Monitoring after Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b. In the event that Settling Defendants fail to conduct such studies and investigations as required by this Paragraph, and EPA or, as appropriate, the State takes such action instead, Settling Defendants shall reimburse EPA and the State for all costs of the response action not inconsistent with the NCP pursuant to Paragraph 54 (Payment of Specified Future Response Costs).

     20. Further Response Actions.

          a. If the Response Agencies determine, at any time, that the Remedial Action is not protective of human health and the environment, the Response Agencies may select further response actions for OU1 in accordance with the requirements of CERCLA and the NCP.

          b. Settling Defendants and, if required by Sections 113(k)(2) or 117 of CERCLA, the public, will be provided with an opportunity to comment on any further response actions proposed by the Response Agencies as a result of the review conducted pursuant to Section 121(c) of CERCLA and to submit written comments for the record during the comment period.

          c. Notwithstanding Paragraph F of Section I (Background), Settling Defendants hereby agree and covenant that the Plaintiffs shall not have to prove, and that Settling Defendants shall not contest, the following facts with respect to OU1 in response to any

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administrative order or in any judicial proceeding relating to any further response action the Response Agencies select for OU1 to the extent that the reopener conditions in Paragraph 86 or Paragraph 87 (United States’ reservations of liability based on unknown conditions or new information) are satisfied:

     (1) Each Settling Defendant is a person who at the time of disposal of a hazardous substance owned or operated a facility from which such hazardous substances were disposed of, and from which there have been releases of hazardous substances which caused the incurrence of response costs for OU1; and

     (2) Each Settling Defendant is a person who by contract, agreement, or otherwise arranged for the disposal or treatment of hazardous substances owned or possessed by the Settling Defendant, by another party or entity, at a facility owned or operated by another party or entity and containing such hazardous substances, from which there have been releases of hazardous substances which caused the incurrence of response costs for OU1.

          d. Except as provided by Subparagraph 20.c, nothing herein shall constitute a waiver of any claim or defense by any Party with respect to any such further response action.

IX. QUALITY ASSURANCE, SAMPLING, AND DATA ANALYSIS

     21. Settling Defendants shall use quality assurance, quality control, and chain of custody procedures for all treatability, design, compliance and monitoring samples in accordance with “EPA Requirements for Quality Assurance Project Plans (QA/R5)” (EPA/240/B-01/003, March 2001), “Guidance for Quality Assurance Project Plans (QA/G-5)” (EPA/600/R-98/018, February 1998), and subsequent amendments to such guidelines upon notification by the Response Agencies to Settling Defendants of such amendment. Amended guidelines shall apply

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only to procedures conducted after such notification. Prior to the commencement of any monitoring project under this Consent Decree, Settling Defendants shall submit to the Response Agencies for approval a Quality Assurance Project Plan (“QAPP”) that is consistent with the SOW, the NCP and applicable guidance documents. If relevant to the proceeding, the Parties agree that validated sampling data generated in accordance with the QAPP(s) and reviewed and approved by the Response Agencies shall be admissible as evidence, without objection, in any proceeding under this Decree. Settling Defendants shall ensure that the Response Agencies’ personnel and their authorized representatives are allowed access at reasonable times to all laboratories utilized by Settling Defendants in implementing this Consent Decree. In addition, Settling Defendants shall ensure that such laboratories shall analyze all samples submitted by the Response Agencies pursuant to the QAPP for quality assurance monitoring. Settling Defendants shall ensure that the laboratories they utilize for the analysis of samples taken pursuant to this Decree perform all analyses according to accepted EPA methods. Accepted EPA methods consist of those methods which are documented in the “Contract Lab Program Statement of Work for Inorganic Analysis” and the “Contract Lab Program Statement of Work for Organic Analysis,” dated February 1988, and any amendments made thereto during the course of the implementation of this Decree; however, upon approval by the Response Agencies, Settling Defendants may use other analytical methods which are as stringent as or more stringent than the CLP-approved methods. Settling Defendants shall ensure that all laboratories they use for analysis of samples taken pursuant to this Consent Decree participate in an EPA or EPA-equivalent QA/QC program. Settling Defendants shall only use laboratories that have a documented Quality System which complies with ANSI/ASQC E4-1994, “Specifications and Guidelines for Quality Systems for Environmental Data Collection and Environmental

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Technology Programs,” (American National Standard, January 5, 1995), and “EPA Requirements for Quality Management Plans (QA/R-2),” (EPA/240/B-01/002, March 2001) or equivalent documentation as determined by the Response Agencies. The Response Agencies may consider laboratories accredited under the National Environmental Laboratory Accreditation Program (“NELAP”) as meeting the Quality System requirements. Settling Defendants shall ensure that all field methodologies utilized in collecting samples for subsequent analysis pursuant to this Decree will be conducted in accordance with the procedures set forth in the QAPP approved by the Response Agencies.

     22. Upon request, the Settling Defendants shall allow split or duplicate samples to be taken by the Response Agencies or their authorized representatives. Settling Defendants shall notify the Response Agencies not less than 15 days in advance of any sample collection activity unless shorter notice is agreed to by the Response Agencies. In addition, the Response Agencies shall have the right to take any additional samples that the Response Agencies deem necessary. Upon request, the Response Agencies shall allow the Settling Defendants to take split or duplicate samples of any samples they take as part of the Plaintiffs’ oversight of the Settling Defendants’ implementation of the Response Work.

     23. Settling Defendants shall submit to the Response Agencies copies of the results of all sampling and/or tests or other data obtained or generated by or on behalf of Settling Defendants with respect to OU1 and/or the implementation of this Consent Decree unless the Response Agencies agree otherwise.

     24. Notwithstanding any provision of this Consent Decree, the United States and the State hereby retain all of their information gathering and inspection authorities and rights,

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including enforcement actions related thereto, under CERCLA, RCRA and any other applicable statutes or regulations.

X. ACCESS AND INSTITUTIONAL CONTROLS

     25. If any property where access and/or land/water use restrictions are needed to implement this Consent Decree is owned or controlled by any of the Settling Defendants, such Settling Defendants shall:

          a. commencing on the Date of Lodging of this Consent Decree, provide the Plaintiffs and their representatives, including the Response Agencies and their contractors, with access at all reasonable times to such property, for the purpose of conducting any activity related to this Consent Decree including, but not limited to, the following activities:

               (1) monitoring the Response Work;

               (2) verifying any data or information submitted to the Plaintiffs;

               (3) conducting investigations relating to contamination at or near the Site;

               (4) obtaining samples;

               (5) assessing the need for, planning, or implementing additional response actions at or near the Site;

               (6) implementing the Response Work pursuant to the conditions set forth in Paragraph 90 of this Consent Decree;

               (7) inspecting and copying records, operating logs, contracts, or other documents maintained or generated by Settling Defendants or their agents, consistent with Section XXVI (Access to Information);

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               (8) assessing Settling Defendants’ compliance with this Consent Decree; and

               (9) determining whether the Site or other property is being used in a manner that is prohibited or restricted, or that may need to be prohibited or restricted, by or pursuant to this Consent Decree;

          b. commencing on the Date of Lodging of this Consent Decree, refrain from using the Site, or such other property, in any manner that would interfere with or adversely affect the integrity or protectiveness of the remedial measures to be implemented pursuant to this Consent Decree.

          c. if requested in writing by the Response Agencies, execute and record in the appropriate County land records office, an easement, running with the land, that: (i) grants a right of access for the purpose of conducting any activity related to this Consent Decree including, but not limited to, those activities listed in Paragraph 25.a of this Consent Decree, and (ii) grants the right to enforce the land/water use restrictions listed in Paragraph 25.b of this Consent Decree, or other restrictions that the Response Agencies determine are necessary to implement, ensure non-interference with, or ensure the protectiveness of the remedial measures to be performed pursuant to this Consent Decree. Such Settling Defendants shall grant the access rights and the rights to enforce the land/water use restrictions to: (i) the United States, on behalf of EPA, and its representatives, (ii) the State, on behalf of WDNR, and its representatives, (iii) the other Settling Defendants and their representatives, and/or (iv) other appropriate grantees identified by the Response Agencies. Such Settling Defendants shall, within 45 days after receiving a written request from the Response Agencies, submit to the response Agencies for review and approval with respect to such property:

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     (1) a draft easement that is enforceable under the laws of the State of Wisconsin, free and clear of all prior liens and encumbrances (except as approved by EPA), and acceptable under the Attorney General’s Title Regulations promulgated pursuant to 40 U.S.C. § 255; and

     (2) a current title commitment or report prepared in accordance with the U.S. Department of Justice’s Title Standards 2001 (the “Standards”). Within 15 days of EPA’s approval and acceptance of the easement, such Settling Defendants shall update the title search and, if it is determined that nothing has occurred since the effective date of the commitment or report to affect the title adversely, take the steps necessary to record the easement with the appropriate County land records office. Within 30 days of recording the easement, such Settling Defendants shall provide EPA with final title evidence acceptable under the Standards, and a certified copy of the original recorded easement showing the clerk’s recording stamps.

     26. If any property where access and/or land/water use restrictions are needed to implement this Consent Decree is owned or controlled by persons other than any of the Settling Defendants, Settling Defendants shall use best efforts to secure from such persons:

          a. an agreement to provide access thereto for Settling Defendants, as well as for the Plaintiffs, on behalf of the response Agencies, as well as their representatives (including contractors), for the purpose of conducting any activity related to this Consent Decree including, but not limited to, those activities listed in Paragraph 25.a of this Consent Decree;

          b. an agreement, enforceable by the Settling Defendants and the Plaintiffs, to abide by the obligations and restrictions established by Paragraph 25.b of this Consent Decree, or

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that are otherwise necessary to implement, ensure non-interference with, or ensure the protectiveness of the remedial measures to be performed pursuant to this Consent Decree; and

          c. if requested in writing by the Response Agencies, the execution and recordation in the appropriate County land records office, of an easement, running with the land, that: (i) grants a right of access for the purpose of conducting any activity related to this Consent Decree including, but not limited to, those activities listed in Paragraph 25.a of this Consent Decree, and (ii) grants the right to enforce the land/water use restrictions listed in Paragraph 25.b of this Consent Decree, or other restrictions that the Response Agencies determine are necessary to implement, ensure non-interference with, or ensure the protectiveness of the remedial measures to be performed pursuant to this Consent Decree. The access rights and/or rights to enforce land/water use restrictions shall be granted to: (i) the United States, on behalf of EPA, and its representatives, (ii) the State, on behalf of WDNR, and its representatives, (iii) the other Settling Defendants and their representatives, and/or (iv) other appropriate grantees. Settling Defendants shall, within 45 days after receiving a written request from the Response Agencies, submit to the Response Agencies for review and approval with respect to such property:

     (1) a draft easement that is enforceable under the laws of the State of Wisconsin, free and clear of all prior liens and encumbrances (except as approved by the Response Agencies), and acceptable under the Attorney General’s Title Regulations promulgated pursuant to 40 U.S.C. § 255; and

     (2) a current title commitment or report prepared in accordance with the U.S. Department of Justice’s Title Standards 2001 (the “Standards”). Within 15 days of EPA’s approval and acceptance of the easement, Settling Defendants shall update the title search and, if it is determined that nothing has occurred since

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the effective date of the commitment or report to affect the title adversely, take the steps necessary to record the easement with the appropriate County land records office. Within 30 days of the recording of the easement, Settling Defendants shall provide EPA with final title evidence acceptable under the Standards, and a certified copy of the original recorded easement showing the clerk’s recording stamps.

     27. For purposes of Paragraph 26 of this Consent Decree, “best efforts” includes the payment of reasonable sums of money in consideration of access, access easements, land/water use restrictions, and/or restrictive easements. If any access or land/water use restriction agreements required by Paragraphs 26.a or 26.b of this Consent Decree are not obtained within 45 days of the Effective Date of this Consent Decree, or if any access easements or restrictive easements required by Paragraph 26.c of this Consent Decree are not submitted to the Response Agencies in draft form within 45 days of receipt of a written request by the Response Agencies, then Settling Defendants shall promptly notify the United States in writing, and shall include in that notification a summary of the steps that Settling Defendants have taken to attempt to comply with Paragraph 26 of this Consent Decree. The United States and the State may, as they deem appropriate, assist Settling Defendants in obtaining access or land/water use restrictions, either in the form of contractual agreements or in the form of easements running with the land. Settling Defendants shall reimburse the United States and the State, as Specified Future Response Costs, for all costs incurred, direct or indirect, by the United States or the State in obtaining such access and/or land/water use restrictions including, but not limited to, the cost of attorney time and the amount of monetary consideration paid or just compensation.

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     28. If any property where access and/or land/water use restrictions are needed to implement this Consent Decree is owned or controlled by the Plaintiffs, the Plaintiffs shall use best efforts to assist the Settling Defendants in securing necessary access and/or land/water use restrictions.

     29. If the Response Agencies determine that land/water use restrictions in the form of state or local laws, regulations, ordinances or other governmental controls are needed to implement the remedy selected in the ROD, ensure the integrity and protectiveness thereof, or ensure non-interference therewith, Settling Defendants shall cooperate with the Response Agencies’ efforts to secure such governmental controls.

     30. Notwithstanding any provision of this Consent Decree, the United States and the State retain all of their access authorities and rights, as well as all of their rights to require land/water use restrictions, including enforcement authorities related thereto, under CERCLA, RCRA and any other applicable statute or regulations.

XI. REPORTING REQUIREMENTS

     31. Monthly RD/RA Progress Reports.

          a. In addition to any other requirement of this Consent Decree, starting with the first month after the Date of Lodging, Settling Defendants shall submit two copies of written Monthly RD/RA Progress Reports to each of the Response Agencies that shall: (i) describe the actions which have been taken toward achieving compliance with this Consent Decree during the previous month; (ii) include a summary of all results of sampling and tests and all other data received or generated by Settling Defendants or their contractors or agents in the previous month; (iii) identify all work plans, plans and other deliverables required by this Consent Decree completed and submitted during the previous month; (iv) describe all actions, including, but not limited to, data collection and implementation of work plans, which are scheduled for the next month and provide other information relating to the progress of construction, including, but not

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limited to, critical path diagrams, Gantt charts and Pert charts; (v) include information regarding percentage of completion, unresolved delays encountered or anticipated that may affect the future schedule for implementation of the Response Work, and a description of efforts made to mitigate those delays or anticipated delays; (vi) include any modifications to the work plans or other schedules that Settling Defendants have proposed to the Response Agencies or that have been approved by the Response Agencies; and (vii) describe all activities undertaken in support of the Community Relations Plan during the previous month and those to be undertaken in the next month. Settling Defendants shall submit these progress reports to the Response Agencies by the tenth day of every month following the Date of Lodging until Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b. During performance of the Remedial Design, the Monthly RD/RA Progress Reports shall include all information required by Paragraph 38 of the July 2003 AOC and shall thereby satisfy the requirement to submit a monthly progress report under the July 2003 AOC and this Consent Decree. If requested by the Response Agencies, Settling Defendants shall also provide briefings for the Response Agencies to discuss the progress of the Response Work.

          b. The Settling Defendants shall notify the Response Agencies of any change in the schedule described in the Monthly RD/RA Progress Report for the performance of any activity, including, but not limited to, data collection and implementation of work plans, no later than seven days prior to the performance of the activity.

     32. Quarterly Reports. Starting with the second quarter of 2004, the Settling Defendants shall submit Quarterly Reports under this Paragraph to assist the Plaintiffs in

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monitoring the funding and budgeting of the Response Work and any Approved Restoration Work.

          a. The Settling Defendants shall submit Quarterly Reports on a quarterly basis for so long as the Remedial Action continues under this Consent Decree, until Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b. For a given calendar year, the Report for the first calendar quarter shall be submitted by no later than May 1 of that calendar year, the Report for the second calendar quarter shall be submitted by no later than August 1 of that calendar year, the Report for the third calendar quarter shall be submitted by no later than November 1 of that calendar year, and the Report for the fourth calendar quarter shall be submitted by no later than February 1 of the next calendar year.

          b. Each Quarterly Report shall:

     (1) provide a complete and accurate written cost summary of all Allowable RD/RA Costs submitted to the Escrow Agent for payment from the Escrow Account during the reporting period, certified in accordance with Subparagraph 32.d;

     (2) specify any amount requested as a periodic disbursement from the Disbursement Special Account to the Escrow Account pursuant to Paragraph 10 and Appendix B;

     (3) provide a complete and accurate written cost summary of all Allowable Restoration Work Costs submitted to the Escrow Agent for payment from the Escrow Account during the reporting period, certified in accordance with Subparagraph 32.d;

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     (4) list and total all amounts requested and/or disbursed during the reporting period as payments or reimbursements from the Escrow Account pursuant to Paragraph 11 and Appendix C;

     (5) indicate the approximate balance of the Escrow Account at the end of the reporting period; and

     (6) summarize all Response Work and all Approved Restoration Work funded and performed under the Consent Decree during the reporting period.

          c. In addition, prior to the Certification of Completion of Remedial Action, the third Quarterly Report of each calendar year (that is, the report due on or before November 1) shall project whether the total balance present in or committed by a secured obligation to the Escrow Account, including all sub-accounts, is likely to be sufficient to fund the completion of the Remedial Action, and to leave a remaining balance of $4,000,000 for work in the year 2010 and thereafter, including work required by Section VIII of this Amended Consent Decree (Post-Remedy Response Work and Remedy Review), after making all other payments and reimbursements from those Accounts that are required under the Consent Decree; if the balance is projected to be insufficient, that third Quarterly Report shall specify the amount of additional funding sufficient to complete the Remedial Action and to leave a remaining balance of $4,000,000 for work in the year 2010 and thereafter, including work required by Section VIII of this Amended Consent Decree (Post-Remedy Response Work and Remedy Review).

          d. Each Quarterly Report shall contain the following certification signed by the Chief Financial Officer of a Settling Defendant or by an Independent Certified Public Accountant retained by the Settling Defendants:

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“To the best of my knowledge, after thorough investigation and review of Settling Defendants’ documentation of unreimbursed costs incurred and paid for the work summarized in this report that was performed pursuant to the Consent Decree, I certify that the information contained in or accompanying this Quarterly Report is true, accurate, and complete. I am aware that there are significant penalties for knowingly submitting false information, including the possibility of fine and imprisonment.”

Each Quarterly Report shall include a list of the cost documents that the certifying individuals reviewed in support of the Quarterly Cost Summary Report. Upon request by the Plaintiffs, Settling Defendants shall provide the Plaintiffs any additional information that the Plaintiffs deem necessary for review of a Quarterly Report.

          e. If the Plaintiffs find that a Quarterly Report includes a mathematical error, an accounting error, costs that are not Allowable Response Work Costs or Allowable Restoration Work Costs, costs that are inadequately documented, or costs covered by a prior Quarterly Report, the Plaintiffs will notify Settling Defendants and the Settling Defendants shall cure the deficiency by submitting a revised Quarterly Report.

     33. Release Reporting.

          a. Upon the occurrence of any event during performance of the Response Work that Settling Defendants are required to report pursuant to Section 103 of CERCLA or Section 304 of the Emergency Planning and Community Right-to-Know Act (“EPCRA”), Settling Defendants shall within 24 hours of the onset of such event orally notify the Response Agencies’ Project Coordinators or the Response Agencies’ Alternate Project Coordinators (in the event of the unavailability of the Project Coordinator). If neither the EPA Project Coordinator nor the EPA Alternate Project Coordinator is available, oral notification notice shall be given to the Emergency Response Section, Region 5, United States Environmental Protection Agency. These reporting requirements are in addition to the reporting required by CERCLA Section 103 or EPCRA Section 304.

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          b. Within 20 days of the onset of such an event, Settling Defendants shall furnish to Plaintiffs a written report, signed by the Settling Defendants’ Project Coordinator, setting forth the events which occurred and the measures taken, and to be taken, in response thereto. Within 30 days of the conclusion of such an event, Settling Defendants shall submit a report to Plaintiffs setting forth all actions taken in response thereto.

     34. Submission and Certification of Reports.

          a. Settling Defendants shall submit two hard copies of all plans, reports, and data required by the SOW, the Remedial Design Work Plan, the Remedial Action Work Plan, or any other approved plans to each of the Response Agencies in accordance with the schedules set forth in such plans. At the same time, the Settling Defendants shall submit an additional copy to each of the Response Agencies in electronic format.

          b. All reports and other documents submitted by Settling Defendants to the Response Agencies (other than the monthly progress reports referred to above) which purport to document Settling Defendants’ compliance with the terms of this Consent Decree shall be signed by an authorized representative of the Settling Defendants, including but not limited to the Settling Defendants’ Project Coordinator.

XII. RESPONSE AGENCIES’ APPROVAL OF PLANS AND OTHER SUBMISSIONS

     35. After review of any plan, report or other item which is required to be submitted for approval by the Response Agencies pursuant to this Consent Decree, the Response Agencies shall: (i) approve, in whole or in part, the submission; (ii) approve the submission upon specified conditions; (iii) modify the submission to cure the deficiencies; (iv) disapprove, in whole or in part, the submission, directing that the Settling Defendants modify the submission; or (v) any combination of the above. However, the Response Agencies shall not modify a submission

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without first providing Settling Defendants at least one notice of deficiency and an opportunity to cure within 30 days, except where to do so would cause serious disruption to the Response Work or where previous submission(s) have been disapproved due to material defects and the deficiencies in the submission under consideration indicate a bad faith lack of effort to submit an acceptable deliverable.

     36. In the event of approval, approval upon conditions, or modification by the Response Agencies, pursuant to Paragraph 35(i), (ii), or (iii), Settling Defendants shall proceed to take any action required by the plan, report, or other item, as approved or modified by the Response Agencies subject only to their right to invoke the Dispute Resolution procedures set forth in Section XX (Dispute Resolution) with respect to the modifications or conditions made by the Response Agencies. In the event that a submission has a material defect and the Response Agencies modify the submission to cure the deficiencies pursuant to Paragraph 35(i), the Response Agencies retain their right to seek stipulated penalties, as provided in Section XXI (Stipulated Penalties).

     37. Resubmission of Plans.

          a. Upon receipt of a notice of disapproval pursuant to Paragraph 35(iv), Settling Defendants shall, within 30 days or such longer time as specified by the Response Agencies in such notice, correct the deficiencies and resubmit the plan, report, or other item for approval. Any stipulated penalties applicable to the submission, as provided in Section XXI, shall accrue during the 30-day period or otherwise specified period but shall not be payable unless the resubmission is disapproved or modified due to a material defect as provided in Paragraphs 38 and 39.

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          b. Notwithstanding the receipt of a notice of disapproval pursuant to Paragraph 35(iv), Settling Defendants shall proceed, at the direction of the Response Agencies, to take any action required by any non-deficient portion of the submission. Implementation of any non-deficient portion of a submission shall not relieve Settling Defendants of any liability for stipulated penalties under Section XXI (Stipulated Penalties).

     38. In the event that a resubmitted plan, report or other item, or portion thereof, is disapproved by the Response Agencies, the Response Agencies may again require the Settling Defendants to correct the deficiencies, in accordance with the preceding Paragraphs. The Response Agencies also retain the right to modify or develop the plan, report or other item. Settling Defendants shall implement any such plan, report, or item as modified or developed by the Response Agencies, subject only to their right to invoke the procedures set forth in Section XX (Dispute Resolution).

     39. If upon resubmission, a plan, report, or item is disapproved or modified by the Response Agencies due to a material defect, Settling Defendants shall be deemed to have failed to submit such plan, report, or item timely and adequately unless the Settling Defendants invoke the dispute resolution procedures set forth in Section XX (Dispute Resolution) and the response Agencies’ action is overturned pursuant to that Section. The provisions of Section XX (Dispute Resolution) and Section XXI (Stipulated Penalties) shall govern the implementation of the Response Work and accrual and payment of any stipulated penalties during Dispute Resolution. If the Response Agencies’ disapproval or modification is upheld, stipulated penalties shall accrue for such violation from the date on which the initial submission was originally required, as provided in Section XXI.

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     40. All plans, reports, and other items required to be submitted to the response Agencies under this Consent Decree shall, upon approval or modification by the Response Agencies, be enforceable under this Consent Decree. In the event the Response Agencies approve or modify a portion of a plan, report, or other item required to be submitted to the Response Agencies under this Consent Decree, the approved or modified portion shall be enforceable under this Consent Decree.

XIII. PROJECT COORDINATORS

     41. Within 10 days after Settling Defendant WTM I Company’s submittal of the Pre-Final (90%) Design, Settling Defendants, WDNR, and EPA will notify each other, in writing, of the name, address and telephone number of their respective designated Project Coordinators and Alternate Project Coordinators. If a Project Coordinator or Alternate Project Coordinator initially designated is changed, the identity of the successor will be given to the other Parties at least 5 working days before the changes occur, unless impracticable, but in no event later than the actual day the change is made. The Settling Defendants’ Project Coordinator shall be subject to disapproval by the Response Agencies and shall have the technical expertise sufficient to adequately oversee all aspects of the Response Work. The Settling Defendants’ Project Coordinator shall not be an attorney for any of the Settling Defendants in this matter. He or she may assign other representatives, including other contractors, to serve as a representative for oversight of performance of daily operations during remedial activities at OU1.

     42. Plaintiffs may designate other representatives, including, but not limited to, EPA and WDNR employees, and federal and State contractors and consultants, to observe and monitor the progress of any activity undertaken pursuant to this Consent Decree. EPA’s Project Coordinator and Alternate Project Coordinator shall have the authority lawfully vested in a

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Remedial Project Manager (“RPM”) and an On-Scene Coordinator (“OSC”) by the National Contingency Plan, 40 C.F.R. Part 300. In addition, the Response Agencies’ Project Coordinators or Alternate Project Coordinators shall have authority, consistent with the National Contingency Plan, to halt any Response Work required by this Consent Decree and to take any necessary response action when s/he determines that conditions at the Site constitute an emergency situation or may present an immediate threat to public health or welfare or the environment due to release or threatened release of Waste Material.

     43. The Response Agencies’ Project Coordinators and the Settling Defendants’ Project Coordinator will meet, at a minimum, on a monthly basis.

XIV. CERTIFICATION OF COMPLETION

     44. Certification of Completion of the Remedial Action for OU1.

          a. Within 90 days after Settling Defendants conclude that the Remedial Action has been fully performed such that the Performance Standards have been achieved, Settling Defendants shall schedule and conduct a pre-certification inspection to be attended by Settling Defendants and the Response Agencies. If, after the pre-certification inspection, the Settling Defendants still believe that the Remedial Action has been fully performed such that the Performance Standards have been achieved, they shall submit a written report to the Response Agencies requesting certification pursuant to Section XII (Response Agencies’ Approval of Plans and Other Submissions) within 60 days of the inspection. In the report, a registered professional engineer and the Settling Defendants’ Project Coordinator shall state that the Remedial Action has been completed in full satisfaction of the requirements of this Consent Decree. The written report shall include as-built drawings signed and stamped by a professional engineer. The report

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shall contain the following statement, signed by a responsible corporate official of a Settling Defendant or the Settling Defendants’ Project Coordinator:

To the best of my knowledge, after thorough investigation, I certify that the information contained in or accompanying this submission is true, accurate and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations.

If, after completion of the pre-certification inspection and receipt and review of the written report, EPA, after reasonable opportunity to review and comment by the State, determines that the Remedial Action or any portion thereof has not been completed in accordance with this Consent Decree such that the Performance Standards have not been achieved, EPA will notify Settling Defendants in writing of the activities that must be undertaken by Settling Defendants pursuant to this Consent Decree to complete the Remedial Action such that the Performance Standards are achieved; provided, however, that EPA may only require Settling Defendants to perform such activities pursuant to this Paragraph to the extent that such activities are consistent with the “scope of the remedy selected in the ROD,” as that term is defined in Paragraph 15.b. EPA will set forth in the notice a schedule for performance of such activities consistent with the Consent Decree and the SOW or require the Settling Defendants to submit a schedule to EPA for approval pursuant to Section XII (Response Agencies’ Approval of Plans and Other Submissions). Settling Defendants shall perform all activities described in the notice in accordance with the specifications and schedules established pursuant to this Paragraph, subject to their right to invoke the dispute resolution procedures set forth in Section XX (Dispute Resolution).

          b. If EPA concludes, based on the initial or any subsequent report requesting Certification of Completion and after a reasonable opportunity for review and comment by the State, that the Remedial Action has been performed in accordance with this Consent Decree such

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that the Performance Standards have been achieved, EPA will so certify in writing to Settling Defendants. This certification shall constitute the Certification of Completion of the Remedial Action for purposes of this Consent Decree, including, but not limited to, Section XXII (Covenants Not to Sue by Plaintiffs). Except as expressly provided by this Consent Decree, Certification of Completion of the Remedial Action shall not affect Settling Defendants’ obligations under this Consent Decree.

     45. Certification of Completion of the Response Work for OU1.

          a. Within 90 days after Settling Defendants conclude that all phases of the Response Work (including O&M, Post-Remedy Institutional Controls Work, and Post-Remedy Monitoring) have been fully performed, Settling Defendants shall schedule and conduct a pre-certification inspection to be attended by Settling Defendants and the Response Agencies. If, after the pre-certification inspection, the Settling Defendants still believe that the Response Work has been fully performed, Settling Defendants shall submit a written report by a registered professional engineer stating that the Response Work has been completed in full satisfaction of the requirements of this Consent Decree. The report shall contain the following statement, signed by a responsible corporate official of a Settling Defendant or the Settling Defendants’ Project Coordinator:

To the best of my knowledge, after thorough investigation, I certify that the information contained in or accompanying this submission is true, accurate and complete. I am aware that there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations.

If, after review of the written report, EPA, after reasonable opportunity to review and comment by the State, determines that any portion of the Response Work has not been completed in accordance with this Consent Decree, EPA will notify Settling Defendants in writing of the activities that must be undertaken by Settling Defendants pursuant to this

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Consent Decree to complete the Response Work; provided, however, that EPA may only require Settling Defendants to perform such activities pursuant to this Paragraph to the extent that such activities are consistent with the “scope of the remedy selected in the ROD,” as that term is defined in Paragraph 15.b. EPA will set forth in the notice a schedule for performance of such activities consistent with the Consent Decree and the SOW or require the Settling Defendants to submit a schedule to EPA for approval pursuant to Section XII (Response Agencies’ Approval of Plans and Other Submissions). Settling Defendants shall perform all activities described in the notice in accordance with the specifications and schedules established therein, subject to their right to invoke the dispute resolution procedures set forth in Section XX (Dispute Resolution).

          b. If EPA concludes, based on the initial or any subsequent request for Certification of Completion by Settling Defendants and after a reasonable opportunity for review and comment by the State, that the Response Work has been performed in accordance with this Consent Decree, EPA will so notify the Settling Defendants in writing.

XV. EMERGENCY RESPONSE

     46. In the event of any action or occurrence during the performance of the Response Work which causes or threatens a release of Waste Material at or from OU1 that constitutes an emergency situation or may present an immediate threat to public health or welfare or the environment, Settling Defendants shall, subject to Paragraph 47, immediately take all appropriate action to prevent, abate, or minimize such release or threat of release, and shall immediately notify the Response Agencies’ Project Coordinators, or, if a Response Agency Project Coordinator is unavailable, the Response Agency’s Alternate Project Coordinator. If neither the EPA Project Coordinator nor the EPA Alternate Project Coordinator is available, the Settling

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Defendants shall notify the EPA Emergency Response Unit, Region 5. Settling Defendants shall take such actions in consultation with the EPA’s Project Coordinator or other available authorized EPA officer and in accordance with all applicable provisions of the Health and Safety Plans, the Contingency Plans, and any other applicable plans or documents developed pursuant to the SOW. In the event that Settling Defendants fail to take appropriate response action as required by this Section, and EPA or, as appropriate, the State takes such action instead, Settling Defendants shall reimburse EPA and the State for all costs of the response action not inconsistent with the NCP pursuant to Paragraph 54 (Payment of Specified Future Response Costs).

     47. Nothing in the preceding Paragraph or in this Consent Decree shall be deemed to limit any authority of the United States, or the State, to: (i) take all appropriate action to protect human health and the environment or to prevent, abate, respond to, or minimize an actual or threatened release of Waste Material on, at, or from the Site, or (ii) direct or order such action, or seek an order from the Court, to protect human health and the environment or to prevent, abate, respond to, or minimize an actual or threatened release of Waste Material at or from the Site, subject to Section XXII (Covenants Not to Sue by Plaintiffs).

XVI. NATURAL RESOURCE RESTORATION EFFORTS

     48. Settling Defendants’ Performance of Approved Restoration Work. As provided by the following Subparagraphs, the Settling Defendants may propose to the Plaintiffs or the Plaintiffs may propose to the Settling Defendants that the Settling Defendants perform certain natural resource restoration work under this Consent Decree, with the costs to be paid or reimbursed from the Escrow Account.

          a. Any restoration work that the Parties agree will be performed by one or both of the Settling Defendants under this Paragraph shall be performed in accordance with a

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written Project Implementation Plan, jointly approved by the Plaintiffs and by the other Trustees, as represented by the Trustee Council (“Approved Restoration Work”). The Project Implementation Plan shall: (i) describe the restoration work to be performed by one or both of the Settling Defendants; (ii) establish a schedule for performance of the work; and (iii) establish a project budget and a pre-approved cost ceiling for the work. The Project Implementation Plan (including the project budget and the pre-approved cost ceiling) may be revised during the course of the work by a written amendment approved by the Parties to this Consent Decree and by the other Trustees.

          b. All Approved Restoration Work shall be consistent with the Trustees’ Joint Restoration Plan and Environmental Assessment for the Lower Fox River and Green Bay (the “Restoration Plan”).

          c. All of the Settling Defendants’ Allowable Restoration Work Costs (as defined by Subparagraph 9.b) for Approved Restoration Work shall be paid or reimbursed from the Escrow Account in accordance with Paragraph 11 of this Consent Decree and Appendix C. Dispute resolution provisions and force majeure provisions for Approved Restoration Work are set forth in Appendix E, which is incorporated herein by reference.

          d. As provided by Paragraph 32, each Quarterly Report submitted to the Plaintiffs under this Consent Decree shall include, among other things, a complete and accurate written cost summary of all Allowable Restoration Work Costs for the reporting period, and a summary of all Approved Restoration Work funded and performed under this Paragraph during the reporting period.

          e. Within 60 days after completing all Approved Restoration Work under a particular Project Implementation Plan, the Settling Defendants shall submit a Final Project

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Report to DOI and WDNR summarizing: (i) all Approved Restoration Work performed under the Plan; and (ii) the total Allowable Restoration Work Costs for the Approved Restoration Work performed under the Plan. DOI and WDNR shall in turn provide the other Trustees copies of each Final Project Report.

     49. Trustee-Sponsored Natural Resource Restoration Efforts.

          a. All funds paid and disbursed to a Site-specific sub-account within the NRDAR Fund under Paragraph 53 shall be managed by DOI for the joint benefit and use of the Trustees to pay for Trustee-sponsored natural resource restoration efforts in accordance with the Restoration Plan. Consistent with the Restoration Plan, all such funds shall be applied toward the costs of restoration, rehabilitation, or replacement of injured natural resources at the Site, and/or acquisition of equivalent resources, including but not limited to any administrative costs and expenses necessary for, and incidental to, restoration, rehabilitation, replacement, and/or acquisition of equivalent resources planning, and any restoration, rehabilitation, replacement, and/or acquisition of equivalent resources undertaken.

          b. Decisions regarding any dedication or expenditure of funds under this Paragraph shall be made by the Trustees, acting through the Trustee Council. Settling Defendants shall not be entitled to dispute B under Section XX (Dispute Resolution) or in any other forum or proceeding B any decision relating to funds or restoration efforts under this Paragraph.

XVII. PAYMENTS

     50. Payments Into the Escrow Account.

          a. Timing and Amount of Initial Payments. Each Settling Defendant shall make initial payments totaling $26,250,000 into the Escrow Account in accordance with the

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following schedule: (i) each Settling Defendant shall deposit $10,500,000 into the Escrow Account by no later than March 31, 2004; and (ii) each Settling Defendant shall deposit an additional $15,750,000 into the Escrow Account by no later than June 30, 2004. The payment requirements of this Paragraph are several obligations only, not joint obligations.

          b. Nature of the Initial Payments. Each Settling Defendant’s payment under this Paragraph includes the following: (i) $25,000,000 to fund the Remedial Action; and (ii) $1,250,000 to fund a portion of the NRD Commitment.

          c. Subsequent Payments. Subsequent payments into the Escrow Account shall be made and used to fund the Remedial Action and the Response Work as follows:

     (1) Each Settling Defendants has made or assured payments of $6,000,000 into the Escrow Account as provided by the Agreed Supplement to Consent Decree filed with the Court on September 13, 2007.

     (2) The parties acknowledge that an additional $7,000,000 has been paid into the Escrow Account by Menasha Corporation as provided by the Second Agreed Supplement to Consent Decree filed with the Court on November 13, 2007. This Amended Consent Decree does not alter or supersede the provisions of that Second Agreed Supplement relating to that payment by Menasha Corporation.

     (3) By July 15, 2008, WTM I Company (“WTM I”) shall make a payment of $9,500,000, which shall be deposited in the WTM I Sub-account.

     (4) By July 15, 2008, P.H. Glatfelter Company (“Glatfelter”) shall make a payment of $3,000,000, which shall be deposited in the Glatfelter Subaccount. In addition, by July 15, 2008, Glatfelter shall obtain an irrevocable

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letter of credit which shall provide for payment of an additional $6,500,000 into the Glatfelter Sub-account upon receipt of a written demand by EPA at any time between January 15, 2009 and February 20, 2009. The irrevocable letter of credit shall be issued by a financial institution that has the authority to issue letters of credit and whose letter of credit operations are regulated and examined by an agency of the United States Government. The financial institution shall have surplus and reserves in excess of $500 million. The irrevocable letter of credit shall identify EPA as the beneficiary and the full $6,500,000 shall immediately be payable to the Glatfelter Sub-account upon receipt of an EPA Payment Directive (to be dated no earlier than January 15, 2009) in the form attached hereto at Appendix J. Notwithstanding the requirement that the letter of credit be irrevocable, at any time prior to January 15, 2009, Glatfelter may deposit an additional $6,500,000 into the Glatfelter Sub-account, at which time Glatfelter may cancel the letter of credit. The United States shall surrender the letter of credit for cancellation to the issuing bank at Glatfelter’s request at any time following Glatfelter’s deposit into the Escrow Account pursuant to the preceding sentence.

     (5) If, prior to the Certification of Completion of Remedial Action, the third Quarterly Report for any calendar year (that is, the report due on or before November 1) indicates that the balance remaining in the Escrow Account, including all sub-accounts, is insufficient to fund the completion of the following season of the Remedial Action and to leave a remaining balance of $4,000,000 for work in the year 2010 and thereafter, including work required by Section VIII of

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this Amended Consent Decree (Post-Remedy Response Work and Remedy Review), each Settling Defendant shall make an additional payment to the Escrow Account. The amount of each Settling Defendant’s payment pursuant to this subparagraph shall be one-half of the amount of additional funding specified in the Quarterly Report as sufficient to complete the following season and to leave a remaining balance of $4,000,000 for work in the year 2010 and thereafter, including work required by Section VIII of this Amended Consent Decree (Post-Remedy Response Work and Remedy Review). The payments shall be deposited in each Settling Defendant’s sub-account of the Escrow Account on or before the January 15 following the Quarterly Report.

     51. Disbursements from the Escrow Account.

          a. As provided by this Consent Decree and Appendix C, certain funds from the Escrow Account shall be disbursed to the United States and the State as payment of sums due under this Consent Decree, and certain other funds from Escrow Account shall be disbursed to the Settling Defendants for payment or reimbursement of Allowable RD/RA Costs and/or Allowable Restoration Work Costs.

          b. It is anticipated that certain funds may be disbursed from the Escrow Account for payment of certain Allowable RD/RA costs and/or Allowable Restoration Work Costs even before the Effective Date. In the event the Plaintiffs withdraw or withhold consent to this Consent Decree before entry, or the Court declines to enter the Consent Decree, the unexpended balance of the Escrow Account shall be disbursed to the Settling Defendants at their request.

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     52. Initial Payments to Plaintiffs.

          a. Initial Payments to the United States. Within 30 days after the Date of Lodging, the Settling Defendants shall pay a total of $1,040,000 directly to the United States, with each Settling Defendant being responsible for paying one-half of that total amount ($520,000 each). The $1,040,000 paid to the United States under this Subparagraph shall be applied as follows: (i) $740,000 shall be directed to the Fox River Site Special Account within the EPA Hazardous Substance Superfund, as the EPA Past Cost Payments, and shall be retained and used to conduct or finance response actions at or in connection with the Site, or transferred by EPA to the EPA Hazardous Substance Superfund; and (ii) $300,000 shall be directed to the DOI NRDAR Fund, as the DOI Past Cost Payments.

          b. State Past Cost Payments. Within 30 days after the Date of Lodging, the Settling Defendants shall pay a total of $10,000 directly to the State, as the State Past Cost Payments, with each Settling Defendant being responsible for paying one-half of that total amount ($5,000 each).

          c. The payment requirements of this Paragraph are several obligations only, not joint obligations.

     53. Subsequent Payments and Disbursements for Natural Resource Restoration. As provided by this Paragraph and by Appendix C, a total of $3,000,000 shall be paid and disbursed as the NRD Commitment.

          a. By no later than January 31, 2004, the Settling Defendants shall pay a total of $500,000 of the NRD Commitment directly to a Site-specific sub-account within the DOI NRDAR Fund, with each Settling Defendant being responsible for paying one-half of that total amount ($250,000 each), to finance Trustee-sponsored natural resource damage restoration

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efforts under Paragraph 49. The payment requirements of this Subparagraph are several obligations only, not joint obligations.

          b. The remaining $2,500,000 of the NRD Commitment shall be disbursed from the Escrow Account in accordance with the schedule and requirements of Appendix C: (i) for payment or reimbursement of Allowable Restoration Work Costs incurred for Approved Restoration Work to be performed by the Settling Defendants under Paragraph 48; and/or (ii) for payment to a Site-specific sub-account within the DOI NRDAR Fund, to finance Trustee-sponsored natural resource damage restoration efforts under Paragraph 49.

     54. Reimbursement of Specified Future Response Costs.

          a. EPA Reimbursement. All Specified Future Response Costs incurred by the United States shall be reimbursed as follows:

               (1) The United States shall be entitled to seek reimbursement of any Specified Future Response Costs incurred and billed by the United States from the Escrow Account as provided by Appendix C, to the extent that such costs are not inconsistent with the National Contingency Plan.

               (2) Upon receipt of a written demand for payment, the Settling Defendants shall make direct payments to EPA for any Specified Future Response Costs incurred and billed by the United States if such costs have not been reimbursed from the Escrow Account, to the extent that such costs are not inconsistent with the National Contingency Plan. On a periodic basis, if such costs have not been reimbursed from the Escrow Account, the United States will send Settling Defendants a bill requiring payment that includes an EPA cost summary, showing direct and indirect costs incurred by EPA and its contractors, and a DOJ cost summary, showing costs incurred by DOJ and its contractors, if any. Settling Defendants shall

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make all payments within 30 days of Settling Defendants’ receipt of each bill requiring payment, except as otherwise provided by Paragraph 68.

               (3) All payments and disbursements received by EPA under this Subparagraph 54.a shall be deposited in the Fox River Site Special Account within the EPA Hazardous Substance Superfund, and shall be retained and used to conduct or finance response actions at or in connection with the Site, or transferred by EPA to the EPA Hazardous Substance Superfund.

          b. State Reimbursement. All Specified Future Response Costs incurred by the State shall be reimbursed as follows:

               (1) The State shall be entitled to seek reimbursement of any Specified Future Response Costs incurred and billed by the State from the Escrow Account as provided by Appendix C, to the extent that such costs are not inconsistent with the National Contingency Plan.

               (2) Upon receipt of a written demand for payment, the Settling Defendants shall make direct payments to the State for any Specified Future Response Costs incurred and billed by the State if such costs have not been reimbursed from the Escrow Account, to the extent that such costs are not inconsistent with the National Contingency Plan. On a periodic basis, if such costs have not been reimbursed from the Escrow Account, the State will send Settling Defendants a bill requiring payment that includes a WDNR cost summary, showing direct and indirect costs incurred by WDNR and its contractors, and a WDOJ cost summary, showing costs incurred by WDOJ and its contractors, if any. Settling Defendants shall make all payments within 30 days of Settling Defendants’ receipt of each bill requiring payment, except as otherwise provided by Paragraph 68.

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          c. The direct payment requirements of this Paragraph are joint obligations of both Settling Defendants, not several obligations.

     55. Payment Instructions.

          a. Payments to the United States.

               (1) Initial Payments to the United States. The Initial Payments to the United States under Subparagraph 52.a shall be paid by FedWire Electronic Funds Transfer (“EFT”) to the U.S. Department of Justice account in accordance with current EFT procedures, referencing the Lower Fox River and Green Bay Site and DOJ Case Number 90-11-2-1045/2. Payment shall be made in accordance with instructions to be provided by the Financial Litigation Unit of the United States Attorney’s Office for the Eastern District of Wisconsin after the Date of Lodging. Any payments received by the Department of Justice after 4:00 p.m. (Eastern Time) will be credited on the next business day. At the time of payment, Settling Defendants shall ensure that notice that payment has been made is sent to DOJ, DOI, and EPA in accordance with Section XXVIII (Notices and Submissions) and to:

Financial Management Officer
U.S. Environmental Protection Agency
Region 5 Mail Code MF-10J
77 W. Jackson Blvd.
Chicago, IL 60604

Of the $1,040,000 total amount paid to the United States under Subparagraph 52.a: (i) $740,000 shall be deposited in the Fox River Site Special Account, to be retained and used to conduct or finance response actions at or in connection with the Site, or transferred by EPA to the EPA Hazardous Substance Superfund; and (ii) $300,000 shall be deposited in the DOI NRDAR Fund.

               (2) All Other Payments to EPA. Except as provided by Subparagraph 55.a.(1), all payments to EPA under this Section or under Appendix C shall: (i) be made by a

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certified or cashier’s check or checks made payable to “EPA Hazardous Substance Superfund, Fox River Site Special Account;” (ii) reference the Lower Fox River and Green Bay Site, EPA Site/Spill ID Number A565, and DOJ Case Number 90-11-2-1045/2; and (iii) indicate that the payment is for Specified Future Response Costs payable pursuant to this Consent Decree. All payments to EPA under Section XXI (Stipulated Penalties and Stipulated Damages) shall: (i) be made by a certified or cashier’s check or checks made payable to “EPA Hazardous Substance Superfund;” (ii) reference the Lower Fox River and Green Bay Site, EPA Site/Spill ID Number A565, and DOJ Case Number 90-11-2-1045/2; and (iii) indicate that the payment is for stipulated penalties payable pursuant to this Consent Decree. All payments under this Subparagraph 55.a.(2) shall be sent to:

U.S. Environmental Protection Agency
     Superfund Payments – Cincinnati
      Finance Center
P.O. Box 979076
St. Louis, MO 63197-9000

At the time of payment, Settling Defendants shall ensure that notice that payment has been made is sent to DOJ and EPA in accordance with Section XXVIII (Notices and Submissions) and to:

Financial Management Officer
U.S. Environmental Protection Agency
Region 5, Mail Code MF-10J
77 W. Jackson Blvd.
Chicago, IL 60604

               (3) All Other Payments to the DOI NRDAR Fund. Except as provided by Subparagraph 55.a.(1), all payments to the DOI NRDAR Fund under this Section or under Appendix C shall: (i) be made by an electronic funds transfer transaction in accordance with transfer instruction to be provided by the United States; (ii) reference the Lower Fox River and Green Bay Site and DOJ Case Number 90-11-2-1045/2; and (iii) indicate that the payment is

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being made pursuant to this Consent Decree with WTM I Company and P. H. Glatfelter Company. At the time of payment, Settling Defendants shall ensure that notice that payment has been made is sent to DOI, DOJ, WDNR, and WDOJ in accordance with Section XXVIII (Notices and Submissions) and to:

Department of the Interior
Natural Resource Damage Assessment and
      Restoration Program
Attn: Restoration Fund Manager
1849 C Street, NW, Mailstop 4449
Washington, DC 20240

DOI shall in turn notify the other Trustees that a payment to the DOI NRDAR Fund has been received under this Subparagraph.

               (4) Payments to the United States for Stipulated Damages Under Paragraph 74. All payments to the United States under Paragraph 74 (Stipulated Damages Amounts – NRD Commitment) shall: (i) be made by a certified or cashier’s check or checks made payable to “Treasurer, United States of America;” (ii) be tendered to the Financial Litigation Unit of the Office of the United States Attorney for the Eastern District of Wisconsin; and (iii) be accompanied by a letter referencing the Lower Fox River and Green Bay Site and indicating that the payment is for stipulated damages payable pursuant to Paragraph 74 of this Consent Decree with WTM I Company and P. H. Glatfelter Company. At the time of payment, Settling Defendants shall ensure that notice that payment has been made is sent to DOI and DOJ in accordance with Section XXVIII (Notices and Submissions).

          b. Payments to the State. All payments to the State under this Section or under Section XXI (Stipulated Penalties and Stipulated Damages) shall: (i) be made by a certified or cashier’s check or checks made payable to “Wisconsin Department of Natural Resources;” (ii) reference the Lower Fox River and Green Bay Site; (iii) indicate that the

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payment is being made pursuant to this Consent Decree with WTM I Company and P. H. Glatfelter Company; and (iv) be sent to:

Wisconsin Department of Natural Resources
Attn: Greg Hill, State Project Coordinator
101 S. Webster St.
Madison, WI 53703

At the time of payment, Settling Defendants shall ensure that notice that payment has been made is sent to the State in accordance with Section XXVIII (Notices and Submissions).

XVIII. INDEMNIFICATION AND INSURANCE

     56. Settling Defendants’ Indemnification of the United States and the State.

          a. The United States and the State do not assume any liability by entering into this agreement or by virtue of any designation of Settling Defendants as EPA’s authorized representatives under Section 104(e) of CERCLA. Settling Defendants shall indemnify, save and hold harmless the United States, the State, and their officials, agents, employees, contractors, subcontractors, or representatives for or from any and all claims or causes of action arising from, or on account of, negligent or other wrongful acts or omissions of Settling Defendants, their officers, directors, employees, agents, contractors, subcontractors, and any persons acting on their behalf or under their control, in carrying out activities pursuant to this Consent Decree, including, but not limited to, any claims arising from any designation of Settling Defendants as EPA’s authorized representatives under Section 104(e) of CERCLA. Further, the Settling Defendants agree to pay the United States and the State all costs they incur including, but not limited to, attorneys fees and other expenses of litigation and settlement arising from, or on account of, claims made against the United States or the State based on negligent or other wrongful acts or omissions of Settling Defendants, their officers, directors, employees, agents,

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contractors, subcontractors, and any persons acting on their behalf or under their control, in carrying out activities pursuant to this Consent Decree. Neither the United States nor the State shall be held out as a party to any contract entered into by or on behalf of Settling Defendants in carrying out activities pursuant to this Consent Decree. Neither the Settling Defendants nor any such contractor shall be considered an agent of the United States or the State.

          b. The United States and the State shall give Settling Defendants notice of any claim for which the United States or the State plans to seek indemnification pursuant to Paragraph 56, and shall consult with Settling Defendants prior to settling such claim.

          c. Nothing contained in this Consent Decree is intended to limit Settling Defendants’ potential for insurance coverage.

     57. Settling Defendants waive all claims against the United States and the State for damages or reimbursement or for set-off of any payments made or to be made to the United States or the State, arising from or on account of any contract, agreement, or arrangement between any one or more of Settling Defendants and any person for performance of Response Work on or relating to OU1 or any Approved Restoration Work, including, but not limited to, claims on account of construction delays. In addition, Settling Defendants shall indemnify and hold harmless the United States and the State with respect to any and all claims for damages or reimbursement arising from or on account of any contract, agreement, or arrangement between any one or more of Settling Defendants and any person for performance of Response Work on or relating to OU1 or any Approved Restoration Work, including, but not limited to, claims on account of construction delays.

     58. No later than 15 days before commencing any on-site Remedial Design work under this Consent Decree, Settling Defendant WTM I Company shall secure, and shall maintain

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throughout the Remedial Design, comprehensive general liability insurance with limits of 1 million dollars, combined single limit, and automobile liability insurance with limits of 1 million dollars, combined single limit, naming the United States and the State as additional insureds. No later than 15 days before commencing any on-site Remedial Action work under this Consent Decree, Settling Defendants shall secure, and shall maintain until the first anniversary of EPA’s Certification of Completion of the Remedial Action pursuant to Subparagraph 44.b, comprehensive general liability insurance with limits of 5 million dollars, combined single limit, and automobile liability insurance with limits of 2 million dollars, combined single limit, naming the United States and the State as additional insureds. In addition, for the duration of this Consent Decree, Settling Defendants shall satisfy, or shall ensure that their contractors or subcontractors satisfy, all applicable laws and regulations regarding the provision of worker’s compensation insurance for all persons performing the Response Work on behalf of Settling Defendants in furtherance of this Consent Decree. Prior to commencement of the Response Work under this Consent Decree, Settling Defendants shall provide the Response Agencies certificates of such insurance and a copy of each insurance policy. Settling Defendants shall resubmit such certificates and copies of policies each year on the anniversary of the Effective Date. If Settling Defendants demonstrate by evidence satisfactory to the Response Agencies that any contractor or subcontractor maintains insurance equivalent to that described above, or insurance covering the same risks but in a lesser amount, then, with respect to that contractor or subcontractor, Settling Defendants need provide only that portion of the insurance described above which is not maintained by the contractor or subcontractor. Costs incurred by Settling Defendants to comply with this paragraph shall be considered Allowable RD/RA Costs.

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XIX. FORCE MAJEURE EVENTS

     59. Except as provided by Paragraph 2 of Appendix E, if any event occurs or has occurred that may delay the performance of any obligation under this Consent Decree, whether or not caused by a Force Majeure Event, the Settling Defendants or their contractors shall orally notify the Response Agencies’ Project Coordinators or, in a Response Agency’s Project Coordinator’s absence, the response Agency’s Alternate Project Coordinator or, in the event both of EPA’s designated representatives are unavailable, Superfund Division Director for EPA Region 5, within 5 working days of when Settling Defendants first knew that the event might cause a delay. Within 10 working days thereafter, Settling Defendants shall provide the Response Agencies a written explanation and description of the reasons for the delay; the anticipated duration of the delay; all actions taken or to be taken to prevent or minimize the delay; a schedule for implementation of any measures to be taken to prevent or mitigate the delay or the effect of the delay; the Settling Defendants’ rationale for attributing such delay to a Force Majeure Event if they intend to assert such a claim; and a statement as to whether, in the opinion of the Settling Defendants, such event may cause or contribute to an endangerment to public health, welfare or the environment. The Settling Defendants shall include with any notice all available documentation supporting their claim that the delay was attributable to a Force Majeure Event. Failure to comply with the above requirements shall preclude Settling Defendants from asserting any claim of a Force Majeure Event for that event for the period of time of such failure to comply, and for any additional delay caused by such failure. Settling Defendants shall be deemed to know of any circumstance of which Settling Defendants, any entity controlled by Settling Defendants, or Settling Defendants’ contractors knew or should have known.

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     60. If EPA, after a reasonable opportunity for review and comment by WDNR, agrees that the delay or anticipated delay is attributable to a Force Majeure Event, the time for performance of the obligations under this Consent Decree that are affected by the Force Majeure Event will be extended by EPA, after a reasonable opportunity for review and comment by WDNR, for such time as is necessary to complete those obligations. An extension of the time for performance of the obligations affected by the Force Majeure Event shall not, of itself, extend the time for performance of any other obligation. If EPA, after a reasonable opportunity for review and comment by WDNR, does not agree that the delay or anticipated delay has been or will be caused by a Force Majeure Event, EPA will notify the Settling Defendants in writing of its decision. If EPA, after a reasonable opportunity for review and comment by WDNR, agrees that the delay is attributable to a Force Majeure Event, EPA will notify the Settling Defendants in writing of the length of the extension, if any, for performance of the obligations affected by the Force Majeure Event.

     61. If the Settling Defendants elect to invoke the dispute resolution procedures set forth in Section XX (Dispute Resolution), they shall do so no later than 15 days after receipt of EPA’s notice. In any such proceeding, Settling Defendants shall have the burden of demonstrating by a preponderance of the evidence that the delay or anticipated delay has been or will be caused by a Force Majeure Event, that the duration of the delay or the extension sought was or will be warranted under the circumstances, that best efforts were exercised to avoid and mitigate the effects of the delay, and that Settling Defendants complied with the requirements of Paragraphs 57 and 58, above. If Settling Defendants carry this burden, the delay at issue shall be deemed not to be a violation by Settling Defendants of the affected obligation of this Consent Decree identified to EPA and the Court.

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XX. DISPUTE RESOLUTION

     62. Except as provided by Paragraph 3 of Appendix E, the dispute resolution procedures of this Section shall be the exclusive mechanism to resolve disputes between Settling Defendants and the Plaintiffs arising under or with respect to this Consent Decree. However, the procedures set forth in this Section shall not apply to actions by the Plaintiffs to enforce obligations of the Settling Defendants that have not been disputed in accordance with this Section. The dispute resolution procedures of this Section shall not apply to any disputes between Settling Defendants and the Plaintiffs not arising under or with respect to this Consent Decree.

     63. Informal Dispute Resolution. Any dispute which arises under or with respect to this Consent Decree shall in the first instance be the subject of informal negotiations between the parties to the dispute. The period for informal negotiations shall not exceed 20 days from the time the dispute arises, unless it is modified by written agreement of the parties to the dispute. The dispute shall be considered to have arisen when one party sends the other parties a written Notice of Dispute.

     64. Formal Dispute Resolution.

          a. Except as provided by Paragraph 3 of Appendix E, in the event that the parties cannot resolve a dispute by informal negotiations under Paragraph 63, then the position advanced by EPA shall be considered binding unless, within 10 days after the conclusion of the informal negotiation period, Settling Defendants invoke the formal dispute resolution procedures of this Section by serving on the Plaintiffs a written Statement of Position on the matter in dispute, including, but not limited to, any factual data, analysis or opinion supporting that position and any supporting documentation relied upon by the Settling Defendants. The

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Statement of Position shall specify the Settling Defendants’ position as to whether formal dispute resolution should proceed under Paragraph 65 or Paragraph 66.

          b. Within 30 days after receipt of Settling Defendants’ Statement of Position, EPA will serve on Settling Defendants its Statement of Position, including, but not limited to, any factual data, analysis, or opinion supporting that position and all supporting documentation relied upon by EPA. EPA’s Statement of Position shall include a statement as to whether formal dispute resolution should proceed under Paragraph 65 or 66. Within 10 days after receipt of EPA’s Statement of Position, Settling Defendants may submit a Reply.

          c. If there is disagreement between EPA and the Settling Defendants as to whether dispute resolution should proceed under Paragraph 65 or 66, the parties to the dispute shall follow the procedures set forth in the paragraph determined by EPA to be applicable. However, if the Settling Defendants ultimately appeal to the Court to resolve the dispute, the Court shall determine which paragraph is applicable in accordance with the standards of applicability set forth in Paragraphs 65 and 66.

     65. Formal dispute resolution for disputes pertaining to the selection or adequacy of any response action and all other disputes that are accorded review on the administrative record under applicable principles of administrative law shall be conducted pursuant to the procedures set forth in this Paragraph. For purposes of this Paragraph, the adequacy of any response action includes, without limitation: (i) the adequacy or appropriateness of plans, procedures to implement plans, or any other items requiring approval by the Response Agencies under this Consent Decree; and (ii) the adequacy of the performance of response actions taken pursuant to this Consent Decree. Nothing in this Consent Decree shall be construed to allow any dispute by Settling Defendants under this Consent Decree regarding the validity of the ROD’s provisions.

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          a. An administrative record of the dispute shall be maintained by EPA and shall contain all statements of position, including supporting documentation, submitted pursuant to this Section. Where appropriate, EPA may allow submission of supplemental statements of position by the parties to the dispute.

          b. The Superfund Division Director for EPA Region 5 will issue a final administrative decision resolving the dispute based on the administrative record described in Subparagraph 65.a. This decision shall be binding upon the Settling Defendants, subject only to the right to seek judicial review pursuant to Subparagraphs 65.c and d.

          c. Any administrative decision made by EPA pursuant to Subparagraph 65.b shall be reviewable by this Court, provided that a motion for judicial review of the decision is filed by the Settling Defendants with the Court and served on all Parties within 20 days of receipt of EPA’s decision. The motion shall include a description of the matter in dispute, the efforts made by the parties to resolve it, the relief requested, and the schedule, if any, within which the dispute must be resolved to ensure orderly implementation of this Consent Decree. The United States and the State may file a response to Settling Defendants’ motion.

          d. In proceedings on any dispute governed by this Paragraph, Settling Defendants shall have the burden of demonstrating that the decision of the Superfund Division Director for EPA Region 5 is arbitrary and capricious or otherwise not in accordance with law. Judicial review of EPA’s decision shall be on the administrative record compiled pursuant to Subparagraph 65.a.

     66. Formal dispute resolution for disputes that neither pertain to the selection or adequacy of any response action nor are otherwise accorded review on the administrative record under applicable principles of administrative law, shall be governed by this Paragraph.

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          a. Following receipt of Settling Defendants’ Statement of Position submitted pursuant to Paragraph 64, and after service of EPA’s Statement of Position and any Reply, the Superfund Division Director for EPA Region 5 will issue a final decision resolving the dispute. The Superfund Division Director’s decision shall be binding on the Settling Defendants unless, within 20 days of receipt of the decision, the Settling Defendants file with the Court and serve on the parties a motion for judicial review of the decision setting forth the matter in dispute, the efforts made by the parties to resolve it, the relief requested, and the schedule, if any, within which the dispute must be resolved to ensure orderly implementation of the Consent Decree. The United States may file a response to Settling Defendants’ motion.

          b. Notwithstanding Paragraph K of Section I (Background) of this Consent Decree, judicial review of any dispute governed by this Paragraph shall be governed by applicable principles of law.

     67. The invocation of formal dispute resolution procedures under this Section shall not extend, postpone or affect in any way any obligation of the Settling Defendants under this Consent Decree, not directly in dispute, unless EPA or the Court agrees otherwise. Stipulated penalties with respect to the disputed matter shall continue to accrue but payment shall be stayed pending resolution of the dispute as provided in Paragraph 79. Notwithstanding the stay of payment, stipulated penalties shall accrue from the first day of noncompliance with any applicable provision of this Consent Decree. In the event that the Settling Defendants do not prevail on the disputed issue, stipulated penalties shall be assessed and paid as provided in Section XXI (Stipulated Penalties).

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     68. Disputes Regarding Specified Future Response Costs. Settling Defendants may contest payment of any Specified Future Response Costs under Paragraph 54 if they determine that the United States or the State has made an accounting error or if they allege that a cost item that is included represents costs that are inconsistent with the NCP. For any such costs incurred and billed before Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b, notice of any such objection shall be submitted in writing as provided by Subparagraph 5.c of Appendix C. For any such costs incurred and billed after Certification of Completion of Remedial Action by EPA pursuant to Subparagraph 44.b, notice of any such objection shall be given in writing within 30 days of receipt of the bill. A copy of any notice of objection shall be sent to the United States (if the United States’ accounting is being disputed) or to the State (if the State’s accounting is being disputed) pursuant to Section XXVIII (Notices and Submissions). Any such notice of objection shall specifically identify the contested Specified Future Response Costs and the basis for objection. In the event of an objection, all uncontested Specified Future Response Costs shall immediately be paid to the United States or the State in the manner described in Paragraph 54. Upon submitting a notice of objection, the Settling Defendants shall initiate the Dispute Resolution procedures in Section XX (Dispute Resolution). If the United States or the State prevails in the dispute, within 10 days of the resolution of the dispute, all sums due (with accrued Interest) shall be paid to EPA (if the United States’ cost are disputed) or to the State (if the State’s costs are disputed) in the manner described in Paragraph 54. If the Settling Defendants prevail concerning any aspect of the contested costs, the portion of the costs (plus associated accrued interest) for which they did not prevail shall be disbursed to EPA or the State, as appropriate, in the manner described in Paragraph 54; and the amount that was successfully contested need not be paid to EPA or to the State. The dispute resolution

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procedures set forth in this Paragraph in conjunction with the procedures set forth in Section XX (Dispute Resolution) shall be the exclusive mechanisms for resolving disputes regarding reimbursement of the United States and the State for their Specified Future Response Costs.

XXI. STIPULATED PENALTIES AND STIPULATED DAMAGES

     69. Settling Defendants shall be liable for stipulated penalties and/or stipulated damages in the amounts set forth in this Section for failure to comply with the requirements of this Consent Decree specified below, unless excused under Section XIX (Force Majeure Events) or Paragraph 2 (Force Majeure Events for Restoration Work) of Appendix E. “Compliance” by Settling Defendants shall include completion of the activities under this Consent Decree or any work plan or other plan approved under this Consent Decree identified below in accordance with all applicable requirements of law, this Consent Decree, the SOW, and any plans or other documents approved by the Plaintiffs pursuant to this Consent Decree and within the specified time schedules established by and approved under this Consent Decree.

     70. Stipulated Penalty Amounts — Failure to Make Payments. A Settling Defendant shall be liable for stipulated penalties in the amounts set forth below for each day of violation for that Settling Defendant’s failure to make payments as required under this Consent Decree:

	PENALTY PER DAY
			UP TO 11-30		OVER
VIOLATION	10 DAYS		DAYS		30 DAYS
Failure to deposit funds in the Escrow Account as required by Subparagraph 50.a:	$	10,00	$	15,000	$	25,000
Failure to make any Initial Payments to Plaintiffs as required by Paragraph 52:	$	1,000	$	2,500	$	5,000
Failure to make any payment of Specified Future Response Costs as required by Subparagraphs 54.a.(2) or 54.b.(2):	$	1,000	$	2,500	$	5,000

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Any stipulated penalties for failure to deposit funds in the Escrow Account shall be divided evenly between EPA and the State. Any stipulated penalties for failure to make any Initial Payments to Plaintiffs shall be divided between the United States and the State in proportion to the amounts that are unpaid or overdue. Any stipulated penalties for failure to make payment of Specified Future Response Costs shall be paid to the Party that rendered the bill involved.

     71. Stipulated Penalty Amounts — Response Work. Settling Defendants shall be liable for stipulated penalties in the amounts set forth below for each day of violation for failure to perform Response Work as required under this Consent Decree:

	PENALTY PER DAY
			UP TO 11-30		OVER
VIOLATION	10 DAYS		DAYS		30 DAYS
Failure to perform the Remedial Action in accordance with the schedule and requirements established by the Remedial Action Work Plan, as mandated by Paragraph 14:	$	2,000	$	5,000	$	10,000
Failure to perform O&M or Long Term Monitoring in accordance with the schedule and requirements established by the Final Operation and Maintenance Plan, as mandated by Paragraph 14, Paragraph 18, and Paragraph 19:	$	1,000	$	2,500	$	5,000
Failure to perform Institutional Controls requirements in accordance with the schedule and requirements established by the Institutional Controls Plan, as mandated by Paragraph 14 and Paragraph 18: $1,000 $2,500 $5,000	$	1,000	$	2,500	$	5,000
Failure to undertake response action as required by Section XV (Emergency Response):	$	5,000	$	10,000	$	20,000

Any stipulated penalties under this Paragraph shall be divided evenly between EPA and the State.

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     72. Stipulated Penalty Amount — Response Work Takeover. In the event that the Response Agencies assume performance of a portion or all of the Response Work pursuant to Paragraph 90 of Section XXII (Covenants Not to Sue by Plaintiffs), Settling Defendants shall be liable for a stipulated penalty in the amount of $250,000. Any stipulated penalties under this Paragraph shall be divided evenly between EPA and the State.

     73. Stipulated Penalty Amounts — Response Work Reports and Submissions. Settling Defendants shall be liable for stipulated penalties in the amounts set forth below for each day of violation for failure to comply with Response Work reporting and submission requirements under this Consent Decree:

	PENALTY PER DAY
			UP TO 11-30		OVER
VIOLATION	10 DAYS		DAYS		30 DAYS
Failure to submit a Remedial Action Work Plan or any other Remedial Action Plan as Required by Paragraph 14:	$	2,000	$	4,000	$	5,000
Failure to submit any Monthly RD/RA Progress Report as required by Paragraph 31:	$	1,000	$	2,000	$	2,500
Failure to submit any Quarterly Report as required by Paragraph 32:	$	1,000	$	2,000	$	2,500
Failure to comply with the Release Reporting requirements under Paragraph 33:	$	1,000	$	2,000	$	2,500

Any stipulated penalties under this Paragraph shall be divided evenly between the United States and the State.

     74. Stipulated Damages Amounts — NRD Commitment. A Settling Defendant shall be liable for stipulated damages in the amounts set forth below for each day of violation for that Settling Defendant’s failure to comply with requirements under this Consent Decree relating to the NRD Commitment:

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	DAMAGES PER DAY
			UP TO 11-30		OVER
VIOLATION	10 DAYS		DAYS		30 DAYS
Failure to make the Subsequent Payment for Natural Resource Restoration as required by Subparagraph 53.a:	$	1,000	$	2,500	$	5,000
Failure to perform Approved Restoration Work in accordance with an approved Project Implementation Plan, as required by Paragraph 48:	$	500	$	1,000	$	1,500
Failure to submit a Final Project Report on Approved Restoration Work, as required by Subparagraph 48.e:	$	500	$	1,000	$	2,000

Any stipulated damages under this Paragraph shall be divided evenly between the United States and the State.

     75. All stipulated penalties and/or stipulated damages shall begin to accrue on the day after the complete performance is due or the day a violation occurs, and shall continue to accrue through the final day of the correction of the noncompliance or completion of the activity. However, stipulated penalties shall not accrue: (i) with respect to a deficient submission under Section XII (Response Agencies’ Approval of Plans and Other Submissions), during the period, if any, beginning on the 31st day after the response Agencies’ receipt of such submission until the date that the Response Agencies notify Settling Defendants of any deficiency; (ii) with respect to a decision by the Plaintiffs under Paragraph 3 (Dispute Resolution for Restoration Work) of Appendix E, during the period, if any, beginning on the 21st day after the date that Settling Defendants’ Statement of Position is received until the date that the Plaintiffs issue a final administrative decision regarding such dispute; (iii) with respect to a decision by the Superfund Division Director for Region 5 under Subparagraph 65.b or 66.a of Section XX (Dispute Resolution), during the period, if any, beginning on the 21st day after the date that

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Settling Defendants’ reply to EPA’s Statement of Position is received until the date that the Superfund Division Director issues a final decision regarding such dispute; or (iv) with respect to judicial review by this Court of any dispute under Section XX (Dispute Resolution) or Paragraph 3 of Appendix E, during the period, if any, beginning on the 31st day after the Court’s receipt of the final submission regarding the dispute until the date that the Court issues a final decision regarding such dispute. Nothing herein shall prevent the simultaneous accrual of separate stipulated penalties and/or stipulated damages for separate violations of this Consent Decree.

     76. Following the Plaintiffs’ determination that Settling Defendants have failed to comply with a requirement of this Consent Decree, the Plaintiffs may give Settling Defendants written notification of the same and describe the noncompliance. The Plaintiffs may send the Settling Defendants a written demand for the payment of the penalties. However, penalties shall accrue as provided in the preceding Paragraph regardless of whether the Plaintiffs have notified the Settling Defendants of a violation.

     77. Settling Defendants shall pay any stipulated penalties or stipulated damages accruing under this Section directly to the Plaintiffs, and shall not be entitled to seek payment or reimbursement of such penalties or damages from the Disbursement Special Account or from the Escrow Account under Paragraph 10, Paragraph 11, Appendix B, or Appendix C. All penalties or damages accruing under this Section shall be due and payable to the United States and the State within 30 days of the Settling Defendants’ receipt of a demand for payment by the Plaintiffs, unless Settling Defendants invoke the Dispute Resolution procedures under Paragraph 3 of Appendix E or Section XX (Dispute Resolution). All payments under this Section shall be paid by certified or cashier’s check(s), shall indicate that the payment is for stipulated penalties or

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stipulated damages, and shall be submitted to EPA, to the State, and/or to the DOI NRDAR Fund, as appropriate, in the manner specified by Paragraph 55 (Payment Instructions).

     78. The payment of penalties or damages under this Section shall not alter in any way Settling Defendants’ obligation to complete the performance of the Response Work or any Approved Restoration Work required under this Consent Decree.

     79. Penalties and/or damages shall continue to accrue as provided in Paragraph 75 during any dispute resolution period, but need not be paid until the following:

          a. If the dispute is resolved by agreement or by an administrative decision that is not appealed to this Court, accrued penalties and/or damages determined to be owing shall be paid to within 15 days of the agreement or the receipt of the administrative decision;

          b. If the dispute is appealed to this Court and the Plaintiffs prevail in whole or in part, Settling Defendants shall pay all accrued penalties and/or damages determined by the Court to be owed to the Plaintiffs within 60 days of receipt of the Court’s decision or order, except as provided in Subparagraph c below;

          c. If the District Court’s decision is appealed by any Party, Settling Defendants shall pay all accrued penalties and/or damages determined by the District Court to be owing to the United States or the State into an interest-bearing escrow account within 60 days of receipt of the Court’s decision or order. Penalties and/or damages shall be paid into this account as they continue to accrue, at least every 60 days. Within 15 days of receipt of the final appellate court decision, the Escrow Agent shall pay the balance of the account to the Plaintiffs or to Settling Defendants to the extent that they prevail.

     80. If Settling Defendants fail to pay stipulated penalties and/or stipulated damages when due, the United States or the State may institute proceedings to collect the penalties and/or

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damages, as well as interest. Settling Defendants shall pay Interest on the unpaid balance, which shall begin to accrue on the date of demand made pursuant to Paragraph 77.

     81. Nothing in this Consent Decree shall be construed as prohibiting, altering, or in any way limiting the ability of the United States or the State to seek any other remedies or sanctions available by virtue of Settling Defendants’ violation of this Decree or of the statutes and regulations upon which it is based, including, but not limited to, penalties pursuant to Section 122(l) of CERCLA; provided, however, that the United States shall not seek civil penalties pursuant to Section 122(l) of CERCLA for any violation for which a stipulated penalty is provided herein, except in the case of a willful violation of the Consent Decree.

     82. Notwithstanding any other provision of this Section, the United States may, in its unreviewable discretion, waive any portion of stipulated penalties or stipulated damages payable to the United States that have accrued pursuant to this Consent Decree. Similarly, notwithstanding any other provision of this Section, the State may, in its unreviewable discretion, waive any portion of stipulated penalties or stipulated damages payable to the State that have accrued pursuant to this Consent Decree.

XXII. COVENANTS NOT TO SUE BY PLAINTIFFS

     83. General Scope of Covenants

          a. As specified by the covenants not to sue contained in Paragraphs 84 and 85, and subject to the reservations contained in Paragraphs 86, 87, and 89, this Consent Decree is intended to addresses the Settling Defendants’ alleged liability under Sections 106 and 107(a) of CERCLA for “OU1 Response Activities and Costs,” as that term is defined by the following Subparagraph 83.b.

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          b. For the purpose of this Consent Decree, the term “OU1 Response Activities and Costs” is defined as all response activities for Operable Unit 1 performed or to be performed after July 1, 2003, as well as all costs for response activities for Operable Unit 1 incurred after July 1, 2003. The “OU1 Response Activities and Costs” shall therefore include, but shall not be limited to, all Response Work performed or to be performed after July 1, 2003 and all Specified Future Response Costs.

     84. United States’ Covenant Not To Sue. In consideration of the actions that will be performed by the Settling Defendants pursuant to this Consent Decree and the payments that will be made to the Plaintiffs under the terms of the Consent Decree, and except as specifically provided by Paragraphs 86, 87, and 89, the United States covenants not to sue or to take administrative action against Settling Defendants for OU1 Response Activities and Costs pursuant to: (i) CERCLA Sections 106 and 107, 42 U.S.C. §§ 9606 and 9607; (ii) RCRA Section 7003, 42 U.S.C. § 6973; (iii) Clean Water Act Section 311, 33 U.S.C. § 1321; (iv) Toxic Substances Control Act Section 7, 15 U.S.C. § 2606; or (v) Section 10 of the Rivers and Harbors Act of 1899, 33 U.S.C. § 403. Except with respect to future liability, these covenants not to sue shall take effect upon the receipt by Plaintiffs of the payments required by Paragraph 52 (Initial Payments to Plaintiffs). With respect to future liability, these covenants not to sue shall take effect upon Certification of Completion of Remedial Action by EPA pursuant to Paragraph 44.b. These covenants not to sue are conditioned upon the satisfactory performance by Settling Defendants of their obligations under this Consent Decree. These covenants not to sue extend only to the Settling Defendants and do not extend to any other person; provided, however that these covenants not to sue (and the reservations thereto) shall also apply to Settling Defendants’ Related Parties.

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     85. State’s Covenant Not To Sue. In consideration of the actions that will be performed by the Settling Defendants and the payments that will be made to the Plaintiffs under the terms of the Consent Decree, and except as specifically provided by Paragraphs 86, 87, and 89, the State covenants not to sue or to take administrative action against Settling Defendants for OU1 Response Activities and Costs pursuant to: (i) CERCLA Section 107, 42 U.S.C. § 9607; (ii) RCRA Section 700, 42 U.S.C. § 6972; (iii) Clean Water Act Section 505, 33 U.S.C. § 1365; (iv) Toxic Substances Control Act Section 20, 15 U.S.C. § 2619; or (v) Wisconsin statutory or common law. Except with respect to future liability, these covenants not to sue shall take effect upon the receipt by Plaintiffs of the payments required by Paragraph 52 (Initial Payments to Plaintiffs). With respect to future liability, these covenants not to sue shall take effect upon Certification of Completion of Remedial Action by EPA pursuant to Paragraph 44.b. These covenants not to sue are conditioned upon the satisfactory performance by Settling Defendants of their obligations under this Consent Decree. These covenants not to sue extend only to the Settling Defendants and do not extend to any other person; provided, however that these covenants not to sue (and the reservations thereto) shall also apply to Settling Defendants’ Related Parties.

     86. Pre-certification Reservations. Notwithstanding any other provision of this Consent Decree, the United States and the State reserve, and this Consent Decree is without prejudice to, the right to institute proceedings in this action or in a new action, or to issue an administrative order seeking to compel Settling Defendants (i) to perform further response actions relating to OU1 or (ii) to reimburse the United States or the State for additional costs of response if, prior to Certification of Completion of the Remedial Action:

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          a. conditions relating to OU1, previously unknown to EPA, are discovered, or

          b. information, previously unknown to EPA, is received, in whole or in part, and these previously unknown conditions or information together with any other relevant information indicates that the Remedial Action is not protective of human health or the environment.

     87. Post-certification Reservations. Notwithstanding any other provision of this Consent Decree, the United States and the State reserve, and this Consent Decree is without prejudice to, the right to institute proceedings in this action or in a new action, or to issue an administrative order seeking to compel Settling Defendants (i) to perform further response actions relating to OU1 or (ii) to reimburse the United States or the State for additional costs of response if, subsequent to Certification of Completion of the Remedial Action:

          a. conditions relating to OU1, previously unknown to EPA, are discovered, or

          b. information, previously unknown to EPA, is received, in whole or in part, and these previously unknown conditions or this information together with other relevant information indicate that the Remedial Action is not protective of human health or the environment.

     88. For purposes of Paragraph 86, the information and the conditions known to EPA shall include only that information and those conditions known to EPA as of the date the ROD was signed and set forth in the Record of Decision and the administrative record supporting the Record of Decision. For purposes of Paragraph 87, the information and the conditions known to EPA shall include only that information and those conditions known to EPA as of the date of

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Certification of Completion of the Remedial Action and set forth in the Record of Decision, the administrative record supporting the Record of Decision, the post-ROD administrative record, or in any information received by EPA pursuant to the requirements of this Consent Decree prior to Certification of Completion of the Remedial Action.

     89. General Reservations of Rights. The covenants not to sue set forth above do not pertain to any matters other than those expressly specified in Paragraphs 84 and Paragraph 85. The United States and the State reserve, and this Consent Decree is without prejudice to, all rights against Settling Defendants with respect to all other matters, including but not limited to, the following:

          a. claims based on a failure by Settling Defendants to meet a requirement of this Consent Decree;

          b. liability for performance of response activities or for response costs falling outside the definition of the OU1 Response Activities and Costs, including but not limited to: (i) liability arising from the past, present, or future disposal, release, or threat of release of Waste Materials outside of the Site; (ii) liability for operable units at the Site other than OU1; and (iii) liability for response costs for OU1 incurred by the United States or by the State before the Date of Lodging (specifically including, but not limited to, any additional liability for Unresolved EPA Past Costs or for Unresolved State Past Costs);

          c. liability for future disposal of Waste Material at OU1, other than as provided in the ROD, the Response Work, or otherwise ordered by EPA;

          d. liability, prior to Certification of Completion of the Remedial Action, for additional response actions at OU1 that EPA determines are necessary to achieve Performance

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Standards, but that cannot be required pursuant to Paragraph 15 (Modification of the SOW or Related Work Plans);

          e. liability for damages for injury to, destruction of, or loss of natural resources at the Site, and for the costs of any natural resource damage assessments relating to the Site (specifically including, but not limited to, any additional liability for natural resource damages beyond the NRD Commitment or for Unresolved DOI Past Costs);

          f. liability for violations of federal or state law which occur during or after implementation of the Remedial Action; and

          g. criminal liability.

     90. Response Work Takeover. In the event EPA, in consultation with WDNR, determines that Settling Defendants have ceased implementation of any portion of the Response Work, are seriously or repeatedly deficient or late in their performance of the Response Work, or are implementing the Response Work in a manner which may cause an endangerment to human health or the environment, EPA and/or WDNR may assume the performance of all or any portions of the Response Work as EPA determines necessary. Settling Defendants may invoke the procedures set forth in Section XX (Dispute Resolution), Paragraph 65, to dispute EPA’s determination that takeover of the Response Work is warranted under this Paragraph. Costs incurred by the United States and/or the State in performing the Response Work pursuant to this Paragraph shall be considered Specified Future Response Costs.

     91. Notwithstanding any other provision of this Consent Decree, the United States and the State retain all authority and reserve all rights to take any and all response actions authorized by law.

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XXIII. COVENANTS BY SETTLING DEFENDANTS

     92. Settling Defendants’ Covenant Not to Sue. Subject to the reservations in Paragraph 93, Settling Defendants hereby covenant not to sue and agree not to assert any claims or causes of action against the United States or the State with respect to the EPA Past Cost Payments, the State Past Cost Payments, the DOI Past Cost Payments, the NRD Commitment, the OU1 Response Activities and Costs, or this Consent Decree, including, but not limited to:

          a. any direct or indirect claim for reimbursement from the Hazardous Substance Superfund (established pursuant to the Internal Revenue Code, 26 U.S.C. § 9507) through CERCLA Sections 106(b)(2), 107, 111, 112, 113 or any other provision of law;

          b. any claims against the United States (including any department, agency or instrumentality of the United States) or State (including any department, agency or instrumentality of the States) under CERCLA Sections 107 or 113, 42 U.S.C. §§ 9607 or 9613, related to the EPA Past Cost Payments, the State Past Cost Payments, the DOI Past Cost Payments, the NRD Commitment, or the OU1 Response Activities and Costs;

          c. any claims against the United States (including any department, agency or instrumentality of the United States) or State (including any department, agency or instrumentality of the States) under the United States Constitution, the Wisconsin Constitution, the Tucker Act, 28 U.S.C. § 1491, the Equal Access to Justice Act, 28 U.S.C. § 2412, as amended, or at common law, related to the EPA Past Cost Payments, the State Past Cost Payments, the DOI Past Cost Payments, the NRD Commitment, or the OU1 Response Activities and Costs;

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          d. any direct or indirect claim for disbursement from the Disbursement Special Account (established pursuant to this Consent Decree), except as provided by Paragraph 10; or

          e. any direct or indirect claim for disbursement from the Fox River Site Special Account.

Except as provided in Paragraph 95 (Waiver of Claims Against De Micromis Parties) and Paragraph 105 (Waiver of Claim-Splitting Defenses), these covenants not to sue shall not apply in the event that the United States or the State brings a cause of action or issues an order pursuant to the reservations set forth in Paragraph 86, Paragraph 87, or Subparagraphs 89.b to 89.e, but only to the extent that Settling Defendants’ claims arise from the same response action, response costs, or damages that the United States or the State is seeking pursuant to the applicable reservation.

     93. The Settling Defendants reserve, and this Consent Decree is without prejudice to, claims against the United States, subject to the provisions of Chapter 171 of Title 28 of the United States Code, for money damages for injury or loss of property or personal injury or death caused by the negligent or wrongful act or omission of any employee of the United States while acting within the scope of his office or employment under circumstances where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the act or omission occurred. However, any such claim shall not include a claim for any damages caused, in whole or in part, by the act or omission of any person, including any contractor, who is not a federal employee as that term is defined in 28 U.S.C. § 2671; nor shall any such claim include a claim based on EPA’s selection of response actions, or the oversight or approval of the Settling Defendants’ plans or activities. The foregoing applies only to claims

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which are brought pursuant to any statute other than CERCLA and for which the waiver of sovereign immunity is found in a statute other than CERCLA;

     94. Nothing in this Consent Decree shall be deemed to constitute preauthorization of a claim within the meaning of Section 111 of CERCLA, 42 U.S.C. § 9611, or 40 C.F.R. § 300.700(d).

     95. Waiver of Claims Against De Micromis Parties.

          a. Settling Defendants agree not to assert any claims and to waive all claims or causes of action that they may have for all matters relating to the Site, including for contribution, against any person where the person’s liability to Settling Defendants with respect to the Site is based solely on having arranged for disposal or treatment, or for transport for disposal or treatment, of hazardous substances at the Site, or having accepted for transport for disposal or treatment of hazardous substances at the Site, if the materials contributed by such person to the Site contained less than 2.0 kilograms of polychlorinated biphenyls (which amounts to 0.002% of the total mass of polychlorinated biphenyls remaining at the Site, as estimated by the December 2002 Remedial Investigation Report).

          b. This waiver shall not apply to any claim or cause of action against any person meeting the above criteria if EPA has determined that the materials contributed to the Site by such person contributed or could contribute significantly to the costs of response at the Site. This waiver also shall not apply with respect to any defense, claim, or cause of action that a Settling Defendant may have against any person if such person asserts a claim or cause of action relating to the Site against such Settling Defendant.

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XXIV. [DELETED]

     96. [DELETED]

     97. [DELETED]

     98. [DELETED]

     99. [DELETED]

XXV. EFFECT OF SETTLEMENT AND CONTRIBUTION PROTECTION

     100. Except as provided in Paragraph 95 (Waiver of Claims Against De Micromis Parties), nothing in this Consent Decree shall be construed to create any rights in, or grant any cause of action to, any person not a Party to this Consent Decree. The preceding sentence shall not be construed to waive or nullify any rights that any person not a signatory to this decree may have under applicable law. Except as provided in Paragraph 95 (Waiver of Claims Against De Micromis Parties), each of the Parties expressly reserves any and all rights (including, but not limited to, any right to contribution), defenses, claims, demands, and causes of action which each Party may have with respect to any matter, transaction, or occurrence relating in any way to the Site against any person not a Party hereto.

     101. Statutory Contribution Protection. The Parties agree, and by entering this Consent Decree this Court finds, that the Settling Defendants are entitled, as of the Effective Date, to protection from contribution actions or claims as provided by CERCLA Section 113(f)(2), 42 U.S.C. § 9613(f)(2) for matters addressed in this Consent Decree. Settling Defendants’ Related Parties are also entitled, as of the Effective Date, to protection from contribution actions or claims as provided by Section 113(f)(2) of CERCLA, 42 U.S.C. § 9613(f)(2), for “matters addressed” in this Consent Decree. For the purpose of this Paragraph 101, the “matters addressed” by this Consent Decree are the OU1 Response Activities and Costs.

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     102. Credit for Payments Made and Work Performed.

          a. The Parties agree and acknowledge that the Plaintiffs shall recognize that the Settling Defendants are entitled to full credit, applied against their liabilities for response costs and natural resource damages at the Site, for: (i) the EPA Past Cost Payments, (ii) the State Past Cost Payments; (iii) the DOI Past Cost Payments; (iv) the NRD Commitment; (v) all Specified Future Response Costs reimbursed under Paragraph 54; (vi) all response costs incurred and paid by the Settling Defendants in performing the Remedial Design under the July 2003 AOC and this Consent Decree; and (vii) the Allowable RD/RA Costs paid or reimbursed from the Escrow Account under Paragraph 11 of this Consent Decree and Appendix C; provided, however, that the credit ultimately recognized shall take into account and shall not include the amount of any recoveries by Settling Defendants of any portion of such payments from other liable persons, such as through a recovery under Sections 107 and 113 of CERCLA, 42 U.S.C. §§ 9607 and 9613. With respect to the Allowable RD/RA Costs, the recognized credit shall take into account and shall not include the amount of any disbursements from the Disbursement Special Account to the Escrow Account pursuant to Paragraph 10 of this Consent Decree and Appendix B. With respect to the NRD Commitment, the recognized credit may take into account, as appropriate, the value of restoration projects funded by the NRD Commitment.

          b. As provided by Paragraph 30 of the API/NCR Consent Decree, the Plaintiffs shall recognize that Appleton Papers Inc. and NCR Corporation are entitled to full credit, applied against their liabilities for response costs at the Site, for the funds deposited in and disbursed from the Disbursement Special Account pursuant to Paragraph 10 of this Consent Decree and Appendix B. In addition, the Settling Defendants hereby agree and acknowledge that they shall recognize that Appleton Papers Inc. and NCR Corporation are entitled to full credit,

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applied against their liabilities for response costs at the Site, for the funds deposited in and disbursed from the Disbursement Special Account pursuant to Paragraph 10 of this Consent Decree and Appendix B.

     103. The Settling Defendants agree that with respect to any suit or claim for contribution brought by them for matters related to this Consent Decree they will notify the United States and the State in writing no later than 20 days prior to the initiation of such suit or claim.

     104. The Settling Defendants also agree that with respect to any suit or claim for contribution brought against them for matters related to this Consent Decree they will notify in writing the United States and the State within 20 days of service of the complaint on them. In addition, Settling Defendants shall notify the United States and the State within 20 days of service or receipt of any Motion for Summary Judgment and within 20 days of receipt of any order from a court setting a case for trial.

     105. Waiver of Claim-Splitting Defenses. In any subsequent administrative or judicial proceeding initiated by the United States or the State for injunctive relief, recovery of response costs, or other appropriate relief relating to the Site, Settling Defendants shall not assert, and may not maintain, any defense or claim based upon the principles of waiver, res judicata, collateral estoppel, issue preclusion, claim-splitting, or other defenses based upon any contention that the claims raised by the United States or the State in the subsequent proceeding were or should have been brought in the instant case; provided, however, that nothing in this Paragraph affects the enforceability of the covenants not to sue set forth in Section XXII (Covenants Not to Sue by Plaintiffs).

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XXVI. ACCESS TO INFORMATION

     106. Settling Defendants shall provide to the Response Agencies, upon request, copies of all documents and information within their possession or control or that of their contractors or agents relating to activities at OU1 or to the implementation of this Consent Decree, including, but not limited to, sampling, analysis, chain of custody records, manifests, trucking logs, receipts, reports, sample traffic routing, correspondence, or other documents or information related to the Response Work. Settling Defendants shall also make available to the Response Agencies, for purposes of investigation, information gathering, or testimony, their employees, agents, or representatives with knowledge of relevant facts concerning the performance of the Response Work.

     107. Business Confidential and Privileged Documents.

          a. Settling Defendants may assert business confidentiality claims covering part or all of the documents or information submitted to Plaintiffs under this Consent Decree to the extent permitted by and in accordance with Section 104(e)(7) of CERCLA, 42 U.S.C. § 9604(e)(7), and 40 C.F.R. § 2.203(b). Documents or information determined to be confidential by EPA will be afforded the protection specified in 40 C.F.R. Part 2, Subpart B. If no claim of confidentiality accompanies documents or information when they are submitted to EPA and the State, or if EPA has notified Settling Defendants that the documents or information are not confidential under the standards of Section 104(e)(7) of CERCLA, the public may be given access to such documents or information without further notice to Settling Defendants.

          b. The Settling Defendants may assert that certain documents, records and other information are privileged under the attorney-client privilege or any other privilege recognized by federal law. If the Settling Defendants assert such a privilege in lieu of providing

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documents, they shall provide the Plaintiffs with the following: (i) the title of the document, record, or information; (ii) the date of the document, record, or information; (iii) the name and title of the author of the document, record, or information; (iv) the name and title of each addressee and recipient; (v) a description of the contents of the document, record, or information: and (vi) the privilege asserted by Settling Defendants. However, no documents, reports or other information created or generated pursuant to the requirements of the Consent Decree shall be withheld on the grounds that they are privileged.

     108. No claim of confidentiality shall be made with respect to any data generated pursuant to the requirements of this Consent Decree, including, but not limited to, all sampling, analytical, monitoring, hydrogeologic, scientific, chemical, or engineering data, or any other documents or information evidencing conditions at or around the Site.

XXVII. RETENTION OF RECORDS

     109. Until 10 years after the Settling Defendants’ receipt of EPA’s notification of Certification of Completion of the Response Work pursuant to Paragraph 45.b, each Settling Defendant shall preserve and retain all records and documents now in its possession or control or which come into its possession or control that relate in any manner to the performance of the Response Work or liability of any person for response actions conducted and to be conducted at the Site, regardless of any corporate retention policy to the contrary. Until 10 years after the Settling Defendants’ receipt of EPA’s notification of Certification of Completion of the Response Work pursuant to Paragraph 45.b, Settling Defendants shall also instruct their contractors and agents to preserve all documents, records, and information of whatever kind, nature or description relating to the performance of the Response Work. At any time more than 5 years after Certification of Completion of Remedial Action by EPA pursuant to Consent Decree

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Subparagraph 44.b, the Settling Defendants may request Plaintiffs’ assent to terminate the document retention period earlier for specified categories of records and documents. If Plaintiffs assent to any such request, the Plaintiffs assent shall be given in writing.

     110. At the conclusion of this document retention period, Settling Defendants shall notify the United States and the State at least 90 days prior to the destruction of any such records or documents, and, upon request by the United States or the State, Settling Defendants shall deliver any such records or documents to EPA or WDNR. The Settling Defendants may assert that certain documents, records and other information are privileged under the attorney-client privilege or any other privilege recognized by federal law. If the Settling Defendants assert such a privilege, they shall provide the Plaintiffs with the following: (i) the title of the document, record, or information; (ii) the date of the document, record, or information; (iii) the name and title of the author of the document, record, or information; (iv) the name and title of each addressee and recipient; (v) a description of the subject of the document, record, or information; and (vi) the privilege asserted by Settling Defendants. However, no documents, reports or other information created or generated pursuant to the requirements of the Consent Decree shall be withheld on the grounds that they are privileged.

     111. Each Settling Defendant hereby certifies individually that, to the best of its knowledge and belief, after thorough inquiry, it has not altered, mutilated, discarded, destroyed or otherwise disposed of any records, documents or other information relating to its potential liability regarding the Site since notification of potential liability by the United States or the State or the filing of suit against it regarding the Site and that it has fully complied with any and all requests for information pursuant to Section 104(e) and 122(e) of CERCLA, 42 U.S.C. §§ 9604(e) and 9622(e), and Section 3007 of RCRA, 42 U.S.C. § 6927.

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XXVIII. NOTICES AND SUBMISSIONS

     112. Whenever, under the terms of this Consent Decree, written notice is required to be given or a report or other document is required to be sent by one Party to another, it shall be directed to the individuals at the addresses specified below, unless those individuals or their successors give notice of a change to the other Parties in writing. All notices and submissions shall be considered effective upon receipt, unless otherwise provided. Written notice as specified herein shall constitute complete satisfaction of any written notice requirement of the Consent Decree with respect to the United States, the State, and the Settling Defendants, respectively.

As to the United States:

     As to DOJ:

Chief, Environmental Enforcement Section
Environment and Natural Resources Division
U.S. Department of Justice (DJ # 90-11-2-1045/2)

P.O. Box 7611	601 D Street, N.W. — Room 2121
Washington, D.C. 20044-7611	Washington, DC 20004

As to EPA:

Director, Superfund Division
U.S. Environmental Protection Agency
Region 5
77 West Jackson Blvd.
Chicago, IL 60604

As to DOI:

Office of the Solicitor
Division of Parks and Wildlife
U.S. Department of the Interior
1849 C Street, N.W.
Washington, DC 20240

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As to the State:

As to WDOJ:

Cynthia R. Hirsch
Assistant Attorney General
Wisconsin Department of Justice

P.O. Box 7857	17 West Main Street
Madison, WI 53707-7857	Madison, WI 53702

     As to WDNR:

Greg Hill
State Project Coordinator
Wisconsin Department of Natural Resources
P.O. Box 7921 101 S. Webster St.
Madison, WI 53707-7921 Madison, WI 53703

As to the Settling Defendants:

     As to the P. H. Glatfelter Company

Thomas G. Jackson
Assistant General Counsel

P. H. Glatfelter Company
96 South George Street
York, PA 17401-1434

     with a copy to:

David G. Mandelbaum
Ballard Spahr Andrews & Ingersoll, LLP
1735 Market Street, 51st Floor
Philadelphia, PA 19103-7599

     As to WTM I Company:

J.P. Causey Jr.
Vice President & Corporate Secretary/WTM I Company
c/o Chesapeake Corporation
1021 E. Cary Street
Box 2350
Richmond, VA 23218-2350

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     with a copy to:

Nancy K. Peterson
Quarles & Brady LLP
411 East Wisconsin Avenue, Suite 2040
Milwaukee, Wisconsin 53202-4497

XXIX. EFFECTIVE DATE

     113. The effective date of the original version of the Consent Decree shall be April 12, 2004, the date upon which it was entered by the Court. The effective date of the Amended Consent Decree shall be the date upon which the Amended Consent Decree is entered by the Court; provided, however, that the Settling Defendants hereby agree that they shall be bound upon the Date of Lodging of the Amended Consent Decree to comply with obligations of the Settling Defendants specified in this Amended Consent Decree that arise before the date upon which this Amended Consent Decree is entered by the Court. In the event the Plaintiffs withdraw or withhold consent to the Amended Consent Decree before entry, or the Court declines to enter the Amended Consent Decree, then the preceding requirement to comply with requirements of the Amended Consent Decree upon the Date of Lodging of the Amended Consent Decree shall terminate and the parties shall be bound to comply with the original Consent Decree in this case. In the event that the Court does not enter this Amended Consent Decree, nothing in the preceding sentence shall bar any party from applying to the Court for any available relief pursuant to Fed. R. Civ. P. 60.

XXX. RETENTION OF JURISDICTION

     114. This Court retains jurisdiction over both the subject matter of this Consent Decree and the Settling Defendants for the duration of the performance of the terms and provisions of this Consent Decree for the purpose of enabling any of the Parties to apply to the Court at any

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time for such further order, direction, and relief as may be necessary or appropriate for the construction or modification of this Consent Decree, or to effectuate or enforce compliance with its terms, or to resolve disputes in accordance with Section XX (Dispute Resolution) hereof.

XXXI. APPENDICES

     115. The following appendices are attached to and incorporated into this Consent Decree:

     “Appendix A” is the Trustee Council Resolution relating to this Consent Decree.

     “Appendix B” is the Appendix addressing Management of the Disbursement Special Account.

     “Appendix C” is the Appendix addressing Escrow Account Management.

     “Appendix D” is the form of Escrow Agreement (including the Amendments thereto).

     “Appendix E” is the Appendix addressing Special Procedures for Restoration Work.

     “Appendix F” is the July 2003 AOC (including the SOW for Remedial Design).

     “Appendix G” is the map of OU1.

     “Appendix H” is the 2002 ROD.

     “Appendix H1” is the 2008 ROD Amendment.

     “Appendix I” is the Amended Statement of Work for the Remedial Action.

     “Appendix J” is the form of EPA Payment Directive.

XXXII. COMMUNITY RELATIONS

     116. Settling Defendants shall propose to the Response Agencies the Settling Defendants’ participation in the community relations plan to be developed by the Response Agencies. The Response Agencies will determine the appropriate role for the Settling Defendants under the Plan. Settling Defendants shall also cooperate with the Response Agencies

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in providing information regarding the Response Work to the public. As requested by the Response Agencies, Settling Defendants shall participate in the preparation of such information for dissemination to the public and in public meetings which may be held or sponsored by the Response Agencies to explain activities at or relating to OU1.

XXXIII. MODIFICATION

     117. Schedules specified in this Consent Decree for completion of the Response Work may be modified by agreement of the Response Agencies and the Settling Defendants. All such modifications shall be made in writing.

     118. Except as provided in Paragraph 15 (“Modification of the SOW or related Work Plans”), no material modifications shall be made to the SOW without written notification to and written approval of the United States, the State, Settling Defendants, and the Court. Modifications to the SOW that do not materially alter that document may be made by written agreement between the Response Agencies and the Settling Defendants.

     119. Nothing in this Decree shall be deemed to alter the Court’s power to enforce, supervise or approve modifications to this Consent Decree.

XXXIV. LODGING AND OPPORTUNITY FOR PUBLIC COMMENT

     120. This Consent Decree shall be lodged with the Court for a period of not less than thirty (30) days for public notice and comment in accordance with Section 122(d)(2) of CERCLA, 42 U.S.C. § 9622(d)(2), and 28 C.F.R. § 50.7. The United States reserves the right to withdraw or withhold its consent if the comments regarding the Consent Decree disclose facts or considerations which indicate that the Consent Decree is inappropriate, improper, or inadequate. Settling Defendants consent to the entry of this Consent Decree without further notice.

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     121. If for any reason the Court should decline to approve this Consent Decree in the form presented, this agreement is voidable at the sole discretion of any Party and the terms of the agreement may not be used as evidence in any litigation between the Parties.

XXXV. SIGNATORIES/SERVICE

     122. The undersigned representatives of each Settling Defendant, the undersigned representatives of the State, and the Assistant Attorney General for the Environment and Natural Resources Division of the United States Department of Justice each certify that he or she is fully authorized to enter into the terms and conditions of this Consent Decree and to execute and legally bind such Party to this document.

     123. Each Settling Defendant hereby agrees not to oppose entry of this Consent Decree by this Court or to challenge any provision of this Consent Decree unless the United States has notified the Settling Defendants in writing that it no longer supports entry of the Consent Decree.

     124. Each Settling Defendant shall identify, on the attached signature page, the name, address and telephone number of an agent who is authorized to accept service of process by mail on behalf of that Party with respect to all matters arising under or relating to this Consent Decree. Settling Defendants hereby agree to accept service in that manner and to waive the formal service requirements set forth in Rule 4 of the Federal Rules of Civil Procedure and any applicable local rules of this Court, including, but not limited to, service of a summons.

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XXXVI. FINAL JUDGMENT

     125. Upon approval and entry of this Consent Decree by the Court, this Consent Decree shall constitute a final judgment between and among the United States, the State, and the Settling Defendants. The Court finds that there is no just reason for delay and therefore enters this judgment as a final judgment under Fed. R. Civ. P. 54 and 58.

SO ORDERED.

THE COURT’S APPROVAL AND ENTRY OF THIS CONSENT DECREE SHALL BE SIGNIFIED BY ENTRY OF A SEPARATE ORDER IN ACCORDANCE WITH THE COURT’S ELECTRONIC CASE FILING POLICIES AND PROCEDURES MANUAL

United States District Judge

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THE UNDERSIGNED PARTY enters into this Amended Consent Decree in the matter of United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company (E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay Site.

	FOR THE UNITED STATES OF AMERICA
18 June 2008	/s/ Ronald J. Tenpas
Date	RONALD J. TENPAS
	Assistant Attorney General
	Environment and Natural Resources Division
	U.S. Department of Justice
	Washington, D.C. 20530
June 19, 2008	/s/ Randall M. Stone
Date	RANDALL M. STONE, Senior Attorney
	Environmental Enforcement Section
	Environment and Natural Resources Division
	U.S. Department of Justice
	P. O. Box 7611
	Washington, D.C. 20044-7611
	STEVEN M. BISKUPIC
	United States Attorney
	MATTHEW V. RICHMOND
	Assistant United States Attorney
	Eastern District of Wisconsin
	U.S. Courthouse and Federal Building
	Room 530
	517 E. Wisconsin Avenue
	Milwaukee, WI 53202

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THE UNDERSIGNED PARTY enters into this Amended Consent Decree in the matter of United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company (E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay Site.

6/13/08	/s/ Walter W. Kovalich — for
Date	BHARAT MATHUR
	Acting Regional Administrator
	U. S. Environmental Protection Agency
	Region 5
	77 West Jackson Boulevard
	Chicago, IL 60604
June 5, 2008	/s/ Richard Murawski
Date	RICHARD MURAWSKI
	Associate Regional Counsel
	U.S. Environmental Protection Agency
	Region 5
	77 West Jackson Boulevard
	Chicago, IL 60604

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THE UNDERSIGNED PARTY enters into this Amended Consent Decree in the matter of United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company (E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay Site.

	FOR THE STATE OF WISCONSIN
6-12-08	/s/ Mary Ellen Vollbradt — for
Date	MATTHEW J. FRANK
	Secretary
	Wisconsin Department of Natural Resources
	101 South Webster Street
	Madison, WI 53703
6/12/08	/s/ Cynthia R. Hirsch
Date	CYNTHIA R. HIRSCH
	Assistant Attorney General
	Wisconsin Department of Justice
	17 West Main Street
	Madison, WI 53702

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THE UNDERSIGNED PARTY enters into this Amended Consent Decree in the matter of United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company (E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay Site.

	FOR P.H. GLATFELTER COMPANY
	Signature:	/s/ John P. Jacunski
Date	Name (print):	John P Jacunski
	Title:	Sr. Vice President
	Address:	96 South George Street
		Suite 500
		York, Pennsylvania 17401-1434

Agent Authorized to Accept Services on Behalf of Above-signed Party:

Name (print):

Title:

Address:

Ph. Number:

102

THE UNDERSIGNED PARTY enters into this Amended Consent Decree in the matter of United States and the State of Wisconsin v. P.H. Glatfelter Company and WTM I Company (E.D. Wis.), relating to Operable Unit 1 of the Lower Fox River and Green Bay Site.

	FOR WTM I COMPANY
June 4, 2008	Signature:	/s/ J. P. Causey, Jr.
Date	Name (print):	J.P. Causey, Jr.
	Title:	Vice President & Secretary
	Address:	WTM I Company
		c/o Chesapeake Corporation
		1071 E. Cary Street
		Box 2350
		Richmond, VA 23218

Agent Authorized to Accept Services on Behalf of Above-signed Party:

Name (print):	Nancy K. Patterson
Title:	Attorney
Address:	Quarles & Brady LLP
	411 E. Wisconsin Avenue
	Milwaukee, WI 53202
Ph. Number:               414-277-5515

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Consent Decree Appendix A

Trustee Council Resolution relating to this Consent Decree

[See original Consent Decree]

B-1 

Consent Decree Appendix B

Management of the Disbursement Special Account

[See original Consent Decree]

B-1 

Consent Decree Appendix C

Escrow Account Management

     1. Escrow Account Establishment. Pursuant to Consent Decree Paragraph 11, the Settling Defendants established an escrow account trust fund, known as the Fox River OU1 Escrow Account (the “Escrow Account”), with a duly-chartered federally-insured bank (the “Escrow Agent”). The funds in the Escrow Account shall continue to be held in trust for the performance of certain requirements of the Amended Consent Decree, and the United States and the State shall continue to be beneficiaries of the Escrow Account. The Escrow Account may be established and managed as several accounts or sub-accounts to address the different sources and uses of the funds paid into the Escrow Account.

     2. Escrow Agreement Form and Requirements. The final Escrow Agreement (and Amendment No. 1 thereto) was approved by the Plaintiffs to ensure that the escrowed funds will be handled in accordance with the Consent Decree. The Escrow Agreement shall continue to instruct and authorize the Escrow Agent to apply, retain, or use the funds in the Escrow Account (and all interest or other income earned on funds deposited in the Escrow Account) in order to finance response actions taken or to be taken at or in connection with OU1 of the Site, but only in accordance with, and to the extent required by, the governing provisions of the Amended Consent Decree.

     3. Monthly Financial Reports. The escrow agreement shall require that the Escrow Agent prepare and submit to the Response Agencies’ Project Coordinators designated under the Consent Decree statements every month detailing money received and disbursed in the preceding month, and the balance in the Escrow Account on the date of the statement.

     4. Disbursements from the Escrow Account, Generally. The Escrow Agent shall disburse certain funds from the Escrow Account to the United States and the State as payment of sums due under this Amended Consent Decree and shall disburse certain other funds from the Escrow Account to the Settling Defendants for reimbursement of Allowable RD/RA Costs and/or Allowable Restoration Work Costs. In addition, the Settling Defendants may direct the Escrow Agent to pay Allowable RD/RA Costs directly to a contractor or subcontractor responsible for the performance of the Response Work, or to pay Allowable Restoration Work Costs directly to a contractor or subcontractor responsible for the performance of Approved Restoration Work.

     5. Disbursements from the Escrow Account.

     a. Disbursements shall be made from the Escrow Account only for:

     (1) payment of amounts due under Amended Consent Decree Subparagraph 53.b (Subsequent Payments and Disbursements for Natural Resource Restoration);

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     (2) payment or reimbursement of Allowable RD/RA Costs under Amended Consent Decree Paragraph 12 (OU1 Remedial Design) and Amended Consent Decree Paragraph 14 (OU1 Remedial Action);

     (3) payment of Specified Future Response Costs payable to Plaintiffs under Amended Consent Decree Paragraph 54 (Payment of Specified Future Response Costs);

     (4) a payment of any or all unexpended funds remaining in the Escrow Account to the Fox River Site Special Account within the EPA Hazardous Substance Superfund, to be retained and used to conduct or finance response actions at or in connection with the Site, or transferred by EPA to the EPA Hazardous Substance Superfund, in the event EPA and/or WDNR assume performance of all or any portions of the Response Work under Amended Consent Decree Paragraph 90 (Response Work Takeover);

     (5) payment or reimbursement of Allowable Restoration Work Costs for Approved Restoration Work under Amended Consent Decree Paragraph 48;

     (6) a partial refund payment to the Settling Defendants after Certification of Completion of Remedial Action by EPA pursuant to Amended Consent Decree Subparagraph 44.b, if requested by the Settling Defendants and approved by EPA, after a determination by EPA that the partial refund will leave a balance in the account that will be sufficient to fund the completion of the Response Work;

     (7) [INTENTIONALLY DELETED]

     (8) a refund payment of any and all unexpended funds paid pursuant to Subparagraphs 50.c.(3)-(5) of the Amended Consent Decree remaining in the Escrow Account, after a determination by the Plaintiffs that all pending disbursements from the Escrow Account have been made, in the event the Plaintiffs withdraw or withhold consent to the Amended Consent Decree before entry, or the Court declines to enter the Amended Consent Decree;

     (9) a final payment of any and all unexpended funds remaining in the Escrow Account, after Certification of Completion of the Response Work by EPA pursuant to Amended Consent Decree Subparagraph 45.b, either: (i) as a final refund payment to the Settling Defendant, if a final refund payment is requested by the Settling Defendants within 180 days after Certification of Completion of the Response Work; or (ii) as a payment to the Fox River Site Special Account within the EPA Hazardous Substance Superfund, to be retained and used to conduct or finance response actions at or in connection with the Site, or transferred by EPA to the EPA Hazardous Substance Superfund, if a final refund payment is not requested by Settling Defendants within 180 days after Certification of Completion of the Response Work; and

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     (10) payment of fees, taxes, and expenses under Section 5.3 of the Escrow Agreement.

          b. A disbursement from the Escrow Account shall only be made by the Escrow Agent after receipt of a duly executed escrow disbursement certificate in substantially the form set forth in the Escrow Agreement (attached hereto at Consent Decree Appendix D) at Exhibit A (Form of Escrow Disbursement Certificate for Trustee-Sponsored Natural Resource Restoration Efforts), Exhibit B (Form of Escrow Disbursement Certificate for Payment or Reimbursement of Allowable RD/RA Costs), Exhibit C (Form of Escrow Disbursement Certificate for Payment of Specified Future Response Costs), Exhibit D (Form of Escrow Disbursement Certificate for Response Work Takeover), Exhibit E (Form of Escrow Disbursement Certificate for Payment or Reimbursement of Allowable Restoration Costs), Exhibit F (Form of Escrow Disbursement Certificate for Refund Payment to Settling Defendants), or Exhibit G (Form of Escrow Disbursement Certificate for Final Payment to Fox River Site Special Account).

          c. Copies of any escrow disbursement certificate submitted to the Escrow Agent shall be submitted to all other Parties to this Amended Consent Decree in accordance with Amended Consent Decree Section XXVIII (Notices and Submissions), and shall be submitted to the other Parties in the same manner and on the same day that the escrow disbursement certificate is submitted to the Escrow Agent. No disbursement from the Escrow Account shall be made in response to an escrow disbursement certificate unless: (i) at least 10 business day have elapsed since the Escrow Agent received the escrow disbursement certificate; and (ii) the Escrow Agent has not received written notice within those 10 business days that a Party to this Amended Consent Decree objects to the requested disbursement and has invoked the dispute resolution procedures under Amended Consent Decree Section XX (Dispute Resolution) to resolve the objection.

          d. In the event that the Existing Funds (as defined in Amendment No. 2 to the Escrow Agreement at Paragraph 1, which creates modified Subsection 1.e of the Escrow Agreement) and the Glatfelter Sub-account are both expended prior to Glatfelter’s $6,500,000 payment, due no later than January 15, 2008 pursuant to Amended Consent Decree Subparagraph 50.c.(4), disbursements shall be made solely from the WTM Sub-account until funds are deposited into the Glatfelter Sub-account at which time disbursements shall be made solely from the Glatfelter Sub-account until the balances in the WTM and Glatfelter Sub-accounts are equal. Thereafter, all disbursements shall be made in accordance with Subsection 4.d. of the Escrow Agreement (as set forth at Paragraph 2 of Amendment No. 2 to Escrow Agreement).

          e. Refund payments under Subparagraphs 5.a.(6), 5.a.(8) and 5.a.(9)(i) above shall be processed according to the following principles (with terms as defined in the Escrow Agreement, as amended): (1) amounts refunded from the Existing Funds shall be distributed 50/50 to Glatfelter and WTM, and (2) amounts from the Sub-accounts shall be wholly refunded to the respective contributors (WTM or Glatfelter) to each Sub-account, unless EPA determines that a balance must remain in the Sub-accounts in which case an amount equal to one-half the required balance shall be left in each Sub-account, and any overage in the Glatfelter Sub-account

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shall be refunded exclusively to Glatfelter, and any overage in the WTM Sub-account shall be refunded exclusively to WTM.

     6. Disbursements for Natural Resource Restoration. Beyond the $500,000 initial payment for Trustee-sponsored natural resource damage restoration efforts required by Consent Decree Subparagraph 53.a, an additional $2,500,000 deposited in the Escrow Account shall be earmarked and dedicated for natural resource restoration relating to the Site, as the remainder of the NRD Commitment. That $2,500,000 shall be disbursed from the Escrow Account as set forth in the following Subparagraphs: (i) for payment or reimbursement of Allowable Restoration Work Costs incurred for Approved Restoration Work to be performed by the Settling Defendants under Consent Decree Paragraph 48; and/or (ii) for payment to a Site-specific sub-account within the DOI NRDAR Fund, to finance Trustee-sponsored natural resource damage restoration efforts under Consent Decree Paragraph 49.

          a. Disbursements shall be made from the Escrow Account in accordance with Consent Decree Paragraph 11 and Consent Decree Paragraph 48 for payment or reimbursement of Allowable Restoration Work Costs incurred for Approved Restoration Work to be performed by the Settling Defendants.

          b. By no later than December 1, 2004, the following additional amount shall be disbursed from the Escrow Account to a Site-specific sub-account within the NRDAR Fund: $1,250,000 less the total amount of all disbursements from the Escrow Account for Allowable Restoration Work Costs through September 30, 2004.

          c. By no later than December 1, 2005, the following additional amount shall be disbursed from the Escrow Account to a Site-specific sub-account within the NRDAR Fund: $1,250,000 less the total amount of all disbursements from the Escrow Account for Allowable Restoration Work Costs between October 1, 2004 and September 30, 2005.

     [Note: The requirements of this Paragraph 6 have been satisfied.]

     7. Disbursements for Specified Future Response Costs. Except for costs under Amended Consent Decree Section XV (Emergency Response) that are payable under Amended Consent Decree Subparagraph 54.a.(2), all Specified Future Response Costs incurred and billed by the United States and/or the State before Certification of Completion of Remedial Action by EPA pursuant to Amended Consent Decree Subparagraph 44.b shall be reimbursed from the Escrow Account, to the extent that such costs are not inconsistent with the National Contingency Plan. The procedures to be used for billing and reimbursing such Specified Future Response Costs are specified by the following Subparagraphs.

          a. EPA Reimbursement. On a periodic basis, the United States will send Settling Defendants a cost summary that includes an EPA cost summary, showing direct and indirect costs incurred by EPA and its contractors, and a DOJ cost summary, showing costs incurred by DOJ and its contractors, if any. At any time after the bill has been sent to the Settling Defendants, the United States may submit a duly executed escrow disbursement certificate requesting that the Escrow Agent disburse the billed amount to EPA, subject to the

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dispute procedures established by pursuant to Amended Consent Decree Paragraph 68 and Section XX (Dispute Resolution) of the Amended Consent Decree.

          b. State Reimbursement. On a periodic basis, the State will send Settling Defendants a cost summary that includes a WDNR cost summary, showing direct and indirect costs incurred by WDNR and its contractors, and a WDOJ cost summary, showing costs incurred by WDOJ and its contractors, if any. At any time after the bill has been sent to the Settling Defendants, the State may submit a duly executed escrow disbursement certificate requesting that the Escrow Agent disburse the billed amount to the State, subject to the dispute procedures established by Amended Consent Decree Paragraph 68 and Section XX (Dispute Resolution) of the Amended Consent Decree.

     8. Disbursements for the Remedial Design.

          a. Settling Defendant WTM I Company shall be entitled to seek disbursements from the Escrow Account for payment or reimbursement up to $2 million in response costs incurred in performing its obligations under the July 2003 AOC and Consent Decree Paragraph 12, as Allowable RD/RA Costs. If the costs of performing the work required under the June 2003 AOC and Consent Decree Paragraph 12 exceed $2 million, then Settling Defendant WTM I Company shall continue to perform and shall complete such work at its own expense, without additional reimbursement from the Escrow Account. [Note: The requirements of this Subparagraph have been satisfied.]

          b. The Plaintiffs shall be entitled to seek disbursements from the Escrow Account for payment of all response costs incurred by Plaintiffs in overseeing the components of the Response Work performed under the July 2003 AOC and Amended Consent Decree Paragraph 12, as Specified Future Response Costs.

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Consent Decree Appendix D

Escrow Agreement for the Fox River OU1 Escrow Account:

D1 — Escrow Agreement

D2 — Amendment No. 1 to Escrow Agreement

D3 — Amendment No. 2 to Escrow Agreement

D-1

Appendix D1

ESCROW AGREEMENT
For the Fox River OUI Escrow Account

D1-1

Appendix D2

AMENDMENT NO. 1 TO ESCROW AGREEMENT
For the Fox River OUI Escrow Account

D2-1

Appendix D3

AMENDMENT NO. 2 TO ESCROW AGREEMENT

For the Fox River OUI Escrow Account

     THIS AMENDMENT NO. 2 TO ESCROW AGREEMENT (this “Amendment”) for the Fox River OU1 Escrow Account is effective as of ___, 2008 (the “Amendment No. 2 Effective Date”) by and among P. H. GLATFELTER COMPANY (“Glatfelter”), WTM I COMPANY (“WTM”), GW PARTNERS, LLC (“the LLC”), and DEUTSCHE BANK TRUST COMPANY AMERICAS (the “Escrow Agent”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Escrow Agreement (as defined below).

RECITALS

     A. The United States and the State have filed an action, captioned United States and the State of Wisconsin v. P. H. Glatfelter Company and WTM I Company (E.D. Wis.) (the “Litigation”), pursuant to Sections 106 and 107 of CERCLA;

     B. The United States, the State, Glatfelter, and WTM negotiated a Consent Decree in the Litigation memorializing a settlement of claims on specified terms, which Consent Decree was approved and entered in a Decision and Order of the United States District Court for the Eastern District of Wisconsin (the “Court”) dated April 12, 2004 (the “Consent Decree”);

     C. Pursuant to the terms of the Consent Decree, Glatfelter, WTM, the LLC, and the Escrow Agent entered into an Escrow Agreement effective as of March 29, 2004 (the “Escrow Agreement”), for the benefit of the United States (on behalf of the EPA and the DOI) and the State (on behalf of the WDNR).

     D. The United States, the State, Glatfelter, and WTM further negotiated and executed an Agreed Supplement to Consent Decree that was filed with the Court in a corrected form on September 13, 2007 (the “Supplement”) providing for additional funds to be made available to fund response work with respect to OU1.

     E. The United States, the State, Glatfelter, WTM, and Menasha Corporation further negotiated and executed a Second Agreed Supplement to Consent Decree that was filed with the Court on November 13, 2007 (the “Second Supplement”) providing for additional funds to be made available to fund response work with respect to OU1.

     F. The United States, the State, Glatfelter, and WTM further negotiated an Amended Consent Decree, which is being executed as of the same date as this Amendment No. 2 by Glatfelter and WTM and will be lodged with the Court for entry.

     G. In furtherance of the terms of the Amended Consent Decree, the parties desire to amend the Escrow Agreement on the terms and conditions set forth herein.

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

     1. Section 1 — Funding of Escrow Account. The unnumbered paragraph of Section 1 of the Escrow Agreement shall be designated as Section 1.a, and the following subsections shall be added to Section 1 of the Escrow Agreement to read as follows (subsection 1.e. modifies that subsection as originally added to Section 1 of the Escrow Agreement by Amendment No. 1 to the Escrow Agreement):

     e. All funds maintained in the Escrow Account, not including the Sub-accounts, but including without limitation all interest and income earned on the Account funds (but not the Sub-accounts funds), shall be segregated from the WTM Sub-account and the Glatfelter Sub-account, in one or more accounts or sub-accounts of the Escrow Account, and the aggregate amount of all such funds shall be referred to herein as the “Existing Funds.” All amounts paid by Menasha Corporation pursuant to the Second Supplement, and all interest and income earned on such funds, shall be placed with and treated thereafter as Existing Funds.

     f. In addition to the amounts required to be paid into the Escrow Account under Subsection 1.a.-d. above, WTM shall pay a total of $9,500,000 into the WTM Sub-account of the Escrow Account in accordance with the schedule specified by Paragraph 50.c.(3) of the Amended Consent Decree. The Escrow Agent shall deposit these funds into the WTM Sub-account and all funds deposited pursuant to this Subsection 1.f shall be deposited into the WTM Sub-account and segregated from other funds paid into the Escrow Account. All interest and income earned on the funds deposited into the WTM Sub-account shall be deemed part of the WTM Sub-account.

     g. In addition to the amounts required to be paid into the Escrow Account under Subsection 1.a.-d. above, Glatfelter shall pay a total of $9,500,000 into the Glatfelter Sub-account of the Escrow Account in accordance with the schedule specified by Paragraph 50.c.(4) of the Amended Consent Decree. As specified in that Subparagraph, $3,000,000 shall be paid initially into the Glatfelter Sub-account and an additional $6,500,000 of that payment shall be secured through an irrevocable letter of credit (the “2009 LC”) on the terms set forth in Subparagraph 50.c.(4) of the Amended Consent Decree. At least five (5) business days before finalizing the 2009 LC, Glatfelter shall afford the United States, the State and WTM an opportunity to review the proposed letter of credit to assess whether it conforms to the requirements of Subparagraph 50.c.(4) of the Amended Consent Decree The Escrow Agent shall deposit the initial $3,000,000 and the subsequent $6,500,000 (whether drawn under the 2009 LC or paid by Glatfelter in lieu of drawing on the 2009 LC) into the Glatfelter Sub-account and segregated from other funds paid into the Escrow Account. All interest

D3-2

and income earned on the funds deposited into the Glatfelter Sub-account shall be deemed part of the Glatfelter Subaccount.

     h. Pursuant to Subparagraph 50.c.(4) of the Amended Consent Decree, Glatfelter has the option of depositing into the Escrow Subaccount immediately available funds in the amount of $6,500,000 in substitution for the undrawn 2009 LC before January 15, 2009. In the event that Glatfelter makes such deposit of funds, said funds shall be deposited into the Glatfelter Sub-account and segregated from other funds paid into the Escrow Account. All fees, taxes and expenses (including without limitation expenses, fees and attorneys’ fees of the Escrow Agent) associated with the 2009 LC, or its cancellation, shall be paid by Glatfelter and not from the Escrow Account, or any of its Sub-accounts.

     i. If Glatfelter and WTM make any additional payments to the Escrow Account as provided for in Subparagraph 50.c.(5) of the Amended Consent Decree, each company’s payment shall be deposited into that company’s respective Sub-account, together with all interest and income earned on the fund so deposited.

     2. Section 4 — Order of Disbursement of Funds. Subsection 4.d of the Escrow Agreement shall be modified and Subsection 4.e. shall be added to read as follows:

     d. The Escrow Agent shall disburse the funds held in the Escrow Account to make payments in accordance with Section 4.a of the Escrow Agreement as follows: (1) first from the Existing Funds until the entire amount of the Existing Funds, including all interest and income earned on the Existing Funds, have been fully expended, and then (2) from the WTM Sub-account and the Glatfelter Sub-account in equal amounts, on a 50/50 basis.

     e. In the event that the Existing Funds and Glatfelter Subaccount are both expended (i.e., have a balance of $0) prior to Glatfelter’s $6,500,000 payment, due no later than January 15, 2009 pursuant to Amended Consent Decree Subparagraph 50.c.(4), disbursements shall be made solely from the WTM Sub-account until funds are deposited into the Glatfelter Sub-account at which time disbursements shall be made solely from the Glatfelter Sub-account until the balances in the WTM and Glatfelter Sub-accounts are equal. Thereafter, all disbursements shall be made in accordance with Subsection 4.d. of the Escrow Agreement (as set forth in Paragraph 2.d. of this Amendment No. 2).

     3. Continuance of Escrow Agreement. Except as specifically amended by this Amendment No. 2, the Escrow Agreement, as amended by Amendment No. 1, shall remain in full force and effect.

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     4. Binding Effect. This Amendment No. 2 shall be binding upon Glatfelter, WTM, the LLC, the Escrow Agent, and their respective successors and assigns.

     5. Severability. If any section of this Amendment No. 2, or portion thereof, shall be adjudged illegal, invalid, or unenforceable, such illegality, invalidity, or unenforceability shall not affect the legality, validity, or enforceability of this Amendment No. 2, as a whole, or of any other section or portion thereof not so adjudged.

     6. Governing Law. This Amendment No. 2 shall in all respects be governed by, and construed in accordance with, the laws of the State of Wisconsin applicable to agreements made and to be performed entirely within such State, including without limitation all matters of construction, validity, and performance; provided, however, that the rights and duties of the Escrow Agent shall be governed under New York law..

     7. Interpretation. As used in this Amendment No.2, words in the singular include the plural and words in the plural include the singular; the masculine and neuter genders shall be deemed to include the masculine, feminine and neuter. The section headings contained in this Amendment No. 2 are for reference purposes only and shall not affect in any way the meaning or interpretation of this Amendment No. 2.

     8. Counterparts. This Amendment No. 2 may be executed in two or more counterparts, each of which shall be deemed to be an original but all of which together shall constitute one and the same instrument. Each of the parties to this Amendment No. 2 agrees that a signature affixed to a counterpart of this Amendment No. 2 and delivered by facsimile or electronic transmission by any person is intended to be its, his, or her signature and shall be valid, binding and enforceable against such person.

* * * * *

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     IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 2 as of the Amendment No. 2 Effective Date.

P. H. GLATFELTER COMPANY

By:

Its:

WTM I COMPANY

By:

Its:

GW PARTNERS, LLC

By:

Its:

By:

Its:

DEUTSCHE BANK TRUST COMPANY AMERICAS as Escrow Agent

By:

Its:

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The forgoing Amendment No. 2 is hereby approved by the Beneficiaries as of the Amendment No. 2 Effective Date.

FOR THE UNITED STATES OF AMERICA

RONALD J. TENPAS

Assistant Attorney General

Environmental and Natural Resources Division

/s/ Randall M. Stone

RANDAL M. STONE

Senior Attorney

Environmental Enforcement Section

U.S. Department of Justice

/s/ Richard Murawski

RICHARD MURAWSKI

Associate Regional Counsel

U.S. Environmental Protection Agency

Region 5

FOR THE STATE OF WISCONSIN

BRUCE BAKER

Deputy Administrator, Division of Water

Wisconsin Department of Natural Resources

/s/ Cynthia Hirsch

CYNTHIA HIRSCH

Assistant Attorney General

Wisconsin Department of Justice

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Consent Decree Appendix E

Special Procedures for Restoration Work

[Intentionally Omitted]

E-1

Consent Decree Appendix F

Administrative Order on Consent between WTM I Company, EPA, and WDNR, captioned
In the matter of the Lower Fox River and the Green Bay Site, Docket No. V-W-’03-C-745
(including the Statement of Work for Remedial Design)

[Intentionally Omitted]

F-1

Consent Decree Appendix G

Map of Operable Unit 1

[Intentionally Omitted]

G-1

Consent Decree Appendix H

Record of Decision for Operable Units 1 and 2

[Intentionally Omitted]

Consent Decree Appendix H1

Amended Record of Decision for Operable Unit 1

H1-1

Record of Decision Amendment

Operable Unit 1

Lower Fox River and Green Bay Superfund Site

June 2008

TABLE OF CONTENTS

Abbreviations and Acronyms		4
I.	Introduction	6
II.	Site History	8
III.	Site Location and Description	8
IV.	Site Characteristics	10
V.	Site Risks	10
VI.	Agency Evaluations and Decisions	11
	A. Site Evaluations and Original Remedy Selection Decisions	11
	B. Remedial Action Objectives	11
	C. New Information Gathered During 2003-2004 and 2006-2007 Sampling and 2004-2007 Remedial Activities and Its Bearing on the 2002 ROD	12
VII.	Procedure for Changing the Remedy	17
VIII.	Community Relations	18
IX.	Development of the Remedial Action Alternatives	18
X.	Evaluation of Alternatives	20
	A. Evaluation Criteria	20
	B. Application of the Evaluation Criteria to Amended Remedy and the 2002 ROD Remedy	21
XI.	Description of the Amended Remedy	27
	A. The Primary Remedial Approach and Alternate Remedial Approaches	31
	B. The Relationship Between the Remedial Action Level (RAL) and the Surface-Weighted Average Concentration (SWAC) Goal	36
	C. Other Features of the Amended Remedy	38
	D. Long Term Monitoring, Cap Maintenance, and Institutional Controls	39
XII.	Comparison of the Amended Remedy and the 2002 ROD Remedy	42
XIII.	Statutory Findings	45
XIV.	Public Participation and Documentation of Significant Changes from Proposed Plan	48
XVI.	New Information Obtained During the Public Comment Period	48
Signatures		48

FIGURES

1.	Lower Fox River PCB-Contaminated Sediment Deposits and Operable Units	9
2.	Amended Remedy, Mosaic of Remedial Action, Operable Unit 1	29
3.	Amended Remedy, Mosaic of Remedial Action, Post-2007 Project Work, Operable Unit 1	30

TABLES

1.	Operable Units and Previously Selected Remedies	10
2.	Comparison of PCB Mass Within 1.0 ppm Prism	13
3.	Estimated Current PCB SWAC and Projected SWAC results for All-Dredging Remedy and Amended Remedy	21
4.	Comparative Costs of the 2002 ROD Remedy and Amended Remedy	25
5.	Summary of Design Features for Capping and Sand Covers	36

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6.	Summary of Changes to 2002 ROD	43
7.	Comparison of Remedy Volumes, Mass Removal and Remediation Areas for OU 1	44
8.	Fox River ARARS	46

APPENDICES

Appendix A – Responsiveness Summary
Appendix B – Administrative Record Index
Appendix C – SWAC Estimating Procedure

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Abbreviations and acronyms used in this document

Agencies	Wisconsin Department of Natural Resources and United States Environmental Protection Agency
Amended	Remedy selected in Record of Decision Amendment,
Remedy	Operable Unit 1, Lower Fox River and Green Bay Superfund Site
ARARs	Applicable or Relevant and Appropriate Requirements
CERCLA	Comprehensive Environmental Response, Compensation, and Liability Act
cy	cubic yards
footprint	Areas that encompass the 1 ppm PCB Remedial Action Level
kg	Kilograms
MNR	Monitored Natural Recovery
NCP	National Oil and Hazardous Substances Pollution Contingency Plan
O&M	operation and maintenance
OU	Operable Unit
OU 1	Little Lake Butte des Morts reach
OU 2	Appleton to Little Rapids reach
OU 3	Little Rapids to De Pere reach
OU 4	De Pere to Green Bay reach
OU 5	Green Bay
PCB	polychlorinated biphenyl
ppm	parts per million
PRPs	Potentially Responsible Parties under CERCLA
RAL	Remedial Action Level
RAO	Remedial Action Objective
RIFS	Remedial Investigation/Feasibility Study
ROD	Record of Decision
RS	Responsiveness Summary
Site	Lower Fox River and Green Bay Site
Design	OU1 Design Supplement, Lower Fox River Operable Unit 1,
Supplement	November 2007
SWAC	Surface Weighted Average Concentration
TSCA	Toxic Substances Control Act
EPA	United States Environmental Protection Agency
WDNR	Wisconsin Department of Natural Resources
2002 ROD	Record of Decision, Operable Units 1 and 2, Lower Fox River and Green Bay Site, December 2002
2003 ROD	Record of Decision, Operable Units 3, 4, and 5, Lower Fox River and Green Bay Site, June 2003

4

INTENTIONALLY LEFT BLANK

5

Record of Decision Amendment, Operable Unit 1
Outagamie and Winnebago Counties, Wisconsin

I. Introduction

Reasons for a Change in Remedy

This Record of Decision Amendment (ROD Amendment) for the Lower Fox River and Green Bay Site (Site) selects and explains an Amended Remedy that makes changes to parts of the remedy described in the Record of Decision for Operable Unit 1 (OU 1) of the Site, dated December 20, 2002 (2002 ROD). The ROD Amendment for Operable Units 2, 3, 4, and 5, dated June 26, 2007 (2007 ROD Amendment), is not affected by this amendment. This ROD Amendment is being issued by the United States Environmental Protection Agency (EPA) and the Wisconsin Department of Natural Resources (WDNR) under the authority of the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), as amended, 42 U.S.C. §§ 9601-9675.

As explained below, the Amended Remedy is being adopted in response to new information that has been collected and analyzed since the 2002 ROD was issued. The 2002 ROD selected dredging and a contingency remedy (which allowed capping). This new information was obtained through experience with full-scale remediation activities in OU 1, and during intensive data collection and evaluation efforts performed as part of the remedial design for OU 1. For example, a wealth of new sediment data was collected and analyzed during 2003-2004 and 2006-2007 sediment collection activities in OU 1, including more than 5949 sediment samples at 996 locations, with 129 locations having no recoverable sediments. This new information can be found in the Administrative Record.¹

Most of the new information for OU 1 is compiled and analyzed in the “OU1 Design Supplement Lower Fox River Operable Unit 1,” dated November 16, 2007 (Design Supplement), approved by EPA and WDNR on November 20, 2007. The Design Supplement was developed by two Potentially Responsible Parties (PRPs), P.H. Glatfelter Company and WTMI Company, as part of the remedial design for OU 1. In addition to the Design Supplement, the PRPs submitted a document entitled “Concept Paper, Lower Fox River Operable Unit 1,” dated November 19, 2007 (Concept Paper) which summarized and explained key aspects of the proposed design changes. The remedial design and remedial actions required under the 2002 ROD have been funded and implemented under a settlement agreement between the PRPs and EPA and WDNR. EPA and WDNR are overseeing all aspects of design evaluations prepared by the PRPs, as well as remedial actions required by the 2002 ROD.

¹ The Administrative Record contains detailed information EPA considered in selection of this Amended Remedy, and is available at the DNR Northeast Region office, 2984 Shawano Ave., Green Bay, Wis.; DNR Bureau of Watershed Management, 3rd Floor, 101 S. Webster St., Madison, Wis.; and the EPA Records Center, 7th floor, 77 W. Jackson Blvd., Chicago, III.

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The new data and analyses presented in the Design Supplement and the Concept Paper showed that:

1.	Polychlorinated biphenyls (PCBs) are more heavily concentrated in discrete areas in OU 1; and
2.	The total PCB mass in the 1.0 ppm prism2 is less than predicted in the ROD, amounting to 2/3 of the 2002 ROD estimate; and
3.	PCBs are present at low concentrations (i.e., slightly above the PCB Remedial Action Level (RAL) of 1.0 ppm) in areas containing large volumes and relatively thin deposits of contaminated sediment.

Additionally, operational experience shows that:

1.	A specified dredge-line can only be attained if a dredging contractor is provided with an overcut allowance. Based on dredging experience in OU 1, an average 4-inch overcut is necessary to attain a dredge cut line to a degree of accuracy that attains remediation results that are acceptable to the Agencies. This results in additional dredging volume. This additional volume of material was not accounted for in the 2002 ROD and thus the total dredging cost was underestimated.
2.	When the 1.0 ppm RAL cutline (elevation) is achieved, experience in OU 1 has demonstrated that all sediment containing more than 1.0 ppm PCBs can often be removed by dredging. However, generated dredge residuals sometimes remain above 1.0 ppm PCBs. Thus, a sand cover over selected areas having dredge residuals would be required in order to meet the Surface Weighted Average Concentration (SWAC) goal specified in the 2002 ROD. Sand cover costs were also not accounted for in the 2002 ROD estimate.
3	The cost of implementing the all-dredging remedy set forth in the 2002 ROD would be more than twice the cost estimated in the 2002 ROD. Based on additional data and operational experience discussed above, the current estimate for the 2002 ROD Remedy is $144 million, an increase of $78 million compared to the $66 million estimated by the 2002 ROD.
4.	Dredging, capping and sand covering options are all implementable and environmentally protective.

Based upon this newly–obtained information, WDNR and EPA have determined that it is appropriate to modify the 2002 ROD remedy by selecting the Amended Remedy described in this ROD Amendment. WDNR and EPA are jointly signing this ROD

² The 1 ppm PCB dredge prism is the area and volume of sediments that includes all contaminated sediments that have PCB concentrations 1 ppm or greater.

7

Amendment. This Amended Remedy will be comparably protective or more protective, be completed faster, reduce risks sooner, and be more cost effective than the 2002 ROD Remedy.

II. Site History

For many years, a large number of paper production facilities have been and continue to be concentrated along the Lower Fox River. Some of the facilities manufactured a particular type of carbonless copy paper containing PCBs. Some of the other facilities reprocessed PCB-containing waste paper and used it as feedstock for the production of other paper products. In both of these processes, PCBs were released from the paper production facilities to the Fox River directly, or after passing through municipal wastewater treatment plants. PCBs were then transported within the river system as PCBs have a tendency to sink and adhere to sediments in the river bottom. As a result, PCB contaminated sediments are found in 39 mile stretch of the Lower Fox River and Green Bay.

Additional details on Site history appear in the 2002 ROD.

III. Site Location and Description

The Lower Fox River and Green Bay Site (“the Site”) includes approximately 39 miles of the Lower Fox River (referred to herein as “the River”) as well as the Bay of Green Bay (referred to herein as “the Bay”) – see Figure 1 below. The River portion of the Site extends from the outlet of Lake Winnebago and continues downstream to the mouth of the River at Green Bay, Wisconsin. The Bay portion of the Site includes all of Green Bay, from the City of Green Bay to the point where Green Bay enters Lake Michigan.

EPA and WDNR have organized the Site into five Operable Units (OUs) and those OUs are addressed by two RODs and the 2007 ROD Amendment. These OUs, divided on the basis of similar features, characteristics and dam locations, are described in Table 1 and shown in Figure 1 below.

8

Figure 1. Lower Fox River PCB-Contaminated Sediment Deposits and Operable Units

9

TABLE 1. Operable Units and Previously Selected Remedies

ROD	Operable Unit		Location	Remedy
2002 ROD		1	Little Lake Butte des Morts	Dredging and disposal
		2	Appleton to Little Rapids	Monitored Natural Recovery
2007 ROD Amendment	3 (and OU 2 Deposit DD)		Little Rapids to De Pere	Dredging and disposal, Capping and Sand Covers
		4	De Pere to Green Bay	Dredging and disposal, Capping and Sand
				Covers
2007 ROD Amendment and 2003 ROD		5	Green Bay	Monitored Natural Recovery

This ROD Amendment addresses OU 1. With the exception of the remedial activities at Deposit DD, the remedy for OU 2 is unchanged from the 2002 ROD.

IV. Site Characteristics

Section 6 of the 2002 ROD provides a complete description of the characteristics of the Site. Additional post-ROD information regarding Site characteristics is in the Design Supplement, and is summarized in the Introduction above (new information).

V. Site Risks

Section 8 of the 2002 ROD provides a complete description of the risks to human health and the environment posed by the PCB-contaminated sediments at the Site. However, general conclusions from the Risk Assessments at the site are:

• The primary contaminant of concern is PCBs.

• Human health and ecological receptors are at risk from PCB bioaccumulation.

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• Fish consumption is the exposure pathway presenting the greatest risk for human health and ecological receptors.

VI. Agency Evaluations and Decisions

A. Site Evaluations and Remedy Selection Decisions

The Agencies have conducted extensive evaluations, particularly beginning in 1989 with the Green Bay Mass Balance Study, as well as demonstration projects in two discrete areas of the river (known as Deposit N/O and Sediment Management Unit 56/57) from 1998 – 2000. Details of these projects are discussed in the 2002 and 2003 RODs.

WDNR released the draft Remedial Investigation/Feasibility Study (RIFS) for public review and comment in February 1999. The early release in the planning process of the draft RIFS for public comment allowed the Agencies to better evaluate public acceptance of cleanup alternatives. Comments were received from governmental agencies, the public, environmental groups, and private-sector corporations. These comments were used to revise and refine the scope of work that led to the finalization of the RIFS and Proposed Plan released for public comment in October 2001. Comments received from the PRPs, the public, and independent peer review committees were incorporated into the final RIFS. In December 2002, EPA and WDNR signed the ROD for OU 1 and OU 2. The 2002 ROD called for active remediation in OU 1 (i.e., dredging, with a capping contingency remedy) and “Monitored Natural Recovery” (MNR) in most of OU 2. In June 2003, a ROD was signed for OU 3, OU 4 and OU 5. The 2003 ROD called for active remediation in OU 2 (deposit DD), OU 3, OU 4 and MNR for OU 5. In 2006, upon completion of collecting additional sediment data and based upon additional analyses, the Agencies issued a Proposed Plan to modify the 2003 ROD for OUs 2 (deposit DD), OU 3, OU 4 and OU 5 (near the mouth of the river). Comments received from the public were incorporated into the 2007 ROD Amendment, which modified the original decision for OU 3, 4 and 5 from all-dredging to a combination of dredging, capping and sand covers.

B. Remedial Action Objectives

The 2002 and 2003 RODs adopted the same Site-wide Remedial Action Objectives (RAOs). Those RAOs are unchanged by this ROD Amendment. RAOs address protection of human health and the environment. No numeric cleanup standards have been promulgated by the federal government or the State of Wisconsin for PCB-contaminated sediment. Therefore, site-specific RAOs to protect human health and the environment were developed based on available information and standards, such as “Applicable or Relevant and Appropriate Requirements” (ARARs), guidelines that are referred to as factors “to be considered,” and risk-based PCB chemical concentration levels established using the human and ecological risk assessments performed at the Site. As discussed in detail in Section 9 of the 2002 ROD, the following five RAOs have been established for the Lower Fox River and Green Bay Site.

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• RAO 1: Achieve, to the extent practicable, surface water quality criteria throughout the Lower Fox River and Green Bay. This RAO is intended to reduce PCB concentrations in surface water as quickly as possible. The current water quality criteria for PCBs are 0.003 nanograms per liter (ng/L) for the protection of human health, and 0.012 ng/L for the protection of wild and domestic animals. Water quality criteria incorporate all routes of exposure assuming the maximum amount is ingested daily over a person’s (or animals) lifetime.

• RAO 2: Protect humans who consume fish from exposure to Contaminants of Concern (COCs) that exceed protective levels. This RAO is intended to protect human health by targeting removal of fish consumption advisories as quickly as possible. The WDNR and EPA defined the expectation for the protection of human health as recreational and high intake fish consumers being able to safely eat unlimited amounts of fish within 10 years to 30 years, respectively.

• RAO 3: Protect ecological receptors from exposure to COCs above protective levels. RAO 3 is intended to protect ecological receptors such as invertebrates, birds, fish, and mammals. WDNR and EPA defined the ecological expectation of achieving safe ecological thresholds for fish-eating birds and mammals within 30 years following remedy completion. Although the Feasibility Study did not identify a specific time frame for evaluating ecological protection, the 30-year figure was used as a measurement tool.

• RAO 4: Reduce transport of PCBs from the Lower Fox River into Green Bay and Lake Michigan. The objective of this RAO is to reduce the transport of PCBs from the River into the Bay and Lake Michigan as quickly as possible. The WDNR and EPA defined the transport expectation as a reduction in loading to the Bay and Lake Michigan to levels comparable to the loading from other Lake Michigan tributaries. This RAO applies to each OU encompassing part of the River (sometimes referred to as River “reaches”).

• RAO 5: Minimize the downstream movement of PCBs during implementation of the remedy. This objective would minimize as much as feasible the release of contaminants during remedial activities such as dredging, capping or placing sand covers.

C. New Information Gathered During 2003-2004 and 2006-2007 Sampling and 2004-2007 Remedial Activities and Its Bearing on the 2002 ROD

During sampling and analysis in 2003-2004 and 2006-2007, new PCB data from more than 5,900 sediment samples at 996 core locations was collected and analyzed in OU 1.³ The results of that sampling are presented in the Design Supplement, and several significant findings based on that sampling data are summarized above in

³ From page 10 of the Design Supplement.

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Section I. Four of those findings are discussed in greater detail below, namely: (1) PCBs are more heavily concentrated in discrete areas in OU 1; (2) the total PCB mass in the prism that includes all contaminants above 1.0 ppm is less than predicted in the ROD, amounting to 2/3 of the 2002 ROD estimate; (3) it is now projected that the SWAC goals established by the 2002 ROD would not be met for a dredge only remedy even if the entire targeted volume of contaminated sediment were dredged; and (4) PCB concentrations in areas containing large volumes of contaminated sediment are low, with many areas only marginally above the Remedial Action Level (RAL) of 1.0 ppm.

Additionally, experience in dredging approximately 335,000 cy of PCB contaminated sediments and a cap placement test in OU 1 in 2007 demonstrated: (1) the need to “over-dredge” (discussed below); (2) some areas would still have elevated PCB concentrations even after dredging attempted to remove all contaminated sediments above the 1 ppm RAL (even after overdredging); and (3) both dredging and capping are implementable in OU 1.

          1. PCBs are more heavily concentrated in discrete areas

As shown in Table 2 below, PCBs were determined to be more concentrated within discrete areas than was known prior to the 2002 ROD. For example, based on more recent data (i.e., 2003-2004 and 2006–2007 sampling and analysis), Sub-areas A, E and POG (shaded in Table 2 below) had 93.6% of the total PCB mass compared to 63.5% of the total mass based on the RIFS (1989 — 1999) data. Based on this information, recovery of a greater percentage of PCBs with targeted removal of the most highly contaminated sediments is expected.

Table 2. Comparison of OU 1 PCB Mass Estimates Within 1.0 ppm Prism

	1989 – 1999 RIFS1					2003 – 2007 Post-RIFS2
Sub-area	kg		% of total			Kg		% of total
A		237		16.6			218.3		19.1
B		409		28.5			0		0
C		35		2.4			33.5		2.9
D		78		5.4			37.6		3.3
E		373		26.0			331.4		29.0
F		3		0.002			2.5		0.002
G		0		0			0		0
H		0.4		0.0003			0		0
POG		299		20.9			519.5		45.5
TOTAL		1,434.4		99.8	3		1,142.8		99.8	3

Table Notes:

Table adapted from Table 2-1, page 12, Design Supplement.

Shaded cells are contaminated sediment deposits removed during 2004 – 2007 dredging activities.

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1	Source: December 2002 RI, Table 5-14; December 2002 FS, Table 5-3. Data was compiled from data collected from 1989 – 1999.
2	Source: Data collected in 2004 – 2004 and 2006 – 2007.
3	Percent total is not 100% because of rounding.

          2. The Increased Sediment Volume Estimate

In order to ensure more complete removal of targeted sediments above the 1 ppm PCB RAL, OU 1 dredging operations demonstrated the need to remove an additional 4-inches of sediment. This additional dredge cut below the targeted dredge elevation is referred to as dredge overcut. With an average thickness of 1-foot of sediment to the 1 ppm PCB RAL in OU 1, an additional 4-inch overcut increases the actual dredge volume under the 2002 ROD remedy by 29% (from 721,200 cy to 928,400 cy). While the practical necessity of a dredge overcut was generally acknowledged in the Lower Fox River Feasibility Study (FS), the increased volume and cost implications was not addressed in the FS or the 2002 ROD.

          3. The Revised SWAC Projections for the 2002 ROD Remedy

In addition to identifying a larger volume of sediment that would need to be removed under the 2002 ROD, the additional sampling and analyses performed during the remedial design process showed that dredging remedy alone would not meet the PCB SWAC goals as originally envisioned in the 2002 ROD. Specifically, concentrations would be reduced from an average PCB SWAC of 1.9 ppm to 0.48 ppm by dredging alone⁴ whereas a combination of dredging higher concentration areas, capping and sand covers over lower concentrations would achieve a PCB SWAC of 0.25 ppm. There are two main reasons why dredging alone would not meet PCB SWAC goals.

• First, even if all sediment exceeding the 1.0 ppm PCB RAL is dredged in an area, the post-dredging surface concentrations may still exceed 1.0 ppm PCBs. That is because experience with dredging projects at OU 1 and other dredging projects has shown that the dredging process itself commonly re-suspends some contaminated sediment that is then re-deposited in a thin layer on top of the newly-dredged area. That re-deposited contamination is called “generated residuals.”⁵ The 2002 ROD stated that generated residuals could be addressed by re-dredging and/or placement of sand covers over dredged areas.

• Second, contrary to earlier expectations, the recent sampling data shows that large areas of relatively low PCB levels on the surface of undredged areas (i.e.,

4	From page 10 of the Concept Paper, November 19, 2007.
5	In this ROD Amendment, the term “generated residuals” is used to describe contaminated sediment that is re-deposited at the surface of a newly-dredged area (i.e., in the top six inches of the sediment surface). A different term – “undisturbed residuals” – is used to describe contaminated sediment that is more than six inches below the surface of a newly-dredged area.

14

in areas with no sediment exceeding the 1.0 ppm PCB RAL) might prevent an all-dredging remedy from reaching the OU-wide SWAC goals. If an all-dredging remedy did not meet those SWAC goals by the completion of active remediation, then additional time would be required for further reductions in surface concentrations through sediment deposition processes (before RAOs could be achieved).

          4. Operational Experience at OU 1

Approximately 335,000 cubic yards have been dredged at OU 1 from 2004-2007. Operations have been refined and improved based on contractor experience. For example, a sediment screening and thickener was added to the dewatering process in 2006, improving efficiency of the dewatering operation by reducing the volume of water being pumped into the geotextile tubes and significantly improving dewatering operations. A slight (i.e., approximately 3 to 4 days out of a total 30 days) reduction in the time needed for dewatering was realized.

In addition to dredging and sand covering operations dredged residuals, cap placement test studies were also conducted in 2007. These test studies demonstrated the ability to consistently place a 6-inch sand layer overlain by 7-inches of armor stone (i.e., ASTM C33 gradation for fine aggregates and 1 ¹/4 inch-minus stone meeting C33 gradation for coarse aggregate No. 467). Other aspects relating to capping construction that were successfully evaluated included methods of cap material placement, production rates of material placement, sediment consolidation, monitoring and verification procedures, stability of underlying sediment, and impact to water quality during placement (which has been minimal). Some of these aspects, such as sediment consolidation, and monitoring and verification procedures will be further evaluated after construction completion.

The dredging experience and cap placement test studies have both demonstrated the viability and implementability of these operations.

          5. Summary of 2002 ROD Remedy and Relevance Regarding New Information and Findings

A comparison of the Remedy Amendment and the 2002 ROD remedy follows below, and in Table 6, page 42.

m Sediment removal. The 2002 ROD called for removal of all sediment with a PCB concentration exceeding the 1.0 ppm RAL. The estimated volume of the sediment that would need to be removed under that remedy has increased. As discussed above in Section I, it is now estimated that approximately 928,400 cy of sediment would need to be dredged under the remedy selected by the 2002 ROD, in light of new sampling data and overdredge allowance. The 2002 ROD originally estimated approximately 784,200 cy would be removed, as it did not include overdredging volumes.

15

m	Sediment dewatering and disposal. The 2002 ROD envisioned that contaminated sediment would be dewatered using mechanical processes similar to those used at other Fox River dredging projects (e.g., plate and frame presses). Experience at OU 1 has shown that geotextile tubes have proven to be effective for dewatering dredged sediments from OU 1.
m	Water treatment. Water generated by dredging and dewatering operations will be treated prior to discharging it back to the Fox River to meet State and federal water quality standards, consistent with the 2002 ROD.
m	Capping. A capping contingency plan included in the 2002 ROD allowed for the use of an engineered cap in limited areas it was shown to be protective and less costly than dredging. At a minimum, an Explanation of Significant Differenceswould have been required prior to implementation of capping. The capping portion of the Amended Remedy is consistent with the capping contingency allowed in the 2002 ROD.
m	Long-term monitoring. Long-term monitoring of surface water and biota would continue until PCB concentrations and exposures are below risk levels.
m	Institutional controls. Institutional controls (e.g., fish advisories) would be maintained to minimize human and ecological exposures to contaminants.
m	RAL and SWAC. Sediments with PCB concentrations greater than the 1.0 ppm RAL were targeted for removal. The 2002 ROD stated that SWAC levels of approximately 0.25 ppm PCB would be achieved if all sediment above the 1.0 ppm RAL were removed by dredging. If all sediments above the 1.0 ppm RAL were not removed in OU 1 due to dredge-generated residuals remaining in dredge areas, then the 2002 ROD indicated that a SWAC of approximately 0.25 ppm for OU 1 could be met by other means, such as redredging, capping or placement of sand cover on dredged residual. The specific SWAC goals in the 2002 ROD were 0.25 ppm.
m	Natural recovery after remediation. Although the 2002 ROD specified that the RAL requirement or SWAC goal would need to be met immediately after the completion of dredging in a particular OU, it was also recognized that it would take additional time for natural recovery before some of the RAOs would be achieved. For example, the 2002 ROD estimated that a SWAC of approximately 0.25 ppm PCBs would be achieved at construction completion, but the 2002 ROD also estimated that it would take another 14 years before reduced PCB levels in fish tissue would allow relatively safe consumption of walleye for high-intake consumers. If the 2002 ROD remedy did not achieve the SWAC goal, longer natural recovery periods would be required to meet RAOs.

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m Costs. Based on new information gathered after issuing the 2002 ROD, the cost of implementing the 2002 ROD remedy in OU 1 is currently projected at $144 million. The 2002 ROD originally estimated the cost at $66.2 million. The lower cost estimate in the 2002 ROD did not include dredging overcut volumes. The additional volume is significant in OU 1 due to thin contaminant zones. The added volume increases costs for dewatering, transportation and disposal.

VII. Procedure for Changing the Remedy

Under CERCLA Section 117(c), 42 U.S.C. § 9617(c), and the National Oil and Hazardous Substances Pollution Contingency Plan (NCP), 40 C.F.R. § 300.435(c)(2)(ii), if EPA proposes to fundamentally alter the basic features of the selected remedy with respect to scope, performance, or cost, then EPA is required to publish the proposed amendment and provide an opportunity for public comment. In this case, the decision by EPA and WDNR to modify the remedy for this Site fundamentally alters the basic features of the remedy previously selected, and that action necessitates the issuance of this ROD Amendment.

Accordingly, EPA and WDNR issued a Proposed Plan on November 26, 2007, and invited public comment on possible changes to the remedy in the 2002 ROD. After reviewing and fully considering the public comments submitted, EPA and WDNR have decided to modify the selected remedy. The 2002 ROD remedy required predominantly dredging PCB-contaminated sediments. This ROD Amendment employs a combination of the following actions:

• Dredging as the primary remedial approach

and the following alternate remedial approaches:

• capping, and

• sand covers for residuals management and as the sole remedial approach in certain areas.

In accordance with Section 300.825(a)(2) of the NCP, 40 C.F.R. § 300.825(a)(2), this ROD Amendment is part of the administrative record for the Site, available for public inspection at the following three locations, at the following times: 1) WDNR Northeast Region office, 2984 Shawano Avenue, Green Bay, Wisconsin, 7:45 AM – 4:30 PM, Monday-Friday; 2) WDNR Bureau of Watershed Management, 2nd Floor, 101 South Webster Street, Madison, Wisconsin, 7:45 AM – 4:30 PM, Monday-Friday; and 3) EPA Records Center, 7th Floor, 77 West Jackson Boulevard, Chicago, Ill, 8 AM – 4 PM, Monday-Friday. An index of documents contained in the administrative record is attached as Appendix A to this ROD Amendment. Details of this Amended Remedy are described in Section XI below.

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VIII. Community Relations

EPA and WDNR issued the Proposed Plan for a ROD Amendment to the public on November 26, 2006. This issuance began a 66 day public comment period on proposed changes to the 2002 ROD. EPA and WDNR held a public meeting on December 13, 2007 to discuss and receive comments on the proposed ROD Amendment at Lawrence University, Appleton, Wisconsin. The comment period ended on January 31, 2008. See Section 3 of the 2002 ROD for the community relations history prior to the December 2002 ROD.

Since the 2002 ROD, the following major public meetings and press conferences have occurred:

• Oct. 2003 — OU 1 cleanup Consent Decree press conference,

• Aug 2004 — OU 1 2004 season pre-construction public meeting,

• May 2005 — OU 3-5 design update public meeting,

• July 2005 — OU 1 construction update public meeting,

• April 2006 – OU 4 Phase I Consent Decree press conference,

• June 2006 — OU 1 construction update meeting,

• December 5, 2006 – Public meeting for comments on the Proposed Plan to amend the 2003 ROD, and

• December 13, 2007 – Public meeting for comments on the Proposed Plan to amend the 2002 ROD.

Additionally, since the issuance of the 2002 ROD, the Agencies’ staffs have made presentations at or attended approximately 50 meetings or community events to discuss Site cleanup, restoration or regarding other site-relate issues, as requested by local officials, citizen groups, universities and other schools, unions, etc. The Agencies also continue to send the Agency Site newsletter, the Fox River Current, to 16,000 addresses. Agency and company websites with information for OU 1 also include:

• http://www.epa.gov/region5/sites/foxriver/index.html,

• http://www.dnr.state.wi.us/org/water/wm/foxriver/reportsanddocs.html, and

• http://www.littlelakecleanup.com/.

IX. Development of the Remedial Action Alternatives

The ROD Amendment involves evaluation of two remedial action alternatives: (1) the 2002 ROD Remedy; and (2) the Amended Remedy described in Section XI.

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The development of the 2002 ROD Remedy alternative was fully described in the 2002 ROD itself.

The Amended Remedy alternative was developed based on new information and new engineering analyses that were outgrowths of the remedial design and remedial actions from 2004 to 2007 conducted under the 2002 ROD and Consent Decree (03-C-0949), and as summarized in Sections I and VI. The Design Supplement summarized and presented that new information and analyses. The Design Supplement also proposed a remedial design based on the new sediment data and operational dredging experience at OU 1. Details regarding scheduling, monitoring and costs were also evaluated in the Design Supplement. This ROD Amendment modifies the 2002 ROD to allow alternate remedial approaches under the criteria specified in Section XI (Description of the Amended Remedy).

As discussed in greater detail in Section X, the Amended Remedy is designed to have several advantages over the 2002 ROD remedy, including the following:

• Although the Amended Remedy is primarily a dredging remedy, the Amended Remedy also allows alternate remedial approaches in certain situations (such as sand covering or capping undredged areas). This will result in the Amended Remedy being more likely to produce PCB SWAC levels at or less than 0.25 ppm upon completion of active remediation.

• The Amended Remedy is projected to be completed by 2009 rather than 2014 under the 2002 ROD. The active remediation work will be done sooner (2 more years for the Amended Remedy, rather than 7 more years under the 2002 ROD Remedy – following 2007 cleanup activities). In addition, less time will be needed for post-remediation natural recovery in order to achieve the RAOs because the Amended Remedy is expected to yield a lower SWAC than the 2002 ROD Remedy.

• The Amended Remedy allows alternate remedial approaches that are much more efficient than dredging the relatively thin layer of PCB deposits found to be present in OU 1. Under the 2002 ROD Remedy a large volume of relatively clean sediment would need to be removed as the amount of overdredging (about 4-inches) would be significant due to the thin nature of the contaminated sediment deposits (in an average thickness of layers about 1-foot). Once removed, that relatively clean sediment would take up valuable disposal space since it would need to be disposed of in a landfill along with the more contaminated sediment. The Amended Remedy would allow caps or sand covers in some areas with thin layer deposits, if specified criteria can be met. It is estimated that the Amended Remedy would thereby reduce the overdredge volume by 122,000 cubic yards.

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X. Evaluation of Alternatives

A. Evaluation Criteria

Remedial alternatives are evaluated based on the nine criteria set forth in the NCP, 40 CFR § 300.430(e)(9)(iii). These criteria are described below.

A remedial alternative is first judged in terms of the threshold criteria of protecting human health and the environment and complying with ARARs (Applicable or Relevant and Appropriate Requirements). If a proposed remedy meets these two threshold criteria, the remedial alternative is then evaluated under the balancing and modifying criteria, to arrive at a final recommended alternative.

Threshold Criteria

1. Overall protection of human health and the environment: Alternatives are assessed to determine whether they adequately protect human health and the environment from unacceptable risks posed by hazardous substances, pollutants, or contaminants present at a site.

2. Compliance with ARARs: Alternatives are assessed to determine whether they attain applicable or relevant and appropriate requirements under federal environmental laws and state environmental or facility siting laws, or provide grounds for invoking a waiver.

Balancing Criteria

3. Long-term effectiveness and permanence: Alternatives are assessed for their ability to maintain protection of human health and the environment over time, and for the reliability of such protection.

4. Reduction of contaminant toxicity, mobility, or volume through treatment: Alternatives are assessed based upon the degree to which they use treatment to address the principal threats posed by a site.

5. Short-term effectiveness: Alternatives are assessed based on the length of time needed to implement an alternative and the risks the alternative poses to workers, residents, and the environment during implementation.

6. Implementability: Alternatives are assessed based on the technical and administrative feasibility of implementing the alternative, such as the relative availability of goods and services.

7. Cost: The cost of each alternative is assessed, including each alternative’s capital cost, annual operation and maintenance (O&M) cost, and net present value of capital and O&M cost. Net present value is the total cost of an alternative over time in

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terms of today’s dollars.

Modifying Criteria

8. State acceptance: The assessment of remedial alternatives includes consideration of concerns the State has raised with respect to the preferred alternative, other alternatives or with ARARs or ARAR waivers.

9. Community acceptance: The assessment of remedial alternatives also includes consideration of the extent to which interested community members support, have reservations about, or oppose certain components of the alternatives.

B. Application of the Evaluation Criteria to the Amended Remedy and the 2002 ROD Remedy

1. Overall Protection of Human Health and the Environment

Compared to the 2002 ROD Remedy, the Amended Remedy is more protective of human health and the environment in the short term, and at least as protective as the 2002 ROD Remedy in the long term.

In the short term, the Amended Remedy has the following advantages over the 2002 ROD remedy:

• The Amended Remedy is projected to achieve a lower PCB SWAC in OU 1 sediment than an all dredging remedy and thus reduce contaminant exposure sooner. The Amended Remedy will leave lower PCB surface concentrations in capped and sand cover areas, as compared to the higher expected levels that would remain at the surface if the same areas were dredged. The Amended Remedy also provides additional options for meeting the SWAC (e.g., placement of sand covers over undredged areas). Table 3 presents the estimated pre-remediation SWAC and the estimated SWAC results under the two remedial approaches, assuming a post-dredging sand cover for both remedies.

TABLE 3. Estimated Current PCB SWAC and Projected SWAC Results for OU 1
for an All-Dredging Remedy and Amended Remedy⁶

Pre-Remediation	After all-dredging		After Amended
(ppm)	remedy (ppm)		Remedy (ppm)
1.9		0.48		0.25

• The Amended Remedy will also achieve RAOs years before they would be achieved under the 2002 ROD Remedy. The active remediation work will be done sooner (within 2 more years under the Amended Remedy, rather than

⁶ From the Concept Paper, page 10.

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taking 7 more years under the 2002 ROD Remedy). In addition, less time will be needed for post-remediation natural recovery in order to achieve the RAOs because the Amended Remedy is expected to a yield lower SWAC than the 2002 ROD remedy. That lower post-construction SWAC would yield lower PCB concentrations in fish tissue sooner.

The Amended Remedy and the 2002 ROD Remedy would offer comparable protection over the long term. Both alternatives use the same RAL. Although a lower volume of contaminated sediment would be dredged under the Amended Remedy, 97% of all PCBs in OU 1 would still be removed, contained by a cap or sand cover. ⁷ The engineered caps that are allowed by the Amended Remedy are designed to remain protective over the long term, as the Amended Remedy includes stringent design criteria for caps and ongoing cap monitoring and maintenance requirements. If long term monitoring shows that a cap is deteriorating or damaged, EPA and WDNR could require that the cap be enhanced or removed (along with removal of the underlying sediment).

     2. Compliance with ARARs

Both the 2002 ROD Remedy and the Amended Remedy will meet all ARARs. This is discussed in detail in Section XIV.2.

TSCA requirements are significant ARARs for sediment with PCB concentrations at or above 50 ppm PCBs (TSCA sediment). However, at OU 1 all TSCA sediments (with PCB concentrations equal to or greater than 50 ppm) were removed during dredging activities from 2004-2006. If additional TSCA sediments are discovered in subsequent sampling or remedial activities, TSCA sediment will be dredged from the River and that dredged material will be handled, stored, and disposed or capped in accordance with TSCA requirements.

     3. Long-term Effectiveness and Permanence

Both the 2002 ROD Remedy and the Amended Remedy meet the long-term protectiveness and permanence requirements of the NCP. As discussed above, the Amended Remedy’s design criteria for engineered caps require that the caps are designed to be durable and effective over the long term. Those design criteria were developed based on detailed evaluations of the following processes or events that could potentially compromise the integrity and protectiveness of a cap:

m Scour from hydrodynamic flows. The caps are designed to remain stable under maximum shear stresses for reasonable worst case scenarios (e.g., 100-year storm event). Experts in the fields of environmental engineering, hydrodynamic flow modeling, and sediment remediation have determined an

⁷ 100% of PCBs are not addressed because some limited areas are inaccessible due to utilities or shoreline issues.

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	appropriately conservative design, reflected in the Amended Remedy.
m	Disruption from bioturbation (i.e., biological activity). The caps are designed with thicknesses that will resist cap damage or exposure of underlying contamination due to bioturbation. Data from other similar Great Lakes sediment sites indicates that the potential bioturbation depth is approximately 4 inches. This is incorporated into the cap design.
m	Ice scour. An independent expert evaluation of potential ice scour was conducted using available historic climate data, site visits, and interviews with local individuals who have significant experience on the Lower Fox River. Among other things, the evaluation considered the risk of frazil ice negatively impacting the capped areas (i.e., ice on the river bottom that occurs in supercooled areas of the River with turbulent water). Areas in OU 1 with potential frazil ice formation were determined to be outside the areas that would be capped. Thus, the evaluation did not identify any areas where frazil ice or other ice forms (e.g., ice dams or jams) would be expected to cause erosion or damage to caps either directly from ice or indirectly from increased water velocities under the ice.
m	Scour from propeller wash. The cap design criteria include minimum depth requirements (i.e., 6-foot water depth for post capped areas) and cap design requirements (such as an armor stone layer) to ensure that caps are resistant to propeller wash from recreational or commercial vessels. Those requirements were developed based on analyses of existing and possible future vessel types and river uses for OU 1, including physical tests and modeling.
m	Other technical considerations. The caps are designed for stability, by requiring that a cap can only be installed if the underlying sediment has sufficient load bearing capacity and if the capped area will have stable side slopes.

The Amended Remedy also includes long-term monitoring and maintenance and Institutional Control requirements for caps as described in detail in Section XI.D.

Both the 2002 ROD Remedy and the Amended Remedy require long-term monitoring of surface water and biota and Institutional Controls (e.g., fish consumption advisories) until remedial objectives are met.

     4. Reduction of Toxicity, Mobility or Volume through Treatment

Both the 2002 ROD Remedy and the Amended Remedy reduce contaminant mobility by either containment (under caps or sand covers) or removal and containment (by dredging and off-Site landfill disposal). Contaminated sediment would not receive further treatment under either the 2002 ROD or the Amended Remedy. Dredging

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carrier water will be treated to meet State standards to remove PCBs or other contaminants, and recycled/discharged back into the Lower Fox River. Contaminated sediments removed from the Lower Fox River will be dewatered, transported, and landfilled.

     5. Short-Term Effectiveness

As discussed above, in the short term, the Amended Remedy would be more effective than the 2002 ROD Remedy. The Amended Remedy would be done sooner, it would achieve a lower SWAC upon remedy completion, and it would achieve RAOs sooner.

Past experience at this Site has shown that minor amounts of contaminated sediment may be re-suspended and released during dredging. Those short-term impacts during remedy implementation would end sooner under the Amended Remedy because that remedy could be completed sooner (2 more years for the Amended Remedy versus 7 more years for the 2002 ROD Remedy to complete remediation after 2007 remediation).

     6. Implementability

As discussed in Section VI.C.4 above, operational experience at OU 1 during dredging operations from 2004-2007 has demonstrated that sediment removal, transportation, dewatering and disposal methods envisioned by the 2002 ROD and the Amended Remedy are implementable. Additionally cap placement tests conducted during 2007 demonstrated that cap materials could be reliably and effectively placed, consistent with design standards discussed in the Design Supplement.

Services, materials and equipment would be locally available for both the 2002 ROD Remedy and the Amended Remedy (described in Section XI below). For example, materials required for capping (i.e., sand and armor stone) under the Amended Remedy are readily available in the area.

     7. Cost

Table 4 below summarizes the most recent cost estimates for the 2002 ROD Remedy and the Amended Remedy, as presented in the Design Supplement. The original cost estimate for the 2002 ROD Remedy was $66 million. The most recent cost estimate for the 2002 ROD Remedy is $144 million, an increase of $78 million compared to the estimate in the 2002 ROD. That cost estimate increased for several reasons, but the most significant factor was the increased estimate of the volume that would need to be dredged and disposed, based on new sampling and recent estimates of overdredge requirements. Sampling and analysis of PCB contaminated sediments in 2003-2004 and 2006-2007 identified numerous thin layer PCB deposits in OU 1. Under the 2002 ROD Remedy, a significant volume of relatively clean sediment would need to be removed as overdredge allowance for dredging thin layer deposits. Once removed, that relatively clean sediment must be disposed of in a landfill along with the more contaminated sediment.

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The estimated cost for the Amended Remedy is approximately $102 million. The Amended Remedy allows alternate remedial approaches that are much more efficient than dredging thin layer PCB deposits. The Amended Remedy would allow caps or sand covers in some areas with thin layer deposits, if specified criteria can be met (discussed detail in Section XI.A.2 below). It is estimated that the Amended Remedy would thereby reduce the overdredge volume by 122,000 cubic yards.

The cost estimates for both alternatives include preliminary estimates of operation and maintenance costs, including estimated costs of cap maintenance under the Amended Remedy. Refined estimates of operation and maintenance costs for the Amended Remedy will be developed during the remedial design process. The cost estimates do not include institutional control costs, although those costs are not expected to be significant compared to other cost components.

Because the Amended Remedy would cost an estimated approximately $42 million less than the 2002 ROD Remedy, and the Amended Remedy will achieve comparable or better results, it is more cost effective than the 2002 ROD Remedy.

TABLE 4. Comparative Costs of the 2002 ROD Remedy and Amended Remedy.

Item		2002 ROD			Amended Remedy
2004-2007 Dredging/dewatering/water treatment and disposal		$	67,000,000		$	67,000,000	1
Post-2007	Dredging/dewatering/water treatment and disposal	$	56,250,000	2	$	6,450,000	2
	Capping		0		$	9,650,000
	Sand Cover	$	17,150,000	2	$	8,700,000	2
	Demobilization	$	1,750,000	2	$	1,750,000	2
	Monitoring and Maintenance	$	2,000,000		$	4,650,000
	Contingency		0	3	$	4,050,000
	TOTAL	$	144,150,000		$	102,250,000

Table Notes:

Costs are from the Design Supplement, Sections 7.2.2 and 7.3, pages 50 and 51, respectively.

1	Although these costs were for cleanup actions completed consistent with the 2002 ROD, they are listed here to allow comparison of overall cleanup costs.
2	Averages are used for the estimated cost ranges.
3	No contingency is used for the 2002 ROD costs because experience at OU 1 gives a high confidence based on actual operating expenses from dredging completed during 2004 to 2007 (with 335,000 cy of sediments dredged).

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     8. State Acceptance

WDNR agrees with the Amended Remedy and is co-signing this Record of Decision Amendment.

     9. Community Acceptance

Community acceptance considers whether the local community supports or opposes particular alternatives. Comments on the Proposed Plan are an important indicator of community acceptance.

The Responsiveness Summary that is attached as Appendix A to this ROD Amendment summarizes and addresses 44 comments on the Proposed Plan. The majority of the public comments supported a remedial action addressing the PCB contamination at the Site. A number of comments expressed support for the Proposed Plan because it would achieve remedial goals sooner, and would be more cost effective, as compared to the 2002 ROD Remedy. Some comments expressed concerns regarding the permanence of caps (i.e., long-term stability and effectiveness), as well as concerns about long-term maintenance of caps. As noted above, the Amended Remedy includes several features that are designed to address those concerns, including stringent design and criteria for caps and long-term cap monitoring and maintenance requirements. None of the comments provided specific technical reasons or justifications for certain assertions that the Amended Remedy would not be effective or protective.

Results of Evaluation Using the Nine Criteria

Both the 2002 ROD Remedy and the Amended Remedy meet the threshold criteria described above. Both would provide for protection of human health and the environment; and meet state and federal ARARs.

The Amended Remedy has distinct advantages under the balancing criteria described above. It would be more effective than the 2002 ROD Remedy in achieving risk-reduction SWAC goals, and would be more cost-effective. Recent analyses also suggest that the 2002 ROD Remedy would be more difficult and take longer to implement.

The two alternatives have also been evaluated under the modifying criteria described above. WDNR supports adoption of the Amended Remedy and is co-signing this Record of Decision Amendment. In response to community input, certain requirements of the Amended Remedy have been clarified and strengthened.

Applying the nine remedy selection criteria, and fully considering comments from the public, EPA and WDNR have decided to change the remedy for the Site by amending the 2002 ROD, as described below.

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XI. Description of the Amended Remedy

The Amended Remedy addresses all areas of OU 1 containing sediment with PCB concentrations greater than the 1.0 ppm RAL. The Amended Remedy adopts removal of contaminated sediments with dredging as the primary remedial approach for sediment exceeding the 1.0 ppm PCB RAL, but it allows alternative remedial approaches to be used instead of dredging (i.e., capping and placement of a sand cover) under the eligibility criteria specified below. The short-term and long-term objectives of the Amended Remedy include: removing and containing PCB-contaminated sediment in OU 1 to meet the RAL and/or OU-specific SWAC goals upon construction completion; achieving further reductions in PCB surface concentrations through natural recovery processes; achieving corresponding reductions in PCB levels in the water column and in fish tissue; and ensuring continuation of those benefits to human health and the environment through long-term operation and maintenance and application of institutional controls.

Although the Amended Remedy adopts sediment removal as the primary remedial approach for sediment with PCBs greater than the 1.0 ppm RAL, additional remedial measures will be necessary to meet the SWAC goals in many areas where dredging occurs. The Amended Remedy remains consistent with the 2002 Remedy as sediment removal is still the primary remediation approach at this Site. However the additional remedial measures selected here will fully achieve the original cleanup requirements in a shorter period of time.

As explained above, prior experience with dredging work at this Site and at other locations has shown that, during the dredging process, a small amount of sediment invariably becomes re-suspended and resettles in a thin layer of generated residuals at the surface of the newly-dredged area. The generated residuals could have unacceptably high levels of PCBs, and may continue to pose a risk unless the primary approach is modified. The Amended Remedy, therefore, includes post-removal survey and sampling requirements, and post-removal residuals management requirements, as outlined below.

The Amended Remedy allows alternate remedial approaches such as capping in certain areas at the Site where those alternate approaches can help achieve the overall remedial objectives more quickly, more effectively, and at a lower cost. However, unlike sediment removal, a containment approach such as capping would leave contaminated sediment in place in some areas at the Site, so the Amended Remedy includes two main features that are designed to ensure that capping would be as protective as sediment removal over the long term. First, the cap design and minimum depth requirements specified below are designed such that the caps will be durable over the long term, even with factors such as major flood events, ice scour, and propeller wash. Second, the Amended Remedy includes specific requirements for monitoring and maintaining caps that are installed, to confirm that the long-term objectives of the Amended Remedy are achieved.

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The ROD Amendment establishes general criteria governing use of the primary remedial approach and the alternate remedial approaches in areas within OU 1, but more specific plans will be developed during the remedial design process. A conceptual design for dredging, capping, and sand covering areas is shown in Figures 2 and 3 below, and summarized in Table 5. As discussed in greater detail in the Design Supplement, that design would involve removing an estimated total of 406,100 cubic yards of sediment with PCB concentrations greater than 1.0 ppm by dredging, and containing 503,900 cubic yards by capping or a sand cover. The final remedial action design and implementation details will be subject to approval by EPA and WDNR, and the Agencies will require the remedial action to be consistent with all criteria and requirements of the Amended Remedy, as outlined below.

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A. The Primary Remedial Approach and the Alternate Remedial Approaches

          1. The Primary Remedial Approach

The Amended Remedy adopts sediment removal (discussed below) as the primary remedial approach for sediment exceeding the 1.0 ppm PCB RAL. The primary remedial approach must be used to remediate such sediment unless the eligibility criteria for employing an alternate remedial approach in the specific area can be met and the alternate remedial approach is more feasible and more cost effective in that area.

Any final remedial action must incorporate the following minimum standards:

m	Sediment removal requirements. All sediment with PCB concentrations exceeding the 1.0 ppm RAL will be targeted for removal in all areas within OU 1 unless use of an alternate remedial approach is approved by the Agencies for a particular area under the eligibility criteria listed below in Section XI.A.2. More specifically, in each sediment removal area, sediment shall be removed to a target elevation that: (1) encompasses all contaminated sediment exceeding the 1.0 ppm PCB RAL (as determined from 2003-2004, 2006-2007 and 2008 sampling data and data interpolation), including an overdredge allowance, as appropriate; and (2) includes any remaining sediments with PCB concentrations greater or equal to 50 ppm.
m	Sediment removal methods and precautions. Sediment removal will be conducted using a dredge appropriate to Site conditions. In-water pipelines or other appropriate methods will transport the dredged sediment from the dredge to the staging area(s). Dredging experience at OU 1 from 2004 – 2007 has shown that with careful operation of environmental dredges, silt curtains or other containment devices generally are not necessary during dredging activities. However, if future operations indicate that controls are necessary to ensure protectiveness, then additional measures or modifications to the dredging process will be employed, as appropriate. Turbidity will be monitored during dredging operations. Buoys and other waterway markers will be installed around the perimeter of the in-water work area.
m	Sediment dewatering and disposal. Dewatering will be employed at the staging facility for dredged sediment. The dewatering will be accomplished using processes such as plate and frame presses, belt filter presses, or geotextile tubes to remove water from PCB contaminated sediment before disposal. Based on dredging and dewatering from 2004 – 2007, it is expected that geotextile tubes will likely be used to complete the dewatering of dredged sediments for the remainder of the project. Dewatered contaminated sediment will be transported by truck, rail, and/or barge to a dedicated engineered landfill or another suitable upland disposal facility, consistent with applicable federal and state requirements. Based on previous

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	experience at OU 1, it is anticipated that trucks would be utilized to transport dredged PCB-contaminated sediments to an approved upland disposal facility. All known TSCA sediments were removed during dredging operations from 2004 to 2006. Although only non-TSCA sediments are expected to remain at OU 1, if TSCA sediments were found to still remain at OU 1, dewatered sediments subject to TSCA disposal requirements must be transported consistent with TSCA requirements by truck, rail, and/or barge to a landfill facility appropriately permitted to receive TSCA waste.
m	Water treatment. Superfund cleanups are required to meet the substantive discharge requirements of the Clean Water Act, but National Pollutant Discharge Elimination System (NPDES) permits are not required for on-site work. Thus, water generated by dredging and dewatering operations will be treated prior to discharge back to the River and will meet all state and federal water quality standards. This may include (but not be limited to) bag filter and sand filtration and granulated activated carbon (GAC) treatment. Treated water will be sampled and analyzed to verify compliance with the appropriate discharge requirements according to plans that will be developed in the design phase and approved by the Agencies.
m	Post-removal confirmatory surveys and sampling. After removal of sediments from a particular area, a survey and sampling activities will be performed to: (1) determine whether the sediment removal requirements specified above were met; and/or (2) determine whether there is a need for post-removal residuals management measures, as specified below. If the survey and/or sampling results show that the sediment removal requirements were not met in an area, then additional sediment in the area shall be removed until compliance with the sediment removal requirements is achieved. If the survey and/or sampling results in a particular area shows that post-removal dredge residuals management measures are needed, then those measures shall be implemented. The post-removal surveys and sampling will be done when the initial round of dredging in a particular area is completed.
m	Post-removal residuals management. As explained above, this ROD Amendment uses the term “generated residuals” for sediment that is re-suspended and re-deposited on the surface of a newly-dredged area (i.e., within the top six inches of the sediment), and it uses the term “undisturbed residuals” for sediment that is more than six inches below the surface of the newly-dredged sediment. If post-removal confirmatory sampling in a sediment removal area reveals post-removal generated residuals or undisturbed residuals with PCB concentrations exceeding the 1.0 ppm PCB RAL, then one or more of the following must occur:

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• For management of generated residuals

§	Generated residuals with a PCB concentration equal to or greater than 5.0 ppm must either be: (1) removed (typically by re-dredging) in accordance with the sediment removal requirements specified above; or (2) capped, if the eligibility criteria for that alternate remedial approach can be met, as specified below.
§	Generated residuals with a PCB concentration between 1.0 ppm and 5.0 ppm must be covered with at least 6 inches of clean sand from an off-Site source (referred to as a “residual sand cover”).
§	Place a residual sand cover as necessary to meet the SWAC goal for the OU of 0.25 ppm.

• For management of undisturbed residuals

§ Unless EPA and WDNR approve use of a different residuals management approach in a particular area within OU 1, undisturbed residuals with a PCB concentration exceeding the 1.0 ppm PCB RAL must be removed (typically by re-dredging) in accordance with the sediment removal requirements specified above. EPA and WDNR may evaluate and approve the use of a different residuals management approach (such as a cap or a sand cover) for undisturbed residuals in limited areas if the eligibility criteria for alternate remedial approaches in Section XI.A.2 below is met.

          2. Alternate Remedial Approaches

As noted above, the primary remedial approach shall be used to remediate sediment with a PCB concentration exceeding the 1.0 ppm PCB RAL, unless the eligibility criteria for employing an alternate remedial approach in the specific area can be met and the alternate remedial approach is more feasible and more cost-effective in that area. The Agencies have already determined that alternate remedial approaches will be more feasible and more cost-effective than dredging in certain areas identified in the Design Supplement, but the Design Supplement did not make final recommendations for all areas. Capping will only be allowed where the average PCB concentrations do not exceed 10.0 ppm in the top 8-inch interval of sediment underlying the cap.

The Design Supplement included alternate remedial approaches in some areas, but more specific plans for any alternate remedial approaches in OU 1 will be developed

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before or during completion of the remedial action. Any final remedial action must incorporate the following minimum standards:

m Engineered caps. An engineered cap consisting of a sand layer and an armor stone layer may be installed in an area if the following eligibility criteria are satisfied:

• Minimum water depth criteria for capping.

§	Capping will not be allowed in areas within the federally-authorized navigation channels. (Note: Sand covering will be allowed in the navigation channel(s) to manage dredged residuals. These sand covers must be at least 6 inches thick and must not impede navigation.)
§	Capping will be allowed in areas outside of the federally authorized navigation channel only if the top of the cap is at least 6 feet below the low water datum.

• Engineered caps of 13 inches in thickness. This type of cap may be used in areas outside of the federally authorized navigational channel if the minimum water depth criteria for capping and all of the following additional criteria are met:

§	The cap shall be constructed of at least 3 inches of clean sand covered by at least 4 inches of armor stone, with an overplacement allowance of 3 inches of sand and 3 inches of armor stone.
§	The PCB concentration in the sediment in the eight inches immediately beneath the cap8 shall not exceed an average of 10.0 ppm.

• Initial post-construction cap monitoring. Immediately after completion of capping construction activities for both sand and then separately for armor layers, a hydrographic survey shall be performed and direct cap thickness verification sampling shall be conducted. The post-construction thickness sampling will verify that cap placement specifications and cap construction criteria have been met, including an evaluation of whether the installed cap is sufficient in aerial coverage and thickness, and whether the cap material meets all applicable physical and chemical design standards. If the initial post-construction cap monitoring in a particular area shows that the cap

⁸ This eight inches is comprised of two 4-inch sampling intervals.

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placement specifications and cap construction criteria have not been met, then the cap in that area shall be augmented or replaced to meet the applicable specifications and criteria.

m  Sand covers in undredged areas.

o A cover composed of at least an average of 6 inches (3-inch minimum thickness) of uncontaminated sand from an off-Site source may be placed over certain undredged areas that have low PCB concentrations in a relatively thin layer of PCB-contaminated sediment exceeding the 1.0 ppm PCB RAL if both of the following criteria are met:

• The sediment beneath the sand cover must not exceed 2.0 ppm at any depth within the sediment profile.

• The sediment profile shall contain only one 8-inch interval with PCB concentrations between 1.4 – 2.0 ppm.

o A cover composed of at least an average of 3 inches (1.5-inch minimum) of uncontaminated sand from an off-Site source may be placed over certain undredged areas that have low PCB concentrations in a relatively thin layer of PCB-contaminated sediment exceeding the 1.0 ppm PCB RAL if both of the following criteria are met:

• The sediment beneath the sand cover must not exceed 1.4 ppm at any depth within the sediment profile.

• The sediment profile shall contain only one 8-inch interval with PCB concentrations between 1.0 – 1.4 ppm.

Immediately after completion of sand cover placement activities, sand cover cores shall be collected. These initial post-construction cores or other measures approved by the agencies will verify that sand cover placement specifications have been met, including an evaluation of whether the sand cover is sufficient in areal coverage and thickness. If the initial post-construction sand cover monitoring in a particular area shows that the sand cover placement specifications have not been met, then the sand cover in that area shall be augmented or replaced to meet the applicable specifications and criteria.

m

Exceptional areas. EPA and WNDR may approve use of modified remedial approaches or other remedial approaches in exceptional areas at the Site based upon a showing that use of another remedial approach in an exceptional area is sufficiently protective and is more feasible and more cost effective than the primary remedial approach or any of the alternate remedial

35

approaches described above. EPA and WDNR expect that there will only be a relatively small number of areas at the Site that will need to be treated as exceptional areas, including some shallower near shore areas or areas near utilities. The specific remedial approach for each exceptional area will be subject to review and approval by EPA and WDNR, and will be included in the final remedial design.

A summary of a preliminary design features for capped areas and sand cover areas is shown in Table 5 below.

TABLE 5. Summary of Design Features for Capping and Sand Covers

		Minimum post-
		cap/cover water		Area covered by cap or
Description		depth	PCB concentration	sand cover
Cap: 6-inches of sand and 7-inches of gravel		6 feet	<=10 ppm1	112 acres
	6-inches of sand	Varies	1.4 – 2.0 ppm2	46 acres
Sand Cover	3-inches of sand	Varies	1.0 – 1.4 ppm2		68
	6-inches of sand	Varies	Dredge residuals		30

Table Notes:
1	PCB average concentration in 0 – 0.5 foot depth below mudline.
2	Maximum PCB concentration in any 8-inch interval. Sand cover is assumed to completely mix with the top three (3) inches of underlying sediment and will achieve the 1.0 ppm RAL in the 0 - - 0.5 foot depth below mudline.

B. The Relationship Between the Remedial Action Level (RAL) Performance Standard and the Surface-Weighted Average Concentration (SWAC) Goal

This ROD Amendment requires remediation of all contaminated sediment exceeding the 1.0 ppm PCB Remedial Action Level (RAL) either by the primary remedial approach or by one of the alternate remedial approaches discussed above. The ROD Amendment also establishes two standards that will be used to judge the completion of construction of the Amended Remedy for OU 1: a RAL Performance Standard and a SWAC goal. As explained below, construction of the remedy will be deemed complete for OU 1 if the RAL Performance Standard has been met throughout the OU. If the RAL Performance Standard has not been met after employing the primary remedial approach and/or the alternate remedial approaches throughout the OU, then the remedy will be deemed complete if the SWAC, as determined by WDNR and EPA, meets the SWAC goal for the OU. The construction of the remedy will not be deemed complete based on the SWAC goal unless and until all sediment exceeding the RAL has been remediated using the primary remedial approach and/or the alternate remedial approaches.

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As discussed in the 2002 ROD, EPA and WDNR selected the 1.0 ppm PCB RAL because it would achieve cost-effective removal and/or containment of PCBs, and substantially reduce migration of PCBs downstream. The Amended Remedy adopts that same RAL, and it incorporates a presumption in favor of remediation by sediment removal, but it also allows remediation of sediment above the RAL by alternate remedial approaches. The mass and volume of contaminated sediment to be removed under the primary remedial approach will depend upon the horizontal footprint and depth of the contamination exceeding the 1.0 ppm PCB RAL. The use of alternate remedial approaches for remediation of sediment exceeding the 1.0 ppm PCB RAL will depend upon the depth and level of contamination of the sediment and location-specific design requirements and eligibility criteria, as detailed above.

If all sediment exceeding the 1.0 ppm PCB RAL within OU 1 is removed and/or contained using the primary remedial approach and/or the alternate remedial approaches, then construction of the remedy in OU 1 will be deemed complete based on achievement of the RAL Performance Standard. Achievement of the RAL Performance Standard will be assessed soon after completion of sediment removal, capping, and sand cover placement activities. As discussed below, even if the RAL Performance Standard is not met, construction of the remedy in OU 1 can still be deemed complete based on the Agencies’ determination that the SWAC goal has been achieved.

As explained in the 2002 ROD, a SWAC at or near 0.25 ppm is expected to reduce PCB levels in sport fish to acceptable levels within a reasonable time period after completion of active remediation (e.g., for walleye, it would take an estimated 9 years for recreational fishers and 14 years for high-intake fish consumers). The Amended Remedy therefore requires achievement of an OU-specific SWAC goal if the RAL Performance Standard has not been met after employing the primary remedial approach and/or the alternate remedial approach throughout OU 1 (e.g., if post-removal residuals exceeding the 1.0 ppm PCB RAL remain in an area after it has been dredged to the required target elevation). Under the Amended Remedy, the PCB SWAC goal for OU 1 is 0.25 ppm PCBs. If the SWAC calculation, as determined by the EPA and WDNR, is met within OU 1 after all sediment exceeding the 1.0 ppm PCB RAL has been remediated using the primary remedial approach and/or the alternate remedial approaches, then the

Explanation of Remedial Action Level and
Surface-Weighted Average Concentration

The term Remedial Action Level (RAL) refers to a PCB concentration in sediment used to define an area or volume of contaminated sediment that is targeted for remediation. In other words, the RAL in this ROD calls for remediation by dredging, or application of capping or a sand cover, of all sediment in OU 1 having a PCB concentration of greater than 1.0 ppm. If all sediment with a concentration greater than the 1.0 ppm RAL is addressed by dredging, capping and sand covers, it is predicted that the residual Surface-Weighted Average Concentration (SWAC) of sediment will be approximately 0.25 ppm. The SWAC goal in this instance is less than the RAL performance standard because a SWAC is calculated as an average concentration over the entire Operable Unit, after dredging, capping or placement of a sand cover in discrete areas that are above the RAL, and includes averaging over areas in which there are surface concentrations less than the RAL. SWAC calculations are discussed in Section 5.2 of the 2002 Feasibility Study.

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construction of the remedial action can be deemed complete based on the Agencies’ determination that the SWAC goal has been achieved.

The Amended Remedy offers a range of options for completing construction of the remedy if all contaminated sediment exceeding the 1.0 ppm PCB RAL has been remediated in OU 1 using the primary remedial approach and/or the alternate remedial approaches, but it still appears that the RAL Performance Standard or achievement of the SWAC goal will not be met. Those options are:

1.	Performing additional dredging or capping to ensure that all sediments with PCB concentrations greater than the 1.0 ppm PCB RAL are removed, contained or covered;
2.	Installing capping in areas with higher PCB concentrations (provided minimum water depth criteria and other capping criteria and design requirements are met);
3.	Placing a residual sand cover over dredged areas; and
4.	Placing a sand cover over undredged areas (consistent with the general requirements for sand covers outlined above).

Once the Agencies have determined that the RAL Performance Standard or the SWAC goal is achieved in OU 1, the construction of the OU 1 remedy will be deemed complete (although ongoing monitoring and maintenance requirements and contingencies that are part of the Amended Remedy will continue to apply).

C. Other Features of the Amended Remedy

The Amended Remedy includes the following additional elements:

m

Site mobilization and preparation. Staging area(s) will be required for facilities associated with sediment dewatering, sediment handling, water treatment, and material handling for cap and cover operations. Specific staging areas will likely be facilities previously utilized for the OU 1 project from 2004 to 2007. Docking facilities for dredging equipment and ancillary equipment for capping or sand covers at the existing facility will also likely be utilized.

m

Demobilization and staging area(s) restoration. Demobilization, staging area(s) restoration, and decontamination of all equipment will require removing all equipment from the staging and work areas and restoring the staging area(s) as needed to meet the legal requirements or any agreement with the property owner.

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m	Natural recovery after remediation. Although the RAL Performance Standard or the SWAC goal will need to be met before construction of the remedial action can be deemed complete in OU 1, it will take additional time for natural recovery before some of the remedial action objectives are achieved. Sediment Quality Thresholds vary depending on the sensitivity of the particular receptor (such as recreational anglers, high-intake fish consumers walleye, mink, etc.), but post-remediation natural recovery will need to occur before certain SQTs and other remedial action objectives can be achieved. This is unchanged from the 2002 ROD, because the 2002 ROD and the Amended Remedy selected the same RAL and comparable SWACs.
m	Long-term monitoring, cap maintenance, and institutional controls. These requirements are discussed below in Section XI.D
m	Monitored Natural Recovery and Institutional Controls. This ROD Amendment does not change the original remedy for OU 2 in the 2002 ROD (i.e., Monitored Natural Recovery and Institutional Controls other than in Deposit DD).
m	Estimated costs. Costs for the Amended Remedy are estimated to be approximately $102 million and are presented in detail in Table 4 above.

D. Long Term Monitoring, Cap Maintenance, and Institutional Controls

m	Long-term monitoring of surface water and biota. The Amended Remedy requires long-term monitoring of surface water and biota to assess progress in achieving the remedial action objectives. Monitoring will continue until acceptable levels of PCBs are reached in surface water and fish. A detailed Long-Term Monitoring Plan, specifying the types and frequency of monitoring, will be developed.
m	Long-term cap monitoring. The Amended Remedy requires long-term monitoring of any engineered caps that are installed at the Site to confirm their long-term integrity and protectiveness. The long-term monitoring will include:

• Hydrographic surveys and core sampling. A hydrographic survey shall be performed and cores of the cap shall be collected, at a minimum, 2 years and 4 years after the initial post-construction survey and every 5 years thereafter. Based on the results observed in that periodic monitoring, EPA and WDNR may increase or decrease the frequency of periodic monitoring. EPA and WDNR may require additional cap monitoring (between periodic monitoring events) after particular events that could cause cap damage, such as major storm events, ice scour events, or propeller wash scour events.

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§	Monitoring for physical integrity. Hydrographic survey results and core samples collected during cap monitoring events will be analyzed to determine cap thickness and integrity.
§	Monitoring for chemical containment. Some core samples collected during cap monitoring events will also be analyzed for PCB contamination within 6 inch intervals (or less) to determine whether contamination is being effectively contained and isolated from the biota.

m Cap enhancement and/or removal in response to cap degradation. If monitoring, or other information, indicates that the cap in an area no longer meets its original as-built design criteria and that degradation of the cap in the area may result in an actual or threatened release of PCBs at or from the area, then EPA and WDNR shall identify additional response activities to be undertaken in the area. If monitoring or other information shows a pattern of cap degradation in multiple areas, then EPA and WDNR may identify additional response activities to be undertaken in multiple capped areas at the Site (including in areas that have not yet shown any signs of degradation). The additional response activities shall include either:

• Cap enhancement (e.g., application of a thicker sand layer or stone layer or use of larger armor stone); and/or

• Cap removal and removal of underlying contaminated sediment (consistent with the requirements of the primary remedial approach).

m Cap enhancement and/or removal in response to changed water levels. EPA and WDNR may identify additional response activities to be undertaken in a capped area if monitoring or other information indicates that the minimum water depth criteria for capping are no longer being met in the area and that the failure to meet the water depth criteria: (1) may result in an actual or threatened release of PCBs at or from the area (e.g., due to an increased risk of damage caused by propeller wash, ice scour, or other factors); or (2) may have adverse impacts on Lower Fox River uses. The additional response activities may include either:

• Cap enhancement; and/or

• Cap removal and removal of underlying contaminated sediment (consistent with the requirements of the primary remedial approach).

m Institutional controls. Institutional Controls (ICs) are necessary to prevent interference with the remedy and to reduce exposure of contaminants to

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human or ecological receptors. ICs are defined as non-engineered instruments, such as administrative and legal controls that help minimize potential for exposure to contamination and protect the integrity of the remedy. ICs are also required to assure long-term protectiveness for those areas that do not allow for unlimited use and unrestricted exposure. ICs are also required to maintain the integrity of the remedy. At this Site, ICs are required to protect the cap (engineered remedy), and reduce potential exposure for all areas where residual contamination will remain. Also, interim ICs may be necessary to prevent exposure to contaminants which may be released during construction activities such as dredging, capping and placing of sand covers. Long-term protectiveness requires compliance with effective ICs. Hence, effective ICs must be implemented, monitored and maintained.

Institutional controls will be identified as part of the remedial design process in an Institutional Control Implementation and Assurance Plan (ICIAP) for review and approval by EPA and WDNR. The required ICs may include property use controls (such as easements and restrictive covenants), governmental controls (including zoning ordinances and local permits), and informational devices (including signage and fish consumption advisories). The ICIAP shall identify parties responsible (i.e., federal, State or local authorities or private entities) for implementation, enforcement, and monitoring and long-term assurance of each institutional control including costs, both short-term and long-term, and methods to fund the costs and responsibilities for each step.

The ICIAP shall include maps, which shall describe coordinates of the restricted areas on paper and provide shape files in an acceptable GIS format (i.e., NAD 83) depicting all areas that do not allow unlimited use/unrestricted exposure, where dredging is not allowed (e.g., capped areas, buried utilities and near highway bridges) and areas where ICs have been implemented along with a schedule for updating them. The maps and information about the ICs shall be made available to the public in at least several ways, such as a website that is easily accessible to the public and posted in the public library. In addition the ICIAP shall identify reporting requirements associated with each institutional control which shall include at a minimum an annual certification regarding the status and effectiveness of the ICs.

Among other things, the ICIAP shall include the following institutional controls for any capped areas:

• By using governmental and/or property use ICs, establishment of a Regulated Navigation Area (designating areas including an appropriate buffer) where use restrictions are required such as water use restrictions (e.g., limitations on anchoring, dredging, spudding, or dragging limitations, conducting salvage operations, establishment of “no wake” areas and other operating restrictions for commercial and non-commercial vessels which could potentially disturb the riverbed or the engineered remedy limitations); construction limitations (e.g.,

41

	restrictions on utilities such as laying cable, new bridges or dredging limitations for marina expansion or maintenance); and monitoring and maintenance requirements for all areas including dams.
•	Provide additional information to the public to assure protectiveness of the remedy (such as fish consumption advisories.)

XII. Comparison of the Amended Remedy and the 2002 ROD Remedy

Table 6 summarizes the differences between the 2002 ROD Remedy and the Amended Remedy. Table 7 compares the estimated sediment volumes, contaminant masses, and acreages remediated under the 2002 ROD Remedy and the Amended Remedy.

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TABLE 6. Summary of Changes to 2002 ROD

Remedy Element	2002 ROD	Amended Remedy
Remedial Action Level	1.0 ppm PCBs	1.0 ppm PCBs
SWAC Goal for OU 1	0.25 ppm PCBs	0.25 ppm PCBs
Dredging Volume removed	928,400 cubic yards	406,100 cubic yards
PCB Mass removed (kilograms)	1143	843
Engineered Cap	Allowed under contingent remedy	Estimated 112 acres or less
Sand cover over sediments with PCB concentrations 1.0 — 2.0 ppm and 8-inch thickness or less that exceed the 1.0 ppm PCB RAL	None (not allowed)	Estimated 114 acres or less
Post-dredging sand cover in dredged areas if contaminants have PCB concentrations greater than the 1.0 ppm PCB RAL	Required (as necessary to meet the SWAC)	Estimated 30 acres
Transportation of dredge slurry from dredge to river-side facility	In-water pipeline	In-water pipeline
Separation of water from sediments	Mechanical presses	Geotextile tubes
Transportation of contaminated sediment from a river-side dewatering facility to landfill for final disposal	Trucks	Trucks
Disposal of dredged sediments	Contaminated sediments will go to a landfill that complies with all applicable federal and state laws and regulations	Contaminated sediments will go to a landfill that complies with all applicable federal and state laws and regulations
Institutional Controls until contaminants are at acceptable levels	Required	Required
Long-term monitoring of biota and water until contaminants are at acceptable levels	Required	Required
Monitored Natural Recovery until contaminants are at acceptable levels	Required	Required
Long-term monitoring and maintenance of cap	Required for contingent remedy	Required
Time (from 2007) to complete remediation	7 years	2 years
Cost	$144 million	$102 million

Fundamental change

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Table 7. Comparison of Remedy Volumes, Mass Removal, and Remediation Areas for OU 1¹

	Sediment Volume
	Addressed					Mass Removed				Area Remediated
	(cubic yards; cy)					(kilograms; kg)				(acres)
				Amended				Amended				Amended
Remedial Action	2002 ROD			Remedy		2002 ROD		Remedy		2002 ROD		Remedy
Dredge/dispose 3		928,400	2		406,100		1,143		843		426		216
Engineered cap 4		0			325,100		0		0		0		112
Sand cover over PCB concentrations 1.0 - 2.0 ppm		0			178,800		0		0		0		114
Remedial action area total		928,400			910,000		1,143		843		426		442

Table Notes:
1	Figures are modeled estimates except for dredge and residual sand cover components which are based on actual data. Because of variation between actual conditions and modeled estimates, the total acreage, sediment volume, and PCB mass projected for the Amended Remedy vary from the acreage, sediment volume and PCB mass estimate for the 2002 ROD Remedy.
2	The ROD estimate did not account for overcut. In addition, the 928,400 cubic yard volume estimate is a modeled estimate and does not account for “high subgrade” (i.e., areas that have a hard undredgable surface at higher than expected elevation underneath the zone of contaminated sediments, resulting in a lower volume than predicted of contaminated sediments). Based on actual dredging experience, high subgrade is estimated to reduce the total dredge volume by up to 90,000 cubic yards.
3	Values indicated are based on actual data for the 2004-2006 RA activities and projections for the 2007 and 2008 RA activities. This Amended Remedy includes dredging in the following areas beyond those areas already identified by the 2007 RA Work Plan: re-dredge of Sub-Area POG2 and areas north of the trestle trail with residual concentrations above 5.0 ppm; 7-8 acres in Sub-Area D1; 40 acres in Sub-Areas D2N, E3 North, E3 South, E4, POG4, and F (due to capping constraints, based on a 6-foot post-cap water depth requirement); and 0.7 acres in Sub-Area E2.
4	Approximate average of 13-inches includes 3-inch overplacement allowances in both the sand and armor layers.

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XIII. Statutory Findings

Under CERCLA Section 121, 42 U.S.C. § 9621 and the NCP, 40 C.F.R. § 300.430, the remedies that are selected for Superfund sites are required to be protective of human health and the environment, comply with applicable or relevant and appropriate requirements (unless a statutory waiver is justified), be cost-effective, and utilize permanent solutions and alternative treatment technologies or resource recovery technologies to the maximum extent practicable. In addition, CERCLA includes a preference for remedies that employ treatments that permanently and significantly reduce the volume, toxicity, or mobility of hazardous wastes as a principal element, and there is a bias against off-site disposal of untreated wastes. The following sections discuss how the Amended Remedy meets these legal requirements.

This ROD Amendment satisfies these requirements as follows:

1. Protection of Human Health and the Environment

Implementation of the Amended Remedy will adequately protect human health and the environment and achieve the RAOs discussed in Section IV above, through the following actions:

• Dredging and off-site disposal of PCB-contaminated sediment. Dredging is focused on sediments with higher PCB concentrations.

• In-place containment of PCB contaminated sediments under engineered caps designed to provide long-term stability. Capping will generally be performed where PCB concentrations are lower and contaminated deposits are relatively thin.

• Enhanced natural recovery by placement of a sand cover. Natural recovery will be accelerated where PCB concentrations are only slightly above the 1.0 ppm PCB RAL (i.e., between 1.0 to 2.0 ppm) and would also be limited to areas where the thickness of sediment at those PCB levels is eight inches or less.

• Construction monitoring to ensure that there are no significant releases of contaminants during remedial activities.

• Long-term monitoring and maintenance of caps.

• Long-term monitoring of surface water and biota.

• Implementation of an Institutional Control Implementation and Assurance Plan.

The Amended Remedy will address sediment with PCB concentrations exceeding the 1.0 ppm RAL. The estimated post remediation PCB SWAC will meet the SWAC goals if

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the RAL is not achieved in all areas within OU 1.

Implementation of the Amended Remedy in OU 1 will result in reductions in fish tissue PCB concentrations to acceptable levels within a reasonable time and in a shorter time than the 2002 ROD Remedy. Monitoring will help assess achievement of remedial action objectives. The Amended Remedy does not pose unacceptable short-term risk because experience on other projects has shown that environmental dredging and capping does not result in significant contaminant releases during implementation.

2. Attainment of Applicable or Relevant and Appropriate Requirements

ARARs are discussed in detail in the 2002 ROD for the Site, and are summarized in Table 8 below. These ARARs will be met by the Amended Remedy.

TABLE 8. Fox River ARARs

Act/Regulation	Citation
Federal Chemical-Specific ARARs
TSCA1	40 CFR 761.79 and EPA Disposal Approval
	40 CFR 761.75
	40 CFR 761.61(c)
Clean Water Act — Federal Water Quality Standards	40 CFR 131 and 33 CFR 323
Federal Action-/Location-Specific ARARs
Fish and Wildlife Coordination Act	16 USC 661 et seq.
	33 CFR 320-330 — Rivers and Harbors Act
	40 CFR 6.304
Endangered Species Act	16 USC 1531 et seq.
	50 CFR 200
	50 CFR 402
Rivers and Harbors Act	33 USC 403; 33 CFR 322, 323
National Historic Preservation Act	15 USC 470; et seq. 36 CFR Part 800
Floodplain and Wetlands Regulations and Executive Orders	40 CFR 264.18(b) and Executive Order 11988
State Chemical-Specific ARARs
Surface Water Quality Standards	NR 102, 105 (To Be Considered), and 207
	NR 722.09 1-2
Groundwater Quality Standards	NR 140
Soil Cleanup Standards	NR 720 and 722
Hazardous Waste Statutes and Rules	NR 600-685
State Action-/Location-Specific ARARs
Management of PCBs and Products Containing PCBs	NR 157
Wisconsin’s Floodplain Management Program	NR 116
Solid Waste Management	NR 500-520
Fish and Game	Chapter 29.415 — Wisconsin Statutes

Note 1: TSCA establishes requirements for the handling, storage, and disposal of PCB-containing materials equal to or greater than 50 ppm. TSCA is an ARAR at the Site with respect to any PCB-

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containing materials with PCB concentrations equal to or greater than 50 ppm that are removed from the Site. However, all known TSCA sediments in OU 1 have been removed during dredging operations from 2004 to 2006. This is unchanged from the 2002 ROD and all TSCA requirements for off-site disposal will still be met.

3. Cost Effectiveness

The Amended Remedy will cost approximately $42 million less to implement than the 2002 ROD Remedy. A significant portion of the cost savings is due to the smaller volume of relatively clean sediment that will be disposed of at a landfill under the Amended Remedy. The Amended Remedy will generally achieve equivalent or better results at lower cost, so it is more cost-effective than the 2002 ROD Remedy.

4. Use of Permanent Solutions and Alternative Treatment Technologies or Resource Recovery Technologies to the Maximum Extent Practicable

EPA and WDNR have determined that the Amended Remedy represents the maximum extent to which permanent solutions and treatment technologies can be used in a cost-effective manner for the Site.

5. Preference for Treatment as a Principal Element of the Remedy

Neither the 2002 ROD Remedy nor the Amended Remedy satisfies the statutory preference for treatment of the hazardous substances present at the Site because treatment was not found to be practical or cost-effective. For example, the most promising treatment technology, vitrification, was fully evaluated, but was not cost-effective and it had implementability issues (e.g., engineering uncertainties because a full-scale sediment vitrification facility had never been designed, permitted, or constructed). However, water separated from dredged sediments will be treated prior to discharge back to the Lower Fox River.

6. Five Year Review Requirements

CERCLA Section 121(c), 42 U.S.C. § 9621(c) and the NCP at 40 C.F.R. § 300.430(f)(4)(ii), require a 5-year review if the remedial action results in hazardous substances, pollutants, or contaminants remaining on Site above levels that allow for unlimited use and unrestricted exposure. Because this remedy will result in hazardous contaminants remaining on Site above levels that allow for unlimited exposure, a statutory review will be conducted within 5 years after initiation of the remedial action to ensure that the remedy is, or will be, protective of human health and the environment.

XIV. Public Participation and Documentation of Significant Changes from
Proposed Plan

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To fulfill the requirements of CERCLA Section 117(b), 42 U.S.C. § 9617(b), and the NCP at 40 C.F.R. §§ 300.430(f)(5){iii)(B) and 300.430(f)(3)(ii)(A)), a ROD Amendment must document and discuss the reasons for any significant changes made to the Proposed Plan. Public participation requirements listed above, as well as those in NCP (40 C.F.R. §§ 300.435(c)(2)(ii) have been met.

The Proposed Plan was released for public comment on November 26, 2007. It proposed modifying the 2002 ROD Remedy from an all-dredging remedy with a capping contingency to: 1) dredging, 2) capping, and 3) sand cover. Compared to the 2002 ROD, the RAL and the SWAC goals are unchanged. Agency responses to all significant public comments are included in the Responsiveness Summary, attached to this ROD Amendment as Appendix A.

XV. New Information Obtained During the Public Comment Period

While there were a number of comments on the Proposed Plan that expressed concerns regarding the permanence or effectiveness of capping, no comments provided new information or evaluations based on engineering or scientific analyses or data, that demonstrated capping or sand covers would not be effective or protective.

In conclusion, there were no fundamental changes to the Proposed Plan due to new information or considerations raised in the public comment period.

/s/ Richard C. Karl
Richard C. Karl, Director	Date 6/17/08
Superfund Division
EPA — Region 5
/s/ Bruce Baker
Bruce Baker, Deputy Administrator	Date June 6, 2008
Water Division

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Consent Decree Appendix I

AMENDED STATEMENT OF WORK

FOR COMPLETION OF THE REMEDIAL DESIGN, THE REMEDIAL ACTION,

AND OTHER RESPONSE WORK FOR

OPERABLE UNIT 1 AT THE

LOWER FOX RIVER AND GREEN BAY SITE

BROWN, OUTAGAMIE, AND WINNEBAGO COUNTIES, WISCONSIN

I. PURPOSE

          This Amended Statement of Work (“Amended SOW”) sets forth the requirements for completion of the Remedial Design (“RD”), the Remedial Action (“RA”), and other Response Work relating to Operable Unit 1 (“OU 1”) of the Lower Fox River and Green Bay Site (the “Site”). The selected remedy for OU 1 at the Site is set forth in a Record of Decision and a Record of Decision Amendment issued by the U.S. Environmental Protection Agency (“EPA”) and the Wisconsin Department of Natural Resources (“WDNR”) (collectively referred to herein as the “Response Agencies” or the “Agencies”). The original Record of Decision for OUs 1 and 2 at the Site was signed in December 2002 (the “2002 ROD”). A Record of Decision Amendment, signed in June 2008 (the “2008 ROD Amendment”), modified certain aspects of the selected remedy for OU 1. The 2002 ROD and the 2008 ROD Amendment are collectively referred to herein as the “RODs.”

          This Amended SOW addresses only OU 1. Significant Remedial Design and Remedial Action activities at OU 1 have already been performed by P.H. Glatfelter Company and WTM I Company under a Consent Decree that was approved and entered on April 12, 2004, in the case captioned United States and the State of Wisconsin v. P.H. Glatfelter Co. and WTM I Co., Case No. 03-C-0949 (E.D. Wis.) (the “Original Decree”). Since entry of the Original Decree, P.H. Glatfelter Co., WTM I Company, and Menasha Corporation also have agreed to provide additional funding for the continuation of the Response Work at OU 1 pursuant to a set of Agreed Supplements to the Original Decree. This Amended SOW replaces the SOW that accompanied the Original Decree and all remaining RD activities, RA activities, and other Response Work relating to OU 1 shall be performed under the Amended Decree and this Amended SOW.¹ In the event of conflict between this Amended SOW and the

¹ The RD for OU1 was originally addressed in an Administrative Order on Consent between WTM I Company, EPA, and WDNR, captioned In the matter of the Lower Fox River and the Green Bay Site, Docket No. V-W-’03-C-745 (the “July 2003 AOC”), which was incorporated into the Original Decree and made enforceable only as to WTM I Company. Consistent with the approach taken in that prior settlement agreement, this Amended SOW specifies certain RD requirements that apply solely to WTM I Company.

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original RD SOW that accompanied the July 2003 AOC, this Amended SOW shall control.

II. DESCRIPTION OF THE OU 1 REMEDIAL ACTION, AS MODIFIED BY THE 2008 ROD AMENDMENT

          The remedial action addresses all areas of OU 1 containing sediment with PCB concentrations greater than the 1.0 ppm Remedial Action Level (“RAL”). The remedial action adopts removal of contaminated sediments with dredging as the primary remedial approach for sediment exceeding the 1.0 ppm PCB RAL, but it allows alternative remedial approaches to be used instead of dredging (i.e., capping and placement of a sand cover) under the eligibility criteria specified below. The short-term and long-term objectives of the remedial action include: removing and containing PCB-contaminated sediment in OU 1 to meet the RAL and/or OU-specific SWAC goals upon construction completion; achieving further reductions in PCB surface concentrations through natural recovery processes; achieving corresponding reductions in PCB levels in the water column and in fish tissue; and ensuring continuation of those benefits to human health and the environment through long-term operation and maintenance and application of institutional controls.

A. The Primary Remedial Approach and the Alternate Remedial Approaches

1. The Primary Remedial Approach

          The remedial action adopts sediment removal (discussed below) as the primary remedial approach for sediment exceeding the 1.0 ppm PCB RAL. The primary remedial approach must be used to remediate such sediment unless the eligibility criteria for employing an alternate remedial approach in the specific area can be met and the alternate remedial approach is more feasible and more cost effective in that area.

          Any final remedial action must incorporate the following minimum standards:

m

Sediment removal requirements. All sediment with PCB concentrations exceeding the 1.0 ppm RAL will be targeted for removal in all areas within OU 1 unless use of an alternate remedial approach is approved by the Agencies for a particular area under the eligibility criteria listed below in Section II.A.2. More specifically, in each sediment removal area, sediment shall be removed to a target elevation that: (1) encompasses all contaminated sediment exceeding the 1.0 ppm PCB RAL (as determined from 2003-2004, 2006-2007 and 2008 sampling data and data interpolation), including an overdredge allowance, as appropriate; and (2) includes any remaining sediments with PCB concentrations greater or equal to 50 ppm.

m

Sediment removal methods and precautions. Sediment removal will be conducted using a dredge appropriate to Site conditions. In-water pipelines

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	or other appropriate methods will transport the dredged sediment from the dredge to the staging area(s). Dredging experience at OU 1 from 2004 — 2007 has shown that with careful operation of environmental dredges, silt curtains or other containment devices generally are not necessary during dredging activities. However, if future operations indicate that controls are necessary to ensure protectiveness, then additional measures or modifications to the dredging process will be employed, as appropriate. Turbidity will be monitored during dredging operations. Buoys and other waterway markers will be installed around the perimeter of the in-water work area.
m	Sediment dewatering and disposal. Dewatering will be employed at the staging facility for dredged sediment. The dewatering will be accomplished using processes such as plate and frame presses, belt filter presses, or geotextile tubes to remove water from PCB contaminated sediment before disposal. Based on dredging and dewatering from 2004 — 2007, it is expected that geotextile tubes will likely be used to complete the dewatering of dredged sediments for the remainder of the project. Dewatered contaminated sediment will be transported by truck, rail, and/or barge to a dedicated engineered landfill or another suitable upland disposal facility, consistent with applicable federal and state requirements. Based on previous experience at OU 1, it is anticipated that trucks would be utilized to transport dredged PCB-contaminated sediments to an approved upland disposal facility. All known TSCA sediments were removed during dredging operations from 2004 to 2006. Although only non-TSCA sediments are expected to remain at OU 1, if TSCA sediments were found to still remain at OU 1, dewatered sediments subject to TSCA disposal requirements must be transported consistent with TSCA requirements by truck, rail, and/or barge to a landfill facility appropriately permitted to receive TSCA waste.
m	Water treatment. Superfund cleanups are required to meet the substantive discharge requirements of the Clean Water Act, but National Pollutant Discharge Elimination System (NPDES) permits are not required for on-site work. Thus, water generated by dredging and dewatering operations will be treated prior to discharge back to the River and will meet all state and federal water quality standards. This may include (but not be limited to) bag filter and sand filtration and granulated activated carbon (GAC) treatment. Treated water will be sampled and analyzed to verify compliance with the appropriate discharge requirements according to plans that will be developed in the design phase and approved by the Agencies.
m	Post-removal confirmatory surveys and sampling. After removal of sediments from a particular area, a survey and sampling activities will be performed to: (1) determine whether the sediment removal requirements specified above were met; and/or (2) determine whether there is a need for post-removal residuals management measures, as specified below. If the

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survey and/or sampling results show that the sediment removal requirements were not met in an area, then additional sediment in the area shall be removed until compliance with the sediment removal requirements is achieved. If the survey and/or sampling results in a particular area shows that post-removal dredge residuals management measures are needed, then those measures shall be implemented. The post-removal surveys and sampling will be done when the initial round of dredging in a particular area is completed.

m

Post-removal residuals management. The 2008 ROD Amendment uses the term “generated residuals” for sediment that is re-suspended and re-deposited on the surface of a newly-dredged area (i.e., within the top six inches of the sediment), and it uses the term “undisturbed residuals” for sediment that is more than six inches below the surface of the newly-dredged sediment. If post-removal confirmatory sampling in a sediment removal area reveals post-removal generated residuals or undisturbed residuals with PCB concentrations exceeding the 1.0 ppm PCB RAL, then one or more of the following must occur:

• For management of generated residuals

§	Generated residuals with a PCB concentration equal to or greater than 5.0 ppm must either be: (1) removed (typically by re-dredging) in accordance with the sediment removal requirements specified above; or (2) capped, if the eligibility criteria for that alternate remedial approach can be met, as specified below.
§	Generated residuals with a PCB concentration between 1.0 ppm and 5.0 ppm must be covered with at least 6 inches of clean sand from an off-Site source (referred to as a “residual sand cover”).
§	Placement of a residual sand cover as necessary to meet the SWAC goal for the OU of 0.25 ppm.

• For management of undisturbed residuals

§ Unless EPA and WDNR approve use of a different residuals management approach in a particular area within OU 1, undisturbed residuals with a PCB concentration exceeding the 1.0 ppm PCB RAL must be removed (typically by re-dredging) in accordance with the sediment removal requirements specified above. EPA and WDNR may evaluate and approve the use of a different residuals management approach (such as a cap or a sand cover) for undisturbed residuals in limited areas if the eligibility criteria

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for alternate remedial approaches in Section II.A.2 below is met.

2. Alternate Remedial Approaches

          As noted above, the primary remedial approach shall be used to remediate sediment with a PCB concentration exceeding the 1.0 ppm PCB RAL, unless the eligibility criteria for employing an alternate remedial approach in the specific area can be met and the alternate remedial approach is more feasible and more cost-effective in that area. The Agencies have already determined that alternate remedial approaches will be more feasible and more cost-effective than dredging in certain areas identified in the November 2007 OU 1 Design Supplement (the “Design Supplement”), but the Design Supplement did not make final recommendations for all areas. Capping will only be allowed where the average PCB concentrations do not exceed 10.0 ppm in the top 8-inch interval of sediment underlying the cap.

          The Design Supplement included alternate remedial approaches in some areas, but more specific plans for any alternate remedial approaches in OU 1 will be developed before or during completion of the remedial action. Any final remedial action must incorporate the following minimum standards:

m Engineered caps. An engineered cap consisting of a sand layer and an armor stone layer may be installed in an area if the following eligibility criteria are satisfied:

• Minimum water depth criteria for capping.

§	Capping will not be allowed in areas within the federally-authorized navigation channels. (Note: Sand covering will be allowed in the navigation channel(s) to manage dredged residuals. These sand covers must be at least 6 inches thick and must not impede navigation.)
§	Capping will be allowed in areas outside of the federally authorized navigation channel only if the top of the cap is at least 6 feet below the low water datum.

• Engineered caps of 13 inches in thickness. This type of cap may be used in areas outside of the federally authorized navigational channel if the minimum water depth criteria for capping and all of the following additional criteria are met:

§ The cap shall be constructed of at least 3 inches of clean sand covered by at least 4 inches of armor stone, with an overplacement allowance of 3 inches of sand and 3 inches of armor stone.

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§ The PCB concentration in the sediment in the eight inches immediately beneath the cap² shall not exceed an average of 10.0 ppm.

• Initial post-construction cap monitoring. Immediately after completion of capping construction activities for both sand and then separately for armor layers, a hydrographic survey shall be performed and direct cap thickness verification sampling shall be conducted. The post-construction thickness sampling will verify that cap placement specifications and cap construction criteria have been met, including an evaluation of whether the installed cap is sufficient in aerial coverage and thickness, and whether the cap material meets all applicable physical and chemical design standards. If the initial post-construction cap monitoring in a particular area shows that the cap placement specifications and cap construction criteria have not been met, then the cap in that area shall be augmented or replaced to meet the applicable specifications and criteria.

m Sand covers in undredged areas.

o A cover composed of at least an average of 6 inches (3-inch minimum thickness) of uncontaminated sand from an off-Site source may be placed over certain undredged areas that have low PCB concentrations in a relatively thin layer of PCB-contaminated sediment exceeding the 1.0 ppm PCB RAL if both of the following criteria are met:

• The sediment beneath the sand cover must not exceed 2.0 ppm at any depth within the sediment profile.

• The sediment profile shall contain only one 8-inch interval with PCB concentrations between 1.4 – 2.0 ppm.

o A cover composed of at least an average of 3 inches (1.5-inch minimum) of uncontaminated sand from an off-Site source may be placed over certain undredged areas that have low PCB concentrations in a relatively thin layer of PCB-contaminated sediment exceeding the 1.0 ppm PCB RAL if both of the following criteria are met:

• The sediment beneath the sand cover must not exceed 1.4 ppm at any depth within the sediment profile.

• The sediment profile shall contain only one 8-inch interval with PCB concentrations between 1.0 – 1.4 ppm.

Immediately after completion of sand cover placement activities, sand cover

² This eight inches is comprised of two 4-inch sampling intervals.

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cores shall be collected. These initial post-construction cores or other measures approved by the agencies will verify that sand cover placement specifications have been met, including an evaluation of whether the sand cover is sufficient in areal coverage and thickness. If the initial post-construction sand cover monitoring in a particular area shows that the sand cover placement specifications have not been met, then the sand cover in that area shall be augmented or replaced to meet the applicable specifications and criteria.

m

Exceptional areas. EPA and WNDR may approve use of modified remedial approaches or other remedial approaches in exceptional areas at the Site based upon a showing that use of another remedial approach in an exceptional area is sufficiently protective and is more feasible and more cost effective than the primary remedial approach or any of the alternate remedial approaches described above. EPA and WDNR expect that there will only be a relatively small number of areas at the Site that will need to be treated as exceptional areas, including some shallower near shore areas or areas near utilities. The specific remedial approach for each exceptional area will be subject to review and approval by EPA and WDNR, and will be included in the final remedial design.

B. The Relationship Between the Remedial Action Level (RAL) Performance Standard and the Surface-Weighted Average Concentration (SWAC) Goal

          The 2008 ROD Amendment requires remediation of all contaminated sediment exceeding the 1.0 ppm PCB Remedial Action Level (RAL) either by the primary remedial approach or by one of the alternate remedial approaches discussed above. The 2008 ROD Amendment also establishes two standards that will be used to judge the completion of construction of the remedial action for OU 1: a RAL Performance Standard and a SWAC goal. As explained below, construction of the remedy will be deemed complete for OU 1 if the RAL Performance Standard has been met throughout the OU. If the RAL Performance Standard has not been met after employing the primary remedial approach and/or the alternate remedial approaches throughout the OU, then the remedy will be deemed complete if the SWAC, as determined by WDNR and EPA, meets the SWAC goal for the OU. The construction of the remedy will not be deemed complete based on the SWAC goal unless and until all sediment exceeding the RAL has been remediated using the primary remedial approach and/or the alternate remedial approaches.

          The 2008 ROD Amendment adopts the same RAL as the 2002 ROD, and it incorporates a presumption in favor of remediation by sediment removal, but it also allows remediation of sediment above the RAL by alternate remedial approaches. The mass and volume of contaminated sediment to be removed under the primary remedial approach will depend upon the horizontal footprint and depth of the contamination exceeding the 1.0 ppm PCB RAL. The use of alternate remedial approaches for

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remediation of sediment exceeding the 1.0 ppm PCB RAL will depend upon the depth and level of contamination of the sediment and location-specific design requirements and eligibility criteria, as detailed above.

          If all sediment exceeding the 1.0 ppm PCB RAL within OU 1 is removed and/or contained using the primary remedial approach and/or the alternate remedial approaches, then construction of the remedy in OU 1 will be deemed complete based on achievement of the RAL Performance Standard. Achievement of the RAL Performance Standard will be assessed soon after completion of sediment removal, capping, and sand cover placement activities. As discussed below, even if the RAL Performance Standard is not met, construction of the remedy in OU 1 can still be deemed complete based on the Agencies’ determination that the SWAC goal has been achieved.

          As explained in the 2002 ROD, a SWAC at or near 0.25 ppm is expected to reduce PCB levels in sport fish to acceptable levels within a reasonable time period after completion of active remediation. The remedial action therefore requires achievement of an OU-specific SWAC goal if the RAL Performance Standard has not been met after employing the primary remedial approach and/or the alternate remedial approach throughout OU 1 (e.g., if post-removal residuals exceeding the 1.0 ppm PCB RAL remain in an area after it has been dredged to the required target elevation). Under the remedial action, the PCB SWAC goal for OU 1 is 0.25 ppm PCBs. If the SWAC calculation, as determined by the EPA and WDNR, is met within OU 1 after all sediment exceeding the 1.0 ppm PCB RAL has been remediated using the primary remedial approach and/or the alternate remedial approaches, then the construction of the remedial action can be deemed complete based on the Agencies’ determination that the SWAC goal has been achieved.

          The remedial action offers a range of options for completing construction of the remedy if all contaminated sediment exceeding the 1.0 ppm PCB RAL has been remediated in OU 1 using the primary remedial approach and/or the alternate remedial approaches, but it still appears that the RAL Performance Standard or achievement of the SWAC goal will not be met. Those options are:

1.	Performing additional dredging or capping to ensure that all sediments with PCB concentrations greater than the 1.0 ppm PCB RAL are removed, contained or covered;
2.	Installing capping in areas with higher PCB concentrations (provided minimum water depth criteria and other capping criteria and design requirements are met);
3.	Placing a residual sand cover over dredged areas; and
4.	Placing a sand cover over undredged areas (consistent with the general requirements for sand covers outlined above).

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          Once the Agencies have determined that the RAL Performance Standard or the SWAC goal is achieved in OU 1, the construction of the OU 1 remedy will be deemed complete (although ongoing monitoring and maintenance requirements and contingencies that are part of the remedial action will continue to apply).

C. Other Features of the Remedial Action

     The remedial action includes the following additional elements:

m	Site mobilization and preparation. Staging area(s) will be required for facilities associated with sediment dewatering, sediment handling, water treatment, and material handling for cap and cover operations. Specific staging areas will likely be facilities previously utilized for the OU 1 project from 2004 to 2007. Docking facilities for dredging equipment and ancillary equipment for capping or sand covers at the existing facility will also likely be utilized.
m	Demobilization and Staging Area(s) restoration. Demobilization, Staging area(s) restoration, and decontamination of all equipment will require removing all equipment from the staging and work areas and restoring the staging area(s) as needed to meet the legal requirements or any agreement with the property owner.
m	Natural recovery after remediation. Although the RAL Performance Standard or the SWAC goal will need to be met before construction of the remedial action can be deemed complete in OU 1, it will take additional time for natural recovery before some of the remedial action objectives are achieved.
m	Long-term monitoring, cap maintenance, and institutional controls. These requirements are discussed below in Section II.D.

D. Long Term Monitoring, Cap Maintenance, and Institutional Controls

m	Long-term monitoring of surface water and biota. The remedial action requires long-term monitoring of surface water and biota to assess progress in achieving the remedial action objectives. Monitoring will continue until acceptable levels of PCBs are reached in surface water and fish. A detailed Long-Term Monitoring Plan, specifying the types and frequency of monitoring, will be developed.
m	Long-term cap monitoring. The remedial action requires long-term monitoring of any engineered caps that are installed at the Site to confirm their long-term integrity and protectiveness. The long-term monitoring will include:

• Hydrographic surveys and core sampling. A hydrographic survey

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shall be performed and cores of the cap shall be collected, at a minimum, 2 years and 4 years after the initial post-construction survey and every 5 years thereafter. Based on the results observed in that periodic monitoring, EPA and WDNR may increase or decrease the frequency of periodic monitoring. EPA and WDNR may require additional cap monitoring (between periodic monitoring events) after particular events that could cause cap damage, such as major storm events, ice scour events, or propeller wash scour events.

§	Monitoring for physical integrity. Hydrographic survey results and core samples collected during cap monitoring events will be analyzed to determine cap thickness and integrity.
§	Monitoring for chemical containment. Some core samples collected during cap monitoring events will also be analyzed for PCB contamination within 6 inch intervals (or less) to determine whether contamination is being effectively contained and isolated from the biota.

m Cap enhancement and/or removal in response to cap degradation. If monitoring, or other information, indicates that the cap in an area no longer meets its original as-built design criteria and that degradation of the cap in the area may result in an actual or threatened release of PCBs at or from the area, then EPA and WDNR shall identify additional response activities to be undertaken in the area. If monitoring or other information shows a pattern of cap degradation in multiple areas, then EPA and WDNR may identify additional response activities to be undertaken in multiple capped areas at the Site (including in areas that have not yet shown any signs of degradation). The additional response activities shall include either:

• Cap enhancement (e.g., application of a thicker sand layer or stone layer or use of larger armor stone); and/or

• Cap removal and removal of underlying contaminated sediment (consistent with the requirements of the primary remedial approach).

m Cap enhancement and/or removal in response to changed water levels. EPA and WDNR may identify additional response activities to be undertaken in a capped area if monitoring or other information indicates that the minimum water depth criteria for capping are no longer being met in the area and that the failure to meet the water depth criteria: (1) may result in an actual or threatened release of PCBs at or from the area (e.g., due to an increased risk of damage caused by propeller wash, ice scour, or other factors); or (2) may have adverse impacts on Lower Fox River uses. The additional response activities may include either:

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• Cap enhancement; and/or

• Cap removal and removal of underlying contaminated sediment (consistent with the requirements of the primary remedial approach).

m	Institutional controls. Institutional Controls (ICs) are necessary to prevent interference with the remedy and to reduce exposure of contaminants to human or ecological receptors. ICs are defined as non-engineered instruments, such as administrative and legal controls that help minimize potential for exposure to contamination and protect the integrity of the remedy. ICs are also required to assure long-term protectiveness for those areas that do not allow for unlimited use and unrestricted exposure. ICs are also required to maintain the integrity of the remedy. At this Site, ICs are required to protect the cap (engineered remedy), and reduce potential exposure for all areas where residual contamination will remain. Also, interim ICs may be necessary to prevent exposure to contaminants which may be released during construction activities such as dredging, capping and placing of sand covers. Long-term protectiveness requires compliance with effective ICs. Hence, effective ICs must be implemented, monitored and maintained.
	Institutional controls will be identified as part of the remedial design process in an Institutional Control Implementation and Assurance Plan (ICIAP) for review and approval by EPA and WDNR. The required ICs may include property use controls (such as easements and restrictive covenants), governmental controls (including zoning ordinances and local permits), and informational devices (including signage and fish consumption advisories). The ICIAP shall identify parties responsible (i.e., federal, State or local authorities or private entities) for implementation, enforcement, and monitoring and long-term assurance of each institutional control including costs, both short-term and long-term, and methods to fund the costs and responsibilities for each step.
	The ICIAP shall include maps, which shall describe coordinates of the restricted areas on paper and provide shape files in an acceptable GIS format (i.e., NAD 83) depicting all areas that do not allow unlimited use/unrestricted exposure, where dredging is not allowed (e.g., capped areas, buried utilities and near highway bridges) and areas where ICs have been implemented along with a schedule for updating them. The maps and information about the ICs shall be made available to the public in at least several ways, such as a website that is easily accessible to the public and posted in the public library. In addition the ICIAP shall identify reporting requirements associated with each institutional control which shall include at a minimum an annual certification regarding the status and effectiveness of the ICs.
	Among other things, the ICIAP shall include the following institutional controls for any capped areas:

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• By using governmental and/or property use ICs, establishment of a Regulated Navigation Area (designating areas including an appropriate buffer) where use restrictions are required such as water use restrictions (e.g., limitations on anchoring, dredging, spudding, or dragging limitations, conducting salvage operations, establishment of “no wake” areas and other operating restrictions for commercial and non-commercial vessels which could potentially disturb the riverbed or the engineered remedy limitations); construction limitations (e.g., restrictions on utilities such as laying cable, new bridges or dredging limitations for marina expansion or maintenance); and monitoring and maintenance requirements for all areas including dams.

• Provide additional information to the public to assure protectiveness of the remedy (such as fish consumption advisories.)

III. THE RESPONSE WORK

A. Timing

          Settling Defendants shall commence the work required by this Amended SOW by no later than the Date of Lodging of the Amended Decree and shall continue such work until all requirements under the RODs have been met and the performance standards set forth in the RODs have been achieved. Among other things, this Amended SOW requires the immediate submission of an integrated Final Design and Remedial Action Work Plan for work to be performed in 2008 and 2009, and later submission of corresponding plans for work to be performed after 2009. The Settling Defendants shall submit all such plans in accordance with the schedule specified in Section IV of this Amended SOW, and shall implement the approved plans as a requirement of this Amended SOW.

B. Scope of the Work

          The Amended Consent Decree and this Amended SOW: (i) require Settling Defendant WTM I Company to perform all remaining aspects of the Remedial Design for OU 1 in accordance with the RODs and all RD submittals that are approved by the Response Agencies; (ii) require the Settling Defendants to perform all remaining aspects of the Remedial Action for OU 1 in accordance with the RODs and all Remedial Action Work Plans that are approved by the Response Agencies; and (iii) require the Settling Defendants to perform all other Response Work — including operation and maintenance and long-term monitoring activities — as specified by the RODs and all relevant plans that are approved by the Response Agencies. That work shall include the continuation of sediment remediation in OU 1 in accordance with the schedules contained in the approved RD submittals and Remedial Action Work Plans and in Section IV of this SOW, with continuation of full-scale sediment remediation throughout subsequent years (until completion of construction of the OU 1 remedy), and performance of monitoring and maintenance activities (during and after construction of

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the remedy, as required by the RODs, the RD submittals, the Remedial Action Work Plans, and other pertinent plans).

C. Remedial Design and Remedial Action Plans

          As detailed below and in accordance with Section XII of the Amended Decree, the Settling Defendants shall submit the following plans for review and approval by the Response Agencies, and the Settling Defendants shall implement such plans as approved by the Response Agencies.

1. Final Design and Remedial Action Work Plan for 2008-2009 Response Work

          As set forth herein and specifically in accordance with the schedule set forth in Section IV of this Amended SOW, Settling Defendants shall prepare and submit an integrated Final Design and Remedial Action Work Plan for 2008-2009 that establishes detailed plans and schedules for performance of all elements of the Response Work in 2008 and 2009. Settling Defendant WTM I Company shall be responsible for preparation of the Final Design elements of the integrated submittal and Settling Defendants shall be jointly responsible for preparation of the Remedial Action Work Plan portions of the submittal.

          The Final Design shall include relevant design information on site staging and support areas, as well as specific design plans for the following elements of the 2008-2009 Response Work:

s	dredging;
s	sediment dewatering, loading, hauling, and disposal;
s	water treatment and discharge;
s	sand cover placement; and
s	engineered cap placement.

          Consistent with the requirements that were originally imposed by Section III of the RD SOW for the July 2003 AOC and Section III of the RA SOW that accompanied the Original Decree, the integrated submittal shall also include final versions of the following plans for Remedial Action activities to be performed in 2008-2009:

s	a Health and Safety and Contingency Plan;
s	a Construction Quality Assurance Project Plan;
s	an Operation and Maintenance Plan;
s	a Sediment Removal Verification Plan;
s	a Quality Assurance Project Plan for the Operation and Maintenance Plan;

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s	an updated Regulatory Substantive Requirements Compliance Plan;
s	a Dredge Plan;
s	a Dewatering Plan;
s	a Water Treatment Plan;
s	a Loading, Transportation, and Disposal Plan;
s	a Sand Cover and Armored Cap Placement Plan;
s	a Capital and Operation and Maintenance Cost Estimate; and
s	a Final Project Schedule for the construction and implementation of the Response Work in 2008-2009 which identifies timing for initiation and completion of all critical path tasks.

The integrated submittal shall also include a description of: (i) the organization, responsibility, and authority of the Settling Defendants’ project team; (ii) plans for ensuring effective communications between Settling Defendants’ project team and the Response Agencies; and (iii) the Settling Defendants’ plans for addressing other environmental considerations that are potentially relevant to the 2008-2009 Response Work (including wetland protection, stormwater management, and surface water turbidity monitoring).

2. Pre-Final and Final Design and Draft and Final Remedial Action Work Plan for Post 2009 Response Work

          As set forth herein and specifically in accordance with the schedule set forth in Section IV of this SOW, Settling Defendants shall prepare and submit: (i) an integrated Pre-Final Design and Draft Remedial Action Work Plan for all remaining Response Work to be performed after 2009; followed by (ii) an integrated Final Design and Remedial Action Work Plan that establishes detailed plans and schedules for all remaining Response Work to be performed after 2009. Settling Defendant WTM I Company shall be responsible for preparation of the Pre-Final and Final Design elements of those integrated submittals and Settling Defendants shall be jointly responsible for preparation of the Draft and Final Remedial Action Work Plan portions of those submittals.

          The Post 2009 Pre-Final and Final Design shall include relevant design information on site staging and support areas (including information on any continued use of such areas and information on site demobilization and restoration), as well as specific design plans for all elements of the remaining Response Work.

          The integrated submittals shall also include draft and final versions of a Remedial Action Work Plan for the Post 2009 Response Work, which shall include modified or updated versions of the plans that are required to be included in the Remedial Action

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Work Plan for 2008-2009 (unless a particular plan is no longer relevant to the Response Work that remains after 2009).

          The integrated submittals shall specifically include detailed plans for implementing all long term monitoring, operation and maintenance, and institutional controls requirements, as described in Section II.D of this Amended SOW and Paragraph 14 and Section VIII of the Amended Decree. As envisioned by the Amended Decree, the Long Term Monitoring Plan may be included as part of the Operation and Maintenance Plan. Institutional controls requirements shall be addressed in an Institutional Controls Plan (also called an Institutional Control Implementation and Assurance Plan).

C. Content of Certain Supporting Plans

1. Health and Safety Plan

          The Health and Safety Plan shall be designed to protect on-site personnel and area residents from physical, chemical and all other hazards posed by activities conducted as part of the work.

2. Quality Assurance Project Plans

          The Quality Assurance Project Plans shall describe the site-specific components of the quality assurance program that the Settling Defendants shall use to ensure that the completed project meets or exceeds all design criteria, plans, and specifications.

D. Other Requirements

1. Community Relations Support

          The Response Agencies shall implement a community relations program. Settling Defendants shall cooperate with the Response Agencies and, at the request of the Response Agencies, shall participate in the preparation of appropriate information to be disseminated to the public by the Response Agencies. At the request of the Response Agencies, Settling Defendants shall participate in public meetings that may be held or sponsored by the Response Agencies to explain activities at or concerning the Site.

          Community relations support will be consistent with Superfund community relations policy, as stated in the “Guidance for Implementing the Superfund Program” and Community Relations in Superfund — A handbook.

2. Progress Reports

          Settling Defendants shall submit Monthly RD/RA Progress Reports and Quarterly Reports as required by Section XI of the Amended Decree. Upon request by the Response Agencies, Settling Defendants shall also provide more frequent progress reports (e.g., daily and/or weekly reports on sediment remediation progress and production).

Appendix I - Page 15

E. Implementation of the Response Work

          Settling Defendants shall implement the Response Work in accordance with the RODs, this Amended SOW, and the plans and schedules contained in the submittals and plans that are approved by the Response Agencies under this Amended SOW.

F. Completion of the Remedial Action for OU1

1. Construction Completion inspection

          Within 90 days after completion of all phases of construction specified by the RD and after conducting post-construction sampling to determine whether the RAL Performance Standard or the SWAC goal has been achieved as described in Section II.B of this Amended SOW, the Settling Defendants shall send the Response Agencies written notice for the purpose of scheduling and conducting a Construction Completion Inspection. The Construction Completion Inspection should consist of a site tour by the Settling Defendants and the Response Agencies, a review of the post-construction sampling data, and a discussion regarding the Settling Defendants’ plans for: (1) performing O&M, Long Term Monitoring, and Institutional Controls; and (2) taking any additional steps required to ensure completion of the RA such that the Performance Standards are achieved.

2. RA Completion Plan

          If the Performance Standards have not been achieved by the time of the Construction Completion Inspection, then the written notice sent to the Response Agencies shall indicate that the Construction Completion inspection will not serve as a Pre-Certification Inspection under Amended Decree Subparagraph 44.a. Within 60 days after confirmation at the Construction Completion Inspection that the Performance Standards have not been achieved, Settling Defendants shall submit an RA Completion Plan. The RA Completion Plan shall include a description of the characteristics of areas that do not comply with the Performance Standards and a detailed description (e.g., map, data tables and location information) showing areas in compliance or not in compliance with Performance Standards. Sampling and locational information should be provided in both hardcopy and EPA Superfund’s designated digital format (i.e., Superfund Electronic Data Deliverable, Specification Manual 1.05, website address: http://www.epa.gov/region5superfund/edman/). In addition to describing noncompliance areas, the RA Completion Plan shall outline any additional RA construction work required to achieve Performance Standards, a schedule for completing any additional RA construction work, and a proposed date for a Construction Completion Re-Inspection. The Settling Defendants shall implement the RA Completion Plan as approved by the Response Agencies.

3. RA Pre-Certification Inspection

          If the Settling Defendants believe that the RA has been fully performed such that the Performance Standards have been achieved, then the written notice sent to the

Appendix I - Page 16

Response Agencies shall indicate that the Construction Completion Inspection will also serve as an RA Pre-Certification Inspection under Amended Decree Subparagraph 44.a. If, after the RA Pre-Certification Inspection, the Settling Defendants still believe that the RA has been fully performed such that the Performance Standards have been achieved, Settling Defendants shall submit an RA Certification of Completion Report within 60 days after the RA Pre-Certification Inspection. In the RA Certification of Completion Report, a registered professional engineer and the Project Coordinator of the Settling Defendants shall certify that the RA has been completed in full satisfaction of the requirements of the Amended Decree. The Report shall also contain the following statement, signed by a responsible corporate official of each Settling Defendant:

“To the best of my knowledge, after thorough investigation, I certify that the information contained in or accompanying this submission is true, accurate and complete. I am aware there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations.”

The Report shall document that the RA has been performed such that the Performance Standards have been achieved. The Report shall include, but shall not be limited to, the following elements: (a) an introduction; (b) a chronology of events; (c) a summary of construction activities; (d) a summary of the RA Pre-Certification Inspection; (e) record drawings signed and stamped by a professional engineer; (e) an explanation of any modifications to the plans and why these were necessary for the project; (f) a verification that the RA has been completed such that the Performance Standards have been achieved; (g) a listing of the criteria, established before the construction was initiated, for judging the functioning of the RA and also explaining any modification to these criteria; (h) results of site monitoring, indicating that the RA meets or exceeds the Performance Standards; (i) an explanation of the O&M taking place at the site and any changes in the Final O&M Plan that were required based on modification of site plans during construction; and (j) a summary of project costs.

4. EPA Response to RA Certification of Completion Report

          If, after completion of the RA Pre-Certification Inspection and receipt and review of the RA Certification of Completion Report, EPA, after reasonable opportunity to review and comment by the State, determines that the RA or any portion thereof has not been completed in accordance with the Amended Decree such that the Performance Standards have not been achieved, EPA will notify Settling Defendants in writing of the activities that must be undertaken by Settling Defendants pursuant to Amended Decree Subparagraph 44.a to complete the RA such that the Performance Standards are achieved. EPA will set forth in the notice a schedule for performance of such activities consistent with the Amended Decree and this SOW or require the Settling Defendants to submit an RA Completion Plan pursuant to Section III.F.2 of this Amended SOW.

          If EPA concludes, based on the RA Pre-Certification Inspection and the RA

Appendix I - Page 17

Certification of Completion Report, and after a reasonable opportunity for review and comment by the State, that the RA has been performed in accordance with the Amended Decree such that the Performance Standards have been achieved, EPA will so certify in writing to Settling Defendants. This certification shall constitute the Certification of Completion of the RA for purposes of the Amended Decree.

G. Completion of the Response Work for OU1

1. Response Work Pre-Certification Inspection

          Within 90 days after Settling Defendants conclude that all phases of the Response Work have been fully performed, Settling Defendants shall send written notice to the Response Agencies for the purpose of scheduling and conducting a Response Work Pre-Certification Inspection to be attended by Settling Defendants and the Response Agencies. The purpose of the inspection is to determine whether the O&M, the Long Term Monitoring, and the Institutional Controls have been fully performed, as required by the Institutional Controls Plan and the Final O&M Plan.

2. Continuation of Response Work

          If, after the Response Work Pre-Certification Inspection, EPA determines (after a reasonable opportunity for review and comment by the State) that the Response Work or any portion thereof has not been fully performed, the Settling Defendants shall continue to perform O&M, Institutional Controls, and Long Term Monitoring as required by the Institutional Controls Plan and the Final O&M Plan. The Settling Defendants shall continue the Response Work pursuant to a schedule approved by EPA, after reasonable opportunity for review and comment by the State.

3. Response Work Certification of Completion Report

          If, after the Response Work Pre-Certification Inspection, the Settling Defendants believe that the Response Work has been fully performed, the Settling Defendants shall submit a Response Work Certification of Completion Report within 60 days after the Response Work Pre-Certification Inspection. In the Response Work Certification of Completion Report, a registered professional engineer and the Project Coordinator of the Settling Defendants shall certify that the Response Work has been completed in full satisfaction of the requirements of the Amended Decree. The Report shall also contain the following statement, signed by a responsible corporate official of each Settling Defendant:

“To the best of my knowledge, after thorough investigation, I certify that the information contained in or accompanying this submission is true, accurate, and complete. I am aware there are significant penalties for submitting false information, including the possibility of fine and imprisonment for knowing violations.”

The report shall document that the Response Work has been fully performed. The

Appendix I - Page 18

report shall include, but not be limited to, the following elements: (a) an introduction; (b) a chronology of events beginning with the Certification of Completion of the RA; (c) a summary of inspections for completion of Response Work; (d) record drawings signed and stamped by a professional engineer for any additional work completed since the Certification of Completion of the RA; (e) an explanation of any modifications to the plans and why these were necessary for the project; (f) a verification that the Response Work is complete; (g) a listing of the criteria, established before the construction was initiated, for judging the functioning of the RA and also explaining any modification to these criteria; (h) results of site monitoring, indicating that the Response Work is complete; (i) an explanation of any changes in the Final O&M Plan after the Certification of Completion of the RA; and (j) a summary of project costs after the Certification of Completion of the RA.

4. EPA Response to Response Work Certification of Completion Report

          If, after completion of the Response Work Pre-Certification Inspection and receipt and review of the Response Work Certification of Completion Report, EPA, after reasonable opportunity to review and comment by the State, determines that the Response Work or any portion thereof has not been fully performed, EPA will notify Settling Defendants in writing of the activities that must be undertaken by Settling Defendants pursuant to Amended Decree Subparagraph 45.a to complete the Response Work. EPA will set forth in the notice a schedule for performance of such activities consistent with the Amended Decree and this Amended SOW or require the Settling Defendants to submit a schedule for continuation of the Response Work pursuant to Section III.G.2 of this Amended SOW.

          If EPA concludes, based on the Response Work Pre-Certification Inspection and the Response Work Certification of Completion Report, and after a reasonable opportunity for review and comment by the State, that the Response Work has been fully performed in accordance with the Amended Decree, EPA will so certify in writing to Settling Defendants. This certification shall constitute the Certification of Completion of the Response Work for purposes of the Consent Decree.

IV. SUMMARY OF MAJOR MILESTONES AND DEADLINES

          A summary of major milestones for the Response Work is presented below. Settling Defendants shall adhere to the following schedule unless it is modified in writing by EPA’s Remedial Project Manager.

Appendix I - Page 19

Deliverable/Milestone	Due Date
Final Design and Remedial Action Work Plan for 2008-2009	Within 10 calendar days after the Date of Lodging of the Amended Consent Decree
Pre-Final Design and Draft Remedial Action Work Plan for Remaining Response Work	February 1, 2010
Final Design and Remedial Action Work Plan for Remaining Response Work	Within 30 calendar days after receipt of the Response Agencies’ comments on the Pre-Final Design and Draft Remedial Action Work Plan for Remaining Response Work
Pre-Completion Inspection	At least 90 days before the anticipated completion of all phases of construction specified by the RD, and before final demobilization and staging area restoration efforts
Construction Completion Inspection/RA Pre-Certification Inspection	Within 90 days after completion of all phases of construction specified by the RD and after conducting post-construction sampling to determine whether the RAL Performance Standard or the SWAC goal has been achieved as described in Section II.B of this Amended SOW; a Construction Completion Inspection will also serve as an RA Pre- Certification Inspection if the Settling Defendants believe that the RA has been performed such that the Performance Standards have been achieved
RA Certification of Completion Report	Within 60 days after an RA Pre-Certification Inspection, provided Settling Defendants still believe Performance Standards have been achieved
Revised RA Certification of Completion Report	30 calendar days after receipt of the Response Agencies’ comments on the Report
Certification of Completion of the RA	Upon EPA’s approval of the RA Certification of Completion Report
Response Work Pre- Certification Inspection	Within 90 days after Settling Defendants conclude that all phases of Response Work are completed
Response Work Certification of Completion Report	Within 60 days after Response Work Pre- Certification Inspection, provided Settling Defendants believe Response Work has been fully performed

Appendix I - Page 20

Deliverable/Milestone	Due Date
Revised Response Work Certification of Completion Report	30 calendar days after receipt of the Response Agencies’ comments on the Report
Issuance of Certification of Completion of Response Work	Upon EPA’s approval of the Response Work Certification of Completion Report
Monthly Progress Reports	By the 10th of each month from the Date of Lodging of the Amended Decree for so long as the RA continues, until Certification of Completion of the RA
Quarterly Reports	Quarterly basis for so long as the RA continues under the Amended Decree, until Certification of Completion of the RA

Appendix I - Page 21

Consent Decree Appendix J

Form of EPA Payment Directive

IRREVOCABLE LETTER OF CREDIT NO. XXXXXXXXXXX

(DATE)

PNC BANK, NATIONAL ASSOCIATION
500 FIRST AVENUE 3^RD FLOOR
PITTSBURGH PA 15219

PAYMENT DIRECTIVE UNDER LETTER OF CREDIT NO. XXXXXXXXXX

SIR OR MADAM:

I (STATE NAME AND TITLE) AM WRITING IN MY CAPACITY AS THE AUTHORIZED REPRESENTATIVE OF THE U.S. ENVIRONMENTAL PROTECTION AGENCY (“EPA”), THE DESIGNATED BENEFICIARY UNDER THE ABOVE-REFERENCED LETTER OF CREDIT (“LOC”). THE LOC WAS ESTABLISHED PURSUANT TO AN “AMENDED CONSENT DECREE FOR REMEDIAL DESIGN AND REMEDIAL ACTION AT OPERABLE UNIT 1 OF THE LOWER FOX RIVER AND GREEN BAY SITE” (“AMENDED CONSENT DECREE”) IN THE CASE CAPTIONED UNITED STATES AND THE STATE OF WISCONSIN V. P.H. GLATFELTER COMPANY AND WTM I CO., CASE NO. 03-C-0949 (E.D. WIS.), AND SUBPARAGRAPH 50(c)(4) OF THAT AMENDED CONSENT DECREE SPECIFIED THAT THE FULL AMOUNT OF THE LOC (THE “PAYMENT AMOUNT”) WOULD BE PAYABLE TO A DESIGNATED ESCROW ACCOUNT IMMEDIATELY UPON RECEIPT OF THIS PAYMENT DIRECTIVE IF AN AMOUNT EQUAL TO THE PAYMENT AMOUNT WAS NOT PAID TO THE ESCROW ACCOUNT BY OR FOR THE ACCOUNT OF P.H. GLATFELTER COMPANY (“THE GLATFELTER PAYMENT”) BEFORE JANUARY 15, 2009 AND THIS CERTIFICATION IS DATED NO EARLIER THAN JANUARY 15, 2009.

EPA HEREBY CERTIFIES THAT THE GLATFELTER PAYMENT WAS NOT PAID BEFORE JANUARY 15, 2009 AND THAT THIS CERTIFICATION IS DATED NO EARLIER THAN JANUARY 15, 2009, AS PROVIDED UNDER SUBPARAGRAPH 50(c)(4) OF THE AMENDED CONSENT DECREE AND EPA THEREFORE DIRECTS YOUR INSTITUTION TO PAY THE FULL AMOUNT DUE UNDER THE LOC ( $6,500,000.00) IMMEDIATELY UPON RECEIPT OF THIS PAYMENT DIRECTIVE BY WIRE TRANSFER, IN ACCORDANCE WITH THE FOLLOWING PAYMENT INSTRUCTIONS:

J-1

PAYMENT AMOUNT: $6,500,000.00

PAYEE: FOX RIVER OU1 ESCROW ACCOUNT

C/O DEUTSCHE BANK TRUST COMPANY AMERICAS

SUPERFUND DIVISION DIRECTOR 

U.S. ENVIRONMENTAL PROTECTION AGENCY, REGION 5 

WIRE TRANSFER INSTRUCTIONS:

DEUTSCHE BANK TRUST COMPANY AMERICAS
ABA 021001033
ACCOUNT NAME: TRUST AND SECURITIES SERVICES
ACCOUNT NUMBER: 01419647 FCT
PAYMENT DETAILS: GLATFELTER SUB-ACCOUNT
NO. 58528 REF: FOX RIVER OU-1 ESCROW ACCOUNT

J-2

EX-10.4

                                                                    Exhibit 10.4

                          CONTRACT FOR THE PURCHASE AND

                            BARGAIN SALE OF PROPERTY

         THIS AGREEMENT, made as of the 16th day of December, 2002, by and among
GLATFELTER PULP WOOD COMPANY, formerly known as The Glatfelter Pulp Wood
Company, a Maryland corporation (hereinafter referred to as "Seller"), THE
CONSERVATION FUND, A NON-PROFIT CORPORATION (hereinafter referred to as "TCF"),
and FIDELITY NATIONAL TITLE INSURANCE COMPANY (hereinafter referred to as
"Escrow Agent ").

                              W I T N E S S E T H:

         WHEREAS, Seller is the owner of the Property (as hereinafter defined);
and has determined that it wishes to bargain sale same to TCF;

         WHEREAS, TCF desires to purchase and Seller desires to bargain sell the
Property as an installment sale (the "Installment Sale");

         NOW, THEREFORE, the parties have agreed and do hereby agree as follows:

         1.       Agreement of Purchase and Bargain Sale. Subject to the
provisions of this Agreement, and for the consideration herein stated, Seller
agrees to bargain sell to TCF and TCF agrees to buy from Seller all of the
following described property (collectively, the "Property"):

         (a)      fee simple interest in and to those certain tracts or parcels
of land in Charles, Caroline, Dorchester, Somerset, St. Mary's, Wicomico and
Worcester Counties, Maryland, containing approximately 25,568 acres, all of
which tracts or parcels are more fully described in Exhibit A attached hereto,
together with all buildings, structure and other improvements located thereon,
all tenements: hereditaments, easements, appurtenances and

                                                                               1


privileges thereto belonging, all trees, timber, sand, gravel and crops now
located thereon or thereunder (said land, together with said buildings,
structures, improvements, tenements, hereditaments, easements, appurtenances,
privileges, trees, timber, sand, gravel and crops being hereinafter referred to
as the "Real Property");

         (b)      to the extent Seller has the right to assign the same, all of
Seller's right, title and interest in and to the leases, subleases, contracts,
licenses and permits described on Exhibit B attached hereto and any renewals
thereof (collectively, the "Leases");

         (c)      all of Seller's non-proprietary files and records relating to
the Real Property (excluding any financial records) (the "Books and Records"),

         The parties agree that if any portion of the Real Property is deleted
or taken pursuant to either of paragraphs 5(b)(iii), 7, 8(a) or 8(c) below, then
the term "Red Property" shall no longer include such deleted portion.

         2.       Purchase Price: Earnest Money.

         (a)      Subject to adjustment as provided in paragraphs 4, 5(b)(ii),
7, 8(b), 8(c) and 11 hereof, the purchase price for the Property (the "Purchase
Price") shall be Thirty-Seven Million Eight Hundred Fifty Thousand and No/100
Dollars ($37,850,000.00). The Purchase Price will be payable on the Closing Date
(as hereinafter defined) by delivery by TCF to Seller or its assignee of an
installment promissory note (the "Installment Note") for the Purchase Price
secured by a letter of credit and issued in conformity with the requirements of
and subject to the terms and provisions set forth on Exhibit D attached hereto
(the "Installment Sale Terms"). The forms of all documents to be executed by
Seller and/or TCF in connection with the Installment Sale, including, without
limitation, the Installment Note shall be in form reasonably acceptable to the
parties. Seller acknowledges and agrees that Seller shall be solely responsible
for all of TCF's additional fees, costs, and expenses incurred in connection
with the Installment Sale

                                                                               2


structure of this transaction including but not limited to costs incurred in
connection with obtaining the letter of credit, documenting the transaction as
an installment sale and preparing the installment promissory note. Seller
further acknowledges that TCF is making no representation or warranty concerning
the Seller's use of the Installment Sale structure, including but not limited to
the tax consequences thereof. TCF agrees to reasonably cooperate with Seller in
structuring and documenting the Installment Sale including, without limitation,
providing all reasonable information requested by Seller's structuring agent;
provided, however, TCF shall not be required to incur any additional cost or
assume any additional liabilities or obligations not expressly contemplated
under the Agreement.

         (b)      Within five (5) business days after the effective date of this
Agreement, TCF will deliver to Escrow Agent the sum of $200,000 (said sum,
together with all interest earned thereon, is referred to herein as the "Earnest
Money"), which sum shall be held by Escrow Agent in an interest bearing account
and shall be disbursed in accordance with the further provisions of this
Agreement. At Closing, Escrow Agent shall return the Earnest Money to TCF.

         3.       Closing.

         (a)      The execution and delivery of the documents and instruments
for the consummation of the purchase and sale of the Property pursuant hereto
(herein referred to as the "Closing") will take place at 1O:OO a.m. on or before
the date which is twenty (20) days after the expiration of the Inspection
Period, as that term is defined below in Section 5 (the "Closing Date") at the
offices of Seller's Title Company In Maryland, subject to extension as provided
in paragraphs 5(b), 6, 7, 8 and 29 hereof, or such other date and time, and/or
such other location, as may be mutually agreeable to Seller and TCF.
Notwithstanding the foregoing, the parties will use reasonable efforts to close
on or before January 15, 2003, provided that TCF is able to

                                                                               3


successfully complete all of its due diligence of the Real Property, as
contemplated herein, prior to January 15,2003 and Seller has sufficient time to
complete transaction documents required for the Closing. Seller may elect not to
attend the Closing so long as all documents to be executed by Seller in
connection with the consummation of the transactions contemplated herein are
delivered to Escrow Agent not later than two (2)days prior to Closing.

         (b)      At the Closing, Seller will execute and deliver to TCF (i)
seven or more special warranty deeds conveying the Real Property to TCF subject
only to the Permitted Encumbrances (as hereinafter defined), (ii) a bill of sale
with respect to the Books and Records, (iii) an affidavit as to the non-foreign
status of Seller (or, if Seller is a foreign person, Seller will deliver to TCF
a withholding exemption certificate pursuant to Section 1445 of the Internal
Revenue Code of 1954, as amended), (iv) an assignment of the applicable Leases
(as hereinafter defined) (the "Assignment of Leases"); if any, with rents to be
pro-rated at Closing (v) an owner's affidavit in form satisfactory to TCF's
title insurer, (vi) such assignments and other documents as are necessary to
assign unto TCF any Forest Management Conservation Agreements, and (vii) such
other deeds, assignments, certificates, affidavits and instruments as may be
reasonably necessary or desirable to consummate the purchase and sale
contemplated hereby and to obtain the issuance of the title insurance policy
insuring TCF's fee simple title to the Real Property as of the date of the
Closing. All of the foregoing documents shall be in form and content reasonably
satisfactory to Seller and TCF.

         (c)      At the Closing, TCF will execute and deliver to Seller (i) the
Assignment of Leases, and (ii) such other deeds, assignments, certificates,
affidavits and instruments as may be reasonably necessary or desirable to
consummate the purchase and sale contemplated hereby, including the Installment
Note, the TSA (as described below in Section 13) and such other instruments as
are required pursuant to Exhibit D hereof to consummate the installment sale in

                                                                               4


accordance therewith, which documents shall be in form reasonably satisfactory
to Seller and TCF.

         (d)      The parties agree to do such other acts and execute and
deliver such other documents and instruments as are reasonably necessary or
desirable for the consummation of the transactions contemplated hereby.

         4.       Acreage Verification. TCF shall have the right at any time
prior to Closing to independently verify the number of acres contained within
the Real Property. In the event TCF determines that the Real Property contains
less than 25,312 acres, the Purchase Price shall be reduced by an amount equal
to the product of (a) the difference between 25,312 minus the number of acres
contained within the Real Property as verified by TCF multiplied by (b)
$1,480.37. In the event TCF determines that the Real Property contains more than
25,823 acres, the Purchase Price shall be increased by an amount equal to the
product of the difference between the number of acres contained within the Real
Property, as verified by TCF, minus 25,823 multiplied by $1,480.37, provided
however, that if the Purchase Price is increased by more than $500,000 TCF may
elect to terminate this Agreement, in which event the Earnest Money shall be
returned to TCF and neither party shall have any further rights or obligations
hereunder. If Seller disputes the acreage verification, the dispute will be
resolved pursuant to Paragraph 29 hereof.

         5.       Title.

         (a)      Seller agrees to convey to TCF or a supporting organization
thereof qualifying for bargain sale treatment under the Internal Revenue Code
good and marketable fee simple title to the Real Property at the Closing by
special warranty deed.

         (b)      TCF shall have the right to obtain, at its sole cost and
expense, a commitment for an owner's policy of title insurance issued by
Fidelity National Title Insurance

                                                                               5


Company (the "Title Company") having an insured amount equal to the Purchase
Price (the "Title Commitment"). TCF will have from the date of this Agreement
until 5:00 p.m. EDT on January 31, 2003 (as the same may be extended pursuant to
paragraph 6 below, the "Inspection Period") to examine the title to the Real
Property and furnish to Seller written notice of any objections to Seller's
title to the Real Property, other than the matters set forth on Exhibit E
attached hereto (the "Permitted Encumbrances"). Upon full execution this
Agreement, Seller will make available to TCF, its contractors, agents and
representatives copies of all maps and surveys in Seller's possession that
relate to the Real Property. TCF shall also have the right to object to any
title exceptions created or suffered between the date of the Title Commitment
and the date of the Closing which do not constitute Permitted Encumbrances. Any
title objections raised by TCF shall be provided on or before the expiration of
the Inspection Period by written notice to Seller accompanied with a copy of
that portion of the Title Commitment and all supplemental title documents
evidencing and describing the nature of the title objection. Seller will have
the right, but not the obligation, to cure or remove at or prior to the Closing
all objections to Seller's title to the Real Property. In the event that TCF
fails to give notice to Seller on or before the expiration of the Inspection
Period of TCF's objection to any exception to Seller's title to the Real
Property, such exception will be deemed to be a Permitted Encumbrance. In the
event that TCF gives such notice of objection to any such exception and Seller
fails or elects not to cure or remove such exception at or prior to the Closing,
TCF, at its sole option, may elect either of the following:

                  (i)      waive the objection and proceed to Closing; or

                  (ii)     subject to the conditions set forth in Section 5(e)
         below, delete the portion of the Real Property subject to any such
         uncured or unremoved exception from the real property conveyed by
         Seller to TCF at Closing, and the Purchase Price will be reduced by

                                                                               6


         an amount equal to the product of the number of acres contained within
         such deleted portion multiplied by the quotient of the Purchase Price
         divided by the acreage contained in the Real Property as determined in
         accordance with paragraph 4 above.

Notwithstanding the foregoing, in the event TCF timely delivers its notice of
objection to any matter pursuant to this paragraph 5(b), the Closing, at
Seller's election, shall be adjourned to the date which is twenty (20) days
after the scheduled Closing Date to allow the parties adequate time to properly
document the transactions contemplated hereunder.

         (c)      So long as this contract remains in force, Seller will not
enter into any new lease, modify or renew any existing lease or encumber or
convey all or part of the Real Property or any interest therein, or enter into
any agreement granting to any person any right with respect to the Real Property
or any portion thereof, without the prior written consent of TCF, which consent
shall not be unreasonably withheld or delayed so long as such action by Seller
does not materially impair the value or TCF's contemplated use of the Property.

         (d)      In the event the aggregate acres of those portions of the
Property, if any, deleted from the transactions pursuant to this paragraph 5 or
paragraph 7 below, together with the acres of the Property destroyed or damaged
prior to Closing, as determined in accordance with paragraph 8(b) below exceeds
256 acres, then either party may terminate this Agreement, whereupon Escrow
Agent shall return the Earnest Money to TCF and no party hereto will have any
further rights, duties or obligations hereunder, other than those which
expressly survive a termination hereof.

         (e)      The parties acknowledge that the deletion by TCF from the
transaction of any real property pursuant to Paragraphs 5(b) or 7 hereof (the
"Excluded Acres") may require a subdivision of such Excluded Acres from certain
other tracts TCF intends to acquire at Closing. Seller shall retain at Closing
such Excluded Acres and the least amount of acreage contiguous

                                                                               7


with such Excluded Acres as is necessary to create a legal parcel for which no
subdivision is required (the "Additional Acres") and subject to the provisions
of Paragraph 5(d), the Purchase Price will be reduced on account of Seller's
retention of the Additional Acres by an amount equal to the product of the
number of acres contained within the Additional Acres multiplied by the quotient
of the Purchase Price divided by the acreage contained in the Real Property as
determined in accordance with Paragraph 4 above.

         6.       Inspection. TCF will have from the date of this Agreement
until the expiration of the Inspection Period to inspect the Real Property and,
among other things, to perform timber cruises, environmental evaluations and
verify compliance with applicable laws, ordinances and regulations. TCF and its
agents, representatives, employees, engineers and contractors will have the
right to enter upon the Real Property to inspect, examine, survey and make test
borings, soil bearing tests, timber cruises and other engineering tests or
surveys which it may deem necessary or advisable. Prior to entering upon the
Property to conduct such activities, TCF shall deliver to Seller certificates of
commercial general liability insurance with coverage amounts not less than
$l,000,000 on an occurrence basis showing Seller as an additional insured
thereunder. TCF hereby agrees to return the Real Property to substantially the
same condition that existed prior to Purchaser's activities. TCF further agrees
to indemnify and hold Seller harmless for any and all cost and expense resulting
from claims or damages caused by said inspections, examinations and tests. Upon
full execution of this Agreement, Seller will make available to TCF, its agents,
contractors and representatives, at Seller's offices all non-privileged,
non-proprietary materials relating to the Real Property in the possession of
Seller or its agents or attorneys, including without limitation, all aerial
photographs, maps, charts, existing surveys, timber cruises, previous deeds,
leases, reports, timber type maps, timber inventories, soil maps, growth and
yield information, harvest schedules, and timber bid customer lists relating

                                                                               8


to the Real Property. In the event TCF, after using commercially reasonable
efforts, is not able to complete its due diligence inspections of the Property
prior to the expiration of the Inspection Period, TCF shall have the right, upon
written notice to Seller delivered prior to the expiration of the Inspection
Period to extend the Inspection Period for an additional ten (10) days. In such
event, the Closing Date shall be postponed to a mutually acceptable date not
later than the date which is twenty (20) days after the expiration of the
Inspection Period, as extended hereunder. In the event TCF in its sole and
absolute discretion is not satisfied for any reason whatsoever with the
Property, then TCF may terminate this Agreement by delivering written notice to
Seller at my time prior to the expiration of the Inspection Period, whereupon
Escrow Agent shall return the Earnest Money to TCF and no party will have any
further rights, duties or obligations under this Agreement other than those
which expressly survive a termination hereof. In such event, TCF shall promptly
deliver to Seller, without representation or warranty, all title materials,
environmental reports and other third party reports (other than any appraisal or
cruise results) obtained by TCF in connection with its inspections or
investigations of the Property.

         7.       Environmental Audit. TCF will have the right at any time
before the expiration of the Inspection Period to perform or cause to be
performed, at TCF's expense, a non-invasive environmental audit or assessment
of the Real Property. In the event that such audit or assessment reveals that
(i) any portion of the Real Property has ever been used as a landfill to receive
solid wastes; (ii) has been affected by or contains any underground storage tank
or storage facility; (iii) has ever been used for dumping, discharge, treatment,
storage of hazardous wastes or hazardous substances; (iv) is in violation of any
law, ordinance, notice requirement, rule or regulation because of its
environmental and/or ecological condition; or (v) is identified by TCF's
consultant as a "high risk" parcel or acre (in each instance, an "Environmental
Defect"), TCF shall promptly notify Seller and, subject to the provisions of
paragraph 5(d) and (e) above,

                                                                               9


TCF may delete the portion of the Real Property subject to such Environmental
Defect from the real property conveyed by Seller to TCF at the Closing, and the
Purchase Price will be reduced by an amount equal to the product of the number
of acres contained within such deleted portion multiplied by the quotient of the
Purchase Price divided by the acreage contained in the Real Property as
determined in accordance with paragraph 4 hereof. In the event TCF notifies
Seller of any Environmental Defect, Seller, at its election, may adjourn the
Closing until the date which is twenty (20) days after the scheduled Closing
Date to allow the parties adequate time to properly document the transactions
contemplated herein. In the event TCF objects to any Environmental Defect, TCF
shall provide Seller with a copy of any environmental audit, assessment or
report forming the basis for TCF's objection.

         8.       Condition of Property; Damage; Condemnation.

         (a)      Seller agrees that at the Closing the Property will be in
substantially the same condition as exists on the date hereof, subject to
condemnation and casualties beyond Seller's control and Seller's harvest of
timber in the ordinary course of business. During the pendency of this
Agreement, Seller shall not materially accelerate the volume of timber or the
species harvested relative to Seller's past practices. All risk of loss to the
Property or any part thereof prior to the Closing will be borne entirely by
Seller. Except for timber harvesting conducted in the ordinary course of
Seller's business, Seller will neither cut or remove nor permit the cutting or
removal of any timber or trees or the mining of any oil, gas, gravel or other
minerals located on the Real Property without the prior consent of TCF, which
consent shall not be unreasonably withheld or delayed so long as such action by
Seller does not materially impair the value or TCF's contemplated use of the
Property. Seller shall keep detailed records on a load by load basis by species
and category of the volume of timber harvested after the effective date of this
Agreement and prior to Closing. Five (5) days prior to Closing (the "Adjustment
Date"),

                                                                              10


an officer of Seller with knowledge of such matters shall deliver a certificate
setting forth the total volume by species harvested by Seller during the
pendency of this Agreement. The Purchase Price shall be reduced on account of
such harvested timber by an amount equal to the sum of the products of the
volume of each species and category of timber harvested multiplied by the
applicable unit value for such species and category set forth on Exhibit F
attached hereto and hereby made a part hereof. Within five (5) days after
Closing, the Seller shall deliver to TCF another certificate setting forth the
total volume by species harvested by Seller between the Adjustment Date and the
Closing date, and shall deliver to TCF, or its assignee a check for the value of
the timber harvested during such period, calculated in the same manner as
described above.

         (b)      If at my time prior to the Closing, the Property or any
material part thereof (including, but not limited to, any timber or trees which
are included as part of the Property) is destroyed or damaged by fire or other
casualty, then TCF, subject to the provisions of paragraph 5(d) above, shall
purchase the Property, whereupon the Purchase Price will be reduced as mutually
agreed by Seller and TCF, or, in the event such parties are unable to agree
within fifteen (15) days after TCF's receipt of notice of the occurrence of such
damage or destruction, the Purchase Price will be reduced by an mount determined
in accordance with the procedures set forth in paragraph 29 hereof. TCF's option
under this paragraph 8(b) will be exercisable at any time on or before fifteen
(15) days after TCF's receipt of notice of the occurrence of such damage or
destruction and the date of Closing will be extended to the extent necessary to
permit the exercise of such option by TCF and the determination of the Purchase
Price reduction. For purposes of this paragraph 8(b), a "material" part of the
Property shall mean damage to the Property prior to Closing having an aggregate
value, in TCF's good faith estimate, equal to or exceeding $50,000.

                                                                              11


         (c)      If at any time prior to the Closing, any action or proceeding
is filed or threatened under which the Real Property or any part thereof may be
taken pursuant to any law, ordinance or regulation by condemnation or the right
of eminent domain, then TCF shall purchase the Real Property pursuant to this
Agreement, notwithstanding such action or proceeding, and receive a credit
against the Purchase Price in the amount of all proceeds of any awards paid to
Seller with respect to the Real Property, or if such amounts have not been paid
to Seller as of the Closing, Seller shall assign all of its rights to any such
proceeds or awards.

         9.       Warranties and Representations.

         (a)      Seller hereby warrants and represents to TCF as follows:

                  (i)      Seller owns good and marketable fee simple title to
         the Real Property, and will convey such title at the Closing by special
         warranty deed subject only to the Permitted Encumbrances.

                  (ii)     Attached hereto as Exhibit B and hereby made a part
         hereof is a true and accurate summary of all leases, timber service
         agreements, licenses, permits, contracts and agreements affecting the
         Real Property; the Leases remain in full force and effect, and have not
         been modified or amended, and except as set forth on Exhibit B, no
         consent is required to be obtained to assign Seller's right, title and
         interest in, under and to the Leases to TCF and to Seller's actual
         knowledge neither party thereto is in default in the observance or
         performance of any of its duties or obligations thereunder.

                  (iii)    There are no outstanding mineral leases affecting the
         Real Property and, to Seller's actual knowledge there are no current
         commercial mining activities occurring on the Red Property and no
         mining permits are currently issued and outstanding with respect to the
         Real Property or any portion thereof.

                                                                              12


                  (iv)     There is no pending or, to Seller's actual knowledge,
         threatened action or proceeding (including, but not limited to, any
         condemnation or eminent domain action or proceeding) before any court,
         governmental agency or arbitrator which may adversely affect Seller's
         ability to perform this Agreement or which may affect the Real
         Property.

                  (v)      To Seller's actual knowledge, the Real Property is in
         compliance with all statutes, ordinances, rules, regulations, orders
         and requirements of all federal, state and local authorities and any
         other governmental entity having jurisdiction over the Real Property;
         and Seller has not received any notice from any such governmental
         entity of any violation of any of the aforesaid statutes, ordinances,
         rules, regulations, orders and requirements.

                  (vi)     Seller has the full capacity, power and authority to
         enter into this Agreement and fully perform its obligations hereunder,
         subject however to the final approval by its Board of Directors at its
         next regularly scheduled meeting currently planned to be held on
         December 17, 2002, and the final approval of its parent corporation's
         Board of Directors at its next regularly scheduled meeting, currently
         planned to be held on December 18, 2002.

                  (vii)    This Agreement and the performance hereof by Seller
         will not contravene any law or contractual restriction binding on
         Seller.

                  (viii)   Subject to subparagraphs (vi) and (ix) herein, Seller
         has the full right, power, and authority to enter into and perform this
         Agreement; and no consent, approval, order or authorization of any
         court or other governmental entity is required to be obtained by Seller
         in connection with the execution and delivery of this Agreement or the
         performance hereof by Seller.

                                                                              13


                  (ix)     This Agreement has been duly executed and delivered
         by Seller and is subject to approval by Seller's Board of Directors and
         P. H. Glatfelter's Board of Directors, which, if granted; constitutes
         the valid and binding obligation of Seller, enforceable against Seller
         in accordance with its terms subject to applicable bankruptcy,
         insolvency and other similar laws affecting the enforceability of
         creditors' rights generally and the discretion of the courts with
         respect to equitable remedies.

                  (x)      No portion of the Real Property has ever been used by
         Seller or by any third party with the affirmative consent of Seller as
         a land fill or as a dump to receive garbage, refuse, or waste, whether
         or not hazardous, and to Seller's actual knowledge there is and has
         been no Hazardous Waste stored, handled, installed or disposed in, on
         or about the Real Property. For purposes of this warranty, the term
         "Hazardous Waste" means any such materials, waste, contaminates,
         petroleum, crude oil or any fraction thereof or other substances as
         defined by cumulative reference to the following sources as amended
         from time to time: (i) the Resource Conservation and Recovery Act of
         1976, 42 USC Section 6901 et. seq. (RCRA); (ii) the Comprehensive
         Environmental Response, Compensation and Liability Act of 1980, 42 USC
         Section 9601 et. seq. (CERCLA); (iii) the Hazardous Materials
         Transportation Act, 49 USC Section 1801, et. seq.; (iv) applicable laws
         of the State of Maryland; and (v) any federal, state or local
         regulations, rules or orders issued or promulgated under or pursuant to
         any of the foregoing or otherwise by any department, agency or other
         administrative, regulatory or judicial body. To Seller's actual
         knowledge there are no underground storage tanks situated in the
         Property nor have such tanks been previously situated thereon.

                                                                              14


                  (xi)     To Seller's actual knowledge, the Real Property is in
         substantially the same condition as existed on the date TCF inspected
         the Real Property. Since such date, there has been no material
         destruction or damage to the Real Property or any part thereof or any
         improvements, timber or trees thereon by fire or other casualty.

                  (xii)    The Property does not constitute an asset of an
         employee benefit plan affiliated with Seller, as defined in Section
         3(3) of ERISA.

                  (xiii)   No party other than Seller has any right to conduct
         timbering operations on the Real Property or any right, title or
         interest in and to any timber located on the Real Property.

                  (xiv)    To Seller's actual knowledge, the present use of the
         Real Property for the purpose of harvesting timber or any related
         purpose does not pose a danger to any Endangered Species, Critical
         Habitat or Habitat that would expose TCF to any liability under any
         applicable federal, state or local laws. For purposes of this warranty,
         the terms "Endangered Species", "Critical Habitat" and "Habitat" mean
         any such animal, vegetation, flora, fauna, other wildlife, ecosystem or
         geographic region as defined by cumulative reference to the following
         sources as amended from time to time: (i) the Endangered Species Act of
         1973, 16 USC Section 1531, et. seq.; (ii) the applicable law of the
         State of Maryland, and (iii) any federal, state or local regulations,
         rules, or orders issued or promulgated under or pursuant to any of the
         foregoing or otherwise by any department, agency or other
         administrative, regulatory or judicial body.

                  (xv)     Seller hereby certifies that the sale of the Property
         does not represent a transfer of all or substantially all of the assets
         of Seller.

                                                                              15


All warranties and representations will be true as of the date of this Agreement
and, as of the date of the Closing. As used herein, the term "Seller's actual
knowledge" means the actual knowledge of Peter Alexander and Thomas V. Bosky,
the individual officers or employees of Seller having day-to-day responsibility
for the oversight, management and operation of the Property. The foregoing
representations and warranties shall survive the Closing for a period of twelve
(12) months from and after the Closing Date.

                  (xvi)    Except for the foregoing representations and
warranties, the Property is being conveyed hereunder as-is, where-is, without
any representations or warranties, express or implied.

         (b)      Seller hereby agrees to indemnify and hold harmless TCF from
and against any liability, cost, damage, loss, claim, expense or cause of action
(including but not limited to reasonable attorneys' fees and court costs)
incurred by or filed against TCF as a direct result of any breach of any of the
warranties or representations by Seller contained in this paragraph 9. The
foregoing indemnity shall survive the Closing for a period of twelve (12) months
after the Closing Date; provided, however, such indemnity shall continue with
respect to any breach of warranty or representation by Seller for which TCF has
brought a claim against Seller during such twelve (12) month period.

         (c)      TCF hereby warrants and represents to Seller as follows:

                  (i)      TCF is a non-profit corporation organized in
         accordance with Section 501(c)(3) of the Internal Revenue Code and is
         existing and in good standing under the laws of the State of Maryland;

                  (ii)     TCF has the full right, power and authority to enter
         into this Agreement; and, with the exception of approval of this
         transaction by TCF's Board of Directors, no consent, approval, order or
         authorization is required to be

                                                                              16


         obtained by TCF in connection with the execution and delivery of this
         Agreement or the performance hereof by TCF; and

                  (iii)    This Agreement has been duly executed by TCF and
         constitutes the valid and binding obligation of TCF, enforceable
         against TCF in accordance with its terms, subject to applicable
         bankruptcy, insolvency and other similar laws affecting the
         enforceability of creditors' rights generally and the discretion of the
         courts with respect to equitable remedies.

         10.      Brokerage Commission. Seller and TCF each warrant and
represent to the other that neither has incurred any liability for any brokerage
fee or commission in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby. Seller
and TCF each agree to indemnify and hold harmless the other from any and all
damage, loss, liability, expense and claim (including but not limited to
attorneys' fees and court costs) arising with respect to any such fee or
commission which may be suffered by the indemnified party by reason of any
action or agreement of the indemnifying party.

         11.      Taxes: Expenses.

         (a)      Ad valorem real property taxes on the Real Property, special
assessments, utility charges (if any) and all rental payments with respect to
the Leases will be prorated as of the date of Closing. If actual tax bills for
the calendar year of Closing are not available, said taxes will be prorated
based on tax bills for the previous calendar year and the parties hereto agree
to cause a reproration of said taxes upon the receipt of tax bills for the
calendar year of Closing. Seller will pay all timber taxes, severance taxes and
any other taxes imposed with respect to timbering operations on the Real
Property prior to the date of Closing and all income and/or capital gains taxes
attributable to the sale of the Real Property, if any. Seller shall be
responsible for any "roll back" taxes or similar taxes that relate to periods
prior to the Closing

                                                                              17


and arise as a direct result of the consummation of the transactions
contemplated hereunder. TCF shall be responsible for any "roll back" taxes or
similar taxes imposed due to a change in the use of the Real Property by TCF
after the Closing.

         (b)      TCF will pay the cost of TCF's inspection of the Real
Property, the costs of the title examination and preparation of the Title
Commitment, the title insurance premium with respect to any owner's policy of
title insurance obtained by TCF and recording fees in connection with the
recordation of the deeds delivered at Closing. TCF will also pay one-half of all
transfer taxes and/or recordation taxes imposed in connection with the
recordation of the deeds delivered at Closing.

         (c)      Seller will provide for and pay the costs associated with the
preparation of Seller's special warranty deeds and will pay one-half of all
transfer taxes in connection with the transfer of the Property and/or
recordation taxes and the recordation of the deeds delivered at Closing. Seller
shall pay all other taxes assessed in connection with the transfer of the
Property. Seller shall pay all additional costs, fees and expenses incurred by
TCF that would not otherwise have arisen in connection with Seller's sale of the
Property to TCF on a non-installment sale basis, including reasonable attorneys
fees not to exceed $25,000, incurred by TCF in connection with the installment
sale structure of the transaction.

         (d)      Each party will pay its respective costs and expenses of legal
representation.

         12.      Conditions. Unless waived by TCF, the obligations of TCF under
this Agreement are expressly made subject to the fulfillment in all respects of
the following conditions precedent:

                  (i)      the truth and accuracy in all material respects as of
         the date of the Closing of each and every warranty and representation
         herein made by Seller;

                                                                              18


                  (ii)     Seller's timely performance of and compliance with
         each and every term, condition, agreement, restriction and obligation
         to be performed and complied with by Seller under this Agreement;

                  (iii)    TCF's receipt at Closing of an owner's policy of
         title insurance in the amount of the Purchase Price and otherwise in
         form and substance reasonably satisfactory to TCF;

                  (iv)     TCF shall have received prior to Closing the Maryland
         Board of Public Works approval of the transactions contemplated herein
         and public funds will be available at Closing; and

                  (v)      TCF's Board of Directors will have approved the
         transaction at its regularly scheduled meeting on December 16, 2002.

                  (vi)     The approval of this transaction by Seller's Board of
         Directors at its regularly scheduled meeting on December 17, 2002 and
         the approval of this transaction by the Board of Directors of Seller's
         parent, P. H. Glatfelter, at its regularly scheduled meeting on
         December 18, 2002.

                  [CONTINUED ON NEXT PAGE]

                                                                              19


         In the event any of the above conditions are not satisfied on or before
Closing, TCF will have the right, exercisable at TCF's sole election, to cancel
this Agreement whereupon Escrow Agent shall return the Earnest Money to TCF and
neither party hereto will have any further rights or obligations hereunder.
Notwithstanding the foregoing, if the condition set forth in subparagraph (iv)
above is not satisfied, or if TCF is otherwise unable for any other reason to
raise by the Closing $37,850,000 for acquisition of the Real Property as
contemplated herein, this Agreement shall be terminated, the Earnest Money
Deposit shall be paid to the Seller and neither party hereto will have any
further rights or obligation hereunder.

         13.      Mutual Condition. Unless waived by Seller and TCF, the
obligations of Seller and TCF under this Agreement are expressly made subject to
Seller and TCF negotiating and agreeing to the terms of: 1) a timber supply
agreement ("TSA") to be granted to Seller at Closing and 2) completing Exhibit
B, Exhibit D and Exhibit E of this Agreement; and 3) favorable opinions from
both parties' tax advisors or counsel regarding the structuring of this
transaction as a bargain sale and installment sale. The TSA shall commence at
Closing and terminate on December 31, 2010. The TSA shall be subject and
subordinate to any conservation easement granted by TCF contemporaneously with
Closing, which conservation easement is subject to Seller's prior written
approval, which approval shall not be unreasonably withheld or delayed so long
as such conservation easement does not materially interfere with Seller's rights
to harvest timber pursuant to the TSA.

         14.      Default; Remedies; Escrow Agent.

         (a)      If the purchase and sale of the Real Property is not
consummated because of a breach by TCF in the performance or observance by TCF
of any of its material covenants or obligations under this Agreement, then
Escrow Agent shall pay the Earnest Money to Seller as full liquidated damages
(the parties hereto acknowledging that Seller's damages as a result of

                                                                              20


such default are not capable of exact ascertainment and that said liquidated
damages are fair and reasonable), said remedy being Seller's sole and exclusive
remedy hereunder on account of any default by TCF, whereupon this Agreement will
terminate and neither party will have any further rights, duties or obligations
hereunder, other than those which expressly survive a termination hereof.

         (b)      If the purchase and sale of the Property contemplated hereby
is not consummated because of a breach by Seller in the performance or
observance by Seller of any of its material covenants or obligations under this
Agreement, then TCF shall be entitled to damages in an amount equal to TCF's
actual out of pocket expenses incurred in connection with the transactions
contemplated by this Agreement, which amount shall not exceed $200,000.

         (c)      The duties of Escrow Agent will be as follows:

                  (i)      During the term of this Agreement, Escrow Agent will
         hold the Earnest Money, upon the delivery by TCF to Escrow Agent of the
         same, in an interest bearing account approved by TCF and will deliver
         the Earnest Money in accordance with the terms and provisions of this
         Agreement.

                  (ii)     If this Agreement is terminated without the mutual
         written agreement of Seller and TCF, or if Escrow Agent is unable to
         determine at any time to whom the Earnest Money should be delivered, or
         if a dispute develops between Seller and TCF concerning to whom the
         Earnest Money should be delivered, then in any such event, Escrow Agent
         will request joint written instructions from Seller and TCF and will
         deliver the Earnest Money in accordance with such joint written
         instructions. In the event that such written instructions are not
         received by Escrow Agent within ten (10) days after Escrow Agent has
         served a written request for instructions upon Seller and TCF, Escrow

                                                                              21


         Agent will have the right to pay the Earnest Money into a court of
         competent jurisdiction and interplead Seller and TCF in respect
         thereof, and thereafter Escrow Agent will be discharged of any
         obligations in connection with this Agreement.

                  (iii)    If costs or expenses are incurred by Escrow Agent
         because of litigation or a dispute between Seller and TCF arising out
         of the holding of the Earnest Money in escrow, Seller and TCF will each
         pay Escrow Agent one-half of such reasonable and direct costs and
         expenses. Except for such costs and expenses, no fee or charge will be
         due or payable to Escrow Agent for its services as escrow holder.

                  (iv)     By joining herein, Escrow Agent undertakes only to
         perform the duties and obligations imposed upon it under the terms of
         this contract and expressly does not undertake to perform any of the
         other covenants, terms and provisions incumbent upon Seller and TCF
         hereunder.

                  (v)      TCF and Seller hereby agree and acknowledge that
         Escrow Agent assumes no liability in connection herewith except for
         gross negligence or willful misconduct; that Escrow Agent will never be
         responsible for the validity, correctness or genuineness of any
         document or notice referred to under this Agreement; and that Escrow
         Agent may seek advice from its own counsel and will be fully protected
         in any action taken by it in good faith in accordance with the opinion
         of its counsel.

         15.      Assignment. Prior to Closing, TCF will have the right to
assign its rights under this Agreement, in whole or in part, but only to an
organization or entity which would allow Seller to claim bargain sale treatment
of this transaction under the Internal Revenue Code,

                                                                              22


would not cause Seller to incur any "roll back" taxes or increased transfer
taxes, and is previously approved by Seller in its reasonable discretion. Upon
such assignment TCF will be relieved of liability hereunder. Contemporaneously
with the Closing, TCF shall have the right to assign the provisions of this
Agreement which survive the Closing, in whole or in part, to the ultimate title
holders of the Property including, without limitation, an entity of the State of
Maryland and The Forestland Group, LLC or an affiliate thereof, provided that
the ultimate title holders assume said provisions which survive Closing and such
assignment does not cause Seller to incur any "roll back" taxes or increased
transfer tax, nor adversely impact bargain or Installment Sale considerations
herein.

         16.      No Waiver. No action or failure to act by any party hereto
will constitute a waiver of any right or duty afforded to such party under this
Agreement, nor will any such action or failure to act constitute an approval of
or acquiescence in any breach of this Agreement except as may be specifically
agreed in writing.

         17.      Governing Law. This Agreement will be governed by the laws of
the State of Maryland.

         18.      Notice. Any and all notices, elections and communications
required or permitted by this Agreement will be made or given in writing and
will be delivered in person, sent by facsimile with confirmed electronic
receipt, sent by reputable overnight courier or sent by postage prepaid United
States mail, certified or registered, return receipt requested, to the other
parties at the addresses set forth below, or such other address or facsimile as
may be furnished by notice in accordance with this paragraph. The date of notice
given by personal delivery will be the date of such delivery. The effective date
of notice by overnight courier or mail will be the date such notice is mailed.

                                                                              23


         Seller:           Glatfelter Pulp Wood Company
                           Attn: Vice President and General Manager
                           228 S. Main Street
                           Spring Grove, PA 17362
                           Fax: (717) 225-2850

                           With copies to:

                           Glatfelter
                           Attn: Legal Department
                           96 South George Street, Suite 500
                           York, PA 17401-1434
                           Fax: (717) 846-2419

                           And:

                           Glatfelter
                           Attn: John R. Anke, Treasurer
                           96 South George Street, Suite 500
                           York, PA 17401-1434
                           Fax: (717) 846-7208

         TCF:              The Conservation Fund
                           584 Bellerive Drive
                           Suite 3-D
                           Annapolis, Maryland 21401
                           Attention: Jodi R. O'Day
                           Fax: (410) 757-0370

         with a copy to:   The Conservation Fund
                           1800 North Kent Street
                           Suite 1120
                           Arlington, Virginia 22209-2156
                           Attention: Richard Erdmann
                           Fax: (703) 525-4610

         with a copy to:   Sutherland Asbill & Brennan LLP
                           999 Peachtree Street, N.E.
                           Atlanta, Georgia 30309
                           Attention: Victor P. Haley
                           Fax: (404) 853-8806

         Escrow Agent:     Fidelity National Title Insurance Company
                           200 Galleria Parkway, Suite 1695

                                                                              24


                           Atlanta, GA 30339
                           Attention: Kevin Wood
                           Fax: (770) 850-8222

         19.      Entire Agreement. This Agreement contains the entire agreement
among the parties hereto With respect to the subject matter hereof and cannot be
amended or supplemented except by a written agreement signed by all parties.

         20.      Captions, The captions of paragraphs in this Agreement are for
convenience and reference only and are not part of the substance hereof.

         21.      Severability. In the event that any one or more of the
provisions, paragraphs, words, clauses, phrases or sentences contained in this
Agreement, or the application thereof in any circumstance is held invalid,
illegal or unenforceable in any respect for any reason, the validity, legality
and enforceability of any such provision, paragraph, word, clause, phrase or
sentence in every other respect and of the remaining provisions, paragraphs,
words, clauses, phrases or sentences of this contract, will not be in any way
impaired, it being the intention of the parties that this contract will be
enforceable to the fullest extent permitted by 1aw.

         22.      Duplicate Originals. This Agreement shall be executed in
duplicate originals, both of which will be construed as original documents.

         23.      Binding Effect. This Agreement will bind the parties hereto
and their respective heirs, legal representatives, successors and assigns.

         24.      Time of Essence. Time is of the essence of this Agreement.

         25.      Bargain Sale. Purchaser acknowledges that it is Seller's
intent to effectuate a "bargain sale" of the Property, i.e., a sale to a
charitable organization at a price below fair market value wherein the
difference is considered a charitable contribution under applicable sections of
the Internal Revenue Code. Seller acknowledges that the substantiation of a

                                                                              25


charitable contribution deduction rests exclusively with Seller but for
Purchaser's execution of Internal Revenue Service Form 8283.

         26.      Survival. With the exception of the indemnity set forth in
paragraph 9(b), she indemnities set forth herein will survive the Closing or any
termination of this Agreement indefinitely. The warranties and representations
set forth herein will survive the Closing for a period of twelve (12) months.

         27.      Waivers of Application of Title 42 U.S.C.A. Section 4601
and/or Just Compensation Under Applicable State Statutes. Purchaser may assign
this Agreement and its rights as Purchaser hereunder including the Earnest Money
by written assignment to a governmental agency or entity which assumes the
obligations of Purchaser hereunder, provided such entity is a qualified entity
for purposes of ensuring that the transactions contemplated hereunder qualify
under the Internal Revenue Code for bargain and Installment sale treatment and
do not cause Seller to incur any "roll-back" taxes or increased transfer tax.
Seller hereby waives any right to demand fair market value for the Property. In
addition, recognizing that this Agreement is made in order to procure lands for
public ownership and that condemnation will not be used in any way as part of
this transaction or in securing the Property, Seller hereby knowingly waives any
potential right to receive compensation for the Property consistent with the
requirements of either (i) Title II and Title III of the Uniform Relocation
Assistance and Real Property Acquisition Policies Act of 1970, Title 42 U.S.C.A.
Section 4601, et seq. (Public Law 91-646, as amended) including those provisions
relating to incidental expenses incurred by Seller and/or (ii) applicable state
statutes and regulations. Seller makes this waiver knowing that a governmental
agency or entity may ultimately own the Property and/or that a governmental
agency or entity may be an assignee of this Agreement.

                                                                              26


         28.      Saturdays, Sundays, Holidays. If the final date of any time
period of limitation set out in any provision of this agreement falls on a
Saturday, Sunday or a legal holiday under the laws of the state in which the
Property is situated, then the time of such period shall be extended to the next
day which is not a Saturday, Sunday or legal holiday.

         29.      Resolution of Disputes. In the event Seller and TCF are unable
to agree as to the reduction of the Purchase Price set forth in paragraph 8(b)
hereof, Seller and TCF will each appoint an independent forestry consultant,
each of which may be a consultant previously engaged by the appointing party
with respect to the Real Property, and such two consultants will in turn select
a third independent forestry consultant to act with them in a panel to determine
the appropriate reduction of the Purchase Price. The panel of consultants will
reach a binding decision within thirty (30) days of the selection of the third
consultant, and the decision of the panel of consultants as to the reduction of
the Purchase Price will be final. Seller and TCF will each bear the cost of its
respective consultant and one-half (1/2) of the cost of the third consultant.
The date of Closing will be extended to the extent necessary to permit the final
decision of the panel of consultants.

         30.      Effective Date. The effective date of this Agreement will be
the date all parties hereto have executed this contract.

         31.      Incorporation of Exhibits. All exhibits referred to herein are
hereby incorporated in this Agreement by this reference.

                                                                              27


         IN WITNESS WHEREOF, this contract has been duly executed, sealed and
delivered by the parties hereto the day and year first above written.

                           SELLER:

                           GLATFELTER PULP WOOD COMPANY

                           By: /s/ R.P. Newcomer
                               ---------------------------------------
                           Name:   ROBERT P. NEWCOMER
                           Title:  Vice President & Treasurer

                           TCF:

                           THE CONSERVATION FUND

                           By: /s/ Jodi R. O'Day
                               ---------------------------------------
                           Name:   Jodi R. O'Day
                           Title:  Vice President & Regional Counsel

                                                                              28


EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
CAROLINE COUNTY



     PHG#     TRACT    MAP   GRID   PARCEL
     ----   --------   ---   ----   ------
                     
1     101   Koch        29    23       19
2     101   Koch        29    23       63
3     101   Koch        34     6        1
4     101   Koch        34    12        6
5     101   Koch        34    12        8
6     101   Koch        34    12        5
7     101   Koch        34    12        7
8     101   Koch        34    12       89
9     101   Koch        35    13        5
10    101   Koch        34    18        4
11    101   Koch*       34     5        2
12    101   Koch        34    23      121
13    101   Koch        35    19        6
14    101   Koch        34    23       50
15    101   Koch        34    23      120
16    101   Koch        38     5      110
17    101   Koch        34    24       54
18    103   Bradley     41    14       23
19    111   Howard      22     1        2
20    111   Howard      17    19        6
21    113   Collins     55    15       43
22    116   Apex        48             89
23    137   Chopt#l     18    23       85
24    137   Chopt#l     18    22       59
25    137   Chopt#l     18    23       58
26    137   Chopt#l     23     4       58
27    137   Chopt#l     23     4       98
28    137   Chopt#l     23     4       59
29    138   Chopt#2     23     5      103
30    138   Chopt#2     23     6       19
31    138   Chopt#2     23    12       20
32    152   Long Swp    55     9       44




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
CHARLES COUNTY



     PHG#        TRACT       MAP   GRID   PARCEL
     ----   --------------   ---   ----   ------
                           
1      3    Gross, Reid       35    18       59
2      8    Mansion Hall      52    10        6
3      8    Mansion Hall      52     1       49
4      8    Mansion Hall      52    13       10
5      9    Belmont           52    16        7
6     10    Rison             70
7     11    Tayloe Neck       70     5        0
8     12    Hard Frost        29    17        3
9     13    G. Thompson       30    14       86
10    14    Larsen            31    13       32
11    15    Double Trouble    30    17      120
12    15    Double Trouble    31    24       78
12    17    Thee               1    22      250




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
DORCHESTER COUNTY



     PHG#     TRACT     MAP   GRID   PARCEL
     ----   ---------   ---   ----   ------
                      
1     100   Thomas       34    17       19
2     100   Thomas       34    23       11
3     100   Thomas       34    23       63
4     100   Thomas       45     5       42
5     105   DeWolfe      74    18       31
6     105   DeWolfe      75    13        6
7     112   Hackett      32    11      163
8     112   Hackett      32    12       14
9     112   Hackett      32    12      139
10    115   Lee Jones    60     4       46
11    140   Wheatley      7    15       58




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
ST. MARY'S COUNTY



PHG#   TRACT   MAP   GRID   PARCEL
- ----   -----   ---   ----   ------
                
  4    Salem    42    13      64
  4    Salem    49     5      67




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
SOMERSET COUNTY



      PHG         TRACT         MAP   GRID   PARCEL
      ---   -----------------   ---   ----   ------
                              
1     102   Diament              48    18       17
2     102   Diament              48    24       22
3     102   Diament              48    23       23
4     102   Diament              48    24       24
5     104   Packer               34    20       39
6     104   Packer               34    19       41
7     106   Hamlet               15     1      170
8     106   Hamlet               15     2      449
9     106   Hamlet                9    19       49
10    107   Tilghman              6    13        1
11    109   Whittington          25    10       47
12    110   Wagenberg             3    24       18
13    110   Wagenberg             3    24       62
14    110   Wagenberg      .   .  3   .24       64
15    110   Wagenberg             3    24       67
16    110   Wagenberg             3    24       68
17    110   Wagenberg             3    24       71
18    110   Wagenberg             3    24       72
19    110   Wagenberg             4    19        5
20    110   Wagenberg             4    19        7
21    110   Wagenberg             4    19       16
22    110   Wagenberg             8    12      245
23    110   Wagenberg             9     3        1
24    110   Wagenberg             9     1        6
25    110   Wagenberg             9     2        7
26    110   Wagenberg             9     7       10
27    110   Wagenberg             9     1       18
28    110   Wagenberg             9     1       32
29    110   Wagenberg             9     2       54
30    110   Wagenberg             9     1       60
31    110   Wagenberg             9     2       68
32    110   Wagenberg             9     1       72
33    110   Wagenberg             9     8       73
34    118   Matthews             58             85
35    118   Matthews             58            108




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
SOMERSET COUNTY



      PHG         TRACT         MAP   GRID   PARCEL
      ---   -----------------   ---   ----   ------
                              
36    119   Kingston             49     5      120
37    120   Bowland              42     6      104
38    120   Bowland              42     5      119
39    121   Laws                  5    11       12
40    121   Laws                  5     5       36
41    121   Laws                  5     6       97
42    123   Greenhill            41     4       23
43    123   Greenhill            41     4      171
44    124   Evans                 8    20      260
45    127   Theis                59    13       78
46    128   Turner               65    15      222
47    131   Moseman              41    19      147
48    134   Jamestown            39    12       11
49    134   Jamestown            40    13       13
50    139   Yaggi                49     1       88
51    149   Arden Station        33     9        6
52    149   Arden Station        33    15       19
53    151   Barnes               14     2      159
54    153   Corbin               58    15       93
55    154   Lovers Lane          49    20      101
56    154   Lovers Lane          49    14      105
57    156   Waters               21     6        9
58    156   Waters               21     6      140
59    157   Eel Pot              14    19      173
60    158   Deal Island          14    20       57
61    158   Deal Island          22     2      244
62    160   Fooks                25     6       62
63    161   Austin               23     1       29
64    164   Ridge                15     4      125
65    165   Harris                9     3       70
66    167   Bounds               14    19        1
67    167   Bounds               14    19       90
68    171   Willard              39     5      178
69    171   Willard              39     5      188




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
SOMERSET COUNTY



      PHG         TRACT         MAP   GRID   PARCEL
      ---   -----------------   ---   ----   ------
                              
70    173   Flower Hill           5    10      107
71    176   Molley Mills         16    20       69
72    176   Molley Mills         16    20      156
73    177   Sally Hawkins        16     2        2
74    177   Sally Hawkins        16     8       24
75    177   Sally Hawkins        16     9       54
76    177   Sally Hawkins        16     9       56
77    177   Sally Hawkins        16     8       57
78    177   Sally Hawkins        16    14       73
79    177   Sally Hawkins        16    14       84
80    177   Sally Hawkins        16    14       86
81    177   Sally Hawkins        16    14      172
82    177   Sally Hawkins        16     8      240
83    178   Pine Pole            15     9        3
84    178   Pine Pole            15     7       68
85    178   Pine Pole            15     8      121
86    178   Pine Pole            15     8      123
87    178   Pine Pole            15     8      175
88    178   Pine Pole            15     7      176
89    178   Pine Pole            15     7      177
90    178   Pine Pole            15     8      232
91    178   Pine Pole             5    10      107
92    180   Ruark                66    11      108
93    180   Ruark                66    11      109
94    182   Sea Tick              5    24      108
95    182   Sea Tick             10    11       23
96    182   Sea Tick             10     5       39
97    182   Sea Tick             10    12       40
98    182   Sea Tick             10    17       41
99    182   Sea Tick             10    11       42
100   182   Sea Tick             10     6       46
101   182   Sea Tick             10    11       93
102   182   Sea Tick             10     4       99
103   182   Sea Tick             11    14        5




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
SOMERSET COUNTY



      PHG         TRACT         MAP   GRID   PARCEL
      ---   -----------------   ---   ----   ------
                              
104   182   Sea Tick             11     2       11
105   182   Sea Tick             11     7       13
106   182   Sea Tick             11     7       14
107   182   Sea Tick             11    13       15
108   182   Sea Tick             11    14       16
109   182   Sea Tick             11     8       18
110   182   Sea Tick             11     7       20
111   182   Sea Tick             11    15       21
112   182   Sea Tick             11    14       22
113   182   Sea Tick             11     8       25
114   182   Sea Tick             11     8       51
115   182   Sea Tick             11     8       57
116   187   Beauchamp            32     7      188
117   187   Beauchamp            32     1      213
118   187   Beauchamp            32     7      228
119   188   Lankford-Anderson    13    18       26
120   193   Bromley              10     8       31
121   194   Marshall             40             96
122   196   Woodcock              5    20      157
123   196   Woodcock              5            157
124         Kingston             49    10      119



EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
WICOMICO COUNTY



     PHG#         TRACT        MAP   GRID   PARCEL
     ----   ----------------   ---   ----   ------
                             
1     117   Wimbrow             60    11        3
2     122   Travers             64    11       15
3     122   Travers             64     3       21
4     122   Travers             64     5       40
5     122   Travers             64     5       42
6     122   Travers             64     5       46
7     122   Travers             64     5       47
8     122   Travers             64     5       66
9     122   Travers             64     5      122
10    122   Travers             64     5      124
11    122   Travers             64    11      125
12    122   Travers             64     5      198
13    125   Johnson             60    16       10
14    125   Johnson             60    16       10
15    125   Johnson             60    16       10
16    125   Johnson             60    14       32
17    129   Cappy                3    19      127
18    129   Cappy                6     1       56
19    129   Cappy                6     2       57
20    130   Hodson              50     5       93
21    130   Hodson              51     1      206
22    132   Hastings            20     7       42
23    132   Hastings            20     8      120
24    141   Wells               61     6       37
25    143   Dennis              27    23       55
26    145   Hammond             21    17       25
27    148   Rich Hall           23     3       50
28    155   Lilly               35     2       52
29    159   Cooper              56    20      216
30    163   Allen               57    15      288
31    169   Outten              59    22       91
32    169   Outten              59    22       99
34    172   Bethards            68              9
35    179   Kings Misfortune    44     5      216
36    181   Morris              51     8      198
37    183   Ward                45     3        6
38    183   Ward                45    15       41
39    184   Banks               56    15       93
40    185   Senkbeil            55    21      108
41    185   Senkbeil            65     3        1
42    185   Senkbeil            65     4      153
43    186   Ellis               35     4       45
44    186   Ellis               35             46
45    190   Nelson               8     3       49
46    192   McMichael           34    17       15
47    195   Raynor              65     2       18
48    195   Raynor              65     2       19
49    195   Raynor              65     3       97
50    195   Raynor              65     7      125




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
WICOMICO COUNTY



     PHG#         TRACT        MAP   GRID   PARCEL
     ----   ----------------   ---   ----   ------
                             
51    195   Raynor              65     7       16




EXHIBIT A
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
DESCRIPTION OF PROPERTY
WORCESTER COUNTY



     PHG#      TRACT      MAP   GRID   PARCEL
     ----   -----------   ---   ----   ------
                        
1     108   Carter         32    17       18
2     114   Ewing          46     2      121
3     125   Johnson        37     8       34
4     125   Johnson        37     8       34
5     125   Johnson        37     3       38
6     125   Johnson        37     4       39
7     125   Johnson        37    10       53
8     126   Furnace        54     2        3
9     133   Cropper        49    13       70
10    135   Hudson         30    23       15
11    142   Selby          94    16        1
12    144   Godfrey        46     4       42
13    146   Almshouse      56     1       39
14    147   Mason          78    14       16
15    147   Mason          78    14       17
16    147   Mason          78    19       86
17    150   Birch          24    16       22
18.   162   Zeuger         44    16       34
19    166   Dickerson      46    24       19
20    166   Dickerson      46    23       31
21    168   Porter         45     1        2
22    168   Porter         45     1       24
23    172   Bethards       35             43
24    174   Nocedum Swp    44    12       30
25    175   Stevenson      61     6       22
26    189   Todd           46    11        9
27    191   Byrd           84    11       16
28    191   Byrd           84    11       16
29    191   Byrd           84    10       85
30    197   Scotland       64    12       61



                                    EXHIBIT E

                             Permitted Encumbrances

1.   Ad valorem taxes not yet due and payable.

2.   All matters that would be revealed by a current, accurate survey of the
     Property.

3.   All matters appearing of record not otherwise raised as objection during
     Due Diligence.

EX-10.4.(A)

                                                                 Exhibit 10.4(a)

                                 FIRST AMENDMENT
             CONTRACT FOR THE PURCHASE AND BARGAIN SALE OF PROPERTY

     THIS FIRST AMENDMENT TO CONTRACT FOR THE PURCHASE AND BARGAIN SALE OF
PROPERTY (this "Amendment") is entered into this 10th day of February, 2003, by
and between GLATFELTER PULP WOOD COMPANY, formerly known as The Glatfelter Pulp
Wood Company, a Maryland corporation (the "Seller"), and THE CONSERVATION FUND,
A NON-PROFIT CORPORATION ("TCF").

                                    RECITALS:

     A. The Seller and TCF entered into that certain Contract for the Purchase
and Bargain Sale of Property dated as of December 16, 2002 (the "Contract")
involving the purchase and sale of certain property containing approximately
25,568 acres situated in seven (7) counties within the State of Maryland,
namely, Charles, Caroline, Dorchester, Somerset, St. Mary's, Wicomico, and
Worcester Counties, all as more particularly described in the Contract (the
"Property"); and

     B. The parties desire to amend the Contract to (i) confirm certain Exhibits
intended to be incorporated within the Contract, (ii) extend the date of
expiration of the Inspection Period (defined in Section 5(b) of the Contract),
and (iii) amend other terms and provisions of the Contract as more particularly
set forth below.

     NOW THEREFORE, for and in consideration of ONE DOLLAR ($1.00) and other
good and valuable consideration, receipt and adequacy of which are hereby
acknowledged, Seller and TCF hereby agree as follows:

     1. Extension of Inspection Period. Notwithstanding the terms of the
Contract to the contrary, the Inspection Period is hereby extended and shall
expire February 14, 2003.


                                                                               1



     2. Incorporation of Exhibits B and F. The Exhibits attached to this
Amendment as Exhibits A and B, respectively, are hereby incorporated into the
Contract as Exhibits B and F as if originally made a part thereof.

     3. Extension on Deadline Date to Include Exhibit D. Notwithstanding the
terms of the Contract to the contrary, the parties agree to confirm the terms
and provisions of the Installment Note defined in Section 2(a) of the Contract
and to be attached to the Contract as Exhibit D by the date set for Closing
under the Contract.

     4. Incorporation of Recitals and Exhibits. The Recitals set forth above,
and all exhibits referred to herein are incorporated into this Amendment by this
reference.

     5. Ratification of Contract. All other terms and conditions in said
Contract are hereby ratified and affirmed.

     IN WITNESS WHEREOF, the parties have set their hands and seals.

WITNESS:                                SELLER:
                                        GLATFELTER PULP WOOD COMPANY
                                        Formerly The Glatfelter Pulp Wood
                                        Company a Maryland corporation


/s/ Illegible                           BY: /s/ John R. Anke
                                            ------------------------------------
                                        Printed Name: John R. Anke
                                        Title: Treasurer
                                        Date: 2/10/03


                                        TCF:
                                        THE CONSERVATION FUND
                                        A NON-PROFIT CORPORATION


/s/ Illegible                           By: /s/ Jodi R. O'Day
                                            ------------------------------------
                                            Jodi R. O'Day
                                            Vice President and Regional Counsel
                                        Date: 2/6/03


                                                                               2



                                    EXHIBIT A

        ATTACHED HERETO IS THE FINAL AGREED TO EXHIBIT B TO THE CONTRACT

             WHICH IS HEREBY INCORPORATED INTO THE CONTRACT BY THIS

                                    AMENDMENT

Exhibit B being incorporated into the Contract contains a total of 10 pages,
exclusive of this cover sheet


                                                                               3


EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
CAROLINE COUNTY



                                                                                                           ACTUAL 2002-2003
GPW #   TRACT  MAP GRID PARCEL         AGREEMENT                   PARTY              DATE*  CONSIDERATION  AMT. COLLECTED
- ----- -------- --- ---- ------ ------------------------- -------------------------- -------- ------------- ----------------
                                                                                
101   Koch      29  23     19  Hunting Rights Agreements United Sportsmen            6/28/00   $6,180.00      $ 8,230.00
101   Koch      29  23     63
101   Koch      34   6      1
101   Koch      34  12      6
101   Koch      34  12      8
101   Koch      34  12      5
101   Koch      34  12      7
101   Koch      34  12     89
101   Koch      35  13      5
101   Koch      34  18      4
101   Koch*     34   5      2
101   Koch      34  23    121
101   Koch      35  19      6
101   Koch      34  23     50
101   Koch      34  23    120
101   Koch      38   5    110
101   Koch      34  24     54
103   Bradley   41  14     23  Hunting Rights Agreements Hog Creek Hunt Club         6/28/00   $  610.00      $   770.00
111   Howard    22   1      2  Hunting Rights Agreements Bayside Hunt Club            6/2/00   $1,110.00      $ 1,400.00
111   Howard    17  19      6
113   Collins   55  15     43  Hunting Rights Agreements Bushwackers                 3/22/00   $  190.00      $   260.00
116   Apex      48         89  Hunting Rights Agreements Pine Town Hunt Club          3/9/96   $  220.00      $   380.00
137   Chopt#1   18  23     85  Hunting Rights Agreements Whitetail Hunting Club      6/21/00   $  850.00      $ 1,080.00
137   Chopt#1   18  22     59
137   Chopt#1   18  23     58
137   Chopt#1   23   4     58
137   Chopt#1   23   4     98
137   Chopt#1   23   4     59
138   Chopt#2   23   5    103  Hunting Rights Agreements Whitetail Hunting Club      6/21/00   $  610.00      $   760.00
138   Chopt#2   23   6     19
138   Chopt#2   23  12     20
152   Long Swp  55   9     44  Hunting Rights Agreements Daniel D. Clark/Bushwacker  3/22/00   $  270.00      $   340.00
                                                                                                              ----------
                                                                                                    Total:    $13,220.00


*    All hunting rights effective July 1 of year signed through June 30 of
     following year

* ALL TRACTS IN ALL COUNTIES
   ARE ENROLLED IN FOREST
      CONSERVATION AND
    MANAGEMENT AGREEMENTS
     FOR TAX ASSESSMENT
          PURPOSES


EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
CHARLES COUNTY



                                                                                                                ACTUAL 2002-2003
GPW #      TRACT     MAP GRID PARCEL         AGREEMENT                  PARTY              DATE*  CONSIDERATION  AMT. COLLECTED
- ----- -------------- --- ---- ------ ------------------------ -------------------------- -------- ------------- ----------------
                                                                                     
   3  Gross, Reid     35  18     59  Hunting Rights Agreement La Plata Hunt Club          8/10/95   $  650.00      $   930.00
   8  Mansion Hall    52  10      6  Hunting Rights Agreement Bulls Eye Hunting Club     12/31/96   $5,300.00      $ 5,830.00
   8  Mansion Hall    52   1     49
   8  Mansion Hall    52  13     10
   9  Belmont         52  16      7  Hunting Lease            Belmont WMA                  7/1/01   $2,050.00      $ 2,250.00
  10  Rison           70             Hunting Rights Agreement Christian M. Phillips       7/23/98   $  700.00      $   890.00
  11  Tayloe Neck     70   5      0  Hunting Rights Agreement J&D Masonry                 9/25/00   $2,450.00      $ 2,820.00
  11  Tayloe Neck                    Hunting Rights Agreement Sur-Shot Hunt Club           7/1/01   $2,600.00
  12  Hard Frost      29  17      3  Hunting Rights Agreement Anthony C. Wolfe             7/6/95   $1,120.00      $ 1,640.00
  13  G. Thompson     30  14     86  Hunting Lease            Jeffrey S. Gibson            7/1/01   $2,000.00      $ 2,200.00
  14  Larsen          31  13     32  Hunting Rights Agreement Edgewood Fish & Game Club    7/1/98   $1,300.00      $ 1,560.00
  15  Double Trouble  30  17    120  Hunting Rights Agreement Double Trouble Hunt Club     7/6/95   $3,350.00      $ 3,690.00
  15  Double Trouble  31  24     78
  17  Thee             1  22    250  Hunting Rights Agreement Game Busters Hunting Club   7/25/95   $1,160.00      $ 1,530.00
                                                                                                                   ----------
                                                                                                         Total:    $23,340.00


*    All hunting rights effective July 1 of year signed through June 30 of
     following year

   * ALL TRACTS IN ALL
COUNTIES ARE ENROLLED IN
 FOREST CONSERVATION AND
  MANAGEMENT AGREEMENTS
   FOR TAX ASSESSMENT
        PURPOSES



EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
DORCHESTER COUNTY



                                                                                                   ACTUAL 2002-2003
GPW #   TRACT   MAP GRID PARCEL         AGREEMENT               PARTY         DATE*  CONSIDERATION  AMT. COLLECTED
- ----- --------- --- ---- ------ ------------------------ ------------------ -------- ------------- ----------------
                                                                        
 100  Thomas     34  17     19  Hunting Rights Agreement White Stag H.C.     6/27/00   $  670.00       $  750.00
 100  Thomas     34  23     11
 100  Thomas     34  23     63
 100  Thomas     45   5     42                                                                         $2,430.00
 105  DeWolfe    74  18     31  Hunting Rights Agreement Essex Six Shooters  5/20/96   $1,290.00       $1,940.00
 105  DeWolfe    75  13      6
 112  Hackett    32  11    163  Hunting Rights Agreement Childs Hunt Club     6/3/00   $  750.00       $  940.00
 112  Hackett    32  12     14  Hunting Rights Agreement Harris Hunt Club    6/26/95   $  980.00       $1,520.00
 112  Hackett    32  12    139
 115  Lee Jones  60   4     46  Hunting Rights Agreement 10 Shot Hunt Club   6/14/96   $  280.00       $  400.00
 140  Wheatley    7  15     58  Hunting Rights Agreement Wehner Hunt Club    6/12/01   $  390.00       $  390.00
                                                                                                       ---------
                                                                                            Total:     $8,370.00


*    All hunting rights effective July 1 of year signed through June 30 of
     following year

   * ALL TRACTS IN ALL
COUNTIES ARE ENROLLED IN
 FOREST CONSERVATION AND
  MANAGEMENT AGREEMENTS
   FOR TAX ASSESSMENT
        PURPOSES



EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
ST. MARY'S COUNTY



                                                                                                  ACTUAL 2002-2003
GPW # TRACT MAP GRID PARCEL         AGREEMENT                PARTY           DATE*  CONSIDERATION  AMT. COLLECTED
- ----- ----- --- ---- ------ ------------------------ --------------------- -------- ------------- ----------------
                                                                       
  4   Salem  42  13    64   Hunting Rights Agreement Swill River Hunt Club  8/5/98    $3,000.00       $4,650.00
                                                                                                      ---------
  4   Salem  49   5    67                                                                  Total:     $4,650.00


*    All hunting rights effective July 1 of year signed through June 30 of
     following year

  * ALL TRACTS IN ALL
 COUNTIES ARE ENROLLED
IN FOREST CONSERVATION
    AND MANAGEMENT
  AGREEMENTS FOR TAX
  ASSESSMENT PURPOSES


EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
SOMERSET COUNTY



                                                                                                          ACTUAL 2002-2003
GPW #    TRACT    MAP GRID PARCEL         AGREEMENT                 PARTY           DATE*   CONSIDERATION  AMT. COLLECTED
- ----- ----------- --- ---- ------ ------------------------ ---------------------- --------- ------------- ----------------
                                                                               
102   Diament      48  18     17  Hunting Rights Agreement R&R&D (Illegible) Club 8/20/96     $  110.00       $  530.00
102   Diament      48  24     22
103   Diament      43  23     23
104   Diament      48  24     24
104   Packer       34  20     39  Hunting Rights Agreement Southern Hunt Club      6/4/00     $1,050.00       $1,320.00
105   Packer       34  19     14
105   Hamlet       15   1    170  Hunting Rights Agreement (Illegible) Hunt Club  6/20/00     $1,560.00       $1,920.00
106   Hamlet       15   2    449
106   Hamlet        9  19     49
107   Tilghman      6  13      1  Hunting Rights Agreement (Illegible) Hunt Club  6/20/96     $  390.00       $  620.00
109   Whittington  25  10     47  Hunting Rights Agreement (Illegible) Hunt Club  6/27/00     $  510.00       $  630.00
110   Wagenberg     3  24     18  Hunting Rights Agreement (Illegible)            6/28/00     $4,090.00       $5,160.00
110   Wagenberg     3  24     62
110   Wagenberg     3  24     64
110   Wagenberg     3  24     67
110   Wagenberg     3  24     68
110   Wagenberg     3  24     71
110   Wagenberg     3  24     72
110   Wagenberg     4  19      5
110   Wagenberg     4  19      7
110   Wagenberg     4  19     16
110   Wagenberg     8  12    245
110   Wagenberg     9   3      1
110   Wagenberg     9   1      6
110   Wagenberg     9   2      7
110   Wagenberg     9   7     10
110   Wagenberg     9   1     18
110   Wagenberg     9   1     32
110   Wagenberg     9   2     54
110   Wagenberg     9   1     60
110   Wagenberg     9   2     68
110   Wagenberg     9   1     72
110   Wagenberg     9   8     73
118   Matthews     58         85  Hunting Rights Agreement Buck & Bear Hunt Club  6/28/00     $  650.00       $  810.00
118   Matthews     58        108
119   Kingston     49   5    120  Hunting Rights Agreement (Illegible) Hunt Club  6/20/00     $  680.00       $  350.00
120   Bowland      42   6    104  Hunting Rights Agreement (Illegible) Hunt Club   7/1/00     $  900.00       $1,130.00
120   Bowland      42   5    119
121   Laws          5  11     12  Hunting Rights Agreement Members Only Hunt Club 6/20/96     $1,470.00       $2,520.00
121   Laws          5   5     36
121   Laws          5   6     97
123   Greenhill    41   4     23  Hunting Rights Agreement (Illegible) Hunt Club   7/3/97     $  430.00       $  680.00
123   Greenhill    41   4    171
124   Evans         8  20    260  Hunting Rights Agreement (Illegible)            10/1/00     $  330.00       $  330.00
127   Theis        59  13     78  Hunting Rights Agreement (Illegible) Hunt Club   6/6/00     $  670.00       $  840.00
128   Turner       65  15    222  Hunting Rights Agreement (Illegible) Hunt Club   5/6/00     $  230.00       $  230.00
131   Moseman      41  19    147                                                                              $  390.00



EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
SOMERSET COUNTY



                                                                                                      ACTUAL 2002-2003
GPW #     TRACT     MAP GRID PARCEL         AGREEMENT              PARTY         DATE*  CONSIDERATION  AMT. COLLECTED
- ----- ------------- --- ---- ------ ------------------------ ----------------- -------- ------------- ----------------
                                                                           
134   Jamestown      39  12     11  Hunting Rights Agreement ?                  6/20/00   $   290.00      $  360.00
134   Jamestown      40  13     13
139   Yaggi          49   1     88  Hunting Rights Agreement ?                  10/9/00   $   400.00      $  400.00
149   Arden Station  33   9      6  Hunting Rights Agreement ?                        ?   $   380.00      $  650.00
149   Arden Station  33  15     19                           ?
151   Barnes         14   2    159  Hunting Rights Agreement ?                  6/27/00   $   330.00      $  410.00
153   Corbin         58  15     91  Hunting Rights Agreement ?                  6/20/00   $   130.00      $  120.00
154   Lovers Lane    49  20    101  Hunting Rights Agreement David Johnson       7/1/00   $   180.00              ?
154   Lovers Lane    49  14    105
156   Waters         21   6      9  Hunting Rights Agreement Michael K Mullins        ?   $11,000.00      $1,260.00
156   Waters         21   6    140
157   Eel Pot        14  19    173  Hunting Rights Agreement ?                        ?   $   380.00      $  280.00
158   Deal Island    14  20     57  Hunting Rights Agreement ?                        ?   $   500.00      $  630.00
159   Deal Island    22   2    244
160   Fooks          25   6     62  Hunting Rights Agreement ?                        ?   $   600.00      $  740.00
161   Austin         23   1     29  Hunting Rights Agreement ?                  6/27/00   $   198.00              ?
164   Ridge          15   4    125  Hunting Rights Agreement ?                  6/21/00   $   190.00              ?
165   Harris          9   3     70  Hunting Rights Agreement ?                  6/27/00   $   190.00      $  160.00
167   Bounds         14  19      1  Hunting Rights Agreement ?                        ?   $   300.00      $  170.00
167   Bounds         14  19     90
171   Willard        39   5    178  Hunting Rights Agreement ?                        ?            ?      $1,040.00
171   Willard        39   5    178
173   Flower Hill     5  10    107  Hunting Rights Agreement ?                        ?   $ 1,870.00      $  160.00
176   Molley Mills   16  20     69  Hunting Rights Agreement ?                  5/23/01   $   570.00      $  570.00
176   Molley Mills   16  20    156
177   Sally Hawkins  16   2      2  Hunting Rights Agreement ?                  8/28/01   $ 1,870.00      $1,160.00
177   Sally Hawkins  16   8     24  Hunting Rights Agreement ?                  5/25/01   $   300.00              ?
177   Sally Hawkins  16   9     54  Hunting Rights Agreement ?                        ?            ?              ?
177   Sally Hawkins  16   9     56
177   Sally Hawkins  16   8     57
177   Sally Hawkins  16  14     73
177   Sally Hawkins  16  14     84
177   Sally Hawkins  16  14     86
177   Sally Hawkins  16  14    172
177   Sally Hawkins  16   8    240
178   Pine Pole      15   9      3  Hunting Rights Agreement ?                  7/11/96   $ 1,890.00      $3,230.00
178   Pine Pole      15   7     68
178   Pine Pole      15   8    121
178   Pine Pole      15   8    123
178   Pine Pole      15   8    175
178   Pine Pole      15   7    176
178   Pine Pole      15   7    177
178   Pine Pole      15   8    232
178   Pine Pole       5  10    107
180   Ruark          66  11    108  Hunting Rights Agreement ?                        ?   $   163.00      $  190.00
180   Ruark          66  11    109
182   Sea Tick        5  24    108  Hunting Rights Agreement ?                  6/20/00   $ 1,080.00      $1,350.00



EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
SOMERSET COUNTY



                                                                                                               ACTUAL 2002-2003
GPW #       TRACT       MAP GRID PARCEL         AGREEMENT                PARTY           DATE*   CONSIDERATION  AMT. COLLECTED
- ----- ----------------- --- ---- ------ ------------------------- ------------------ ----------- ------------- ----------------
                                                                                    
181   Sea Tick           10  11     23  Hunting Rights Agreement  Shorpine Hunt Club    7/3/96     $ 6,520.00     $12,590.00
182   Sea Tick           10   5     39
182   Sea Tick           10  12     40
183   Sea Tick           10  17     41
183   Sea Tick           10  11     42
182   Sea Tick           10   6     45
182   Sea Tick           10  11     93
183   Sea Tick           10   4     99
183   Sea Tick           11  14      5
183   Sea Tick           11   2     11
183   Sea Tick           11   7     13
183   Sea Tick           11   7     14
183   Sea Tick           11  13     15
182   Sea Tick           11  14     16
182   Sea Tick           11   8     18
182   Sea Tick           11   7     20
182   Sea Tick           11  15     21
182   Sea Tick           11  14     22
182   Sea Tick           11   8     25
182   Sea Tick           11   5     51
183   Sea Tick           11   8     57
187   Beauchamp          32   7    188  Hunting Rights Agreement  David Johnson         7/1/00     $   510.00     $   770.00
187   Beauchamp          32   1    213  minerals rights           Koopers Company    1/82 (Liber          n/a            n/a
                                           reservation                                330, Folio
                                           (1/2 interest)                                806)
187   Beauchamp          32   7    228
188   LankFord-Anderson  10  18     25  Hunting Rights Agreement  (Illegible) Hund     6/20/00     $   740.00     $   920.00
                                           Reservation of mineral    Club
                                           rights (1/2 interest)  Koopers Company    1/82 (Liber          n/a            n/a
                                                                                      330, Folio
                                                                                         806)
193   Bramley            10   8     31  Hunting Rights Agreement  Jack A. Brambley     9/18/96     $   100.00     $   120.00
194   Marshall           40         95  Hunting Rights Agreement  BCPD Hunt Club       6/20/00     $   130.00     $   150.00
196   Woodcock            5  20    157  Hunting Rights Agreement  Wilson Davis         11/1/01     $ 1,710.00     $ 1,710.00
196   Woodcock            5        157  PCS Site Agreement        APC Realty & Equip
                                                                     Co. (Illegible)               $19,990.00
                                                                                                                  ----------
      Kingston           49  10    119                                                                  Total     $51,900.00


*    All hunting rights effective July 1 of year signed through June 30 of
     following year

 * ALL TRACTS IN ALL
    COUNTRIES ARE
 ENROLLED IN FOREST
  CONSERVATION AND
     MANAGEMENT
 AGREEMENTS FOR TAX
 ASSESSMENT PURPOSES


EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
WICOMICO COUNTY



                                                                                                                  ACTUAL 2002-2003
GPW #       TRACT      MAP GRID PARCEL             AGREEMENT              PARTY            DATE*    CONSIDERATION  AMT. COLLECTED
- ----- ---------------- --- ---- ------ ------------------------- ---------------------- ----------- ------------- ----------------
                                                                                       
117   Wimbrow           60  11      3  Hunting Rights Agreement  Sadler Hunt Club         6/26/96     $1,330.00       $2,380.00
122   Travers           64  11     15  Hunting Rights Agreement  Stag Hunt Club           6/20/00     $1,230.00       $1,530.00
122   Travers           64   3     21
122   Travers           64   5     40
122   Travers           64   5     42
122   Travers           64   5     46
122   Travers           64   5     47
122   Travers           64   5     66
122   Travers           64   5    122
122   Travers           64   5    124
122   Travers           64  11    125
122   Travers           64   5    198
125   Johnson           60  16     10  Hunting Rights Agreement
125   Johnson           60  16     10  Hunting Rights Agreement
125   Johnson           60  16     10  Hunting Rights Agreement
125   Johnson           60  14     32
129   Cappy              3  19    127  Hunting Rights Agreement  Robbins Hunt Club        3/24/00     $  180.00       $  230.00
129   Cappy              6   1     56  Hunting Rights Agreement  K-C Hunt Club            6/21/00     $1,190.00       $1,500.00
129   Cappy              6   2     57
130   Hodson            50   5     93  Hunting Rights Agreement  Buck & Doe Hunt Club     6/27/00     $1,180.00       $1,490.00
130   Hodson            51   1    206
132   Hastings          20   7     42  Hunting Rights Agreement  Fat Boys Hunt Club       6/13/00     $1,310.00       $1,640.00
132   Hastings          20   8    120
141   Wells             61   6     37  Hunting Rights Agreement  Bayfront Sports Club     6/14/00     $  410.00       $  510.00
143   Dennis            27  23     55  Hunting Rights Agreement  New Delaware Sportsman   6/22/00     $  470.00       $  590.00
145   Hammond           21  17     25  Hunting Rights Agreement  Robert Hall             10/14/02     $1,010.00       $1,010.00
148   Rich Hall         23   3     50  Hunting Rights Agreement  Davis Hunt Club          6/27/00     $  400.00       $  490.00
155   Lilly             35   2     52  Hunting Rights Agreement  B.S. Hunt Club            5/5/00     $  520.00       $  650.00
159   Cooper            56  20    216  Hunting Rights Agreement  Over Here Hunt Club      8/12/02     $  400.00       $  400.00
163   Allen             57  15    288  Hunting Rights Agreement  Bill Hall                6/14/00     $  260.00       $  320.00
169   Outten            59  23     91  Hunting Rights Agreement  William R. Lewis         6/27/00     $  400.00       $  490.00
169   Outten            59  22     99
172   Bethards          68          9  Hunting Rights Agreement  The Good, The Bad &      6/27/96     $  290.00       $  490.00
                                                                    The Ugly Hunt Club
179   Kings Misfortune  44   5    216  Hunting Rights Agreement  Trojan Hunt Club         6/26/00     $  460.00       $  580.00
181   Morris            51   8    198  Hunting Rights Agreement  Outlaws Hunt Club        3/28/96     $  270.00       $  470.00
183   Ward              45   3      6  Hunting Rights Agreement  West Side Hunt Club      6/27/00     $1,850.00       $2,330.00
183   Ward              45  15     41  Reservation of mineral    Koppers Co.            1/82 (liber         n/a             n/a
                                          rights (1/2 interest)                          969 Folio
                                                                                            106)
184   Banks             56  15     93  Hunting Rights Agreement. Nichols Hunt Club        7/22/96     $  470.00       $  800.00
                                          Reservation of mineral Koppers Co.            1/82 (liber         n/a             n/a
                                          rights (1/2 interest)                          969 Folio
                                                                                            106)
185   Senkbell          55  21    108  Hunting Rights Agreement  Stag Hunt Club           6/27/00     $  570.00       $  710.00
185   Senkbell          65   3      1  Reservation of mineral    Koppers Co.            1/82 (liber         n/a             n/a
                                          rights (1/2 interest)                          969 Folio
                                                                                            106)
185   Senkbell          65   4    153
186   Ellis             35   4     45  Hunting Rights Agreement  Billy Cropper            6/14/00     $  570.00       $  710.00
186   Ellis             35         46  Reservation of mineral    Koppers Co.            1/82 (liber         n/a             n/a
                                          rights (1/2 interest)                          969 Folio
                                                                                            106)
190   Nelson             8   3     49  Hunting Rights Agreement  Thomas Lambrose, Jr.     6/27/00     $  460.00       $  580.00



EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
WICORNICO COUNTY



                                                                                                     ACTUAL 2002-2003
GPW #    TRACT   MAP GRID PARCEL         AGREEMENT                PARTY         DATE*  CONSIDERATION  AMT. COLLECTED
- ----- ---------- --- ---- ------ ------------------------ -------------------- ------- ------------- ----------------
                                                                          
192   McMichael   34  17     15  Hunting Rights Agreement Mortomer Hunt Club   6/20/96    $210.00       $   350.00
195   Raynor      65   2     18  Hunting Rights Agreement T&B Hunt Club        5/31/01    $290.00       $   290.00
195   Raynor      65   2     19  Hunting Rights Agreement
195   Raynor      65   3     97
195   Raynor      65   7    125
195   Raynor      65   7     16
                                                                                                        ----------
                                                                                              Total:    $20,440.00


*    All hunting rights effective July 1 of year signed through June 30 of
     following year

   * ALL TRACTS IN ALL
COUNTIES ARE ENROLLED IN
 FOREST CONSERVATION AND
  MANAGEMENT AGREEMENTS
   FOR TAX ASSESSMENT
        PURPOSES


EXHIBIT B
CONTRACT BETWEEN GLATFELTER AND THE CONSERVATION FUND
LIST OF LEASES
WORCESTER COUNTY



                                                                                                              ACTUAL 2002-2003
GPW #    TRACT   MAP GRID PARCEL         AGREEMENT                    PARTY              DATE*  CONSIDERATION  AMT. COLLECTED
- ----- ---------- --- ---- ------ ------------------------ ---------------------------- -------- ------------- ----------------
                                                                                   
108   Carter      32  17     18  Hunting Rights Agreement Horn Hunters                  6/28/00   $  520.00      $   650.00
114   Ewing       46   2    121  Hunting Rights Agreement Red Wolf Hunt Club            4/28/96   $  370.00      $   620.00
125   Johnson     37   8     34  Hunting Rights Agreement Burnt Pine Hunt Club          6/28/00   $5,970.00      $ 7,530.00
125   Johnson     37   8     34  Hunting Rights Agreement Hancock Hunt Club              4/5/00   $  390.00      $   470.00
125   Johnson     37   3     38  Hunting Rights Agreement Massey Hunt Club              6/24/00   $  630.00      $ 1,060.00
125   Johnson     37   4     39
125   Johnson     37  10     53
126   Furnace     54   2      3  Hunting Rights Agreement Baltimore Hunt Club           6/21/00   $2,870.00      $ 3,620.00
133   Cropper     49  13     70  Hunting Rights Agreement Investment Hunt Club           7/1/00   $2,490.00      $ 3,130.00
135   Hudson      30  23     15  Hunting Rights Agreement Evergreen Red & Gun Club      6/20/00   $1,410.00      $ 1,780.00
142   Selby       94  16      1  Hunting Rights Agreement Trophy Trackers Hunting Club  6/26/96   $  720.00      $ 1,230.00
144   Godfrey     46   4     42  Hunting Rights Agreement Mount Olive Hunt Club         6/25/96   $1,360.00      $ 2,330.00
146   Almshouse   55   1     39  Hunting Rights Agreement Parks Hunt Club               6/27/00   $1,420.00      $ 1,770.00
146   Almshouse
147   Mason       78  14     16  Hunting Rights Agreement Edgewood Backwoodsmen         6/26/96   $1,310.00      $ 2,240.00
147   Mason       78  14     17
147   Mason       78  19     86
150   Birch       34  16     22  Hunting Rights Agreement McCafe Hunt Club              6/24/96   $  300.00      $   500.00
162   Zenger      44  16     34  Hunting Rights Agreement Peek Hunt Club                7/10/00   $  130.00      $   150.00
166   Dickerson   46  24     19  Hunting Rights Agreement Royal Hunt Club                6/5/00   $1,790.00      $ 2,250.00
166   Dickerson   46  23     31
168   Porter      45   1      2  Hunting Rights Agreement ?????                         6/27/96   $  210.00      $   360.00
168   Porter      45   1     24  Hunting Rights Agreement ?????                         6/30/98   $  320.00      $   540.00
172   Bethards    35         43  Hunting Rights Agreement
174   Necedum Swp 44  12     30  Hunting Rights Agreement Pioneer Sportsmen Association 9/30/12   $  830.00      $   830.00
175   Stevenson   61   6     22  Hunting Rights Agreement ?????                         6/27/00   $  120.00      $   130.00
189   Todd        46  11      9  Hunting Rights Agreement Lucky 7 Sportsmen             6/27/00   $  430.00      $   540.00
191   Byrd        84  11     16  Hunting Rights Agreement ?????                         5/22/96   $  580.00      $   990.00
191   Byrd        84  11     16
191   Byrd        84  10     85
197   Scotland    64  12     61  Hunting Rights Agreement 4100 Sportsman Club            7/2/96   $1,530.00      $ 2,610.00
                                                                                                                 ----------
                                                                                                       Total:    $35,320.00


*    All hunting rights effective July 1 of year signed through June 30 of
     following year

   * ALL TRACTS IN ALL
 COUNTIES ARE ENROLLED IN
 FOREST CONSERVATION AND
MANAGEMENT AGREEMENTS FOR
 TAX ASSESSMENT PURPOSES


                                    EXHIBIT B

                          ATTACHED HERETO IS EXHIBIT F

        ATTACHED HERETO IS THE FINAL AGREED TO EXHIBIT F TO THE CONTRACT

             WHICH IS HEREBY INCORPORATED INTO THE CONTRACT BY THIS

                                    AMENDMENT

Exhibit F being incorporated into the Contract contains a total of one page,
exclusive of this cover page


                                                                               4



                                    EXHIBIT F

                                   UNIT PRICES

         ITEM NO. 3 OF EXHIBIT F TO BE COMPLETED AND AGREED TO BY SELLER
                          AND TCF BY DECEMBER 31, 2002

                            
1.   Pine Pulpwood Clearcut:   $5.67/ton

2.   Pine Pulpwood Thinning:   $3.80/ton

3.   Sawtimber:                $90/mbf + 90% of delivered price in excess of
                               $200/mbf. 55% to Glatfelter Pulp Wood and 45% to
                               The Forestland Group, of delivered price $200/mbf
                               or less.

EX-10.5

SEPARATION AGREEMENT AND GENERAL RELEASE

     PLEASE READ THIS AGREEMENT CAREFULLY. IT INCLUDES A RELEASE OF CLAIMS.

     Jeffrey J. Norton (referred to herein as “I”, “me”, “my”, or “myself”) and P. H. Glatfelter Company, (hereinafter “Glatfelter” or “Company”), hereby enter into this Separation Agreement and General Release (hereinafter “Agreement”) which was presented to me by Glatfelter for my consideration on June 5, 2008 concerning my termination from Glatfelter effective September 30, 2008 (“Termination Date”). I agree to the terms of this Agreement on behalf of myself, my spouse, and my heirs, estate, executors, administrators, successors, and assigns. Glatfelter enters into this Agreement on behalf of P. H. Glatfelter Company, d/b/a Glatfelter, and its directors, officers, agents, employees, consultants and insurers, and its respective past, present, and future parents, affiliated companies, subsidiaries, successors, and assigns. Glatfelter and I have agreed to the following terms to resolve, settle and terminate any dispute or claim I may have about my employment with Glatfelter, including but not limited claims related to the termination of my employment with the Company. I further understand that my decision to accept or decline the terms and conditions set forth in this Agreement does not affect my Termination Date.

     1. Transition Period: If I enter into this Agreement, I understand that my employment continues through September 30, 2008 at my current base pay, bonus, and associated benefits programs. I understand that I am to execute my responsibilities as previously discussed and documented to create an effective transition work plan. The Company acknowledges that I may conduct an active job search during this period provided this does not inhibit the execution of my work responsibilities. It is recognized, however, that I may devote a significant portion of time during my work days to search for a new position, including taking time off for research purposes, consultations with outplacement professionals and interviews. The Company agrees to continue to provide me the necessary tools including laptop, blackberry, and voice mail to execute my responsibilities.

     2. Severance Pay. In addition to the monies associated with the Transition Period described in paragraph 1, if I enter into this Agreement, the Company will pay me my current base salary less required withholdings and applicable payroll taxes in the form of severance from the period of October 1, 2008 through December 31, 2008 (referred to herein as the “Severance

Page 1 of 11

Period”) without regard to whether I obtain another position. The severance pay will be paid in a lump sum within 30 days of the execution of this Agreement. However, no such payments will be made until the 7-day revocation period as provided in paragraph 21 (e) below has expired. I will receive these severance payments via check or direct deposit, in accordance with the most recent usual practices regarding my salary payments to date. Further, with respect to the Company’s Management Incentive Plan (MIP) for the year 2008, the Company will pay me an additional amount of $83,784.75 in complete satisfaction of any possible distribution associated with a management incentive plan bonus for the year 2008. I shall have no further claim for a management incentive plan bonus for the year 2008. This payment is to be made in a lump sum in January of 2009.

     3. In addition, subject to the terms provided in this Agreement, the Company will make the following payments and offer me the following benefits following the date of my departure from employment

a. COBRA Benefits:

(i)

Regardless of whether I enter into this Agreement, I understand that, my health insurance coverage provided through the Company’s sponsored health plan, will terminate for me and my currently covered dependants on June 30, 2009. In addition, I acknowledge that in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1986 (COBRA) I have the right, at my cost and expense, to temporarily continue health, vision and dental insurance benefits for up to 18 months following the Termination Date (“COBRA Continuation Coverage Period”).

(ii)

If I enter into this Agreement, and elect to continue health or dental benefits under COBRA, through June 30, 2009, the Company will continue to extend health, vision and dental benefits to me and my eligible dependents at the current employee contribution rates for such coverages as are in effect for active salaried employees of Company (the “Employee Portion”) and the Severance Period will be counted against the COBRA Continuation Coverage Period. I understand and agree that the Company

Page 2 of 11

will, on a monthly basis during the Severance Period, bill the Employee Portion to me at my current mailing address: 822 Woodfield Drive, Lititz, Pennsylvania 17543. I agree to provide the Company in writing with any applicable change in mailing address and acknowledge that failure to do so constitutes my agreement that the mailing address listed herein is valid for any matters pertaining to this Agreement. I understand that if, by June 30, 2009, or upon my becoming eligible for healthcare benefits with a new employer, I elect to continue health or dental benefits for the remainder of the COBRA Continuation Coverage Period, I will be responsible for the full cost of such health or dental coverage at the premiums and rates charged by the Company’s coverage providers during the remainder of the COBRA Continuation Coverage Period.

b. Outplacement Services: If I enter into this Agreement, the Company will arrange for Outplacement Services to be provided to me by Right Associates. The Company agrees to reimburse me for any out of pocket expenses, including reasonable travel and meals, associated with meetings with Right Associates and/or meetings with individuals or groups related to my search for a new position until June 30, 2009. I understand that I should contact William T. Yanavitch if I have any questions regarding my outplacement program eligibility.

c. Unused Vacation: The Company will pay me my accrued but unused vacation entitlement, pro-rated from the beginning of the year until the Termination Date through the normal payroll process, regardless of whether I enter into this Agreement.

d. 401(k) Benefits: I understand that employee 401 (k) contributions and any matching employer 401 (k) contributions cease as of the Termination Date, regardless of whether I enter into this Agreement.

e. Equity: Regardless of whether I enter into this Agreement, the Company will convey common stock shares to me for my vested Restricted Stock Units according to the terms in my RSU certificate. Additionally, I am eligible to exercise any vested stock options previously granted according to the terms of my certificate.

Page 3 of 11

f. Pension: I understand I am vested in the Glatfelter pension plan and an exhibit of the pension estimate has been provided to me. Additionally, the Company agrees to pay $40,000 in satisfaction of my SMPP. This amount is to be paid within 10 days of the execution of this Agreement.

g. Other Benefits: If I enter into this Agreement, the Employee Assistance Program will be extended beyond the Termination Date, and will include a maximum of three sessions during the Severance Period.

h. In addition, the Company will pay the cost of financial planning/tax review/legal services incurred in the negotiation and review of this Severance Offer in an amount up to $5,000.

j. The Company agrees to reimburse me for my annual executive physical examination, inoculations and related laboratory tests.

     4. The payments made and benefits provided by the Company under this Agreement are in full satisfaction of all bonus pay, profit-sharing, stock options, relocation expenses, termination benefits, statutory entitlements or other compensation which I may be entitled by virtue of my employment with, or separation from, the Company. I understand that the payments and benefits outlined in paragraph 1, 2 and 3 above are in addition to any other payment or benefit to which I otherwise may be entitled under any of Glatfelter’s benefit plans and are valuable benefits to which I would not otherwise be entitled if I do not enter into this Agreement. I understand that any payments made under this Agreement are not in lieu of any applicable unemployment compensation benefits I may otherwise be entitled to receive.

     5. Defense and Indemnity: The Company agrees to defend and indemnify and hold harmless me from all liability and costs incurred (including reasonable attorney’s fees and disbursements) as a consequence of claims by third parties, whether or not derivatively on behalf of the Company resulting from or growing out of my status as or as a result of my having been an officer or director of (or counsel to) the Company or any affiliate thereof, to the full extent permitted by law. In no event shall the terms, provisions and conditions of the defense and indemnity provided for thereunder be less than the same as those presently provided for under

Page 4 of 11

the Articles of Incorporation and By-Laws of the Company. Said terms, provisions and conditions of defense and indemnity shall remain an independent, contractual obligation of the Company to me from and after the date hereof regardless of how the Company might hereafter amend or change its Articles of Incorporation or By-Laws to provide for different terms, conditions and provisions of defense and indemnity for other officers and directors of the Company. In the event the Company should amend its articles of Incorporation or Bylaws to provide for different terms, conditions and provisions of defense and indemnity after the effective date hereof, I shall be notified in writing of the change. I shall thereafter have thirty (30) days to elect in writing to accept the changed conditions of defense and indemnity as a modification to the Company’s contractual obligation hereunder or to continue under the terms of defense and indemnity as provided for herein.

     6. With the limited exception outlined in paragraph 12 below, in consideration for the payments to be made and benefits to be offered by Glatfelter to me under this Agreement, on behalf of myself and my heirs, estate, executors, administrators, successors, and assigns, I hereby release and agree to hold harmless Glatfelter and its directors, officers, agents, employees, insurers, affiliated companies, subsidiaries, successors and assigns from all actions, causes of action, claims, disputes, judgments, obligations, damages, and liabilities, in law or equity (herein, collectively “Claims”), relating to my employment with Glatfelter or lack of employment with Glatfelter, including but not limited to my employment termination and any Glatfelter actions that led to that termination.

     In particular, I understand and agree that this Agreement includes, without limitation, my release of all Claims arising under any federal, state, or local law, including any and all laws and regulations prohibiting employment discrimination on the basis of race, color, religion, age, sex, national origin, ancestry, disability, medical condition, veteran status, marital status, and sexual orientation or other status or characteristic protected by law or ordinance, including, but not limited to, claims under Title VII of the Civil Rights Act of 1964, as amended; Section 1981 of the Civil Rights Act of 1866; the Americans with Disabilities Act (“ADA”); the Employee Retirement Income Security Act of 1974, as amended (“ERISA”); the Fair Labor Standards Act, as amended, including the Equal Pay Act; the Worker Adjustment and Retraining Notification Act (“WARN”); the Age Discrimination in Employment Act of 1967, as amended, (the

Page 5 of 11

“ADEA”); the Family and Medical Leave Act of 1993 (the “FMLA”); the Act pertaining to the Employment and Reemployment Rights of Members of the Uniformed Services, (“USERRA”); the Immigration Reform and Control Act; the Occupational Safety and Health Act; and other state and local human or civil rights laws as well as all other statutes; and all regulations pertaining to the above statutes, as any of the foregoing may have been amended; as well as any and all other tort, contract, or statutory claims related to my employment, including but not limited to the termination of that employment unless otherwise addressed herein.

     7. In consideration of the payments and benefits provided by this Agreement, I agree that I will not knowingly seek reemployment with, and that I will not be eligible for reemployment with, the current Company, or any current affiliated owned or operated entity. I further understand that it is the Company’s policy to provide only confirmation of my dates of employment and job titles held. No additional references will be provided by the Company either verbally or in writing to other employers on my behalf without the express permission of the Vice President Human Resources and Administration. The Company has agreed to provide me with a mutually agreed-to written letter of recommendation in support of my search process which letter will be provided within ten (10) business days of the execution of this Agreement. The Company agrees that any written or oral inquiries regarding Jeffrey J. Norton will be provided by the current Vice President of Human Resources and Adminsitration, William T. Yanavitch and/or the current Chairman and Chief Executive Officer George H. Glatfelter.

     8. This Agreement does not constitute an admission by the Company that it has violated any contract, law, or regulation, or in any way infringed my rights or privileges. The Company and I are making this Agreement in order to end my employment on a friendly basis, and to avoid the costs of defending any legal action, which I might otherwise initiate. Because this Agreement is being offered to me in order to settle or compromise any possible disputed employment or contract claims that I may have against the Company, I agree that I may not use it as evidence for any purpose except where it is alleged that the Agreement itself has been breached in some manner.

     9. I understand and agree that this Agreement extends to all Claims which are known or unknown to me, asserted or unasserted by me, suspected or unsuspected by me, past, present, and

Page 6 of 11

through the Termination Date.

     10. With the limited exception outlined in paragraph 12, I release and discharge Glatfelter not only from any Claims which I could make on my own behalf, but also those that may or could be brought by any person or organization on my behalf, and I specifically waive any right to become and promise not to become a member of any class in any proceeding or case in which any such Claim against Glatfelter may arise, in whole or in part, from any event which occurred on or before the Termination Date.

     11. I have not filed any Claims against Glatfelter based on any event that took place on or before the date I execute this Agreement, and I have not previously purported to have assigned or transferred, to any person or entity, any Claim released by me under this Agreement.

     12. I agree that within five (5) business days of the signing of this Agreement, I will have delivered to the Company all Company documents, keys, access cards, cell phones, computers and other materials which came into my possession during the course of my employment with Glatfelter. I further agree that I will not make use of or disclose to anyone, without the prior written consent of Glatfelter, any information or documents concerning or related to the Company, whether confidential or not, that I acquired during the course of my employment with the Company. I further agree that, outside of normal business transactions in which I am involved on behalf of the Company, I will not discuss the Company’s business, customers, sales, prospects, trade secrets, methods of operation, or other similar topics with anyone other than the officers or members of the Board of Directors of Glatfelter, and I will not engage in any activities or make any statements that may disparage or reflect negatively on the Company, its officers, directors, employees or shareholders. This provision shall include, but not be limited to, Internet postings under an alias, as well as anonymous media contacts. The term “disparage” includes, without limitation, comments or statements to the press or the other media about Glatfelter or any individual or entity with whom Glatfelter has a business relationship which I know or should know would adversely affect in any manner (i) the conduct of the business or prospective business of Glatfelter or (ii) the business or personal reputation of Glatfelter or any of its current officers, officers, directors, employees, subsidiaries, affiliates, parent entities or related business entities. Glatfelter Management (including, but not limited to

Page 7 of 11

its Officers and Directors) agrees that they will not disparage or encourage or induce others to disparage me. The term “disparage” further includes, without limitation, comments or statements to the press, media or any other persons that would affect in any manner the business or personal reputation of Jeffrey J. Norton. Any such disparagement of me by Glatfelter and/or any of its officers, directors, employees, subsidiaries, etc. shall be considered a material breach of this Agreement and, notwithstanding anything contained herein to the contrary, I reserve the right to pursue legal action regarding any such disparagement.

     13. Other than the fact of my termination, I have kept, and will continue to keep, the terms and conditions of this Agreement, and any related agreements, and all matters concerning them confidential, except that I may reveal the terms and conditions of this Agreement and any related agreements to my immediate family, my attorney and/or financial advisor, if any, so long as they first agree not to disclose the information to anyone else. I further agree that I will not make any statements or remarks that are disparaging to, or which have the potential of harming Company and/or its present and former officers, directors, agents or employees, and that I will not engage in any act or conduct that is, or could reasonably be construed to be, detrimental to Company’s interests, business, or reputation.

     14. I agree to cooperate with any reasonable request of Glatfelter to participate in the preparation for, response to, prosecution of and/or defense of any pending, actual, or threatened litigation, arbitration and/or administrative proceeding involving the Company. The Company will reimburse me for all reasonable out-of-pocket expenses that I may incur as a result of such cooperation. Reasonable expenses incurred by me (including, but not limited to, travel-related expenses, meals and lodging and any then current hourly wages associated with time spent by me preparing for and/or participating in any such legal or administrative proceeding) as a result of such cooperation will be reimbursed in accordance with Glatfelter policy within 60 calendar days following the date on which Glatfelter receives appropriate documentation with respect to such expenses, but in no event later than 120 days from the date that I incur the related expense.

     15. I agree that this Agreement may be revoked by Glatfelter if:

a  I breach the confidentiality or non-disparagement terms of this Agreement, or any agreements regarding confidentiality that I may have previously

Page 8 of 11

	entered into with Glatfelter, including but not limited to the Confidentiality Agreement incorporated herein and attached hereto as Appendix “A”;
b.	I misappropriate or fail to return Company property, misuse Company property (such as, but not limited to, Internet access), or engage in efforts that undermine the effectiveness of the Company’s operations.

     16. The foregoing terms represent the entire agreement between Glatfelter and me related to the subject matter hereof and this Agreement supersedes any conflicting agreements between Glatfelter and me, including any agreement executed at the commencement of my employment. No other promises, consideration, agreement, plan, representation, oral statement, understanding, or course of conduct not expressly set forth in this Agreement have been made between Glatfelter and me to cause either of us to sign this Agreement.

     17. The provisions of this Agreement are severable. If any provision of this Agreement is determined to be invalid or unenforceable by a court of competent jurisdiction, the other provisions of this Agreement shall continue in full force and effect and the voided provision(s) shall be amended, if possible, to the extent necessary to render it valid and enforceable.

     18. All matters relating to the interpretation, construction, and enforcement of this Agreement shall be governed by and construed according to the laws of the Commonwealth of Pennsylvania, without giving effect to its principles of conflicts of law, to the extent that the laws of the United States of America do not preempt those laws. I further agree that jurisdiction shall be proper in, and limited to, any appropriate state or federal court in the Commonwealth of Pennsylvania.

     19. If any suit is brought relating to this Agreement or any breach of it, either by me or by Glatfelter, the prevailing party in such suit shall be entitled to reimbursement for reasonable costs, expenses and attorneys’ fees incurred by it in such suit.

     20. This Agreement may not be amended except by a written agreement that has been executed by me and by an Officer of Glatfelter on behalf of Glatfelter.

     21. In connection with my execution of this Agreement, I acknowledge the following:

Page 9 of 11

          (a) I HAVE BEEN ADVISED BY THE COMPANY TO SEEK THE ADVICE OF LEGAL COUNSEL PRIOR TO EXECUTING THIS DOCUMENT.

          (b) I have carefully read this Agreement, fully understand its terms, understand its legal and binding effect, have had full opportunity to review it with my legal counsel, and that I sign this Agreement voluntarily;

          (c) That I am waiving all rights and claims that I have or may have under the federal Age Discrimination in Employment Act, as well as any rights or claims that I have or may have under other federal, state, or local laws with regard to discrimination;

          (d) That I have a period of 21 days in which to consider this Agreement before signing it;

          (e) That for a period of 7 days following my signing of this Agreement, I may revoke this Agreement, and that this Agreement shall not become effective and enforceable until this 7-day revocation period has expired. Any revocation shall be submitted in writing to the signatory for the Company. I also understand that this Agreement shall not become effective or enforceable until the expiration of that seven (7) day period.

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     IN WITNESS WHEREOF, the undersigned parties have executed this Agreement, as of the dates indicated below.

		P.H. Glatfelter Company
Jeffrey J. Norton		By: William T. Yanavitch VP, Human Resources and Administration
Signed:	/s/ Jeffrey J. Norton	Signed:	/s/ William T. Yanavitch
Date:	10/21/2008	Date:	10/25/2008

Page 11 of 11

GLATFELTER

Employee’s Agreement

     Recognizing that Glatfelter, and any other entity which may now or hereafter be its subsidiary, affiliate, successor, or assign (hereinafter referred to collectively as “Glatfelter”), for many years have been, are now, and in the future may be, engaged in developing, and/or acquiring new or improved products, processes, innovations, formulae, procedures, materials, techniques, or apparatus (hereinafter referred to collectively as “inventions” whether or not they are patentable or reduced to practice), and recognizing further that it is vital to the success of Glatfelter’s business (a) to protect such inventions either by acquiring patents, trademarks or copyrights thereon or maintaining them as trade secrets, (b) to protect the confidential nature of its relationships with its customers and suppliers, and (c) to maintain as trade secrets other data, information and know-how acquired by Glatfelter in connection with the manufacture and marketing of its products.

     I, Jeffrey J. Norton AGREE, in consideration of my employment by Glatfelter, and/or the continuance thereof for such time and on such terms as shall be mutually agreeable to Glatfelter and me (either party having a right to terminate such employment at any time) as follows:

     1. Duty to Turn Over Inventions to Glatfelter. I will make prompt and full disclosure to Glatfelter, and hold as trade secrets belonging exclusively to Glatfelter, all inventions heretofore or hereafter made or conceived by me (whether solely or jointly with another or others) during the term of my employment by Glatfelter whether made or conceived during or outside of my working hours:

     (a) which are in any way related to or useful in the business, work, interests, investigations, or proposed operations of Glatfelter during the term of my employment;

     (b) which result from or are suggested by any work done for or on behalf of Glatfelter; or

     (c) which are in any of the following fields:

     (1) pulp, paper, pulp making, paper making, or any products or by-products thereof, or (2) any other articles or materials made or sold by Glatfelter or become interested, or (3) any methods, processes, formulae, procedures, techniques, compositions, apparatus or tools now or later used or useful in connection with the production, sale or use of said pulp, paper, products, by-products, or other articles or materials.

     It is understood that all inventions which I made or conceived prior to my employment by Glatfelter are excluded from the scope of this Agreement. However, to preclude any possible future uncertainty as to such prior inventions, I record on the last page of this Agreement a list, including a brief description, of those of my said prior inventions, if any, which are not yet the subject of a pending patent application or an issued patent, and which are not the property of a previous employer.

     I represent that except as stated on the last page of this Agreement, I have no agreements with or obligations to others in conflict with the foregoing.

     2. Duty Not to Disclose Inventions and Information to Others. Except as Glatfelter may otherwise consent in writing, I will not publish or disclose, and will not make use of, except for the benefit of Glatfelter, at any time either during or subsequent to the term of my employment by Glatfelter, any invention or other trade secret or confidential information which I may learn from Glatfelter, which I may learn from third parties because of my employment by Glatfelter, or which I may obtain or produce myself during the term of my employment by Glatfelter, unless and until such information shall become public knowledge. The phrase “other trade secret or confidential information” in the previous sentence shall be deemed to include, without limitation, Glatfelter’s prices and costs; supplier invoices, lists and files; customer and prospective customer lists and files; manufacturing, engineering, and marketing plans; research and

2

technical information and programs; and all other information regarded by Glatfelter as confidential. My access to information without Glatfelter’s permission, as a result of unauthorized public knowledge, will not change the nature of otherwise trade secret or confidential information.

     3. Duty to Make Records of Inventions. I will keep and maintain adequate and current written records of all my inventions in the form of notes, sketches, drawings, blueprints, models, reproductions, manuals or reports relating thereto, which records shall be and remain the exclusive property of Glatfelter and be made available to it at all times.

     In the event that my employment by Glatfelter is terminated for any reason, I shall turn over to Glatfelter immediately all such records, including any drafts or negatives or preliminary sketches, drawings or models thereof I have made, or any copies thereof I may have in my possession, as well as all other records, files, materials, tolls, and/or equipment which may have been issued or entrusted to me by Glatfelter during the course of such employment, including duplicate copies.

     4. Duty to Assist Glatfelter in Acquiring and Protecting Inventions, Etc. I will take, at Glatfelter’s request and its expense, both during and after my employment, whatever action Glatfelter deems necessary or desirable:

     (a) to enable Glatfelter or its nominee to prepare, file and prosecute applications for letters patent on such inventions in any or all countries and applications for re-issue, renewals and extensions thereof;

     (b) to enable Glatfelter or its nominee to prepare, file and prosecute applications for trademarks, copyrights and other means of protecting proprietary information;

     (c) to vest exclusively in Glatfelter or its nominee all right, title and interest in and to such inventions and/or patents issued thereon, trademarks, copyrights and other means; and

     (d) to protect the right, title and interest of Glatfelter or its nominee in and to all such inventions and proprietary information.

     Such action shall include among other things the execution, acknowledgment and delivery of all appropriate papers.

     5. Continuing Force of Duties. The termination of my employment by Glatfelter shall not release me from the obligations imposed upon me under this Agreement, nor shall any subsequent change or changes in the other duties, salary, compensation, and/or terms of my employment in any way affect the validity of this Agreement.

     6. Reasonableness of the Agreement. The provisions of this Agreement are essential both to this Agreement and to my retention as an employee by Glatfelter. The nature of Glatfelter’s business and the information which I might learn are such that the terms, scope and duration of the provisions of this Agreement are necessary and reasonable.

     7. Glatfelter’s Remedies. If I breach or threaten to breach this Agreement, Glatfelter shall be entitled, in addition to any other remedy, to an injunction or other equitable decree to enforce the terms and prevent further violation of this Agreement. If Glatfelter is successful in any suit under this Agreement, I will reimburse Glatfelter for all expenses of litigation, including but not limited to legal fees.

     8. Severability. If ever it is determined that a provision of this Agreement is unenforceable, that determination will not affect the enforceability of the other provisions of this Agreement and this Agreement will be construed as if the unenforceable provision had never been a part of this Agreement. If a provision is unenforceable because the duration, activity, or subject of the provision is too broad, then the duration, activity, or subject will be interpreted to be only so broad as to be enforceable.

3

     9. Complete Agreement; Waiver. This Agreement is complete and supersedes any prior agreements on these matters which may have existed between me and Glatfelter. This Agreement may not be changed, modified, released, discharged, abandoned or otherwise terminated, in whole or in part, except by an instrument in writing which is signed by an officer of Glatfelter.

     10. Binding Effect. This Agreement shall be binding upon my heirs, executors, administrators, or other legal representatives or assigns.

     11. Governing Law. This Agreement shall be construed under the provisions of Pennsylvania law, without giving effect to the principles of conflicts of laws under Pennsylvania law.

     IN WITNESS WHEREOF, and intending to be legally bound hereby, I have hereunto set my hand and seal this 31^st day of May, 2005.

(Signature)

     Prior to signing this Agreement, the above-named employee and I (the undersigned) reviewed together each of the provisions therein. Said employee represented to me that he/she had read and understood the entire Agreement and thereupon executed it in my presence and stated that he/she had done so of his/her own free will and intending to be legally bound thereby.

	(Signature)
Title:

EX-10.6.(A)

                                                                 EXHIBIT 10.6(a)

                    $200,000,000.00 REVOLVING CREDIT FACILITY
                            $100,000,000.00 TERM LOAN

                                CREDIT AGREEMENT

                                  by and among

                            P.H. GLATFELTER COMPANY

                                       and

                    Certain of its Subsidiaries, as Borrowers

                                       and

                        THE BANKS PARTY HERETO, as Banks

                                       and

                    PNC BANK, NATIONAL ASSOCIATION, as Agent

                                      with

         PNC CAPITAL MARKETS LLC and CREDIT SUISSE SECURITIES (USA) LLC,


                     as Joint Lead Arrangers and Bookrunners

                                       and

            CREDIT SUISSE SECURITIES (USA) LLC, as Syndication Agent

                            Dated as of April 3, 2006



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
1.    CERTAIN DEFINITIONS................................................      1
      1.1     Certain Definitions........................................      1
      1.2     Construction...............................................     26
              1.2.1     Number; Inclusion................................     27
              1.2.2     Determination....................................     27
              1.2.3     Agent's Discretion and Consent...................     27
              1.2.4     Documents Taken as a Whole.......................     27
              1.2.5     Headings.........................................     27
              1.2.6     Implied References to this Agreement.............     27
              1.2.7     Persons..........................................     27
              1.2.8     Modifications to Documents.......................     28
              1.2.9     From, To and Through.............................     28
              1.2.10    Shall; Will......................................     28
      1.3     Accounting Principles......................................     28

2.    REVOLVING CREDIT AND SWING LOAN FACILITIES.........................     29
      2.1     Revolving Credit Commitments...............................     29
              2.1.1     Revolving Credit Loans...........................     29
              2.1.2     Swing Loan Commitment............................     30
      2.2     Nature of Banks' Obligations with Respect to Revolving
              Credit Loans...............................................     31
      2.3     Commitment Fees............................................     31
      2.4     Revolving Credit Loan Requests.............................     31
              2.4.1     Revolving Credit Loan Requests...................     31
              2.4.2     Swing Loan Requests..............................     32
      2.5     Making Revolving Credit Loans and Swing Loans; Revolving
              Credit Notes and Swing Notes...............................     32
              2.5.1     Making Revolving Credit Loans....................     32
              2.5.2     Making Swing Loans...............................     33
      2.6     Revolving Credit Notes.....................................     33
      2.7     Swing Loan Note............................................     33
      2.8     Borrowings to Repay Swing Loans............................     33
      2.9     Utilization of Commitments in Optional Currencies..........     34
              2.9.1     Periodic Computations of Dollar Equivalent
                        Amounts of Revolving Credit Loans and Letters of
                        Credit Outstanding...............................     34
              2.9.2     Notices From Banks That Optional Currencies Are
                        Unavailable to Fund New Loans....................     34
              2.9.3     Notices From Banks That Optional Currencies Are
                        Unavailable to Fund Renewals of the Euro-Rate
                        Option...........................................     34
              2.9.4     European Monetary Union..........................     35



                                       -i-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
              2.9.5     Requests for Additional Optional Currencies......     35
      2.10    Use of Proceeds............................................     36
      2.11    Letter of Credit Subfacility...............................     36
              2.11.1    Issuance of Letters of Credit....................     36
              2.11.2    Letter of Credit Fees............................     36
              2.11.3    Disbursements, Reimbursement.....................     37
              2.11.4    Repayment of Participation Advances..............     38
              2.11.5    Documentation....................................     39
              2.11.6    Determinations to Honor Drawing Requests.........     39
              2.11.7    Nature of Participation and Reimbursement
                        Obligations......................................     39
              2.11.8    Indemnity........................................     41
              2.11.9    Liability for Acts and Omissions.................     41
      2.12    Currency Repayments........................................     42
      2.13    Optional Currency Amounts..................................     43
      2.14    Reduction of Commitment....................................     43

3.    TERM LOANS.........................................................     43
      3.1     Term Loan Commitments......................................     43
      3.2     Nature of Banks' Obligations with Respect to Term Loans....     44
      3.3     Term Loan Notes............................................     44
      3.4     Use of Proceeds............................................     44

4.    INTEREST RATES.....................................................     45
      4.1     Interest Rate Options......................................     45
              4.1.1     Interest Rate Options............................     45
              4.1.2     Rate Quotations..................................     45
      4.2     Interest Periods...........................................     46
              4.2.1     Amount of Borrowing Tranche......................     46
              4.2.2     Renewals.........................................     46
      4.3     Interest After Default.....................................     46
              4.3.1     Letter of Credit Fees, Interest Rate.............     46
              4.3.2     Other Obligations................................     46
              4.3.3     Acknowledgment...................................     46
      4.4     Euro-Rate Unascertainable; Illegality; Increased Costs;
              Deposits Not Available.....................................     47
              4.4.1     Unascertainable..................................     47
              4.4.2     Illegality; Increased Costs; Deposits Not
                        Available........................................     47
              4.4.3     Agent's and Bank's Rights........................     47
      4.5     Selection of Interest Rate Options.........................     48



                                      -ii-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
5.    PAYMENTS...........................................................     48
      5.1     Payments...................................................     48
      5.2     Pro Rata Treatment of Banks................................     49
      5.3     Interest Payment Dates.....................................     49
      5.4     Voluntary Prepayments......................................     50
              5.4.1     Right to Prepay..................................     50
              5.4.2     Replacement of a Bank............................     51
              5.4.3     Change of Lending Office.........................     51
      5.5     Mandatory Prepayments......................................     52
              5.5.1     Prepayment Events................................     52
              5.5.2     Currency Fluctuations............................     53
              5.5.3     Application Among Interest Rate Options..........     53
      5.6     Additional Compensation in Certain Circumstances...........     53
              5.6.1     Increased Costs or Reduced Return Resulting from
                        Taxes, Reserves, Capital Adequacy Requirements,
                        Expenses, Etc....................................     53
              5.6.2     Indemnity........................................     54
      5.7     Interbank Market Presumption...............................     54
      5.8     Taxes......................................................     55
              5.8.1     No Deductions....................................     55
              5.8.2     Stamp Taxes......................................     55
              5.8.3     Indemnification for Taxes Paid by a Bank.........     55
              5.8.4     Certificate......................................     56
              5.8.5     Survival.........................................     56
      5.9     Judgment Currency..........................................     56
              5.9.1     Currency Conversion Procedures for Judgments.....     56
              5.9.2     Indemnity in Certain Events......................     56
      5.10    Notes......................................................     56
      5.11    Settlement Date Procedures.................................     57

6.    REPRESENTATIONS AND WARRANTIES.....................................     57
      6.1     Representations and Warranties.............................     57
              6.1.1     Organization and Qualification...................     57
              6.1.2     Subsidiaries.....................................     57
              6.1.3     Power and Authority..............................     58
              6.1.4     Validity and Binding Effect......................     58
              6.1.5     No Conflict......................................     58
              6.1.6     Litigation.......................................     59
              6.1.7     Title to Properties..............................     59
              6.1.8     Financial Statements.............................     59
              6.1.9     Use of Proceeds; Margin Stock; Section 20
                        Subsidiaries.....................................     60
              6.1.10    Full Disclosure..................................     60



                                      -iii-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
              6.1.11    Taxes............................................     60
              6.1.12    Consents and Approvals...........................     61
              6.1.13    No Event of Default; Compliance with
                        Instruments......................................     61
              6.1.14    Patents, Trademarks, Copyrights, Licenses, Etc...     61
              6.1.15    Security Interests...............................     62
              6.1.16    Status of the Pledged Collateral.................     62
              6.1.17    Insurance........................................     62
              6.1.18    Compliance with Laws.............................     63
              6.1.19    Material Contracts; Burdensome Restrictions......     63
              6.1.20    Investment Companies; Regulated Entities.........     63
              6.1.21    Plans and Benefit Arrangements...................     63
              6.1.22    Employment Matters...............................     64
              6.1.23    Environmental Matters............................     65
              6.1.24    Senior Debt Status...............................     66
              6.1.25    Anti-Terrorism Laws..............................     66
      6.2     Continuation of Representations............................     67
      6.3     Updates to Schedules.......................................     67

7.    CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT............     67
      7.1     First Loans and Letters of Credit..........................     68
              7.1.1     Officer's Certificate............................     68
              7.1.2     Secretary's Certificate..........................     68
              7.1.3     Delivery of Loan Documents.......................     68
              7.1.4     Opinion of Counsel...............................     69
              7.1.5     Legal Details....................................     69
              7.1.6     Payment of Fees..................................     69
              7.1.7     Consents.........................................     69
              7.1.8     Financed Domestic Acquisition....................     69
              7.1.9     Closing Date Compliance Certificate..............     69
              7.1.10    Officer's Certificate Regarding MACs.............     70
              7.1.11    No Violation of Laws.............................     70
              7.1.12    No Actions or Proceedings........................     70
      7.2     Each Additional Loan or Letter of Credit...................     70
      7.3     Loans to Fund Acquisitions.................................     70

8.    COVENANTS..........................................................     71
      8.1     Affirmative Covenants......................................     71
              8.1.1     Preservation of Existence, Etc...................     71
              8.1.2     Payment of Liabilities, Including Taxes, Etc.....     71



                                      -iv-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
              8.1.3     Maintenance of Insurance.........................     71
              8.1.4     Maintenance of Properties and Leases.............     72
              8.1.5     Maintenance of Patents, Trademarks, Etc..........     72
              8.1.6     Visitation Rights................................     72
              8.1.7     Keeping of Records and Books of Account..........     72
              8.1.8     Plans and Benefit Arrangements...................     73
              8.1.9     Compliance with Laws.............................     73
              8.1.10    Further Assurances...............................     73
              8.1.11    Anti-Terrorism Laws..............................     73
              8.1.12    Note Issue.......................................     73
              8.1.13    Covenant to Grant Liens in Pledged Collateral....     74
      8.2     Negative Covenants.........................................     75
              8.2.1     Indebtedness.....................................     76
              8.2.2     Liens............................................     77
              8.2.3     Guaranties.......................................     77
              8.2.4     Loans and Investments............................     77
              8.2.5     Dividends and Related Distributions..............     78
              8.2.6     Liquidations, Mergers, Consolidations,
                        Acquisitions.....................................     78
              8.2.7     Dispositions of Assets or Subsidiaries...........     79
              8.2.8     Affiliate Transactions...........................     80
              8.2.9     Subsidiaries.....................................     81
              8.2.10    Continuation of or Change in Business............     81
              8.2.11    Plans and Benefit Arrangements...................     81
              8.2.12    Fiscal Year......................................     81
              8.2.13    Issuance of Stock................................     81
              8.2.14    Changes in Organizational Documents..............     81
              8.2.15    Minimum Net Worth................................     82
              8.2.16    Maximum Leverage Ratio...........................     82
              8.2.17    Minimum Interest Coverage Ratio..................     82
      8.3     Reporting Requirements.....................................     82
              8.3.1     Quarterly Financial Statements...................     82
              8.3.2     Annual Financial Statements......................     83
              8.3.3     Certificate of the Borrower......................     83
              8.3.4     Notice of Default................................     84
              8.3.5     Notice of Litigation.............................     84
              8.3.6     Notice of Change in Debt Rating..................     84
              8.3.7     Certain Events...................................     84
              8.3.8     Budgets, Forecasts, Other Reports and
                        Information......................................     84
              8.3.9     Notices Regarding Plans and Benefit
                        Arrangements.....................................     85



                                       -v-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
9.    DEFAULT............................................................     86
      9.1     Events of Default..........................................     86
              9.1.1     Payments Under Loan Documents....................     86
              9.1.2     Breach of Warranty...............................     87
              9.1.3     Breach of Negative Covenants or Visitation Rights
                        or Covenant to Grant Liens.......................     87
              9.1.4     Breach of Other Covenants........................     87
              9.1.5     Defaults in Other Agreements or Indebtedness.....     87
              9.1.6     Final Judgments or Orders........................     87
              9.1.7     Loan Document Unenforceable......................     88
              9.1.8     Proceedings Against Assets.......................     88
              9.1.9     Notice of Lien or Assessment.....................     88
              9.1.10    Insolvency.......................................     88
              9.1.11    Events Relating to Plans and Benefit
                        Arrangements.....................................     88
              9.1.12    Cessation of Business............................     89
              9.1.13    Change of Control................................     89
              9.1.14    Involuntary Proceedings..........................     89
              9.1.15    Voluntary Proceedings............................     90
      9.2     Consequences of Event of Default...........................     90
              9.2.1     Events of Default Other Than Bankruptcy,
                        Insolvency or Reorganization Proceedings.........     90
              9.2.2     Bankruptcy, Insolvency or Reorganization
                        Proceedings......................................     90
              9.2.3     Set-off..........................................     91
              9.2.4     Suits, Actions, Proceedings......................     91
              9.2.5     Application of Proceeds; Collateral Sharing......     91
              9.2.6     Other Rights and Remedies........................     92
      9.3     Notice of Sale.............................................     92

10.   THE AGENT..........................................................     93
      10.1    Appointment................................................     93
      10.2    Delegation of Duties.......................................     93
      10.3    Nature of Duties; Independent Credit Investigation.........     93
      10.4    Actions in Discretion of Agent; Instructions From the
              Banks......................................................     94
      10.5    Reimbursement and Indemnification of Agent by the
              Borrower...................................................     94
      10.6    Exculpatory Provisions; Limitation of Liability............     95
      10.7    Reimbursement and Indemnification of Agent by Banks........     95
      10.8    Reliance by Agent..........................................     96
      10.9    Notice of Default..........................................     96
      10.10   Notices....................................................     96
      10.11   Banks in Their Individual Capacities; Agent in its
              Individual Capacity........................................     97
      10.12   Holders of Notes...........................................     97



                                      -vi-



                                TABLE OF CONTENTS



Section                                                                     Page
- -------                                                                     ----
                                                                         
      10.13   Equalization of Banks......................................     97
      10.14   Successor Agent............................................     98
      10.15   Agent's Fee................................................     98
      10.16   Availability of Funds......................................     98
      10.17   Calculations...............................................     99
      10.18   No Reliance on Agent's Customer Identification Program.....     99
      10.19   Beneficiaries..............................................     99

11.   MISCELLANEOUS......................................................    100
      11.1    Modifications, Amendments or Waivers.......................    100
              11.1.1    Increase of Commitment; Extension of Expiration
                        Date.............................................    100
              11.1.2    Extension of Payment; Reduction of Principal
                        Interest or Fees; Modification of Terms of
                        Payment..........................................    100
              11.1.3    Release of Collateral or Guarantor...............    100
              11.1.4    Miscellaneous....................................    100
      11.2    No Implied Waivers; Cumulative Remedies; Writing Required..    101
      11.3    Reimbursement and Indemnification of Banks by the Borrower;
              Taxes......................................................    101
      11.4    Holidays...................................................    102
      11.5    Funding by Branch, Subsidiary or Affiliate.................    102
              11.5.1    Notional Funding.................................    102
              11.5.2    Actual Funding...................................    103
      11.6    Notices; Lending Offices...................................    103
      11.7    Severability...............................................    104
      11.8    Governing Law..............................................    104
      11.9    Prior Understanding........................................    104
      11.10   Duration; Survival.........................................    104
      11.11   Successors and Assigns.....................................    105
      11.12   Confidentiality............................................    106
              11.12.1   General..........................................    106
              11.12.2   Sharing Information With Affiliates of the
                        Banks............................................    106
      11.13   Counterparts...............................................    107
      11.14   Agent's or Bank's Consent..................................    107
      11.15   Exceptions.................................................    107
      11.16   CONSENT TO FORUM; WAIVER OF JURY TRIAL.....................    107
      11.17   Certifications From Banks and Participants.................    108
              11.17.1   Tax Withholding..................................    108
              11.17.2   USA Patriot Act..................................    109
      11.18   Joinder of Guarantors and Borrowers........................    109
      11.19   Nature of Foreign Borrower Obligations.....................    109



                                      -vii-



                         LIST OF SCHEDULES AND EXHIBITS

SCHEDULES

SCHEDULE 1.1(A)   - PRICING GRID
SCHEDULE 1.1(B)   - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES
SCHEDULE 1.1(E)   - EXISTING LETTERS OF CREDIT
SCHEDULE 1.1(M)   - MATERIAL SUBSIDIARIES
SCHEDULE 1.1(P)   - PERMITTED LIENS
SCHEDULE 5.5.1    - MANDATORY PREPAYMENT PERCENTAGE
SCHEDULE 6.1.1    - QUALIFICATIONS TO DO BUSINESS
SCHEDULE 6.1.2    - SUBSIDIARIES
SCHEDULE 6.1.12   - CONSENTS AND APPROVALS
SCHEDULE 6.1.14   - PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.
SCHEDULE 6.1.16   - PARTNERSHIP AGREEMENTS; LLC AGREEMENTS
SCHEDULE 6.1.21   - EMPLOYEE BENEFIT PLAN DISCLOSURES
SCHEDULE 8.2.1    - PERMITTED INDEBTEDNESS
SCHEDULE 8.2.4    - EXISTING INVESTMENTS

EXHIBITS

EXHIBIT 1.1(A)    - ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT 1.1(B)    - BORROWER JOINDER
EXHIBIT 1.1(C)    - INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
EXHIBIT 1.1(G)(1) - GUARANTOR JOINDER
EXHIBIT 1.1(G)(2) - GUARANTY AGREEMENT
EXHIBIT 1.1(P)    - PLEDGE AGREEMENT
EXHIBIT 1.1(R)    - REVOLVING CREDIT NOTE
EXHIBIT 1.1(S)    - SWING LOAN NOTE
EXHIBIT 1.1(T)    - TERM NOTE
EXHIBIT 2.4       - LOAN REQUEST
EXHIBIT 7.1.4     - OPINION OF COUNSEL
EXHIBIT 8.2.6     - ACQUISITION COMPLIANCE CERTIFICATE
EXHIBIT 8.3.3     - QUARTERLY COMPLIANCE CERTIFICATE


                                     -viii-


                                CREDIT AGREEMENT

     THIS CREDIT AGREEMENT is dated as of April 3, 2006, and is made by and
among P.H. GLATFELTER COMPANY, a Pennsylvania corporation ( the "COMPANY") and
certain of its subsidiaries identified on the signature pages hereto (each a
"BORROWER" and collectively, the "BORROWERS"), each of the GUARANTORS (as
hereinafter defined), the BANKS (as hereinafter defined), PNC BANK, NATIONAL
ASSOCIATION, in its capacity as agent for the Banks under this Agreement
(hereinafter referred to in such capacity as the "AGENT"), PNC CAPITAL MARKETS
LLC and CREDIT SUISSE SECURITIES (USA) LLC, as joint arrangers and bookrunners,
and CREDIT SUISSE SECURITIES (USA) LLC, as syndication agent (the "Syndication
Agent").

                                   WITNESSETH:

     WHEREAS, the Borrowers have requested the Banks to provide (i) a revolving
credit facility to the Borrowers in an aggregate principal amount not to exceed
$200,000,000 and (ii) a term loan facility in an aggregate principal amount
equal to $100,000,000; and

     WHEREAS, the revolving credit and term loan facilities shall be used for
(1) financing certain acquisitions permitted by the terms hereof, (2)
refinancing existing Indebtedness, and (3) general corporate purposes; and

     WHEREAS, the Banks are willing to provide such credit upon the terms and
conditions hereinafter set forth;

     NOW, THEREFORE, the parties hereto, in consideration of their mutual
covenants and agreements hereinafter set forth and intending to be legally bound
hereby, covenant and agree as follows:

                    1. CERTAIN DEFINITIONS

          1.1 CERTAIN DEFINITIONS.

          In addition to words and terms defined elsewhere in this Agreement,
the following words and terms shall have the following meanings, respectively,
unless the context hereof clearly requires otherwise:

               ACCOUNTS RECEIVABLE FACILITY DOCUMENTS means all documentation
entered into by the Company and its Subsidiaries, including, without limitation,
the Receivables Entity, in connection with the sale or other transfer of
accounts receivable and other related assets pursuant to a standard accounts
receivable securitization transaction and in a form reasonably satisfactory to
the Agent, as such documentation may be amended, restated, supplemented or
otherwise modified from time to time in accordance with the terms hereof and
thereof.



               AFFILIATE as to any Person shall mean any other Person (i) which,
directly or indirectly controls, is controlled by, or is under common control
with such Person. For purposes of this definition, "control" (including, with
correlative meanings, the term "controlled by" and "under common control with")
shall mean the power, directly or indirectly, either to (a) vote 10% or more of
the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person whether through the ownership of voting securities or by contract
or otherwise, including the power to elect a majority of the directors of a
corporation.

               AGENT shall have the meaning given to such term in the
introductory paragraph hereof.

               AGENT'S FEE shall have the meaning assigned to that term in
Section 10.15.

               AGENT'S LETTER shall have the meaning assigned to that term in
Section 10.15.

               AGREEMENT shall mean this Credit Agreement, as the same may be
supplemented or amended from time to time, including all schedules and exhibits.

               ANTI-TERRORISM LAWS shall mean any Laws relating to terrorism or
money laundering, including Executive Order No. 13224, the USA Patriot Act, the
Laws comprising or implementing the Bank Secrecy Act, and the Laws administered
by the United States Treasury Department's Office of Foreign Asset Control (as
any of the foregoing Laws may from time to time be amended, renewed, extended,
or replaced).

               APPLICABLE COMMITMENT FEE RATE shall mean the percentage rate per
annum at the indicated level of Debt Rating in the pricing grid on SCHEDULE
1.1(A) next to the line titled "Commitment Fee." The Applicable Commitment Fee
Rate shall be computed in accordance with the parameters set forth on SCHEDULE
1.1(A).

               APPLICABLE MARGIN shall mean the percentage spread to be added to
Euro-Rate under the Euro-Rate Option at the indicated level of Debt Rating in
the pricing grid on SCHEDULE 1.1(A) next to the line titled "Euro-Rate Spread."
The Applicable Margin shall be computed in accordance with the parameters set
forth on SCHEDULE 1.1(A).

               APPROVED ACQUISITIONS shall mean the UK Acquisitions and the
Financed Domestic Acquisition.

               APPROVED EBITDA ADJUSTMENTS shall mean the amount of historical
EBITDA to be included in Consolidated Adjusted EBITDA for any 4-quarter period
(the "Measurement Period") in respect of with the Financed Domestic Acquisition
and the UK Acquisitions which amount shall be as set forth in clauses (i)
through (iii) below, provided however that such amount shall be reduced in
proportion to the number of days within such Measurement Period that occur after
the closing date of such acquisition (for example if 3


                                      -2-



months of such Measurement Period is after such closing date, the applicable
figure below shall reduced by 1/4 (i.e. 3 months divided by 12 months)):

               (i) with respect to the Financed UK Acquisition $5,300,000,

               (ii) with respect to the Permitted Future UK Acquisition
$3,100,000, and

               (iii) with respect to the Financed Domestic Acquisition
$22,000,000.

               ASSIGNMENT AND ASSUMPTION AGREEMENT shall mean an Assignment and
Assumption Agreement by and among a Purchasing Bank, a Transferor Bank and the
Agent, as Agent and on behalf of the remaining Banks, substantially in the form
of EXHIBIT 1.1(A).

               AUGMENTING LENDER shall have the meaning assigned to such term in
Section 2.1.1.2.

               AUTHORIZED OFFICER shall mean those individuals, designated by
written notice to the Agent from the Borrowers, authorized to execute notices,
reports and other documents on behalf of the Loan Parties required hereunder.
The Borrowers may amend such list of individuals from time to time by giving
written notice of such amendment to the Agent.

               BANK-PROVIDED INTEREST RATE HEDGE shall mean an Interest Rate
Hedge which is provided by any Bank and with respect to which the Agent confirms
that it meets the following requirements: such Interest Rate Hedge (i) is
documented in a standard International Swap Dealer Association Agreement, (ii)
provides for the method of calculating the reimbursable amount of the provider's
credit exposure in a reasonable and customary manner, and (iii) is entered into
for hedging (rather than speculative) purposes. The liabilities of the Loan
Parties to the provider of any Bank-Provided Interest Rate Hedge (the "HEDGE
LIABILITIES") shall be "Obligations" hereunder, guaranteed obligations under the
Guaranty Agreement and secured obligations under the Pledge Agreement and
otherwise treated as Obligations for purposes of each of the other Loan
Documents. The Liens securing the Hedge Liabilities shall be pari passu with the
Liens securing all other Obligations under this Agreement and the other Loan
Documents.

               BANKS shall mean the financial institutions named on SCHEDULE
1.1(B), their respective successors and assigns as permitted hereunder and each
Augmenting Lender joining this Agreement in accordance with the terms of Section
2.1.1.2 hereof, each of which is referred to herein as a Bank.

               BASE RATE shall mean the greater of (i) the interest rate per
annum announced from time to time by the Agent at its Principal Office as its
then prime rate, which rate may not be the lowest rate then being charged
commercial borrowers by the Agent, or (ii) the Federal Funds Open Rate plus 0.5%
per annum.


                                      -3-



               BASE RATE OPTION shall mean the option of the Borrowers to have
Revolving Credit Loans or Term Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(i).

               BENEFIT ARRANGEMENT shall mean at any time an "employee benefit
plan," within the meaning of Section 3(3) of ERISA, which is neither a Plan nor
a Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the ERISA Group.

               BLOCKED PERSON shall have the meaning assigned to such term in
Section 6.1.25.2.

               BORROWER shall have the meaning given to such term in the
introductory paragraph hereto and shall include any Person required to join this
Agreement pursuant to Section 8.2.9 or which elects to join this agreement as a
Borrower and, in each case, executes a Borrower Joinder.

               BORROWER JOINDER shall mean a joinder by a Person as a Borrower
under this Agreement and the other Loan Documents in the form of EXHIBIT 1.1(B).

               BORROWING DATE shall mean, with respect to any Loan, the date for
the making thereof or the renewal or conversion thereof at the same or a
different Interest Rate Option, which shall be a Business Day.

               BORROWING TRANCHE shall mean specified portions of Loans
outstanding as follows: (i) any Loans to which a Euro-Rate Option applies which
become subject to the same Interest Rate Option under the same Loan Request by
the Borrowers and which have the same Interest Period and which are denominated
either in Dollars or in the same Optional Currency shall constitute one
Borrowing Tranche, and (ii) all Loans to which a Base Rate Option applies shall
constitute one Borrowing Tranche.

               BUSINESS DAY shall mean any day other than a Saturday or Sunday
or a legal holiday on which commercial banks are authorized or required to be
closed for business in Pittsburgh, Pennsylvania and (i) if the applicable
Business Day relates to any Loan to which the Euro-Rate Option applies, such day
must also be a day on which dealings are carried on in the London interbank
market, (ii) with respect to advances or payments of Loans or any other matters
relating to Loans denominated in an Optional Currency, such day also shall be a
day on which dealings in deposits in the relevant Optional Currency are carried
on in the applicable interbank market, and (iii) with respect to advances or
payments of Loans denominated in an Optional Currency, such day shall also be a
day on which all applicable banks into which Loan proceeds may be deposited are
open for business and foreign exchange markets are open for business in the
principal financial center of the country of such currency.

               CIP REGULATIONS shall have the meaning assigned to that term in
Section 10.18.


                                      -4-



               CLOSING DATE shall mean the Business Day on which the first Loan
shall be made, which shall be April 3, 2006 or, if all the conditions specified
in Section 7 have not been satisfied or waived by such date, not later than May
15, 2006, as designated by the Borrowers by at least five (5) Business Days'
advance notice to the Agent at its Principal Office, or such other date as the
parties agree. The closing shall take place at 10 a.m., Pittsburgh time, on the
Closing Date at the offices of Buchanan Ingersoll PC, Pittsburgh, Pennsylvania,
or at such other time and place as the parties agree.

               COLLATERAL shall mean the Pledged Collateral.

               COLLATERAL AGENT shall have the meaning assigned to that term in
Section 9.2.5.2.

               COLLATERAL DOCUMENTS shall have the meaning assigned to that term
in Section 9.2.5.2.

               COLLATERAL SHARING AGREEMENT shall mean an Intercreditor and
Collateral Agency Agreement to be entered into among the Agent, the Loan Parties
and the trustee under the Required Note Refinancing [in the form attached hereto
as Exhibit 1.1(C).

               COMMERCIAL LETTER OF CREDIT shall mean any letter of credit which
is a commercial letter of credit issued in respect of the purchase of goods or
services by one or more of the Loan Parties in the ordinary course of their
business.

               COMMITMENT shall mean as to any Bank the aggregate of its
Revolving Credit Commitment and Term Loan Commitment and, in the case of PNC
Bank, its Swing Loan Commitment, and Commitments shall mean collectively, the
Revolving Credit Commitments, Term Loan Commitments and Swing Loan Commitment of
all of the Banks.

               COMMITMENT FEE shall have the meaning assigned to that term in
Section 2.3.

               COMMITMENT INCREASE AMOUNT shall have the meaning assigned to
that term in Section 2.1.1.2.

               COMPANY shall have the meaning given to such term in the
introductory paragraph hereto.

               COMPLIANCE CERTIFICATE shall have the meaning assigned to such
term in Section 8.3.3.

               COMPUTATION DATE shall have the meaning assigned to such term in
Section 2.9.1.

               CONSIDERATION shall mean with respect to any Permitted
Acquisition, the aggregate of (i) the cash paid by any of the Loan Parties,
directly or indirectly, to the seller in


                                      -5-



connection therewith, (ii) the Indebtedness incurred or assumed by any of the
Loan Parties, whether in favor of the seller or otherwise and whether fixed or
contingent, (iii) any Guaranty given or incurred by any Loan Party in connection
therewith, and (iv) any other consideration given or obligation incurred by any
of the Loan Parties in connection therewith.

               CONSOLIDATED ADJUSTED EBITDA shall mean, for any period,
Consolidated EBITDA adjusted to include the pro forma effects of acquisitions
(which in the case of the Approved Acquisitions shall be the Approved EBITDA
Adjustments which shall not be subject to the requirements in clauses (i)
through (iv) below) and divestitures (not including timberland sales) made
during the period of measurement, including historical EBITDA of acquired
Persons to the extent the acquired EBITDA (i) has been audited, (ii) is
supported by a third party due diligence report delivered by a nationally
recognized firm or otherwise in form and substance satisfactory to the Agent,
(iii) is less than 15% of Consolidated EBITDA as determined as of the last day
of the fiscal quarter immediately preceding the consummation of the acquisition
(the "Most Recent Quarter") (or the quarter immediately preceding the Most
Recent Quarter if the applicable financial statements are not available for the
Most Recent Quarter), or (iv) is approved by the Required Banks, provided that
Consolidated Adjusted EBITDA shall exclude the EBITDA of any divested Persons or
material assets (not including timberland sales). Any such adjustment to
Consolidated EBITDA shall be made for the fiscal quarter during which the
transactions giving rise to such adjustment are consummated.

               CONSOLIDATED EBITDA shall, for any period, mean EBITDA of the
Company and its Subsidiaries plus the gain on sale of timberland properties (as
determined in accordance with GAAP) and minus any losses on such sales, provided
that the amount of the gain net of any losses on sale of timberland properties
included in the calculation of Consolidated EBITDA may not exceed 30% of the
EBITDA of the Company and its Subsidiaries for such period.

               CONSOLIDATED NET WORTH shall mean as of any date of determination
total stockholders' equity of the Company and its Subsidiaries as of such date
determined and consolidated in accordance with GAAP.

               CONSOLIDATED TOTAL ASSETS shall mean, at any time, the total
consolidated assets of the Company and its Subsidiaries measured as of the last
day of the fiscal year ending on or prior to the date of determination, as
determined in accordance with GAAP.

               CONSOLIDATED TOTAL DEBT shall mean all long and short term
Indebtedness (but excluding such Indebtedness to SunTrust Financial described in
Section 8.2.1(viii) or Indebtedness described in Section 8.2.1(xi)).

               CONTAMINATION shall mean the presence or release or threat of
release of Regulated Substances in, on, under or emanating to or from the
Property, which pursuant to Environmental Laws requires notification or
reporting to an Official Body, or which pursuant to Environmental Laws requires
the investigation, cleanup, removal, remediation, containment,


                                      -6-



abatement of or other response action or which otherwise constitutes a violation
of Environmental Laws.

               CREDIT SUISSE shall mean Credit Suisse, Cayman Islands Branch,
its successors and assigns.

               DEBT RATING shall mean the corporate credit rating of Standard &
Poor's and the Issuer Rating of Moody's, in each case, of the Company.

               DECLINED SHARE shall have the meaning assigned to that term in
Section 2.1.1.2.

               DESIGNATED CREDIT PARTIES means the Company and those
Subsidiaries that are from time to time party to the Accounts Receivable
Facility Documents.

               DOLLAR, DOLLARS, U.S. DOLLARS and the symbol $ shall mean lawful
money of the United States of America.

               DOLLAR EQUIVALENT shall mean, with respect to any amount of any
currency, the Equivalent Amount of such currency expressed in Dollars.

               DOLLAR EQUIVALENT REVOLVING FACILITY USAGE shall mean, at any
time, the sum of the Dollar Equivalent of the principal amount of Revolving
Credit Loans then outstanding and the principal amount of Swing Loans then
outstanding and the Dollar Equivalent amount of Letters of Credit Outstanding.

               DOMESTIC GUARANTOR shall mean those Guarantors which are
organized under the laws of the United States.

               DRAWING DATE shall have the meaning assigned to that term in
Section 2.11.3.2.

               EBITDA shall mean, for any period and any Person, net income
(excluding extraordinary gains and losses, gains and losses on sales of assets
and non-cash pension income) plus income tax expense, interest expense,
depreciation, amortization expense and any Permitted EBITDA Add Backs (if EBITDA
is being computed for the Company) of such Person.

               ENVIRONMENTAL COMPLAINT shall mean any written complaint by any
Person or Official Body setting forth a cause of action for personal injury or
property damage, natural resource damage, contribution or indemnity for response
costs, civil or administrative penalties, criminal fines or penalties, or
declaratory or equitable relief arising under any Environmental Laws or any
order, notice of violation, citation, subpoena, request for information or other
written notice or demand of any type issued by an Official Body pursuant to any
Environmental Laws.


                                      -7-



               ENVIRONMENTAL LAWS shall mean all federal, state, local and
foreign Laws and any consent decrees, settlement agreements, judgments, orders,
directives, policies or programs issued by or entered into with an Official Body
pertaining or relating to: (i) pollution or pollution control; (ii) protection
of human health or the environment; (iii) employee safety in the workplace; (iv)
the presence, use, management, generation, manufacture, processing, extraction,
treatment, recycling, refining, reclamation, labeling, transport, storage,
collection, distribution, disposal or release or threat of release of Regulated
Substances; (v) the presence of Contamination; (vi) the protection of endangered
or threatened species; and (vii) the protection of Environmentally Sensitive
Areas.

               ENVIRONMENTALLY SENSITIVE AREA shall mean (i) any wetland as
defined by applicable Environmental Laws; (ii) any area designated as a coastal
zone pursuant to applicable Laws, including Environmental Laws; (iii) any area
of historic or archeological significance or scenic area as defined or
designated by applicable Laws, including Environmental Laws; (iv) habitats of
endangered species or threatened species as designated by applicable Laws,
including Environmental Laws; or (v) a floodplain or other flood hazard area as
defined pursuant to any applicable Laws.

               EQUIVALENT AMOUNT shall mean, at any time, as determined by Agent
(which determination shall be conclusive absent manifest error), with respect to
an amount of any currency (the "REFERENCE CURRENCY") which is to be computed as
an equivalent amount of another currency (the "EQUIVALENT CURRENCY"), the amount
of such Equivalent Currency converted from such Reference Currency at Agent's
spot selling rate (based on the market rates then prevailing and available to
Agent) for the sale of such Equivalent Currency for such Reference Currency at a
time determined by Agent on the second Business Day immediately preceding the
event for which such calculation is made.

               EQUIVALENT CURRENCY shall have the meaning assigned to such term
in the definition of Equivalent Amount.

               ERISA shall mean the Employee Retirement Income Security Act of
1974, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.

               ERISA GROUP shall mean, at any time, the Borrowers and all
members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control and all other entities which,
together with the Borrowers, are treated as a single employer under Section 414
of the Internal Revenue Code.

               EURO shall have the meaning assigned to such term in Section
2.9.4.1.

               EURO-RATE shall mean, the following:

               (A) with respect to Dollar Loans comprising any Borrowing Tranche
to which the Euro-Rate Option applies for any Interest Period, the interest rate
per annum


                                      -8-



determined by the Agent by dividing (the resulting quotient rounded upwards, if
necessary, to the nearest 1/100th of 1% per annum) (i) the rate of interest
determined by the Agent in accordance with its usual procedures (which
determination shall be conclusive absent manifest error) to be the average of
the London interbank offered rates for U.S. Dollars quoted by the British
Bankers' Association as set forth on Moneyline Telerate (or appropriate
successor or, if the British Bankers' Association or its successor ceases to
provide such quotes, a comparable replacement determined by the Agent) display
page 3750 (or such other display page on the Moneyline Telerate service as may
replace display page 3750) two (2) Business Days prior to the first day of such
Interest Period for an amount comparable to such Borrowing Tranche and having a
borrowing date and a maturity comparable to such Interest Period by (ii) a
number equal to 1.00 minus the Euro-Rate Reserve Percentage. The Euro-Rate may
also be expressed by the following formula:

                 Average of London interbank offered rates quoted
                 by BBA or appropriate successor as shown on
                 Moneyline Telerate Service display page 3750
     Euro-Rate = --------------------------------------------
                      1.00 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Loan to which the Euro-Rate
Option applies that is outstanding on the effective date of any change in the
Euro-Rate Reserve Percentage as of such effective date. The Agent shall give
prompt notice to the Borrowers of the Euro-Rate as determined or adjusted in
accordance herewith, which determination shall be conclusive absent manifest
error.

               (B) with respect to Optional Currency Loans comprising any
Borrowing Tranche to which the Euro-Rate Option applies for any Interest Period,
the interest rate per annum determined by Agent by dividing (i) the rate of
interest per annum determined by the Agent in accordance with its usual
procedures (which determination shall be conclusive absent manifest error) to be
the rate of interest per annum for deposits in the relevant Optional Currency
which appears on the relevant Telerate Page (or, if no such quotation is
available on such Telerate Page, on the appropriate Reuters Screen) at
approximately 9:00 a.m., Pittsburgh time, two (2) Business Days prior to the
first day of such Interest Period for delivery on the first day of such Interest
Period for a period, and in an amount, comparable to such Interest Period and
principal amount of such Borrowing Tranche ("LIBO RATE") by (ii) a number equal
to 1.00 minus the Euro-Rate Reserve Percentage. Such Euro-Rate may also be
expressed by the following formula:

                             LIBO Rate
     Euro-Rate = --------------------------------
                 1 - Euro-Rate Reserve Percentage

The Euro-Rate shall be adjusted with respect to any Euro-Rate Option outstanding
on the effective date of any change in the Euro-Rate Reserve Percentage as of
such effective date. The Agent shall give prompt notice to the Borrowers of the
Euro-Rate as determined or adjusted in accordance herewith, which determination
shall be conclusive absent manifest error. The Euro-


                                       -9-



Rate for any Loans shall be based upon the Euro-Rate for the currency in which
such Loans are requested.

               EURO-RATE OPTION shall mean the option of the Borrowers to have
Revolving Credit Loans or Term Loans bear interest at the rate and under the
terms and conditions set forth in Section 4.1.1(ii).

               EURO-RATE RESERVE PERCENTAGE shall mean as of any day the maximum
percentage in effect on such day, (i) as prescribed by the Board of Governors of
the Federal Reserve System (or any successor) for determining the reserve
requirements (including supplemental, marginal and emergency reserve
requirements) with respect to eurocurrency funding (currently referred to as
"EUROCURRENCY LIABILITIES"); and (ii) to be maintained by a Bank as required for
reserve liquidity, special deposit, or a similar purpose by any governmental or
monetary authority of any country or political subdivision thereof (including
any central bank), against (A) any category of liabilities that includes
deposits by reference to which a Euro-Rate is to be determined, or (B) any
category of extension of credit or other assets that includes Loans or Borrowing
Tranches to which a Euro-Rate applies.

               EVENT OF DEFAULT shall mean any of the events described in
Section 9.1 and referred to therein as an "Event of Default."

               EXECUTIVE ORDER NO. 13224 shall mean the Executive Order No.
13224 on Terrorist Financing, effective September 24, 2001, as the same has
been, or shall hereafter be, renewed, extended, amended or replaced.

               EXISTING LETTERS OF CREDIT shall mean those letters of credit
issued by PNC Bank prior to the Agreement as described on SCHEDULE 1.1(E)
attached hereto.

               EXPIRATION DATE shall mean, with respect to the Revolving Credit
Commitments, April 2, 2011.

               FACILITY SHARE shall mean for any Bank, the sum of the
outstanding Term Loan of such Bank and the Revolving Credit Commitment of such
Bank.

               FEDERAL FUNDS EFFECTIVE RATE for any day shall mean the rate per
annum (based on a year of 360 days and actual days elapsed and rounded upward to
the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or
any successor) on such day as being the weighted average of the rates on
overnight federal funds transactions arranged by federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve Bank (or
any successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, if such Federal
Reserve Bank (or its successor) does not announce such rate on any day, the
"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective
Rate for the last day on which such rate was announced.


                                      -10-



               FEDERAL FUNDS OPEN RATE The rate per annum determined by the
Agent in accordance with its usual procedures (which determination shall be
conclusive absent manifest error) to be the "open" rate for federal funds
transactions as of the opening of business for federal funds transactions among
members of the Federal Reserve System arranged by federal funds brokers on such
day, as quoted by Garvin Guybutler, any successor entity thereto, or any other
broker selected by the Agent, as set forth on the applicable Telerate display
page; provided, however; that if such day is not a Business Day, the Federal
Funds Open Rate for such day shall be the "open" rate on the immediately
preceding Business Day, or if no such rate shall be quoted by a Federal funds
broker at such time, such other rate as determined by the Agent in accordance
with its usual procedures.

               FINANCED DOMESTIC ACQUISITION shall mean the Borrowers'
acquisition of certain assets located in Ohio from NewPage Corporation pursuant
to the terms of Asset Purchase Agreement dated February 21, 2006.

               FINANCED UK ACQUISITION shall mean the Borrowers' acquisition of
JR Crompton Limited's Lydney Mill and related inventory located in Lydney,
Gloucestershire, United Kingdom and other related assets pursuant to the terms
of an agreement dated March 8, 2006, by and among JR Crompton Limited, JR
Crompton USA Limited, Nicholas James Dargan, William Kenneth Dawson, Glatfelter
- - UK Limited and P.H. Glatfelter Company.

               FOREIGN BORROWER shall mean those Borrowers which are organized
under the laws of a jurisdiction other than the United States.

               GAAP shall mean generally accepted accounting principles as are
in effect in the United States from time to time, subject to the provisions of
Section 1.3, and applied on a consistent basis both as to classification of
items and amounts.

               GERMAN BORROWERS shall mean those Borrowers organized under the
Laws of Germany.

               GOVERNMENTAL ACTS shall have the meaning assigned to that term in
Section 2.11.8.

               GUARANTOR shall mean each of the parties to this Agreement which
is designated as a "Guarantor" on the signature page hereof and each other
Person which joins this Agreement as a Guarantor after the date hereof pursuant
to Section 11.18.

               GUARANTOR JOINDER shall mean a joinder by a Person as a Guarantor
under this Agreement, the Guaranty Agreement and the other Loan Documents in the
form of EXHIBIT 1.1(G)(1).

               GUARANTY of any Person shall mean any obligation of such Person
guaranteeing or in effect guaranteeing any liability or obligation of any other
Person in any manner, whether directly or indirectly, including any agreement to
indemnify or hold harmless


                                      -11-



any other Person, any performance bond or other suretyship arrangement and any
other form of assurance against loss, except endorsement of negotiable or other
instruments for deposit or collection in the ordinary course of business.

               GUARANTY AGREEMENT shall mean the Guaranty and Suretyship
Agreement in substantially the form of EXHIBIT 1.1(G)(2) executed and delivered
by each of the Guarantors.

               HEDGE LIABILITIES shall have the meaning given to such term in
the definition of "Bank Provided Interest Rate Hedge".

               HISTORICAL STATEMENTS shall have the meaning assigned to that
term in Section 6.1.8.1.

               INCREASING BANK shall have the meaning assigned to that term in
Section 2.1.1.2.

               INDEBTEDNESS shall mean, as to any Person at any time, any and
all indebtedness, obligations or liabilities (whether matured or unmatured,
liquidated or unliquidated, direct or indirect, absolute or contingent, or joint
or several) of such Person for or in respect of: (i) borrowed money, (ii)
amounts raised under or liabilities in respect of any note purchase or
acceptance credit facility, (iii) net reimbursement obligations (contingent or
otherwise) under any letter of credit, currency swap agreement, interest rate
swap, cap, collar or floor agreement or other interest rate management device,
(iv) any other transaction (including forward sale or purchase agreements,
capitalized leases and conditional sales agreements) having the commercial
effect of a borrowing of money entered into by such Person to finance its
operations or capital requirements (but not including trade payables and accrued
expenses incurred in the ordinary course of business which are not represented
by a promissory note or other evidence of indebtedness and which are not more
than sixty (60) days past due), (v) the outstanding amount of any Permitted
Accounts Receivable Securitization, or (vi) any Guaranty of Indebtedness
referred to in clauses (i) through (v) above.

               INELIGIBLE SECURITY shall mean any security which may not be
underwritten or dealt in by member banks of the Federal Reserve System under
Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as
amended.

               INSOLVENCY PROCEEDING shall mean, with respect to any Person, (i)
a case, action or proceeding with respect to such Person (A) before any court or
any other Official Body under any bankruptcy, insolvency, reorganization or
other similar Law now or hereafter in effect, or (B) for the appointment of a
receiver, liquidator, assignee, custodian, trustee, sequestrator, conservator
(or similar official) of any Loan Party or otherwise relating to the
liquidation, dissolution, winding-up or relief of such Person, or (ii) any
general assignment for the benefit of creditors, composition, marshaling of
assets for creditors, or other, similar arrangement in respect of such Person's
creditors generally or any substantial portion of its creditors; undertaken
under any Law.


                                      -12-



               INTEREST PERIOD shall mean the period of time selected by the
Borrowers in connection with (and to apply to) any election permitted hereunder
by the Borrowers to have Revolving Credit Loans or Term Loans bear interest
under the Euro-Rate Option. Subject to the last sentence of this definition,
such period shall be (A) (i) one or two Months if Borrowers select the Euro-Rate
Option during the Syndications Period, and (ii) one, two, three or six Months if
the Borrowers select the Euro-Rate Option after the Syndications Period has
ended, and (B) one Month with respect to any Loans made in any Optional
Currency. Such Interest Period shall commence on the effective date of such
Interest Rate Option, which shall be (i) the Borrowing Date if the Borrowers are
requesting new Loans, or (ii) the date of renewal of or conversion to the
Euro-Rate Option if the Borrowers are renewing or converting to the Euro-Rate
Option applicable to outstanding Loans. Notwithstanding the second sentence
hereof: (A) any Interest Period which would otherwise end on a date which is not
a Business Day shall be extended to the next succeeding Business Day unless such
Business Day falls in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day, and (B) the Borrowers shall
not select, convert to or renew an Interest Period for any portion of the Loans
that would end after the Expiration Date.

               INTEREST RATE, CURRENCY AND COMMODITY HEDGE shall mean (i) an
interest rate exchange, collar, cap, swap, adjustable strike cap, adjustable
strike corridor or similar agreement, or (ii) a foreign exchange contract,
currency swap agreement, futures contract, option contract, commodity hedge,
synthetic cap or similar arrangement, in each case entered into by the Loan
Parties or their Subsidiaries in order to provide protection to, or minimize the
impact upon, the Borrowers, the Guarantor and/or their Subsidiaries of
increasing floating rates of interest applicable to Indebtedness and
fluctuations in currency values and commodity prices, as the case may be, and
not for speculative purposes.

               INTEREST RATE OPTION shall mean any Euro-Rate Option or Base Rate
Option.

               INTERNAL REVENUE CODE shall mean the Internal Revenue Code of
1986, as the same may be amended or supplemented from time to time, and any
successor statute of similar import, and the rules and regulations thereunder,
as from time to time in effect.

               IRH PROVIDER shall have the meaning assigned to that term in
Section 9.2.5.2.

               LABOR CONTRACTS shall mean all employment agreements, employment
contracts, collective bargaining agreements and other agreements among any Loan
Party or Subsidiary of a Loan Party and its employees.

               LAW shall mean any law (including common law), constitution,
statute, treaty, regulation, rule, ordinance, opinion, release, ruling, order,
injunction, writ, decree, bond, judgment, authorization or approval, lien or
award by or settlement agreement with any Official Body.


                                      -13-



               LETTER OF CREDIT shall have the meaning assigned to that term in
Section 2.11.1.

               LETTER OF CREDIT BORROWING shall have the meaning assigned to
such term in Section 2.11.3.4.

               LETTER OF CREDIT FEE shall have the meaning assigned to that term
in Section 2.11.2.

               LETTERS OF CREDIT OUTSTANDING shall mean at any time the sum of
(i) the aggregate undrawn face amount of outstanding Letters of Credit and (ii)
the aggregate amount of all unpaid and outstanding Reimbursement Obligations and
Letter of Credit Borrowings.

               LEVERAGE RATIO shall mean, as of the end of any fiscal quarter,
an amount equal to Consolidated Total Debt on such day divided by Consolidated
Adjusted EBITDA for the four fiscal quarters ending on such date of
determination.

               LIEN shall mean any mortgage, deed of trust, pledge, lien,
security interest, charge or other encumbrance or security arrangement of any
nature whatsoever, whether voluntarily or involuntarily given, including any
conditional sale or title retention arrangement, and any assignment, deposit
arrangement or lease intended as, or having the effect of, security and any
filed financing statement or other notice of any of the foregoing (whether or
not a lien or other encumbrance is created or exists at the time of the filing).

               LIEN CREATION DATE shall have the meaning given to such term in
Section 8.1.13.1.

               LLC INTERESTS shall have the meaning given to such term in
Section 6.1.2.

               LOAN DOCUMENTS shall mean this Agreement, the Notes, the Agent's
Letter, the Guaranty Agreement, the Pledge Agreement, and any other instruments,
certificates or documents delivered or contemplated to be delivered hereunder or
thereunder or in connection herewith or therewith, as the same may be
supplemented or amended from time to time in accordance herewith or therewith,
and LOAN DOCUMENT shall mean any of the Loan Documents.

               LOAN PARTIES shall mean the Borrowers and the Guarantors.

               LOAN REQUEST shall have the meaning given to such term in Section
2.4.1.

               LOANS shall mean, collectively, and LOAN shall mean, separately,
all Revolving Credit Loans, Swing Loans, and the Term Loans or any Revolving
Credit Loan, Swing Loan, or Term Loan.

               MATERIAL ADVERSE CHANGE shall mean any set of circumstances or
events which (a) has or could reasonably be expected to have any material
adverse effect whatsoever upon the validity or enforceability of this Agreement
or any other Loan Document, (b) is or could


                                      -14-



reasonably be expected to be material and adverse to the business, properties,
assets, financial condition or results of operations of the Loan Parties taken
as a whole, (c) impairs materially or could reasonably be expected to impair
materially the ability of the Loan Parties, taken as a whole, to duly and
punctually pay or perform their Indebtedness, or (d) impairs materially the
ability of the Agent or any of the Banks, to the extent permitted, to enforce
their legal remedies pursuant to this Agreement or any other Loan Document.

               MATERIAL EVENT OF DEFAULT shall mean any Event of Default
described in any of the following Sections: 9.1.1 (provided that a Material
Event of Default shall be deemed to occur upon any failure to pay principal,
interest or Commitment Fees without regard to the grace period provided for in
such Section 9.1.1), 9.1.3 (if such Event of Default arises because of a breach
of Section 8.2.15, 8.2.16 or 8.2.17) , 9.1.4 (if such Event of Default arises
because of a breach of Sections 8.3.1, 8.3.2 or 8.3.3), 9.1.10, 9.1.14, or
9.1.15.

               MATERIAL RECOVERY EVENT shall mean any receipt of property or
casualty insurance proceeds or condemnation award proceeds in excess of
$5,000,000.

               MATERIAL SALE OF ASSETS shall mean any sale or other disposition
of: (i) timberland of the Loan Parties to the extent that the proceeds from such
sale or disposition, together with all other sales or dispositions of timberland
within the preceding 12 months, exceeds $250,000, (ii) any other assets (other
than timberland) of the Loan Parties pursuant to Section 8.2.7(vi) if the
proceeds of such sale or other disposition shall exceed $2,000,000, or (iii) any
assets of the Loan Parties pursuant to Section 8.2.7(vii).

               MATERIAL SUBSIDIARY means each Subsidiary of the Company which is
identified on Schedule 1.1(M) as a "Material Subsidiary," and each other
Subsidiary of the Company that has assets at such time, or revenues during the
most recently ended fiscal year, comprising 5% or more of the consolidated
assets of the Company and its Subsidiaries at such time, or of the consolidated
revenues of the Company and its Subsidiaries during such Fiscal Year, as the
case may be.

               MONTH, with respect to an Interest Period under the Euro-Rate
Option, shall mean the interval between the days in consecutive calendar months
numerically corresponding to the first day of such Interest Period. If any
Euro-Rate Interest Period begins on a day of a calendar month for which there is
no numerically corresponding day in the month in which such Interest Period is
to end, the final month of such Interest Period shall be deemed to end on the
last Business Day of such final month.

               MOODY'S shall mean Moody's Investors Service, Inc. and its
successors.

               MOODY'S RATING CONFIRMATION shall mean a confirmation issued by
Moody's that its Ba1 Debt Rating of the Company continues to apply after giving
effect to the Approved Acquisitions and the Indebtedness hereunder.


                                      -15-



               MULTIPLE EMPLOYER PLAN shall mean a Plan which has two or more
contributing sponsors (including the Borrowers or any member of the ERISA Group)
at least two of whom are not under common control, as such a plan is described
in Sections 4063 and 4064 of ERISA.

               MULTIEMPLOYER PLAN shall mean any employee benefit plan which is
a "multiemployer plan" within the meaning of Section 4001(a)(3) of ERISA and to
which the Borrowers or any member of the ERISA Group is then making or accruing
an obligation to make contributions or, within the preceding five Plan years,
has made or had an obligation to make such contributions.

               NOTE ISSUE shall mean (i) prior to the Required Note Refinancing,
the debt issued under the Indenture dated as of July 22, 1997, between the
Company and The Bank of New York, as trustee, and, (ii) after the date of the
Required Note Refinancing, the debt under such Required Note Refinancing.

               NOTES shall mean the Revolving Credit Notes, the Swing Note and
the Term Notes.

               NOTICES shall have the meaning assigned to that term in Section
11.6.

               OBLIGATION shall mean any obligation or liability of any of the
Loan Parties to the Agent or any of the Banks, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing, or due or to become due, under or in connection with this Agreement,
the Notes, the Letters of Credit, the Agent's Letter or any other Loan Document.
Obligations shall include the liabilities to any Bank under any Bank-Provided
Interest Rate Hedge but shall not include the liabilities to other Persons under
any other Interest Rate Hedge.

               OFFICIAL BODY shall mean any national, federal, state, local or
other government or political subdivision or any agency, authority, board,
bureau, central bank, commission, department or instrumentality of either, or
any court, tribunal, grand jury or arbitrator, in each case whether foreign or
domestic.

               OPTIONAL CURRENCY shall mean Canadian Dollars, British Pounds
Sterling, Euros and any other currency approved by Agent and all of the Banks
pursuant to Section 2.9.4.

               ORDER shall have the meaning assigned to such term in Section
2.11.9.

               ORIGINAL CURRENCY shall have the meaning assigned to such term in
Section 5.9.1.

               OTHER CURRENCY shall have the meaning assigned to such term in
Section 5.9.1.


                                      -16-



               OTHER TAXES shall have the meaning assigned to such term in
Section 5.8.2.

               OVERNIGHT RATE shall mean for any day with respect to any Loans
in an Optional Currency, the rate of interest per annum as determined by the
Agent at which overnight deposits in such currency, in an amount approximately
equal to the amount with respect to which such rate is being determined, would
be offered for such day in the applicable offshore interbank market.

               PARTICIPATION ADVANCE shall mean, with respect to any Bank, such
Bank's payment in respect of its participation in a Letter of Credit Borrowing
according to its Ratable Share pursuant to Section 2.11.3.4.

               PARTNERSHIP INTERESTS shall have the meaning given to such term
in Section 6.1.2.

               PBGC shall mean the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA or any successor.

               PERMITTED ACCOUNTS RECEIVABLE PROGRAM means an accounts
receivables securitization program concluded pursuant to the Accounts Receivable
Facility Documents and provided that (1) the aggregate principal amount thereof
does not to exceed $75,000,000, (2) on the effective date of such program, the
Debt Rating of the Company shall be at least BB+ or higher by Standard & Poor's
and Ba1 or higher by Moody's (and if the Lien Creation Date has occurred, a
Release Event shall have subsequently occurred), (3) the Revolving Credit
Commitments shall be reduced on or before the date of such closing in an amount
equal to the aggregate principal amount of such program, (4) on the effective
date of such program and after giving effect to such program and related
transactions (and to the reduction of Commitments provided in clause (3) above),
there shall exist no Events of Default or Potential Defaults, (5) the effective
date of such program shall not be earlier than April 3, 2007, and (6) the
Company shall have delivered to the Agent certifications acceptable to the Agent
that the foregoing conditions have been met.

               PERMITTED ACQUISITIONS shall have the meaning assigned to such
term in Section 8.2.6.

               PERMITTED EBITDA ADD BACKS shall mean the following cash or non
cash charges incurred after January 1, 2006 and before March 31, 2007 which are
deducted in the computation of the net income of the Borrowers and which the
Borrowers may add back to such net income in their computation of EBITDA (as
provided in the definition of such term), with appropriate adjustments for the
tax effects of such add-backs and subject to the proviso below: charges related
to the shut-down of the Neenah, WI, production facility, the transfer of
production from the Neenah facility to assets acquired in the Financed Domestic
Acquisition, and the integration costs for the Financed Domestic Acquisition,
provided that (1) the total amount of such charges which may be so added back to
net income may not exceed $80,000,000 over the


                                      -17-



term of this Agreement, and (2) the total amount of such cash charges which may
be so added back to net income may not exceed $40,000,000.

               PERMITTED FUTURE UK ACQUISITION shall mean the Borrowers'
proposed acquisition of JR Crompton Limited's Simpson Clough Mill located in
Lancashire, United Kingdom and other related assets; provided that (i) the
amount of consideration paid by the Loan Parties in connection with such
acquisition shall not exceed $25,000,000 (ii) such acquisition shall close
within 90 days following the Closing Date, and (iii) such acquisition shall
close substantially under the terms and conditions set forth in the acquisition
agreement publicly disclosed in filings with the SEC on or before the Closing
Date.

               PERMITTED INVESTMENTS shall mean:

                    (i) direct obligations of the United States of America or
any agency or instrumentality thereof or obligations backed by the full faith
and credit of the United States of America maturing in twelve (12) months or
less from the date of acquisition;

                    (ii) commercial paper maturing in 180 days or less rated not
lower than A-1, by Standard & Poor's or P-1 by Moody's on the date of
acquisition;

                    (iii) demand deposits, time deposits or certificates of
deposit maturing within one year in commercial banks whose obligations are rated
A-1, A or the equivalent or better by Standard & Poor's, or P-1 or the
equivalent or better by Moody's, on the date of acquisition;

                    (iv) Interest Rate Hedges otherwise permitted hereunder;

                    (vi) investments (including debt obligations) received in
connection with the bankruptcy or reorganization of suppliers and customers and
in settlement of delinquent obligations of, and other disputes with, customers
and suppliers arising in the ordinary course of business;

                    (vii) shares of any money market mutual fund rated at least
AAA by Standard & Poor's or at least Aaa by Moody's;

                    (viii) debt securities as partial consideration for a sale
of assets which is permitted hereunder.

               PERMITTED LIENS shall mean:

                    (i) Liens for taxes, assessments, or similar charges,
incurred in the ordinary course of business and which are not yet due and
payable;

                    (ii) Pledges or deposits made in the ordinary course of
business to secure payment of workmen's compensation, or to participate in any
fund in connection with


                                      -18-



workmen's compensation, unemployment insurance, old-age pensions or other
social security programs;

                    (iii) Liens of mechanics, materialmen, warehousemen,
carriers, or other like Liens, securing obligations incurred in the ordinary
course of business that are not yet due and payable and Liens of landlords
securing obligations to pay lease payments that are not yet due and payable or
in default;

                    (iv) Good-faith pledges or deposits made in the ordinary
course of business to secure performance of bids, tenders, contracts (other than
for the repayment of borrowed money) or leases, not in excess of the aggregate
amount due thereunder, or to secure statutory obligations, or surety, appeal,
indemnity, performance or other similar bonds required in the ordinary course of
business;

                    (v) Encumbrances consisting of zoning restrictions,
easements or other restrictions on the use of real property, none of which
materially impairs the use of such property or the value thereof, and none of
which is violated in any material respect by existing or proposed structures or
land use;

                    (vi) Liens, security interests and mortgages in favor of the
Agent, for the benefit of the Banks, securing the Obligations including
liabilities under any Bank-Provided Interest Rate Hedge;

                    (vii) Pari passu Liens in the Pledged Collateral in favor of
the noteholders under the Required Note Refinancing provided that such Liens are
governed by and subject to the Collateral Sharing Agreement;

                    (viii) Liens on property leased by any Loan Party or
Subsidiary of a Loan Party under capital and operating leases permitted in
Section 8.2.1 securing obligations of such Loan Party or Subsidiary to the
lessor under such leases;

                    (ix) Any Lien existing on the date of this Agreement and
described on SCHEDULE 1.1(P), provided that no additional assets become subject
to such Lien and the Indebtedness secured thereby is permitted under Section
8.2.1;

                    (x) Liens on tangible property (or any improvement thereon)
acquired or constructed by the Company or any Subsidiary after the Closing Date
to secure Indebtedness of the Company or such Subsidiary incurred in connection
with such acquisition or construction; provided that:

                         (1) no such Lien shall extend to or cover any Property
other than the property (or improvement thereon) being acquired or constructed;
and

                         (2) the principal amount of the Indebtedness secured by
any such Lien, together with the aggregate principal amount of all other
Indebtedness secured by Liens on such Property, shall not exceed the lesser of
(A) an amount equal to the fair market


                                      -19-



value of such property so acquired or constructed and (B) the cost to the
Company or such Subsidiary of such property (or improvement thereon) so acquired
or constructed."

                    (xi) Purchase Money Security Interests;

                    (xii) The following, (A) if the validity or amount thereof
is being contested in good faith by appropriate and lawful proceedings
diligently conducted so long as levy and execution thereon have been stayed and
continue to be stayed or (B) if a final judgment is entered and such judgment is
discharged within thirty (30) days of entry, and in either case they do not
affect the Collateral or, in the aggregate, materially impair the ability of any
Loan Party to perform its Obligations hereunder or under the other Loan
Documents:

               (1) Claims or Liens for taxes, assessments or charges due and
          payable and subject to interest or penalty, provided that the
          applicable Loan Party maintains such reserves or other appropriate
          provisions as shall be required by GAAP and pays all such taxes,
          assessments or charges forthwith upon the commencement of proceedings
          to foreclose any such Lien;

               (2) Claims, Liens or encumbrances upon, and defects of title to,
          real or personal property other than the Collateral, including any
          attachment of personal or real property or other legal process prior
          to adjudication of a dispute on the merits;

               (3) Claims or Liens of mechanics, materialmen, warehousemen,
          carriers, or other statutory nonconsensual Liens; and

               (4) Liens resulting from final judgments or orders described in
          Section 9.1.6; and

                    (xiii) Any Liens that arise or are deemed to arise under a
Permitted Accounts Receivable Program.

               PERSON shall mean any individual, corporation, partnership,
limited liability company, association, joint-stock company, trust,
unincorporated organization, joint venture, government or political subdivision
or agency thereof, or any other entity.

               PLAN shall mean at any time an employee pension benefit plan
(including a Multiple Employer Plan, but not a Multiemployer Plan) which is
covered by Title IV of ERISA or is subject to the minimum funding standards
under Section 412 of the Internal Revenue Code and either (i) is maintained by
any member of the ERISA Group for employees of any member of the ERISA Group or
(ii) has at any time within the preceding five years been maintained by any
entity which was at such time a member of the ERISA Group for employees of any
entity which was at such time a member of the ERISA Group.

               PLEDGE AGREEMENT shall mean the Pledge Agreement in substantially
the form of EXHIBIT 1.1(P) when and if required to be delivered pursuant to this
Agreement. As


                                      -20-



more fully provided in the Pledge Agreement: (i) prior to the effective date of
the Required Note Refinancing (or such earlier date on which the Note Issue
shall terminate or all restrictions on the grant of Liens described in clause
(ii) below contained in such Note Issue shall terminate) (the "Collateral Spread
Date") the Pledged Collateral subject to the Pledge Agreement shall secure the
Tranche A Term Loans (but not the Tranche B Term Loans or other Loans hereunder)
and (ii) after the Collateral Spread Date, the Pledge Agreement shall secure all
Obligations hereunder.

               PLEDGED COLLATERAL shall mean the property of the Loan Parties in
which security interests are to be granted under the Pledge Agreement. The
Pledged Collateral shall include all of the ownership interests in each of the
Loan Parties except for the Company.

               PNC BANK shall mean PNC Bank, National Association, its
successors and assigns.

               POTENTIAL DEFAULT shall mean any event or condition which with
notice, passage of time or a determination by the Agent or the Required Banks,
or any combination of the foregoing, would constitute an Event of Default.

               PRINCIPAL OFFICE shall mean the main banking office of the Agent
in Pittsburgh, Pennsylvania.

               PRIOR SECURITY INTEREST shall mean a valid and enforceable
perfected first-priority security interest under the Uniform Commercial Code in
the Pledged Collateral which is subject only to Liens for taxes not yet due and
payable to the extent such prospective tax payments are given priority by
statute or Purchase Money Security Interests as permitted hereunder.

               PRIOR SENIOR CREDIT FACILITY shall mean the credit facilities
provided to the Borrowers pursuant to the terms of a Credit Agreement among the
Borrowers, Deutsche Bank AG New York Branch, as Agent, various lending
institutions dated as of June 24, 2002, the Borrowers' obligations with respect
to which are intended to be satisfied in full on the Closing Date with advances
of Loans hereunder.

               PROHIBITED TRANSACTION shall mean any prohibited transaction as
defined in Section 4975 of the Internal Revenue Code or Section 406 of ERISA for
which neither an individual nor a class exemption has been issued by the United
States Department of Labor.

               PROPERTY shall mean all real property, both owned and leased, of
any Loan Party or Subsidiary of a Loan Party.

               PURCHASE MONEY SECURITY INTEREST shall mean Liens upon tangible
personal property securing loans to any Loan Party or Subsidiary of a Loan Party
or deferred payments by such Loan Party or Subsidiary for the purchase of such
tangible personal property, provided that such security interest does not
encumber any asset not thereby purchased, and


                                      -21-



provided further that such security interest does not secure obligations in
excess of such purchase price or deferred payments.

               PURCHASING BANK shall mean a Bank which becomes a party to this
Agreement by executing an Assignment and Assumption Agreement.

               RECEIVABLES ENTITY means a Subsidiary of the Company which is
wholly owned by the Company (directly or indirectly) and which engages in no
activities other than in connection with the financing of accounts receivables
of the Designated Credit Parties and which is designated (as provided below) as
the Receivables Entity no portion of the Indebtedness or any other obligations
(contingent or otherwise) of which (i) is guaranteed by the Company or any other
Subsidiary of the Company (excluding guarantees of obligations pursuant to
Standard Securitization Undertakings), (ii) is recourse to or obligates the
Company or any other Subsidiary of the Company in any way other than pursuant to
Standard Securitization Undertakings or (iii) subjects any property or asset of
the Company or any other Subsidiary of the Company, directly or indirectly,
contingently or otherwise, to the satisfaction thereof, other than pursuant to
Standard Securitization Undertakings. The designation of an entity as a
Receivables Entity hereunder shall be evidenced to the Agent by filing with the
Agent an officer's certificate of the Company executed by a Responsible Officer
certifying that, to the best of such officer's knowledge, and belief after
consultation with counsel, such designations complied with the foregoing
conditions.

               REFERENCE CURRENCY shall have the meaning assigned to such term
in the definition of Equivalent Amount.

               REGULATED SUBSTANCES shall mean, without limitation, any
substance, material or waste, regardless of its form or nature, defined under
Environmental Laws as a "hazardous substance," "pollutant," "pollution,"
"contaminant," "hazardous or toxic substance," "extremely hazardous substance,"
"toxic chemical," "toxic substance," "toxic waste," "hazardous waste," "special
handling waste," "industrial waste," "residual waste," "solid waste," "municipal
waste," "mixed waste," "infectious waste," "chemotherapeutic waste," "medical
waste," or "regulated substance" or any other material, substance or waste,
regardless of its form or nature, which otherwise is regulated by Environmental
Laws.

               REGULATION U shall mean Regulation U, T, G or X as promulgated by
the Board of Governors of the Federal Reserve System, as amended from time to
time.

               REIMBURSEMENT OBLIGATION shall have the meaning assigned to such
term in Section 2.11.3.2.

               RELEASE EVENT shall be deemed to occur if (1) the Lien Creation
Date has occurred and (2) subsequently: (A) the Debt Rating of the Company is
BB+ or higher by Standard & Poor's; and (B) the Company receives from Moody's
the Moody's Rating Confirmation or (if Moody's has downgraded its Debt Rating
below Ba1) a new Debt Rating from Moody's which is Ba1 or higher.


                                      -22-


               REPORTABLE EVENT shall mean a reportable event described in
Section 4043 of ERISA and regulations thereunder with respect to a Plan or
Multiemployer Plan.

               REQUIRED BANKS shall mean

               (i) prior to termination of the Revolving Credit Commitments,
Banks whose Facility Share aggregate at least 51% of the aggregate Facility
Shares of all of the Banks; and

               (ii) after termination of the Revolving Credit Commitments, any
group of Banks if the sum of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings of such Banks then outstanding aggregates at least 51% of the
total principal amount of all of the Loans, Reimbursement Obligations and Letter
of Credit Borrowings then outstanding. Reimbursement Obligations and Letter of
Credit Borrowings shall be deemed, for purposes of this definition, to be in
favor of the Agent and not a participating Bank if such Bank has not made its
Participation Advance in respect thereof and shall be deemed to be in favor of
such Bank to the extent of its Participation Advance if it has made its
Participation Advance in respect thereof.

               REQUIRED NOTE REFINANCING shall have the meaning assigned to such
term in Section 8.1.12.

               REQUIRED ENVIRONMENTAL NOTICES shall mean all notices, reports,
plans, forms or other filings which pursuant to Environmental Laws, Required
Environmental Permits or at the request or direction of an Official Body either
must be submitted to an Official Body or which otherwise must be maintained.

               REQUIRED ENVIRONMENTAL PERMITS shall mean all permits, licenses,
bonds, consents, programs, approvals or authorizations required under
Environmental Laws to own, occupy or maintain the Property or which otherwise
are required for the operations and business activities of the Borrowers or
Guarantors.

               REQUIRED SHARE shall have the meaning assigned to such term in
Section 5.11.

               RESPONSIBLE OFFICER with respect to any Person, the chief
executive officer, president, treasurer, chief or principal financial officer of
such Person. Unless otherwise qualified, all references to "Responsible Officer"
in this Agreement shall refer to a "Responsible Officer" of a Loan Party.

               RESTRICTED PAYMENT shall mean (i) any dividend or distribution by
a Loan Party on or in respect of its capital stock or to the direct or indirect
holders of its capital stock (except dividends or distributions payable solely
in such capital stock or in options, warrants or other rights to purchase such
capital stock and except dividends or distributions payable to the Company or
another Loan Party) or (ii) purchase, redemption or other acquisition or
retirement for value of any capital stock of P. H. Glatfelter Company or (iii)
any payment on, purchase,


                                      -23-



defeasance, redemption, prepayment, decrease or other acquisition or retirement
for value, prior to any scheduled final maturity, of any other Indebtedness that
is subordinate or junior in right of payment to the Obligations.

               REVOLVING CREDIT COMMITMENT shall mean, as to each Bank at any
time, the amounts initially set forth opposite its name on SCHEDULE 1.1(B) in
the column labeled "Amount of Commitment for Revolving Credit Loans," and,
thereafter, as such amounts may be amended, whether pursuant to Assignment and
Assumption Agreements, increases or reductions in Revolving Credit Commitments
provided for under the terms of the Agreement or otherwise, and REVOLVING CREDIT
COMMITMENTS shall mean the aggregate Revolving Credit Commitments of all of the
Banks.

               REVOLVING CREDIT LOANS shall mean, collectively, and REVOLVING
CREDIT LOAN shall mean, separately, all Revolving Credit Loans or any Revolving
Credit Loan made by the Banks or one of the Banks to the Borrowers pursuant to
Sections 2.1 or 2.11.3.

               REVOLVING CREDIT NOTES shall mean collectively and REVOLVING
CREDIT NOTE shall mean separately all the Revolving Credit Notes of the
Borrowers in the form of EXHIBIT 1.1(R) evidencing the Revolving Credit Loans
together with all amendments, extensions, renewals, replacements, refinancings
or refundings thereof in whole or in part.

               REVOLVING CREDIT RATABLE SHARE shall mean the proportion that a
Bank's Revolving Credit Commitment bears to the Revolving Credit Commitments of
all of the Banks.

               SEC shall mean the Securities and Exchange Commission or any
governmental agencies substituted therefor.

               SECTION 20 SUBSIDIARY shall mean the Subsidiary of the bank
holding company controlling any Bank, which Subsidiary has been granted
authority by the Federal Reserve Board to underwrite and deal in certain
Ineligible Securities.

               SETTLEMENT DATE shall mean any Business Day on which the Agent
elects to effect settlement pursuant to Section 5.11.

               STANDARD & POOR'S shall mean Standard & Poor's Ratings Services,
a division of The McGraw-Hill Companies, Inc., and its successors.

               STANDARD SECURITIZATION UNDERTAKINGS means representations,
warranties, covenants and indemnities entered into by the Company or any
Subsidiary thereof in connection with the Permitted Accounts Receivable Program
which are reasonably customary in an accounts receivable securitization
transaction at the time of consummation of such transaction.

               STANDBY LETTER OF CREDIT shall mean a Letter of Credit issued to
support obligations of one or more of the Loan Parties, contingent or otherwise,
which finance the working capital and business needs of the Loan Parties
incurred in the ordinary course of


                                      -24-



business, but excluding any Letter of Credit under which the stated amount of
such Letter of Credit increases automatically over time.

               SUBSIDIARY of any Person at any time shall mean (i) any
corporation or trust of which 50% or more (by number of shares or number of
votes) of the outstanding capital stock or shares of beneficial interest
normally entitled to vote for the election of one or more directors or trustees
(regardless of any contingency which does or may suspend or dilute the voting
rights) is at such time owned directly or indirectly by such Person or one or
more of such Person's Subsidiaries, (ii) any partnership of which such Person is
a general partner or of which 50% or more of the partnership interests is at the
time directly or indirectly owned by such Person or one or more of such Person's
Subsidiaries, (iii) any limited liability company of which such Person is a
manager or of which 50% or more of the limited liability company interests is at
the time directly or indirectly owned by such Person or one or more of such
Person's Subsidiaries or (iv) any corporation, trust, partnership, limited
liability company or other entity which is controlled or capable of being
controlled by such Person or one or more of such Person's Subsidiaries.

               SUBSIDIARY SHARES shall have the meaning assigned to that term in
Section 6.1.2.

               SUN TRUST INDEBTEDNESS shall have the meaning assigned to such
term in Section 8.2.1.

               SWING LOAN COMMITMENT shall mean PNC Bank's commitment to make
Swing Loans to the Borrowers pursuant to Section 2.1.2 hereof in an aggregate
principal amount up to $20,000,000.00.

               SWING LOAN NOTE shall mean the Swing Loan Note of the Borrowers
in the form of EXHIBIT 1.1(S) evidencing the Swing Loans, together with all
amendments, extensions, renewals, replacements, refinancings or refundings
thereof in whole or in part.

               SWING LOAN REQUEST shall mean a request for Swing Loans made in
accordance with Section 2.4.2 hereof.

               SWING LOANS shall mean collectively and SWING LOAN shall mean
separately all Swing Loans or any Swing Loan made by PNC Bank to the Borrowers
pursuant to Section 2.1.2 hereof.

               SYNDICATIONS PERIOD shall mean the period between the Closing
Date and the earlier of the following dates: (a) the date on which the Agent
notifies the Borrowers that the Syndications Period has ended, and (b) the date
which is sixty (60) days after the Closing Date.

               TAXES shall have the meaning assigned to such term in Section
5.8.1.

               TERM LOAN shall have the meaning given to such term in Section
3.1; Term Loans shall mean collectively all of the Term Loans.


                                      -25-



               TERM LOAN COMMITMENT shall mean, as to any Bank (or its successor
by assignment) at any time, the amount initially set forth opposite its name on
SCHEDULE 1.1(B) in the column labeled "Amount of Commitment for Term Loans".

               TERM LOAN RATABLE SHARE shall mean (i) on the Closing Date, the
proportion that a Bank's Term Loan Commitment bears to the Term Loan Commitments
of all of the Banks, and (ii) thereafter, the proportion that a Bank's Term Loan
bears to the aggregate Term Loans of the Banks.

               TERM NOTES shall mean, collectively, and TERM NOTE shall mean,
separately, all of the Term Notes of the Borrowers in the form of EXHIBIT 1.1(T)
issued by the Borrowers at the request of a Bank pursuant to Section 5.10
evidencing the Term Loans together with all amendments, extensions, renewals,
replacements, refinancings or refunds thereof in whole or in part.

               TRANCHE A TERM LOAN shall have the meaning assigned to that term
in Section 3.1.

               TRANCHE B TERM LOAN shall have the meaning assigned to that term
in Section 3.1.

               TRANSFEROR BANK shall mean the selling Bank pursuant to an
Assignment and Assumption Agreement.

               UK ACQUISITIONS shall mean the Financed UK Acquisition and the
Permitted Future UK Acquisition

               UK BORROWER shall mean any Borrower organized under the Laws of
the United Kingdom.

               USA PATRIOT ACT shall mean the Uniting and Strengthening America
by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
of 2001, Public Law 107-56, as the same has been, or shall hereafter be,
renewed, extended, amended or replaced.

               WEBSITE POSTING shall have the meaning assigned to that term in
Section 11.6.

          1.2 CONSTRUCTION.

               Unless the context of this Agreement otherwise clearly requires,
the following rules of construction shall apply to this Agreement and each of
the other Loan Documents:


                                      -26-



               1.2.1 NUMBER; INCLUSION.

               References to the plural include the singular, the plural, the
part and the whole; "or" has the inclusive meaning represented by the phrase
"and/or," and "including" has the meaning represented by the phrase "including
without limitation";

               1.2.2 DETERMINATION.

               References to "determination" of or by the Agent or the Banks
shall be deemed to include good-faith estimates by the Agent or the Banks (in
the case of quantitative determinations) and good-faith judgment by the Agent or
the Banks (in the case of qualitative determinations) and such determination
shall be conclusive absent manifest error;

               1.2.3 AGENT'S DISCRETION AND CONSENT.

               Whenever the Agent or the Banks are granted the right herein to
act in its or their sole discretion or to grant or withhold consent such right
shall be exercised in good faith;

               1.2.4 DOCUMENTS TAKEN AS A WHOLE.

               The words "hereof," "herein," "hereunder," "hereto" and similar
terms in this Agreement or any other Loan Document refer to this Agreement or
such other Loan Document as a whole and not to any particular provision of this
Agreement or such other Loan Document;

               1.2.5 HEADINGS.

               The section and other headings contained in this Agreement or
such other Loan Document and the Table of Contents (if any), preceding this
Agreement or such other Loan Document are for reference purposes only and shall
not control or affect the construction of this Agreement or such other Loan
Document or the interpretation thereof in any respect;

               1.2.6 IMPLIED REFERENCES TO THIS AGREEMENT.

               Article, section, subsection, clause, schedule and exhibit
references are to this Agreement or other Loan Document, as the case may be,
unless otherwise specified;

               1.2.7 PERSONS.

               Reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement or such other Loan Document, as the case may be, and reference to
a Person in a particular capacity excludes such Person in any other capacity;


                                      -27-



               1.2.8 MODIFICATIONS TO DOCUMENTS.

               Reference to any agreement (including this Agreement and any
other Loan Document together with the schedules and exhibits hereto or thereto),
document or instrument means such agreement, document or instrument as amended,
modified, replaced, substituted for, superseded or restated;

               1.2.9 FROM, TO AND THROUGH.

               Relative to the determination of any period of time, "from" means
"from and including," "to" means "to but excluding," and "through" means
"through and including"; and

               1.2.10 SHALL; WILL.

               References to "shall" and "will" are intended to have the same
meaning.

          1.3 ACCOUNTING PRINCIPLES.

               Except as otherwise provided in this Agreement, all computations
and determinations as to accounting or financial matters and all financial
statements to be delivered pursuant to this Agreement shall be made and prepared
in accordance with GAAP (including principles of consolidation where
appropriate), and all accounting or financial terms shall have the meanings
ascribed to such terms by GAAP; provided, however, that all accounting terms
used in Section 8.1.14 (and all defined terms used in the definition of any
accounting term used in Section 8.1.14 shall have the meaning given to such
terms (and defined terms) under GAAP as in effect on the date hereof applied on
a basis consistent with those used in preparing the Annual Statements referred
to in Section 6.1.8(i) . In the event of any change after the date hereof in
GAAP, and if such change would result in the inability to determine compliance
with the financial covenants set forth in Section 8.1.14 based upon the
Company's regularly prepared financial statements by reason of the preceding
sentence, then the parties hereto agree to endeavor, in good faith, to agree
upon an amendment to this Agreement that would adjust such financial covenants
in a manner that would not affect the substance thereof, but would allow
compliance therewith to be determined in accordance with the Company's financial
statements at that time.


                                      -28-



                 2. REVOLVING CREDIT AND SWING LOAN FACILITIES

          2.1 REVOLVING CREDIT COMMITMENTS.

               2.1.1 REVOLVING CREDIT LOANS.

                    2.1.1.1 COMMITMENT.

               Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, each Bank holding any Revolving
Credit Commitment severally agrees to make Revolving Credit Loans in either
Dollars or one or more Optional Currencies to the Borrowers at any time or from
time to time on or after the date hereof to the Expiration Date, provided that
(i) after giving effect to each such Loan the aggregate Dollar Equivalent amount
of Revolving Credit Loans from such Bank shall not exceed such Bank's Revolving
Credit Commitment minus such Bank's Revolving Credit Ratable Share of the Dollar
Equivalent amount of Letters of Credit Outstanding, and (ii) no Revolving Credit
Loan to which the Base Rate Option applies shall be made in an Optional
Currency. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrowers may borrow, repay and reborrow
pursuant to this Section 2.1. The Borrowers shall repay in full the outstanding
principal amount of the Revolving Credit Loans, together with all accrued
interest thereon and all fees and other amounts owing under any of the Loan
Documents relating thereto on the Expiration Date or earlier termination of the
Revolving Credit Commitments in connection with the terms hereof.

                    2.1.1.2 DISCRETIONARY COMMITMENT INCREASE.

               Provided that no Event of Default or Potential Default is then
occurring or would be caused thereby, at any time prior to the Expiration Date,
the Borrowers may request from time to time in writing to the Agent that the
Revolving Credit Commitments be increased, by an amount being an integral
multiple of $5,000,000.00 not greater than $50,000,000.00, according to the
following procedures:

                         (i) The Borrowers shall offer the existing Banks the
opportunity to participate in any such increased amount of the Revolving Credit
Commitments (such increased amount being referred to as the "COMMITMENT INCREASE
AMOUNT") in accordance with each Bank's Revolving Credit Ratable Share (each
participating Bank being referred to as an "INCREASING BANK"). The existing
Banks shall be under no obligation to participate in any such Commitment
Increase Amounts and any agreement by any Bank to so participate will be in the
sole discretion of such Bank.

                         (ii) If any Bank declines to commit to its Revolving
Credit Ratable Share of any such Commitment Increase Amount (such declined
portion of the Commitment Increase Amount being referred to as a "DECLINED
SHARE"), then the Agent may join a new bank(s) or financial institution(s) to
this Agreement, which shall be acceptable to the Borrowers (each such bank or
financial institution, an "AUGMENTING LENDER"), or permit an


                                      -29-



existing Bank which has already agreed to commit to its Revolving Credit Ratable
Share of any such Commitment Increase Amount, to commit to the Declined Share or
portion thereof in an amount of at least $5,000,000. Each Augmenting Lender
committing to a Declined Share, or a portion thereof, shall join this Agreement
as a Bank by entering into a bank joinder and assumption agreement in form and
substance satisfactory to the Agent, setting forth the Revolving Credit
Commitment of such Augmenting Lender, pursuant to which such Augmenting Lender
will become a Bank as of the effective date thereof.

                         (iii) On the effective date of any increase in the
Revolving Credit Commitments as contemplated herein (A) each Increasing Bank and
new Augmenting Lender shall make available to the Agent, for the benefit of the
other Banks, such amounts, in immediately available funds, as the Agent shall
determine as being required in order to cause, after giving effect to such
increase and the use of such amounts to make payments to such other Banks, each
Bank's portion of the outstanding Revolving Credit Loans of all the Banks to
equal its Revolving Credit Ratable Share of the Revolving Credit Commitments
(after giving effect to the increase in the Revolving Credit Commitments
occasioned by the addition of the Increasing Bank(s) or Augmenting Lender(s), or
both, as the case may be) and (B) the Borrowers shall be deemed to have repaid
and reborrowed all outstanding Revolving Loans as of the date of any increase in
the Revolving Credit Commitments (with such reborrowing to consist of Revolving
Credit Loans subject to the same interest rate options provided herein, with
related Interest Periods if applicable, specified in a notice delivered by the
Borrowers in accordance with the requirements of Section 4.2). The deemed
payments made pursuant to clause (B) of the immediately preceding sentence in
respect of each Revolving Credit Loan to which a Euro-Rate Option applies shall
be subject to indemnification by the Borrowers pursuant to the provisions of
Section 5.6.2 if the deemed payment occurs other than on the last day of the
related Interest Periods. Upon the request of the Agent, the Borrowers shall
execute and deliver to the Agent for the benefit of the Banks any and all Notes
and other documents, instruments, and agreements necessary or advisable in the
reasonable judgment of the Agent to evidence or document the increase in the
Revolving Credit Commitments, including any amendments hereto, and each of the
Banks and each of the Loan Parties hereby provides its consent hereto and
thereto, and each Bank hereby authorizes the Agent, and each Loan Party hereby
authorizes the Borrowers, to execute any such documents, instruments, and
agreements consistent with the terms of this Section on its behalf without the
necessity of any further consent of any Bank or Loan Party.

               2.1.2 SWING LOAN COMMITMENT.

               Subject to the terms and conditions hereof and relying upon the
representations and warranties herein set forth, and in order to facilitate
loans and repayments between Settlement Dates, PNC Bank may, at its option,
cancelable at any time for any reason whatsoever, make swing loans (the "SWING
LOANS") to the Borrowers at any time or from time to time after the date hereof
to, but not including, the Expiration Date, in an aggregate principal amount up
to but not in excess of $20,000,000.00 (the "SWING LOAN COMMITMENT"), provided
that the aggregate principal amount of PNC Bank's Swing Loans and the Revolving
Credit Loans of all the Banks at any one time outstanding shall not exceed the
Revolving Credit Commitments


                                      -30-



of all the Banks. Within such limits of time and amount and subject to the other
provisions of this Agreement, the Borrowers may borrow, repay and reborrow
pursuant to this Section 2.1.2.

          2.2 NATURE OF BANKS' OBLIGATIONS WITH RESPECT TO REVOLVING CREDIT
LOANS.

               Each Bank shall be obligated to participate in each request for
Revolving Credit Loans pursuant to Section 2.4 in accordance with its Revolving
Credit Ratable Share. The aggregate Dollar Equivalent amount of each Bank's
Revolving Credit Loans outstanding hereunder to the Borrowers at any time shall
never exceed its Revolving Credit Commitment minus its Revolving Credit Ratable
Share of the Dollar Equivalent amount of Letters of Credit Outstanding. The
obligations of each Bank hereunder are several. The failure of any Bank to
perform its obligations hereunder shall not affect the Obligations of the
Borrowers to any other party nor shall any other party be liable for the failure
of such Bank to perform its obligations hereunder. The Banks shall have no
obligation to make Revolving Credit Loans hereunder on or after the Expiration
Date.

          2.3 COMMITMENT FEES.

               Accruing from the date hereof until the Expiration Date, the
Borrowers agree to pay to the Agent in Dollars for the account of each Bank, as
consideration for such Bank's Revolving Credit Commitment hereunder, a
nonrefundable commitment fee (the "COMMITMENT FEE") equal to the Applicable
Commitment Fee Rate (computed on the basis of a year of 360 days, and actual
days elapsed) on the average daily difference between the amount of (i) such
Bank's Revolving Credit Commitment as the same may be constituted from time to
time (for purposes of this computation, PNC Bank's Swing Loans shall be deemed
to be borrowed amounts under its Revolving Credit Commitment) and (ii) the sum
of the Dollar Equivalent amount of such Bank's Revolving Credit Loans
outstanding plus its Revolving Credit Ratable Share of the Dollar Equivalent
amount of Letters of Credit Outstanding, in each case as determined during the
preceding fiscal quarter (or shorter period commencing with the Closing Date or
ending on the Expiration Date). All Commitment Fees shall be payable quarterly
in arrears on the first day of each July, October, January and April after the
date hereof and on the Expiration Date or upon acceleration of the Loan.

          2.4 REVOLVING CREDIT LOAN REQUESTS.

          2.4.1 REVOLVING CREDIT LOAN REQUESTS.

               Except as otherwise provided herein, the Borrowers may from time
to time prior to the Expiration Date request the Banks to make Revolving Credit
Loans, or renew or convert the Interest Rate Option applicable to existing
Revolving Credit Loans or Term Loans pursuant to Section 4.2, by delivering to
the Agent, not later than 10:30 a.m., Pittsburgh time, (i) three (3) Business
Days prior to the proposed Borrowing Date with respect to the making of
Revolving Credit Loans in Dollars to which the Euro-Rate Option applies or the
conversion to or the renewal of the Euro-Rate Option for any such Loans and four
(4) Business Days prior to the proposed Borrowing Date with respect to the
making of Revolving Credit Loans in an Optional


                                      -31-



Currency or the date of conversion to or renewal of the Euro-Rate Option for
Revolving Credit Loans in an Optional Currency and (ii) on either the proposed
Borrowing Date (which shall be a Business Day) with respect to the making of a
Revolving Credit Loan to which the Base Rate Option applies or the last day of
the preceding Interest Period with respect to the conversion to the Base Rate
Option for any Loan, of a duly completed request therefor substantially in the
form of EXHIBIT 2.4 or a request by telephone immediately confirmed in writing
by letter, facsimile or telex in such form (each, a "LOAN REQUEST"), it being
understood that the Agent may rely on the authority of any individual making
such a telephonic request without the necessity of receipt of such written
confirmation. Each Loan Request shall be irrevocable and shall specify (i) the
proposed Borrowing Date; (ii) the aggregate amount of the proposed Loans
(expressed in the currency in which such Loans shall be funded) comprising each
Borrowing Tranche, the Dollar Equivalent amount of which shall be in integral
multiples of $100,000.00 and not less than $2,000,000.00 for each Borrowing
Tranche to which the Euro-Rate Option applies and not less than the lesser of
$2,000,000.00 and the maximum amount available for Borrowing Tranches to which
the Base Rate Option applies; (iii) whether the Euro-Rate Option or Base Rate
Option shall apply to the proposed Revolving Credit Loans comprising the
applicable Borrowing Tranche; (iv) the currency in which such Loans shall be
funded if the Borrower is electing the Euro-Rate Option; and (v) in the case of
a Borrowing Tranche to which the Euro-Rate Option applies, an appropriate
Interest Period for the Loans comprising such Borrowing Tranche.

               2.4.2 SWING LOAN REQUESTS.

               Except as otherwise provided herein, the Borrowers may from time
to time prior to the Expiration Date request PNC Bank to make Swing Loans by
delivery to PNC Bank not later than 10:30 a.m. Pittsburgh time on the proposed
Borrowing Date of a duly completed request therefor substantially in the form of
EXHIBIT 2.4 hereto or a request by telephone immediately confirmed in writing by
letter, facsimile or telex (each, a "SWING LOAN REQUEST"), it being understood
that PNC Bank may rely on the authority of any individual making such a
telephonic request without the necessity of receipt of such written
confirmation. Each Swing Loan Request shall be irrevocable and shall specify the
proposed Borrowing Date and the principal amount of such Swing Loan, which shall
be not less than $500,000.00.

               2.5 MAKING REVOLVING CREDIT LOANS AND SWING LOANS; REVOLVING
CREDIT NOTES AND SWING NOTES.

               2.5.1 MAKING REVOLVING CREDIT LOANS.

               Promptly after receipt by the Agent of a Loan Request pursuant to
Section 2.4, the Agent shall notify the Banks of its receipt of such Loan
Request specifying: (i) the proposed Borrowing Date and the time and method of
disbursement of the Revolving Credit Loans requested thereby; (ii) the amount
and type of each such Revolving Credit Loan and the applicable Interest Period
(if any); (iii) the apportionment among the Banks of such Revolving Credit Loans
as determined by the Agent in accordance with Section 2.2; and (iv) the currency
in which Revolving Credit Loan is requested. Each Bank shall remit the principal
amount of each Revolving Credit Loan in the requested currency to the Agent such
that the


                                      -32-



Agent is able to, and the Agent shall, to the extent the Banks have made funds
available to it for such purpose and subject to Section 7.2, fund such Revolving
Credit Loans to the Borrowers in U.S. Dollars and immediately available funds at
the Principal Office prior to 2:00 p.m., Pittsburgh time, on the applicable
Borrowing Date, provided that if any Bank fails to remit such funds to the Agent
in a timely manner, the Agent may elect, in its sole discretion, to fund with
its own funds the Revolving Credit Loans of such Bank on such Borrowing Date,
and such Bank shall be subject to the repayment obligation in Section 10.16.

               2.5.2 MAKING SWING LOANS.

               So long as PNC Bank elects to make Swing Loans, PNC Bank shall,
after receipt by it of a Swing Loan Request pursuant to Section 2.4.2, fund such
Swing Loan to the Borrowers in Dollars and immediately available funds at the
Principal Office prior to three (3) o'clock p.m. Pittsburgh time on the
Borrowing Date.

          2.6 REVOLVING CREDIT NOTES.

               The obligation of the Borrowers to repay the aggregate unpaid
principal amount of the Revolving Credit Loans made to it by each Bank, together
with interest thereon, shall be evidenced by a Revolving Credit Note dated the
Closing Date payable to the order of such Bank in a face amount equal to the
Revolving Credit Commitment of such Bank.

          2.7 SWING LOAN NOTE.

               The obligation of the Borrowers to repay the unpaid principal
amount of the Swing Loans made to it by PNC Bank together with interest thereon
shall be evidenced by the Swing Loan Note payable to the order of PNC Bank in a
face amount equal to the Swing Loan Commitment.

          2.8 BORROWINGS TO REPAY SWING LOANS.

               PNC Bank may, at its option, exercisable at any time for any
reason whatsoever, demand repayment of the Swing Loans, and each Bank shall make
a Revolving Credit Loan in an amount equal to such Bank's Revolving Credit
Ratable Share of the aggregate principal amount of the outstanding Swing Loans,
plus, if PNC Bank so requests, accrued interest thereon, provided that no Bank
shall be obligated in any event to make any Revolving Credit Loan if after
giving effect thereto, the sum of the Dollar Equivalent amount of its Revolving
Credit Loans plus such Bank's Revolving Credit Ratable Share of the Dollar
Equivalent amount of Letters of Credit Outstanding exceeds its Revolving Credit
Commitment. Revolving Credit Loans made pursuant to the preceding sentence shall
bear interest at the Base Rate Option and shall be deemed to have been properly
requested in accordance with Section 2.4.1 without regard to any of the
requirements of that provision. PNC Bank shall provide notice to the Banks
(which may be telephonic or written notice by letter, facsimile or telex) that
such Revolving Credit Loans are to be made under this Section 2.8 and of the
apportionment among the Banks, and the Banks shall be unconditionally obligated
to fund such Revolving Credit Loans (whether or not


                                      -33-



the conditions specified in Section 7.2 are then satisfied) by the time PNC Bank
so requests, which shall not be earlier than 3:00 p.m. Pittsburgh time on the
next Business Day after the date the Banks receive such notice from PNC Bank.

          2.9 UTILIZATION OF COMMITMENTS IN OPTIONAL CURRENCIES.

               2.9.1 PERIODIC COMPUTATIONS OF DOLLAR EQUIVALENT AMOUNTS OF
REVOLVING CREDIT LOANS AND LETTERS OF CREDIT OUTSTANDING.

               The Agent will determine the Dollar Equivalent amount of (i)
proposed Letters of Credit to be denominated in an Optional Currency as of the
requested Borrowing Date or date of issuance, as the case may be, (ii)
outstanding Letters of Credit Outstanding denominated in an Optional Currency as
of the last Business Day of each month, and (iii) outstanding Revolving Credit
Loans denominated in an Optional Currency as of the end of each Interest Period
(each such date under clauses (i) through (iii), a "COMPUTATION DATE").

               2.9.2 NOTICES FROM BANKS THAT OPTIONAL CURRENCIES ARE UNAVAILABLE
TO FUND NEW LOANS.

               The Banks shall be under no obligation to make the Revolving
Credit Loans requested by the Borrowers which are denominated in an Optional
Currency if any Bank notifies the Agent by 5:00 p.m. (Pittsburgh time) four (4)
Business Days prior to the Borrowing Date for such Revolving Credit Loans that
such Bank cannot provide its Revolving Credit Ratable Share of such Revolving
Credit Loans in such Optional Currency. In the event the Agent timely receives a
notice from a Bank pursuant to the preceding sentence, the Agent will notify the
Borrowers no later than 12:00 noon (Pittsburgh time) three (3) Business Days
prior to the Borrowing Date for such Revolving Credit Loans that the Optional
Currency is not then available for such Revolving Credit Loans, and the Agent
shall promptly thereafter notify the Banks of the same and the Banks shall not
make such Revolving Credit Loans requested by the Borrowers under their Loan
Request.

               2.9.3 NOTICES FROM BANKS THAT OPTIONAL CURRENCIES ARE UNAVAILABLE
TO FUND RENEWALS OF THE EURO-RATE OPTION.

               If the Borrowers deliver a Loan Request requesting that the Banks
renew the Euro-Rate Option with respect to an outstanding Borrowing Tranche of
Revolving Credit Loans denominated in an Optional Currency, the Banks shall be
under no obligation to renew such Euro-Rate Option if any Bank delivers to the
Agent a notice by 5:00 p.m. (Pittsburgh time) four (4) Business Days prior to
the effective date of such renewal that such Bank cannot continue to provide
Revolving Credit Loans in such Optional Currency. In the event the Agent timely
receives a notice from a Bank pursuant to the preceding sentence, the Agent will
notify the Borrowers no later than 12:00 noon (Pittsburgh time) three (3)
Business Days prior to the renewal date that the renewal of such Revolving
Credit Loans in such Optional Currency is not then available, and the Agent
shall promptly thereafter notify the Banks of the same. If the Agent shall have
so notified the Borrowers that any such continuation of such Revolving Credit
Loans


                                      -34-



in such Optional Currency is not then available, any notice of renewal with
respect thereto shall be deemed withdrawn, and such Loans shall be redenominated
into Base Rate Loans in Dollars with effect from the last day of the Interest
Period with respect to any such Loans. The Agent will promptly notify the
Borrowers and the Banks of any such redenomination, and in such notice, the
Agent will state the aggregate Dollar Equivalent amount of the redenominated
Revolving Credit Loans in an Optional Currency as of the applicable Computation
Date with respect thereto and such Bank's Revolving Credit Ratable Share
thereof.

               2.9.4 EUROPEAN MONETARY UNION.

                    2.9.4.1 PAYMENTS IN EUROS UNDER CERTAIN CIRCUMSTANCES.

               If, as a result of the implementation of the European monetary
union, (i) any Optional Currency ceases to be lawful currency of the nation
issuing the same and is replaced by a European common currency (the "EURO") or
(ii) any Optional Currency and the Euro are at the same time recognized by any
governmental authority of the nation issuing such currency as lawful currency of
such nation and the Agent or the Required Banks shall so request in a notice
delivered to the Borrowers, then any amount payable hereunder by any party
hereto in such Optional Currency shall instead by payable in the Euro and the
amount so payable shall be determined by translating the amount payable in such
Optional Currency to the Euro at the exchange rate recognized by the European
Central Bank for the purpose of implementing the European monetary union (and
the provisions governing payments in Optional Currencies in this Agreement shall
apply to such payment in the Euro as if such payment in the Euro were a payment
in an Optional Currency). Prior to the occurrence of the event or events
described in clause (i) or (ii) of the preceding sentence, each amount payable
hereunder in any Optional Currency will, except as otherwise provided herein,
continue to be payable only in that currency.

                    2.9.4.2 ADDITIONAL COMPENSATION UNDER CERTAIN CIRCUMSTANCES.

               The Borrowers agree, at the request of any Bank to compensate
such Bank for any loss, cost, expense or reduction in return that such Bank
shall reasonably determine shall be incurred or sustained by such Bank as a
result of the implementation of European monetary union and that would not have
been incurred or sustained but for the transactions provided for herein. A
certificate of any Bank setting forth such Bank's determination of the amount or
amounts necessary to compensate such Bank shall be delivered to the Borrowers
and shall be conclusive absent manifest error so long as such determination is
made on a reasonable basis. The Borrowers shall pay such Bank the amount shown
as due on any such certificate within ten (10) days after receipt thereof.

                    2.9.5 REQUESTS FOR ADDITIONAL OPTIONAL CURRENCIES.

               The Borrowers may deliver to the Agent a written request that
Revolving Credit Loans hereunder also be permitted to be made in any other
lawful currency (other than


                                      -35-



Dollars), in addition to the currencies specified in the definition of "Optional
Currency" herein provided that such currency must be freely traded in the
offshore interbank foreign exchange markets, freely transferable, freely
convertible into Dollars and available to the Banks in the applicable interbank
market. The Agent will promptly notify the Banks of any such request promptly
after the Agent receives such request. The Agent and each Bank may grant or
accept such request in their sole discretion. The Agent will promptly notify the
Borrowers of the acceptance or rejection by the Agent and each of the Banks of
the Borrowers' request. The requested currency shall be approved as an Optional
Currency hereunder only if the Agent and all of the Banks approve of the
Borrowers' request.

          2.10 USE OF PROCEEDS.

               The proceeds of the Revolving Credit Loans shall be used for (i)
financing the Permitted Future UK Acquisition, (ii) financing the Financed
Domestic Acquisition, (iii) refinancing amounts outstanding under the Prior
Senior Credit Facility, and (iv) general corporate purposes, including financing
working capital and Permitted Acquisitions.

          2.11 LETTER OF CREDIT SUBFACILITY.

               2.11.1 ISSUANCE OF LETTERS OF CREDIT.

               The Borrowers may request the issuance of a letter of credit
(each such letter of credit and each Existing Letter of Credit, a "LETTER OF
CREDIT") on behalf of itself or another Loan Party by delivering or having such
other Loan Party deliver to the Agent a completed application and agreement for
letters of credit in such form as the Agent may specify from time to time by no
later than 10:00 a.m., Pittsburgh time, at least five (5) Business Days, or such
shorter period as may be agreed to by the Agent, in advance of the proposed date
of issuance. Each Letter of Credit shall be a Standby Letter of Credit (and may
not be a Commercial Letter of Credit) and may be denominated in either Dollars
or an Optional Currency. Subject to the terms and conditions hereof and in
reliance on the agreements of the other Banks set forth in this Section 2.11,
the Agent or any of the Agent's Affiliates will issue a Letter of Credit
provided that each Letter of Credit shall (A) have a maximum maturity of twelve
(12) months from the date of issuance, and (B) in no event expire later than
five (5) Business Days prior to the Expiration Date and providing that in no
event shall (i) the Dollar Equivalent amount of Letters of Credit Outstanding
exceed, at any one time, $20,000,000.00, or (ii) the Dollar Equivalent Revolving
Facility Usage exceed, at any one time, the Revolving Credit Commitments. The
Existing Letters of Credit shall be deemed to have been issued hereunder.

               2.11.2 LETTER OF CREDIT FEES.

               The Borrowers shall pay in Dollars (i) to the Agent for the
ratable account of the Banks a fee (the "LETTER OF CREDIT FEE") equal to the
Applicable Margin then in effect for Revolving Credit Loans subject to the
Euro-Rate Option, per annum, and (ii) to the Agent for its own account a
fronting fee equal to 0.125% per annum (each computed on the basis of a year of
360 days and actual days elapsed), which fees shall be computed on the daily
average Dollar


                                      -36-



Equivalent amount of Letters of Credit Outstanding during the preceding fiscal
quarter (or shorter period commencing with the Closing Date or ending with the
Expiration Date) and shall be payable quarterly in arrears commencing with the
first day of each July, October, January and April following issuance of each
Letter of Credit and on the Expiration Date. The Borrowers shall also pay to the
Agent in Dollars for the Agent's sole account the Agent's then in effect
customary fees and administrative expenses payable with respect to the Letters
of Credit as the Agent may generally charge or incur from time to time in
connection with the issuance, maintenance, modification (if any), assignment or
transfer (if any), negotiation, and administration of Letters of Credit.

               2.11.3 DISBURSEMENTS, REIMBURSEMENT.

                    2.11.3.1 Immediately upon the issuance of each Letter of
Credit (and with respect to the Existing Letters of Credit, on the Closing
Date), each Bank shall be deemed to, and hereby irrevocably and unconditionally
agrees to, purchase from the Agent a participation in such Letter of Credit and
each drawing thereunder in an amount equal to such Bank's Revolving Credit
Ratable Share of the maximum amount available to be drawn under such Letter of
Credit and the amount of such drawing, respectively.

                    2.11.3.2 In the event of any request for a drawing under a
Letter of Credit by the beneficiary or transferee thereof, the Agent will
promptly notify the Borrowers. Provided that it shall have received such notice,
the Borrowers shall reimburse (such obligation to reimburse the Agent shall
sometimes be referred to as a "REIMBURSEMENT OBLIGATION") the Agent in Dollars
prior to 12:00 noon, Pittsburgh time on each date that an amount is paid by the
Agent under any Letter of Credit (each such date, a "DRAWING DATE") in an amount
equal to the Dollar Equivalent amount so paid by the Agent. In the event the
Borrowers fail to reimburse the Agent for the full Dollar Equivalent amount of
any drawing under any Letter of Credit by 12:00 noon, Pittsburgh time, on the
Drawing Date, the Agent will promptly notify each Bank thereof, and the
Borrowers shall be deemed to have requested that Revolving Credit Loans be made
by the Banks in Dollars under the Base Rate Option in an amount equal to the
Dollar Equivalent amount of such drawing to be disbursed on the Drawing Date
under such Letter of Credit, subject to the amount of the unutilized portion of
the Revolving Credit Commitment and subject to the conditions set forth in
Section 7.2 other than any notice requirements. Any notice given by the Agent
pursuant to this Section 2.11.3.2 may be oral if immediately confirmed in
writing; provided that the lack of such an immediate confirmation shall not
affect the conclusiveness or binding effect of such notice.

                    2.11.3.3 Each Bank shall upon any notice pursuant to Section
2.11.3.2 make available to the Agent an amount in Dollars in immediately
available funds equal to its Revolving Credit Ratable Share of the Dollar
Equivalent amount of the drawing (whether or not the conditions set forth in
Section 7.2 shall have been satisfied), whereupon the participating Banks shall
(subject to Section 2.11.3.4) each be deemed to have made a Revolving Credit
Loan in Dollars under the Base Rate Option to the Borrowers in that amount. If
any Bank so notified fails to make available in Dollars to the Agent for the
account of the Agent the amount of such Bank's Revolving Credit Ratable Share of
such Dollar Equivalent


                                      -37-



amount by no later than 2:00 p.m., Pittsburgh time on the Drawing Date, then
interest shall accrue on such Bank's obligation to make such payment, from the
Drawing Date to the date on which such Bank makes such payment (i) at a rate per
annum equal to the Federal Funds Effective Rate during the first three (3) days
following the Drawing Date and (ii) at a rate per annum equal to the rate
applicable to Loans under the Base Rate Option on and after the fourth day
following the Drawing Date. The Agent will promptly give notice of the
occurrence of the Drawing Date, but failure of the Agent to give any such notice
on the Drawing Date or in sufficient time to enable any Bank to effect such
payment on such date shall not relieve such Bank from its obligation under this
Section 2.11.3.3.

                    2.11.3.4 With respect to any unreimbursed drawing that is
not converted into Revolving Credit Loans under the Base Rate Option to the
Borrowers in whole or in part as contemplated by Section 2.11.3.2, because of
the Borrowers' failure to satisfy the conditions set forth in Section 7.2 other
than any notice requirements or for any other reason, the Borrowers shall be
deemed to have incurred from the Agent a borrowing (each a "LETTER OF CREDIT
BORROWING") in Dollars in the Dollar Equivalent amount of such drawing. Such
Letter of Credit Borrowing shall be due and payable on demand (together with
interest) and shall bear interest at the rate per annum applicable to the
Revolving Credit Loans under the Base Rate Option. Each Bank's payment to the
Agent pursuant to Section 2.11.3.3 shall be deemed to be a payment in respect of
its participation in such Letter of Credit Borrowing and shall constitute a
"PARTICIPATION ADVANCE" from such Bank in satisfaction of its participation
obligation under this Section 2.11.3.

               2.11.4 REPAYMENT OF PARTICIPATION ADVANCES.

                    2.11.4.1 Upon (and only upon) receipt by the Agent for its
account of immediately available funds from the Borrowers (i) in payment of any
Letter of Credit Borrowing made by the Agent under the Letter of Credit with
respect to which any Bank has made a Participation Advance to the Agent, or (ii)
in payment of interest on such a payment made by the Agent under such a Letter
of Credit, the Agent will pay to each Bank, in the same funds as those received
by the Agent, the amount of such Bank's Revolving Credit Ratable Share of such
funds, except the Agent shall retain the amount of the Revolving Credit Ratable
Share of such funds of any Bank that did not make a Participation Advance in
respect of such payment by Agent.

                    2.11.4.2 If the Agent is required at any time to return to
any Loan Party, or to a trustee, receiver, liquidator, custodian, or any
official in any Insolvency Proceeding, any portion of the payments made by any
Loan Party to the Agent pursuant to Section 2.11.4.1 in reimbursement of a
payment made under the Letter of Credit or interest or fee thereon, each Bank
shall, on demand of the Agent, forthwith return to the Agent the amount of its
Revolving Credit Ratable Share of any amounts so returned by the Agent plus
interest thereon from the date such demand is made to the date such amounts are
returned by such Bank to the Agent, at a rate per annum equal to the Federal
Funds Effective Rate in effect from time to time.


                                      -38-



               2.11.5 DOCUMENTATION.

               Each Loan Party agrees to be bound by the terms of the Agent's
application and agreement for letters of credit and the Agent's written
regulations and customary practices relating to letters of credit, though such
interpretation may be different from such Loan Party's own. In the event of a
conflict between such application or agreement and this Agreement, this
Agreement shall govern. It is understood and agreed that, except in the case of
its own gross negligence or willful misconduct, the Agent shall not be liable
for any error, negligence and/or mistakes, whether of omission or commission, in
following any Loan Party's instructions or those contained in the Letters of
Credit or any modifications, amendments or supplements thereto.

               2.11.6 DETERMINATIONS TO HONOR DRAWING REQUESTS.

               In determining whether to honor any request for drawing under any
Letter of Credit by the beneficiary thereof, the Agent shall be responsible only
to determine that the documents and certificates required to be delivered under
such Letter of Credit have been delivered and that they comply on their face
with the requirements of such Letter of Credit.

               2.11.7 NATURE OF PARTICIPATION AND REIMBURSEMENT OBLIGATIONS.

               Each Bank's obligation in accordance with this Agreement to make
the Revolving Credit Loans or Participation Advances, as contemplated by Section
2.11.3, as a result of a drawing under a Letter of Credit, and the Obligations
of the Borrowers to reimburse the Agent upon a draw under a Letter of Credit,
shall be absolute, unconditional and irrevocable, and shall be performed
strictly in accordance with the terms of this Section 2.11 under all
circumstances, including the following circumstances:

                    (i) any set-off, counterclaim, recoupment, defense or other
right which such Bank may have against the Agent or any of its Affiliates, the
Borrowers or any other Person for any reason whatsoever;

                    (ii) the failure of any Loan Party or any other Person to
comply, in connection with a Letter of Credit Borrowing, with the conditions set
forth in Sections 2.1, 2.4, 2.5 or 7.2 or as otherwise set forth in this
Agreement for the making of a Revolving Credit Loan, it being acknowledged that
such conditions are not required for the making of a Letter of Credit Borrowing
and the obligation of the Banks to make Participation Advances under Section
2.11.3;

                    (iii) any lack of validity or enforceability of any Letter
of Credit;

                    (iv) any claim of breach of warranty that might be made by
any Loan Party or any Bank against any beneficiary of a Letter of Credit, or the
existence of any claim, set-off, recoupment, counterclaim, crossclaim, defense
or other right which any Loan Party or any Bank may have at any time against a
beneficiary, successor beneficiary any transferee or assignee of any Letter of
Credit or the proceeds thereof (or any Persons for whom


                                      -39-



any such transferee may be acting), the Agent or its Affiliates or any Bank or
any other Person or, whether in connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including any underlying
transaction between any Loan Party or Subsidiaries of a Loan Party and the
beneficiary for which any Letter of Credit was procured);

                    (v) the lack of power or authority of any signer of (or any
defect in or forgery of any signature or endorsement on) or the form of or lack
of validity, sufficiency, accuracy, enforceability or genuineness of any draft,
demand, instrument, certificate or other document presented under or in
connection with any Letter of Credit, or any fraud or alleged fraud in
connection with any Letter of Credit, or the transport of any property or
provisions of services relating to a Letter of Credit, in each case even if the
Agent or any of the Agent's Affiliates has been notified thereof;

                    (vi) payment by the Agent or any of its Affiliates under any
Letter of Credit against presentation of a demand, draft or certificate or other
document which does not comply with the terms of such Letter of Credit;

                    (vii) the solvency of, or any acts of omissions by, any
beneficiary of any Letter of Credit, or any other Person having a role in any
transaction or obligation relating to a Letter of Credit, or the existence,
nature, quality, quantity, condition, value or other characteristic of any
property or services relating to a Letter of Credit;

                    (viii) any failure by the Agent or any of Agent's Affiliates
to issue any Letter of Credit in the form requested by any Loan Party, unless
the Agent has received written notice from such Loan Party of such failure
within three Business Days after the Agent shall have furnished such Loan Party
a copy of such Letter of Credit and such error is material and no drawing has
been made thereon prior to receipt of such notice;

                    (ix) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or prospects of any Loan
Party or Subsidiaries of a Loan Party;

                    (x) any breach of this Agreement or any other Loan Document
by any party thereto;

                    (xi) the occurrence or continuance of an Insolvency
Proceeding with respect to any Loan Party;

                    (xii) the fact that an Event of Default or a Potential
Default shall have occurred and be continuing;

                    (xiii) the fact that the Expiration Date shall have passed
or this Agreement or the Commitments hereunder shall have been terminated; and

                    (xiv) any other circumstance or happening whatsoever,
whether or not similar to any of the foregoing.


                                      -40-



               2.11.8 INDEMNITY.

               In addition to amounts payable as provided in Section 10.5, the
Borrowers hereby agree to protect, indemnify, pay and save harmless the Agent
and any of Agent's Affiliates that has issued a Letter of Credit from and
against any and all claims, demands, liabilities, damages, taxes, penalties,
interest, judgments, losses, costs, charges and expenses (including reasonable
fees, expenses and disbursements of counsel and allocated costs of internal
counsel) which the Agent or any of Agent's Affiliates may incur or be subject to
as a consequence, direct or indirect, of the issuance of any Letter of Credit,
other than as a sole result of (i) the gross negligence or willful misconduct of
the Agent as determined by a final judgment of a court of competent jurisdiction
or (ii) the wrongful dishonor by the Agent or any of Agent's Affiliates of a
proper demand for payment made under any Letter of Credit, except if such
dishonor resulted from any act or omission, whether rightful or wrongful, of any
present or future de jure or de facto government or governmental authority (all
such acts or omissions herein called "GOVERNMENTAL ACTS").

               2.11.9 LIABILITY FOR ACTS AND OMISSIONS.

               As between any Loan Party and the Agent, or the Agent's
Affiliates, such Loan Party assumes all risks of the acts and omissions of, or
misuse of the Letters of Credit by, the respective beneficiaries of such Letters
of Credit. In furtherance and not in limitation of the foregoing, the Agent
shall not be responsible for any of the following including any losses or
damages to any Loan Party or other Person or property relating therefrom: (i)
the form, validity, sufficiency, accuracy, genuineness or legal effect of any
document submitted by any party in connection with the application for an
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
(even if the Agent or the Agent's Affiliates shall have been notified thereof);
(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) the failure of the beneficiary
of any such Letter of Credit, or any other party to which such Letter of Credit
may be transferred, to comply fully with any conditions required in order to
draw upon such Letter of Credit or any other claim of any Loan Party against any
beneficiary of such Letter of Credit, or any such transferee, or any dispute
between or among any Loan Party and any beneficiary of any Letter of Credit or
any such transferee; (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 the Agent or
the Agent's Affiliates, as applicable, including any Governmental Acts, and none
of the above shall affect or impair, or prevent the vesting of, any of the
Agent's or the Agent's Affiliates rights or powers hereunder. Nothing in the
preceding sentence shall relieve the Agent from liability for the Agent's gross
negligence or willful misconduct in connection with actions or omissions
described in such clauses (i) through (viii) of


                                      -41-



such sentence. In no event shall the Agent or the Agent's Affiliates be liable
to any Loan Party for any indirect, consequential, incidental, punitive,
exemplary or special damages or expenses (including without limitation
attorneys' fees), or for any damages resulting from any change in the value of
any property relating to a Letter of Credit.

               Without limiting the generality of the foregoing, the Agent and
each of its Affiliates (i) may rely on any oral or other communication believed
in good faith by the Agent or such Affiliate to have been authorized or given by
or on behalf of the applicant for a Letter of Credit, (ii) may honor any
presentation if the documents presented appear on their face substantially to
comply with the terms and conditions of the relevant Letter of Credit; (iii) may
honor a previously dishonored presentation under a Letter of Credit, whether
such dishonor was pursuant to a court order, to settle or compromise any claim
of wrongful dishonor, or otherwise, and shall be entitled to reimbursement to
the same extent as if such presentation had initially been honored, together
with any interest paid by the Agent or its Affiliate; (iv) may honor any drawing
that is payable upon presentation of a statement advising negotiation or
payment, upon receipt of such statement (even if such statement indicates that a
draft or other document is being delivered separately), and shall not be liable
for any failure of any such draft or other document to arrive, or to conform in
any way with the relevant Letter of Credit; (v) may pay any paying or
negotiating bank claiming that it rightfully honored under the laws or practices
of the place where such bank is located; and (vi) may settle or adjust any claim
or demand made on the Agent or its Affiliate in any way related to any order
issued at the applicant's request to an air carrier, a letter of guarantee or of
indemnity issued to a carrier or any similar document (each an "ORDER") and
honor any drawing in connection with any Letter of Credit that is the subject to
such Order, notwithstanding that any drafts or other documents presented in
connection with such Letter of Credit fail to conform in any way with such
Letter of Credit.

               In furtherance and extension and not in limitation of the
specific provisions set forth above, any action taken or omitted by the Agent or
the Agent's Affiliates under or in connection with the Letters of Credit issued
by it or any documents and certificates delivered thereunder, if taken or
omitted in good faith, shall not put the Agent or the Agent's Affiliates under
any resulting liability to the Borrowers or any Bank.

          2.12 CURRENCY REPAYMENTS.

          Notwithstanding anything contained herein to the contrary, the entire
amount of principal of and interest on any Revolving Credit Loan made in an
Optional Currency shall be repaid in the same Optional Currency in which such
Loan was made, provided, however, that if it is impossible or illegal for the
Borrowers to effect payment of a Revolving Credit Loan in the Optional Currency
in which such Loan was made, or if the Borrowers default in their obligations to
do so, the Required Banks may at their option permit such payment to be made (i)
at and to a different location, subsidiary, affiliate or correspondent of Agent,
(ii) in the Equivalent Amount of Dollars or (iii) in an Equivalent Amount of
such other currency (freely convertible into Dollars) as the Required Banks may
solely at their option designate. Upon any events described in (i) through (iii)
of the preceding sentence, the Borrowers shall make such payment, and the
Borrowers agree to hold each Bank harmless from and against any loss incurred by
any Bank


                                      -42-



arising from the cost to such Bank of any premium, any costs of exchange, the
cost of hedging and covering the Optional Currency in which such Loan was
originally made, and from any change in the value of Dollars, or such other
currency, in relation to the Optional Currency that was due and owing. Such loss
shall be calculated for the period commencing with the first day of the Interest
Period for such Loan and continuing through the date of payment thereof. Without
prejudice to the survival of any other agreement of the Borrowers hereunder, the
Borrowers' obligations under this Section 2.12 shall survive termination of this
Agreement.

          2.13 OPTIONAL CURRENCY AMOUNTS.

               Notwithstanding anything contained herein to the contrary, the
Agent may, with respect to notices by the Borrowers for Revolving Credit Loans
in an Optional Currency or voluntary prepayments of less than the full amount of
an Optional Currency Borrowing Tranche, engage in reasonable rounding of the
Optional Currency amounts requested to be loaned or repaid; and, in such event,
the Agent shall promptly notify the Borrowers and the Banks of such rounded
amounts and the Borrowers' request or notice shall thereby be deemed to reflect
such rounded amounts.

          2.14 REDUCTION OF COMMITMENT.

               The Borrowers shall have the right at any time and from time to
time upon five (5) Business Days' prior written notice to the Agent to
permanently reduce, in whole multiples of $5,000,000 of principal, or terminate
the Revolving Credit Commitments without penalty or premium, except as
hereinafter set forth, provided that any such reduction or termination shall be
accompanied by (a) the payment in full of any Commitment Fee then accrued on the
amount of such reduction or termination and (b) prepayment of the Revolving
Credit Notes, together with the full amount of interest accrued on the principal
sum to be prepaid (and all amounts referred to in Section 5.6 hereof), to the
extent that the Dollar Equivalent Revolving Facility Usage then outstanding
exceeds the Revolving Credit Commitments as so reduced or terminated. From the
effective date of any such reduction or termination the obligations of Borrower
to pay the Commitment Fee pursuant to Section 2.3 shall correspondingly be
reduced or cease.

                                 3. TERM LOANS

          3.1 TERM LOAN COMMITMENTS.

               Subject to the terms and conditions hereof, and relying upon the
representations and warranties herein set forth, each Bank severally agrees to
make a term loan in Dollars (and not in an Optional Foreign Currency) (the "TERM
Loans") to the Borrowers on the Closing Date in the principal amount of such
Bank's Term Loan Commitment. A portion of the Term Loans equal to $50,000,000 is
hereby designated as "Tranche A" (the "Tranche A Term Loans"), and a portion of
the Term Loans equal to $50,000,000 is hereby designated as "Tranche


                                      -43-



B" (the "Tranche B Term Loans") and 50% of the Term Loans made by each Bank
shall be Tranche A Term Loans and the remaining 50% of such Term Loans made by
such Bank shall be Tranche B Term Loans.

          3.2 NATURE OF BANKS' OBLIGATIONS WITH RESPECT TO TERM LOANS.

               The failure of any Bank to make a Term Loan shall not relieve any
other Bank of its obligations to make a Term Loan nor shall it impose any
additional liability on any other Bank hereunder. The Banks shall have no
obligation to make Term Loans hereunder after the Closing Date. The Term Loan
Commitments are not revolving credit commitments, and the Borrowers shall not
have the right to borrow, repay and reborrow Term Loans under Section 3.1.

          3.3 TERM LOAN NOTES.

               The obligation of the Borrowers to repay the unpaid principal
amount of the Term Loans made to it by each Bank, together with interest
thereon, shall be evidenced by a Term Note dated the Closing Date payable to the
order of each Bank in a face amount equal to the Term Loan of such Bank. The
principal amount of the Term Notes shall be payable in aggregate quarterly
installments on the last day of each fiscal quarter commencing March 31, 2007 as
follows:



        Due Dates          Amount of Each Payment   Total for Fiscal Year
        ---------          ----------------------   ---------------------
                                              
3/31/07 through 12/31/07        $3,750,000.00           $15,000,000.00
3/31/08 through 12/31/08        $5,000,000.00           $20,000,000.00
3/31/09 through 12/31/09        $6,250,000.00           $25,000,000.00
3/31/10 through 12/31/10        $6,250,000.00           $25,000,000.00


with a final payment due on April 2, 2011, equal to the total outstanding
principal amount of the Term Loans, all accrued, but unpaid, interest thereon
and all fees and other amounts owing under the Loan Documents with respect
thereto.

          3.4 USE OF PROCEEDS.

               The proceeds of the Term Loans shall be used for (i) financing
the Financed Domestic Acquisition, (ii) refinancing amounts outstanding under
the Prior Senior Credit Facility, and (iii) general corporate purposes,
including financing working capital and Permitted Acquisitions.


                                      -44-


                               4. INTEREST RATES

          4.1 INTEREST RATE OPTIONS.

               The Borrowers shall pay interest in respect of the outstanding
unpaid principal amount of the Loans as selected by it from the Base Rate Option
or Euro-Rate Option set forth below applicable to the Loans, it being understood
that, subject to the provisions of this Agreement, the Borrowers may select
different Interest Rate Options and different Interest Periods to apply
simultaneously to the Loans comprising different Borrowing Tranches and may
convert to or renew one or more Interest Rate Options with respect to all or any
portion of the Loans comprising any Borrowing Tranche, provided that there shall
not be at any one time outstanding more than eleven (11) Borrowing Tranches in
the aggregate among all of the Loans. If at any time the designated rate
applicable to any Loan made by any Bank exceeds such Bank's highest lawful rate,
the rate of interest on such Bank's Loan shall be limited to such Bank's highest
lawful rate. Interest on the principal amount of each Loan made in an Optional
Currency shall be paid by the Borrowers in such Optional Currency. Swing Loans
shall be interest at a rate to be agreed upon by the Agent and the Borrowers.

               4.1.1 INTEREST RATE OPTIONS.

               The Borrowers shall have the right to select from the following
Interest Rate Options applicable to the Revolving Credit Loans (subject to the
provisions above regarding Swing Loans) and the Term Loans, except that no Loan
to which a Base Rate shall apply may be made in an Optional Currency:

                    (i) Base Rate Option. A fluctuating rate per annum (computed
on the basis of a year of 365 or 366 days, as the case may be, and actual days
elapsed) equal to the Base Rate, such interest rate to change automatically from
time to time effective as of the effective date of each change in the Base Rate;
or

                    (ii) Euro-Rate Option. A rate per annum (computed on the
basis of a year of 360 days and actual days elapsed), provided that, for
Revolving Credit Loans made in an Optional Currency for which a 365-day basis is
the only market practice available to the Agent, such rate shall be calculated
on the basis of a year of 365 or 366 days, as the case maybe for the actual days
elapsed) equal to the Euro-Rate plus the Applicable Margin.

               4.1.2 RATE QUOTATIONS.

               The Borrowers may call the Agent on or before the date on which a
Loan Request is to be delivered to receive an indication of the interest rates
and the applicable currency exchange rates then in effect, but it is
acknowledged that such projection shall not be binding on the Agent or the Banks
nor affect the rate of interest or the calculation of Equivalent Amounts which
thereafter are actually in effect when the election is made.


                                      -45-



          4.2 INTEREST PERIODS.

               At any time when the Borrowers shall select, convert to or renew
a Euro-Rate Option, the Borrowers shall notify the Agent thereof by delivering a
Loan Request at least four (4) Business Days prior to the effective date of such
Interest Rate Option, with respect to an Optional Currency Loan, and three (3)
Business Days prior to the effective date of such Interest Rate Option, with
respect to a Loan denominated in Dollars. The notice shall specify an Interest
Period during which such Interest Rate Option shall apply. Notwithstanding the
preceding sentence, the following provisions shall apply to any selection of,
renewal of, or conversion to a Euro-Rate Option:

               4.2.1 AMOUNT OF BORROWING TRANCHE.

               The Dollar Equivalent amount of each Borrowing Tranche of
Euro-Rate Loans shall be in integral multiples of $100,000.00 and not less than
$2,000,000.00; and

               4.2.2 RENEWALS.

               In the case of the renewal of a Euro-Rate Option at the end of an
Interest Period, the first day of the new Interest Period shall be the last day
of the preceding Interest Period, without duplication in payment of interest for
such day.

          4.3 INTEREST AFTER DEFAULT.

               To the extent permitted by Law, upon the occurrence of an Event
of Default and until such time such Event of Default shall have been cured or
waived:

               4.3.1 LETTER OF CREDIT FEES, INTEREST RATE.

               The Letter of Credit Fees and the rate of interest for each Loan
otherwise applicable pursuant to Section 2.11.2 or Section 4.1, respectively,
shall be increased, by 2.0% per annum; and

               4.3.2 OTHER OBLIGATIONS.

               Each other Obligation hereunder if not paid when due shall bear
interest at a rate per annum equal to the sum of the rate of interest applicable
under the Base Rate Option plus an additional 2% per annum from the time such
Obligation becomes due and payable and until it is paid in full.

               4.3.3 ACKNOWLEDGMENT.

               The Borrowers acknowledges that the increase in rates referred to
in this Section 4.3 reflects, among other things, the fact that such Loans or
other amounts have become a substantially greater risk given their default
status and that the Banks are entitled to additional


                                      -46-



compensation for such risk; and all such interest shall be payable by the
Borrowers upon demand by the Agent.

          4.4 EURO-RATE UNASCERTAINABLE; ILLEGALITY; INCREASED COSTS; DEPOSITS
NOT AVAILABLE.

               4.4.1 UNASCERTAINABLE.

               If on any date on which a Euro-Rate would otherwise be
determined, the Agent shall have determined that:

                    (i) adequate and reasonable means do not exist for
ascertaining such Euro-Rate, or

                    (ii) a contingency has occurred which materially and
adversely affects the London interbank eurodollar market relating to the
Euro-Rate, the Agent shall have the rights specified in Section 4.4.3.

               4.4.2 ILLEGALITY; INCREASED COSTS; DEPOSITS NOT AVAILABLE.

               If at any time any Bank shall have determined that:

                    (i) the making, maintenance or funding of any Loan to which
a Euro-Rate Option applies has been made impracticable or unlawful by compliance
by such Bank in good faith with any Law or any interpretation or application
thereof by any Official Body or with any request or directive of any such
Official Body (whether or not having the force of Law), or

                    (ii) such Euro-Rate Option will not adequately and fairly
reflect the cost to such Bank of the establishment or maintenance of any such
Loan, or

                    (iii) after making all reasonable efforts, deposits of the
relevant amount in Dollars or in the Optional Currency (as applicable) for the
relevant Interest Period for a Loan, or to banks generally, to which a Euro-Rate
Option applies, respectively, are not available to such Bank with respect to
such Loan, or to banks generally, in the interbank eurodollar market, then the
Agent shall have the rights specified in Section 4.4.3.

               4.4.3 AGENT'S AND BANK'S RIGHTS.

               In the case of any event specified in Section 4.4.1 above, the
Agent shall promptly so notify the Banks and the Borrowers thereof, and in the
case of an event specified in Section 4.4.2 above, such Bank shall promptly so
notify the Agent and endorse a certificate to such notice as to the specific
circumstances of such notice, and the Agent shall promptly send copies of such
notice and certificate to the other Banks and the Borrowers. Upon such date as
shall be specified in such notice (which shall not be earlier than the date such
notice is given), the obligation of (A) the Banks, in the case of such notice
given by the Agent, or (B) such Bank, in


                                      -47-



the case of such notice given by such Bank, to allow the Borrowers to select,
convert to or renew a Euro-Rate Option or select an Optional Currency (as
applicable) shall be suspended until the Agent shall have later notified the
Borrowers, or such Bank shall have later notified the Agent, of the Agent's or
such Bank's, as the case may be, determination that the circumstances giving
rise to such previous determination no longer exist. If at any time the Agent
makes a determination under Section 4.4.1 and the Borrowers have previously
notified the Agent of its selection of, conversion to or renewal of a Euro-Rate
Option and such Interest Rate Option has not yet gone into effect, such
notification shall be deemed to provide for selection of, conversion to or
renewal of the Base Rate Option otherwise available with respect to such Loans.
If any Bank notifies the Agent of a determination under Section 4.4.2, the
Borrowers shall, subject to the Borrowers' indemnification Obligations under
Section 5.6.2, as to any Loan of the Bank to which a Euro-Rate Option applies,
on the date specified in such notice either (i) as applicable, convert such Loan
to the Base Rate Option otherwise available with respect to such Loan or select
a different Optional Currency or Dollars, or (ii) prepay such Loan in accordance
with Section 5.4. Absent due notice from the Borrowers of conversion or
prepayment, such Loan shall automatically be converted to the Base Rate Option
otherwise available with respect to such Loan upon such specified date.

          4.5 SELECTION OF INTEREST RATE OPTIONS.

               If the Borrowers fail to select a new Interest Period or Optional
Currency to apply to any Borrowing Tranche of Loans under the Euro-Rate Option
at the expiration of an existing Interest Period applicable to such Borrowing
Tranche in accordance with the provisions of Section 4.2, the Borrowers shall be
deemed to have converted such Borrowing Tranche to the Base Rate Option or to a
Loan in Dollars, as applicable, commencing upon the last day of the existing
Interest Period.

                                  5. PAYMENTS

          5.1 PAYMENTS.

               All payments and prepayments to be made in respect of principal,
interest, Commitment Fees, Letter of Credit Fees, Agent's Fee or other fees or
amounts due from the Borrowers hereunder shall be payable prior to 11:00 a.m.,
Pittsburgh time, on the date when due without presentment, demand, protest or
notice of any kind, all of which are hereby expressly waived by the Borrowers,
and without set-off, counterclaim or other deduction of any nature, and an
action therefor shall immediately accrue. Such payments shall be made to the
Agent at the Principal Office for the account of PNC Bank with respect to the
Swing Loans and for the ratable accounts of the Banks with respect to the
Revolving Loans or Term Loans in Dollars except that payments of principal or
interest shall be made in the currency in which such Loan was made, and in
immediately available funds, and the Agent shall promptly distribute such
amounts to the Banks in immediately available funds, provided that in the event
payments are received by 11:00 a.m., Pittsburgh time, by the Agent with respect
to the Loans and such payments are not distributed to the Banks on the same day
received by the Agent, the Agent shall pay the Banks


                                      -48-



the Federal Funds Effective Rate in the case of Loans or other amounts due in
Dollars, or the Overnight Rate in the case of Loans or other amounts due in an
Optional Currency, with respect to the amount of such payments for each day held
by the Agent and not distributed to the Banks. The Agent's and each Bank's
statement of account, ledger or other relevant record shall, in the absence of
manifest error, be conclusive as the statement of the amount of principal of and
interest on the Loans and other amounts owing under this Agreement (including
the Equivalent Amounts of the applicable currencies where such computations are
required) and shall be deemed an "account stated."

          5.2 PRO RATA TREATMENT OF BANKS.

               Each borrowing of Revolving Credit Loans shall be allocated to
each Bank according to its Revolving Credit Ratable Share, each borrowing of
Tranche A Term Loans shall be allocated to each Bank according to its Term Loan
Ratable Share, and each borrowing of Tranche B Term Loans shall be allocated to
each Bank according to its Term Loan Ratable Share, and each selection of,
conversion to or renewal of any Interest Rate Option and each payment or
prepayment by the Borrowers with respect to principal, interest, Commitment
Fees, Letter of Credit Fees, or other fees (except for the Agent's Fee and the
fronting fee for Letters of Credit referred to in Section 2.11.2(ii)) or amounts
due from the Borrowers hereunder to the Banks with respect to the Loans, shall
(except as provided in Section 4.4.3 in the case of an event specified in
Sections 4.4, 5.4.2 or 5.6) be made in proportion to the applicable Loans
outstanding from each Bank and, if no such Loans are then outstanding, in
proportion to the Revolving Credit Ratable Share or Term Loan Ratable Share, as
applicable of each Bank. Notwithstanding any of the foregoing, each borrowing or
payment or prepayment by the Borrowers of principal, interest, fees or other
amounts from the Borrowers with respect to Swing Loans shall be made by or to
PNC Bank. The borrowing and each repayment of the Term Loans shall be allocated
50% to the Tranche A Term Loans and 50% to the Tranche B Term Loans and each
Bank's share of such borrowing or repayment shall be allocated 50% to Tranche A
Term Loans and 50% to Tranche B Term Loans such that each Bank's Term Loans
shall be comprised 50% of Tranche A Term Loans and 50% of Tranche B Term Loans.

          5.3 INTEREST PAYMENT DATES.

               Interest on Loans to which the Base Rate Option applies shall be
due and payable in arrears on the first day of each July, October, January and
April after the date hereof and on the Expiration Date or upon acceleration of
the Notes. Interest on Loans to which the Euro-Rate Option applies shall be due
and payable in the currency in which such Loan was made on the last day of each
Interest Period for those Loans and, if such Interest Period is longer than
three (3) Months, also on the 90th day of such Interest Period. Interest on
mandatory prepayments of principal under Section 5.5 shall be made in the
currency in which such Loan was made and shall be due on the date such mandatory
prepayment is due. Interest on the principal amount of each Loan or other
monetary Obligation shall be due and payable in the currency in which such Loan
was made on demand after such principal amount or other monetary Obligation
becomes due and payable (whether on the stated maturity date, upon acceleration
or otherwise).


                                      -49-



          5.4 VOLUNTARY PREPAYMENTS.

               5.4.1 RIGHT TO PREPAY.

               The Borrowers shall have the right, at its option, from time to
time to prepay the Loans in whole or part without premium or penalty (except as
provided in Section 5.4.2 below or in Section 5.6) in the currency in which such
Loan was made:

                    (i) at any time with respect to any Loan to which the Base
Rate Option applies,

                    (ii) on the last day of the applicable Interest Period with
respect to Loans to which a Euro-Rate Option applies,

                    (iii) on the date specified in a notice by any Bank pursuant
to Section 4.4 with respect to any Loan to which a Euro-Rate Option applies.

               Whenever the Borrower desires to prepay any part of the Loans, it
shall provide a prepayment notice to the Agent by 1:00 p.m. Pittsburgh time: (i)
at least one (1) Business Day prior to the date of prepayment of the Revolving
Credit Loans or Term Loans made in Dollars and (ii) at least four (4) Business
Days prior to the date of prepayment of any Loans in an Optional Currency, and
(iii) on the date of prepayment of Swing Loans, in each case setting forth the
following information:

               (x) the date, which shall be a Business Day, on which the
          proposed prepayment is to be made;

               (y) a statement indicating the application of the prepayment
          between the Revolving Credit Loans and Term Loans; and

               (z) the total principal amount and currency of such prepayment,
          the Dollar Equivalent amount of which shall not be less than
          $500,000.00 for any Swing Loan or $1,000,000.00 for any Revolving
          Credit Loan or Term Loan or such lesser amount as may be outstanding.

               All prepayment notices shall be irrevocable. The principal amount
of the Loans for which a prepayment notice is given, together with interest on
such principal amount except with respect to Loans to which the Base Rate Option
applies, shall be due and payable on the date specified in such prepayment
notice as the date on which the proposed prepayment is to be made in the
currency in which such Loans was made. All Term Loan prepayments permitted
pursuant to this Section 5.4.1 shall be applied to the unpaid installments of
principal of the Term Loans on a pro rata basis and 50% of such prepayment shall
be allocated to the Tranche A Term Loans and 50% of such prepayment shall be
allocated to the Tranche B Term Loans. Except as provided in Section 4.4.3, if
the Borrowers prepay a Loan but fails to specify the applicable Borrowing
Tranche which the Borrowers are prepaying, the prepayment shall be applied (i)
first to Revolving Credit Loans and then to Term Loans; and (ii) after giving
effect to the allocations


                                      -50-



in clause (i) above and in the preceding sentence, first to Loans to which the
Base Rate Option applies, then to Loans to which the Euro-Rate Option applies,
and then to Optional Currency Loans. Any prepayment hereunder shall be subject
to the Borrowers' Obligation to indemnify the Banks under Section 5.6.2.
Revolving Credit Loan prepayments shall not result in an reduction of the
Revolving Credit Commitments unless the Borrowers have elected to reduce such
Revolving Credit Commitments pursuant to Section 2.14.

               5.4.2 REPLACEMENT OF A BANK.

               In the event any Bank (i) gives notice under Section 2.9, Section
4.4 or Section 5.6.1, (ii) does not fund Revolving Credit Loans because the
making of such Loans would contravene any Law applicable to such Bank, or (iii)
becomes subject to the control of an Official Body (other than normal and
customary supervision), then the Borrowers shall have the right at its option,
with the consent of the Agent, which shall not be unreasonably withheld, to
prepay the Loans of such Bank in whole, together with all interest accrued
thereon, and terminate such Bank's Commitment within ninety (90) days after (x)
receipt of such Bank's notice under Section 4.4 or 5.6.1, (y) the date such Bank
has failed to fund Revolving Credit Loans because the making of such Loans would
contravene Law applicable to such Bank, or (z) the date such Bank became subject
to the control of an Official Body, as applicable; provided that the Borrowers
shall also pay to such Bank at the time of such prepayment any amounts required
under Section 5.6 and any accrued interest due on such amount and any related
fees; provided, however, that the Revolving Credit Commitment and any Term Loan
of such Bank shall be provided by one or more of the remaining Banks or a
replacement bank acceptable to the Agent; provided, further, the remaining Banks
shall have no obligation hereunder to increase their Commitments.
Notwithstanding the foregoing, the Agent may only be replaced subject to the
requirements of Section 10.14 and provided that all Letters of Credit have
expired or been terminated or replaced.

               5.4.3 CHANGE OF LENDING OFFICE.

               Each Bank agrees that upon the occurrence of any event giving
rise to increased costs or other special payments under Section 4.4.2 or 5.6.1
with respect to such Bank, it will if requested by the Borrowers, use reasonable
efforts (subject to overall policy considerations of such Bank) to designate
another Lending Office for any Loans or Letters of Credit affected by such
event, provided that such designation is made on such terms that such Bank and
its Lending Office suffer no economic, legal or regulatory disadvantage, with
the object of avoiding the consequence of the event giving rise to the operation
of such Section. Nothing in this Section 5.4.3 shall affect or postpone any of
the Obligations of the Borrowers or any other Loan Party or the rights of the
Agent or any Bank provided in this Agreement.


                                      -51-



          5.5 MANDATORY PREPAYMENTS.

               5.5.1 PREPAYMENT EVENTS.

                    5.5.1.1 SALE OF ASSETS.

               Within five (5) Business Days of any Material Sale of Assets, the
Borrowers shall make a mandatory prepayment of principal on the Term Loans equal
to the applicable percentage (as reflected on SCHEDULE 5.5.1) of the after-tax
proceeds of such sale (as estimated in good faith by the Borrower), together
with accrued interest on such principal amount.

                    5.5.1.2 MATERIAL RECOVERY EVENT.

               Within five (5) Business Days following any Material Recovery
Event if the recovered proceeds are not intended by Borrowers to be used within
180 days for the repair, replacement or restoration of damaged property (or on
such 180th day if the Borrowers intend to use such proceeds for such repair,
replacement or restoration but fails to do so within such 180-day period), the
Borrowers shall make a mandatory prepayment of principal on the Term Loans equal
to the applicable percentage (as reflected on SCHEDULE 5.5.1) of such proceeds
not intended to be so used, or not so used (as the case may be), together with
accrued interest on such principal amount.

                    5.5.1.3 ADDITIONAL INDEBTEDNESS.

               In the event the Borrowers incur Indebtedness (other than
pursuant Section 8.2.1, including, without limitation, indebtedness incurred in
connection with the Required Note Refinancing) in excess of $10,000,000.00 in
the aggregate, upon such incurrence the Borrowers shall make a mandatory
prepayment of principal on the Term Loans equal to the applicable percentage (as
reflected on SCHEDULE 5.5.1) of the proceeds of such Indebtedness in excess of
$10,000,000.00, together with accrued interest on such principal amount.

                    5.5.1.4 EQUITY ISSUANCE.

               In the event of any private placement or public sale of equity by
the Borrowers, the Borrowers shall make a mandatory prepayment of principal of
the Term Loans equal to the applicable percentage (as reflected on SCHEDULE
5.5.1 attached hereto) of the proceeds of such equity issuance (net of
reasonable costs and expenses of such issuance paid or payable to unrelated
third parties) together with accrued interest on such principal amount.

                    5.5.1.5 APPLICATION OF PROCEEDS.

               All prepayments pursuant to this Section 5.5.1 shall be applied
to the payment of the principal amount of the Term Loans by application to the
unpaid installments of principal on a pro rata basis, and 50% of such prepayment
shall be allocated to the Tranche A Term Loans and 50% of such prepayment shall
be allocated to the Tranche B Term Loans.


                                      -52-



               5.5.2 CURRENCY FLUCTUATIONS.

               If on any Computation Date the sum of the Dollar Equivalent
Revolving Facility Usage is greater than the Revolving Credit Commitments as a
result of a change in exchange rates between one (1) or more Optional Currencies
and Dollars, then the Agent shall notify the Borrowers of the same. The
Borrowers shall pay or prepay the Revolving Credit Loans (subject to Borrowers'
indemnity obligations contained in this Agreement, including, without
limitation, under Section 5.6.2) or Swing Loans within three (3) Business Days
after receiving such notice such that the sum of the Dollar Equivalent Revolving
Facility Usage exceeds the aggregate Revolving Credit Commitments.

               5.5.3 APPLICATION AMONG INTEREST RATE OPTIONS.

               All prepayments required pursuant to this Section 5.5 shall first
be applied among the Interest Rate Options to the principal amount of the
applicable Loans subject to the Base Rate Option, then to Dollar Loans
denominated in Dollars and subject to a Euro-Rate Option and then to Loans of
Optional Currencies subject to the Euro-Rate Option, and the Borrowers will be
subject to the indemnity obligation set forth in Section 5.6.2.

          5.6 ADDITIONAL COMPENSATION IN CERTAIN CIRCUMSTANCES.

               5.6.1 INCREASED COSTS OR REDUCED RETURN RESULTING FROM TAXES,
RESERVES, CAPITAL ADEQUACY REQUIREMENTS, EXPENSES, ETC.

               If any Law, guideline or interpretation or any change in any Law,
guideline or interpretation or application thereof by any Official Body charged
with the interpretation or administration thereof or compliance with any request
or directive (whether or not having the force of Law) of any central bank or
other Official Body:

                    (i) subjects any Bank to any tax or changes the basis of
taxation with respect to this Agreement, the Notes, the Loans or payments by the
Borrowers of principal, interest, Commitment Fees, or other amounts due from the
Borrowers hereunder or under the Notes (except for taxes on the overall net
income of such Bank),

                    (ii) imposes, modifies or deems applicable any reserve,
special deposit or similar requirement against credits or commitments to extend
credit extended by, or assets (funded or contingent) of, deposits with or for
the account of, or other acquisitions of funds by, any Bank or any lending
office of any Bank, or

                    (iii) imposes, modifies or deems applicable any capital
adequacy or similar requirement (A) against assets (funded or contingent) of, or
letters of credit, other credits or commitments to extend credit extended by,
any Bank, or (B) otherwise applicable to the obligations of any Bank or any
lending office of any Bank under this Agreement,

and the result of any of the foregoing is to increase the cost to, reduce the
income receivable by, or impose any expense (including loss of margin) upon any
Bank or its lending office with


                                      -53-



respect to this Agreement, the Notes or the making, maintenance or funding of
any part of the Loans (or, in the case of any capital adequacy or similar
requirement, to have the effect of reducing the rate of return on any Bank's
capital, taking into consideration such Bank's customary policies with respect
to capital adequacy) by an amount which such Bank in its sole discretion deems
to be material, such Bank shall from time to time notify the Borrowers and the
Agent of the amount determined in good faith (using any averaging and
attribution methods employed in good faith) by such Bank to be necessary to
compensate such Bank for such increase in cost, reduction of income, additional
expense or reduced rate of return. Such notice shall set forth in reasonable
detail the basis for such determination. Such amount shall be due and payable by
the Borrowers to such Bank ten (10) Business Days after such notice is given.

               5.6.2 INDEMNITY.

               In addition to the compensation required by Section 5.6.1, the
Borrowers shall indemnify each Bank against all liabilities, losses or expenses
(including loss of margin, any loss or expense incurred in liquidating or
employing deposits from third parties and any loss or expense incurred in
connection with funds acquired by a Bank to fund or maintain Loans subject to a
Euro-Rate Option) which such Bank sustains or incurs as a consequence of any:

                    (i) payment, prepayment, conversion or renewal of any Loan
to which a Euro-Rate Option applies on a day other than the last day of the
corresponding Interest Period (whether or not such payment or prepayment is
mandatory, voluntary or automatic and whether or not such payment or prepayment
is then due),

                    (ii) attempt by the Borrowers to revoke (expressly, by later
inconsistent notices or otherwise) in whole or part any Loan Requests under
Section 2.4 or Section 4.2 or notice relating to prepayments under Section 5.4,
or

                    (iii) default by the Borrowers in the performance or
observance of any covenant or condition contained in this Agreement or any other
Loan Document, including any failure of the Borrowers to pay when due (by
acceleration or otherwise) any principal, interest, Commitment Fee or any other
amount due hereunder.

               If any Bank sustains or incurs any such loss or expense, it shall
from time to time notify the Borrowers of the amount determined in good faith by
such Bank (which determination may include such assumptions, allocations of
costs and expenses and averaging or attribution methods as such Bank shall deem
reasonable) to be necessary to indemnify such Bank for such loss or expense.
Such notice shall set forth in reasonable detail the basis for such
determination. Such amount shall be due and payable by the Borrowers to such
Bank ten (10) Business Days after such notice is given.

          5.7 INTERBANK MARKET PRESUMPTION.

               For all purposes of this Agreement and each Note with respect to
any aspects of the Euro-Rate, any Loan under the Euro-Rate Option or any
Optional Currency, each


                                      -54-



Bank and Agent shall be presumed to have obtained rates, funding, currencies,
deposits, and the like in the applicable interbank market regardless of whether
it did so or not; and, each Bank's and Agent's determination of amounts payable
under, and actions required or authorized by, Section 5.6.2 shall be calculated,
at each Bank's and Agent's option, as though each Bank and Agent funded each
Borrowing Tranche of Loans under the Euro-Rate Option through the purchase of
deposits of the types and maturities corresponding to the deposits used as a
reference in accordance with the terms hereof in determining the Euro-Rate
applicable to such Loans, whether in fact that is the case.

          5.8 TAXES.

               5.8.1 NO DEDUCTIONS.

               All payments made by the Borrowers hereunder and under each Note
shall be made free and clear of and without deduction for any present or future
taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on the net income of
any Bank and all income and franchise taxes applicable to any Bank of the United
States (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "TAXES"). If the
Borrowers shall be required by Law to deduct any Taxes from or in respect of any
sum payable hereunder or under any Note, (i) the sum payable under such Note
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 5.8.1) each Bank receives an amount equal to the sum it would have
received had no such deductions been made, (ii) the Borrowers shall make such
deductions and (iii) the Borrowers shall timely pay the full amount deducted to
the relevant tax authority or other authority in accordance with applicable Law.

               5.8.2 STAMP TAXES.

               In addition, the Borrowers agree to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges, or
similar levies which arise from any payment made hereunder or from the
execution, delivery, or registration of, or otherwise with respect to, this
Agreement or any Note (hereinafter referred to as "OTHER TAXES").

               5.8.3 INDEMNIFICATION FOR TAXES PAID BY A BANK.

               The Borrowers shall indemnify each Bank for the full amount of
Taxes or Other Taxes (including, without limitation, any Taxes or Other Taxes
imposed by any jurisdiction on amounts payable under this Section 5.8.3) paid by
any Bank and any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. This indemnification shall be made within 30 days
from the date a Bank makes written demand therefor.


                                      -55-



               5.8.4 CERTIFICATE.

               Within 30 days after the date of any payment of any Taxes by the
Borrowers, the Borrowers, shall furnish to each Bank, at its address referred to
herein, the original or a certified copy of a receipt evidencing payment
thereof. If no Taxes are payable in respect of any payment by the Borrowers, the
Borrowers shall, if so requested by a Bank, provide a certificate of an officer
of the Borrowers to that effect.

               5.8.5 SURVIVAL.

               Without prejudice to the survival of any other agreement of the
Borrowers hereunder, the agreements and obligations of the Borrowers contained
in Sections 5.8.1 through 5.8.4 shall survive the payment in full of principal
and interest hereunder and under any instrument delivered hereunder.

          5.9 JUDGMENT CURRENCY.

               5.9.1 CURRENCY CONVERSION PROCEDURES FOR JUDGMENTS.

               If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder or under a Note in any currency (the
"ORIGINAL CURRENCY") into another currency (the "OTHER CURRENCY"), the parties
hereby agree, to the fullest extent permitted by Law, that the rate of exchange
used shall be that at which in accordance with normal banking procedures each
Bank could purchase the Original Currency with the Other Currency after any
premium and costs of exchange on the Business Day preceding that on which final
judgment is given.

               5.9.2 INDEMNITY IN CERTAIN EVENTS.

               The obligation of the Borrowers in respect of any sum due from
the Borrowers to any Bank hereunder shall, notwithstanding any judgment in an
Other Currency, whether pursuant to a judgment or otherwise, be discharged only
to the extent that, on the Business Day following receipt by any Bank of any sum
adjudged to be so due in such Other Currency, such Bank may in accordance with
normal banking procedures purchase the Original Currency with such Other
Currency. If the amount of the Original Currency so purchased is less than the
sum originally due to such Bank in the Original Currency, the Borrowers agree,
as a separate obligation and notwithstanding any such judgment or payment, to
indemnify such Bank against such loss.

          5.10 NOTES.

               Upon the request of any Bank, the Revolving Credit Loans or Term
Loans made by such Bank may be evidenced by a Revolving Credit Note or a Term
Note.


                                      -56-



          5.11 SETTLEMENT DATE PROCEDURES.

               In order to minimize the transfer of funds between the Banks and
the Agent, the Borrowers may borrow, repay and reborrow Swing Loans and PNC Bank
may make Swing Loans as provided in Section 2.4.2 hereof during the period
between Settlement Dates. Not later than 11:00 a.m., Pittsburgh time, on any
Settlement Date, the Agent shall notify each Bank of its Ratable Share of the
total of the Revolving Credit Loans and the Swing Loans (each a "REQUIRED
SHARE") as of such date. Prior to 1:00 p.m., Pittsburgh time, on such Settlement
Date, each Bank shall pay to the Agent the amount equal to the difference
between its Required Share and its Revolving Credit Loans, and the Agent shall
pay to each Bank its Ratable Share of all payments made by the Borrowers to the
Agent with respect to the Revolving Credit Loans. The Agent may at its option
effect settlement on any Business Day. These settlement procedures are
established solely as a matter of administrative convenience, and nothing
contained in this Section 5.11 shall relieve the Banks of their obligations to
fund Revolving Credit Loans on dates other than a Settlement Date. The Agent
may, at any time at its option, for any reason whatsoever require each Bank to
pay immediately to the Agent such Bank's Ratable Share of the outstanding
Revolving Credit Loans and, each Bank may at any time require the Agent to pay
immediately to such Bank its Ratable Share of all payments made by the Borrowers
to the Agent with respect to the Revolving Credit Loans.

                    6. REPRESENTATIONS AND WARRANTIES

          6.1 REPRESENTATIONS AND WARRANTIES.

               The Loan Parties, jointly and severally, represent and warrant to
the Agent and each of the Banks as follows:

               6.1.1 ORGANIZATION AND QUALIFICATION.

               Each Loan Party and each Subsidiary of each Loan Party is a
corporation, partnership or limited liability company duly organized, validly
existing and in good standing under the laws of its jurisdiction of
organization. Each Loan Party and each Subsidiary of each Loan Party has the
lawful power to own or lease its properties and to engage in the business it
presently conducts or proposes to conduct. Each Loan Party and each Subsidiary
of each Loan Party is duly licensed or qualified and in good standing in each
jurisdiction listed on SCHEDULE 6.1.1 and in all other jurisdictions where the
property owned or leased by it or the nature of the business transacted by it or
both makes such licensing or qualification necessary except where the failure to
do so would result in a Material Adverse Change.

               6.1.2 SUBSIDIARIES.

               SCHEDULE 6.1.2 states the name of each of the Company's
Subsidiaries, its jurisdiction of incorporation, its authorized capital stock,
the issued and outstanding shares (referred to herein as the "SUBSIDIARY
SHARES") and the owners thereof if it is a corporation, its outstanding
partnership interests (the "PARTNERSHIP INTERESTS") if it is a partnership and
its


                                      -57-



outstanding limited liability company interests, interests assigned to managers
thereof and the voting rights associated therewith (the "LLC INTERESTS") if it
is a limited liability company. The Borrowers and each Subsidiary of the
Borrowers have good and marketable title to all of the Subsidiary Shares,
Partnership Interests and LLC Interests it purports to own, free and clear, in
each case, of any Lien. All Subsidiary Shares, Partnership Interests and LLC
Interests have been validly issued, and all Subsidiary Shares are fully paid and
nonassessable. All capital contributions and other consideration required to be
made or paid in connection with the issuance of the Partnership Interests and
LLC Interests have been made or paid, as the case may be. There are no options,
warrants or other rights outstanding to purchase any such Subsidiary Shares,
Partnership Interests or LLC Interests except as indicated on SCHEDULE 6.1.2. As
of the Closing Date each of the Material Subsidiaries of the Company is either a
Borrower or a Guarantor.

               6.1.3 POWER AND AUTHORITY.

               Each Loan Party has full power to enter into, execute, deliver
and carry out this Agreement and the other Loan Documents to which it is a
party, to incur the Indebtedness contemplated by the Loan Documents and to
perform its Obligations under the Loan Documents to which it is a party, and all
such actions have been duly authorized by all necessary proceedings on its part.

               6.1.4 VALIDITY AND BINDING EFFECT.

               This Agreement has been duly and validly executed and delivered
by each Loan Party, and each other Loan Document which any Loan Party is
required to execute and deliver on or after the date hereof will have been duly
executed and delivered by such Loan Party on the required date of delivery of
such Loan Document. This Agreement and each other Loan Document constitutes, or
will constitute, legal, valid and binding obligations of each Loan Party which
is or will be a party thereto on and after its date of delivery thereof,
enforceable against such Loan Party in accordance with its terms, except to the
extent that enforceability of any of such Loan Document may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforceability of creditors' rights generally or limiting the
right of specific performance.

               6.1.5 NO CONFLICT.

               Neither the execution and delivery of this Agreement or the other
Loan Documents by any Loan Party nor the consummation of the transactions herein
or therein contemplated or compliance with the terms and provisions hereof or
thereof by any of them will conflict with, constitute a default under or result
in any breach of (i) the terms and conditions of the certificate of
incorporation, bylaws, certificate of limited partnership, partnership
agreement, certificate of formation, limited liability company agreement or
other organizational documents of such Loan Party or (ii) any Law or any
material agreement or instrument or order, writ, judgment, injunction or decree
to which such Loan Party or any of its Subsidiaries is a party or by which it or
any of its Subsidiaries is bound or to which it is subject, or result in the
creation or enforcement of any Lien, charge or encumbrance whatsoever upon any
property (now or


                                      -58-



hereafter acquired) of such Loan Party or any of its Subsidiaries (other than
Liens granted under the Loan Documents).

               6.1.6 LITIGATION.

               There are no actions, suits, proceedings or investigations
pending or, to the knowledge of any Loan Party, threatened against any Loan
Party or any Subsidiary of such Loan Party at law or equity before any Official
Body which individually or in the aggregate would result in any Material Adverse
Change. None of the Loan Parties or any Subsidiaries of any Loan Party is in
violation of any order, writ, injunction or any decree of any Official Body
which would result in any Material Adverse Change.

               6.1.7 TITLE TO PROPERTIES.

               Each Loan Party and each Subsidiary of each Loan Party has good
and marketable title to or valid leasehold interest in all properties, assets
and other rights which it purports to own or lease or which are reflected as
owned or leased on its books and records, free and clear of all Liens and
encumbrances except Permitted Liens, and subject to the terms and conditions of
the applicable leases. All leases of property are in full force and effect
without the necessity for any consent which has not previously been obtained
upon consummation of the transactions contemplated hereby.

               6.1.8 FINANCIAL STATEMENTS.

                    6.1.8.1 HISTORICAL STATEMENTS.

                    The Company has delivered to the Agent copies of its audited
consolidated year-end financial statements for and as of December 31, 2003, 2004
and 2005 (collectively, "HISTORICAL STATEMENTS"). The Historical Statements were
compiled from the books and records maintained by the Borrowers' management, are
correct and complete and fairly represent the consolidated financial condition
of the Company and its Subsidiaries as of their dates and the results of
operations for the fiscal periods then ended and have been prepared in
accordance with GAAP consistently applied.

                    6.1.8.2 ACCURACY OF FINANCIAL STATEMENTS.

                    Neither the Borrowers nor any Subsidiary of the Borrowers
have any liabilities, contingent or otherwise, or forward or long-term
commitments that are not disclosed in the Historical Statements or in the notes
thereto, and except as disclosed therein there are no unrealized or anticipated
losses from any commitments of the Borrowers or any Subsidiary of the Borrowers
which would cause a Material Adverse Change. Since December 31, 2005, no
Material Adverse Change has occurred.


                                      -59-



               6.1.9 USE OF PROCEEDS; MARGIN STOCK; SECTION 20 SUBSIDIARIES.

                    6.1.9.1 GENERAL.

                    The Loan Parties intend to use Letters of Credit and the
proceeds of the Loans in accordance with Sections 2.10 and 3.4.

                    6.1.9.2 MARGIN STOCK.

                    None of the Loan Parties or any Subsidiaries of any Loan
Party engages or intends to engage principally, or as one of its important
activities, in the business of extending credit for the purpose, immediately,
incidentally or ultimately, of purchasing or carrying margin stock (within the
meaning of Regulation U). No part of the proceeds of any Loan has been or will
be used, immediately, incidentally or ultimately, to purchase or carry any
margin stock or to extend credit to others for the purpose of purchasing or
carrying any margin stock or to refund Indebtedness originally incurred for such
purpose, or for any purpose which entails a violation of or which is
inconsistent with the provisions of the regulations of the Board of Governors of
the Federal Reserve System. None of the Loan Parties or any Subsidiary of any
Loan Party holds or intends to hold margin stock in such amounts that more than
25% of the reasonable value of the assets of any Loan Party or Subsidiary of any
Loan Party are or will be represented by margin stock.

                    6.1.9.3 SECTION 20 SUBSIDIARIES.

                    The Borrowers do not intend to use and shall not use any
portion of the proceeds of the Loans, directly or indirectly, to purchase during
the underwriting period, or for thirty (30) days thereafter, Ineligible
Securities being underwritten by a Section 20 Subsidiary.

               6.1.10 FULL DISCLOSURE.

               Neither this Agreement nor any other Loan Document, nor any
certificate, statement, agreement or other documents furnished to the Agent or
any Bank in connection herewith or therewith, contains any untrue statement of a
material fact or omits to state a material fact necessary in order to make the
statements contained herein and therein, in light of the circumstances under
which they were made, not misleading. There is no fact known to any Loan Party
which materially adversely affects the business, property, assets, financial
condition, results of operations or prospects of any Loan Party or Subsidiary of
any Loan Party which has not been set forth in this Agreement or in the
certificates, statements, agreements or other documents furnished in writing to
the Agent and the Banks prior to or at the date hereof in connection with the
transactions contemplated hereby.

               6.1.11 TAXES.

               All federal, state, local and other tax returns required to have
been filed with respect to each Loan Party and each Subsidiary of each Loan
Party have been filed, and


                                      -60-



payment or adequate provision has been made for the payment of all taxes, fees,
assessments and other governmental charges which have or may become due pursuant
to said returns or to assessments received, except to the extent that such
taxes, fees, assessments and other charges are being contested in good faith by
appropriate proceedings diligently conducted and for which such reserves or
other appropriate provisions, if any, as shall be required by GAAP shall have
been made. There are no agreements or waivers extending the statutory period of
limitations applicable to any federal income tax return of any Loan Party or
Subsidiary of any Loan Party for any period.

               6.1.12 CONSENTS AND APPROVALS.

               No consent, approval, exemption, order or authorization of, or a
registration or filing with, any Official Body or any other Person is required
by any Law or any agreement in connection with the execution, delivery and
carrying out of this Agreement and the other Loan Documents by any Loan Party,
except as listed on SCHEDULE 6.1.12, all of which shall have been obtained or
made on or prior to the Closing Date except as otherwise indicated on SCHEDULE
6.1.12.

               6.1.13 NO EVENT OF DEFAULT; COMPLIANCE WITH INSTRUMENTS.

               No event has occurred and is continuing and no condition exists
or will exist after giving effect to the borrowings or other extensions of
credit to be made on the Closing Date under or pursuant to the Loan Documents
which constitutes an Event of Default or Potential Default. None of the Loan
Parties or any Subsidiaries of any Loan Party is in violation of (i) any term of
its certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, limited liability company
agreement or other organizational documents or (ii) any material agreement or
instrument to which it is a party or by which it or any of its properties may be
subject or bound where such violation would constitute a Material Adverse
Change.

               6.1.14 PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.

               Each Loan Party and each Subsidiary of each Loan Party owns or
possesses all the material patents, trademarks, service marks, trade names,
copyrights, licenses, registrations, franchises, permits and rights necessary to
own and operate its properties and to carry on its business as presently
conducted and planned to be conducted by such Loan Party or Subsidiary, without
known possible, alleged or actual conflict with the rights of others. All
patents, trademarks, service marks, trade names, copyrights, licenses,
registrations, franchises and permits of each Loan Party and each Subsidiary of
each Loan Party the absence of which. individually or collectively, would result
in a Material Adverse Change are listed and described on SCHEDULE 6.1.14.


                                      -61-



               6.1.15 SECURITY INTERESTS.

               The Liens and security interests granted to the Agent, for the
benefit of the Banks, pursuant to the Pledge Agreement in the Collateral
constitute and will continue to constitute Prior Security Interests under the
Uniform Commercial Code as in effect in each applicable jurisdiction (the
"UNIFORM COMMERCIAL CODE") or other applicable Law entitled to all the rights,
benefits and priorities provided by the Uniform Commercial Code or such Law.
Upon the filing of financing statements relating to said security interests in
each office and in each jurisdiction where required in order to perfect the
security interests described above and taking possession of any stock
certificates or other certificates evidencing the Pledged Collateral as
applicable, all such action as is necessary or advisable to establish such
rights of the Agent will have been taken, and there will be upon execution and
delivery of the Pledge Agreement, such filings and such taking of possession, no
necessity for any further action in order to preserve, protect and continue such
rights, except the filing of continuation statements with respect to such
financing statements within six months prior to each five-year anniversary of
the filing of such financing statements. All filing fees and other expenses in
connection with each such action have been or will be paid by the Borrower.

               6.1.16 STATUS OF THE PLEDGED COLLATERAL.

               All the shares of capital stock, Partnership Interests or LLC
Interests included in the Pledged Collateral to be pledged pursuant to the
Pledge Agreement are or will be upon issuance validly issued and nonassessable
and owned beneficially and of record by the pledgor free and clear of any Lien
or restriction on transfer, except as otherwise provided by the Pledge Agreement
and except as the right of the Banks to dispose of the Subsidiary Shares,
Partnership Interests or LLC Interests may be limited by the Securities Act of
1933, as amended, and the regulations promulgated by the Securities and Exchange
Commission thereunder and by applicable state securities laws. There are no
shareholder, partnership, limited liability company or other agreements or
understandings with respect to the shares of capital stock, Partnership
Interests or LLC Interests included in the Pledged Collateral except for the
partnership agreements and limited liability company agreements described on
SCHEDULE 6.1.16. The Loan Parties have delivered true and correct copies of such
partnership agreements and limited liability company agreements to the Agent.

               6.1.17 INSURANCE.

               No notice has been given or claim made and no grounds exist to
cancel or avoid any of such policies or bonds or to reduce the coverage provided
thereby. Such policies and bonds provide adequate coverage from reputable and
financially sound insurers in amounts sufficient to insure the assets and risks
of each Loan Party and each Subsidiary of each Loan Party in accordance with
prudent business practice in the industry of the Loan Parties and their
Subsidiaries.


                                      -62-



               6.1.18 COMPLIANCE WITH LAWS.

               The Loan Parties and their Subsidiaries are in compliance in all
material respects with all applicable Laws (other than Environmental Laws which
are specifically addressed in Section 6.1.23) in all jurisdictions in which any
Loan Party or Subsidiary of any Loan Party is presently or will be doing
business except where the failure to do so would not constitute a Material
Adverse Change.

               6.1.19 MATERIAL CONTRACTS; BURDENSOME RESTRICTIONS.

               Except for the Prior Senior Credit Facility (which will be
terminated and all obligations thereunder will be satisfied in full on the
Closing Date), the material contracts filed or incorporated by reference in the
Company's Annual Report on form 10-Kfor the fiscal year ended December 31, 2005
are valid, binding and enforceable upon such Loan Party or Subsidiary and each
of the other parties thereto in accordance with their respective terms, and
there is no default thereunder, to the Loan Parties' knowledge, with respect to
parties other than such Loan Party or Subsidiary. None of the Loan Parties or
their Subsidiaries is bound by any contractual obligation, or subject to any
restriction in any organization document, or any requirement of Law which would
result in a Material Adverse Change.

               6.1.20 INVESTMENT COMPANIES; REGULATED ENTITIES.

               None of the Loan Parties or any Subsidiaries of any Loan Party is
an "investment company" registered or required to be registered under the
Investment Company Act of 1940 or under the "control" of an "investment company"
as such terms are defined in the Investment Company Act of 1940 and shall not
become such an "investment company" or under such "control." None of the Loan
Parties or any Subsidiaries of any Loan Party is subject to any other Federal or
state statute or regulation limiting its ability to incur Indebtedness for
borrowed money.

               6.1.21 PLANS AND BENEFIT ARRANGEMENTS.

               Except as set forth on SCHEDULE 6.1.21:

                    (i) The Borrowers and each other member of the ERISA Group
are in compliance in all material respects with any applicable provisions of
ERISA with respect to all Benefit Arrangements, Plans and Multiemployer Plans.
There has been no Prohibited Transaction with respect to any Benefit Arrangement
or any Plan or, to the best knowledge of the Borrowers, with respect to any
Multiemployer Plan or Multiple Employer Plan, which could result in any material
liability of the Borrowers or any other member of the ERISA Group. The Borrowers
and all other members of the ERISA Group have made when due any and all payments
required to be made under any agreement relating to a Multiemployer Plan or a
Multiple Employer Plan or any Law pertaining thereto. With respect to each Plan
and Multiemployer Plan, the Borrowers and each other member of the ERISA Group
(i) have fulfilled in all material respects their obligations under the minimum
funding standards of


                                      -63-



ERISA, (ii) have not incurred any liability to the PBGC, and (iii) have not had
asserted against them any penalty for failure to fulfill the minimum funding
requirements of ERISA. All Plans, Benefit Arrangements and Multiemployer Plans
have been administered in accordance with their terms and applicable Law.

                    (ii) To the best of the Borrowers' knowledge, each
Multiemployer Plan and Multiple Employer Plan is able to pay benefits thereunder
when due.

                    (iii) Neither the Borrowers nor any other member of the
ERISA Group has instituted or intends to institute proceedings to terminate any
Plan.

                    (iv) No event requiring notice to the PBGC under Section
302(f)(4)(A) of ERISA has occurred or is reasonably expected to occur with
respect to any Plan, and no amendment with respect to which security is required
under Section 307 of ERISA has been made or is reasonably expected to be made to
any Plan.

                    (v) The aggregate actuarial present value of all benefit
liabilities (whether or not vested) under each Plan, determined on a plan
termination basis, as disclosed in, and as of the date of, the most recent
actuarial report for such Plan, does not exceed the aggregate fair market value
of the assets of such Plan.

                    (vi) Neither the Borrowers nor any other member of the ERISA
Group has incurred or reasonably expects to incur any material withdrawal
liability under ERISA to any Multiemployer Plan or Multiple Employer Plan.
Neither the Borrowers nor any other member of the ERISA Group has been notified
by any Multiemployer Plan or Multiple Employer Plan that such Multiemployer Plan
or Multiple Employer Plan has been terminated within the meaning of Title IV of
ERISA and, to the best knowledge of the Borrowers, no Multiemployer Plan or
Multiple Employer Plan is reasonably expected to be reorganized or terminated,
within the meaning of Title IV of ERISA.

                    (vii) To the extent that any Benefit Arrangement is insured,
the Borrowers and all other members of the ERISA Group have paid when due all
premiums required to be paid for all periods through the Closing Date. To the
extent that any Benefit Arrangement is funded other than with insurance, the
Borrowers and all other members of the ERISA Group have made when due all
contributions required to be paid for all periods through the Closing Date.

                    (viii) All Plans, Benefit Arrangements and Multiemployer
Plans have been administered in all material respects and in accordance with
their terms and applicable Law.

               6.1.22 EMPLOYMENT MATTERS.

               Each of the Loan Parties and each of their Subsidiaries is in
compliance with the Labor Contracts and all applicable federal, state and local
labor and employment Laws including those related to equal employment
opportunity and affirmative action, labor relations,


                                      -64-



minimum wage, overtime, child labor, medical insurance continuation, worker
adjustment and relocation notices, immigration controls and worker and
unemployment compensation, where the failure to comply would constitute a
Material Adverse Change. There are no outstanding grievances, arbitration awards
or appeals therefrom arising out of the Labor Contracts or current or, to the
knowledge of any Loan Party, threatened strikes, picketing, handbilling or other
work stoppages or slowdowns at facilities of any of the Loan Parties or any of
their Subsidiaries which in any case would constitute a Material Adverse Change.
The Borrowers have delivered to the Agent true and correct copies of each of the
Labor Contracts (excluding individual employment contracts with individual
employees).

               6.1.23 ENVIRONMENTAL MATTERS.

               Except (i) as disclosed in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2005, including Note 19 to the
Consolidated Financial Statements or such matters to the extent that reserves
have been set aside as set forth in such statements and (ii) except to the
extent that a Material Adverse Change would not result therefrom:

                    (i) None of the Loan Parties has received, or has any reason
to believe that it might receive, any Environmental Complaint, whether directed
or issued to such Loan Party or relating or pertaining to any prior owner,
operator or occupant of the Property , and has no reason to believe that it
might receive any Environmental Complaint.

                    (ii) No activity of any Loan Party at the Property is being
or has been conducted in violation of any Environmental Law or Required
Environmental Permit and to the knowledge of any Loan Party, no activity of any
prior owner, operator or occupant of the Property was conducted in violation of
any Environmental Law.

                    (iii) There are no Regulated Substances present on, in,
under, or emanating from, or to any Loan Party's knowledge emanating to, the
Property or any portion thereof which result in Contamination.

                    (iv) Each Loan Party has all Required Environmental Permits
and all such Required Environmental Permits are in full force and effect.

                    (v) Each Loan Party has submitted to an Official Body and/or
maintains, as appropriate, all Required Environmental Notices.

                    (vi) No structures, improvements, equipment, fixtures,
impoundments, pits, lagoons or aboveground or underground storage tanks located
on the Property contain or use, except in compliance with Environmental Laws and
Required Environmental Permits, Regulated Substances or otherwise are operated
or maintained except in compliance with Environmental Laws and Required
Environmental Permits.

                    (vii) No portion of the Property is identified or to the
knowledge of any Loan Party, proposed to be identified on any list of
contaminated properties or


                                      -65-



other properties which pursuant to Environmental Laws are the subject of a
investigation or remediation action by an Official Body, nor to the knowledge of
any Loan Party is any portion of any property adjoining or in the proximity of
such portion of the Property identified or proposed to be identified on any such
list.

                    (viii) No lien or other encumbrance authorized by
Environmental Laws exists against the Property and the Loan Parties Borrowers
have no reason to believe that such a lien or encumbrance may be imposed.

               6.1.24 SENIOR DEBT STATUS.

                    The Obligations of each Loan Party under this Agreement, the
Notes, the Guaranty Agreement and each of the other Loan Documents to which it
is a party do rank and will rank at least pari passu in priority of payment with
all other Indebtedness of such Loan Party. There is no Lien upon or with respect
to any of the properties or income of any Loan Party or Subsidiary of any Loan
Party which secures indebtedness or other obligations of any Person except for
Permitted Liens.

               6.1.25 ANTI-TERRORISM LAWS.

                    6.1.25.1 GENERAL.

                    None of the Loan Parties nor or any Subsidiaries of any Loan
Party (or to its knowledge any Affiliate of any Loan Party), is in violation of
any Anti-Terrorism Law or engages in or conspires to engage in any transaction
that evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

                    6.1.25.2 EXECUTIVE ORDER NO. 13224.

                    None of the Loan Parties, nor or any Subsidiaries of any
Loan Party (or to its knowledge any Affiliate of any Loan Party or, to the
knowledge of any Loan Party, their respective agents acting or benefiting in any
capacity in connection with the Loans, Letters of Credit or other transactions
hereunder), is any of the following (each a "BLOCKED PERSON"):

                    (i) a Person that is listed in the annex to, or is otherwise
subject to the provisions of, the Executive Order No. 13224;

                    (ii) a Person owned or controlled by, or acting for or on
behalf of, any Person that is listed in the annex to, or is otherwise subject to
the provisions of, the Executive Order No. 13224;

                    (iii) a Person or entity with which any Bank is prohibited
from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law;


                                      -66-


                    (iv) a Person or entity that commits, threatens or conspires
to commit or supports "terrorism" as defined in the Executive Order No. 13224;

                    (v) a Person or entity that is named as a "specially
designated national" on the most current list published by the U.S. Treasury
Department Office of Foreign Asset Control at its official website or any
replacement website or other replacement official publication of such list, or

                    (vi) a person or entity who is affiliated or associated with
a person or entity listed above.

                    No Loan Party or, to the knowledge of any Loan Party, any of
its agents acting in any capacity in connection with the Loans, Letters of
Credit or other transactions hereunder (i) conducts any business or engages in
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, or (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order No. 13224.

          6.2 CONTINUATION OF REPRESENTATIONS.

               The Loan Parties make the representations and warranties in this
Section 6 on the date hereof and on the Closing Date and each date thereafter on
which a Loan is made or a Letter of Credit is issued as provided in and subject
to Sections 2 and 7.

          6.3 UPDATES TO SCHEDULES.

               Should any of the information or disclosures provided on any of
the Schedules attached hereto become outdated or incorrect in any material
respect, the Borrowers shall promptly provide the Agent in writing with such
revisions or updates to such Schedule as may be necessary or appropriate to
update or correct same; provided, however, that no Schedule shall be deemed to
have been amended, modified or superseded by any such correction or update, nor
shall any breach of warranty or representation resulting from the inaccuracy or
incompleteness of any such Schedule be deemed to have been cured thereby, unless
and until the Required Banks, in their sole and absolute discretion, shall have
accepted in writing such revisions or updates to such Schedule.

           7. CONDITIONS OF LENDING AND ISSUANCE OF LETTERS OF CREDIT

               The obligation of each Bank to make Loans and of the Agent to
issue Letters of Credit hereunder is subject to the performance by each of the
Loan Parties of its Obligations to be performed hereunder at or prior to the
making of any such Loans or issuance of such Letters of Credit and to the
satisfaction of the following further conditions:


                                      -67-



          7.1 FIRST LOANS AND LETTERS OF CREDIT.

               On the Closing Date:

               7.1.1 OFFICER'S CERTIFICATE.

               The representations and warranties of each of the Loan Parties
contained in Section 6 and in each of the other Loan Documents shall be true and
accurate on and as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of such date (except
representations and warranties which relate solely to an earlier date or time,
which representations and warranties shall be true and correct on and as of the
specific dates or times referred to therein), and each of the Loan Parties shall
have performed and complied with all covenants and conditions hereof and
thereof, no Event of Default or Potential Default shall have occurred and be
continuing or shall exist; and there shall be delivered to the Agent for the
benefit of each Bank a certificate of each of the Loan Parties (other than the
German Borrowers which shall comply with Section 8.1.14), dated the Closing Date
and signed by the Chief Executive Officer, President or Chief Financial Officer
of each of the Loan Parties, to each such effect.

               7.1.2 SECRETARY'S CERTIFICATE.

               There shall be delivered to the Agent for the benefit of each
Bank a certificate dated the Closing Date and signed by the Secretary or an
Assistant Secretary of each of the Loan Parties (other than the German Borrowers
which shall comply with Section 8.1.14), certifying as appropriate as to:

                    (i) all action taken by each Loan Party in connection with
this Agreement and the other Loan Documents;

                    (ii) the names of the officer or officers authorized to sign
this Agreement and the other Loan Documents and the true signatures of such
officer or officers and specifying the Authorized Officers permitted to act on
behalf of each Loan Party for purposes of this Agreement and the true signatures
of such officers, on which the Agent and each Bank may conclusively rely; and

                    (iii) copies of its organizational documents, including its
certificate of incorporation, bylaws, certificate of limited partnership,
partnership agreement, certificate of formation, and limited liability company
agreement as in effect on the Closing Date certified by the appropriate state
official where such documents are filed in a state office together with
certificates from the appropriate state officials as to the continued existence
and good standing of each Loan Party in each state where organized or qualified
to do business.

               7.1.3 DELIVERY OF LOAN DOCUMENTS.

               The Guaranty Agreement shall have been duly executed and
delivered to the Agent for the benefit of the Banks.


                                      -68-



               7.1.4 OPINION OF COUNSEL.

               There shall be delivered to the Agent for the benefit of each
Bank a written opinion of counsel to each of the Loan Parties (other than
counsel for the German Borrowers and the UK Borrower; opinions of such counsel
shall be delivered in accordance with Section 8.1.14), including Ballard Spahr
Andrews & Ingersoll, LLP, as may be acceptable to the Agent, dated the Closing
Date and in form and substance satisfactory to the Agent and its counsel:

                    (i) as to the matters set forth in EXHIBIT 7.1.4; and

                    (ii) as to such other matters incident to the transactions
contemplated herein as the Agent may reasonably request.

               7.1.5 LEGAL DETAILS.

               All legal details and proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be in form and substance satisfactory to the Agent and counsel for the Agent,
and the Agent shall have received all such other counterpart originals or
certified or other copies of such documents and proceedings in connection with
such transactions, in form and substance satisfactory to the Agent and said
counsel, as the Agent or said counsel may reasonably request.

               7.1.6 PAYMENT OF FEES.

               The Borrowers shall have paid or caused to be paid to the Agent
for itself and for the account of the Banks, as appropriate, to the extent not
previously paid all commitment and other fees accrued through the Closing Date
and the costs and expenses for which the Agent and the Banks are entitled to be
reimbursed.

               7.1.7 CONSENTS.

               All material consents required to effectuate the transactions
contemplated hereby as set forth on SCHEDULE 6.1.12 shall have been obtained.

               7.1.8 FINANCED DOMESTIC ACQUISITION

               The Financed Domestic Acquisition shall have closed on terms and
conditions set forth in the acquisitions documents related thereto which shall
be reasonably acceptable to the Agent and the Banks and the Borrowers shall have
delivered copies of such documents to the Agent and the Banks.

               7.1.9 CLOSING DATE COMPLIANCE CERTIFICATE

               The Company shall have delivered a Compliance Certificate dated
as of the Closing Date which demonstrates that the Borrowers are in compliance
with its financial covenants as of the Closing Date (measuring Consolidated
Adjusted EBITDA and other income


                                      -69-



and expense items through December 31, 2005 and measuring Indebtedness as of the
Closing Date after giving effect to the Loans made and Letters of Credit issued
on such date).

               7.1.10 OFFICER'S CERTIFICATE REGARDING MACS.

               Since December 31, 2005, no Material Adverse Change shall have
occurred; prior to the Closing Date, there shall have been no material change in
the management of any Loan Party or Subsidiary of any Loan Party; and there
shall have been delivered to the Agent for the benefit of each Bank a
certificate dated the Closing Date and signed by the Chief Executive Officer,
President or Chief Financial Officer of each Loan Party to each such effect.

               7.1.11 NO VIOLATION OF LAWS.

               The making of the Loans and the issuance of the Letters of Credit
shall not contravene any Law applicable to any Loan Party.

               7.1.12 NO ACTIONS OR PROCEEDINGS.

               No action, proceeding, investigation, regulation or legislation
shall have been instituted, threatened or proposed before any court,
governmental agency or legislative body to enjoin, restrain or prohibit, or to
obtain damages in respect of, this Agreement, the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby or which, in the
Agent's sole discretion, would make it inadvisable to consummate the
transactions contemplated by this Agreement or any of the other Loan Documents.

          7.2 EACH ADDITIONAL LOAN OR LETTER OF CREDIT.

               At the time of making any Loans or issuing any Letters of Credit
other than Loans made or Letters of Credit issued on the Closing Date and after
giving effect to the proposed extensions of credit: the representations and
warranties of the Loan Parties contained in Section 6 and in the other Loan
Documents shall be true on and as of the date of such additional Loan or Letter
of Credit with the same effect as though such representations and warranties had
been made on and as of such date (except representations and warranties which
expressly relate solely to an earlier date or time, which representations and
warranties shall be true and correct on and as of the specific dates or times
referred to therein) and the Loan Parties shall have performed and complied with
all covenants and conditions hereof; no Event of Default or Potential Default
shall have occurred and be continuing or shall exist; the making of the Loans or
issuance of such Letter of Credit shall not contravene any Law applicable to any
Loan Party or Subsidiary of any Loan Party or any of the Banks; and the
Borrowers shall have delivered to the Agent a duly executed and completed Loan
Request or application for a Letter of Credit as the case may be.

          7.3 LOANS TO FUND ACQUISITIONS.

               Prior to the making of any Loan or issuance of any Letter of
Credit to finance any acquisitions (other than the Approved Acquisitions), the
Borrowers shall have


                                      -70-



delivered to the Agent the documents, pro forma statements, certificates, other
material required by Section 8.2.6 and such other evidence requested by the
Agent in order that the Agent can determine whether such proposed acquisition
qualifies as a Permitted Acquisition; and the Agent shall have so determined
that such acquisition so qualifies as a Permitted Acquisition.

                                  8. COVENANTS

          8.1 AFFIRMATIVE COVENANTS.

          The Loan Parties, jointly and severally, covenant and agree that until
payment in full of the Loans, Reimbursement Obligations and Letter of Credit
Borrowings, and interest thereon, expiration or termination of all Letters of
Credit, satisfaction of all of the Loan Parties' other Obligations under the
Loan Documents and termination of the Commitments, the Loan Parties shall comply
at all times with the following affirmative covenants:

               8.1.1 PRESERVATION OF EXISTENCE, ETC.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain its legal existence as a corporation, limited partnership or
limited liability company and its license or qualification and good standing in
each jurisdiction in which its ownership or lease of property or the nature of
its business makes such license or qualification necessary, except (i) as
otherwise expressly permitted in Section 8.2.6 or (ii) except to the extent the
failure to do so would not be reasonably expected the result in a Material
Adverse Change.

               8.1.2 PAYMENT OF LIABILITIES, INCLUDING TAXES, ETC.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, duly pay and discharge all material liabilities to which it is subject or
which are asserted against it, promptly as and when the same shall become due
and payable, including all material taxes, assessments and governmental charges
upon it or any of its properties, assets, income or profits, prior to the date
on which penalties attach thereto, except to the extent that such material
liabilities, including taxes, assessments or charges, are being contested in
good faith and by appropriate and lawful proceedings diligently conducted and
for which such reserve or other appropriate provisions, if any, as shall be
required by GAAP shall have been made, but only to the extent that failure to
discharge any such material liabilities would not result in any additional
liability which would adversely affect to a material extent the financial
condition of any Loan Party or Subsidiary of any Loan Party or which would
affect the Collateral, provided that the Loan Parties and their Subsidiaries
will pay all such material liabilities forthwith upon the commencement of
proceedings to foreclose any Lien which may have attached as security therefor.

               8.1.3 MAINTENANCE OF INSURANCE.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, insure its properties and assets against loss or damage by fire and such
other insurable hazards as such


                                      -71-



assets are commonly insured (including fire, extended coverage, property damage,
workers' compensation, public liability and business interruption insurance) and
against other risks (including errors and omissions) in such amounts as similar
properties and assets are insured by prudent companies in similar circumstances
carrying on similar businesses, and with reputable and financially sound
insurers, including self-insurance to the extent customary.

               8.1.4 MAINTENANCE OF PROPERTIES AND LEASES.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in good repair, working order and condition (ordinary wear and tear
excepted) in accordance with the general practice of other businesses of similar
character and size, all of those properties useful or necessary to its business,
and from time to time, such Loan Party will make or cause to be made all
appropriate repairs, renewals or replacements thereof, except, in each case,
where the failure to do so would not reasonably be expected to be materially
adverse to the Loan Parties.

               8.1.5 MAINTENANCE OF PATENTS, TRADEMARKS, ETC.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, maintain in full force and effect all patents, trademarks, service marks,
trade names, copyrights, licenses, franchises, permits and other authorizations
deemed necessary by such Loan Party for the ownership and operation of its
properties and business if the failure so to maintain the same would constitute
a Material Adverse Change.

               8.1.6 VISITATION RIGHTS.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, permit any of the officers or authorized employees or representatives of the
Agent or any of the Banks to visit and inspect any of its properties and to
examine and make excerpts from its books and records and discuss its business
affairs, finances and accounts with its officers, all in such detail and at such
times during normal business hours and as often as any of the Banks may
reasonably request, provided that each Bank shall provide the Borrowers and the
Agent with reasonable notice prior to any visit or inspection. In the event any
Bank desires to conduct an audit of any Loan Party, such Bank shall make a
reasonable effort to conduct such audit contemporaneously with any audit to be
performed by the Agent.

               8.1.7 KEEPING OF RECORDS AND BOOKS OF ACCOUNT.

               The Borrowers shall, and shall cause each Subsidiary of the
Borrowers to, maintain and keep proper books of record and account which enable
the Borrowers and their Subsidiaries to issue financial statements in accordance
with GAAP and as otherwise required by applicable Laws of any Official Body
having jurisdiction over the Borrowers or any Subsidiary of the Borrowers, and
in which full, true and correct entries shall be made in all material respects
of all its dealings and business and financial affairs.


                                      -72-



               8.1.8 PLANS AND BENEFIT ARRANGEMENTS.

               The Borrowers shall, and shall cause each other member of the
ERISA Group to, comply with ERISA, the Internal Revenue Code and other
applicable Laws applicable to Plans and Benefit Arrangements except where such
failure, alone or in conjunction with any other failure, would not result in a
Material Adverse Change. Without limiting the generality of the foregoing, the
Borrowers shall cause all of its Plans and all Plans maintained by any member of
the ERISA Group to be funded in accordance with the minimum funding requirements
of ERISA and shall make, and cause each member of the ERISA Group to make, in a
timely manner, all contributions due to Plans, Benefit Arrangements and
Multiemployer Plans.

               8.1.9 COMPLIANCE WITH LAWS.

               Each Loan Party shall, and shall cause each of its Subsidiaries
to, comply with all applicable Laws, including all Environmental Laws, in all
respects, provided that it shall not be deemed to be a violation of this Section
8.1.9 if any failure to comply with any Law would not result in fines,
penalties, remediation costs, other similar liabilities or injunctive relief
which in the aggregate would constitute a Material Adverse Change.

               8.1.10 FURTHER ASSURANCES.

               Each Loan Party shall, from time to time, at its expense,
faithfully preserve and protect the Agent's Lien on and Prior Security Interest
in the Collateral as a continuing first priority perfected Lien, subject only to
Permitted Liens, and shall do such other acts and things as the Agent, in its
sole discretion, may deem necessary or advisable from time to time in order to
preserve, perfect and protect the Liens granted under the Loan Documents and to
exercise and enforce its rights and remedies thereunder with respect to the
Collateral.

               8.1.11 ANTI-TERRORISM LAWS.

               The Loan Parties shall not knowingly (i) conduct any business or
engage in any transaction or dealing with any Blocked Person, including the
making or receiving any contribution of funds, goods or services to or for the
benefit of any Blocked Person, (ii) deal in, or otherwise engage in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order No. 13224; or (iii) engage in or conspire to engage in
any transaction that evades or avoids, or has the purpose of evading or
avoiding, or attempts to violate, any of the prohibitions set forth in the
Executive Order No. 13224, the USA Patriot Act or any other Anti-Terrorism Law.
The Borrowers shall deliver to Banks any certification or other evidence
requested from time to time by any Bank in its sole discretion, confirming
Borrowers' compliance with this Section 8.1.11.

               8.1.12 NOTE ISSUE.

               Within six (6) months after the Closing Date, the Company will
refinance (the "REQUIRED NOTE REFINANCING") the outstanding amounts under the
Note Issue existing on the Closing Date, provided that (i) the principal amount
of the Required Note Refinancing shall


                                      -73-



not exceed $200,000,000.00, (ii) such Required Note Refinancing shall not
provide for any rights to obtain collateral security except on a pari passu
basis with the Agent and the Banks hereunder (and to the extent that, on the
effective date of such Required Note Refinancing, the Lien Creation Date has
occurred and the Lien Release Date has not subsequently occurred (so that the
Pledge Agreement is then effective) the trustee under the Required Note
Refinancing on behalf of the noteholders shall, on or before such effective
date, enter into the Collateral Sharing Agreement with the Agent in a form
acceptable to the Agent and the Agent is hereby authorized to negotiate, make
appropriate revisions to (in its discretion) and enter into such Collateral
Sharing Agreement on behalf of the Banks), (iii) the warranties and covenants
contained in the agreements governing such Required Note Refinancing shall not
be more restrictive than those contained in this Agreement, and (iv) the
maturity date of such Required Note Refinancing shall not be earlier than 6
months following the Expiration Date.

               8.1.13 COVENANT TO GRANT LIENS IN PLEDGED COLLATERAL

                    8.1.13.1 Creation of Liens.

                    On or before April 12, 2006, the Loan Parties shall complete
the following steps unless Moody's issues a Moody's Rating Confirmation on or
before such date (in which case such steps shall not be required) (if Moody's
does not issue such Moody's Rating Confirmation on or before such date, April
12, 2006 shall be referred to as the "Lien Creation Date"):

               (1) execute and deliver the Pledge Agreement in the form attached
as Exhibit 1.1(P) hereto

               (2) deliver UCC-1 financing statements as requested by the Agent
to perfect the Liens of the Agent in the Pledged Collateral

               (3) deliver stock powers, certificates evidencing the Pledged
Collateral and any other related documents satisfactory to the Agent as required
hereunder or by the Pledge Agreement relating as Pledged Collateral in
connection with such pledge;

               (4) deliver to the Agent and the Banks an opinion of the counsel
to the Loan Parties acceptable to the Agent as to the authorization, execution,
delivery and enforceability of the Pledge Agreement and the creation and
perfection of the Liens thereunder in the Pledged Collateral.

                    8.1.13.2 Termination of Springing Liens.

                    The Liens in the Pledged Collateral shall be automatically
terminated upon the occurrence of a Release Event, as provided in the Pledge
Agreement, and the Agent is authorized to prepare, execute, and record such
documents, make deliveries and take all other appropriate steps in its
discretion to effectuate such termination and the release of the Pledged
Collateral.


                                      -74-



               8.1.14 DELIVERIES AND ACTIONS TO BE COMPLETED ON OR BEFORE APRIL
12, 2006.

                    On or before April 12, 2006, the applicable Loan Parties
shall complete all of the following actions:

                         (1) German Borrowers:

                              (i) Authorization. The German Borrowers shall take
all appropriate corporate action required to authorize and ratify the execution
and delivery of the Loan Documents by the German Borrowers and the consummation
of the transactions thereunder by such German Borrowers.

                              (ii) Secretary's Certificate. The German Borrowers
shall deliver to the Agent a secretary's certificate relating to such German
Borrowers in the form described in Section 7.1.2 containing the attachments
listed in clauses (i), (ii) and (iii) of such Section 7.1.2.

                              (iii) Officer's Certificate. The German Borrowers
shall deliver to the Agent an officer's certificate relating to the German
Borrowers in the form described in Section 7.1.1.

                              (iv) Opinion of Counsel. The German Borrowers
shall deliver to the Agent an Opinion of their German counsel in a form
acceptable to the Agent which confirms the matters described in clauses (i) and
(ii) of Section 7.1.4 with respect to the German Borrowers, and confirms the
enforceability under the Laws of Germany of a judgment rendered against such
German Borrowers under the Laws of the United States.

                         (2) UK Borrower:

                              The UK Borrower shall deliver to the Agent an
Opinion of its United Kingdom counsel in a form acceptable to the Agent which
confirms the matters described in clauses (i) and (ii) of Section 7.1.4 with
respect to the UK Borrower, and confirms the enforceability under the Laws of
the United Kingdom of a judgment rendered against such UK Borrower under the
Laws of the United States.

          8.2 NEGATIVE COVENANTS.

               The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations under the
Loan Documents and termination of the Commitments, the Loan Parties shall comply
with the following negative covenants:


                                      -75-



               8.2.1 INDEBTEDNESS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Indebtedness, except:

                    (i) Indebtedness under the Loan Documents;

                    (ii) Existing Indebtedness as set forth on SCHEDULE 8.2.1
(including any extensions, renewals or refinancings thereof), provided there is
no increase in the amount thereof or other significant change in the terms
thereof unless otherwise specified on SCHEDULE 8.2.1;

                    (iii) Indebtedness incurred pursuant to capitalized leases;

                    (iv) The Note Issue in a maximum principal amount
outstanding not to exceed $200,000,000, at any time; provided, however, this
amount may be increased for 45 consecutive days to accommodate an orderly tender
offer or make-whole call process;

                    (v) Indebtedness secured by Purchase Money Security
Interests;

                    (vi) Indebtedness of a Loan Party to another Loan Party,
provided that such indebtedness is subordinated to the Obligations pursuant to
terms and conditions satisfactory to Agent;

                    (vii) Any Interest Rate, Currency and Commodity Hedge;

                    (viii) Guaranties by the Loan Parties of other Indebtedness
of other Loan Parties permitted hereunder;

                    (ix) Indebtedness (the "Sun Trust Indebtedness") owing to
SunTrust Financial in an amount outstanding at any time not to exceed
$34,000,000.00, provided that the terms and conditions contained in the
agreements evidencing such Indebtedness shall not be modified after the Closing
Date without the consent of the Agent;

                    (x) Indebtedness structured similarly to the Sun Trust
Indebtedness and for similar purposes, provided that the terms thereof and the
documentation governing the same shall be subject to the review and approval by
the Agent and provided further that the terms and conditions contained in the
agreements evidencing such Indebtedness shall not be subsequently modified after
the closing date thereof without the consent of the Agent;

                    (xi) Indebtedness incurred pursuant to a Permitted
Acquisition or Approved Acquisition;


                                      -76-



                    (xii) Indebtedness of the Receivables Entity under the or in
connection with a Permitted Accounts Receivable Program; and

                    (xiii) Other unsecured Indebtedness in an amount not to
exceed $10,000,000 outstanding at any time.

               8.2.2 LIENS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time create, incur, assume or suffer to exist any
Lien on any of its property or assets, tangible or intangible, now owned or
hereafter acquired, or agree or become liable to do so, except Permitted Liens.

               8.2.3 GUARANTIES.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time, directly or indirectly, become or be liable in
respect of any Guaranty, or assume, guarantee, become surety for, endorse or
otherwise agree, become or remain directly or contingently liable upon or with
respect to any obligation or liability of any other Person, except for
Guaranties of Indebtedness of the Loan Parties permitted hereunder.

               8.2.4 LOANS AND INVESTMENTS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, at any time make or suffer to remain outstanding any loan
or advance to, or purchase, acquire or own any stock, bonds, notes or securities
of, or any partnership interest (whether general or limited) or limited
liability company interest in, or any other investment or interest in, or make
any capital contribution to, any other Person, or agree, become or remain liable
to do any of the foregoing, except:

                    (i) investments identified on Schedule 8.2.4 hereto;

                    (ii) trade credit extended on usual and customary terms in
the ordinary course of business;

                    (iii) loans or advances to employees, officers or directors
in the ordinary course of business in an aggregate principal amount not
exceeding $2,000,000.00 at any time outstanding; ;

                    (iv) Permitted Investments;

                    (v) loans, advances and investments in other Loan Parties
which otherwise are permitted hereunder;

                    (vi) Permitted Acquisitions and Approved Acquisitions; and


                                      -77-



                    (vii) loans and investments in connection with a Permitted
Accounts Receivable Program,

                    (viii) additional investments to or in a Person, provided
that such investments measured at the time of the making thereof (determined
without regard to any write-down or write-offs thereof and net of cash payments
of principal in the case of loans and cash equity returns, whether as a dividend
or a redemption in the case of equity investments) do not exceed in the
aggregate 5% of Consolidated Total Assets as determined as of the most recent
fiscal year and for which financial statements are required to be delivered
hereunder.

               8.2.5 DIVIDENDS AND RELATED DISTRIBUTIONS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to make or pay, or agree to become or remain liable to make or
pay, any Restricted Payment unless no Material Event of Default exists or would
be caused thereby, except dividends or other distributions payable to another
Loan Party (but in such case, subject to compliance with the Pledge Agreement).

               8.2.6 LIQUIDATIONS, MERGERS, CONSOLIDATIONS, ACQUISITIONS.

               Each of the Loan Parties shall not, and shall permit any of its
Subsidiaries to, dissolve, liquidate or wind-up its affairs, or become a party
to any merger or consolidation, or acquire by purchase, lease or otherwise all
or substantially all of the assets or capital stock or other equity interests of
any other Person, except for the Approved Acquisitions, and further provided
that

                    (i) any Loan Party other than the Company may consolidate or
merge into another Loan Party which is wholly-owned by one or more of the other
Loan Parties and any Subsidiary of a Loan Party which is not a Loan Party may
consolidate or merge into another Loan Party or Subsidiary of a Loan Party, but
in all such cases, subject to compliance with the Pledge Agreement, and

                    (ii) in addition to the Approved Acquisitions, any Loan
Party may acquire, whether by purchase or by merger, (x) all of the ownership
interests of any other Person or (y) substantially all of assets of another
Person or of a business or division of any other Person (each an "PERMITTED
ACQUISITION"), provided that each of the following requirements is met:

                         (A) if any Loan Party acquires the ownership interests
in such Person, such Person shall, if required pursuant to Section 8.2.9,
execute a Borrower Joinder or Guarantor Joinder and join this Agreement as a
Borrower or Guarantor pursuant to Section 11.18 within 3 Business Days following
the date of such Permitted Acquisition;


                                      -78-



                         (B) the Loan Parties, such Person and its owners, as
applicable, shall otherwise comply with Section 11.18 within three (3) Business
Days following the date of such Permitted Acquisition;

                         (C) the board of directors or other equivalent
governing body of such Person shall have approved such Permitted Acquisition
and, if the Loan Parties shall use any portion of the Loans to fund such
Permitted Acquisition, the Loan Parties also shall have delivered to the Banks
written evidence of the approval of the board of directors (or equivalent body)
of such Person for such Permitted Acquisition;

                         (D) the business acquired, or the business conducted by
the Person whose ownership interests are being acquired, as applicable, shall be
substantially the same as one or more line or lines of business conducted by the
Loan Parties and shall comply with Section 8.2.10;

                         (E) no Potential Default or Event of Default shall
exist immediately prior to and after giving effect to such Permitted
Acquisition;

                         (F) the Company shall demonstrate that the Borrowers
shall be in pro forma compliance with the covenants contained in Sections
8.2.15, 8.2.16 and 8.2.17 after giving effect to such Permitted Acquisition
(including in such computation, Indebtedness or other liabilities assumed or
incurred in connection with such Permitted Acquisition and including income
earned or expenses incurred by the Person, business or assets to be acquired
prior to the date of such Permitted Acquisition as more fully provided herein)
by delivering at least five (5) Business Days prior to such Permitted
Acquisition a certificate in the form of EXHIBIT 8.2.6 evidencing such pro forma
compliance;

                         (G) if the Leverage Ratio (after taking into account
the pro forma effect of the Permitted Acquisition) is in excess of 3.25 to 1.00,
then Required Banks shall have consented in writing thereto prior to its
consummation; and

                         (H) the Loan Parties shall deliver to the Agent at
least five (5) Business Days before such Permitted Acquisition copies of any
agreements entered into or proposed to be entered into by such Loan Parties in
connection with such Permitted Acquisition and shall deliver to the Agent such
other information about such Person or its assets as Agent may reasonably
require, and all such agreements and information shall be reasonably
satisfactory to the Agent.

               8.2.7 DISPOSITIONS OF ASSETS OR SUBSIDIARIES.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, sell, convey, assign, lease, abandon or otherwise transfer
or dispose of, voluntarily or involuntarily, any of its properties or assets,
tangible or intangible (including sale, assignment, discount or other
disposition of accounts, contract rights, chattel paper, equipment or general
intangibles with or without recourse or of capital stock, shares of beneficial
interest,


                                      -79-



partnership interests or limited liability company interests of a Subsidiary of
such Loan Party), except for the following, subject to the prepayment
requirements in Section 5.5:

                    (i) transactions involving the sale of inventory in the
ordinary course of business;

                    (ii) any sale, transfer or lease of assets in the ordinary
course of business which are no longer necessary or required in the conduct of
such Loan Party's or such Subsidiary's business;

                    (iii) any sale, transfer or lease of assets by any wholly
owned Subsidiary of such Loan Party to another Loan Party or its Subsidiary;

                    (iv) the disposition of assets of the Company from its
Neenah, Wisconsin facility in connection with the transfer of operations
therefrom to a facility in Chillicothe, Ohio after consummation of the Financed
Domestic Acquisition; and

                    (v) sales or other transfers of accounts receivables and
related rights of the Company and its Subsidiaries pursuant to or in connection
with a Permitted Accounts Receivable Program;

                    (vi) any sale of assets not listed in clauses (i) through
(v) above provided that (A) no Event of Default shall exist or shall result from
such disposition, and (B) the aggregate net book value of all assets so sold by
the Loan Parties and their Subsidiaries pursuant to this clause (vi) shall not
exceed in any fiscal year 10% of the Consolidated Total Assets measured as of
the end of the previous fiscal year (such 10% figure shall be referred to as
"Availability"), provided that to the extent that such value of assets sold is
less than Availability in such fiscal year (the difference being, the "Unused
Portion"), such Unused Portion may be carried over to the next fiscal year (but
not to subsequent fiscal years) and increase Availability in such next fiscal
year by such amount, provided further that the aggregate net book value of all
assets sold in any two consecutive fiscal years may not exceed 20% of
Consolidated Total Assets measured at the beginning of such two-consecutive
fiscal year period; and

                    (vii) any sale, transfer or lease of assets, other than
those specifically excepted pursuant to clauses (i) through (vi) above, which is
approved by the Required Banks so long as the after-tax proceeds (as reasonably
estimated by the Borrower) are applied as a mandatory prepayment of the Term
Loans in accordance with the provisions of Section 5.5.1 above.

               8.2.8 AFFILIATE TRANSACTIONS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, enter into or carry out any transaction (including
purchasing property or services from or selling property or services to any
Affiliate of any Loan Party or other Person other than another Loan Party)
unless such transaction is not otherwise prohibited by this Agreement, is


                                      -80-



entered into in the ordinary course of business upon fair and reasonable
arm's-length terms and conditions which are fully disclosed to the Agent and is
in accordance with all applicable Law.

               8.2.9 SUBSIDIARIES.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, own or create directly or indirectly any Material
Subsidiaries other than (i) Foreign Subsidiaries (ii) any Material Subsidiary
(except for the Receivables Entity) which has joined this Agreement as a
Guarantor or a Borrower on the Closing Date; or (iii) any Material Subsidiary
formed, acquired or in existence after the Closing Date (except for the
Receivables Entity) which joins this Agreement as a Guarantor or a Borrower
pursuant to and in compliance with Section 11.18.

               8.2.10 CONTINUATION OF OR CHANGE IN BUSINESS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, engage in any other business than now engaged in by one or
more of the Loan Parties or their Subsidiaries, substantially as conducted and
operated by such Loan Party or Subsidiary during the present fiscal year, and
such Loan Party or Subsidiary shall not permit any material change in such
business, provided, however, that the Receivables Entity may engage in the
business of purchasing accounts receivable from the Company and its
Subsidiaries..

               8.2.11 PLANS AND BENEFIT ARRANGEMENTS.

               None of the Loan Parties shall, and shall not permit any of its
Subsidiaries to, engage in a Prohibited Transaction with any Plan, Benefit
Arrangement or Multiemployer Plan which, alone or in conjunction with any other
circumstances or set of circumstances resulting in liability under ERISA or
otherwise violate ERISA:

               8.2.12 FISCAL YEAR.

               The Company shall not, and shall not permit any Subsidiary of the
Company to, change its fiscal year from the twelve-month period beginning
January 1 and ending December 31.

               8.2.13 ISSUANCE OF STOCK.

               None of the Subsidiaries of the Company shall issue any
additional shares of its capital stock or any options, warrants or other rights
in respect thereof, except as may be permitted under Section 8.2.5, and, in any
event, subject to compliance with the Pledge Agreement, to the extent
applicable.

               8.2.14 CHANGES IN ORGANIZATIONAL DOCUMENTS.

               Each of the Loan Parties shall not, and shall not permit any of
its Subsidiaries to, amend in any respect its certificate of incorporation
(including any provisions or


                                      -81-


resolutions relating to capital stock), by-laws, certificate of limited
partnership, partnership agreement, certificate of formation, limited liability
company agreement or other organizational documents without providing at least
thirty (30) calendar days' prior written notice to the Agent and the Banks and,
in the event such change would be adverse to the Banks as determined by the
Agent in its sole discretion, obtaining the prior written consent of the
Required Banks.

               8.2.15 MINIMUM NET WORTH.

               The Borrowers shall not permit Consolidated Net Worth, calculated
as of the last day of each fiscal quarter, to be less than $307,500,000.

               8.2.16 MAXIMUM LEVERAGE RATIO.

               The Borrowers shall not permit the Leverage Ratio, measured as of
the end of each fiscal quarter to exceed the ratio set forth below as of any
fiscal quarter ending during the periods specified below:



           Period                  Ratio
           ------              ------------
                            
Closing Date through 3/31/07   3.75 to 1.00
   6/30/07 and thereafter      3.50 to 1.00


               8.2.17 MINIMUM INTEREST COVERAGE RATIO.

               The Borrowers shall not permit the ratio of Consolidated Adjusted
EBITDA to consolidated interest expense of the Borrowers and its Subsidiaries,
measured as of the end of each fiscal quarter, for the four (4) fiscal quarters
then ended, to be less than 3.50 to 1.00.

          8.3 REPORTING REQUIREMENTS.

               The Loan Parties, jointly and severally, covenant and agree that
until payment in full of the Loans, Reimbursement Obligations and Letter of
Credit Borrowings and interest thereon, expiration or termination of all Letters
of Credit, satisfaction of all of the Loan Parties' other Obligations hereunder
and under the other Loan Documents and termination of the Commitments, the Loan
Parties will furnish or cause to be furnished to the Agent and each of the
Banks:

               8.3.1 QUARTERLY FINANCIAL STATEMENTS.

               As soon as available and in any event within forty-five (45)
calendar days (or any such earlier date as may be mandated by the SEC) after the
end of each of the first three fiscal quarters in each fiscal year, financial
statements of the Company and its Subsidiaries, consisting of a consolidated
balance sheets as of the end of such fiscal quarter and related consolidated
statements of income, consolidated retained earnings and cash flows for the
fiscal quarter then ended and the fiscal year through that date, all in
reasonable detail and certified (subject to normal year-end audit adjustments)
by the President, Chief Financial Officer or


                                      -82-



Treasurer of the Company as having been prepared in accordance with GAAP,
consistently applied, and setting forth in comparative form the respective
financial statements for the corresponding date and period in the previous
fiscal year. The Loan Parties will be deemed to have complied with the delivery
requirements of this Section 8.3.1 if within forty-five (45) days (or any such
earlier date as may be mandated by the SEC) after the end of its fiscal quarter,
the Company delivers to the Agent and each of the Banks a copy of its Form 10-Q
as filed with the SEC and the financial statements contained therein meets the
requirements described in this Section.

               8.3.2 ANNUAL FINANCIAL STATEMENTS.

               As soon as available and in any event within ninety (90) days (or
any such earlier date as may be mandated by the SEC) after the end of each
fiscal year of the Company and its Subsidiaries, financial statements of the
Company consisting of a consolidated balance sheets as of the end of such fiscal
year, and related consolidated statements of income, consolidated retained
earnings and cash flows for the fiscal year then ended, all in reasonable detail
and setting forth in comparative form the financial statements as of the end of
and for the preceding fiscal year, and certified by independent certified public
accountants of nationally recognized standing satisfactory to the Agent. The
certificate or report of accountants shall be free of qualifications (other than
any consistency qualification that may result from a change in the method used
to prepare the financial statements as to which such accountants concur) and
shall not indicate the occurrence or existence of any event, condition or
contingency which would materially impair the prospect of payment or performance
of any covenant, agreement or duty of any Loan Party under any of the Loan
Documents. The Loan Parties will be deemed to have complied with the delivery
requirements of this Section 8.3.2 if within ninety (90) days (or any such
earlier date as may be mandated by the SEC) after the end of its fiscal year,
the Company delivers to the Agent and each of the Banks a copy of its Annual
Report and Form 10-K as filed with the SEC and the financial statements and
certification of public accountants contained therein meets the requirements
described in this Section. The Loan Parties shall deliver with such financial
statements and certification by their accountants (i) a certificate to be
delivered pursuant to Section 8.3.3 with respect to such financial statements
and (ii) any management letters of such accounts addressed to the Company.

               8.3.3 CERTIFICATE OF THE BORROWER.

               Concurrently with the financial statements the Company furnished
to the Agent and to the Banks pursuant to Sections 8.3.1 and 8.3.2, a
certificate (each a "COMPLIANCE CERTIFICATE") of the Company signed by a
Responsible Officer of the Company, in the form of EXHIBIT 8.3.4, to the effect
that, except as described pursuant to Section 8.3.4, (i) the representations and
warranties of the Borrowers contained in Section 6 and in the other Loan
Documents are true on and as of the date of such certificate with the same
effect as though such representations and warranties had been made on and as of
such date (except representations and warranties which expressly relate solely
to an earlier date or time) and the Loan Parties have performed and complied
with all covenants and conditions hereof, (ii) no Event of Default or Potential
Default exists and is continuing on the date of such certificate, and (iii)
containing


                                      -83-



calculations in sufficient detail to demonstrate compliance as of the date of
such financial statements with all financial covenants contained in Section
8.1.14.

               8.3.4 NOTICE OF DEFAULT.

               Promptly after any officer of any Loan Party has learned of the
occurrence of an Event of Default or Potential Default, a certificate signed by
the President, Chief Financial Officer or Treasurer of such Loan Party setting
forth the details of such Event of Default or Potential Default and the action
which the such Loan Party proposes to take with respect thereto.

               8.3.5 NOTICE OF LITIGATION.

               Promptly after the commencement thereof, notice of all actions,
suits, proceedings or investigations before or by any Official Body or any other
Person against any Loan Party or Subsidiary of any Loan Party which relate to
the Collateral, involve a claim or series of claims in excess of $15,000,000.00
or which if adversely determined would constitute a Material Adverse Change.

               8.3.6 NOTICE OF CHANGE IN DEBT RATING.

               Within two (2) Business Days after Standard & Poor's or Moody's
announces a change in the Company's Debt Rating, notice of such change.
Borrowers will deliver, together with such notice, a copy of any written
notification which the Company received from the applicable rating agency
regarding such change of Debt Rating.

               8.3.7 CERTAIN EVENTS.

               Written notice to the Agent:

                    (i) at least thirty (30) calendar days prior thereto, with
respect to any proposed sale or transfer of assets pursuant to Section
8.2.7(vi),

                    (ii) within the time limits set forth in Section 8.2.14, any
amendment to the organizational documents of any Loan Party; and

               8.3.8 BUDGETS, FORECASTS, OTHER REPORTS AND INFORMATION.

               The following documents (1) upon the request of the Agent for so
long as the Company is obligated to publicly file the reports listed below with
the SEC, or (2) promptly upon their becoming available to the Company (without
any such request by the Agent) in the event that the Company shall cease to be
so obligated to publicly file such reports :

                    (i) any reports including management letters submitted to
the Company by independent accountants in connection with any annual, interim or
special audit,


                                      -84-



                    (ii) any reports, notices or proxy statements generally
distributed by the Company to its stockholders on a date no later than the date
supplied to such stockholders,

                    (iii) regular or periodic reports, including Forms 10-K,
10-Q and 8-K, registration statements and prospectuses, filed by the Company
with the SEC,

                    (iv) a copy of any order in any proceeding to which the
Company or any of its Subsidiaries is a party issued by any Official Body, and

                    (v) such other reports and information as any of the Banks
may from time to time reasonably request. The Loan Parties shall also notify the
Banks promptly of the enactment or adoption of any Law which may result in a
Material Adverse Change.

               8.3.9 NOTICES REGARDING PLANS AND BENEFIT ARRANGEMENTS.

                    8.3.9.1 CERTAIN EVENTS.

                    Promptly upon becoming aware of the occurrence thereof,
notice (including the nature of the event and, when known, any action taken or
threatened by the Internal Revenue Service or the PBGC with respect thereto) of:

                    (i) any Reportable Event with respect to the Borrowers or
any other member of the ERISA Group (regardless of whether the obligation to
report said Reportable Event to the PBGC has been waived),

                    (ii) any Prohibited Transaction which could subject the
Borrowers or any other member of the ERISA Group to a civil penalty assessed
pursuant to Section 502(i) of ERISA or a tax imposed by Section 4975 of the
Internal Revenue Code in connection with any Plan, any Benefit Arrangement or
any trust created thereunder,

                    (iii) any assertion of material withdrawal liability with
respect to any Multiemployer Plan,

                    (iv) any partial or complete withdrawal from a Multiemployer
Plan by the Borrowers or any other member of the ERISA Group under Title IV of
ERISA (or assertion thereof), where such withdrawal is likely to result in
material withdrawal liability,

                    (v) any cessation of operations (by the Borrowers or any
other member of the ERISA Group) at a facility in the circumstances described in
Section 4062(e) of ERISA,

                    (vi) withdrawal by the Borrowers or any other member of the
ERISA Group from a Multiple Employer Plan,


                                      -85-



                    (vii) a failure by the Borrowers or any other member of the
ERISA Group to make a payment to a Plan required to avoid imposition of a Lien
under Section 302(f) of ERISA,

                    (viii) the adoption of an amendment to a Plan requiring the
provision of security to such Plan pursuant to Section 307 of ERISA, or

                    (ix) any change in the actuarial assumptions or funding
methods used for any Plan, where the effect of such change is to materially
increase or materially reduce the unfunded benefit liability or obligation to
make periodic contributions.

                    8.3.9.2 NOTICES OF INVOLUNTARY TERMINATION AND ANNUAL
REPORTS.

               Promptly after receipt thereof, copies of (a) all notices
received by the Borrowers or any other member of the ERISA Group of the PBGC's
intent to terminate any Plan administered or maintained by the Borrowers or any
member of the ERISA Group, or to have a trustee appointed to administer any such
Plan; and (b) at the request of the Agent or any Bank each annual report (IRS
Form 5500 series) and all accompanying schedules, the most recent actuarial
reports, the most recent financial information concerning the financial status
of each Plan administered or maintained by the Borrowers or any other member of
the ERISA Group, and schedules showing the amounts contributed to each such Plan
by or on behalf of the Borrowers or any other member of the ERISA Group in which
any of their personnel participate or from which such personnel may derive a
benefit, and each Schedule B (Actuarial Information) to the annual report filed
by the Borrowers or any other member of the ERISA Group with the Internal
Revenue Service with respect to each such Plan.

                    8.3.9.3 NOTICE OF VOLUNTARY TERMINATION.

               Promptly upon the filing thereof, copies of any Form 5310, or any
successor or equivalent form to Form 5310, filed with the PBGC in connection
with the termination of any Plan.

                                   9. DEFAULT

          9.1 EVENTS OF DEFAULT.

               An Event of Default shall mean the occurrence or existence of any
one or more of the following events or conditions (whatever the reason therefor
and whether voluntary, involuntary or effected by operation of Law):

               9.1.1 PAYMENTS UNDER LOAN DOCUMENTS.

               The Borrowers shall fail to pay any principal of any Loan
(including scheduled installments, mandatory prepayments or the payment due at
maturity), Reimbursement


                                      -86-



Obligation or Letter of Credit Borrowing when due or shall fail to pay any
interest on any Loan, Reimbursement Obligation or Letter of Credit Borrowing or
any other amount owing hereunder or under the other Loan Documents within three
(3) Business Days after such interest or other amount becomes due in accordance
with the terms hereof or thereof;

               9.1.2 BREACH OF WARRANTY.

               Any representation or warranty made at any time by any of the
Loan Parties herein or by any of the Loan Parties in any other Loan Document, or
in any certificate, other instrument or statement furnished pursuant to the
provisions hereof or thereof, shall prove to have been false or misleading in
any material respect as of the time it was made or furnished;

               9.1.3 BREACH OF NEGATIVE COVENANTS AND CERTAIN AFFIRMATIVE
COVENANTS.

               Any of the Loan Parties shall default in the observance or
performance of any covenant contained in Sections 8.1.6, 8.1.13, 8.1.14 or
8.1.14;

               9.1.4 BREACH OF OTHER COVENANTS.

               Any of the Loan Parties shall default in the observance or
performance of any other covenant, condition or provision hereof or of any other
Loan Document and such default shall continue unremedied for a period of twenty
(20) Business Days after any Responsible Officer of any Loan Party becomes aware
of the occurrence thereof (such grace period to be applicable only in the event
such default can be remedied by corrective action of the Loan Parties as
determined by the Agent in its sole discretion);

               9.1.5 DEFAULTS IN OTHER AGREEMENTS OR INDEBTEDNESS.

               A default or event of default shall occur at any time under the
terms of any other agreement involving borrowed money or the extension of credit
or any other Indebtedness under which any Loan Party or Subsidiary of any Loan
Party may be obligated as a borrower or guarantor in excess of $5,000,000.00 in
the aggregate, and such breach, default or event of default consists of the
failure to pay (beyond any period of grace permitted with respect thereto,
whether waived or not, but in any event not beyond thirty (30) days) any
Indebtedness when due (whether at stated maturity, by acceleration or otherwise)
or if such breach or default permits or causes the acceleration of any
Indebtedness (whether or not such right shall have been waived) or the
termination of any commitment to lend;

               9.1.6 FINAL JUDGMENTS OR ORDERS.

               Any final judgments or orders for the payment of money in excess
of $10,000,000.00 in the aggregate shall be entered against any Loan Party by a
court having jurisdiction in the premises, which judgment is not discharged,
vacated, bonded or stayed pending appeal within a period of forty-five (45) days
from the date of entry;


                                      -87-


               9.1.7 LOAN DOCUMENT UNENFORCEABLE.

               Any of the Loan Documents shall cease to be legal, valid and
binding agreements enforceable against any Loan Party executing the same or such
party's successors and assigns (as permitted under the Loan Documents) in
accordance with the respective terms thereof or shall in any way be terminated
(except in accordance with its terms) or become or be declared ineffective or
inoperative or shall in any way be challenged or contested or cease to give or
provide the respective Liens, security interests (except for the release of
liens provided under Section 8.1.13.2), rights, titles, interests, remedies,
powers or privileges intended to be created thereby;

               9.1.8 PROCEEDINGS AGAINST ASSETS.

               Assets of the Loan Parties' or any of their Subsidiaries are
attached, seized, levied upon or subjected to a writ or distress warrant; or
such come within the possession of any receiver, trustee, custodian or assignee
for the benefit of creditors and the fair market value of such assets are in
excess of $10,000,000.00 in the aggregate and the same is not cured within
forty-five (45) days thereafter;

               9.1.9 NOTICE OF LIEN OR ASSESSMENT.

               A notice of Lien or assessment in excess of $10,000,000.00 which
is not a Permitted Lien is filed of record with respect to all or any part of
any of the Loan Parties' or any of their Subsidiaries' assets by the United
States, or any department, agency or instrumentality thereof, or by any state,
county, municipal or other governmental agency, including the PBGC, or any taxes
or debts owing at any time or times hereafter to any one of these becomes
payable and the same is not paid or bonded within forty-five (45) days after the
same becomes payable;

               9.1.10 INSOLVENCY.

               Any Loan Party or any Material Subsidiary of a Loan Party ceases
to be solvent or admits in writing its inability to pay its debts as they
mature;

               9.1.11 EVENTS RELATING TO PLANS AND BENEFIT ARRANGEMENTS.

               Any of the following occurs: (i) any Reportable Event, which the
Agent determines in good faith constitutes grounds for the termination of any
Plan by the PBGC or the appointment of a trustee to administer or liquidate any
Plan, shall have occurred and be continuing; (ii) proceedings shall have been
instituted or other action taken to terminate any Plan, or a termination notice
shall have been filed with respect to any Plan; (iii) a trustee shall be
appointed to administer or liquidate any Plan; (iv) the PBGC shall give notice
of its intent to institute proceedings to terminate any Plan or Plans or to
appoint a trustee to administer or liquidate any Plan; and, in the case of the
occurrence of (i), (ii), (iii) or (iv) above, the Agent determines in good faith
that the amount of the Borrowers' liability is likely to exceed $5,000,000.00;
(v) the Borrowers or any member of the ERISA Group shall fail to make any
material contributions when due to a Plan or a Multiemployer Plan; (vi) the
Borrowers or any


                                      -88-



other member of the ERISA Group shall make any amendment to a Plan with respect
to which security is required under Section 307 of ERISA; (vii) the Borrowers or
any other member of the ERISA Group shall withdraw completely or partially from
a Multiemployer Plan; (viii) the Borrowers or any other member of the ERISA
Group shall withdraw (or shall be deemed under Section 4062(e) of ERISA to
withdraw) from a Multiple Employer Plan; or (ix) any applicable Law is adopted,
changed or interpreted by any Official Body with respect to or otherwise
affecting one or more Plans, Multiemployer Plans or Benefit Arrangements and,
with respect to any of the events specified in (v), (vi), (vii), (viii) or (ix),
the Agent determines in good faith that any such occurrence would be reasonably
likely to materially and adversely affect the total enterprise represented by
the Borrowers and the other members of the ERISA Group;

               9.1.12 CESSATION OF BUSINESS.

               Any Loan Party ceases to conduct its business as contemplated,
except as expressly permitted under Sections 8.2.6 or 8.2.7, or any Loan Party
or Subsidiary of a Loan Party is enjoined, restrained or in any way prevented by
court order from conducting all or any material part of its business and such
injunction, restraint or other preventive order is not dismissed within thirty
(30) days after the entry thereof;

               9.1.13 CHANGE OF CONTROL.

                    (i) Any person or group of persons (within the meaning of
Sections 13(d) or 14(a) of the Securities Exchange Act of 1934, as amended)
shall have acquired, after the Closing Date, beneficial ownership of (within the
meaning of Rule 13d-3 promulgated by the SEC under said Act) 20.00% or more of
the voting capital stock of P. H. Glatfelter Company; or (ii) within a period of
twelve (12) consecutive calendar months, individuals who were directors of the
Company on the first day of such period (together with any new directors whose
election by the board of directors of the Company or whose nomination for
election by the shareholders of the Company was approved by a vote of a majority
of the directors then still in office who were either directors as of the first
day of such period or whose election or nomination for election was previously
so approved) shall cease to constitute a majority of the board of directors of
the Company;

               9.1.14 INVOLUNTARY PROCEEDINGS.

               A proceeding shall have been instituted in a court having
jurisdiction in the premises seeking a decree or order for relief in respect of
any Loan Party or Subsidiary of a Loan Party in an involuntary case under any
applicable bankruptcy, insolvency, reorganization or other similar law now or
hereafter in effect, or for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator, conservator (or similar official) of any Loan
Party or Subsidiary of a Loan Party for any substantial part of its property, or
for the winding-up or liquidation of its affairs, and such proceeding shall
remain undismissed or unstayed and in effect for a period of forty-five (45)
consecutive days or such court shall enter a decree or order granting any of the
relief sought in such proceeding; or


                                      -89-



               9.1.15 VOLUNTARY PROCEEDINGS.

               Any Loan Party or Material Subsidiary of a Loan Party shall
commence a voluntary case under any applicable bankruptcy, insolvency,
reorganization or other similar law now or hereafter in effect, shall consent to
the entry of an order for relief in an involuntary case under any such law, or
shall consent to the appointment or taking possession by a receiver, liquidator,
assignee, custodian, trustee, sequestrator, conservator (or other similar
official) of itself or for any substantial part of its property or shall make a
general assignment for the benefit of creditors, or shall fail generally to pay
its debts as they become due, or shall take any action in furtherance of any of
the foregoing.

          9.2 CONSEQUENCES OF EVENT OF DEFAULT.

               9.2.1 EVENTS OF DEFAULT OTHER THAN BANKRUPTCY, INSOLVENCY OR
REORGANIZATION PROCEEDINGS.

               If an Event of Default specified under Sections 9.1.1 through
9.1.13 shall occur and be continuing, the Banks and the Agent shall be under no
further obligation to make Loans or issue Letters of Credit, as the case may be,
and the Agent may, and upon the request of the Required Banks, shall (i) by
written notice to the Borrowers, declare the unpaid principal amount of the
Notes then outstanding and all interest accrued thereon, any unpaid fees and all
other Indebtedness and Obligations of the Borrowers to the Banks hereunder and
thereunder to be forthwith due and payable, and the same shall thereupon become
and be immediately due and payable to the Agent for the benefit of each Bank
without presentment, demand, protest or any other notice of any kind, all of
which are hereby expressly waived, and (ii) require any Borrowers to, and such
Borrowers shall thereupon, deposit in a non-interest-bearing account with the
Agent, as cash collateral for Borrowers' Obligations under the Loan Documents,
an amount equal to the maximum amount currently or at any time thereafter
available to be drawn on all outstanding Letters of Credit, and each Borrower
hereby pledges to the Agent and the Banks, and grants to the Agent and the Banks
a security interest in, all such cash as security for such Obligations. Upon the
curing of all existing Events of Default to the satisfaction of the Required
Banks, the Agent shall return such cash collateral to the Borrowers (or
applicable Borrowers, as the case may be); and

               9.2.2 BANKRUPTCY, INSOLVENCY OR REORGANIZATION PROCEEDINGS.

               If an Event of Default specified under Sections 9.1.14 or 9.1.15
shall occur, the Banks shall be under no further obligations to make Loans or
issue Letters of Credit hereunder and the unpaid principal amount of the Loans
then outstanding and all interest accrued thereon, any unpaid fees and all other
Indebtedness and Obligations of the Borrowers to the Banks hereunder and
thereunder shall be immediately due and payable, without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived; and


                                      -90-



               9.2.3 SET-OFF.

               If an Event of Default shall occur and be continuing, any Bank to
whom any Obligation is owed by any Loan Party hereunder or under any other Loan
Document or any participant of such Bank which has agreed in writing to be bound
by the provisions of Section 10.13 and any branch, Subsidiary or Affiliate of
such Bank or participant anywhere in the world shall have the right, in addition
to all other rights and remedies available to it, without notice to such Loan
Party, to set-off against and apply to the then unpaid balance of all the Loans
and all other Obligations of the Borrowers and the other Loan Parties hereunder
or under any other Loan Document any debt owing to, and any other funds held in
any manner for the account of, a Borrower or such other Loan Party by such Bank
or participant or by such branch, Subsidiary or Affiliate, including all funds
in all deposit accounts (whether time or demand, general or special,
provisionally credited or finally credited, or otherwise) now or hereafter
maintained by a Borrower or such other Loan Party for its own account (but not
including funds held in custodian or trust accounts) with such Bank or
participant or such branch, Subsidiary or Affiliate. Such right shall exist
whether or not any Bank or the Agent shall have made any demand under this
Agreement or any other Loan Document, whether or not such debt owing to or funds
held for the account of a Borrower or such other Loan Party is or are matured or
unmatured and regardless of the existence or adequacy of any Collateral,
Guaranty or any other security, right or remedy available to any Bank or the
Agent; and

               9.2.4 SUITS, ACTIONS, PROCEEDINGS.

               If an Event of Default shall occur and be continuing, and whether
or not the Agent shall have accelerated the maturity of Obligations pursuant to
any of the foregoing provisions of this Section 9.2, the Agent or any Bank, if
owed any amount with respect to the Obligations, may proceed to protect and
enforce its rights by suit in equity, action at law and/or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement or the other Loan Documents, including as permitted
by applicable Law the obtaining of the ex parte appointment of a receiver, and,
if such amount shall have become due, by declaration or otherwise, proceed to
enforce the payment thereof or any other legal or equitable right of the Agent
or such Bank; and

               9.2.5 APPLICATION OF PROCEEDS; COLLATERAL SHARING.

                    9.2.5.1 APPLICATION OF PROCEEDS.

               From and after the date on which the Agent has taken any action
pursuant to this Section 9.2 and until all Obligations of the Loan Parties have
been paid in full, any and all proceeds received by the Agent from any sale or
other disposition of the Collateral, or any part thereof, or the exercise of any
other remedy by the Agent, shall be applied as follows:

                    (i) first, to reimburse the Agent and the Banks for
out-of-pocket costs, expenses and disbursements, including reasonable attorneys'
and paralegals' fees and legal expenses, incurred by the Agent or the Banks in
connection with realizing on the


                                      -91-



Collateral or collection of any Obligations of any of the Loan Parties under any
of the Loan Documents;

                    (ii) second, to the repayment of all Obligations then due
and unpaid of the Loan Parties to the Banks incurred under this Agreement or any
of the other Loan Documents or a Bank-Provided Interest Rate Hedge, whether of
principal, interest, fees, expenses or otherwise, in such manner as the Agent
may determine in its discretion; and

                    (iii) the balance, if any, as required by Law.

                    9.2.5.2 COLLATERAL SHARING.

               Except as expressly set forth in the Pledge Agreement (to the
extent executed and delivered in accordance herewith) all Liens granted under
the Pledge Agreement and any other Loan Document (collectively, the "COLLATERAL
DOCUMENTS") shall secure ratably and on a pari passu basis (i) the Obligations
in favor of the Agent and the Banks hereunder and (ii) the Obligations incurred
by any of the Loan Parties in favor of any Bank which provides a Bank-Provided
Interest Rate Hedge (the "IRH PROVIDER"). The Agent under the Collateral
Documents shall be deemed to serve as the collateral agent (the "COLLATERAL
AGENT") for the IRH Provider and the Banks hereunder, provided that the
Collateral Agent shall comply with the instructions and directions of the Agent
(or the Banks under this Agreement to the extent that this Agreement or any
other Loan Documents empowers the Banks to direct the Agent), as to all matters
relating to the Collateral, including the maintenance and disposition thereof.
No IRH Provider (except in its capacity as a Bank hereunder) shall be entitled
or have the power to direct or instruct the Collateral Agent on any such matters
or to control or direct in any manner the maintenance or disposition of the
Collateral.

               9.2.6 OTHER RIGHTS AND REMEDIES.

               In addition to all of the rights and remedies contained in this
Agreement or in any of the other Loan Documents, as relates to the Collateral,
the Agent shall have all of the rights and remedies of a secured party under the
Uniform Commercial Code or other applicable Law, all of which rights and
remedies shall be cumulative and non-exclusive, to the extent permitted by Law.
The Agent may, and upon the request of the Required Banks shall, exercise all
post-default rights granted to the Agent and the Banks under the Loan Documents
or applicable Law.

          9.3 NOTICE OF SALE.

               Any notice required to be given by the Agent of a sale, lease, or
other disposition of the Collateral or any other intended action by the Agent,
if given ten (10) days prior to such proposed action, shall constitute
commercially reasonable and fair notice thereof to the Borrower.


                                      -92-



                                 10. THE AGENT

          10.1 APPOINTMENT.

               Each Bank hereby irrevocably designates, appoints and authorizes
PNC Bank to act as Agent for such Bank under this Agreement and to execute and
deliver or accept on behalf of each of the Banks the other Loan Documents. Each
Bank hereby irrevocably authorizes, and each holder of any Note by the
acceptance of a Note shall be deemed irrevocably to authorize, the Agent to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and any other instruments and agreements referred to herein, and
to exercise such powers and to perform such duties hereunder as are specifically
delegated to or required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. PNC Bank agrees to act as the Agent
on behalf of the Banks to the extent provided in this Agreement.

          10.2 DELEGATION OF DUTIES.

               The Agent may perform any of its duties hereunder by or through
agents or employees (provided such delegation does not constitute a
relinquishment of its duties as Agent) and, subject to Sections 10.5 and 10.6,
shall be entitled to engage and pay for the advice or services of any attorneys,
accountants or other experts concerning all matters pertaining to its duties
hereunder and to rely upon any advice so obtained.

          10.3 NATURE OF DUTIES; INDEPENDENT CREDIT INVESTIGATION.

               The Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants, functions,
responsibilities, duties, obligations, or liabilities shall be read into this
Agreement or otherwise exist. The duties of the Agent shall be mechanical and
administrative in nature; the Agent shall not have, by reason of this Agreement,
a fiduciary or trust relationship in respect of any Bank; and nothing in this
Agreement, expressed or implied, is intended to or shall be so construed as to
impose upon the Agent any obligations in respect of this Agreement except as
expressly set forth herein. Without limiting the generality of the foregoing,
the use of the term "agent" in this Agreement with reference to the Agent is not
intended to connote any fiduciary or other implied (or express) obligations
arising under agency doctrine of any applicable Law. Instead, such term is used
merely as a matter of market custom, and is intended to create or reflect only
an administrative relationship between independent contracting parties. Each
Bank expressly acknowledges (i) that the Agent has not made any representations
or warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of any of the Loan Parties, shall be deemed to constitute
any representation or warranty by the Agent to any Bank; (ii) that it has made
and will continue to make, without reliance upon the Agent, its own independent
investigation of the financial condition and affairs and its own appraisal of
the creditworthiness of each of the Loan Parties in connection with this
Agreement and the making and continuance of the Loans and issuance and
maintenance of Letters of Credit hereunder; and (iii) except as expressly
provided herein, that the Agent shall have no duty or responsibility, either
initially or on a continuing


                                      -93-



basis, to provide any Bank with any credit or other information with respect
thereto, whether coming into its possession before the making of any Loan or
issuance of any Letter of Credit or at any time or times thereafter.

          10.4 ACTIONS IN DISCRETION OF AGENT; INSTRUCTIONS FROM THE BANKS.

               The Agent agrees, upon the written request of the Required Banks,
to take or refrain from taking any action of the type specified as being within
the Agent's rights, powers or discretion herein, provided that the Agent shall
not be required to take any action which exposes the Agent to personal liability
or which is contrary to this Agreement or any other Loan Document or applicable
Law. In the absence of a request by the Required Banks, the Agent shall have
authority, in its sole discretion, to take or not to take any such action,
unless this Agreement specifically requires the consent of the Required Banks or
all of the Banks. Any action taken or failure to act pursuant to such
instructions or discretion shall be binding on the Banks, subject to Section
10.6. Subject to the provisions of Section 10.6, no Bank shall have any right of
action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder in accordance with the instructions of the
Required Banks, or in the absence of such instructions, in the absolute
discretion of the Agent.

          10.5 REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY THE BORROWER.

               The Borrowers, on a joint and several basis, unconditionally
agree to pay or reimburse the Agent and hold the Agent harmless against (a)
liability for the payment of all reasonable out-of-pocket costs, expenses and
disbursements, including fees and expenses of counsel (including the allocated
costs of staff counsel), appraisers and environmental consultants, incurred by
the Agent (i) in connection with the development, negotiation, preparation,
printing, execution, administration, syndication, interpretation and performance
of this Agreement and the other Loan Documents, (ii) relating to any requested
amendments, waivers or consents pursuant to the provisions hereof, (iii) in
connection with the enforcement of this Agreement or any other Loan Document or
collection of amounts due hereunder or thereunder or the proof and allowability
of any claim arising under this Agreement or any other Loan Document, whether in
bankruptcy or receivership proceedings or otherwise, and (iv) in any workout or
restructuring or in connection with the protection, preservation, exercise or
enforcement of any of the terms hereof or of any rights hereunder or under any
other Loan Document or in connection with any foreclosure, collection or
bankruptcy proceedings, and (b) all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that the Borrowers shall not be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements if the
same results from the Agent's gross negligence or willful misconduct, or if the
Borrowers was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that the Borrowers
shall remain liable to the extent such failure to give notice does not result in
a loss to the Borrower), or if the same results from a compromise or settlement
agreement entered into


                                      -94-



without the consent of the Borrowers, which shall not be unreasonably withheld.
In addition, the Borrowers, jointly and severally, agrees to reimburse and pay
all reasonable out-of-pocket expenses of the Agent's regular employees and
agents engaged periodically to perform audits of the Loan Parties' books,
records and business properties, provided that such reimbursement obligation
shall be limited to one (1) audit in each fiscal year so long as no Event of
Default exists and is continuing.

          10.6 EXCULPATORY PROVISIONS; LIMITATION OF LIABILITY.

               Neither the Agent nor any of its directors, officers, employees,
agents, attorneys or Affiliates shall (a) be liable to any Bank for any action
taken or omitted to be taken by it or them hereunder, or in connection herewith
including pursuant to any Loan Document, unless caused by its or their own gross
negligence or willful misconduct, (b) be responsible in any manner to any of the
Banks for the effectiveness, enforceability, genuineness, validity or the due
execution of this Agreement or any other Loan Documents or for any recital,
representation, warranty, document, certificate, report or statement herein or
made or furnished under or in connection with this Agreement or any other Loan
Documents, or (c) be under any obligation to any of the Banks to ascertain or to
inquire as to the performance or observance of any of the terms, covenants or
conditions hereof or thereof on the part of the Loan Parties, or the financial
condition of the Loan Parties, or the existence or possible existence of any
Event of Default or Potential Default. No claim may be made by any of the Loan
Parties, any Bank, the Agent or any of their respective Subsidiaries against the
Agent, any Bank or any of their respective directors, officers, employees,
agents, attorneys or Affiliates, or any of them, for any special, indirect or
consequential damages or, to the fullest extent permitted by Law, for any
punitive damages in respect of any claim or cause of action (whether based on
contract, tort, statutory liability, or any other ground) based on, arising out
of or related to any Loan Document or the transactions contemplated hereby or
any act, omission or event occurring in connection therewith, including the
negotiation, documentation, administration or collection of the Loans, and each
of the Loan Parties (for itself and on behalf of each of its Subsidiaries), the
Agent and each Bank hereby waives, releases and agrees never to sue upon any
claim for any such damages, whether such claim now exists or hereafter arises
and whether or not it is now known or suspected to exist in its favor. Each Bank
agrees that, except for notices, reports and other documents expressly required
to be furnished to the Banks by the Agent hereunder or given to the Agent for
the account of or with copies for the Banks, the Agent and each of its
directors, officers, employees, agents, attorneys or Affiliates shall not have
any duty or responsibility to provide any Bank with an credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Loan Parties which may come
into the possession of the Agent or any of its directors, officers, employees,
agents, attorneys or Affiliates.

          10.7 REIMBURSEMENT AND INDEMNIFICATION OF AGENT BY BANKS.

               Each Bank agrees to reimburse and indemnify the Agent (to the
extent not reimbursed by the Borrowers and without limiting the Obligation of
the Borrowers to do so) in proportion to its Ratable Share from and against all
liabilities, obligations, losses, damages,


                                      -95-



penalties, actions, judgments, suits, costs, expenses or disbursements,
including attorneys' fees and disbursements (including the allocated costs of
staff counsel), and costs of appraisers and environmental consultants, of any
kind or nature whatsoever which may be imposed on, incurred by or asserted
against the Agent, in its capacity as such, in any way relating to or arising
out of this Agreement or any other Loan Documents or any action taken or omitted
by the Agent hereunder or thereunder, provided that no Bank shall be liable for
any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements (a) if the same
results from the Agent's gross negligence or willful misconduct, or (b) if such
Bank was not given notice of the subject claim and the opportunity to
participate in the defense thereof, at its expense (except that such Bank shall
remain liable to the extent such failure to give notice does not result in a
loss to the Bank), or (c) if the same results from a compromise and settlement
agreement entered into without the consent of such Bank, which shall not be
unreasonably withheld. In addition, each Bank agrees promptly upon demand to
reimburse the Agent (to the extent not reimbursed by the Borrowers and without
limiting the Obligation of the Borrowers to do so) in proportion to its Ratable
Share for all amounts due and payable by the Borrowers to the Agent in
connection with the Agent's periodic audit of the Loan Parties' books, records
and business properties.

          10.8 RELIANCE BY AGENT.

               The Agent shall be entitled to rely upon any writing, telegram,
telex or teletype message, resolution, notice, consent, certificate, letter,
cablegram, statement, order or other document or conversation by telephone or
otherwise believed by it to be genuine and correct and to have been signed, sent
or made by the proper Person or Persons, and upon the advice and opinions of
counsel and other professional advisers selected by the Agent. The Agent shall
be fully justified in failing or refusing to take any action hereunder unless it
shall first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.

          10.9 NOTICE OF DEFAULT.

               The Agent shall not be deemed to have knowledge or notice of the
occurrence of any Potential Default or Event of Default unless the Agent has
received written notice from a Bank or a Borrower referring to this Agreement,
describing such Potential Default or Event of Default and stating that such
notice is a "notice of default."

          10.10 NOTICES.

               The Agent shall promptly send to each Bank a copy of all notices
received from a Borrower pursuant to the provisions of this Agreement or the
other Loan Documents promptly upon receipt thereof.


                                      -96-



          10.11 BANKS IN THEIR INDIVIDUAL CAPACITIES; AGENT IN ITS INDIVIDUAL
CAPACITY.

               With respect to its Revolving Credit Commitment, the Revolving
Credit Loans, Swing Loan Commitment, Swing Loans, the Term Loan Commitment and
the Term Loan made by it and any other rights and powers given to it as a Bank
hereunder or under any of the other Loan Documents, the Agent shall have the
same rights and powers hereunder as any other Bank and may exercise the same as
though it were not the Agent, and the term "BANK" and "BANKS" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. PNC
Bank and its Affiliates and each of the Banks and their respective Affiliates
may, without liability to account, except as prohibited herein, make loans to,
issue letters of credit for the account of, acquire equity interests in, accept
deposits from, discount drafts for, act as trustee under indentures of, and
generally engage in any kind of banking, trust, financial advisory, underwriting
or other business with, the Loan Parties and their Affiliates, in the case of
the Agent, as though it were not acting as Agent hereunder and in the case of
each Bank, as though such Bank were not a Bank hereunder, in each case, in the
case of a Bank, after prior written notice to Agent and otherwise without notice
to or consent of the other Banks. The Banks acknowledge that, pursuant to such
activities, the Agent or its Affiliates may (i) receive information regarding
the Loan Parties or any of their Subsidiaries or Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Loan Parties or such Subsidiary or Affiliate) and acknowledge that the Agent
shall be under no obligation to provide such information to them, and (ii)
accept fees and other consideration from the Loan Parties for services in
connection with this Agreement and otherwise without having to account for the
same to the Banks.

          10.12 HOLDERS OF NOTES.

               The Agent may deem and treat any payee of any Note as the owner
thereof for all purposes hereof unless and until written notice of the
assignment or transfer thereof shall have been filed with the Agent. Any
request, authority or consent of any Person who at the time of making such
request or giving such authority or consent is the holder of any Note shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
Note or of any Note or Notes issued in exchange therefor.

          10.13 EQUALIZATION OF BANKS.

               The Banks and the holders of any participations in any
Commitments, Loans, Letters of Credit or other rights or obligations of a Bank
hereunder agree among themselves that, with respect to all amounts received by
any Bank or any such holder for application on any Obligation hereunder or under
any such participation, whether received by voluntary payment, by realization
upon security, by the exercise of the right of set-off or banker's lien, by
counterclaim or by any other non-pro rata source, equitable adjustment will be
made in the manner stated in the following sentence so that, in effect, all such
excess amounts will be shared ratably among the Banks and such holders in
proportion to their interests in payments on the Obligations, except as
otherwise provided in Sections 4.4.3, 5.4.2 or 5.6. The Banks or any


                                      -97-



such holder receiving any such amount shall purchase for cash from each of the
other Banks an interest in Obligations owed to such Bank in such amount as shall
result in a ratable participation by the Banks and each such holder in the
aggregate unpaid amount of the Obligations, provided that if all or any portion
of such excess amount is thereafter recovered from the Bank or the holder making
such purchase, such purchase shall be rescinded and the purchase price restored
to the extent of such recovery, together with interest or other amounts, if any,
required by law (including court order) to be paid by the Bank or the holder
making such purchase.

          10.14 SUCCESSOR AGENT.

               The Agent (i) may resign as Agent or (ii) shall resign if such
resignation is requested by the Required Banks (if the Agent is a Bank, the
Agent's Loans and its Commitment shall be considered in determining whether the
Required Banks have requested such resignation) or required by Section 5.4.2, in
either case of (i) or (ii) by giving not less than thirty (30) days' prior
written notice to the Borrowers. If the Agent shall resign under this Agreement,
then either (a) the Required Banks shall appoint from among the Banks a
successor agent for the Banks, subject to the consent of the Borrowers, such
consent not to be unreasonably withheld, or (b) if a successor agent shall not
be so appointed and approved within the thirty (30) day period following the
Agent's notice to the Banks of its resignation, then the Agent shall appoint,
with the consent of the Borrowers, such consent not to be unreasonably withheld,
a successor agent who shall serve as Agent until such time as the Required Banks
appoint and the Borrowers consent to the appointment of a successor agent. Upon
its appointment pursuant to either clause (a) or (b) above, such successor agent
shall succeed to the rights, powers and duties of the Agent, and the term
"AGENT" shall mean such successor agent, effective upon its appointment, and the
former Agent's rights, powers and duties as Agent shall be terminated without
any other or further act or deed on the part of such former Agent or any of the
parties to this Agreement. After the resignation of any Agent hereunder, the
provisions of this Section 10 shall inure to the benefit of such former Agent
and such former Agent shall not by reason of such resignation be deemed to be
released from liability for any actions taken or not taken by it while it was an
Agent under this Agreement.

          10.15 AGENT'S FEE.

               The Borrowers, on a joint and several basis, shall pay to the
Agent a nonrefundable fee (the "AGENT'S FEE") under the terms of a letter (the
"AGENT'S LETTER") among the Borrowers and Agent, as amended from time to time.

          10.16 AVAILABILITY OF FUNDS.

               The Agent may assume that each Bank has made or will make the
proceeds of the applicable Loan available to the Agent in the applicable
currency unless the Agent shall have been notified by such Bank on or before the
later of (1) the close of Business on the Business Day preceding the Borrowing
Date with respect to such Loan or two (2) hours before the time on which the
Agent actually funds the proceeds of such Loan to the Borrowers (whether using
its own funds pursuant to this Section 10.16 or using proceeds deposited with
the


                                      -98-



Agent by the Banks and whether such funding occurs before or after the time on
which Banks are required to deposit the proceeds of such Loan with the Agent).
The Agent may, in reliance upon such assumption (but shall not be required to),
make available to the Borrowers a corresponding amount in the applicable
currency. If such corresponding amount is not in fact made available to the
Agent by such Bank in the applicable currency, the Agent shall be entitled to
recover such amount on demand from such Bank (or, if such Bank fails to pay such
amount forthwith upon such demand from the Borrower) together with interest
thereon, in respect of each day during the period commencing on the date such
amount was made available to the Borrowers and ending on the date the Agent
recovers such amount, at a rate per annum equal to (i) the Federal Funds
Effective Rate during the first three (3) days after such interest shall begin
to accrue and (ii) the applicable interest rate in respect of such Loan after
the end of such three-day period.

          10.17 CALCULATIONS.

               In the absence of gross negligence or willful misconduct, the
Agent shall not be liable for any error in computing the amount payable to any
Bank whether in respect of the Loans, fees or any other amounts due to the Banks
under this Agreement. In the event an error in computing any amount payable to
any Bank is made, the Agent, the Borrowers and each affected Bank shall,
forthwith upon discovery of such error, make such adjustments as shall be
required to correct such error, and any compensation therefor will be calculated
at the Federal Funds Effective Rate or the Overnight Rate if such computation
relates to a Revolving Credit Loan made in an Optional Currency.

          10.18 NO RELIANCE ON AGENT'S CUSTOMER IDENTIFICATION PROGRAM.

               Each Bank acknowledges and agrees that neither such Bank, nor any
of its Affiliates, participants or assignees, may rely on the Agent to carry out
such Bank's, Affiliate's, participant's or assignee's customer identification
program, or other obligations required or imposed under or pursuant to the USA
Patriot Act or the regulations thereunder, including the regulations contained
in 31 CFR 103.121 (as hereafter amended or replaced, the "CIP REGULATIONS"), or
any other Anti-Terrorism Law, including any programs involving any of the
following items relating to or in connection with any of the Loan Parties, their
Affiliates or their agents, the Loan Documents or the transactions hereunder or
contemplated hereby: (1) any identity verification procedures, (2) any
recordkeeping, (3) comparisons with government lists, (4) customer notices or
(5) other procedures required under the CIP Regulations or such other Laws.

          10.19 BENEFICIARIES.

               Except as expressly provided herein, the provisions of this
Section 10 are solely for the benefit of the Agent and the Banks, and the Loan
Parties shall not have any rights to rely on or enforce any of the provisions
hereof. In performing its functions and duties under this Agreement, the Agent
shall act solely as agent of the Banks and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for any of the Loan Parties.


                                      -99-



                               11. MISCELLANEOUS

          11.1 MODIFICATIONS, AMENDMENTS OR WAIVERS.

               With the written consent of the Required Banks, the Agent, acting
on behalf of all the Banks, and the Company on behalf of the Loan Parties, may
from time to time enter into written agreements amending or changing any
provision of this Agreement or any other Loan Document or the rights of the
Banks or the Loan Parties hereunder or thereunder, or may grant written waivers
or consents to a departure from the due performance of the Obligations of the
Loan Parties hereunder or thereunder. Any such agreement, waiver or consent made
with such written consent shall be effective to bind all the Banks and the Loan
Parties; provided, that, without the written consent of all the Banks, no such
agreement, waiver or consent may be made which will:

               11.1.1 INCREASE OF COMMITMENT; EXTENSION OF EXPIRATION DATE.

               Increase the amount of the Revolving Credit Commitment or Term
Loan Commitment or Swing Loan Commitment of any Bank hereunder or extend the
Expiration Date;

               11.1.2 EXTENSION OF PAYMENT; REDUCTION OF PRINCIPAL INTEREST OR
FEES; MODIFICATION OF TERMS OF PAYMENT.

               Whether or not any Loans are outstanding, extend the time for
payment of principal or interest of any Loan (excluding the due date of any
mandatory prepayment of a Loan or any mandatory Commitment reduction in
connection with such a mandatory prepayment hereunder except for mandatory
reductions of the Commitments on the Expiration Date), the Commitment Fee or any
other fee payable to any Bank, or reduce the principal amount of or the rate of
interest borne by any Loan or reduce the Commitment Fee or any other fee payable
to any Bank, or otherwise affect the terms of payment of the principal of or
interest of any Loan, the Commitment Fee or any other fee payable to any Bank;

               11.1.3 RELEASE OF COLLATERAL OR GUARANTOR.

               Release any Collateral consisting of capital stock or other
ownership interests of any Loan Party or its Subsidiary or substantially all of
the assets of any Loan Party, any Guarantor from its Obligations under the
Guaranty Agreement or any other security for any of the Loan Parties'
Obligations, except for releases of Collateral pursuant to Section 8.1.13.2; or

               11.1.4 MISCELLANEOUS.

               Amend Sections 5.2, 10.6 or 10.13 or this Section 11.1, alter any
provision regarding the pro rata treatment of the Banks, change the definition
of Required Banks, or change any requirement providing for the Banks or the
Required Banks to authorize the taking of any action hereunder;


                                     -100-



provided, further, that no agreement, waiver or consent which would modify the
interests, rights or obligations of the Agent in its capacity (as applicable) as
Agent or the issuer of Letters of Credit or PNC Bank, in the case of Swing Loan,
lender shall be effective without the written consent of the Agent.

          11.2 NO IMPLIED WAIVERS; CUMULATIVE REMEDIES; WRITING REQUIRED.

               No course of dealing and no delay or failure of the Agent or any
Bank in exercising any right, power, remedy or privilege under this Agreement or
any other Loan Document shall affect any other or future exercise thereof or
operate as a waiver thereof, nor shall any single or partial exercise thereof or
any abandonment or discontinuance of steps to enforce such a right, power,
remedy or privilege preclude any further exercise thereof or of any other right,
power, remedy or privilege. The rights and remedies of the Agent and the Banks
under this Agreement and any other Loan Documents are cumulative and not
exclusive of any rights or remedies which they would otherwise have. Any waiver,
permit, consent or approval of any kind or character on the part of any Bank of
any breach or default under this Agreement or any such waiver of any provision
or condition of this Agreement must be in writing and shall be effective only to
the extent specifically set forth in such writing.

          11.3 REIMBURSEMENT AND INDEMNIFICATION OF BANKS BY THE BORROWER;
TAXES.

               The Borrowers, jointly and severally, agree unconditionally upon
demand to pay or reimburse to each Bank (other than the Agent, as to which the
Borrowers' Obligations are set forth in Section 10.5) and to save such Bank
harmless against (i) liability for the payment of all reasonable out-of-pocket
costs, expenses and disbursements (including reasonable fees and expenses of
counsel for each Bank except with respect to (a) and (b) below), incurred by
such Bank (a) in connection with the administration and interpretation of this
Agreement, and other instruments and documents to be delivered hereunder, (b)
relating to any amendments, waivers or consents pursuant to the provisions
hereof, (c) in connection with the enforcement of this Agreement or any other
Loan Document, or collection of amounts due hereunder or thereunder or the proof
and allowability of any claim arising under this Agreement or any other Loan
Document, whether in bankruptcy or receivership proceedings or otherwise, and
(d) in any workout or restructuring or in connection with the protection,
preservation, exercise or enforcement of any of the terms hereof or of any
rights hereunder or under any other Loan Document or in connection with any
foreclosure, collection or bankruptcy proceedings, or (ii) all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by or asserted against such Bank, in its capacity as such, in any
way relating to or arising out of this Agreement or any other Loan Documents or
any action taken or omitted by such Bank hereunder or thereunder, provided that
the Borrowers shall not be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (A) if the same results from such Bank's gross
negligence or willful misconduct, or (B) if the Borrowers were not given notice
of the subject claim and the opportunity to participate in the defense thereof,
at its expense (except that the Borrowers shall remain liable to


                                     -101-



the extent such failure to give notice does not result in a loss to the
Borrower), or (C) if the same results from a compromise or settlement agreement
entered into without the consent of the Borrowers, which shall not be
unreasonably withheld. The Banks will attempt to minimize the fees and expenses
of legal counsel for the Banks which are subject to reimbursement by the
Borrowers hereunder by considering the usage of one law firm to represent the
Banks and the Agent if appropriate under the circumstances. The Borrowers, on a
joint and several basis, agree unconditionally to pay all stamp, document,
transfer, recording or filing taxes or fees and similar impositions now or
hereafter determined by the Agent or any Bank to be payable in connection with
this Agreement or any other Loan Document, and the Borrowers, on a joint and
several basis, agree unconditionally to save the Agent and the Banks harmless
from and against any and all present or future claims, liabilities or losses
with respect to or resulting from any omission to pay or delay in paying any
such taxes, fees or impositions.

          11.4 HOLIDAYS.

               Whenever payment of a Loan to be made or taken hereunder shall be
due on a day which is not a Business Day such payment shall be due on the next
Business Day (except as provided in Section 4.2 with respect to Interest Periods
under the Euro-Rate Option) and such extension of time shall be included in
computing interest and fees, except that the Loans shall be due on the Business
Day preceding the Expiration Date if the Expiration Date is not a Business Day.
Whenever any payment or action to be made or taken hereunder (other than payment
of the Loans) shall be stated to be due on a day which is not a Business Day,
such payment or action shall be made or taken on the next following Business
Day, and such extension of time shall not be included in computing interest or
fees, if any, in connection with such payment or action.

          11.5 FUNDING BY BRANCH, SUBSIDIARY OR AFFILIATE.

               11.5.1 NOTIONAL FUNDING.

               Each Bank shall have the right from time to time, without notice
to the Borrowers, to deem any branch, Subsidiary or Affiliate (which for the
purposes of this Section 11.5 shall mean any corporation or association which is
directly or indirectly controlled by or is under direct or indirect common
control with any corporation or association which directly or indirectly
controls such Bank) of such Bank to have made, maintained or funded any Loan to
which the Euro-Rate Option applies at any time, provided that immediately
following (on the assumption that a payment were then due from the Borrowers to
such other office), and as a result of such change, the Borrowers would not be
under any greater financial obligation pursuant to Section 5.6 than it would
have been in the absence of such change. Notional funding offices may be
selected by each Bank without regard to such Bank's actual methods of making,
maintaining or funding the Loans or any sources of funding actually used by or
available to such Bank.


                                     -102-



               11.5.2 ACTUAL FUNDING.

               Each Bank shall have the right from time to time to make or
maintain any Loan or Letter of Credit Borrowing by arranging for a branch,
Subsidiary or Affiliate of such Bank to make or maintain such Loan subject to
the last sentence of this Section 11.5.2. If any Bank causes a branch,
Subsidiary or Affiliate to make or maintain any part of the Loans or Letter of
Credit Borrowing hereunder, all terms and conditions of this Agreement shall,
except where the context clearly requires otherwise, be applicable to such part
of the Loans or Letter of Credit Borrowing to the same extent as if such Loans
or Letter of Credit Borrowing were made or maintained by such Bank, but in no
event shall any Bank's use of such a branch, Subsidiary or Affiliate to make or
maintain any part of the Loans or Letter of Credit Borrowing hereunder cause
such Bank or such branch, Subsidiary or Affiliate to incur any cost or expenses
payable by the Borrowers hereunder or require the Borrowers to pay any other
compensation to any Bank (including any expenses incurred or payable pursuant to
Section 5.6) which would otherwise not be incurred.

          11.6 NOTICES; LENDING OFFICES.

               Any notice, request, demand, direction or other communication
(for purposes of this Section 11.6 only, a "NOTICE") to be given to or made upon
any party hereto under any provision of this Agreement shall be given or made by
telephone or in writing (which includes means of electronic transmission (i.e.,
"e-mail") or facsimile transmission or by setting forth such Notice on a site on
the World Wide Web (a "WEBSITE POSTING") if Notice of such Website Posting
(including the information necessary to access such site) has previously been
delivered to the applicable parties hereto by another means set forth in this
Section 11.6) in accordance with this Section 11.6. Any such Notice must be
delivered to the applicable parties hereto at the addresses and numbers set
forth under their respective names on SCHEDULE 1.1(B) hereof or in accordance
with any subsequent unrevoked Notice from any such party that is given in
accordance with this Section 11.6. Any Notice shall be effective:

                    (i) In the case of hand-delivery, when delivered;

                    (ii) If given by mail, four days after such Notice is
deposited with the United States Postal Service, with first-class postage
prepaid, return receipt requested;

                    (iii) In the case of a telephonic Notice, when a party is
contacted by telephone, if delivery of such telephonic Notice is confirmed no
later than the next Business Day by hand delivery, a facsimile or electronic
transmission, a Website Posting or overnight courier delivery of a confirmatory
notice (received at or before noon on such next Business Day);

                    (iv) In the case of a facsimile transmission, when sent to
the applicable party's facsimile machine's telephone number if the party sending
such Notice receives confirmation of the delivery thereof from its own facsimile
machine;


                                     -103-



                    (v) In the case of electronic transmission, when actually
received;

                    (vi) In the case of a Website Posting, upon delivery of a
Notice of such posting (including the information necessary to access such web
site) by another means set forth in this Section 11.6; and

                    (vii) If given by any other means (including by overnight
courier), when actually received.

Any Bank giving a Notice to a Loan Party shall concurrently send a copy thereof
to the Agent, and the Agent shall promptly notify the other Banks of its receipt
of such Notice. SCHEDULE 1.1(B) lists the Lending Offices of each Bank. Each
Bank may change its Lending Offices by written Notice to the Agent and other
Banks.

          11.7 SEVERABILITY.

               The provisions of this Agreement are intended to be severable. If
any provision of this Agreement shall be held invalid or unenforceable in whole
or in part in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without in
any manner affecting the validity or enforceability thereof in any other
jurisdiction or the remaining provisions hereof in any jurisdiction.

          11.8 GOVERNING LAW.

               Each Letter of Credit and Section 2.11 shall be subject to the
Uniform Customs and Practice for Documentary Credits (1993 Revision),
International Chamber of Commerce Publication No. 500, as the same may be
revised or amended from time to time, and to the extent not inconsistent
therewith, the internal laws of the Commonwealth of Pennsylvania without regard
to its conflict of laws principles, and the balance of this Agreement shall be
deemed to be a contract under the Laws of the Commonwealth of Pennsylvania and
for all purposes shall be governed by and construed and enforced in accordance
with the internal laws of the Commonwealth of Pennsylvania without regard to its
conflict of laws principles.

          11.9 PRIOR UNDERSTANDING.

               This Agreement and the other Loan Documents supersede all prior
understandings and agreements, whether written or oral, between the parties
hereto and thereto relating to the transactions provided for herein and therein,
including any prior confidentiality agreements and commitments.

          11.10 DURATION; SURVIVAL.

               All representations and warranties of the Loan Parties contained
herein or made in connection herewith shall survive the making of Loans and
issuance of Letters of Credit and shall not be waived by the execution and
delivery of this Agreement, any investigation by the


                                     -104-



Agent or the Banks, the making of Loans, issuance of Letters of Credit, or
payment in full of the Loans. All covenants and agreements of the Loan Parties
contained in Sections 8.1, 8.1.14 and 8.3 herein shall continue in full force
and effect from and after the date hereof so long as the Borrowers may borrow or
request Letters of Credit hereunder and until termination of the Commitments and
payment in full of the Obligations and expiration or termination of all Letters
of Credit. All covenants and agreements of the Borrowers and the Banks contained
herein relating to the payment of principal, interest, premiums, additional
compensation or expenses and indemnification, including those set forth in the
Notes, Section 5 and Sections 10.5, 10.7 and 11.3, shall survive payment in full
of the Obligations, expiration or termination of the Letters of Credit and
termination of the Commitments.

          11.11 SUCCESSORS AND ASSIGNS.

                    (i) This Agreement shall be binding upon and shall inure to
the benefit of the Banks, the Agent, the Loan Parties and their respective
successors and assigns, except that none of the Loan Parties may assign or
transfer any of its rights and Obligations hereunder or any interest herein.
Each Bank may, at its own cost, make assignments of or sell participations in
all or any part of its Commitments and the Loans and Letter of Credit Borrowings
made by it to one or more banks or other entities, subject to the consent of the
Company, on behalf of the Borrowers, and the Agent with respect to any assignee,
such consent not to be unreasonably withheld, provided that (1) no consent of
the Borrowers shall be required (A) if an Event of Default exists and is
continuing, (B) in the case of an assignment by a Bank to an Affiliate of such
Bank, or (C) in the case of an assignment by either PNC Bank or Credit Suisse
within 90 days following the Closing Date and (2) any assignment by a Bank to a
Person other than an Affiliate of such Bank may not be made in amounts less than
the lesser of $5,000,000.00 and the amount of the assigning Bank's Revolving
Credit Commitment or outstanding Term Loan. In the case of an assignment, upon
receipt by the Agent of the Assignment and Assumption Agreement, the assignee
shall have, to the extent of such assignment (unless otherwise provided
therein), the same rights, benefits and obligations as it would have if it had
been a signatory Bank hereunder, the Commitments shall be adjusted accordingly,
and upon surrender of any Note subject to such assignment, the Borrowers shall
execute and deliver a new Note to the assignee, if such assignee requests such a
Note in an amount equal to the amount of the Revolving Credit Commitment or Term
Loan assumed by it and a new Revolving Credit Note or Term Note to the assigning
Bank, if the assigning Bank requests such a Note, in an amount equal to the
Revolving Credit Commitment or Term Loan retained by it hereunder. Any Bank
which assigns any or all of its Revolving Credit Commitment or Loans to a Person
other than an Affiliate of such Bank shall pay to the Agent a service fee in the
amount of $3,500.00 for each assignment. In the case of a participation, the
participant shall only have the rights specified in Section 9.2.3 (the
participant's rights against such Bank in respect of such participation to be
those set forth in the agreement executed by such Bank in favor of the
participant relating thereto and not to include any voting rights except with
respect to changes of the type referenced in Sections 11.1.1, 11.1.2, or
11.1.3), all of such Bank's obligations under this Agreement or any other Loan
Document shall remain unchanged, and all amounts payable by any Loan Party
hereunder or thereunder shall be determined as if such Bank had not sold such
participation.


                                     -105-



                    (ii) Any assignee or participant which is not incorporated
under the Laws of the United States of America or a state thereof shall deliver
to the Borrowers and the Agent the form of certificate described in Section
11.17 relating to federal income tax withholding. Each Bank may furnish any
publicly available information concerning any Loan Party or its Subsidiaries and
any other information concerning any Loan Party or its Subsidiaries in the
possession of such Bank from time to time to assignees and participants
(including prospective assignees or participants), provided that such assignees
and participants agree to be bound by the provisions of Section 11.12.

                    (iii) Notwithstanding any other provision in this Agreement,
any Bank may at any time pledge or grant a security interest in all or any
portion of its rights under this Agreement, its Note (if any) and the other Loan
Documents to any Federal Reserve Bank in accordance with Regulation A of the FRB
or U.S. Treasury Regulation 31 CFR Section 203.14 without notice to or consent
of the Borrowers or the Agent. No such pledge or grant of a security interest
shall release the Transferor Bank of its obligations hereunder or under any
other Loan Document.

          11.12 CONFIDENTIALITY.

               11.12.1 GENERAL.

               The Agent and the Banks each agree to keep confidential all
information obtained from any Loan Party or its Subsidiaries which is nonpublic
and confidential or proprietary in nature (including any information the
Borrowers specifically designate as confidential), except as provided below, and
to use such information only in connection with their respective capacities
under this Agreement and for the purposes contemplated hereby. The Agent and the
Banks shall be permitted to disclose such information (i) to outside legal
counsel, accountants and other professional advisors who need to know such
information in connection with the administration and enforcement of this
Agreement, subject to agreement of such Persons to maintain the confidentiality,
(ii) to assignees and participants as contemplated by Section 11.11, and
prospective assignees and participants who will be required to maintain
confidentiality as if they were a Bank under this Agreement, (iii) to the extent
requested by any bank regulatory authority or, with notice to the Borrowers, as
otherwise required by applicable Law or by any subpoena or similar legal
process, or in connection with any investigation or proceeding arising out of
the transactions contemplated by this Agreement, (iv) if it becomes publicly
available other than as a result of a breach of this Agreement or becomes
available from a source not known to be subject to confidentiality restrictions,
or (v) if the Borrowers shall have consented to such disclosure.

               11.12.2 SHARING INFORMATION WITH AFFILIATES OF THE BANKS.

               Each Loan Party acknowledges that from time to time financial
advisory, investment banking and other services may be offered or provided to
the Borrowers or one or more of its Affiliates (in connection with this
Agreement or otherwise) by any Bank or by one or more Subsidiaries or Affiliates
of such Bank and each of the Loan Parties hereby authorizes each


                                     -106-



Bank to share any information delivered to such Bank by such Loan Party and its
Subsidiaries pursuant to this Agreement, or in connection with the decision of
such Bank to enter into this Agreement, to any such Subsidiary or Affiliate of
such Bank, it being understood that any such Subsidiary or affiliate of any Bank
receiving such information shall be bound by the provisions of Section 11.12.1
as if it were a Bank hereunder. Such Authorization shall survive the repayment
of the Loans and other Obligations and the termination of the Commitments.

          11.13 COUNTERPARTS.

               This Agreement may be executed by different parties hereto on any
number of separate counterparts, each of which, when so executed and delivered,
shall be an original, and all such counterparts shall together constitute one
and the same instrument.

          11.14 AGENT'S OR BANK'S CONSENT.

               Whenever the Agent's or any Bank's consent is required to be
obtained under this Agreement or any of the other Loan Documents as a condition
to any action, inaction, condition or event, the Agent and each Bank shall be
authorized to give or withhold such consent in its sole and absolute discretion
(unless otherwise specified herein) and to condition its consent upon the giving
of additional collateral, the payment of money or any other matter.

          11.15 EXCEPTIONS.

               The representations, warranties and covenants contained herein
shall be independent of each other, and no exception to any representation,
warranty or covenant shall be deemed to be an exception to any other
representation, warranty or covenant contained herein unless expressly provided,
nor shall any such exceptions be deemed to permit any action or omission that
would be in contravention of applicable Law.

          11.16 CONSENT TO FORUM; WAIVER OF JURY TRIAL.

               EACH LOAN PARTY HEREBY IRREVOCABLY CONSENTS TO THE NONEXCLUSIVE
JURISDICTION OF THE COURT OF COMMON PLEAS OF PHILADELPHIA COUNTY AND THE UNITED
STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA, AND WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS BE MADE BY CERTIFIED OR REGISTERED MAIL DIRECTED TO SUCH LOAN
PARTY AT THE ADDRESSES PROVIDED FOR IN SECTION 11.6 AND SERVICE SO MADE SHALL BE
DEEMED TO BE COMPLETED UPON ACTUAL RECEIPT THEREOF. EACH LOAN PARTY WAIVES ANY
OBJECTION TO JURISDICTION AND VENUE OF ANY ACTION INSTITUTED AGAINST IT AS
PROVIDED HEREIN AND AGREES NOT TO ASSERT ANY DEFENSE BASED ON LACK OF
JURISDICTION OR VENUE. EACH LOAN PARTY, THE AGENT AND THE BANKS HEREBY WAIVE
TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND
ARISING OUT OF OR


                                     -107-



RELATED TO THIS AGREEMENT, ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULL
EXTENT PERMITTED BY LAW.

          11.17 CERTIFICATIONS FROM BANKS AND PARTICIPANTS

               11.17.1 TAX WITHHOLDING.

               Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
(and, upon the written request of the Agent, each other Bank or assignee or
participant of a Bank) agrees that it will deliver to each of the Company and
the Agent two (2) duly completed appropriate valid Withholding Certificates (as
defined under Section 1.1441-1(c)(16) of the Income Tax Regulations (the
"REGULATIONS")) certifying its status (i.e. U.S. or foreign person) and, if
appropriate, making a claim of reduced, or exemption from, U.S. withholding tax
on the basis of an income tax treaty or an exemption provided by the Internal
Revenue Code. The term "WITHHOLDING CERTIFICATE" means a Form W-9; a Form
W-8BEN; a Form W-8ECI; a Form W-8IMY and the related statements and
certifications as required under Section 1.1441-1(e)(2) and/or (3) of the
Regulations; a statement described in Section 1.871-14(c)(2)(v) of the
Regulations; or any other certificates under the Internal Revenue Code or
Regulations that certify or establish the status of a payee or beneficial owner
as a U.S. or foreign person. Each Bank, assignee or participant required to
deliver to the Company and the Agent a Withholding Certificate pursuant to the
preceding sentence shall deliver such valid Withholding Certificate as follows:
(A) each Bank which is a party hereto on the Closing Date shall deliver such
valid Withholding Certificate at least five (5) Business Days prior to the first
date on which any interest or fees are payable by the Borrowers hereunder for
the account of such Bank; (B) each assignee or participant shall deliver such
valid Withholding Certificate at least five (5) Business Days before the
effective date of such assignment or participation (unless the Agent in its sole
discretion shall permit such assignee or participant to deliver such valid
Withholding Certificate less than five (5) Business Days before such date in
which case it shall be due on the date specified by the Agent). Each Bank,
assignee or participant which so delivers a valid Withholding Certificate
further undertakes to deliver to each of the Company and the Agent two (2)
additional copies of such Withholding Certificate (or a successor form) on or
before the date that such Withholding Certificate expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent
Withholding Certificate so delivered by it, and such amendments thereto or
extensions or renewals thereof as may be reasonably requested by the Borrowers
or the Agent. Notwithstanding the submission of a Withholding Certificate
claiming a reduced rate of or exemption from U.S. withholding tax, the Agent
shall be entitled to withhold United States federal income taxes at the full 30%
withholding rate if in its reasonable judgment it is required to do so under the
due diligence requirements imposed upon a withholding agent under Section
1.1441-7(b) of the Regulations. Further, the Agent is indemnified under Section
1.1461-1(e) of the Regulations against any claims and demands of any Bank or
assignee or participant of a Bank for the amount of any tax it deducts and
withholds in accordance with regulations under Section 1441 of the Internal
Revenue Code.


                                     -108-


               11.17.2 USA PATRIOT ACT.

               Each Bank or assignee or participant of a Bank that is not
incorporated under the Laws of the United States of America or a state thereof
(and is not excepted from the certification requirement contained in Section 313
of the USA Patriot Act and the applicable regulations because it is both (i) an
affiliate of a depository institution or foreign bank that maintains a physical
presence in the United states or foreign county, and (ii) subject to supervision
by a banking authority regulating such affiliated depository institution or
foreign bank) shall deliver to the Agent the certification, or, if applicable,
recertification, certifying that such Bank is not a "shell" and certifying to
other matters as required by Section 313 of the USA Patriot Act and the
applicable regulations: (1) within 10 days after the Closing Date, and (2) at
such other times as are required under the USA Patriot Act.

          11.18 JOINDER OF GUARANTORS AND BORROWERS.

               Any Material Subsidiary of the Borrowers which is required to
join this Agreement as a Guarantor pursuant to Section 8.2.9 or any Subsidiary
which elects to join this Agreement as a Borrower shall execute and deliver to
the Agent (i) a Guarantor Joinder or Borrower Joinder, as applicable, pursuant
to which it shall join as a Guarantor or Borrower each of the Loan Documents to
which the Guarantors or Borrowers are parties; (ii) documents in the forms
described in Section 7.1 modified as appropriate to relate to such Subsidiary;
and (iii) documents necessary to grant and perfect Prior Security Interests, to
the extent required hereunder, to the Agent, for the benefit of the Banks, in
all Collateral held by such Subsidiary. The Loan Parties shall deliver such
Guarantor Joinder or Borrower Joinder and related documents to the Agent within
five (5) Business Days after the date of the filing of such Subsidiary's
articles of incorporation if the Subsidiary is a corporation, the date of the
filing of its certificate of limited partnership if it is a limited partnership
or the date of its organization if it is an entity other than a limited
partnership or corporation.

          11.19 NATURE OF FOREIGN BORROWER OBLIGATIONS.

               (a) Notwithstanding the joint and several liability of the
Foreign Borrowers under this Agreement or any other Loan Document, the
obligations of each Foreign Borrower on account of principal and interest under
the Loans and Reimbursement Obligations and Letters of Credit Borrowings shall
be limited to the principal amount advanced to such Foreign Borrower or its
Subsidiaries and reimbursement of draws under Letters of Credit issued for the
account of such Foreign Borrower or its Subsidiaries and, in each case, interest
thereon. Each Foreign Borrower shall be liable only for its pro rata share of
all fees and expenses and other sums due hereunder (other than principal and
interest on the Loans) based upon the ratio of Loans outstanding to such Foreign
Borrower to the total amount of Loans outstanding hereunder.

               (b) Any Foreign Borrower may from time to time deliver a
termination notice to the Agent requesting that it no longer be a party hereto.
Such termination shall be effective two Business Days after receipt by the Agent
so long as all obligations of such Foreign Borrower hereunder have been paid in
full (including principal, interest and other amounts) and


                                     -109-



no Letter of Credit issued for the account or benefit of such Foreign Borrower
is outstanding; provided that, to the extent this Agreement provides for the
survival of certain provisions upon termination hereof, such surviving
provisions shall survive a termination under this subsection with respect to any
such Foreign Borrower. Following receipt of such notice, no further Loans may be
borrowed by such Foreign Borrower hereunder, unless such Foreign Borrower shall
thereafter rejoin this Agreement as a Borrower pursuant to the joinder
provisions of Section 11.18.


                                     -110-



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

                                        BORROWERS:
                                        P.H. GLATFELTER COMPANY


                                        By: /s/ John C. van Roden, Jr.
                                            ------------------------------------
                                        Name: John C. van Roden, Jr.
                                        Title: Executive Vice President and CFO


                                        PHG TEA LEAVES, INC.


                                        By: /s/ George B. Amoss, Jr.
                                            ------------------------------------
                                        Name: George B. Amoss, Jr.
                                        Title: President


                                        PAPIERFABRIK SCHOELLER & HOESCH GMBH &
                                        CO. KG

                                        By: S&H Verwaltungsgesellschaft mbH,
                                            its General Partner


                                        By: /s/ John P. Jacunski
                                            ------------------------------------
                                        Name: John P. Jacunski
                                        Title: Managing Director


                                        S&H VERWALTUNGSGESELLSCHAFT MBH


                                        By: /s/ John P. Jacunski
                                            ------------------------------------
                                        Name: John P. Jacunski
                                        Title: Managing Director


                                        GLATFELTER-UK, LTD.


                                        By: /s/ Jeffrey J. Norton
                                            ------------------------------------
                                        Name: Jeffrey J. Norton
                                        Title: Secretary


                                        MOLLANVICK, INC.


                                        By: /s/ George B. Amoss, Jr.
                                            ------------------------------------
                                        Name: George B. Amoss, Jr.
                                        Title: President



                                        GUARANTORS:

                                        GLATFELTER PULP WOOD COMPANY


                                        By: /s/ George H. Glatfelter
                                            ------------------------------------
                                        Name: George H Glatfelter
                                        Title: Chairman and President


                                        GLT INTERNATIONAL FINANCE, LLC


                                        By: /s/ George B. Amoss, Jr.
                                            ------------------------------------
                                        Name: George B. Amoss, Jr.
                                        Title: Treasurer


                                        GLENN-WOLFE, INC.


                                        By: /s/ George B. Amoss, Jr.
                                            ------------------------------------
                                        Name: George B. Amoss, Jr.
                                        Title: President



                                        PNC BANK, NATIONAL ASSOCIATION,
                                        and as Agent and as a Bank


                                        By: /s/ Frank A. Pugliese
                                            ------------------------------------
                                        Name: Frank A. Pugliese
                                        Title: Senior Vice President



                                        CREDIT SUISSE, CAYMAN ISLANDS BRANCH


                                        By: /s/ David Dodd
                                            ------------------------------------
                                        Name: David Dodd
                                        Title: Vice President


                                        By: /s/ Mikhail Faybusovich
                                            ------------------------------------
                                        Name: Mikhail Faybusovich
                                        Title: Associate



                                 SCHEDULE 1.1(A)

                   PRICING GRID FOR P. H. GLATFELTER COMPANY*
                             PRICING IN BASIS POINTS



                         LEVEL I           LEVEL II           LEVEL III         LEVEL IV          LEVEL V
                    ----------------   ----------------   ----------------   --------------   --------------
                                                                               
BASIS FOR PRICING   IF THE COMPANY'S   IF THE COMPANY'S   IF THE COMPANY'S       IF THE           IF THE
                     DEBT RATING IS     DEBT RATING IS     DEBT RATING IS    COMPANY'S DEBT   COMPANY'S DEBT
                       BAA2/BBB OR        BAA3/BBB-.          BA1/BB+.          RATING IS        RATING IS
                         HIGHER.                                                 BA2/BB.        BA3/BB- OR
                                                                                                  LOWER.

COMMITMENT FEE            12.5                 15               17.5               22.5             27.5

EURO-RATE SPREAD          67.5               77.5               87.5              112.5            137.5


*    IN THE EVENT THE COMPANY'S SENIOR UNSECURED DEBT IS SPLIT-RATED, PRICING
     WILL BE DETERMINED BY THE HIGHER OF THE TWO RATINGS, EXCEPT THAT IF THE
     RATINGS DIFFER BY MORE THAN ONE LEVEL, PRICING WILL BE DETERMINED BY ONE
     LEVEL ABOVE THE LOWER RATING. IN THE EVENT THAT EITHER MOODY'S OR STANDARD
     & POOR'S SHALL CEASE TO RATE THE SENIOR UNSECURED DEBT OF THE COMPANY,
     LEVEL V PRICING SHALL APPLY. INCREASES OR DECREASES IN PRICING AND FEES
     PURSUANT TO THE GRID ABOVE SHALL BE EFFECTIVE AS OF THE DATE ON WHICH ANY
     RATING OF THE SENIOR UNSECURED DEBT OF THE COMPANY SHALL CHANGE (IF SUCH
     CHANGE RESULTS IN A CHANGE IN THE PRICING LEVEL), EXCEPT THAT ANY INCREASE
     OR DECREASE IN THE PRICING RELATING TO OUTSTANDING BORROWING TRANCHES OF
     LOANS IN AN OPTIONAL CURRENCY SHALL BE EFFECTIVE UPON THE EXPIRATION OF THE
     CURRENT INTEREST PERIOD (AND NOT AT THE TIME OF THE CHANGE IN THE COMPANY'S
     SENIOR UNSECURED DEBT RATING).


                               SCHEDULE 1.1(A) - 1



                                 SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

PART 1 - COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES TO BANKS AND AGENT



                                      AMOUNT OF         AMOUNT OF        AMOUNT OF
                                      COMMITMENT       COMMITMENT       COMMITMENT
                                    FOR REVOLVING       FOR TERM         FOR SWING                       RATABLE
BANK                                 CREDIT LOANS         LOANS            LOANS          COMMITMENT      SHARE
- ----                               ---------------   --------------   --------------   ---------------   -------
                                                                                          
BANK NAME (ALSO AGENT):
PNC Bank, National Association
ADDRESS FOR NOTICES:
1600 Market Street
F2F070 21 1
Philadelphia, PA 19103
Attention: Frank A. Pugliese,
Vice President-PNC Corporate
Finance
Telephone: (215)585-5961
Facsimile: (215)585-6987
                                   $100,000,000.00   $50,000,000.00   $20,000,000.00   $150,000,000.00     50%
ADDRESS OF LENDING OFFICE:
PNC Firstside Center
500 First Avenue
3rd Floor
Pittsburgh, PA 15219
Attention: Rini Davis, Assistant
Vice President
telephone: (412)762-7638
Facsimile: (412)762-8672

BANK NAME:
Credit Suisse, Cayman Islands
Branch
ADDRESS FOR NOTICES AND
LENDING OFFICE:
11 Madison Avenue, OMA 2
New York, NY 10010
Attention: Ed Markowski
Telephone: (212)538-3380
Facsimile: (212)538-6851
                                   $100,000,000.00   $50,000,000.00                    $150,000,000.00     50%


                               SCHEDULE 1.1(B)-1



                                 SCHEDULE 1.1(B)

                 COMMITMENTS OF BANKS AND ADDRESSES FOR NOTICES

PART 2 - ADDRESSES FOR NOTICES TO LOAN PARTIES:

EACH LOAN PARTY:

c/o P. H. Glatfelter Company
Address: 96 South George Street, Suite 500
York, PA 17401
Attention: George Amoss, Treasurer
Telephone: (717)225-2746
Facsimile: (717)812-8964

                               SCHEDULE 1.1(B)-3



                                 SCHEDULE 1.1(E)

                           EXISTING LETTERS OF CREDIT

L/C # 902151 $10,000 Beneficiary: PA Department of Environmental Resources
(expiration--7/19/2006)

L/C # 902152 $4,200,000 Beneficiary: Bureau of Worker's Compensation Self
Insurance Division (expiration--1/14/2007)


                               SCHEDULE 1.1(E)-1



                                 SCHEDULE l.l(M)

                              MATERIAL SUBSIDIARIES

The Glatfelter Pulp Wood Company

Glenn-Wolfe, Inc.

Mollanvick, Inc.

GLT International Finance, LLC

Papierfabrik Schoeller & Hoesch GmbH & Co. KG

S&H Verwaltungsgesellschaft mbH

PHG Tea Leaves, Inc.

Glatfelter-UK, Ltd.



                                 SCHEDULE l.l(P)

                                 PERMITTED LIENS

1.  P.H. Glatfeiter Company
    UCC-1 File Number: 2005120901730
    Filing Date:   12/06/05
    Lapse Date:    12/06/10

Secured Party:    Motion Industries Inc.
                  1605 Alton Road
                  Birmingham, AL 35210

Debtor:           Glatfeiter P.H Company
                  96 S. George Street
                  Suite 500
                  Spring Grove, PA 17362

Borrowers represent and warrant that this UCC-1 relates to a consignment
arrangement of the Company, and extends only to the property consigned by (and
no other property or assets of the Company

2.  GPW Timberlands. LLC
    File Number:   30777345
    Filing Date:   3/26/03

Secured Party:    Suntrust Bank
                  303 Peachtree Street
                  Atlanta, GA 30308

Debtor:           GPW Timberlands, LLC
                  222 Delaware Avenue
                  Suite 1200
                  Wilmington, DE 19801

3. The following UCC-1 financing statements, currently on file with the
Pennsylvania Department of State, Uniform Commercial Code Section, filed against
the Company, as debtor, which the Borrowers represent and warrant relate to the
Company and extend only to the equipment leased by (and no other property or
assets of) the Company:

Jurisdiction : PA-DEPARTMENT OF STATE UNIFORM COMMERCIAL CODE SECTION

     File Type:               Original
     File Number:             33810317
     File Date:               04/10/2001
     Current Secured Party
     of Record :              BANC OF AMERICA VENDOR FINANCE INC



     File Type:               Original
     File Number:             34131300
     File Date:               07/09/2001
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING

     File Type:               Amendment
     File Number:             34240053
     File Date:               08/15/2001
     Original File Number :   34131300

     File Type :              Original
     File Number:             34131311
     File Date:               07/09/2001
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING

     File Type :              Original
     File Number:             34221016
     File Date:               08/13/2001
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING

     File Type:               Amendment
     File Number:             34541228
     File Date:               11/01/2001
     Original File Number :   34221016

     File Type:               Original
     File Number:             34681153
     File Date:               12/07/2001
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING

     File Type:               Amendment
     File Number:             34901165
     File Date:               02/07/2002
     Original File Number :   34681153

     File Type :              Amendment
     File Number:             36191403
     File Date :              05/02/2002
     Original File Number :   34681153

     File Type:               Original
     File Number:             34801297




     File Date:               01/10/2002
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING

     File Type:               Amendment
     File Number:             36241705
     File Date:               05/15/2002
     Original File Number :   34801297

     File Type :              Original
     File Number:             34840070
     File Date:               01/18/2002
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING

     File Type :              Original
     File Number:             34840083
     File Date:               01/18/2002
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING

     File Type :              Original
     File Number:             34840096
     File Date:               01/18/2002
     Current Secured Party
     of Record :              US BANCORP OLIVER ALLEN TECHNOLOGY LEASING



                                 SCHEDULE 5.5.1

                         MANDATORY PREPAYMENT PERCENTAGE



                         PERCENTAGE     PERCENTAGE                     PERCENTAGE
                        FOR PROCEEDS   FOR PROCEEDS     PERCENTAGE    OF PROCEEDS
           LEVERAGE          OF          OF EQUITY     FOR PROCEEDS   OF MATERIAL
LEVEL       RATIO       INDEBTEDNESS     ISSUANCE     OF ASSET SALE    RECOVERIES
- -----   -------------   ------------   ------------   -------------   -----------
                                                       
  I      GREATER THAN       100%            50%            100%           100%
         OR EQUAL TO
             3.0

  II      LESS THAN         100%            50%             75%           100%
           3.0, BUT
        GREATER THAN
             2.5

 III    LESS THAN 2.5        0%              0%              0%             0%


As of the Closing Date, Level I percentages shall apply. Thereafter, the
applicable Level shall be determined based on the most recently delivered
Compliance Certificate delivered pursuant to Section 8.3.3, provided, however,
that once the mandatory prepayment percentage has decreased, no subsequent
increase in the Leverage Ratio shall cause mandatory prepayment percentage to
increase.

                                SCHEDULE 5.5.1-1



                                 SCHEDULE 6.1.1

                          QUALIFICATIONS TO DO BUSINESS

                            P. H. GLATFELTER COMPANY
                                  SUBSIDIARIES



                                              JURISDICTION OF
                                               INCORPORATION    STATES QUALIFIED TO
                   ENTITY                       OR FORMATION        DO BUSINESS
- -------------------------------------------   ---------------   -------------------
                                                          
P. H. Glatfelter Company (GLT)                Pennsylvania      New Jersey
                                                                North Carolina
PHG Tea Leaves, Inc.                          Delaware          N/A
GLT International Finance LLC                 Delaware          N/A
The Glatfelter Pulp Wood Company              Maryland          Pennsylvania
Glatfelter Holdings, LLC                      Delaware          N/A
Glatfelter Holdings II, LLC                   Delaware          N/A
GPW Timberlands, LLC                          Delaware          N/A
Transwelt, Inc.                               Pennsylvania      N/A
GW Partners, LLC (50% partnership interest)   Wisconsin         N/A
Glenn-Wolfe, Inc.                             Delaware          N/A
Mollanvick, Inc.                              Delaware          N/A
Glatfelter Springing Member, Inc.             Delaware          N/A
Schoeller & Hoesch N.A., Inc. (S&H)           Delaware          North Carolina
Papierfabrik Schoeller & Hoesch
GmbH & Co. KG                                 Germany           N/A






                                              JURISDICTION OF
                                               INCORPORATION    STATES QUALIFIED
                   ENTITY                       OR FORMATION     TO DO BUSINESS
- -------------------------------------------   ---------------   ----------------
                                                          
Papcel-Papier und Cellulose,                  Germany           N/A
Technologie und Handels-GmbH
Papierfabrik Schoeller & Hoesch               Germany           N/A
Auslandsbeteiligungen GmbH
PHG Verwaltungsgesellschaft mbH               Germany           N/A
S&H Verwaltungsgesellschaft mbH               Germany           N/A
TL Verwaltungsgesellschaft mbH                Germany           N/A
Unicon-Papier-und Kunststoff handels GmbH     Germany           N/A
Schoeller & Hoesch SAS                        France            N/A
Glatfelter-UK, Ltd.                           United Kingdom    N/A
Balo-I Industrial, Inc.                       Philippines       N/A
Newtech Pulp Inc.                             Philippines       N/A
Papcel-Kiew                                   Ukraine           N/A



                                 SCHEDULE 6.1.2

                                  SUBSIDIARIES



                                 JURISDICTION OF                                       SHARES
                                INCORPORATION OF                                    OUTSTANDING/
NAME                                FORMATION        AUTHORIZED SHARES              STOCKHOLDERS
- ----                            ----------------   --------------------   --------------------------------
                                                                 
PHG Tea Leaves, Inc.            Delaware           1,000 shares common    1,000 shares owned by P.H.
                                                   stock ($0.01 par)      Glatfelter Company ("GLT")

GLT International Finance LLC   Delaware           N/A                    99% GLT ($69.3 million);
                                                                          l% S&H ($0.7 million)

Glatfelter Pulp Wood Company    Maryland           50 shares common       50 shares owned by GLT
                                                   stock

Glatfelter Holdings, LLC        Delaware           wholly owned by        Glatfelter Pulp Wood Company
                                                   Glatfelter Pulp Wood
                                                   Company

Glatfelter Holdings II, LLC     Delaware           wholly owned by        Glatfelter Pulp Wood Company
                                                   Glatfelter Pulp Wood
                                                   Company

GPW Timberlands, LLC            Delaware           N/A                    Glatfelter Pulpwood
                                                                          Company - sole member

Transwelt, Inc.                 Pennsylvania       wholly owned           100 shares owned by GLT

GW Partners, LLC (50%           Wisconsin          N/A                    50% Glatfelter (2,625
partnership interest)                                                     interests $26.25 million)
                                                                          50% WTMI (Joint Venture)

Glenn-Wolfe, Inc.               Delaware           1,000 shares common    1,000 shares owned by GLT
                                                   stock ($0.01 par)

Mollanvick, Inc.                Delaware           1,000 shares common    100 shares owned by GLT
                                                   stock ($0.01 par)

Glatfelter Springing Member,    Delaware           1,000 shares common    1,000 shares owned by GLT
Inc.                                               stock ($0.01 par)

Schoeller & Hoesch N.A., Inc.   Delaware           1,000 shares common    500 shares owned by Papierfabrik
(S&H)                                              stock ($1.00 par)      Schoeller & Hoesch
                                                                          Auslandsbeteiligungen GmbH






                                 JURISDICTION OF                                      SHARES
                                  INCORPORATION                                    OUTSTANDING/
NAME                              OF FORMATION       AUTHORIZED SHARES             STOCKHOLDERS
- ----                            ----------------   ---------------------   ----------------------------
                                                                  
Papierfabrik Schoeller &        Germany                                    S&H
Hoesch GmbH & Co. KG                                                       Verwaltungsgesellschaft
                                                                           mbH - DM 21,889,500
                                                                           PHG
                                                                           Verwaltungsgesellschaft
                                                                           mbH-DM 110,000

Papcel-Papier und Cellulose,    Germany            wholly owned by         Papierfabrik Schoeller &
Technologie und Handels-GmbH                       Papierfabrik Schoeller  Hoesch GmbH & Co. KG - DM
                                                   & Hoesch GmbH & Co.     50,000
                                                   KG

Papierfabrik Schoeller &        Germany            wholly owned by         Papierfabrik Schoeller &
Hoesch                                             Papierfabrik            Hoesch GmbH & Co. KG - DM
Auslandsbeteiligungen                              Schoeller & Hoesch      50,000
GmbH                                               GmbH & Co. KG


PHG                             Germany            wholly owned by PHG     PHG Tea Leaves, Inc. -
Verwaltungsgesellschaft mbH                        Tea Leaves, Inc.        DM 50,000

S&H                             Germany            wholly owned by PHG     PHG Tea Leaves, Inc. -
Verwaltungsgesellschaft                            Tea Leaves, Inc.        DM 50,000
mbH

TL                              Germany            wholly owned by PHG     PHG Tea Leaves, Inc.
Verwaltungsgesellschaft                            Tea Leaves, Inc.
mbH

Unicon-Papier-und Kunststoff    Germany            wholly owned by         Papierfabrik Schoeller &
handels GmbH                                       Papierfabrik            Hoesch
                                                   Schoeller & Hoesch      GmbH & Co. KG - DM
                                                   GmbH & Co. KG           50,000


Schoeller & Hoesch SAS          France             wholly owned by         Papierfabrik S&H
                                                   Papierfabrik S&H        Auslandsbeteiligungen
                                                   Auslandsbeteiligungen   GmbH-1,002,500 shares;
                                                   Gmbh                    15,300,000
                                                                           Euros S

Glatfelter-UK, Ltd.             United Kingdom     wholly owned by PHG     PHG Tea Leaves, Inc.
                                                   Tea Leaves, Inc.






                                 JURISDICTION OF                                      SHARES
                                  INCORPORATION                                    OUTSTANDING/
NAME                              OF FORMATION       AUTHORIZED SHARES             STOCKHOLDERS
- ----                            ----------------   ---------------------   ----------------------------
                                                                  
Balo-I Industrial, Inc.         Philippines                                Papcel-Papier und
                                                                           Cellulose, Technologie
                                                                           und Handels GmbH 998
                                                                           shares
                                                                           Eduardo R. Ramin-1 share
                                                                           (in person)
                                                                           Alberto P. Fenix, Jr.-750
                                                                           shares (in person)
                                                                           Dr. Bernd Seger - 1 share
                                                                           (proxy)
                                                                           Alberto B. Guevara, Jr.-
                                                                           749 shares (in person)
                                                                           Andreas Hirth - 1 share

Newtech Pulp Inc.               Philippines                                Papcel-Papier und
                                                                           Cellulose, Technologie
                                                                           und Handels GmbH
                                                                           1,999,995 shares
                                                                           Dr. Bernd Seger-1 share
                                                                           (proxy)
                                                                           Andreas Hirth - 1 share
                                                                           (proxy)
                                                                           Alberto Guevara, Jr.-l
                                                                           share (in person)
                                                                           Eduardo Ramin-1 share (in
                                                                           person)
                                                                           Alberto Fenix, Jr.-l share
                                                                           (in person)

Papcel-Kiew                     Ukraine                                    Papcel-Papier und Cellulose,
                                                                           Technologie und Handels GmbH




                                 SCHEDULE 6.1.12

                             CONSENTS AND APPROVALS

None.


                                SCHEDULE 6.1.14

            MATERIAL PATENTS, TRADEMARKS, COPYRIGHTS, LICENSES, ETC.

                            P. H. GLATFELTER COMPANY
                    TRADEMARK APPLICATIONS AND REGISTRATIONS

March 31, 2006



                                                                                                SERIAL NO.
              MARK                                     OWNER                                 REGISTRATION NO.
             -----                -----------------------------------------------   ---------------------------------
                                                                              
BEYOND PAPER                      P. H. Glatfelter Company                          PENDING
                                                                                    Filing Date: 4/18/2005
                                                                                    Serial Number: 76323579

BEYOND PAPER                      P. H. Glatfelter Company                          PENDING
                                                                                    Filing Date: 10/26/2005
                                                                                    Serial Number: 78741058

BEYOND PAPER                      P. H. Glatfelter Company                          REGISTERED
                                                                                    9/30/2003
                                                                                    Registration Number: 2769893

DIGIBOOK                          P. H. Glatfelter Company                          REGISTERED
                                                                                    10/29/2002
                                                                                    Registration Number: 2644324

EPA                               P. H. Glatfelter Company                          REGISTERED
                                                                                    1/22/1991
                                                                                    Registration Number: 1632345

EXHERE(Design)                    P. H. Glatfelter Company                          REGISTERED
                                                                                    1/21/2003
(EXHERE LOGO)                                                                       Registration Number: 2676873






                                                                                                SERIAL NO.
              MARK                                     OWNER                                 REGISTRATION NO.
             -----                -----------------------------------------------   ---------------------------------
                                                                              
EXHERE                            P. H. Glatfelter Company                          REGISTERED
                                                                                    8/15/1972
                                                                                    Registration Number: 0940978

G(Stylized)                       P. H. Glatfelter Company                          REGISTERED
                                                                                    12/2/2003
(G(STYLIZED) LOGO)                                                                  Registration Number: 2789388

G(Stylized)                       P. H. Glatfelter Company                          PENDING
                                                                                    Filing Date: 4/18/2005
(G(STYLIZED) LOGO)                                                                  Serial Number: 78610795

GLATEX(Design)                    P. H. Glatfelter Co.                              REGISTERED
                                                                                    2/10/1959
(GLATEX LOGO)                                                                       Registration Number: 673883

G.COLORS ENVELOPE                 P. H. Glatfelter Company                          Filing Date: 10/15/2002
PAPERS (Design)                                                                     Serial Number: 76458308

(G.COLORS ENVELOPE PAPERS LOGO)



                                       12




                                                                                                SERIAL NO.
              MARK                                     OWNER                                 REGISTRATION NO.
             -----                -----------------------------------------------   ---------------------------------
                                                                              
G COLORS                          P. H. Glatfelter Company                          PENDING
                                                                                    Filing Date: 1/31/2006
                                                                                    Serial Number: 78791696

G COLORS                          P. H. Glatfelter Company                          PENDING
                                                                                    Filing Date: 10/15/2002
                                                                                    Serial Number: 76458309

IMPACT BY DESIGN                  P. H. Glatfelter Company                          PENDING
                                                                                    Filing Date: 12/4/2002
                                                                                    Serial Number: 76473260

AUTHORS                           P. H. Glatfelter Company                          REGISTERED
                                                                                    9/12/1995
                                                                                    Registration Number: 1917945

EDITORS                           P. H. Glatfelter Company                          REGISTERED
                                                                                    9/12/1995
                                                                                    Registration Number: 1917932

ECOLOTEXT                         P. H. Glatfelter Company                          REGISTERED
                                                                                    4/11/2000
                                                                                    Registration Number: 2339858

ECOLOCOTE                         P. H. Glatfelter Company                          REGISTERED
                                                                                    10/22/1996
                                                                                    Registration Number: 2009392

GLATFELTER                        P. H. Glatfelter Company                          REGISTERED
                                                                                    12/23/2003
                                                                                    Registration Number: 2796668

GLATFELTER                        P. H. Glatfelter Company                          REGISTERED
                                                                                    8/9/2005
                                                                                    Registration Number: 2982538



                                       13




                                                                                                SERIAL NO.
              MARK                                     OWNER                                 REGISTRATION No.
             -----                -----------------------------------------------   ---------------------------------
                                                                              
GLATFELTER                        P. H. Glatfelter Company                          REGISTERED
                                                                                    8/17/2004
                                                                                    Registration Number: 2873152

GLATFELTER                        P. H. Glatfelter Company                          PENDING
                                                                                    Filing Date: 4/2/2005
                                                                                    Serial Number: 78600703

RELEASE THE                       P. H. Glatfelter Company                          REGISTERED
POSSIBILITIES                                                                       4/15/5003
                                                                                    Registration Number: 2707827

STABILITY                         P. H. Glatfelter Company                          REGISTERED
                                                                                    6/17/1997
                                                                                    Registration Number: 2071914

NATURES                           P. H. Glatfelter Company                          REGISTERED
                                                                                    7/16/1996
                                                                                    Registration Number: 1986600

PIXELLE(Design)                   P. H. Glatfelter Company                          REGISTERED
                                                                                    10/23/2001
(PIXELLE LOGO)                                                                      Registration Number: 2500209

RESTORE COTE                      P. H. Glatfelter Company                          REGISTERED
                                                                                    4/24/1973
                                                                                    Registration Number: 957786

SUPPLE                            P. H. Glatfelter Company                          REGISTERED
                                                                                    7/16/1996
                                                                                    Registration Number: 1986601



                                       14





                                                                                                SERIAL NO.
              MARK                                     OWNER                                 REGISTRATION No.
             -----                -----------------------------------------------   ---------------------------------
                                                                              
THOR (Design)                     P. H. Glatfelter Company                          REGISTERED
                                                                                    9/16/1924
(THOR LOGO)                                                                         Registration Number: 189282

OLD FORGE                         P. H. GLATFELTER CO.                              REGISTERED
                                                                                    1/5/1960
                                                                                    Registration Number: 690914

OLD FORGE VELVETLITH              P. H. GLATFELTER COMPANY                          REGISTERED
                                                                                    4/8/1969
                                                                                    Registration Number: 867920

VELVETLITH                        P. H. GLATFELTER COMPANY                          REGISTERED
                                                                                    8/8/1989
                                                                                    Registration Number: 1550967

WHITE ROSE                        P. H. GLATFELTER CO.                              REGISTERED
                                                                                    3/11/1958
                                                                                    Registration Number: 659360

WRITERS (Design)                  P. H. Glatfelter Co.                              REGISTERED
                                                                                    8/1/1978
(WRITERS LOGO)                                                                      Registration Number: 1098137

DYNAPOD                           Papierfabrik Schoeller & Hoesch; GmbH & Co. KG    PENDING
                                                                                    Filing Date: 3/4/2004
                                                                                    Serial Number: 78378327

DYNAPOD                           Papierfabrik Schoeller & Hoesch; GmbH & Co. KG    PENDING
                                                                                    Filing Date: 3/4/2004
                                                                                    Serial Number: 78378319



                                       15





                                                                                                SERIAL NO.
              MARK                                     OWNER                                 REGISTRATION No.
             -----                -----------------------------------------------   ---------------------------------
                                                                              
DYNAPOD                           Papierfabrik Schoeller & Hoesch GmbH & Co. KG     PENDING
                                                                                    Filing Date: 3/4/2004
                                                                                    Serial Number: 78378349

DYNAPORE                          Papierfabrik Schoeller & Hoesch GmbH & Co. KG     PENDING
                                                                                    Filing Date: 3/3/2004
                                                                                    Serial Number: 79012481

DYNASEAL                          Papierfabrik Schoeller & Hoesch GmbH & Co. KG     REGISTERED
                                                                                    7/26/2005
                                                                                    Registration Number: 2977129

(SCHOELLER HOESCH LOGO)           Papierfabrik Schoeller & Hoesch GmbH & Co. KG     PENDING
A GLATFELTER COMPANY                                                                Filing Date: 4/8/2002
                                                                                    Serial Number: 76392274

(SCHOELLER HOESCH LOGO)           Papierfabrik Schoeller & Hoesch GmbH & Co. KG     REGISTERED
A GLATFELTER COMPANY                                                                1/17/1995
                                                                                    Registration Number: 1873454

GEPALUX                           Papierfabrik Schoeller & Hoesch GmbH & Co. KG     REGISTERED
                                                                                    12/17/1985
                                                                                    Registration Number: 1375652

G(STYLIZED)                       P. H. Glatfelter Company                          CTM COMMUNITY TRADEMARKS
                                                                                    REGISTERED
                                                                                    4/9/2002
(G(STYLIZED) LOGO)                                                                  Registration Number: 2648129



                                       16




                                                                                                SERIAL NO.
              MARK                                     OWNER                                 REGISTRATION No.
             -----                -----------------------------------------------   ---------------------------------
                                                                              
GLATFELTER                        P. H. Glatfelter Company                          CTM COMMUNITY TRADEMARKS
                                                                                    REGISTERED
                                                                                    4/9/2002
                                                                                    Registration Number: 2648095

BEYOND PAPER                      P H. Glatfelter Company                           CTM COMMUNITY TRADEMARKS
                                                                                    REGISTERED
                                                                                    4/9/2002
                                                                                    Number: 2647881



                                       17


(Illegible)



COUNTRY          REFERENCE    TYPE    FILED      SERIAL#     ISSUED     PATENT#     STATUS
- -------        -------------  ----  ---------  ----------  ----------  ---------  ---------
                                                     
                        Next (ILLEGIBLE) Due (Original)
FORMULATION FOR ACHIEVEMENT OF OIL AND GREASE RESISTANCE WITHOUT THE USE OF FLUOROCHEMICALS
AND METHOD OF MAKING SAME
UNITED STATES  GLT-Illegible  NEW   8/15/2000  60/225,285                         EXPIRED

HEATSIALABLE FILTER MATERIAL
UNITED STATES  GLT-108US      NEW   7/11/2003  Illegible                          PENDING
               3/16/2006      RESPONSE TO DA

INK JET PRINTABLE BEAT TRANSFER PAPER
UNITED STATES  GLT-102US      NEW   4/20/2001  09/839,793  10/4/2005   5,951,671  ISSUED
               4/4/2006       ARCHIVE FILE

METHOD FOR MAKING COATED PAPER AND A PAPER COATING COMPOSITION
UNITED STATES  GLT-105US      NEW   8/28/1992  07/936,308  3/29/1994   5,299,335  ISSUED
               9/29/2005      3RD MAINT FEE DUE

NOVEL UNIVERSAL INK JET RECORDING MEDIUM
UNITED STATES  GLT-104US      NEW   3/27/2001  09/818,095                         ABANDONED
UNITED STATES  GLT-104US1     CON   5/24/2004  10/924,726                         PENDING
               8/28/2006      STATUS CHECK

PROCESS FOR PREPARATION OF HIGH OPACITY FRICIPITATED CALCIUM CARBONATE BY REACTING SODIUM
CARBONATE WITH CALCIUM HYDROXIDE
UNITED STATES  GLT-100US      NEW   5/15/1993  05/076,651  11/15/1994  5,364,610  ISSUED
               5/15/2006      3RD MAINT FEE DUE

QUICK DRYING, WATERFAST INKJET RECORDING MEDIA
UNITED STATES  GLT-101US      FCA   2/3/2004   10/770,753                         PENDING
               3/20/2005      RESPONSE TO DA
                      END OF REPORT                        TOTAL ITEMS SELECTED =         8



                                       18


                              Overview SH patents;
                                 status 12/2005



                                                                                               No. of
                                                                                               year /
                                               patent       granted                            annual                   anniversary
no      BU         Title        Inventor         no          since      country     payment     fees      Status/ Date      date
- --   -------- --------------- ------------ -------------- ---------- ------------ ---------- ---------- --------------- -----------
                                                                                          
1    L & op/L Hsf             G.Helnrich   EP 0380127     15.12.93   Osterreich   31.1.01    12/1439 DM canc, 18.1001
              Teebeutelpapier                                        Belgien      31.1.01    12/1021 DM canc, 18.1001
              u. Verfahren                                           Schweiz /
              zu selner                                              Lichienstein 31.1.01    12/1226 DM canc, 18.1001
              Herstellung                                            Deutschland  31.1.04    15/1338 E  valid           2005
              (base Patent                                           Spanien      31.1.04    15/761 E   valid           2005
              for heat                                               Franreich    31.1.04    15/686 E   valid           2005
              sealable, 2                                            England      26.1.04    15/806 E   valid           2005
              layer tea                                              Italian      31.1.04    8/1034 E   valid           2005
              bags)                                                  Niederlande  26.1.03    8/1505 E   canc., 18.10.01
                                           US 5,173,154   12/22/1992 USA          6/22/2000  8/2468 E   Valid           2004
2    L & OP/L Filematerial    G.Helnrich   EP 0656224     8.10.97    Osterreich   18.5.00    7/773 DM   canc., 18.5.01
              (heat           R. Kochel                              Belgien      18.5.00    7/593 DM   canc., 16.2.01
              sealable tea                                           Schweiz/     18.5.00    7/988 DM   canc., 18.5.01
              bag                                                    Lichtenstein
              paper with                                             Deutschland  31.5.03    10/535 E   valid           2004
              meltblown                                              Danemark                           canc., 11.4.97
              technology)                                            Spanien      18.5.00    7/594 DM   canc., 18.5.01
                                                                     Frakreich    18.5.03    10/410 E   valid           2004
                                                                     England      18.5.03    10/532 E   Valid           2004
                                                                     Italian      18.5.01    8/349 E    canc., 2000
                                                                     Niederlande  18.5.00    3/973 DM   canc., 18.5.01
                                           US 5,601,716   2/11/1997  USA          8/11/2000  1/1170 E   valid           2004
                                           CA 2,136,563   11/13/1998 Canada       11/24/2003 10/399 E   valid           2004




                              Overview SH patents;
                                 status 12/2005



                                                                                               No. of
                                                                                               year /
                                               patent       granted                            annual                  anniversary
no      BU         Title        Inventor         no          since      country     payment     fees     Status/ Date     date
- --   -------- --------------- ------------ -------------- ---------- ------------ ---------- ---------- -------------- -----------
                                                                                         
3    FS       Verfahren zur   J. Voronecky EP 881326,      17.10.01  Oslerreich   30.5.01    5/583 E    canc., 30.5.02
              Harslellung     J. Kohn      DE 597 04                 Schweiz/                nicht      nicht benannt
              von gebleichien              954.5                     Lichtenstein            benannt
              Spezialzellslo-                                        Deutschland  31.5.03    7/330 E    valid          2004
              ffen (bleaching                                        Danemark     30.5.01    5/583 E    canc., 30.5.02
              process for                                            Spanien      30.5.03    7/317 E    valid          2005
              fibres)                                                Frankreich   30.5.03    7/364 E    valid          2005
                                                                     England      30.5.03    7/373 E    valid          2005
                                                                     Italian      30.5.01    5/583 E    canc., 30.5.02
                                                                     Portugal     30.5.01    5/583 E    canc., 30.5.02
                                                                     Schweden     30.5.01    5/583 E    canc., 30.5.02
4    L&OP/L   hsf             Timmermann   Profungsphase             Australien   4/30/2004  7/362      valid, granted 2005
              Filtermaterial  Trigat       in Europa                 Asia         examination reports, questionable    2004-2007
              mlt biologisch  Schuiz-      (EP 98924249),                         outcome, orientation to European
              abbaubaren      Schlitte     DE 19719807,                           decis
              Polymeren.      S. Schroft   US 09/423,572,            USA          examination reports, questionable    2004-2006
              (biodegradable  Grangiaden   Asian (Korea,                          outcome
              tea bag paper,  G. Heinrich  China,                    EP           examination reports, questionable    2004-2006
              patent with                  Hongkong),                             outcome
              Bayer, chance                Australlen                EP, annual   4/30/2004  7/943 E    examination    2004
              for granting                 erlellt                   fees
              <10%, hearing                                          Germany      12/31/2003 7/331      examination    2004
              for
              biodegradable
              with lubricants
              and starched
              fibre positive)
5    L&OP/O   Naue            H. Blum      DE 19756871.8             Deutschland  31.12.04   8/391 E    examination    2004
              ultraleichie    J. Voronacky
              Harzschichilra-
              ger u.
              Verfahren zur
              Herslellung
              derselben.
              (light weight
              overlay paper,
              12,5 gsm)



                              Overview SH patents;
                                 status 12/2005



                                                                                               No. of
                                                                                               year /
                                               patent       granted                            annual                  anniversary
no      BU         Title        Inventor         no          since      country     payment     fees     Status/ Date     date
- --   -------- --------------- ------------ -------------- ---------- ------------ ---------- ---------- -------------- -----------
                                                                                         
6    L&OP/L   Filtermaterial  G. Grauer    EP 0943731; DE 13.8.01    Osterreich   20/8/04    7/407 E    Valid          2005
              mlt             Y. Le Brech  598 00 843.8              Belglen      20/8/04    7/316 E    Valid          2005
              elnstellbarer                                          Deutschland  31/3/05    8/390 E    Valid          2005
              Benetzbarkeit u                                        Spanien      20/3/04    7/320 E    Valid          2005
              Verfahren zu                                           Frankreich   20/3/04    7/364 E    Valid          2005
              seiner                                                 England      20/3/04    7/364 E    Valid          2005
              Herstellung                                            Irland       20/3/04    7/425 E    Valid          2005
              (binder                                                Nederlande   20/3/04    3/527 E    Valid          2005
              containing                                             Schweden     cancelled
              non                                                    Italien      20/3/04    7/320 E    Valid          2005
              heatsealable                 US 09/170,99   8/12/2002  USA          28.1.3     4/1170 E   Valid          2007
              tea bag)
7    S&H      einlaglges,     J.M. Brink   EP Anmeldung              Europa       28.2.04    4/530 E    examination    2005
     SARL     beldseitig      M. Bochsel   01102686.1                (Staatenben-
              abrassives      J.M. Dellen- (1128065) DE              ennung
              Viles u.        bach         10005454.4                UK, France,
              Verfahren                                              Germany
              dessen                                                 Belglum
              Herstellung                                            Netherlands
              (Meltblown -                                           Illegible
              non woven,                                             Deutschland  28.2.04    5/205 E    Illegible      2005
              abrasive)                                                           14.10.04              18.08.05
                                                                                                        Illegible
                                                                                                        18.08.05
8    L&OP/L   biologisch      M. Bochsel   DE 19931402               Deutschland  31.7.03    5/206 E    no request for 2004
              abbaubare u.    G. Helnrich                                                               exmination
              Komposlterbare  M. KauBen                              exmination                                        2004
              Filtermaterial  S. Schroft                             fee
              len
              (blodegradable
              filter
              paper with
              softener)
9    L&OP/O   Papier mlt      H. Blum      DE 19939060
              eingelagerten,  D. Evers                               Deutschland  21/8/03    5/2006 E   examination    8/31/2004
              ummantelten                                                         28/11/04              official reply to German
              Parlikel u.                                                                               Patent Off
              Verfahren zu                                                        15/10/04              comment of official letter
              dessan
              Herslellung
              (loaded overlay
              paper with
              melamin
              coated
              corundum)






                              Overview SH patents;
                                 status 12/2005



                                                                                               No. of
                                                                                               year /
                                                  patent       granted                         annual                   anniversary
no      BU         Title           Inventor         no          since    country    payment     fees      Status/ Date      date
- --   -------- ------------------ ----------- ---------------- -------- ----------- -------- ------------ -------------- -----------
                                                                                          
17   L&OP/O   Computer Based     H. Blum M.  EP 01118149.2                         31.7.03  3/530E       examination    2004
              System and         Knapprest
              Method for         -busch,
              Trading Tangible   D. parini,
              Goods via an       Ruckenbrod
              Electronic         S.Sick
              Communication
              System
              (trading software)
18   L&OP/O   Lichlbeslandiges   H. Blum     DE 1016334                Deutschland 31.12.04 4/188        examination    2004
              overlaypapler      R. Hansmann
              (UV- stabllised    S. Sick
              overlay paper)
                                             EP 02 028 521.9           Europe      31.12.04 3/531        examination    2004
                                             US 2003/01411027 31.07.03 USA         2003     1170         Valid          2007
19   NPD      {Illegible)        M. Buchsel  DE 10206924.7             Deutschland 28.04.04 3/186        Valid          2005
              Filtematerialien   H. Heinrich
              (heat sealable,    M. Kauben
              biodegradable
              filler paper with
              lubricants)
                                                                                   20.10.04 (Illegible)
                                                                                            vom 704
                                             JP 569,305/2003           Japan       2003     6850         no request for
                                                                                                         examination
                                             RUS 200 312 8071          Rubland     2003     3900         no request for
                                                                                                         examination
                                             Indo W0020031856          Indonesien  2003     2200         no request for
                                                                                                         examination
                                             CN 03800075;              China       2003     3650         no request for
                                             1533343                                                     examination
                                             ZA 2003/7300              Sudafrika   2003     2620         examination
                                             US 10/472/086             USA         2003     3680         no request for
                                                                                                         examination
                                             CD 2,435,578              Kanada      2003     2780         examination
                                             EP 03 742 544.4           Europa
                                             IN PCT/EP03/              Indien      2003     3310         no request for
                                             01672                                                       examination




                              Overview SH patents;
                                 status 12/2005



                                                                                               No. of
                                                                                               year /
                                                  patent       granted                         annual                  anniversary
no      BU         Title           Inventor         no          since    country      payment    fees   Status/ Date      date
- --   -------- ----------------- ------------ ---------------- -------- ------------ ---------- ------ ---------------- -----------
                                                                                         
20   L&OP/L   (Illegible)       G. Heinrich  DE 10206926.3             Deutchland   28.02.04   3/188  Valid
              Filtermaterial    D. Meger                                            20.10.04          Amisbescheld vom 1.7.04
              (biodegradable    M. Kauben    CD 2,435,577              Kanada       2003       3150   no request for examination
              filter paper with              AUS 200 321 5569          Australien   2003       2900   examination
              streched fibres)               RUS 2003 12 8089          Rubland      2003       4800   examination
                                             JP 569,306/2003;          Japan        2003       8600   no request for examination
                                             517,829/2005              China        2003       3640   request for examination
                                             CN 03 800 077.6           Sudaria      2003       2690   examination
                                             ZA 2003/7299              USA          2003       4920   examination
                                             US 10/472.089             Europe       2003       4140   examination
                                             EP 03742545.1             Europe
                                             EP1526911                 Indonesian   2003       2100   no request for examination
                                             Indo PCT/EP03/            Indian       2003       2430   no request for examination
                                             01673
                                             IN 01248/DELNP/
                                             2003
21   L&OP/L   (Illegible)       Y. Le Brach, DE 10231403      5.02.04  Deutschland                    Valid            2005
              Filtermaterial    G. Heinrich  EP 03015105.4             Europe       2003       2800   Examination
              (heat sealable    M. Kauben    US 10/618,109             USA
              tea bag with      S. Kuntz     ZA 2003/5329     28.04.04 Sudafrika    2003       4830
              coupling agent)   M. Meger     JP 273,626/2003
                                             JP 154,764/2004           Japan        2003       6430   No request for examination
                                             AUS 2003213314            Australian   2003       3500   examination
                                             CD 2 435 030              Kanada       2003       3100   Examination

22   L&OP/L   Filtermaterial                 DE 103 42 416.4           Deutschland  9/13/2003  1550
              (tea bag +
              outlast fibre)
                                             EP 1 514 587              Europe                         filed 08.09.04
                                             ZA 2004/7269     29.06.05 South Africa 11/23/2004
                                             RUS 2004/127218           Russia       11/18/2004
                                             AUS 2004/210563           Australia    11/23/2004
                                             US 10/937,045             USA
                                             CD 2,481,395              Canada       11/23/2004



                GULTIGE MARKEN SCHOELLER & HOESCH GMBH & CO. KG

Stand: 04/03/2004



                    Anmelde-/                                Anmelde-                  Verlongerung
Land                Markon-Nr.          Markenname              tag       Klasse(n)      fallig am             Sonstlgos
- ---------------   ------------   ------------------------   ----------   -----------   ------------   --------------------------
                                                                                    
Deutsche Marken

DE                303 62 061.7   DYNAPORE                   11/27/2003   05,16,24      11/30/2019
DE                302 61 044.8   DYNAMET                    12/13/2002   05,16         12/31/2012
DE                302 61 042.1   DYNAPAD                    12/13/2002   16,24,30      12/31/2012
DE                300 48 137.3   GEPALUX HoloGloss          6/28/2000    16            6/30/2010
DE                396 55 362.1   TIPA                       12/19/1996   16,34         12/31/2006
DE                2 076 841      DYNAPOR                    11/2/1993    16            11/30/2013
DE                2 015 108      Microsorb                  4/9/1992     24            4/30/2012
DE                2 010 341      SCHOELLER HOESCH SPEZIAL   10/9/1991    01,03,16,17   10/31/2011
                                 PAPIERE(illegeble )
DE                2 002 045      MICAMID                    5/7/1991     16            5/30/2011
DE                1 180 319      ELKO(illegeble )           7/17/1990    09,17         7/31/2010
DE                1 161 968      Rikaprint PERMANENCE       12/22/1989   16            12/31/2009
DE                1 037 335      RIKAPRINT                  3/20/1981    16            3/31/2011
DE                1 024 038      GEFOLUX                    8/28/1981    17            8/31/2011
DE                1 023 687      GEPALUX                    8/28/1981    16            8/31/2011
DE                636 126        Napakon                    6/16/1952    16,17,34      9/30/2012
DE                615 357        Tuko                       8/30/1950    17,34         8/31/2010

EU-Marken

EU                003 247 988    DYNAPOD                    7/1/2003     16,24,30      7/1/2013       im Anmeldeverfahren
EU                003 216 462    DYNAPAD                    6/6/2003     16,24,30      6/8/2003       im Anmeldeverfahren
EU                003 169 687    DYNACLEAR                  5/16/2003    03,05,16,24   5/16/2013      im Anmeldeverfahren
EU                002 714 848    DYNAGREEN                  5/27/2002    03,05,16,24   5/27/2012      Wlderspr.aufgrund Gynalren
EU                002 712 776    DYNAPLANT                  5/27/2002    03,05,16,24   5/27/2012



                                       22



                                                                                    
EU                002 647 147    SCHOELLER HOESCH A         4/8/2002     01, 03, 05,   4/8/2012
                                 GLATFELTER Company                      16, 17, 24
EU                002 511 640    DYNACRIMP                  12/20/2001   16            12/20/2011
EU                002 363 539    DYNASEAL                   9/4/2001     16            9/4/2011
EU                002 001 006    GEPALUX HoloGloss          12/15/2000   16            12/15/2010

IR-Marken

AT, AU, BX, CH,                  DYNAPORE                   3/3/2004     5, 16, 24                    Im Anmeldeverfahren
CN, CZ, DK, ES,
FR, GB, IE, IT,
JP, PT, RU, SG,
TR, UA, US

AT, BX, CH, CN,   635 878        GEPALUX                    4/12/1995    16            4/12/2016
ES, FR, IT, PL

AT, BX, CH, CZ,   591 178        SCHOELLER HOESCH           3/27/1992    01, 03, 05,   3/27/2012
ES, FR, HR, HU,                  SPEZIAL-PAPIERE(farbig)                 16, 17, 19,
IT, MK, SI, SK,                                                          34
YU

AT, BX, CH, CZ,   579 849        MICAMID                    1/9/1992     16            1/9/2012
ES, FR, HU, IT
DE                177 420        Byblos                     5/31/1954    16            5/31/2014

AT, BX, CH, CZ,   169 305        Napakon                    5/15/1953    16, 17, 34    5/15/2013
DE, ES, FR, HU,
IT, SI, YU
DE                161 401        Tuko                       5/7/1952     16, 34        5/7/2012

Auslandsmarken

Australian        921028         DYNAGREEN                  7/25/2002    16,24         7/25/2012

China                            SCHOELLER HOESCH A                      16                           Im Anmeldeverfahren
                                 GLATFELTER Company
                  3305384        DYNAPLANT                  9/12/2002    16                           Im Anmeldeverfahren
                  200306914      DYNAPLANT                  9/11/2003    24                           Im Anmeldeverfahren

GroBbritannien    2019728        GEPALUX                    5/5/2005     16            5/5/2005
                  1507051        MICROSORB                  7/18/1992    24            4/9/2009
                  1478722        MICAMID                    10/17/1991   16            5/7/2008
                  696 400        Tuko                       2/28/1951    17            10/28/2010

Finnland          90087          POV                        11/4/1982    34            9/5/2004

Irland            146498         MICAMID                    10/21/1998   16            5/7/2008




                                       23



                                                                                    
Japan             56439/2003     DYNAPOD                    7/7/2003     16, 24, 30                   Fallengelassen auf
                                                                                                      Anweisung F. Werner,
                                                                                                      04/08/04
                  1,692,565      DYNAGREEN                  9/13/2002    16            7/18/2013
                  4,692,584      DYNAPLANT                  9/13/2002    16, 24        7/18/2013
                  3024922        Microsorb                  8/6/19992    24            2/28/2005
                  3155894        SCHOELLER HOESCH           4/9/1992     16            5/31/2006
                                 SPEZIAL-PAPIERE(farbig)
                  3100168        SCHOELLER HOESCH           4/9/1992     17            11/30/2005
                                 SPEZIAL-PAPIERE(farbig)
                  3056426        SCHOELLER HOESCH           4/9/1992     13            6/30/2005
                                 SPEZIAL-PAPIERE(farbig)
Kanada                           DYNAPORE                                5, 16, 24                    Im Anmeldeverfahren
                  1,147,541      DYNAGREEN                  7/25/2002    16, 24                       Im Anmeldeverfahren
                  1,147,540      DYNAPLANT                  7/25/2002    16, 24                       Im Anmeldeverfahren
                  1,136,790      SCHOELLER HOESCH           4/9/2002                                  Im Anmeldeverfahren
                                 A GLATFELTER Company
                  285343         POV                        11/4/1982    16                           11/25/2013
Neuseeland        661447         DYNAGREEN                  7/28/2002    16, 24        5/27/2009
Sudafrika         2002/10937-8   DYNAGREEN                  7/28/2002    16, 24                       Im Anmeldeverfahren
U.S.A.            78/378,319     DYNAPOD                    3/4/2004     16                           Im Anmeldeverfahren
                  78/378,327     DYNAPOD                    3/4/2004     24                           Im Anmeldeverfahren
                  78/378,349     DYNAPOD                    3/4/2004     30                           Im Anmeldeverfahren
                  78/476,950     DYNASEAL                   12/19/2002   16                           Im Anmeldeverfahren
                  78/149,302     DYNAGREEN                  7/31/2002    16, 24                       Im Anmeldeverfahren
                  78/149,288     DYNAPLANT                  7/31/2002    16, 24                       Im Anmeldeverfahren
                  76/392,274     SCHOELLER HOESCH A         4/8/2002     1, 16, 17                    Im Anmeldeverfahren
                                 GLATFELTER Company
                  1,896,181      TUKO                       4/6/1994     16            5/30/2005
                  1,873,454      SCHOELLER HOESCH           8/4/1992     1, 3, 16,     1/17/2005
                                 SPEZIAL-PAPIERE(farbig)                 17, 21, 34
                  1,375,852      GEPALUX                    4/13/1985    14, 37        12/17/2005
                  1,332,098      SCHOELLER & HOESCH         9/10/1984    15, 17, 34    4/23/2005
                                 (Logo)
                  1,307,376      POV                        3/28/1983    34            11/27/2004




                                       24



                  MARKEN SCHOELLER & HOESCH S.A.S., FRANKREICH


                                                                 
EU-Marken
EU                002 762 852   MICRO SORB (fig.)   7/19/2002    24    7/19/2012   SARL

IR-Marken
AT, EX, CH, ES,   569 146       Microsorb           7/16/1992    24    7/16/2012   S.A.S.
FR, HU, IT, PT




                                       25


                                 SCHEDULE 6.1.16

                     PARTNERSHIP AGREEMENTS; LLC AGREEMENTS

GW Partners, LLC Joint Venture Agreement



                                 SCHEDULE 6.1.21

                        EMPLOYEE BENEFIT PLAN DISCLOSURES

None.



                                 SCHEDULE 8.2.1

                             PERMITTED INDEBTEDNESS

                                Letters of Credit



                                   BEGIN      MATURITY                  INTEREST     ANNUAL
BENEFICIARY              BANK      DATE         DATE       $ AMOUNT       RATE        COST
- -----------            -------   ---------   ---------   ------------   --------   ---------
                                                                 
Zurich American
Insurance Comp         M and T    5/3/2005   4/30/2006      50,000.00     1.50%       750.00
Columbia Gas of Ohio   M and T   3/28/2006   4/27/2007   1,000,000.00     1.00%    10,000.00




                                 SCHEDULE 8.2.4

                              EXISTING INVESTMENTS

None.



                                 EXHIBIT 1.1(A)

                       ASSIGNMENT AND ASSUMPTION AGREEMENT

     This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Assignment") is dated as of
the Effective Date set forth below and is entered into by and between [Insert
name of Assignor] (the "Assignor") and [Insert name of Assignee] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as amended, the
"Credit Agreement"), receipt of a copy of which is hereby acknowledged by the
Assignee. The Standard Terms and Conditions set forth in Annex 1 attached hereto
are hereby agreed to and incorporated herein by reference and made a part of
this Assignment as if set forth herein in full.

     For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Agent as contemplated below, the interest in and to all of the Assignor's
rights and obligations under the Credit Agreement and any other documents or
instruments delivered pursuant thereto that represents the amount and percentage
interest identified below of all of the Assignor's outstanding rights and
obligations under the respective facilities identified below (including, to the
extent included in any such facilities, letters of credit and swingline loans)
(the "Assigned Interest"). Such sale and assignment is without recourse to the
Assignor and, except as expressly provided in this Assignment, without
representation or warranty by the Assignor.

1.  Assignor:
                         _______________________________

2.  Assignee:
                         _______________________________ [and is an Affiliate]

3.  Borrower(s):         P. H. GLATFELTER COMPANY, a Pennsylvania corporation,
                         and the other Borrowers now or hereafter party thereto

4.  Agent:               PNC BANK, NATIONAL ASSOCIATION, as the agent under the
                         Credit Agreement

5.  Credit Agreement:    The Credit Agreement dated as of April 3, 2006 among P.
                         H. GLATFELTER COMPANY, a Pennsylvania corporation, and
                         the other Borrowers now or hereafter party thereto, PNC
                         BANK, NATIONAL ASSOCIATION, as Agent, the Guarantors
                         now or hereafter party thereto and the Banks now or
                         hereafter party thereto



6. Assigned Interest:



                                 Aggregate                                          Percentage
                                 Amount of                 Amount of                Assigned of
                            Commitment/Loans of        Commitment/Loans of      Commitment/Loans of
   Facility Assigned    such Facility for all Banks   such Facility Assigned      such Facility(1)
- ---------------------   ---------------------------   ----------------------    -------------------
                                                                       
__________________(2)         $______________            $______________           ______________%

__________________            $______________            $______________           ______________%

__________________            $______________            $______________           ______________%


Effective Date: __________ ___, 20 ______ [TO BE INSERTED BY AGENT AND WHICH
SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE REGISTER
THEREFOR.](3)

     The terms set forth in this Assignment are hereby agreed to:

                                        ASSIGNOR
                                        [NAME OF ASSIGNOR]


                                        By:
                                            ------------------------------------
                                        Title:

                                        ASSIGNEE
                                        [NAME OF ASSIGNEE]


                                        By:
                                            ------------------------------------
                                        Title:

Consented to and Accepted:

PNC BANK, NATIONAL ASSOCIATION, as Agent


By
   --------------------------------
Name:
Title:


[Consented to:](4)

- ----------
(1)  Set forth, to at least 9 decimals, as a percentage of the Commitment/Loans
     of all Banks thereunder.

(2)  Fill in the appropriate terminology for the types of facilities under the
     Credit Agreement that are being assigned under this Assignment (e.g.
     "Revolving Credit Commitment", "Term Loan Commitment", etc.) The same
     percentage of each facility owned by the Assignor shall be assigned to the
     Assignee.

(3)  Assignor shall pay a fee of $3,500 to the Agent in connection with the
     Assignment.

(4)  To be added only if the consent of the Borrower is required by the terms of
     Section 11.11 of the Credit Agreement.



[EACH BORROWER]


By
   ----------------------------------
Name:
Title:




                                                                         ANNEX 1

                  STANDARD TERMS AND CONDITIONS FOR ASSIGNMENT
                            AND ASSUMPTION AGREEMENT

     1. Representations and Warranties.

     1.1 Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby;
and (b) assumes no responsibility with respect to (i) any statements, warranties
or representations made in or in connection with any Loan Document, (ii) the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement or any other instrument or document delivered pursuant
thereto, other than this Assignment (herein collectively the "Loan Documents"),
or any collateral thereunder, (iii) the financial condition of the Borrower, any
of its Subsidiaries or Affiliates or any other Person obligated in respect of
any Loan Document or (iv) the performance or observance by the Borrower, any of
its Subsidiaries or Affiliates or any other Person of any of their respective
obligations under any Loan Document.

     1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and to consummate the transactions contemplated hereby
and to become a Bank under the Credit Agreement, (ii) it meets all requirements,
if any, of an eligible assignee under the Credit Agreement, (iii) from and after
the Effective Date, it shall be bound by the provisions of the Credit Agreement
and, to the extent of the Assigned Interest, shall have the obligations of a
Bank thereunder, (iv) it has received a copy of the Credit Agreement, together
with copies of the most recent financial statements delivered pursuant to
Section 8.3.2 thereof, as applicable, and such other documents and information
as it has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision, and (v) if Assignee is not
incorporated or organized under the laws of the United States of America or any
State thereof, attached to the Assignment is any documentation required to be
delivered by it pursuant to the terms of the Credit Agreement, duly completed
and executed by the Assignee; and (b) agrees that (i) it will, independently and
without reliance on the Agent, the Assignor or any other Bank, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Loan
Documents, and (ii) it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Bank.

     2. Payments. From and after the Effective Date, the Agent shall make all
payments in respect of the Assigned Interest (including payments of principal,
interest, fees and other amounts) to the Assignor for amounts which have accrued
to but excluding the Effective Date and to the Assignee for amounts which have
accrued from and after the Effective Date.(5)

- ----------
(5)  Agent should consider whether this method conforms to its systems. In some
     circumstances, the following alternative language may be appropriate: "From
     and after the Effective Date, the Agent shall make all payments in respect
     of the Assigned Interest (including payments of principal, interest, fees
     and other amounts) to the Assignee whether such amounts have accrued prior
     to or on or after the Effective Date. The Assignor and the Assignee shall
     make all appropriate adjustments in payments by the Agent for periods prior
     to the Effective Date or with respect to the making of this assignment
     directly between themselves."



                                                                               2

     3. General Provisions. This Assignment shall be binding upon, and inure to
the benefit of, the parties hereto and their respective successors and assigns.
This Assignment may be executed in any number of counterparts, which together
shall constitute one instrument. Delivery of an executed counterpart of a
signature page of this Assignment by telecopy shall be effective as delivery of
a manually executed counterpart of this Assignment. This Assignment shall be
governed by, and construed in accordance with, the laws of the Commonwealth of
Pennsylvania.


                                       2



warranties set forth in Section 6 of the Credit Agreement applicable to a Loan
Party is true and correct as to New Borrower on and as of the date hereof and
(ii) New Borrower has heretofore received a true and correct copy of the Credit
Agreement, Pledge Agreement and each of the other Loan Documents (including any
modifications thereof or supplements or waivers thereto) in effect on the date
hereof.

     New Borrower hereby makes, affirms, and ratifies in favor of the Banks and
the Agent the Credit Agreement, Pledge Agreement and each of the other Loan
Documents given by the Borrowers to the Agent and any of the Banks.

     New Borrower is simultaneously delivering to the Agent the documents,
together with this Borrower Joinder and Assumption Agreement, required under
Sections 7.1, 8.2.9 and 11.18.

     In furtherance of the foregoing, New Borrower shall execute and deliver or
cause to be executed and delivered at any time and from time to time such
further instruments and documents and do or cause to be done such further acts
as may be reasonably necessary in the reasonable opinion of Agent to carry out
more effectively the provisions and purposes of this Borrower Joinder and
Assumption Agreement and the other Loan Documents.

     New Borrower acknowledges and agrees that a telecopy transmission to the
Agent or any Bank of signature pages hereof purporting to be signed on behalf of
New Borrower shall constitute effective and binding execution and delivery
hereof by New Borrower.

                   [BALANCE OF PAGE INTENTIONALLY LEFT BLANK]


                                      -2-



           [SIGNATURE PAGE 1 OF 1 OF BORROWER JOINDER AND ASSUMPTION
                                   AGREEMENT]

     NEW BORROWER SHALL CAUSE BORROWERS TO PROVIDE SUCH ADDITIONAL DOCUMENTS AS
REQUIRED BY SECTION 11.18 OF THE CREDIT AGREEMENT.

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the New
Borrower has duly executed this Borrower Joinder and Assumption Agreement and
delivered the same to the Agent for the benefit of the Banks, as of the date and
year first above written with the intention that this Borrower Joinder and
Assumption Agreement constitute a sealed instrument.

ATTEST:
                                        ----------------------------------------


                                        By:                              (SEAL)
                                            ------------------------------
Name:
      -------------------------------   Name:
                                              ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

Acknowledged and accepted:

PNC BANK, NATIONAL ASSOCIATION, as Agent


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------



                                 EXHIBIT 1.1(C)

                               INTERCREDITOR AND
                          COLLATERAL AGENCY AGREEMENT

     This Intercreditor and Collateral Agency Agreement (the "Agreement") is
dated as of _______________, 2006 among the holders of Notes (as defined below)
(the "Noteholders"), and PNC Bank, National Association, as administrative agent
for the Bank Lenders (as defined below) under the Credit Agreement (as defined
below) (the "Bank Agent") (each Noteholder, the Bank Agent, the Trustee (as
defined below), and each Bank Lender, individually, a "Creditor" and
collectively, the "Creditors") [and as collateral agent hereunder for the
Creditors (in such capacity the "Collateral Agent")] (1) and joined by P.H.
Glatfelter Company, a Pennsylvania corporation (the "Company") and the other
Obligors (as defined below).

                                    RECITALS:

     A. Pursuant to an Indenture dated as of _________, 2006, between
__________, as Trustee ("Trustee") and the Company (as such Indenture may be
further modified, amended, renewed or replaced, the "Note Indenture"), the may
issue and sell up to $_______________ aggregate principal amount of
its__________% Notes (the "Notes") and has issued and
sold to the Noteholders $______________ aggregate principal amount of
such Notes.

     B. Pursuant to a Credit Agreement dated as of April 3, 2006, (as such
agreement may be further modified, amended, renewed or replaced, including any
increase in the amount thereof, the "Credit Agreement") among the Company and
the other borrowers and guarantors from time to time party thereto (the "Bank
Obligors"), and each of the banks party thereto (collectively with the
successors and assigns thereof, the "Bank Lenders"), the Bank Lenders have
agreed to provide to the Company certain credit facilities.

     C. Pursuant to the Note Indenture, certain of the subsidiaries of the
Company (collectively, together with each other subsidiary of the Company that
shall at any time be a Guarantor under a Subsidiary Guaranty, as hereinafter
defined, the "Guarantors ", the Company, the Guarantors and the Bank Obligors
shall sometimes collectively be referred to as the "Obligors") have executed and
delivered, in favor of the Noteholders, a guaranty agreement (as such guaranty
may be modified, amended, renewed or replaced, including any increase in the
amount thereof, the "Note Guaranty") dated as of __________, 2006. Pursuant to
the Note Guaranties, the Guarantors have guaranteed the payment of the principal
of, make-whole amount, if any, and interest on the Notes and the payment and
performance of all other obligations, liabilities, and indebtedness of the
Company under the Note Indenture.

- ----------
(1)  Or another Person identified pursuant to the conditions contained in
     Section 7(g)(i) for a successor Collateral Agent, upon which the Trustee
     and Bank Agent may agree, such agreement not to be unreasonably withheld.



     "Agreement" means this Intercreditor and Collateral Agency Agreement, as it
may hereafter be modified or amended from time to time.

     "Bank Agent" has the meaning assigned in the introductory paragraph.

     "Bank Documents" means the Credit Agreement, the Credit Notes, the Bank
Lender Pledge Agreement or other Security Documents and any other Loan Document
(as defined in the Credit Agreement) to which the Bank Agent or Bank Lenders are
parties or of which they are Benefited Parties.

     "Bank Lender Pledge Agreement" has the meaning assigned in the Recitals.
"Bank Lenders " has the meaning assigned in the Recitals.

     "Bank Obligation Guaranty" has the meaning assigned in the Recitals.

     "Bank Obligations" means all Obligations (as defined in the Credit
Agreement) including without limitation, liabilities, and indebtedness of every
nature of the Obligors from time to time to the Bank Lenders under the Credit
Agreement, the Credit Notes or any of the other Bank Documents, including
principal, interest, contingent reimbursement obligations relating to letters of
credit and obligations to provide cash cover for letters of credit and
obligations or credit exposure under any interest rate protection agreement or
hedging agreement, swap or other derivative securities, interest rate breakage
charges, indemnities and expenses accruing under any of the Bank Documents or in
connection with Bank-Provided Interest Rate Hedges (as defined in the Credit
Agreement).

     "Bankruptcy Proceeding" means, with respect to any Person, a general
assignment of such Person for the benefit of its creditors, or the institution
by or against such Person of any proceeding seeking relief as debtor, or seeking
to adjudicate such Person as bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment or composition of such Person or its debts, under any
law relating to bankruptcy, insolvency, reorganization or relief of debtors, or
seeking appointment of a receiver, trustee, custodian or other similar official
for such Person or for any substantial part of its property.

     "Benefited Obligations" means (a) all Bank Obligations (including
obligations, whether fixed or contingent, with respect to Letters of Credit),
(b) all Noteholder Obligations and (c) all other amounts payable by any Obligor
under this Agreement, any of the Guaranties or any of the Security Documents
(including the reasonable fees and expenses of the Collateral Agent).

     "Benefited Parties" means the holders, from time to time, of the Benefited
Obligations.

     "Both Representatives" shall mean collectively the Bank Agent and the
Trustee.


                                       3


     "Code" means the Uniform Commercial Code, as in effect from time to time,
of the applicable state whose laws which are required to be applied in
connection with the creation and perfection of liens in the Collateral.

     "Collateral" means all of the pledged collateral under the Pledge
Agreements.

     "Collateral Agent" has the meaning assigned in the introductory paragraph.

     "Company" has the meaning assigned in the Recitals.

     "Credit Agreement" has the meaning assigned in the Recitals.

     "Credit Note" means any promissory note issued by any of the Obligors under
the Credit Agreement.

     "Creditor" has the meaning assigned in the introductory paragraph.

     "Enforcement" means the commencement of a Bankruptcy Proceeding against any
Obligor, seeking to appoint a receiver against any Obligor or its property, or
the commencement of enforcement, collection (including judicial or non-judicial
foreclosure) or similar proceedings with respect to the Collateral pursuant to
any Security Document.

     "Event of Default" means an "Event of Default" or "Default" as defined in
any Financing Agreement.

     "Financing Agreements" means this Agreement, the Bank Documents, the
Noteholder Documents, each Security Document and any other instrument, document
or agreement entered into in connection with any Benefited Obligation.

     "Guarantor" has the meaning assigned in the Recitals.

     "Guaranty" has the meaning assigned in the Recitals.

     "including" is not a term of limitation and means including without
limitation.

     "Letter of Credit" means any letter of credit issued pursuant to the Credit
Agreement.

     "Note Guaranties" has the meaning assigned in the Recitals.

     Note Indenture" has the meaning assigned in the Recitals.

     "Noteholder" has the meaning assigned in the introductory paragraph.


                                       4



     The Bank Agent on behalf of the Bank Lenders designates and appoints PNC
Bank, National Association to serve as the Collateral Agent under this Agreement
and the Security Documents. In furtherance of the foregoing, the Bank Agent
agrees to assign its Security Documents to the Collateral Agent, for the
purposes set forth herein. The Trustee on behalf of the Noteholders designates
and appoints PNC Bank, National Association to serve as the Collateral Agent
under this Agreement and the Security Documents. In furtherance of the
foregoing, the Trustee agrees to assign its Security Documents to the Collateral
Agent, for the purposes set forth herein.

SECTION 3. DECISIONS RELATING TO ADMINISTRATION AND EXERCISE OF REMEDIES VESTED
IN BOTH REPRESENTATIVES.

     (a) The Collateral Agent agrees that it will not release security interests
or liens or Collateral or commence Enforcement without the direction of both the
Trustee and the Bank Agent. The Collateral Agent agrees to administer the
Security Documents and the Collateral and to make such demands and give such
notices under the Security Documents as Both Representatives may request in
writing, and to take such action to enforce the Security Documents and to
realize upon, collect and dispose of the Collateral or any portion thereof as
may be directed by Both Representatives. The Collateral Agent shall not be
required to take any action that is, or reasonably could be, in the Opinion of
Counsel contrary to law or to the terms of this Agreement or any Security
Document, or that would, or reasonably could, in the Opinion of Counsel subject
the Collateral Agent or any of its officers, employees, agents or directors to
liability, and the Collateral Agent shall not be required to take any action
under this Agreement or any Security Document unless and until the Collateral
Agent shall be indemnified to its reasonable satisfaction by one or more of the
Benefited Parties against any and all loss, cost, expense or liability in
connection therewith.

     (b) The Bank Agent and the Trustee each agrees that the Collateral Agent
shall act as Both Representatives may request (regardless of whether either
Representative agrees, disagrees or abstains with respect to such request), that
the Collateral Agent shall have no liability for acting in accordance with such
request (provided such action does not conflict with the express terms of this
Agreement or the Security Documents) and that neither Representative nor other
Benefited Party shall have any liability to any other Benefited Party,
respectively, for any such request.

     (c) The Collateral Agent may at any time request directions from Both
Representatives as to any course of action or other matter relating hereto or
relating to any Security Document.

     (d) Nothing contained in this Agreement shall affect the right of any
Benefited Party to give the Company or any other Obligor notice of any default
or to accelerate or make demand for payment of its Benefited Obligations under
the Financing Agreements or from instituting legal action against any Obligor to
obtain a judgment or other legal process in respect of the Subject Obligations.


                                       6



     (e) Either Representative that has actual knowledge of the existence of an
Event of Default shall promptly deliver to the Collateral Agent a written
statement describing such Event of Default; provided that failure to do so shall
not constitute a waiver of such Event of Default by any Benefited Party.

     (f) The Collateral Agent shall not release all or any part of the
Collateral without the consent of Both Representatives.

SECTION 4. APPLICATION OF PROCEEDS.

     (a) All Proceeds received by the Collateral Agent from, or in respect of
the Collateral of, any Pledgor in connection with an Enforcement, shall be
applied promptly by the Collateral Agent, as follows:

          FIRST: To the payment of the reasonable costs and expenses of the
     collection of such Proceeds and any sale or collection of or other
     realization upon any Collateral, including fees and expenses of counsel,
     and all reasonable expenses, liabilities and advances made or incurred by
     the Collateral Agent and the Representatives in connection therewith, and
     all other amounts due to the Collateral Agent in its capacity as such;

          SECOND: To the Representatives ratably (based upon the amount of the
     Benefited Obligations held by their respective Represented Parties
     outstanding immediately following an Enforcement of the Benefited
     Obligations) for distribution to their Represented Parties; provided that
     with respect to Benefited Obligations consisting of the undrawn amount of
     any outstanding Letter of Credit, payment shall be made to the Collateral
     Agent, to be retained as Collateral, for the ratable portion of the
     Benefited Obligations consisting of such undrawn amount, it being
     understood that (i) if such Letter of Credit is drawn upon, the Collateral
     Agent shall pay to Bank Agent for the benefit of the Bank Lender that
     issued such Letter of Credit the ratable portion of the amount of cash held
     as Collateral therefor pursuant to this clause that is allocable to the
     amount drawn upon such Letter of Credit and (ii) if and to the extent that
     such Letter of Credit shall expire or terminate, the amount of cash held as
     Collateral therefor pursuant to this clause shall be applied in accordance
     with this Section 4(a), calculated in accordance with the provisions of
     Section 4(b); and

          THIRD: Any surplus then remaining from such Proceeds after payment in
     full of all Benefited Obligations, to the payment to or upon the order of
     the Obligors to the Representatives for the benefit of their Represented
     Parties, or to whomsoever may be lawfully entitled to receive the same or
     as a court of competent jurisdiction may direct.

Until such Proceeds are so applied, the Collateral Agent shall hold such
Proceeds in its custody in accordance with its regular procedures for handling
deposited funds.

     (b) Payment shall be based upon the proportion that the amount that such
Representative's Represented Parties' Benefited Obligations bears to the total
amount of all


                                       7



Benefited Obligations (based on certifications provided to the Collateral Agent
pursuant to Section 7).

     (c) Payments by the Collateral Agent in respect of (i) the Bank Obligations
shall be made to the Bank Agent for distribution to the Bank Lenders in
accordance with the Credit Agreement and (ii) payments by the Collateral Agent
in respect of the Noteholder Obligations shall be made to the Trustee for
distribution to the Noteholders in accordance with the Note Indenture.

SECTION 5. AGREEMENTS AMONG THE CREDITORS.

     (a) Nothing contained in this Agreement shall prohibit any Creditor from
accelerating the maturity of, or demanding payment from any Guarantor on, any
Subject Obligation of the Obligors to such Creditor or from instituting legal
action against the Company or any Obligor to obtain a judgment or other legal
process in respect of such Subject Obligation.

     (b) This Agreement is entered into solely for the purposes set forth
herein, and no Creditor assumes any responsibility to any other party hereto to
advise such other party of information known to such other party regarding the
financial condition of the Company or any other Obligor or of any other
circumstances bearing upon the risk of nonpayment of any Subject Obligation.
Each Creditor specifically acknowledges and agrees that nothing contained in
this Agreement is or is intended to be for the benefit of the Company or any
other Obligor or any creditor of the Company or any other Obligor that is not a
Creditor and nothing contained herein shall limit or in any way modify any of
the obligations of the Company or any other Obligor to the Creditors.

     (c) Each Creditor expressly acknowledges the existence and validity of the
Note Guaranties, the Bank Obligation Guaranty and the Security Documents, and
agrees not to contest or challenge the validity of any of them and agrees that
the judicial or other determination of the invalidity of any of them shall not
affect the provisions of this Agreement.

SECTION 6. INFORMATION FROM BENEFITED PARTIES.

     Each Representative shall promptly from time to time, upon written request
from the Collateral Agent, (i) notify the Collateral Agent of the amount of the
outstanding Benefited Obligations owed to such Representative's Represented
Parties as of such date and such other information as the Collateral Agent may
specify and (ii) notify the Collateral Agent of any payment received thereafter
by such Representative's Represented Parties to be applied to the Benefited
Obligations owing to such Represented Parties. Each Representative shall certify
as to such amounts and the Collateral Agent shall be entitled to rely
conclusively upon such certification.

SECTION 7. DISCLAIMERS, INDEMNITY, ETC.

     (a) The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Agreement and the Security Documents. The
Collateral Agent shall not by reason of this Agreement or the Security Documents
be a trustee for any Benefited Party


                                       8



or have any other fiduciary obligation whatsoever to any Benefited Party
(including any obligation under the Trust Indenture Act of 1939, as amended).
The Collateral Agent shall not be responsible to any Benefited Party for any
recitals, statements, representations or warranties contained in any Financing
Agreement or in any certificate or other document referred to or provided for
in, or received by any of them under, any Financing Agreement, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of any
Financing Agreement or any other document referred to or provided for therein or
any lien under any of the Security Documents or the Guaranties or the perfection
or priority of any such lien or for any failure by the Company, any other
Obligor, any Benefited Party or any other Person to perform any of its
respective obligations under any Financing Agreement. Without limiting the
foregoing, the Collateral Agent shall not be required to take any action under
any Security Document, any action to perfect any security interest granted in
the Collateral pursuant to the Security Documents, or to administer any
Collateral unless instructed to do so by Both Representatives. The Collateral
Agent may employ agents and attorneys-in-fact and shall not be responsible,
except as to money or securities received by it or its authorized agents, for
the negligence or misconduct of any such agents or attorneys-in-fact selected by
it with reasonable care. Neither the Collateral Agent nor any of its directors,
officers, employees or agents shall be liable or responsible for any action
taken or omitted to be taken by it or them hereunder or in connection herewith,
except for the gross negligence or willful misconduct of such Person.

     (b) The Collateral Agent shall be entitled to rely upon any certification,
notice or other communication (including any thereof by telephone, facsimile,
e-mail, telegram or cable) believed by it to be genuine and correct and to have
been signed or sent by or on behalf of the proper Person or Persons, and upon
advice and statements of independent legal counsel, independent accountants and
other experts selected by the Collateral Agent. As to any matters not expressly
provided for by this Agreement, the Collateral Agent shall in all cases be fully
protected in acting, or in refraining from acting, hereunder in accordance with
instructions signed by Both Representatives, and such instructions of Both
Representatives, and any action taken or failure to act pursuant thereto, shall
be binding on all Benefited Parties.

     (c) The Representatives shall cause their Represented Parties to indemnify
the Collateral Agent, in its capacity as the Collateral Agent, ratably in
accordance with the amount of the Benefited Obligations held by such Benefited
Parties, to the extent the Collateral Agent is not reimbursed by Pledgors under
the Security Documents or the Guaranties or reimbursed out of any Proceeds
pursuant to clause FIRST of Section 4(a), for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by or asserted against the Collateral Agent in any way relating to
or arising out of this Agreement or any of the Security Documents or the
enforcement of any of the terms of any thereof, including fees and charges of
counsel (including the allocated cost of internal counsel); provided that no
Represented Party shall be liable for any such payment to the extent the
obligation to make such payment is found in a final judgment by a court of
competent jurisdiction to have arisen from the Collateral Agent's gross
negligence or willful misconduct. The obligations of the Representatives and the
Represented Parties under this Section 7(c) shall survive the payment in full of
the Benefited Obligations and the termination of this Agreement.


                                       9



     (d) Except for action expressly required of the Collateral Agent hereunder,
the Collateral Agent shall, notwithstanding Section 7(c), in all cases be fully
justified in failing or refusing to act hereunder unless it shall be further
indemnified to its reasonable satisfaction by the Represented Parties against
any and all liability and expense that may be incurred by it by reason of taking
or continuing to take any such action.

     (e) The Collateral Agent may deem and treat the payee of any promissory
note or other evidence of indebtedness or obligation relating to any Benefited
Obligation as the owner thereof for all purposes hereof unless and until a
written notice of the assignment or transfer thereof, signed by such payee and
in form reasonably satisfactory to the Collateral Agent, shall have been filed
with the Collateral Agent. Any request, authority or consent of any Person who
at the time of making such request or giving such authority or consent is the
holder of any such note or other evidence of indebtedness or obligation shall be
conclusive and binding on any subsequent holder, transferee or assignee of such
note or other evidence of indebtedness or obligation and of any note or notes or
other evidences of indebtedness or obligation issued in exchange therefor.

     (f) Except as expressly provided herein, the Collateral Agent shall have no
duty to take any affirmative steps with respect to the administration or
collection of amounts payable in respect of the Security Documents or the
Collateral. The Collateral Agent shall incur no liability (except to the extent
the actions or omissions of the Collateral Agent in connection therewith
constitute gross negligence or willful misconduct) as a result of any sale of
any Collateral, whether at any public or private sale.

     (g) (i) The Collateral Agent may resign at any time by giving at least 30
days' notice thereof to the Trustee and the Bank Agent, and the Collateral Agent
may be removed as the Collateral Agent at any time by Both Representatives. In
the event of any such resignation or removal of the Collateral Agent, the
Representatives shall thereupon have the right to appoint a successor Collateral
Agent, subject to the approval of Both Representatives. Any successor Collateral
Agent appointed pursuant to this clause shall be a commercial bank or other
financial institution organized under the laws of the United States of America
or any state thereof having (1) a combined capital and surplus of at least
$500,000,000 and (2) a rating on its long-term senior unsecured indebtedness of
"A2" or better by Moody's Investors Service, Inc. or "A" or better by Standard &
Poor's Corporation. After any resigning or removed Collateral Agent's
resignation or removal hereunder, the provisions of Section 3 and this Section 7
shall continue to inure to its benefit as to any actions taken or omitted to be
taken by it while it was the Collateral Agent.

          (ii) Upon the acceptance by a successor Collateral Agent of
appointment as the Collateral Agent hereunder, such successor Collateral Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring or removed Collateral Agent, and the
retiring or removed Collateral Agent shall thereupon be discharged from its
duties and obligations hereunder.

     (h) In no event shall the Collateral Agent or any other Benefited Party be
liable or responsible for any funds or investments of funds held by the Company
or any of its Affiliates.


                                       10



     (i) With respect to its pro rata share of the Benefited Obligations, [PNC
Bank, National Association and its Affiliates] shall have and may exercise the
same rights and powers hereunder as, and is subject to the same obligations and
liabilities as and to the extent set forth herein for, any other Benefited
Party, all as if [PNC Bank, National Association] were not the Collateral Agent.
The terms "Benefited Parties," or "Bank Lenders" or any similar term shall,
unless the context clearly otherwise indicates, include [PNC Bank, National
Association or any Affiliate of PNC Bank, National Association] in its
individual capacity as a Benefited Party or Bank Lender. [PNC Bank, National
Association and its Affiliates] may lend money to, and generally engage in any
kind of business with, any Obligor as if [PNC Bank, National Association] were
not acting as the Collateral Agent and without any duty to account therefor to
the Benefited Parties. Without limiting the foregoing, each Benefited Party
acknowledges that (i) [PNC Bank, National Association] is a Bank Lender under
the Credit Agreement and the Collateral Agent under the Security Documents and
(ii) [PNC Bank, National Association and its Affiliates] may continue to engage
in any credit decision with respect to the Credit Agreement without any duty to
account therefor to the Benefited Parties by reason of its appointment as the
Collateral Agent.

     (j) If, with respect to any proposed action to be taken by it, the
Collateral Agent shall determine in good faith that the provisions of this
Agreement relating to the functions or discretionary powers of the Collateral
Agent are or may be ambiguous or inconsistent, the Collateral Agent shall notify
the Representatives identifying the proposed action and the provisions it
considers to be ambiguous or inconsistent, and may decline either to perform
such function or responsibility or to exercise such discretionary power unless
it has received the written confirmation of Both Representatives that Both
Representatives concur that the action proposed to be taken by the Collateral
Agent is consistent with the terms of this Agreement or is otherwise
appropriate. The Collateral Agent shall be fully protected in acting or
refraining from acting upon the confirmation of Both Representatives in this
respect, and such confirmation shall be binding upon all Benefited Parties,
subject to Section 9(b).

     (k) Each Obligor, by its consent hereto, agrees to pay to the Collateral
Agent, from time to time upon demand, all reasonable fees, costs and expenses of
the Collateral Agent (including the reasonable fees and expenses of counsel to
the Collateral Agent, the allocated cost of internal legal services, all
disbursements of internal counsel and all fees and charges of any financial
advisor retained by the Collateral Agent or by counsel to the Collateral Agent)
(i) arising in connection with the administration or enforcement of any of the
provisions of this Agreement or any Security Document, (ii) incurred or required
to be advanced in connection with the administration of the Collateral, the sale
or other disposition of the Collateral pursuant to any Security Document and the
preservation, protection or defense of the Collateral Agent's rights under this
Agreement and the other Financing Agreements and in and to the Collateral, or
(iii) incurred by the Collateral Agent in connection with the resignation of the
Collateral Agent pursuant to Section 7(g). Each Obligor, by its consent hereto,
further agrees to indemnify the Collateral Agent, in its capacity as the
Collateral Agent, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by or asserted
against the Collateral Agent in any way relating to or arising out of this
Agreement or any Security Document or the enforcement of any of the terms
thereof, including reasonable fees and expenses of counsel


                                       11



(including the allocated cost of internal counsel); provided that no Obligor
shall be liable for any such payment to the extent the obligation to make such
payment is found in a final judgment by a court of competent jurisdiction to
have arisen from the Collateral Agent's gross negligence or willful misconduct.

SECTION 8. WARRANTIES BY THE REPRESENTATIVES.

     Each Representative represents and warrants that it has the power and
authority to enter into this Agreement and its Represented Parties have
authorized it to enter into this Agreement and that this Agreement is a binding
obligation of such Representative for itself and on behalf of its Represented
Parties.

SECTION 9. MISCELLANEOUS.

     (a) All notices and other communications provided for herein shall be in
writing and may be sent by messenger or overnight air courier, facsimile, e-mail
(with a copy concurrently sent by overnight air courier or facsimile) or United
States mail and shall be deemed to have been given when delivered by messenger
or overnight air courier, when delivered by facsimile or e-mail with electronic
confirmation of receipt or four business days after deposit in the United States
mail, registered or certified, with postage prepaid and properly addressed. For
the purposes of this Agreement, the address of each party (until notice of a
change thereof is delivered as provided in this Section 10(a)) shall be set
forth under such party's name on the signature pages (including acknowledgments)
hereof. The Collateral Agent shall have no liability for the failure of any
Benefited Party to receive a notice sent by the Collateral Agent to all
Benefited Parties so long as the Collateral Agent used reasonable efforts to
send such notice to such Benefited Party.

     (b) This Agreement may be amended, modified or waived only by an instrument
or instruments in writing signed by the Collateral Agent, the Bank Agent and the
Trustee.

     (c) This Agreement shall be binding upon and inure to the benefit of the
Collateral Agent and each Representative and their respective successors and
assigns. Each transferee of any Representative shall assume the rights and
obligations of such Representative subject to the provisions of this Agreement
and to notice to the other parties of such transfer and an affirmation by the
transferee Representative of its obligations hereunder.

     (d) This Agreement shall continue to be effective among the parties hereto
even though a case or proceeding under any bankruptcy or insolvency law or any
proceeding in the nature of a receivership, whether or not under any bankruptcy
or insolvency law, shall be instituted with respect to the Company or any other
Obligor, or any portion of the property or assets of the Company or any other
Obligor, and all actions taken by the Representatives with regard to such
proceeding shall be by Both Representatives; provided that nothing herein shall
be interpreted to preclude any Representative from filing a proof of claim with
respect to its Benefited Obligations or from casting its vote, or abstaining
from voting, for or against confirmation of a plan of reorganization in a case
of bankruptcy, insolvency or similar law in its sole discretion.


                                       12



     (e) Each Representative agrees to do such further acts and things and to
execute and deliver such additional agreements, powers and instruments as the
Collateral Agent or any other Representative may reasonably request to carry
into effect the terms, provisions and purposes of this Agreement or to better
assure and confirm unto the Collateral Agent or such other Representative its
respective rights, powers and remedies hereunder.

     (f) This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument, and any of
the parties hereto may execute this Agreement by signing any such counterpart. A
facsimile of the signature of any party on any counterpart shall be effective as
the signature of such party for purposes of the effectiveness of this Agreement.

     (g) This Agreement shall become effective immediately upon execution by the
initial parties hereto and shall continue in full force and effect until the
earlier of (1) the date on which either (a) the Bank Obligations have been
repaid in full and the Commitments (as defined in the Credit Agreement) have
been terminated or (b) the date on which the Bank Lender Pledge Agreement, and
the grant of liens thereunder, has been terminated by the parties; or (2) the
date on which either (a) the Noteholder Obligations have been repaid in full or
(b) the date on which the Noteholder Pledge Agreement, and the grant of liens
thereunder, has been terminated by the parties.

     (h) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE COMMONWEALTH OF PENNSYLVANIA APPLICABLE TO CONTRACTS MADE AND TO
BE PERFORMED ENTIRELY WITHIN SUCH STATE.

     (i) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT SHALL BE
BROUGHT IN THE COURTS OF THE COMMONWEALTH OF PENNSYLVANIA OR OF THE UNITED
STATES FOR THE WESTERN DISTRICT OF PENNSYLVANIA AND BY ITS EXECUTION AND
DELIVERY OF THIS AGREEMENT (OR ITS CONSENT TO SUCH EXECUTION AND DELIVERY BY ITS
REPRESENTATIVE OR ITS ACCEPTANCE OF THE BENEFITS HEREOF), EACH BENEFITED PARTY
(I) CONSENTS TO THE JURISDICTION OF SUCH COURTS, (II) IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS THAT IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH COURTS IN RESPECT OF THIS
AGREEMENT; AND (III) WAIVES PERSONAL SERVICE OF ANY SUMMONS, COMPLAINT OR OTHER
PROCESS THAT MAY BE MADE BY ANY OTHER MEANS PERMITTED BY PENNSYLVANIA LAW; AND
(IV) WAIVES RIGHT TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON
OR ARISING OUT OF OR RELATED TO THIS AGREEMENT, WITH RESPECT TO CONTRACT CLAIMS,
TORT CLAIMS, OR OTHERWISE.

     (j) Each party expressly acknowledges and agrees that the Benefited
Obligations and the security therefor are intended to rank pari passu.
Accordingly, each party acknowledges the existence and validity of the
Noteholder Documents and the Bank Documents, agrees not to


                                       13



contest or challenge the validity thereof and agrees that the judicial or other
determination of the invalidity of any Noteholder Document or Bank Document
shall not affect the provisions of this Agreement.

     (k) Nothing in this Agreement or in the Security Documents, expressed or
implied, is intended or shall be construed to confer upon or give to any Person,
other than the Representatives and their Represented Parties and the Collateral
Agent, any right, remedy or claim under or by reason of any such agreement or
any covenant, condition or stipulation herein or therein contained.

     (1) If any provision in or obligation under this Agreement shall be
invalid, illegal or unenforceable in any jurisdiction, the validity, legality
and enforceability of the remaining provisions or obligations in or under this
Agreement, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.

     (m) The Company agrees to promptly deliver to the Collateral Agent any
amendment, modification or supplement to any Financing Agreement.

     (n) The Company agrees to pay directly the out-of-pocket expenses of the
Collateral Agent and the Representatives (including fees and expenses of
counsel) in connection with the preparation, execution and delivery of this
Agreement and the transactions contemplated hereby, and all such expenses
relating to any proposed amendment, waiver or consents whether or not
consummated, pursuant to the provisions hereof and any other expenses of the
Collateral Agent in connection with the performance of its duties hereunder.

                            [Signature pages follow]


                                       14



     IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
as the date first above written.

                                        COLLATERAL AGENT

                                        [PNC BANK, NATIONAL ASSOCIATION], as
                                        Collateral Agent


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        Address for Notices:
                                                             -------------------

                                        ----------------------------------------
                                        :
                                          --------------------------------------

                                        BANK AGENT:

                                        PNC BANK, NATIONAL ASSOCIATION, as Bank
                                        Agent,


                                        By:
                                            ------------------------------------
                                        Name:
                                             -----------------------------------
                                        Title:
                                              ----------------------------------
                                        Address for Notices:
                                                             -------------------

                                        ----------------------------------------
                                        :
                                          --------------------------------------

                                        TRUSTEE:

                                                     , as Trustee
                                        -------------


                                        By:
                                            ------------------------------------
                                        Name:
                                              ----------------------------------
                                        Title:
                                               ---------------------------------
                                        Address for Notices:
                                                             -------------------

                                        ----------------------------------------

                                        ----------------------------------------

                                     COMPANY


                                      A-1



                                EXHIBIT 1.1(G)(1)

                                    FORM OF
                   GUARANTOR JOINDER AND ASSUMPTION AGREEMENT

     THIS GUARANTOR JOINDER AND ASSUMPTION AGREEMENT is made as of
_________________, 20___, by___________________________________________, a
_____________________ [corporation/partnership/limited liability company] (the
"New Guarantor").

                                   Background

     Reference is made to (i) the Credit Agreement, dated as of April 3, 2006,
as the same may be amended, restated, supplemented or modified from time to time
(the "Credit Agreement"), by and among P. H. GLATFELTER COMPANY, a Pennsylvania
corporation, the other Borrowers now or hereafter party thereto (collectively,
the "Borrowers"), each of the Guarantors now or hereafter party thereto, the
Banks now or hereafter party thereto (the "Banks") and PNC BANK, NATIONAL
ASSOCIATION, in its capacity as agent for the Banks (in such capacity, the
"Agent"), (ii) the Continuing Agreement of Guaranty and Suretyship (Subsidiary),
dated as of April 3, 2006, as the same may be amended, restated, supplemented or
modified from time to time (the "Guaranty") of Guarantors given to the Agent, as
agent for the Banks, (iii) the Pledge Agreement, dated as of ________ ____,
2006, as the same may be amended, restated, supplemented or modified from time
to time (the "Pledge Agreement") made by certain of the Loan Parties in favor of
the Agent, and (iv) the other Loan Documents referred to in the Credit
Agreement, as the same may be amended, restated, supplemented or modified from
time to time (collectively, the "Loan Documents").

                                    Agreement

     Capitalized terms defined in the Credit Agreement are used herein as
defined therein.

     New Guarantor hereby becomes a Guarantor under the terms of the Credit
Agreement and in consideration of the value of the synergistic and other
benefits received by New Guarantor as a result of being or becoming affiliated
with the Borrower and the Guarantors, New Guarantor hereby agrees that effective
as of the date hereof it hereby is, and shall be deemed to be, and assumes the
obligations of, a "Loan Party" and a "Guarantor", jointly and severally, under
the Credit Agreement, a "Guarantor," jointly and severally with the existing
Guarantors under the Guaranty, a "Pledgor", jointly and severally, under the
Pledge Agreement and a Loan Party or Guarantor, as the case may be, under each
of the other Loan Documents to which the Loan Parties or Guarantors are a party;
and, New Guarantor hereby agrees that from the date hereof and so long as any
Loan or any Commitment of any Bank shall remain outstanding and until the
payment in full of the Loans and the Notes, the expiration of all Letters of
Credit, and the performance of all other obligations of the Loan Parties under
the Loan Documents, New Guarantor shall perform, comply with, and be subject to
and bound by each of the terms and provisions of the Credit Agreement, Guaranty,
Pledge Agreement and each of the other Loan Documents, jointly and severally,
with the existing parties thereto. Without limiting the



           [SIGNATURE PAGE 1 OF 1 OF GUARANTOR JOINDER AND ASSUMPTION
                                   AGREEMENT]

     NEW GUARANTOR SHALL CAUSE BORROWERS TO PROVIDE SUCH ADDITIONAL DOCUMENTS AS
REQUIRED BY SECTION 11.18 OF THE CREDIT AGREEMENT.

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the New
Guarantor has duly executed this Guarantor Joinder and Assumption Agreement and
delivered the same to the Agent for the benefit of the Banks, as of the date and
year first above written with the intention that this Guarantor Joinder and
Assumption Agreement constitute a sealed instrument.

 ATTEST:
                                        ----------------------------------------

                                        By:                               (SEAL)
                                            ------------------------------
Name:                                   Name:
      -------------------------------         ----------------------------------
Title:                                  Title:
       ------------------------------          ---------------------------------

Acknowledged and accepted:

PNC BANK, NATIONAL ASSOCIATION, as
Agent


By:
    ---------------------------------
Name:
      -------------------------------
Title:
       ------------------------------



                                EXHIBIT 1.1(G)(2)

                                    FORM OF
                CONTINUING AGREEMENT OF GUARANTY AND SURETYSHIP

     This Continuing Agreement of Guaranty and Suretyship (the "Guaranty"),
dated as of this 3rd day of April, 2006, is jointly and severally given by each
of the undersigned and each of the other Persons which become Guarantors
hereunder from time to time (each a "Guarantor" and collectively the
"Guarantors") in favor of PNC BANK, NATIONAL ASSOCIATION, as agent for the Banks
(the "Agent") in connection with that Credit Agreement, dated as of April 3,
2006, by and among P. H. GLATFELTER COMPANY, a Pennsylvania corporation, the
other Borrowers now or hereafter party thereto (collectively, the "Borrowers"),
the Guarantors now or hereafter party thereto, the Agent, and the Banks now or
hereafter party thereto (the "Banks") (as amended, restated, modified, or
supplemented from time to time hereafter, the "Credit Agreement"). Capitalized
terms not otherwise defined herein shall have the respective meanings ascribed
to them by the Credit Agreement and the rules of construction set forth in
Section 1.2 of the Credit Agreement shall apply to this Guaranty.

     1. Guaranteed Obligations. To induce the Agent and the Banks to make loans
and grant other financial accommodations to the Borrowers under the Credit
Agreement, each Guarantor hereby jointly and severally unconditionally, and
irrevocably, guaranties to the Agent, each Bank and any IRH Provider; and
becomes surety, as though it was a primary obligor for, the full and punctual
payment and performance when due (whether on demand, at stated maturity, by
acceleration, or otherwise and including any amounts which would become due but
for the operation of an automatic stay under the federal bankruptcy code of the
United States or any similar laws of any country or jurisdiction) of all
Obligations, and all extensions, modifications, renewals, refinancings or
refundings thereof, whether such obligations, liabilities, or indebtedness are
direct or indirect, secured or unsecured, joint or several, absolute or
contingent, due or to become due, whether for payment or performance, now
existing or hereafter arising (and including obligations, liabilities, and
indebtedness arising or accruing after the commencement of any bankruptcy,
insolvency, reorganization, or similar proceeding with respect to the Borrower
or any Guarantor or which would have arisen or accrued but for the commencement
of such proceeding, even if the claim for such obligation, liability, or
indebtedness is not enforceable or allowable in such proceeding, and including
all Obligations, liabilities, and indebtedness arising from any extensions of
credit under or in connection with the Loan Documents from time to time,
regardless whether any such Obligations are in excess of the amount committed
under or contemplated by the Loan Documents or are made in circumstances in
which any condition to extension of credit is not satisfied) (all such
obligations, liabilities and indebtedness are referred to, collectively, as the
"Guaranteed Obligations" and each as a "Guaranteed Obligation"). Without
limitation of the foregoing, any of the Guaranteed Obligations shall be and
remain Guaranteed Obligations entitled to the benefit of this Guaranty if the
Agent or any of the Banks (or any one or more assignees or transferees thereof)
from time to time assign or otherwise transfer all or any portion of their
respective rights and obligations under the Loan Documents, or any other
Guaranteed Obligations, to any other Person, in accordance with the terms of the
Credit Agreement. In furtherance of the foregoing, each Guarantor jointly and
severally agrees as follows.



     2. Guaranty. Subject to Section 19 hereof, each Guarantor hereby promises
to pay and perform all such Guaranteed Obligations immediately upon demand of
the Agent and the Banks or any one or more of them. All payments made hereunder
shall be made by each Guarantor in immediately available funds in United States
Dollars and shall be made without setoff, counterclaim, withholding, or other
deduction of any nature.

     3. Obligations Absolute. The obligations of the Guarantors hereunder shall
not be discharged or impaired or otherwise diminished by the failure, default,
omission, or delay, willful or otherwise, by any Bank, the Agent, or any
Borrower or any other obligor on any of the Guaranteed Obligations, or by any
other act or thing or omission or delay to do any other act or thing which may
or might in any manner or to any extent vary the risk of any Guarantor or would
otherwise operate as a discharge of any Guarantor as a matter of law or equity.
Each of the Guarantors agrees that the Guaranteed Obligations will be paid and
performed strictly in accordance with the terms of the Loan Documents. Without
limiting the generality of the foregoing, each Guarantor hereby consents to, at
any time and from time to time, and the joint and several obligations of each
Guarantor hereunder shall not be diminished, terminated, or otherwise similarly
affected by any of the following:

     (a) Any lack of genuineness, legality, validity, enforceability or
allowability (in a bankruptcy, insolvency, reorganization or similar proceeding,
or otherwise), or any avoidance or subordination, in whole or in part, of any
Loan Document or any of the Guaranteed Obligations and regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of the Guaranteed Obligations, any of the terms of the Loan Documents, or any
rights of the Agent or the Banks or any other Person with respect thereto;

     (b) Any increase, decrease, or change in the amount, nature, type or
purpose of any of, or any release, surrender, exchange, compromise or settlement
of, any of the Guaranteed Obligations (whether or not contemplated by the Loan
Documents as presently constituted); any change in the time, manner, method, or
place of payment or performance of, or in any other term of, any of the
Guaranteed Obligations; any execution or delivery of any additional Loan
Documents; or any amendment, modification or supplement to, or refinancing or
refunding of, any Loan Document or any of the Guaranteed Obligations;

     (c) Any failure to assert any breach of or default under any Loan Document
or any of the Guaranteed Obligations; any extensions of credit in excess of the
amount committed under or contemplated by the Loan Documents, or in
circumstances in which any condition to such extensions of credit has not been
satisfied; any other exercise or non-exercise, or any other failure, omission,
breach, default, delay, or wrongful action in connection with any exercise or
non-exercise, of any right or remedy against any Borrower or any other Person
under or in connection with any Loan Document or any of the Guaranteed
Obligations; any refusal of payment or performance of any of the Guaranteed
Obligations, whether or not with any reservation of rights against any
Guarantor; or any application of collections (including but not limited to
collections resulting from realization upon any direct or indirect security for
the Guaranteed Obligations) to other obligations, if any, not entitled to the
benefits of this Guaranty, in preference to Guaranteed Obligations entitled to
the benefits of this Guaranty, or if any


                                       -2-



collections are applied to Guaranteed Obligations, any application to particular
Guaranteed Obligations;

     (d) Any taking, exchange, amendment, modification, waiver, supplement,
termination, subordination, compromise, release, surrender, loss, or impairment
of, or any failure to protect, perfect, or preserve the value of, or any
enforcement of, realization upon, or exercise of rights, or remedies under or in
connection with, or any failure, omission, breach, default, delay, or wrongful
action by the Agent or the Banks, or any of them, or any other Person in
connection with the enforcement of, realization upon, or exercise of rights or
remedies under or in connection with, or, any other action or inaction by any of
the Agent or the Banks, or any of them, or any other Person in respect of, any
direct or indirect security for any of the Guaranteed Obligations. As used in
this Guaranty, "direct or indirect security" for the Guaranteed Obligations, and
similar phrases, includes any collateral security, guaranty, suretyship, letter
of credit, capital maintenance agreement, put option, subordination agreement,
or other right or arrangement of any nature providing direct or indirect
assurance of payment or performance of any of the Guaranteed Obligations, made
by or on behalf of any Person;

     (e) Any merger, consolidation, liquidation, dissolution, winding-up,
charter revocation, or forfeiture, or other change in, restructuring or
termination of the corporate structure or existence of, any Borrower or any
other Person; any bankruptcy, insolvency, reorganization or similar proceeding
with respect to any Borrower or any other Person; or any action taken or
election made by the Agent or the Banks, or any of them (including but not
limited to any election under Section 1111(b)(2) of the United States Bankruptcy
Code), any Borrower, or any other Person in connection with any such proceeding;

     (f) Any defense, setoff, or counterclaim which may at any time be available
to or be asserted by any Borrower or any other Person with respect to any Loan
Document or any of the Guaranteed Obligations; or any discharge by operation of
law or release of any Borrower or any other Person from the performance or
observance of any Loan Document or any of the Guaranteed Obligations;

     (g) Any other event or circumstance, whether similar or dissimilar to the
foregoing, and whether known or unknown, which might otherwise constitute a
defense available to, or limit the liability of, any Guarantor, a guarantor or a
surety, excepting only full, strict, and indefeasible payment and performance of
the Guaranteed Obligations in full.

     Each Guarantor acknowledges, consents, and agrees that new Guarantors may
join in this Guaranty pursuant to Section 11.18 of the Credit Agreement and each
Guarantor affirms that its obligations shall continue hereunder undiminished.

     4. Waivers, etc. Each of the Guarantors hereby waives any defense to or
limitation on its obligations under this Guaranty arising out of or based on any
event or circumstance referred to in Section 3 hereof. Without limitation and to
the fullest extent permitted by applicable law, each Guarantor waives each of
the following:


                                      -3-



     (a) All notices, disclosures and demand of any nature which otherwise might
be required from time to time to preserve intact any rights against any
Guarantor, including the following: any notice of any event or circumstance
described in Section 3 hereof; any notice required by any law, regulation or
order now or hereafter in effect in any jurisdiction; any notice of nonpayment,
nonperformance, dishonor, or protest under any Loan Document or any of the
Guaranteed Obligations; any notice of the incurrence of any Guaranteed
Obligation; any notice of any default or any failure on the part of any Borrower
or any other Person to comply with any Loan Document or any of the Guaranteed
Obligations or any direct or indirect security for any of the Guaranteed
Obligations; and any notice of any information pertaining to the business,
operations, condition (financial or otherwise) or prospects of any Borrower or
any other Person;

     (b) Any right to any marshalling of assets, to the filing of any claim
against any Borrower or any other Person in the event of any bankruptcy,
insolvency, reorganization or similar proceeding, or to the exercise against any
Borrower or any other Person of any other right or remedy under or in connection
with any Loan Document or any of the Guaranteed Obligations or any direct or
indirect security for any of the Guaranteed Obligations; any requirement of
promptness or diligence on the part of the Agent or the Banks, or any of them,
or any other Person; any requirement to exhaust any remedies under or in
connection with, or to mitigate the damages resulting from default under, any
Loan Document or any of the Guaranteed Obligations or any direct or indirect
security for any of the Guaranteed Obligations; any benefit of any statute of
limitations; and any requirement of acceptance of this Guaranty or any other
Loan Document, and any requirement that any Guarantor receive notice of any such
acceptance;

     (c) Any defense or other right arising by reason of any law now or
hereafter in effect in any jurisdiction pertaining to election of remedies
(including, but not limited to, anti-deficiency laws, "one action" laws or the
like), or by reason of any election of remedies or other action or inaction by
the Agent or the Banks, or any of them (including but not limited to
commencement or completion of any judicial proceeding or nonjudicial sale or
other action in respect of collateral security for any of the Guaranteed
Obligations), which results in denial or impairment of the right of the Agent or
the Banks, or any of them, to seek a deficiency against any Borrower or any
other Person or which otherwise discharges or impairs any of the Guaranteed
Obligations; and

     (d) Any and all defenses it may now or hereafter have based on principles
of suretyship, impairment of collateral, or the like.

     5. Reinstatement. This Guaranty is a continuing obligation of the
Guarantors and shall remain in full force and effect notwithstanding that no
Guaranteed Obligations may be outstanding from time to time and notwithstanding
any other event or circumstance. Upon termination of all Commitments, the
expiration of all Letters of Credit and indefeasible payment in full of all
Guaranteed Obligations, this Guaranty shall terminate; provided, however, that
this Guaranty shall continue to be effective or be reinstated, as the case may
be, any time any payment of any of the Guaranteed Obligations is rescinded,
recouped, avoided, or must otherwise be returned or released by any Bank or
Agent upon or during the insolvency, bankruptcy, or reorganization of, or any
similar proceeding affecting, any Borrower or for any other reason whatsoever,
all as though such payment had not been made and was due and owing.


                                      -4-



     6. Subrogation. Each Guarantor waives and agrees it will not exercise any
rights against any Borrower or any other Guarantor arising in connection with,
or any Collateral securing, the Guaranteed Obligations (including rights of
subrogation, contribution, and the like) until the Guaranteed Obligations have
been indefeasibly paid in full, and all Commitments have been terminated and all
Letters of Credit have expired. If any amount shall be paid to any Guarantor by
or on behalf of any Borrower or any other Guarantor by virtue of any right of
subrogation, contribution, or the like, such amount shall be deemed to have been
paid to such Guarantor for the benefit of, and shall be held in trust for the
benefit of, the Agent and the Banks and shall forthwith be paid to the Agent to
be credited and applied upon the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement.

     7. No Stay. Without limitation of any other provision of this Guaranty, if
any declaration of default or acceleration or other exercise or condition to
exercise of rights or remedies under or with respect to any Guaranteed
Obligation shall at any time be stayed, enjoined, or prevented for any reason
(including, but not limited to, stay or injunction resulting from the pendency
against any Borrower or any other Person of a bankruptcy, insolvency,
reorganization or similar proceeding), the Guarantors agree that, for the
purposes of this Guaranty and their obligations hereunder, the Guaranteed
Obligations shall be deemed to have been declared in default or accelerated, and
such other exercise or conditions to exercise shall be deemed to have been taken
or met.

     8. Taxes.

     (a) No Deductions. All payments made by any Guarantor under any of the Loan
Documents shall be made free and clear of and without deduction for any present
or future taxes, levies, imposts, deductions, charges, or withholdings, and all
liabilities with respect thereto, excluding taxes imposed on the net income of
any Bank and all income and franchise taxes of the United States applicable to
any Bank (all such non-excluded taxes, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as "Taxes"). If any
Guarantor shall be required by law to deduct any Taxes from or in respect of any
sum payable under any of the Loan Documents, (i) the sum payable shall be
increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Subsection (a) such Bank receives an amount equal to the sum it would have
received had no such deductions been made, (ii) such Guarantor shall make such
deductions and (iii) such Guarantor shall timely pay the full amount deducted to
the relevant tax authority or other authority in accordance with applicable law.

     (b) Stamp Taxes. In addition, each Guarantor agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes,
charges, or similar levies which arise from any payment made hereunder or from
the execution, delivery, or registration of, or otherwise with respect to, any
of the Loan Documents (hereinafter referred to as "Other Taxes").

     (c) Indemnification for Taxes Paid by any Bank. Each Guarantor shall
indemnify each Bank for the full amount of Taxes or Other Taxes (including,
without limitation, any Taxes


                                      -5-



or Other Taxes imposed by any jurisdiction on amounts payable under this
Subsection) paid by any Bank and any liability (including penalties, interest,
and expenses) arising therefrom or with respect thereto, whether or not such
Taxes or Other Taxes were correctly or legally asserted. This indemnification
shall be made within thirty (30) days from the date a Bank makes written demand
therefor.

     (d) Certificate. Within thirty (30) days after the date of any payment of
any Taxes by any Guarantor, such Guarantor shall furnish to each Bank, the
original or a certified copy of a receipt evidencing payment thereof. If no
Taxes are payable in respect of any payment by such Guarantor, such Guarantor
shall, if so requested by a Bank, provide a certificate of an officer of such
Guarantor to that effect.

     9. Judgment Currency.

     (a) If for the purposes of obtaining judgment in any court it is necessary
to convert a sum due under any of the Loan Documents in any currency (the
"Original Currency") into another currency (the "Other Currency"), each
Guarantor hereby agrees, to the fullest extent permitted by law, that the rate
of exchange used shall be that at which, in accordance with normal banking
procedures, each Bank could purchase the Original Currency with the Other
Currency after any premium and costs of exchange on the Business Day preceding
that on which final judgment is given.

     (b) The obligation of each Guarantor in respect of any sum due from such
Guarantor to any Bank under any of the Loan Documents shall, notwithstanding any
judgment in an Other Currency, whether pursuant to a judgment or otherwise, be
discharged only to the extent that, on the business day (being a day on which it
is open for business at its principal office in the United States) following
receipt by any Bank of any sum adjudged to be so due in such Other Currency,
such Bank may in accordance with normal banking procedures purchase the Original
Currency with such Other Currency. If the amount of the Original Currency so
purchased is less than the sum originally due to such Bank in the Original
Currency, each Guarantor agrees, as a separate obligation and notwithstanding
any such judgment or payment, to indemnify such Bank against such loss.

     10. Notices. Each Guarantor agrees that all notices, statements, requests,
demands and other communications under this Guaranty shall be given to such
Guarantor at the address set forth on a Schedule to, or in a Guarantor Joinder
and Assumption Agreement given under, the Credit Agreement and in the manner
provided in Section 11.6 of the Credit Agreement. The Agent and the Banks may
rely on any notice (whether or not made in a manner contemplated by this
Guaranty) purportedly made by or on behalf of a Guarantor, and the Agent and the
Banks shall have no duty to verify the identity or authority of the Person
giving such notice.

     11. Counterparts; Telecopy Signatures. This Guaranty may be executed in any
number of counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute but one and the same
instrument. Each Guarantor acknowledges and agrees that a telecopy transmission
to Agent or any Bank of signature pages


                                      -6-


hereof purporting to be signed on behalf of any Guarantor shall constitute
effective and binding execution and delivery hereof by such Guarantor.

     12.  Setoff, Default Payments by Borrowers.

     (a) Subject to Section 19 hereof, in the event that at any time any
obligation of the Guarantors now or hereafter existing under this Guaranty shall
have become due and payable, the Agent and the Banks, or any of them, shall have
the right from time to time, without notice to any Guarantor, to set off against
and apply to such due and payable amount any obligation of any nature of any
Bank or the Agent, or any subsidiary or affiliate of any Bank or Agent, to any
Guarantor, including, but not limited to, all deposits (whether time or demand,
general or special, provisionally credited or finally credited, however
evidenced) now or hereafter maintained by any Guarantor with the Agent or any
Bank or any IRH Provider. Subject to Section 19 hereof, such right shall be
absolute and unconditional in all circumstances and, without limitation, shall
exist whether or not the Agent or the Banks, or any of them, shall have given
any notice or made any demand under this Guaranty or under such obligation to
the Guarantor, whether such obligation to the Guarantor is absolute or
contingent, matured or unmatured (it being agreed that the Agent and the Banks,
or any of them, may deem such obligation to be then due and payable at the time
of such setoff), and regardless of the existence or adequacy of any collateral,
guaranty, or other direct or indirect security or right or remedy available to
the Agent or any of the Banks. Subject to Section 19 hereof, the rights of the
Agent and the Banks under this Section are in addition to such other rights and
remedies (including, without limitation, other rights of setoff and banker's
lien) which the Agent and the Banks, or any of them, may have, and nothing in
this Guaranty or in any other Loan Document shall be deemed a waiver of or
restriction on the right of setoff or banker's lien of the Agent and the Banks,
or any of them. Each of the Guarantors hereby agrees that, to the fullest extent
permitted by law, any affiliate or subsidiary of the Agent or any of the Banks
and any holder of a participation in any obligation of any Guarantor under this
Guaranty, shall have the same rights of setoff as the Agent and the Banks as
provided in this Section (regardless whether such affiliate or participant
otherwise would be deemed a creditor of the Guarantor).

     (b) Upon the occurrence and during the continuation of any default under
any Guaranteed Obligation, if any amount shall be paid to any Guarantor by or
for the account of any Borrower, such amount shall be held in trust for the
benefit of each Bank and Agent and shall forthwith be paid to the Agent to be
credited and applied to the Guaranteed Obligations when due and payable.

     13. Construction. The section and other headings contained in this Guaranty
are for reference purposes only and shall not affect interpretation of this
Guaranty in any respect. This Guaranty has been fully negotiated between the
applicable parties, each party having the benefit of legal counsel, and
accordingly neither any doctrine of construction of guaranties or suretyships in
favor of the guarantor or surety, nor any doctrine of construction of
ambiguities in agreement or instruments against the party controlling the
drafting thereof, shall apply to this Guaranty.

     14. Successors and Assigns. This Guaranty shall be binding upon each
Guarantor, its successors and assigns, and shall inure to the benefit of and be
enforceable by the Agent and the


                                      -7-



Banks, or any of them, and their successors and permitted assigns provided,
however, that no Guarantor may assign or transfer any of its rights or
obligations hereunder or any interest herein and any such purported assignment
or transfer shall be null and void. Without limitation of the foregoing, the
Agent and the Banks, or any of them (and any successive assignee or transferee),
from time to time may assign or otherwise transfer all or any portion of its
rights or obligations in accordance with the Loan Documents (including all or
any portion of any commitment to extend credit), or any other Guaranteed
Obligations, to any other person and such Guaranteed Obligations (including any
Guaranteed Obligations resulting from extension of credit by such other Person
under or in connection with the Loan Documents) shall be and remain Guaranteed
Obligations entitled to the benefit of this Guaranty, and to the extent of its
interest in such Guaranteed Obligations such other Person shall be vested with
all the benefits in respect thereof granted to the Agent and the Banks in this
Guaranty or otherwise.

     15. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial.

     (a) Governing Law. This Guaranty shall be governed by, construed, and
enforced in accordance with the internal laws of the Commonwealth of
Pennsylvania, without regard to conflict of laws principles.

     (b) Certain Waivers. Each Guarantor hereby irrevocably:

     (i) Certain Waivers: Submission to Jurisdiction. Each Guarantor hereby
irrevocably submits to the nonexclusive jurisdiction of the Court of Common
Pleas of Philadelphia County and the United States District Court for the
Eastern District of Pennsylvania, and waives personal service of any and all
process upon it and consents that all such service of process be made by
certified or registered mail directed to any Borrower at the address provided
for in the Credit Agreement and service so made shall be deemed to be completed
upon actual receipt thereof. Each Guarantor waives any objection to jurisdiction
and venue of any action instituted against it as provided herein and agrees not
to assert any defense based on lack of jurisdiction or venue.

     Each Guarantor hereby appoints a process agent, P. H. Glatfelter Company,
as its agent to receive on behalf of such party and its respective property,
service of copies of the summons and complaint and any other process which may
be served in any action or proceeding (the "Process Agent"). Such service may be
made by mailing or delivering a copy of such process to any of the Guarantors in
care of the Process Agent at the Process Agent's address, and each of the
Guarantors hereby authorizes and directs the Process Agent to receive such
service on its behalf. Each Guarantor agrees that a final judgment in any such
action or proceeding shall be conclusive and may be enforced in other
jurisdictions (or any political subdivision thereof) by suit on the judgment or
in any other manner provided by law. Each Guarantor further agrees that it
shall, for so long as any Commitment, Letter of Credit or any Obligation of any
Loan Party to the Bank remains outstanding, continue to retain Process Agent for
the purposes set forth in this Section 15. The Process Agent hereby accepts the
appointment of Process Agent by the Guarantors and agrees to act as Process
Agent on behalf of the Guarantors. The Process Agent has an address of, on the
date hereof, that of P. H. Glatfelter Company as reflected in the Credit
Agreement.


                                      -8-



     (ii) Waives any objection to jurisdiction and venue of any action
instituted against it as provided herein and agrees not to assert any defense
based on lack of jurisdiction or venue; and

     (iii) WAIVES TRIAL BY JURY IN ANY ACTION, SUIT, PROCEEDING, OR COUNTERCLAIM
OF ANY KIND ARISING OUT OF OR RELATED TO THIS AGREEMENT, THE CREDIT AGREEMENT,
OR ANY OTHER LOAN DOCUMENT TO THE FULLEST EXTENT PERMITTED BY LAW.

     16. Severability; Modification to Conform to Law.

     (a) It is the intention of the parties that this Guaranty be enforceable to
the fullest extent permissible under applicable law, but that the
unenforceability (or modification to conform to such law) of any provision or
provisions hereof shall not render unenforceable, or impair, the remainder
hereof. If any provision in this Guaranty shall be held invalid or unenforceable
in whole or in part in any jurisdiction, this Guaranty shall, as to such
jurisdiction, be deemed amended to modify or delete, as necessary, the offending
provision or provisions and to alter the bounds thereof in order to render it or
them valid and enforceable to the maximum extent permitted by applicable law,
without in any manner affecting the validity or enforceability of such provision
or provisions in any other jurisdiction or the remaining provisions hereof in
any jurisdiction.

     (b) Without limitation of the preceding subsection (a), to the extent that
applicable law (including applicable laws pertaining to fraudulent conveyance or
fraudulent or preferential transfer) otherwise would render the full amount of
the Guarantor's obligations hereunder invalid, voidable, or unenforceable on
account of the amount of a Guarantor's aggregate liability under this Guaranty,
then, notwithstanding any other provision of this Guaranty to the contrary, the
aggregate amount of such liability shall, without any further action by the
Agent or any of the Banks or such Guarantor or any other Person, be
automatically limited and reduced to the highest amount which is valid and
enforceable as determined in such action or proceeding, which (without limiting
the generality of the foregoing) may be an amount which is equal to the greater
of:

          (i) the fair consideration actually received by such Guarantor under
the terms and as a result of the Loan Documents and the value of the benefits
described in Section 16 (b) hereof, including (and to the extent not
inconsistent with applicable federal and state laws affecting the enforceability
of guaranties) distributions, commitments, and advances made to or for the
benefit of such Guarantor with the proceeds of any credit extended under the
Loan Documents, or

          (ii) the excess of (1) the amount of the fair value of the assets of
such Guarantor as of the date of this Guaranty as determined in accordance with
applicable federal and state laws governing determinations of the insolvency of
debtors as in effect on the date hereof, over (2) the amount of all liabilities
of such Guarantor as of the date of this Guaranty, also as determined on the
basis of applicable federal and state laws governing the insolvency of debtors
as in effect on the date hereof.


                                      -9-



     (c) Notwithstanding anything to the contrary in this Section or elsewhere
in this Guaranty, this Guaranty shall be presumptively valid and enforceable to
its full extent in accordance with its terms, as if this Section (and references
elsewhere in this Guaranty to enforceability to the fullest extent permitted by
law) were not a part of this Guaranty, and in any related litigation the burden
of proof shall be on the party asserting the invalidity or unenforceability of
any provision hereof or asserting any limitation on any Guarantor's obligations
hereunder as to each element of such assertion.

     17. Additional Guarantors. At any time after the initial execution and
delivery of this Guaranty to the Agent and the Banks, additional Persons may
become parties to this Guaranty and thereby acquire the duties and rights of
being Guarantors hereunder by executing and delivering to the Agent and the
Banks a Guarantor Joinder and Assumption Agreement pursuant to the Credit
Agreement. No notice of the addition of any Guarantor shall be required to be
given to any pre-existing Guarantor and each Guarantor hereby consents thereto.

     18. Joint and Several Obligations. Subject to Section 19 hereof, the
obligations and additional liabilities of the Guarantors under this Agreement
are joint and several obligations of the Guarantors, and each Guarantor hereby
waives to the full extent permitted by law any defense it may otherwise have to
the payment and performance of the Obligations that its liability hereunder is
limited and not joint and several. Each Guarantor acknowledges and agrees that
the foregoing waivers and those set forth below serve as a material inducement
to the agreement of the Agent and the Banks to make the Loans, and that the
Agent and the Banks are relying on each specific waiver and all such waivers in
entering into this Guaranty. The undertakings of each Guarantor hereunder secure
the obligations of itself and the other Guarantors. The Agent and the Banks, or
any of them, may, in their sole discretion, elect to enforce this Guaranty
against any Guarantor without any duty or responsibility to pursue any other
Guarantor and such an election by the Agent and the Banks, or any of them, shall
not be a defense to any action the Agent and the Banks, or any of them, may
elect to take against any Guarantor. Each of the Banks and Agent hereby reserve
all right against each Guarantor.

     19. Obligations of Foreign Guarantors. Notwithstanding the joint and
several liability of the Guarantors under this Guaranty, the obligations of each
Foreign Guarantor on account of Guaranteed Obligations shall be limited to (i)
the principal amounts advanced to, plus reimbursement of draws under Letters of
Credit issued at the request of, a Borrower and used for the benefit of such
Foreign Guarantor and its Subsidiaries, (ii) in each case, interest thereon, and
(iii) such Foreign Guarantor's pro rata share of all fees and expenses and other
sums due thereunder and hereunder (other than principal, unreimbursed draws, and
interest on the Loans) based upon the ratio of the aggregate amount described in
clauses (i) and (ii), to the total amount of principal and interest of all Loans
plus unreimbursed draws under all Letters of Credit.

     20. Receipt of Credit Agreement. Other Loan Documents, Benefits.

     (a) Each Guarantor hereby acknowledges that it has received a copy of the
Credit Agreement and the other Loan Documents and each Guarantor certifies that
the representations and warranties made therein with respect to such Guarantor
are true and correct. Further, each


                                      -10-



Guarantor acknowledges and agrees to perform, comply with, and be bound by all
of the provisions of the Credit Agreement and the other Loan Documents.

     (b) Each Guarantor hereby acknowledges, represents, and warrants that it
receives synergistic benefits by virtue of its affiliation with Borrowers and
the other Guarantors and that it will receive direct and indirect benefits from
the financing arrangements contemplated by the Credit Agreement and that such
benefits, together with the rights of contribution and subrogation that may
arise in connection herewith are a reasonably equivalent exchange of value in
return for providing this Guaranty.

     21. Miscellaneous. (a) Generality of Certain Terms. As used in this
Guaranty, the terms "hereof," "herein," and terms of similar import refer to
this Guaranty as a whole and not to any particular term or provision; the term
"including," as used herein, is not a term of limitation and means "including
without limitation." (b) Amendments, Waivers. No amendment to or waiver of any
provision of this Guaranty, and no consent to any departure by any Guarantor
herefrom, shall in any event be effective unless in a writing manually signed by
or on behalf of the Agent and the Banks. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given. No delay or failure of the Agent or the Banks, or any of them, in
exercising any right or remedy under this Guaranty shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right or remedy
preclude any other or further exercise thereof or the exercise of any other
right or remedy. The rights and remedies of the Agent and the Banks under this
Guaranty are cumulative and not exclusive of any other rights or remedies
available hereunder, under any other agreement or instrument, by law, or
otherwise. (c) Telecommunications. Each Bank and Agent shall be entitled to rely
on the authority of any individual making any facsimile or telephonic notice,
request, or signature without the necessity of receipt of any verification
thereof. (d) Expenses. Each Guarantor unconditionally agrees to pay all costs
and expenses, including reasonable attorney's fees incurred by the Agent or any
of the Banks in enforcing this Guaranty against any Guarantor and each Guarantor
shall pay and indemnify each Bank and Agent for, and hold it harmless from and
against, any and all obligations, liabilities, losses, damages, costs, expenses
(including disbursements and reasonable legal fees of counsel to any Bank or
Agent), penalties, judgments, suits, actions, claims, and disbursements imposed
on, asserted against, or incurred by any Bank or Agent (A) relating to the
preparation, negotiation, execution, administration, or enforcement of or
collection under this Guaranty or any document, instrument, or agreement
relating to any of the Obligations, including in any bankruptcy, insolvency, or
similar proceeding in any jurisdiction or political subdivision thereof; (B)
relating to any amendment, modification, waiver, or consent hereunder or
relating to any telecopy or telephonic transmission purporting to be by any
Guarantor or any Borrower; (C) in any way relating to or arising out of this
Guaranty, or any document, instrument, or agreement relating to any of the
Guaranteed Obligations, or any action taken or omitted to be taken by any Bank
or Agent hereunder, and including those arising directly or indirectly from the
violation or asserted violation by any Guarantor or any Borrower or Agent or any
Bank of any law, rule, regulation, judgment, order, or the like of any
jurisdiction or political subdivision thereof (including those relating to
environmental protection, health, labor, importing, exporting, or safety) and
regardless whether asserted by any governmental entity or any other Person. (e)
Prior Understandings. This Guaranty and the Credit Agreement constitute the
entire agreement of the parties hereto with respect to the subject matter hereof
and supersede any


                                      -11-



         [SIGNATURE PAGE 1 OF 1 OF CONTINUING AGREEMENT OF GUARANTY AND
                                  SURETYSHIP]

     IN WITNESS WHEREOF, each Guarantor intending to be legally bound, has
executed this Guaranty as of the date first above written with the intention
that this Guaranty shall constitute a sealed instrument.

                                        THE GLATFELTER PULP WOOD COMPANY


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        GLT INTERNATIONAL FINANCE, LLC


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        GLENN-WOLFE, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:




                                 EXHIBIT 1.1(R)

                                     FORM OF
                              REVOLVING CREDIT NOTE

$_____________________________                          Pittsburgh, Pennsylvania

                                                        _____________, _________

     FOR VALUE RECEIVED, the undersigned, P. H. GLATFELTER COMPANY, a
Pennsylvania corporation, and the other Borrowers signatory hereto
(collectively, the "Borrowers"), jointly and severally, hereby promise to pay to
the order of _______________________________________________________________(the
"Bank"), the lesser of (i) the principal sum of ________________________________
___________________________________________(US$_________), and (ii) the
aggregate unpaid principal balance of all Revolving Credit Loans made by the
Bank to the Borrowers pursuant to the Credit Agreement, dated as of April 3,
2006, among the Borrowers, the Guarantors now or hereafter party thereto, the
Banks now or hereafter party thereto, and PNC BANK, NATIONAL ASSOCIATION, as
agent (hereinafter referred to in such capacity as the "Agent") (as amended,
restated, modified, or supplemented from time to time, the "Credit Agreement"),
payable by 11:00 a.m. on the Expiration Date, together with interest the unpaid
principal balance hereof from time to time outstanding from the date hereof at
the rate or rates per annum specified by the Borrowers pursuant to, or as
otherwise provided in, the Credit Agreement.

     Interest on the unpaid principal balance hereof from time to time
outstanding from the date hereof will be payable at the times provided for in
the Credit Agreement. Upon the occurrence and during the continuation of an
Event of Default, the Borrowers shall pay interest on the entire principal
amount of the then outstanding Revolving Credit Loans evidenced by this
Revolving Credit Note and all other obligations due and payable to the Bank
pursuant to the Credit Agreement and the other Loan Documents at a rate per
annum as set forth in the Credit Agreement. Such interest will accrue before and
after any judgment has been entered.

     Subject to the provisions of the Credit Agreement, payments of both
principal and interest shall be made without setoff, counterclaim, or other
deduction of any nature at the office of the Agent located at PNC Firstside
Center, 500 First Avenue, 3rd Floor, Pittsburgh, PA 15219, Attn: Rini Davis,
Assistant Vice President, unless otherwise directed in writing by the holder
hereof or provided in the Credit Agreement, in lawful money of the United States
of America in immediately available funds.

     This Note is one of the Revolving Credit Notes referred to in, and is
entitled to the benefits of, the Credit Agreement and other Loan Documents,
including the representations, warranties, covenants, conditions, security
interests, and Liens contained or granted therein. The Credit Agreement among
other things contains provisions for acceleration of the maturity hereof upon
the happening of certain stated events and also for prepayment, in certain
circumstances, on account of principal hereof prior to maturity upon the terms
and conditions therein specified. The Borrowers waive presentment, demand,
notice, protest and all other demands and notices in




connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Credit Agreement.

     This Note shall bind the Borrowers and their respective successors and
assigns, and the benefits hereof shall inure to the benefit of the Bank and its
successors and assigns. All references herein to the "Borrowers" and the "Bank"
shall be deemed to apply to the Borrowers and the Bank, respectively, and their
respective successors and assigns as permitted under the Credit Agreement.

     This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the internal laws
of the Commonwealth of Pennsylvania without giving effect to its conflicts of
law principles.

     All capitalized terms used herein shall, unless otherwise defined herein,
have the same meanings given to such terms in the Credit Agreement.


                            [SIGNATURE PAGE FOLLOWS]


                                      -2-



     IN WITNESS WHEREOF, and intending to be legally bound hereby, the
undersigned has executed this Note by its duly authorized officer with the
intention that it constitute a sealed instrument.

                                        P. H. GLATFELTER COMPANY


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        PHG TEA LEAVES, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        PAPIERFABRIK SCHOELLER & HOESCH GMBH &
                                        CO. KG

                                        By: S&H Verwaltungsgesellschaft mbH,
                                            its General Partner


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        S&H VERWALTUNGSGESELLSCHAFT MBH


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER-UK, LTD.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        MOLLANVICK, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:



                                      -3-

R


                                 EXHIBIT 1.1(S)

                                    FORM OF
                                SWING LOAN NOTE

$20,000,000.00                                          Pittsburgh, Pennsylvania

                                                        ______________, ________

     FOR VALUE RECEIVED, the undersigned, P. H. GLATFELTER COMPANY, a
Pennsylvania corporation, and the other Borrowers signatory hereto
(collectively, the "Borrowers"), jointly and severally, hereby unconditionally
promise to pay to the order of PNC BANK, NATIONAL ASSOCIATION (the "Bank"), the
lesser of (i) the principal sum of TWENTY MILLION DOLLARS (US$20,000,000.00),
and (ii) the aggregate unpaid principal balance of all Swing Loans made by the
Bank to the Borrowers pursuant to Section 2.5.2 of the Credit Agreement, dated
as of April 3, 2006, among the Borrowers, the Guarantors now or hereafter party
thereto, the Banks now or hereafter party thereto, and PNC Bank, National
Association, as agent for the Banks (hereinafter referred to in such capacity as
the "Agent") (as amended, restated, supplemented, or otherwise modified from
time to time, the "Credit Agreement"), payable with respect to each Swing Loan
evidenced hereby on the earlier of (i) demand by the Bank or (ii) by 11:00 a.m.
Pittsburgh time on the Expiration Date, or at such other time specified in the
Credit Agreement.

     The Borrowers shall pay interest on the unpaid principal balance of each
Swing Loan from time to time outstanding hereunder from the date hereof at the
rate per annum and on the date(s) provided in the Credit Agreement. Upon the
occurrence and during the continuation of an Event of Default, the Borrowers
shall pay interest on the entire principal amount of the then outstanding Swing
Loans evidenced by this Note at a rate per annum as set forth in the Credit
Agreement. Such interest will accrue before and after any judgment has been
entered.

     Subject to the provisions of the Credit Agreement, payments of both
principal and interest shall be made without setoff, counterclaim or other
deduction of any nature at the office of the Agent located at PNC Firstside
Center, 500 First Avenue, 3rd Floor, Pittsburgh, PA 15219, Attn: Rini Davis,
Assistant Vice President, unless otherwise directed in writing by the holder
hereof, in lawful money of the United States of America in immediately available
funds.

     This Note is the Swing Loan Note referred to in, and is entitled to the
benefits of, the Credit Agreement and other Loan Documents, including the
representations, warranties, covenants or conditions contained or granted
therein. The Credit Agreement among other things contains provisions for
acceleration of the maturity hereof upon the happening of certain stated events
and also for prepayment, in certain circumstances, on demand or otherwise, on
account of principal hereof prior to maturity upon the terms and conditions
therein specified. All capitalized terms used herein shall, unless otherwise
defined herein, have the same meanings given to such terms in the Credit
Agreement. The Borrowers waive presentment, demand, notice, protest and all
other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note and the Credit Agreement.




     The Borrowers acknowledge and agree that the Bank may at any time and in
its sole discretion demand payment of all amounts outstanding under this Note
without prior notice to the Borrowers.

     This Note shall bind the Borrowers and their respective successors and
assigns, and the benefits hereof shall inure to the benefit of the Bank and its
successors and assigns. All references herein to the "Borrowers" and the "Bank"
shall be deemed to apply to the Borrowers and the Bank, respectively, and their
respective successors and assigns.

     This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the internal laws
of the Commonwealth of Pennsylvania without giving effect to its conflict of
laws principles.

     The Borrowers acknowledge and agree that a telecopy transmission to Agent
or any Bank of signature pages hereof purporting to be signed on behalf of
Borrowers shall constitute effective and binding execution and delivery hereof
by Borrowers.

                            [SIGNATURE PAGE FOLLOWS]


                                       2



                   [SIGNATURE PAGE 1 OF 1 TO SWING LOAN NOTE]

     IN WITNESS WHEREOF, and intending to be legally bound hereby, the
undersigned has executed this Note by its duly authorized officers with the
intention that it constitute a sealed instrument.

                                        P. H. GLATFELTER COMPANY


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        PHG TEA LEAVES, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        PAPIERFABRIK SCHOELLER & HOESCH
                                        GMBH & CO. KG


                                        By: S&H Verwaltungsgesellschaft mbH,
                                            its General Partner


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        S&H VERWALTUNGSGESELLSCHAFT MBH


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER-UK, LTD.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        MOLLANVICK, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:




                                 EXHIBIT 1.1 (T)

                                     FORM OF
                                    TERM NOTE

$__________________                                     Pittsburgh, Pennsylvania
                                                        ______________, ________

FOR VALUE RECEIVED, the undersigned P. H. GLATFELTER COMPANY, a Pennsylvania
corporation, and the other Borrowers signatory hereto (collectively, the
"Borrowers"), jointly and severally, hereby promise to pay to the order
of__________________________________________________________________________(the
"Bank") the principal sum of_________________________________________Dollars
(US$______________________________________), which shall be payable as and when
required by the Credit Agreement, and, in any event, in full on April 2, 2011.

     The Borrowers shall pay interest on the unpaid principal balance hereof
from time to time outstanding from the date hereof at the rate or rates per
annum specified by the Borrowers in the Credit Agreement between the Borrowers,
the Guarantors now or hereafter party thereto, the Banks now or hereafter party
thereto and PNC BANK, NATIONAL ASSOCIATION, as agent (hereinafter referred to in
such capacity as the "Agent") and the Bank dated as of April 3, 2006 (as
amended, restated, modified or supplemented, from time to time, the "Credit
Agreement").

     Interest on the unpaid principal balance hereof from time to time
outstanding from the date hereof will be payable at the times provided for in
the Credit Agreement. Upon the occurrence and during the continuation of an
Event of Default, the Borrowers shall pay interest on the unpaid principal
balance hereof at a rate per annum as set forth in the Credit Agreement. Such
interest will accrue before and after any judgment has been entered.

     Subject to the provisions of the Credit Agreement, payments of principal
and interest shall be made without setoff, counterclaim or other deduction of
any nature at the office of the Agent located at PNC Firstside Center, 500 First
Avenue, 3rd Floor, Pittsburgh, PA 15219, Attn: Rini Davis, Assistant Vice
President, unless otherwise provided in the Credit Agreement, in lawful money of
the United States of America in immediately available funds.

     This Note is one of the Term Notes referred to in, and is entitled to the
benefits of, the Credit Agreement and the other Loan Documents, including the
representations, warranties, covenants, conditions, security interests and Liens
contained or granted therein. The Credit Agreement among other things contains
provisions for acceleration of the maturity hereof upon the happening of certain
stated events and also for prepayments, in certain circumstances, on account of
principal hereof prior to maturity upon the terms and conditions therein
specified.

     Except as otherwise provided in the Credit Agreement, the Borrowers waive
presentment, demand, notice, protest and all other demands and notices in
connection with the delivery, acceptance, performance, default or enforcement of
this Note and the Credit Agreement.




     This Note shall bind the Borrowers and their respective successors and
assigns, and the benefits hereof shall inure to the benefit of the Bank and its
successors and assigns. All references herein to the "Borrowers" and the "Bank"
shall be deemed to apply to the Borrowers and the Bank, respectively, and their
respective successors and assigns as permitted under the Credit Agreement.

     This Note and any other documents delivered in connection herewith and the
rights and obligations of the parties hereto and thereto shall for all purposes
be governed by and construed and enforced in accordance with the internal laws
of the Commonwealth of Pennsylvania without giving effect to its conflicts of
law principles.

     All capitalized terms used herein shall, unless otherwise defined herein,
have the same meanings given to such terms in the Credit Agreement.

                            [SIGNATURE PAGE FOLLOWS]


                                      -2-



     IN WITNESS WHEREOF, and intending to be legally bound the undersigned has
executed this Note by its duly authorized officers with the intention that it
constitute a sealed instrument.

                                        P. H. GLATFELTER COMPANY


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        PHG TEA LEAVES, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        PAPIERFABRIK SCHOELLER & HOESCH
                                        GMBH & CO. KG


                                        By: S&H Verwaltungsgesellschaft mbH,
                                            its General Partner


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        S&H VERWALTUNGSGESELLSCHAFT MBH


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        GLATFELTER-UK, LTD


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                        MOLLANVICK, INC.


                                        By:
                                           -------------------------------------
                                        Name:
                                        Title:


                                      -3-



                                   EXHIBIT 2.4

                              FORM OF LOAN REQUEST

                                                           Date:

TO:  PNC Bank, National Association, as Agent
     PNC Firstside Center
     500 First Avenue, 3rd Floor
     Pittsburgh, PA 15219
     Telephone No.: (412)762-7638
     Telecopier No.: (412)762-8672
     Attention: Rini Davis

FROM: __________________________________

RE:  Credit Agreement (as it may be amended, restated, modified or supplemented,
     the "Agreement") dated as of April 3, 2006 by and among P. H. Glatfelter
     Company, the other Borrowers party thereto (collectively, "Borrowers"), the
     Guarantors party thereto, the Banks party thereto and PNC Bank, National
     Association, as Agent for the Banks (the "Agent")

Capitalized terms not otherwise defined herein shall have the respective
meanings ascribed to them by the Agreement.

A.   Pursuant to Section [2.4] [4.2] of the Agreement, the undersigned Borrower
     irrevocably requests [check one line under 1(a) below and fill in blank
     space next to the line as appropriate]:

     l.(a) [ ]  A new Revolving Credit Loan OR

           [ ]  A new Swing Loan OR

           [ ]  Renewal of the Euro-Rate Option applicable to an outstanding
                ______________ [specify type of Loan -- Revolving Credit Loan or
                Term Loan], originally made on _____________________,________ OR

           [ ]  Conversion of the Base Rate Option applicable to an outstanding
                _____________ [specify type of Loan -- Revolving Credit Loan or
                Term Loan], originally made on __________ to a Loan to which the
                Euro-Rate Option applies, OR




                amount of such Optional Currency to be renewed is
                ________________________.

     [(1) Revolving Credit Loans under Section 2.4 not to be less than
     $2,000,000.00 and in increments of $100,000.00 if in excess thereof for
     each Borrowing Tranche to which the Euro-Rate Option applies and not less
     than the lesser of $2,000,000.00 or the maximum amount available for each
     Borrowing Tranche to which the Base Rate Option applies]

     3.   [Complete blank below if the Borrower is selecting the Euro-Rate
          Option]: Such Loan shall have an Interest Period of [one, two, three,
          or six] Month(s).

          ------------------------------
     [Interest Periods for Optional Currency Loans limited to one month]

     [If a new Loan]

     4.   The proceeds of the Loan shall be advanced to the following
          Borrower(s):

     ---------------------------------------------------------------------------

B.   As of the date hereof and the date of making of the above-requested Loan
     (and after giving effect thereto): the Borrowers have performed and
     complied with all covenants and conditions of the Agreement; all of
     Borrowers' representations and warranties therein are true and correct
     (except representations and warranties which expressly relate solely to an
     earlier date or time, which representations and warranties were true and
     correct on and as of the specific dates or times referred to therein); no
     Event of Default or Potential Default has occurred and is continuing or
     shall exist; and the making of such Loan shall not contravene any Law
     applicable to the Borrowers; the making of any Revolving Credit Loan shall
     not cause the aggregate Revolving Credit Loans, plus Swing Loans plus the
     Letters of Credit Outstanding to exceed the aggregate Revolving Credit
     Commitments.

                            [SIGNATURE PAGE FOLLOWS]


                                       3



                     [SIGNATURE PAGE 1 OF 1 TO LOAN REQUEST]

   The undersigned certifies to the Agent as to the accuracy of the foregoing.

                                        [NAME OF BORROWER]

Date: ________________________, 2006    _________________________________ (SEAL)


                                        By:
                                           -------------------------------------
                                        Title:
                                              ----------------------------------


                LAW OFFICES
BALLARD SPAHR ANDREWS & INGERSOLL, LLP                           BALTIMORE, MD
       1735 MARKET STREET, 51st FLOOR                              DENVER, CO
PHILADELPHIA, PENNSYLVANIA  19103-7559                       SALT LAKE CITY, UT
                215-665-8500                                     VOORHEES, NJ
             FAX: 215-864-8999                                  WASHINGTON, DC
            WWW.BALLARDSPAHR.COM                                 WILMINGTON, DE

                                  April 3, 2006

PNC Bank, National Association, as Agent
1600 Market Street
Philadelphia, PA 19103

and

Each of the Banks listed on Schedule I hereto

     Re:  Credit Agreement, dated as of April 3, 2006 (the "Credit Agreement"),
          among P. H. Glatfelter Company (the "Company"), certain of its
          subsidiaries party thereto, the banks and financial institutions party
          thereto (the "Banks") and PNC Bank, National Association, as agent for
          the Banks (the "Agent")

Ladies and Gentlemen:

     We have acted as counsel to the Company, a Pennsylvania corporation,
Mollanvick, Inc., a Delaware corporation ("Mollanvick"), PHG Tea Leaves, Inc., a
Delaware corporation ("Tea Leaves": and together with the Company and
Mollanvick, each a "Domestic Borrower" and, collectively, the "Domestic
Borrowers"), Glatfelter Pulp Wood Company, a Maryland corporation ("Pulp Wood"),
Glenn-Wolfe, Inc., a Delaware corporation ("Glenn-Wolfe") and GLT International
Finance LLC, a Delaware limited liability company ("GLT"; and together with the
Pulp Wood and Glenn-Wolfe, each a "Guarantor" and, collectively, the
"Guarantors"; and together with the Domestic Borrowers, each a "Domestic Loan
Party" and, collectively, the "Domestic Loan Parties") in connection with the
execution and delivery of the Credit Agreement among the Loan Parties (as
defined below), the Banks and the Agent, and the transactions contemplated
thereby. This opinion is furnished to you pursuant to Section 7.1.4 of the
Credit Agreement. You have received or will receive separate opinions regarding,
Papierfabrik Schoeller & Hoesch GmbH & Co. KG ("Papier"), S&H
Verwaltungsgesellschaft mbH ("S&H") and Glatfelter - UK, Ltd. ("UK"; and
together with Papier and S&H, each a "Foreign Borrower" and, collectively, the
"Foreign Borrowers"; and together with the Domestic Loan Parties, each a "Loan
Party" and, collectively, the "Loan Parties") which are also parties to the
Credit Agreement.

     Unless defined in this opinion, capitalized terms are used herein as
defined in the Credit Agreement.



     In so acting, we have examined copies of executed originals or of
counterparts of the following documents, each dated the date hereof, unless
otherwise noted:

     1. the Credit Agreement;

     2. each Revolving Credit Note from the Borrowers in favor of the Banks
(collectively, the "Revolving Credit Notes");

     3. the Swing Note from the Borrowers in favor of PNC Bank, National
Association (the "Swing Note");

     4. each Term Note from the Borrowers in favor of the Banks (collectively,
the "Term Note");

     5. the Guaranty Agreement from the Guarantors in favor of the Agent;

     6. a copy of the articles or certificate of incorporation and by-laws of
each Domestic Loan Party, each certified by the Secretary or another officer of
such Domestic Loan Party (collectively, the "Charter Documents");

     7. an affidavit dated as of March 27, 2006, from Esquire Assist Ltd. as to
the Company, good standing certificates issued by the Secretary of State of the
State of Delaware each dated March 27, 2006, with respect to each of Mollanvick,
Tea Leaves, Glenn-Wolfe and GLT, and a good standing certificate issued by the
State Department of Assessments and Taxation of the State of Maryland dated
March 27, 2006, with respect to Pulp Wood (collectively, the "Entity
Certificates"); and

     8. officer's certificates of officers of the Domestic Loan Parties
(collectively, the "Officer's Certificates").

     The agreements and documents described in clauses 1 through 5 above are
sometimes collectively referred to herein as the "Loan Documents" and each
individually as a "Loan Document"

     When the phrase "to our knowledge" or an equivalent phrase is used in this
opinion, its purpose is to limit the statements it qualifies to the actual
knowledge of lawyers in this firm performing legal services for the Loan Parties
in connection with the Credit Agreement after such inquiry as they deemed
appropriate. We have not examined any records of any court, administrative
tribunal or other similar entity in connection with our opinion.

     We have assumed the legal capacity and competence of natural persons, the
genuineness of all signatures, the authenticity of all documents submitted to us
as originals, the conformity to original documents of documents submitted to us
as certified, conformed, photostatic, electronic or facsimile copies, and the
completeness of all documents reviewed by us. We have also assumed, without
independent verification, (i) that the parties to the Loan Documents and the
other agreements, instruments and documents executed in connection therewith,
other than the Loan Parties, have the power (including, without limitation,
corporate power where applicable) and authority to enter into and perform the
Loan Documents and such



other agreements, instruments and documents, (ii) the due authorization,
execution and delivery by such parties, other than the Loan Parties, of each
Loan Document and such other agreements, instruments and documents, and (iii)
that the Loan Documents and such other agreements, instruments and documents
constitute legal, valid and binding obligations of each such party, other than
the Loan Parties, enforceable against each such other party in accordance with
their respective terms. For purposes of paragraph 5(b) of this opinion as it may
apply to the Pledge Agreement, we have assumed that the Lien Creation Date is
the date hereof and that 10% of the Consolidated Tangible Net Assets (as such
term is defined in the Indenture dated July 22, 1997 between the Company and The
Bank of New York, Trustee) of the Company on the Lien Creation Date will be
greater than the amount of the Secured Portion (as defined in the Pledge
Agreement) on the Lien Creation Date.

     Based upon the foregoing and subject to the assumptions, exceptions,
limitations and qualifications set forth herein, we are of the opinion that:

     1. The Company is a corporation presently subsisting under the laws of the
Commonwealth of Pennsylvania.

     2. Each of Mollanvick, Tea Leaves and Glenn-Wolfe is a corporation and GLT
is a limited liability company, in each case, validly existing and in good
standing under the laws of the State of Delaware.

     3. Pulp Wood is a corporation, validly existing and in good standing under
the laws of the State of Maryland.

     4. Each of the Domestic Loan Parties has the corporate, or limited
liability company, as applicable, power and authority to enter into and perform
its obligations under the Loan Documents to which it is a party and to incur the
obligations provided therein, and has taken all corporate, or limited liability,
as applicable, action necessary to authorize the execution, delivery and
performance of such Loan Documents.

     5. (a) The execution and delivery by each Domestic Loan Party of the Loan
Documents to which it is a party do not and the performance of the obligations
thereunder will not, as of the date hereof, (i) violate such Domestic Loan
Party's Charter Documents or (ii) violate any present statute, rule or
regulation promulgated by the United States, the Commonwealth of Pennsylvania,
the General Corporation Law of the State of Delaware or the Maryland General
Corporation Law which in our experience is normally applicable both to entities
that are not engaged in regulated business activities and to transactions of the
type contemplated by the Loan Documents.

     (b) The execution and delivery by each Loan Party of the Loan Documents to
which it is a party do not and the performance of the obligations thereunder,
including under the Pledge Agreement in the form attached as Exhibit 1.1(P) to
the Credit Agreement if duly completed, executed and delivered on the Lien
Creation Date as required by and pursuant to the terms of the Credit Agreement,
will not, as of the date hereof, breach or result in a default under the items
listed on the Exhibit Index to the Company's Annual Report filed on Form 10-K
for the fiscal year ended December 31, 2005, or result in the creation or


imposition of any security interest in or lien or encumbrance upon, any of the
assets of any Loan Party pursuant to any item referred to in this paragraph
5(b).

     6. Each Loan Document to which it is a party has been duly executed and
delivered on behalf of each Domestic Loan Party and constitutes the legal, valid
and binding obligation of each Domestic Loan Party, enforceable in accordance
with its terms.

     7. No consent or approval of, or notice to or filing with, any federal or
state regulatory authority of the United States, the Commonwealth of
Pennsylvania, the State of Delaware under the General Corporation Law of the
State of Delaware or the State of Maryland under the Maryland General
Corporation Law is required by any Domestic Loan Party in connection with the
execution or delivery by such Domestic Loan Party of any of the Loan Documents
or the performance of such Domestic Loan Party's obligations under the Loan
Documents.

     8. The borrowing on the date hereof of the Loans under the Credit Agreement
and the Notes, the application of the proceeds thereof as contemplated by the
Credit Agreement and the other Loan Documents do not violate any of the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.

     9. The Company is not, and is not required to register as, an "investment
company" under the Investment Company Act of 1940, as amended.

We are not representing any Loan Party in any pending or overtly threatened
litigation in which it is a named defendant, other than as set forth on Schedule
II hereto.

     The foregoing opinions are subject to the following exceptions, limitations
and qualifications:

     Our opinion is subject to the effect of applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, fraudulent transfer,
marshalling or similar laws affecting creditors' rights and remedies generally;
general principles of equity, including without limitation, concepts of
materiality, reasonableness, good faith and fair dealing (regardless of whether
such enforceability is considered in a proceeding in equity or at law); and
limitations on enforceability of rights to indemnification or contribution by
federal or state securities laws or regulations or by public policy.

     We draw to your attention the provisions of Section 911(b) of the
Pennsylvania Crimes Code (the "Crimes Code"), 18 Pa. C.S. Section 911(b), in
connection with the fact that the Loans bear floating rates of interest. Section
911(b) of the Crimes Codes makes it unlawful to use or invest income derived
from a pattern of "racketeering activity" in the establishment or operation of
any enterprise. "Racketeering activity," as defined in the Crimes Code, includes
the collection of money or other property in full or partial satisfaction of a
debt which arose as the result of the lending of money or other property at a
rate of interest exceeding 25% per annum where not otherwise authorized by law.

     We express no opinion as to the application or requirements of federal or
state securities, patent, trademark, copyright, antitrust and unfair
competition, pension or employee



benefit, labor, environmental, health and safety or tax laws in respect of the
transactions contemplated by or referred to in the Loan Documents.

     We express no opinion as to the validity or enforceability of any provision
of the Loan Documents which (i) permits the Agent or any Banks to increase the
rate of interest or to collect a late charge in the event of delinquency or
default to the extent deemed to be penalties or forfeitures; (ii) purports to
grant the Agent or any Bank a power-of-attorney; (iii) purports to entitle the
Agent or any Bank to take possession of any collateral in any manner other than
peaceably and by reason of the peaceable surrender of such possession by the
applicable Loan Party or by reason of appropriate judicial proceedings; (iv)
purports to require that waivers must be in writing to the extent that an oral
agreement or implied agreement by trade practice or course of conduct modifying
provisions of the Loan Documents has been made; (v) purports to be a waiver of
the right to a jury trial, a waiver of any right to object to jurisdiction or
venue, a waiver of any right to claim damages or to service of process or a
waiver of any other rights or benefits bestowed by operation of law or the
waiver of which is limited by applicable law; (vi) purports to be a waiver of
the obligations of good faith, fair dealing, diligence, mitigation of damages or
commercial reasonableness; (vii) purports to exculpate any party from its own
negligent acts or limit any party from certain liabilities; (viii) purports to
entitle the Agent or any Bank to the appointment of a receiver as a matter of
right; (ix) purports to require the payment of attorneys' fees to the extent
such fees exceed reasonable attorneys' fees; or (x) purports to authorize the
Agent or any Bank to set off and apply any deposits at any time held, and any
other indebtedness at any time owing, by the Agent or any Bank to or for the
account of any Loan Party or which purports to provide that any purchaser of a
participation from the Agent or any Bank may exercise setoff or similar rights
with respect to such participation.

     We express no opinion as to the enforceability of forum selection clauses
upon the courts in the forum selected.

     We express no opinion as to the law of any jurisdiction other than the
federal law of the United States and the law of the Commonwealth of
Pennsylvania, the General Corporation Law of the State of Delaware and the
Maryland General Corporation Law,

     A copy of this opinion may be delivered by you to each financial
institution that may become a Bank under the Credit Agreement, and such persons
may rely on this opinion to the same extent as - but to no greater extent than -
the addressee. This opinion may be relied upon by you and such persons to whom
you may deliver copies as provided in the preceding sentence only in connection
with the consummation of the transactions described herein and may not be used
or relied upon by you or any other person for any other purpose, without in each
instance our prior written consent.

     This opinion is limited to the matters expressly stated herein. No implied
opinion may be inferred to extend this opinion beyond the matters expressly
stated herein. We do not undertake to advise you or anyone else of any changes
in the opinions expressed herein resulting from changes in law, changes in facts
or any other matters that hereafter might occur or be brought to our attention.



     This opinion shall be interpreted in accordance with the Legal Opinion
Principles issued by the Committee on Legal Opinions of the American Bar
Association's Section of Business Law as published in 53 Business Lawyer 831
(May 1998).

                                        Very truly yours,

                                        (BALLARD SPAHR ANDREWS & INGERSOLL, LLP)


                                   SCHEDULE I

                                      BANK

PNC Bank, National Association
Credit Suisse, Cayman Islands Branch


                                       2



                                   SCHEDULE II

United States v. P. H. Glatfelter Co., No. 2:03-CV-00949-LA (E.D. Wis. consent
decree entered Apr. 12, 2004) over which the Court has retained jurisdiction.


                                       2



                                  EXHIBIT 8.2.6

                   FORM OF ACQUISITION COMPLIANCE CERTIFICATE

     In accordance with the provisions of Section 8.2.6 of the Credit Agreement
dated as of April 3, 2006, as amended, restated and otherwise modified through
the date hereof (the "Credit Agreement") by and among P. H. Glatfelter Company,
the other Borrowers party thereto (collectively, the "Borrowers"). PNC Bank,
National Association, as Agent (the "Agent"), and the other parties thereto from
time to time, I, _________, the _____________________ and authorized officer of
P. H. Glatfelter Company, on behalf of all of the Borrowers, do hereby certify
to the Agent and Banks as follows:

          (a) The representations and warranties made by the Borrowers and other
Loan Parties in the Credit Agreement and other Loan Documents are true with the
same effect as though such representations and warranties are made on and as of
this date (except representations and warranties which expressly relate solely
to an earlier date or time, which remain true as of such date or time) and the
Loan Parties have performed and complied with all covenants and conditions set
forth in the Credit Agreement and other Loan Documents;

          (b) No Event of Default or Potential Default has occurred or now
exists, or will occur after giving effect to the proposed Permitted Acquisition;
and

          (c) After giving effect to the proposed Permitted Acquisition, on a
pro forma basis, the Borrowers will continue to be in compliance with the
financial covenants set forth in Section 8.2 of the Credit Agreement as more
fully set forth below and on Annex 1 hereto:



                                          Actual          Required
                                        ----------   ------------------
                                               
CONSOLIDATED NET WORTH                  __________   at least
                                                     $________(1)
CONSOLIDATED LEVERAGE RATIO
ratio of Consolidated Total Debt        __________
divided by
Consolidated Adjusted EBITDA            __________
Leverage Ratio                          __________   not more than
                                                     _______ to 1.00(2)
INTEREST COVERAGE RATIO
ratio of Consolidated Adjusted EBITDA   __________
divided by
consolidated interest expense           __________
Interest Coverage Ratio                 __________   not less than
                                                     3.50 to 1.00


- ----------
(1)  Refer to Section 8.2.15 of Credit Agreement to determine applicable minimum
     amount.

(2)  Refer to Section 8.2.16 of Credit Agreement to determine applicable maximum
     ratio.


                                        1



Attached hereto as Annex 1 are calculations supporting the figures reported
above.

     Any capitalized terms which are used in this Certificate and which are not
defined herein, but which are defined in the above-described Credit Agreement,
shall have the meanings given to those terms in the Credit Agreement.

     IN WITNESS WHEREOF, I have executed this Certificate the _____ day of
_____.

                                        By:
                                            ------------------------------------
                                            ________ of P. H. Glatfelter
                                            Company, on behalf of all the
                                            Borrowers


                                        2


                                  EXHIBIT 8.3.3

                    FORM OF QUARTERLY COMPLIANCE CERTIFICATE

     In accordance with the provisions of Section 8.3.3 of the Credit Agreement
dated as of April 3, 2006, as amended, restated and otherwise modified through
the date hereof (the "Credit Agreement") by and among P. H. Glatfelter Company
(the "Company"), the other Borrowers party thereto (collectively, the
"Borrowers"), PNC Bank, National Association, as Agent (the "Agent"), and the
other parties thereto from time to time, I,_____________, the ______________ and
authorized officer of the Company, on behalf of all of the Borrowers, do hereby
certify to the Agent and Banks as follows:

          (a) The representations and warranties made by the Borrowers and other
Loan Parties in the Credit Agreement and other Loan Documents are true with the
same effect as though such representations and warranties are made on and as of
this date (except representations and warranties which expressly relate solely
to an earlier date or time, which remain true as of such date or time) and the
Loan Parties have performed and complied with all covenants and conditions set
forth in the Credit Agreement and other Loan Documents;

          (b) No Event of Default or Potential Default has occurred or now
exists; and

          (c) The Company, on a consolidated basis, are in compliance with the
financial covenants set forth in Section 8.2 of the Credit Agreement as more
fully set forth below and on Annex 1 hereto:



                                          Actual       Required
                                        ----------   -------------
                                               
CONSOLIDATED NET WORTH                  __________   at least
Leverage Ratio
ratio of Consolidated Total Debt
divided by                              __________   $________ (1)
Consolidated Adjusted EBITDA            __________
Leverage Ratio                          __________   not more than
                                                     ________ to
INTEREST COVERAGE RATIO                              l.00(2)
ratio of Consolidated Adjusted EBITDA   __________
divided by
consolidated interest expense           __________
Interest Coverage Ratio                 __________   not less than
                                                     3.50 to 1.00


- ----------
(1)  Refer to Section 8.2.15 of Credit Agreement to determine applicable minimum
     amount.

(2)  Refer to Section 8.2.16 of Credit Agreement to determine applicable maximum
     ratio.


                                       1



Attached hereto as Annex 1 are calculations supporting the figures reported
above.

     Any capitalized terms which are used in this Certificate and which are not
defined herein, but which are defined in the above-described Credit Agreement,
shall have the meanings given to those terms in the Credit Agreement.

     IN WITNESS WHEREOF, I have executed this Certificate the ______ day of
____________.

                                        By:
                                            ------------------------------------
                                            ____________ of P. H. Glatfelter
                                            Company, on behalf of all of the
                                            Borrowers


                                       2

EX-10.6.(B)

Exhibit 10.6(b)

FIRST AMENDMENT TO CREDIT AGREEMENT

     THIS FIRST AMENDMENT TO CREDIT AGREEMENT (the “Amendment”), dated April 25^th, 2006, by and among P.H. GLATFELTER COMPANY, a Pennsylvania corporation (the “Company”), on behalf of itself and each of the other Loan Parties under the Credit Agreement (as hereinafter defined), the BANKS (as defined under the Credit Agreement) parties hereto, PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for the Banks (the “Agent”).

WITNESSETH:

     WHEREAS, the parties hereto are parties to that certain Credit Agreement, dated as of April 3, 2006 (the “Credit Agreement”);

     WHEREAS, the parties hereto desire to amend the Credit Agreement as provided herein.

     NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows (Defined terms used herein unless otherwise amended or defined herein shall have the meanings ascribed to them in the Credit Agreement as amended by this Amendment.):

1. Amendment to Section 8.1.12 [Note Issue] of the Credit Agreement.

     Clause (iii) of Section 8.1.12 [Note Issue] of the Credit Agreement (which reads as follows: “(iii) the warranties and covenants contained in the agreements governing such Required Note Refinancing shall not be more restrictive than those contained in this Agreement;”) is hereby deleted and the words “and (iv)” which follow immediately after such clause (iii) are hereby amended to read “and (iii)”.

2. Conditions to the Effectiveness of this Amendment.

     This Amendment shall be effective upon when it has been signed by the Company, the Required Banks and the Agent.

3. Force and Effect.

     Each of the parties hereto reconfirms and ratifies the Credit Agreement and all other documents executed in connection therewith, and confirms that all such documents remain in full force and effect since the date of their execution, except to the extent modified by this Amendment.

4. Governing Law.

     This Amendment shall be deemed to be a contract under the laws of the Commonwealth of Pennsylvania and for all purposes shall be governed by and construed and enforced in accordance with the internal laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles.

5. Counterparts.

     This Amendment may be signed by telecopy or original in any number of counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this instrument under seal as of the day and year first above written.

[SIGNATURE PAGES FOLLOWS]

2

[SIGNATURE. PAGE 1 OF 4 TO
FIRST AMENDMENT TO CREDIT AGREEMENT]

COMPANY:
P.H. GLATFELTER COMPANY, FOR ITSELF AND EACH OTHER LOAN PARTY
By:	/s/ John C. van Roden, Jr.
Name:	John C. van Roden, Jr.
Title:	Executive Vice President & Chief Financial Officer

3

[SIGNATURE PAGE 2 OF 4 TO
FIRST AMENDMENT TO CREDIT AGREEMENT]

BANKS AND AGENT:
PNC BANK, NATIONAL ASSOCIATION, individually and as Agent
By:	/s/ Frank A. Pugliese
Name:	Frank A. Pugliese
Title:	Senior Vice President
CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By:	/s/ David Dodd      /s/ Mikhail Faybusovich
Name:	David Dodd            Mikhail Faybusovich
Title:	Vice President        Associate
LASALLE BANK NATIONAL ASSOCIATION
By:	/s/ Philip R. Medsger
Name:	Philip R. Medsger
Title:	First Vice President
MANUFACTURERS AND TRADERS TRUST COMPANY
By:	/s/ Tracey E. Sawyer Calhoun
Name:	Tracey E. Sawyer Calhoun
Title:	Vice President

4

[SIGNATURE PAGE 3 OF 4
TO FIRST AMENDMENT TO CREDIT AGREEMENT]

SUNTRUST BANK
By:	/s/ William C. Washburn, Jr.
Name:	William C. Washburn, Jr.
Title:	Vice President
BANK OF AMERICA, N.A.
By:
Name:
Title:
HSBC BANK USA
By:	/s/ Wynelle Farlow
Name:	Wynelle Farlow
Title:	Vice President
CITIBANK, N.A.
By:	/s/ Christopher Webb
Name:	Christopher Webb
Title:	Senior Vice President
CITIBANK, N.A., CANADIAN BRANCH
By:
Name:
Title:

5

[SIGNATURE PAGE 4 OF 4 TO
FIRST AMENDMENT TO CREDIT AGREEMENT]

CITIZENS BANK OF PENNSYLVANIA
By:	/s/ Michael J. Gillig
Name:	Michael J. Gillig
Title:	Vice President
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
By:
Name:
Title:
COMERICA BANK
By:	/s/ Stacey Judd
Name:	Stacey Judd
Title:	Vice President
FIFTH THIRD BANK
By:	/s/ Jim Janovsky
Name: Title:	Jim Janovsky Vice President
COBANK, ACB
By:	/s/ Michael Tousignant
Name:	Michael Tousignant
Title:	Vice President

6

EX-10.6.(C)

Exhibit 10.6(c)

SECOND AMENDMENT TO CREDIT AGREEMENT

     THIS SECOND AMENDMENT TO CREDIT AGREEMENT (the “Amendment”), dated as of December 22, 2006, by and among P.H. GLATFELTER COMPANY, a Pennsylvania corporation (the “Company”), on behalf of itself and each of the other Loan Parties under the Credit Agreement (as hereinafter defined), the BANKS (as defined under the Credit Agreement) parties hereto, PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for the Banks (the “Agent”).

WITNESSETH:

     WHEREAS, the parties hereto are parties to that certain Credit Agreement, dated as of April 3, 2006, as amended by that First Amendment thereto dated April 25, 2006 (as so amended, the “Credit Agreement”);

     WHEREAS, the parties hereto desire to amend the Credit Agreement as provided herein.

     NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows (Defined terms used herein unless otherwise amended or defined herein shall have the meanings ascribed to them in the Credit Agreement as amended by this Amendment.):

1. Amendment to Section 1.1 [Definitions] of the Credit Agreement.

     (A) Existing Definitions. The following definitions contained in Section 1.1 of the Credit Agreement are hereby amended and restated to read as follows:

          “Consolidated EBITDA shall mean as of the end of any fiscal quarter: (i) EBITDA of the Company and its Subsidiaries for the immediately preceding four fiscal quarters, plus (ii) the aggregate gain on sale of all timberland properties (as determined in accordance with GAAP) (A) made within the eight immediately preceding fiscal quarters and multiplied by one-half (1/2) if Consolidated EBITDA is being calculated for any fiscal quarter through and including the fiscal quarter ending June 30, 2008 and (B) made within the four immediately preceding fiscal quarters if Consolidated EBITDA is being calculated for any fiscal quarter ending after June 30, 2008, in each case net of any losses on such sales, provided that the amount of the net gain on sale of timberland properties included in the calculation of Consolidated EBITDA under this clause (ii) may not exceed 30% of the EBITDA of the Company and its Subsidiaries for the immediately preceding four fiscal quarters.”

          “Consolidated Total Debt shall mean all long and short term Indebtedness (but excluding SunTrust Indebtedness described in Section 8.2.1(ix) and Permitted Timber Installment Sale Indebtedness described in Section 8.2.1(x)).”

          “EBITDA shall mean, for any period and any Person, net income (excluding extraordinary gains and losses, gains and losses on sales of assets and non-cash pension income) plus income tax expense, interest expense (excluding Timber Installment Sale Interest Expense), depreciation, amortization expense and any Permitted EBITDA Add Backs (if EBITDA is being computed for the Company) of such Person.”

          “Interest Period shall mean the period of time selected by the Borrowers in connection with (and to apply to) any election permitted hereunder by the Borrowers to have Revolving Credit Loans or Term Loans bear interest under the Euro-Rate Option. Subject to the last sentence of this definition, such period shall be (A) (i) one or two Months if Borrowers select the Euro-Rate Option during the Syndications Period, and (ii) one, two, three or six Months if the Borrowers select the Euro-Rate Option after the Syndications Period has ended, and (B) one or two Months with respect to any Loans made in any Optional Currency. Such Interest Period shall commence on the effective date of such Interest Rate Option, which shall be (i) the Borrowing Date if the Borrowers are requesting new Loans, or (ii) the date of renewal of or conversion to the Euro-Rate Option if the Borrowers are renewing or converting to the Euro-Rate Option applicable to outstanding Loans. Notwithstanding the second sentence hereof: (A) any Interest Period which would otherwise end on a date which is not a Business Day shall be extended to the next succeeding Business Day unless such Business Day falls in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, and (B) the Borrowers shall not select, convert to or renew an Interest Period for any portion of the Loans that would end after the Expiration Date.”

     “Material Sale of Assets Excluding TISs shall mean: (i) any sales or other dispositions of timberland of the Loan Parties (other than a Permitted Timber Installment Sale) when the aggregate amount of such proceeds from such sales or dispositions equals or exceeds $2,000,000 (the “Material Sale Threshold”) and each time subsequent sales or dispositions are made after such time as the Material Sale Threshold is reached, such subsequent sales or dispositions shall constitute a “Material Sale of Assets Excluding TISs” when the aggregate amount of proceeds from such subsequent sales or dispositions again equals or exceeds the Material Sale Threshold, (ii) any sale or other disposition of any other assets (other than timberland) of the Loan Parties sold pursuant to Section 8.2.7(vi) if the proceeds of such sale or other disposition shall exceed $2,000,000, or (iii) any sale or other disposition of any assets of the Loan Parties sold pursuant to Section 8.2.7(vii).”

     (B) New Definitions. The following new definitions are hereby added to Section 1.1 in alphabetical order:

     “Permitted Timber Installment Sale shall have the meaning assigned to such term in Section 8.2.1(x).”

     “Permitted Timber Installment Sale Indebtedness shall have the meaning assigned to such term in Section 8.2.1(x).”

     “Timber Installment Sale Interest Expense shall mean, for any period of the Company and its Subsidiaries, interest expense arising pursuant to Permitted Timber Installment Sale Indebtedness or SunTrust Indebtedness (as determined and consolidated in accordance with GAAP).”

2. Amendment of Section 1.3 [Accounting Principles] of the Credit Agreement.

     Section 1.3 of the Credit Agreement is hereby amended and restated to read as follows:

     “1.3 Accounting Principles.

     Except as otherwise provided in this Agreement, all computations and determinations as to accounting or financial matters and all financial statements to be delivered pursuant to this Agreement shall be made and prepared in accordance with GAAP (including principles of consolidation where appropriate), and all accounting or financial terms shall have the meanings ascribed to such terms by GAAP; provided, however, that all accounting terms used in Sections 8.2.15, 8.2.16 and 8.2.17 (and all defined terms used in the definition of any accounting term used in Sections 8.2.15, 8.2.16 and 8.2.17 shall have the meaning given to such terms (and defined terms) under GAAP as in effect on the date hereof applied on a basis consistent with those used in preparing the Annual Statements referred to in Section 6.1.8(i) . In the event of any change after the date hereof in GAAP, and if such change would result in the inability to determine compliance with the financial covenants set forth in Sections 8.2.15, 8.2.16 and 8.2.17 based upon the Company’s regularly prepared financial statements by reason of the preceding sentence, then the parties hereto agree to endeavor, in good faith, to agree upon an amendment to this Agreement that would adjust such financial covenants in a manner that would not affect the substance thereof, but would allow compliance therewith to be determined in accordance with the Company’s financial statements at that time; provided, further, that for purposes of the calculation of the financial covenants in Sections 8.2.15, 8.2.16 and 8.2.17, the adjustments to income and expense of the Loan Parties (and any other adjustments) resulting from the promulgation of Statement of Financial Accounting Standards (“SFAS”) No. 158 shall be disregarded.”

3. Amendment of Section 5.5.1.1 [Sale of Assets] of the Credit Agreement.

     Section 5.5.1.1 of the Credit Agreement is hereby amended and restated to read as follows:

     “5.5.1.1 Sale of Assets.

     Within (a) five (5) Business Days of any Material Sale of Assets Excluding TISs and (b) sixty (60) calendar days of any Permitted Timber Installment Sale, the Borrowers shall make a mandatory prepayment of principal on the Term Loans equal to the applicable percentage (as reflected on Schedule 5.5.1) of the after-tax proceeds received or receivable (if not yet received) in connection with such Material Sale of Assets Excluding TISs or such Permitted Timber Installment Sale, as applicable (in each case as estimated in good faith by the Borrower), together with accrued interest on such principal amount.”

4. Amendment of Section 8.2.1 [Indebtedness] of the Credit Agreement.

     Subsections (x) and (xiii) of Section 8.2.1 [Indebtedness] of the Credit Agreement are hereby amended and restated to read as follows:

          “(x) Indebtedness (“Permitted Timber Installment Sale Indebtedness”) which is (a) incurred in connection with an installment sale of timber (a “Permitted Timber Installment Sale”), (b) structured similarly to the SunTrust Indebtedness and used for similar purposes, and(c) upon terms and documentation which has been reviewed and approved by the Agent; provided that the terms and conditions contained in the agreements evidencing such Indebtedness shall not be subsequently modified after the closing date thereof without the consent of the Agent.”

          “(xiii) Other unsecured Indebtedness in an amount not to exceed $30,000,000 outstanding at any time.”

     The remainder of Section 8.2.1 [Indebtedness] remains unchanged hereby.

5. Amendment of Section 8.2.4 [Loans and Investments] of the Credit Agreement.

     A new subsection (ix) is hereby added to Section 8.2.4 [Loans and Investments] of the Credit Agreement immediately after subsection (viii) thereof to read as follows:

          “(ix) loans to (A) purchasers under a Permitted Timber Installment Sale to finance the purchase price thereof and (B) Sustainable Conservation, Inc. made prior to the Closing Date to finance the purchase of timberlands pursuant to an installment sale of timberlands transaction, which occurred in connection with the SunTrust Indebtedness.”

     The remainder of Section 8.2.4 [Loans and Investments] remains unchanged hereby.

6. Amendment of Section 8.2.7 [Dispositions of Assets or Subsidiaries] of the Credit Agreement.

     Subsection (iii) of Section 8.2.7 [Dispositions of Assets or Subsidiaries] of the Credit Agreement is hereby amended and restated to read as follows:

     “(iii) any sale, transfer or lease of assets by (a) one Loan Party to another Loan Party or (b) any Subsidiary of a Loan Party which is not itself a Loan Party to a Loan Party or a Subsidiary of a Loan Party.”

     The remainder of Section 8.2.7 [Dispositions of Assets or Subsidiaries] remains unchanged hereby.

7. Amendment of Section 8.2.17 [Minimum Interest Coverage Ratio] of the Credit Agreement.

     Section 8.2.17 [Minimum Interest Coverage Ratio] of the Credit Agreement is hereby amended and restated to read as follows:

     “8.2.17 Minimum Interest Coverage Ratio.

     The Borrowers shall not permit the ratio of Consolidated Adjusted EBITDA to consolidated interest expense (excluding Timber Installment Sale Interest Expense) of the Borrowers and their Subsidiaries, measured as of the end of each fiscal quarter, for the four (4) fiscal quarters then ended, to be less than 3.50 to 1.00.”

8. Conditions to the Effectiveness of this Amendment.

     This Amendment shall be effective upon when (a) it has been signed and delivered by the Company, the Required Banks and the Agent, (b) the Intercompany Subordination Agreement substantially in the form of Exhibit A hereto has been signed and delivered by each of the Loan

Parties and (c) the representations and warranties of the Loan Parties in Section 6 hereof shall be true and correct.

9. Representations and Warranties.

     The Loan Parties hereby represent and warrant to the Agent and the Banks that (a) the representations and warranties of the Loan Parties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof with the same force and effect as though made by the Loan Parties on such date, except to the extent that any such representation or warranty expressly relates solely to a previous date, and (b) the Loan Parties are in compliance with all terms, conditions, provisions, and covenants contained in the Credit Agreement and the other Loan Documents and there exists no Event of Default or Potential Default and (c) all of the terms and conditions, provisions and covenants in the Credit Agreement, the Loan Documents and all other documents delivered to the Banks and the Agent in connection with any of the foregoing documents and obligations secured thereby are in full force and effect, are hereby ratified and confirmed and remain unaltered, except as expressly modified by this Amendment. This Amendment has been duly executed by an authorized officer of each Loan Party. The execution, delivery, and performance of this Amendment have been duly authorized by all necessary corporate action, require no governmental approval, and will neither contravene, conflict with, nor result in the breach of any law, charter, articles, or certificate of incorporation or organization, bylaws, operating agreement or other agreement governing or binding upon any of the Loan Parties or any of their property. Each Loan Party is in good standing in its jurisdiction of organization.

10. Force and Effect.

     Each of the parties hereto reconfirms and ratifies the Credit Agreement and all other documents executed in connection therewith, and confirms that all such documents remain in full force and effect since the date of their execution, except to the extent modified by this Amendment.

11. Governing Law.

     This Amendment shall be deemed to be a contract under the laws of the Commonwealth of Pennsylvania and for all purposes shall be governed by and construed and enforced in accordance with the internal laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles.

12. Counterparts.

     This Amendment may be signed by telecopy or original in any number of counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this instrument under seal as of the day and year first above written.

[SIGNATURE PAGES FOLLOW]

[SIGNATURE PAGE 1 OF 16 TO

SECOND AMENDMENT TO CREDIT AGREEMENT]

BORROWERS:
P.H. GLATFELTER COMPANY
By:	/s/ John P. Jacunski
Name:	John P. Jacunski
Title:	Senior Vice President and CFO
PHG TEA LEAVES, INC.
By:	/s/ George B. Amoss, Jr.
Name:	George B. Amoss, Jr.
Title:	President
PAPIERFABRIK SCHOELLER & HOESCH GMBH & CO. KG
By: S&H Verwaltungsgesellschaft mbH, its General Partner
By:	/s/ John P. Jacunski
Name:	John P. Jacunski
Title:	Managing Director
S&H VERWALTUNGESELLSCHAFT MBH
By:	/s/ John P. Jacunski
Name:	John P. Jacunski
Title:	Managing Director
GLATFELTER-UK, LTD
By:	/s/ Jeffrey J. Norton
Name:	Jeffrey J. Norton
Title:	Secretary
MOLLANVICK, INC.
By:	/s/ George B. Amoss, Jr.
Name:	George B. Amoss, Jr.
Title:	President

[SIGNATURE PAGE 2 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

GUARANTORS:
THE GLATFELTER PULP WOOD COMPANY
By:	/s/ George H. Glatfelter
Name:	George H. Glatfelter
Title:	Chairman and President
GLT INTERNATIONAL FINANCE, LLC
By:	/s/ George B. Amoss, Jr.
Name:	George B. Amoss, Jr.
Title:	Treasurer
GLENN-WOLFE, INC
By:	/s/ George B. Amoss, Jr.
Name:	George B. Amoss, Jr.
Title:	President
GLATFELTER HOLDINGS, LLC
By:	/s/ Thomas V. Bosley
Name:	Thomas V. Bosley
Title:	Vice President and General Manager
	Of Glatfelter Pulp Wood Company
	Member of Glatfelter Holdings, LLC
GLATFELTER HOLDINGS II, LLC
By:	/s/ Thomas V. Bosley
Name:	Thomas V. Bosley
Title:	Vice President and General Manager
	Of Glatfelter Pulp Wood Company
	Member of Glatfelter Holdings II, LLC

[SIGNATURE PAGE 3 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

BANKS AND AGENT:
PNC BANK, NATIONAL ASSOCIATION, individually and as Agent
By:	/s/ Frank A. Pugliese
Name:	Frank A. Pugliese
Title:	Senior Vice President

[SIGNATURE PAGE 4 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By:	/s/ David Dodd
Name:	David Dodd
Title:	Vice President
By:	/s/ James Neira
Name:	James Neira
Title:	Associate

[SIGNATURE PAGE 5 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

LASALLE BANK NATIONAL ASSOCIATION
By:	/s/ Philip R. Medsger
Name:	Philip R. Medsger
Title:	First Vice President

[SIGNATURE PAGE 6 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

MANUFACTURERS AND TRADERS TRUST COMPANY
By:	/s/ Tracey E. Sawyer-Calhoun
Name:	Tracey E. Sawyer-Calhoun
Title:	Vice President

[SIGNATURE PAGE 7 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

SUNTRUST BANK
By:	/s/ William C. Washburn, Jr.
Name:	William C. Washburn, Jr.
Title:	Vice President

[SIGNATURE PAGE 8 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

BANK OF AMERICA, N.A.
By:	/s/ Charles R. Dickerson
Name:	Charles R. Dickerson
Title:	Managing Director

[SIGNATURE PAGE 9 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

HSBC BANK USA

By:

Name:

Title:

[SIGNATURE PAGE 10 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

CITIBANK, N.A.
By:	/s/ Christopher D. Pannacciulli
Name:	Christopher D. Pannacciulli
Title:	Vice President

[SIGNATURE PAGE 11 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

CITIBANK, N.A., CANADIAN BRANCH
By:	/s/ Niyousha Zarinpour
Name:	Niyousha Zarinpour
Title:	Authorized Signer

[SIGNATURE PAGE 12 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

CITIZENS BANK OF PENNSYLVANIA
By:	/s/ Michael J. Gillig
Name:	Michael J. Gillig
Title:	Vice President

[SIGNATURE PAGE 13 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
By:	/s/ Subash R. Viswanathan
Name:	Subash R. Viswanathan
Title:	Senior Vice President
By:	/s/ Barbara Peters
Name:	Barbara Peters
Title:	Assistant Vice President

[SIGNATURE PAGE 14 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

COMERICA BANK
By:	/s/ Richard C. Hampson
Name:	Richard C. Hampson
Title:	Vice President

[SIGNATURE PAGE 15 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

FIFTH THIRD BANK
By:	/s/ Jim Janovsky
Name:	Jim Janovsky
Title:	Vice President

[SIGNATURE PAGE 16 OF 16 TO
SECOND AMENDMENT TO CREDIT AGREEMENT]

COBANK, ACB
By:	/s/ Pat Schulz
Name:	Pat Schulz
Title:	Assistant Corporate Secretary

EXHIBIT A
FORM OF
INTERCOMPANY SUBORDINATION AGREEMENT

     THIS INTERCOMPANY SUBORDINATION AGREEMENT is dated as of 12/2/2006 and is made by and among the entities listed on the signature page hereto and each Person who hereafter becomes a Borrower or a Guarantor under the Credit Agreement (defined below) (subsequently joining this agreement) (each being individually referred to herein as a “Company” and collectively as the “Companies”).

WITNESSETH THAT:

     WHEREAS, each capitalized term used herein shall, unless otherwise defined herein, have the meaning specified in that certain Credit Agreement dated as of even date herewith (as it may be hereafter amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among P.H. GLATFELTER COMPANY, a Pennsylvania corporation (the “Glatfelter”) and certain of its subsidiaries identified on the signature pages hereto (each a “Borrower” and collectively, the “Borrowers”), the Guarantors now or hereafter party thereto, the Banks now or hereafter party thereto (the “Banks”) and PNC BANK, NATIONAL ASSOCIATION, as agent (the “Agent”) for the Banks, PNC CAPITAL MARKETS LLC and CREDIT SUISSE SECURITIES (USA) LLC, as joint arrangers and bookrunners, and CREDIT SUISSE SECURITIES (USA) LLC, as syndication agent (the “Syndication Agent”); and

     WHEREAS, pursuant to the Credit Agreement and the other Loan Documents referred to and defined in the Credit Agreement, the Banks intend to make Loans to the Borrowers; and

     WHEREAS, the Companies are or may become indebted to each other (the Indebtedness of each of the Companies to any other Company, now existing or hereafter incurred (whether created directly or acquired by assignment or otherwise), and interest and premiums, if any, thereon and other amounts payable in respect thereof are hereinafter collectively referred to as the “Intercompany Indebtedness”); and

     WHEREAS, the obligations of the Banks to maintain the Commitments and make Loans to the Borrowers from time to time are subject to the condition, among others, that the Companies subordinate the Intercompany Indebtedness to the Obligations of the Borrowers or any other Company to the Agent or the Banks pursuant to the Credit Agreement, the other Loan Documents or any Bank-Provided Interest Rate Hedge (collectively, the “Senior Debt”) in the manner set forth herein.

     NOW, THEREFORE, intending to be legally bound hereby, the parties hereto covenant and agree as follows:

     1. Intercompany Indebtedness Subordinated to Senior Debt. The recitals set forth above are hereby incorporated by reference. All Intercompany Indebtedness shall be subordinate

and subject in right of payment to the prior indefeasible payment in full of all Senior Debt pursuant to the provisions contained herein.

     2. Payment Over of Proceeds Upon Dissolution, Etc. Upon any distribution of assets of any Company in the event of (a) any insolvency or bankruptcy case or proceeding, or any receivership, liquidation, reorganization or other similar case or proceeding in connection therewith, relative to any such Company or to its creditors, as such, or to its assets, or (b) any liquidation, dissolution or other winding up of any such Company, whether voluntary or involuntary and whether or not involving insolvency or bankruptcy (other than a liquidation, dissolution or winding up which (i) is permitted under the Credit Agreement (ii) which is made when no Event of Default exists under the Credit Agreement), or (c) any assignment for the benefit of creditors or any marshalling of assets and liabilities of any such Company (a Company distributing assets as set forth herein being referred to in such capacity as a “Distributing Company”), then and in any such event, the Agent shall be entitled to receive, for the benefit of the Agent and the Banks as their respective interests may appear, indefeasible payment in full of all amounts due or to become due (whether or not an Event of Default has occurred under the terms of the Loan Documents or the Senior Debt has been declared due and payable prior to the date on which it would otherwise have become due and payable) on or in respect of any and all Senior Debt before the holder of any Intercompany Indebtedness owed by the Distributing Company is entitled to receive any payment on account of the principal of or interest on such Intercompany Indebtedness, and to that end, the Agent shall be entitled to receive, for application to the payment of the Senior Debt, any payment or distribution of any kind or character, whether in cash, property or securities, which may be payable or deliverable in respect of the Intercompany Indebtedness owed by the Distributing Company in any such case, proceeding, dissolution, liquidation or other winding up event.

     3. No Commencement of Any Proceeding. Each Company agrees that, so long as the Senior Debt shall remain unpaid, it will not commence, or join with any creditor other than the Banks and the Agent in commencing, any proceeding referred to in the first paragraph of Section 2 against any other Company which owes it any Intercompany Indebtedness.

     4. Prior Payment of Senior Debt Upon Acceleration of Intercompany Indebtedness. If any portion of the Intercompany Indebtedness owed by any Company becomes or is declared due and payable before its stated maturity, then and in such event the Agent and the Banks shall be entitled to receive indefeasible payment in full of all amounts due and to become due on or in respect of the Senior Debt (whether or not an Event of Default has occurred under the terms of the Loan Documents or the Senior Debt has been declared due and payable prior to the date on which it would otherwise have become due and payable) before the holder of any such Intercompany Indebtedness is entitled to receive any payment thereon.

     5. No Payment When Senior Debt in Default. If any Event of Default shall have occurred and be continuing, or such an Event of Default or Potential Default would result from or exist after giving effect to a payment with respect to any portion of the Intercompany Indebtedness, unless the Required Banks shall have consented to or waived the same, so long as any of the Senior Debt shall remain outstanding, no payment shall be made by any Company

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owing such Intercompany Indebtedness on account of principal or interest on any portion of the Intercompany Indebtedness.

     6. Payment Permitted if No Default. Nothing contained in this Agreement shall prevent any of the Companies, at any time except during the pendency of any of the conditions described in Sections 2, 4 and 5, from making payments at any time of principal of or interest on any portion of the Intercompany Indebtedness, or the retention thereof by any of the Companies of any money deposited with them for the payment of or on account of the principal of or interest on the Intercompany Indebtedness.

     7. Receipt of Prohibited Payments. If, notwithstanding the foregoing provisions of Sections 2, 4, 5 and 6, a Company which is owed Intercompany Indebtedness by a Distributing Company shall have received any payment or distribution of assets from the Distributing Company of any kind or character, whether in cash, property or securities, then and in such event such payment or distribution shall be held in trust for the benefit of the Agent and the Banks as their respective interests may appear, shall be segregated from other funds and property held by such Company, and shall be forthwith paid over to the Agent in the same form as so received (with any necessary endorsement) to be applied (in the case of cash) to or held as collateral (in the case of noncash property or securities) for the payment or prepayment of the Senior Debt in accordance with the terms of the Credit Agreement.

     8. Rights of Subrogation. Each Company agrees that no payment or distribution to the Agent or the Banks pursuant to the provisions of this Agreement shall entitle it to exercise any rights of subrogation in respect thereof until the Senior Debt shall have been indefeasibly paid in full and the Commitments shall have terminated and the Letters of Credit have expired.

     9. Records Evidencing Intercompany Indebtedness. Each Company will mark its books of account in such a manner as shall be effective to give proper notice of the effect of this Agreement.

     10. Agreement Solely to Define Relative Rights. The purpose of this Agreement is solely to define the relative rights of the Companies, on the one hand, and the Agent and the Banks, on the other hand. Nothing contained in this Agreement is intended to or shall impair, as between any of the Companies and their creditors other than the Agent and the Banks, the obligation of the Companies to each other to pay the principal of and interest on the Intercompany Indebtedness as and when the same shall become due and payable in accordance with its terms, or is intended to or shall affect the relative rights among the Companies and their creditors other than the Agent and the Banks, nor shall anything herein prevent any of the Companies from exercising all remedies otherwise permitted by applicable Law upon default under any agreement pursuant to which the Intercompany Indebtedness is created, subject to the rights, if any, under this Agreement of the Agent and the Banks to receive cash, property or securities otherwise payable or deliverable with respect to the Intercompany Indebtedness.

     11. No Implied Waivers of Subordination. No right of the Agent or any Bank to enforce subordination, as herein provided, shall at any time in any way be prejudiced or impaired

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by any act or failure to act on the part of any Company or by any act or failure to act by the Agent or any Bank, or by any non-compliance by any Company with the terms, provisions and covenants of any agreement pursuant to which the Intercompany Indebtedness is created, regardless of any knowledge thereof with which the Agent or any Bank may have or be otherwise charged. Each Company by its acceptance hereof shall agree that, so long as there is Senior Debt outstanding or Commitments in effect under the Credit Agreement, such Company shall not agree to sell, assign, pledge, encumber or otherwise dispose of, or agree to compromise, the obligations of the other Companies with respect to their Intercompany Indebtedness, other than by means of payment of such Intercompany Indebtedness according to its terms, without the prior written consent of the Agent.

     Without in any way limiting the generality of the foregoing paragraph, the Agent or any of the Banks may, at any time and from time to time, without the consent of or notice to the Companies, without incurring responsibility to the Companies and without impairing or releasing the subordination provided in this Agreement or the obligations hereunder of the Companies to the Agent and the Banks, do any one or more of the following: (i) change the manner, place or terms of payment, or extend the time of payment, renew or alter the Senior Debt or otherwise amend or supplement the Senior Debt or the Loan Documents; (ii) sell, exchange, release or otherwise deal with any property pledged, mortgaged or otherwise securing the Senior Debt; (iii) release any person liable in any manner for the payment or collection of the Senior Debt; and (iv) exercise or refrain from exercising any rights against any of the Companies and any other person.

     12. Additional Subsidiaries. The Companies covenant and agree that they shall cause Material Subsidiaries created or acquired after the date of this Agreement, and any other Material Subsidiaries required to join this Agreement pursuant to Section 8.2.9 [Subsidiaries] or otherwise under the Credit Agreement, to execute either a Guarantor Joinder in substantially the form of Exhibit 1.1(G)(1) to the Credit Agreement or a Borrower Joinder in substantially the form of Exhibit 1.1(B) to the Credit Agreement, whereby such Material Subsidiary joins this Agreement and subordinates all Indebtedness owed to any such Material Subsidiary by any of the Companies or other Material Subsidiaries hereafter created or acquired to the Senior Debt.

     13. Continuing Force and Effect. This Agreement shall continue in force for so long as any portion of the Senior Debt remains unpaid and any Commitments or Letters of Credit under the Credit Agreement remain outstanding, it being contemplated that this Agreement be of a continuing nature.

     14. Modification, Amendments or Waivers. Any and all agreements amending or changing any provision of this Agreement or the rights of the Agent or the Banks hereunder, and any and all waivers or consents to Events of Default or other departures from the due performance of the Companies hereunder, shall be made only by written agreement, waiver or consent signed by the Agent, acting on behalf of all the Banks, with the written consent of the Required Banks, any such agreement, waiver or consent made with such written consent being effective to bind all the Banks.

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     15. Expenses. The Companies unconditionally and jointly and severally agree upon demand to pay to the Agent and the Banks the amount of any and all out-of-pocket costs, expenses and disbursements, including fees and expenses of counsel (including the allocated costs of staff counsel) for which reimbursement is customarily obtained, which the Agent or any of the Banks may incur in connection with (a) the administration of this Agreement, (b) the exercise or enforcement of any of the rights of the Agent or the Banks hereunder, or (c) the failure by the Companies to perform or observe any of the provisions hereof.

     16. Severability. The provisions of this Agreement are intended to be severable. If any provision of this Agreement shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction, be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.

     17. Governing Law. This Agreement shall be a contract under the internal laws of the Commonwealth of Pennsylvania and for all purposes shall be construed in accordance with the internal laws of the Commonwealth of Pennsylvania without giving effect to its principles of conflict of laws.

     18. Successors and Assigns. This Agreement shall inure to the benefit of the Agent and the Banks and their respective successors and assigns, and the obligations of the Companies shall be binding upon their respective successors and permitted assigns, provided, that no company may assign or transfer its rights or obligations hereunder or any interest herein and any such purported assignment or transfer shall be null and void. The duties and obligations of the Companies may not be delegated or transferred by the Companies without the written consent of the Required Banks and any such delegation or transfer without such consent shall be null and void. Except to the extent otherwise required by the context of this Agreement, the word “Banks” when used herein shall include, without limitation, any holder of a Note or an assignment of rights therein originally issued to a Bank under the Credit Agreement, and each such holder of a Note or assignment shall have the benefits of this Agreement to the same extent as if such holder had originally been a Bank under the Credit Agreement.

     19. Joint and Several Obligations. Each of the obligations of each and every Company under this Agreement is joint and several. The Agent and the Banks, or any of them, may, in their sole discretion, elect to enforce this Agreement against any Company without any duty or responsibility to pursue any other Company and such an election by the Agent and the Banks, or any of them, shall not be a defense to any action the Agent and the Banks, or any of them, may elect to take against any Company. Each of the Banks and Agent hereby reserve all right against each Company.

     20. Counterparts. This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts, each of which, when executed and delivered, shall be deemed an original, but all such counterparts shall constitute but one and the same instrument.

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     21. Attornevs-in-Fact. Each of the Companies hereby authorizes and empowers the Agent, at its election and in the name of either itself, for the benefit of the Agent and the Banks as their respective interests may appear, or in the name of each such Company as is owed Intercompany Indebtedness, to execute and file proofs and documents and take any other action the Agent may deem advisable to completely protect the Agent’s and the Banks’ interests in the Intercompany Indebtedness and their right of enforcement thereof and to that end each of the Companies hereby irrevocably makes, constitutes and appoints the Agent, its officers, employees and agents, or any of them, with full power of substitution, as the true and lawful attorney-in-fact and agent of such Company, and with full power for such Company, and in the name, place and stead of such Company for the purpose of carrying out the provisions of this Agreement, and taking any action and executing, delivering, filing and recording any instruments which the Agent may deem necessary or advisable to accomplish the purposes hereof, which power of attorney, being given for security, is coupled with an interest and is irrevocable. Each Company hereby ratifies and confirms, and agrees to ratify and confirm, all action taken by the Agent, its officers, employees or agents pursuant to the foregoing power of attorney.

     22. Application of Payments. In the event any payments are received by the Agent under the terms of this Agreement for application to the Senior Debt at any time when the Senior Debt has not been declared due and payable and prior to the date on which it would otherwise become due and payable, such payment shall constitute a voluntary prepayment of the Senior Debt for all purposes under the Credit Agreement.

     23. Remedies. In the event of a breach by any of the Companies in the performance of any of the terms of this Agreement, the Agent, on behalf of the Banks, may demand specific performance of this Agreement and seek injunctive relief and may exercise any other remedy available at law or in equity, it being recognized that the remedies of the Agent on behalf of the Banks at law may not fully compensate the Agent on behalf of the Banks for the damages they may suffer in the event of a breach hereof.

     24. Consent to Jurisdiction: Waiver of Jury Trial. Each of the Companies hereby irrevocably consents to the non-exclusive jurisdiction of the Court of Common Pleas of Allegheny County, Pennsylvania and the United States District Court for the Western District of Pennsylvania, waives personal service of any and all process upon it and consents that all such service of process be made by certified or registered mail directed to the Companies at the addresses set forth or referred to in Section 26 hereof and service so made shall be deemed to be completed upon actual receipt thereof. Each of the Companies waives any objection to jurisdiction and venue of any action instituted against it as provided herein and agrees not to assert any defense based on lack of jurisdiction or venue, AND EACH OF THE COMPANIES WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT TO THE FULL EXTENT PERMITTED BY LAW.

     Each Company hereby appoints a process agent, P.H. Glatfelter Company, as its agent to receive on behalf of such party and its respective property, service of copies of the summons and complaint and any other process which may be served in any action or proceeding. Such service may be made by mailing or delivering a copy of such process to any of the Companies in care of

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the Process Agent at the Process Agent’s address, and each of the Companies hereby authorizes and directs the Process Agent to receive such service on its behalf. Each Company agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions (or an political subdivision thereof) by suit on the judgment or in any other manner provided by law. Each Company further agrees that it shall, for so long as any Commitment, Letter of Credit or any obligation of any Loan Party to the Bank remains outstanding, continue to retain Process Agent for the purposes set forth in this Section 24. The Process Agent hereby accepts the appointment of Process Agent by the Companies and agrees to act as Process Agent on behalf of the Companies. The Process Agent has an address of, on the date hereof, 96 South George Street, Suite 500, York, PA 17401 United States.

     25. EXCEPT AS PROHIBITED BY LAW, EACH COMPANY, THE AGENT AND THE BANKS HEREBY WAIVE TRIAL BY A JURY IN ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE COLLATERAL TO THE FULLEST EXTENT PERMITTED BY LAW.

     26. Notices. All notices, statements, requests and demands and other communications given to or made upon the Companies, the Agent or the Banks in accordance with the provisions of this Agreement shall be given or made as provided in Section 11.6 [Notices] of the Credit Agreement.

     27. Rules of Construction. The rules of construction set forth in Section 1.2 [Construction] of the Credit Agreement shall apply to this Agreement.

[SIGNATURES APPEAR ON THE FOLLOWING PAGE]

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[SIGNATURE PAGE 1 OF 2 TO
INTERCOMPANY SUBORDINATION AGREEMENT]

BORROWERS: P. H. GLATFELTER COMPANY
By:	/s/ John P. Jacunski
	Name:	John P. Jacunski
	Title:	Senior Vice President and CFO

PHG TEA LEAVES, INC.
By:	/s/ Donald R. Gross
	Name:	Donald R. Gross
	Title:	Treasurer

PAPIERFABRIK SCHOELLER & HOESCH GMBH & CO. KG By: S&H Verwaltungsgesellschaft mbH, its General Partner
By:	/s/ John P. Jacunski
	Name:	John P. Jacunski
	Title:	Managing Director

S&H VERWALTUNGESELLSCHAFT MBH
By:	/s/ John P. Jacunski
	Name:	John P. Jacunski
	Title:	Managing Director

GLATFELTER-UK, LTD
By:	/s/ Jeffrey J. Norton
	Name:	Jeffrey J. Norton
	Title:	Secretary

MOLLANVICK, INC.
By:	/s/ Donald R. Gross
	Name:	Donald R. Gross
	Title:	Treasurer

[SIGNATURE PAGE 2 OF 2 TO
INTERCOMPANY SUBORDINATION AGREEMENT]

GUARANTORS: THE GLATFELTER PULP WOOD COMPANY
By:	/s/ George H. Glatfelter
	Name:	George H. Glatfelter
	Title:	Chairman and President

GLT INTERNATIONAL FINANCE, LLC
By:	/s/ John P. Jacunski
	Name:	John P. Jacunski
	Title:	Manager

GLENN-WOLFE, INC
By:	/s/ Donald R. Gross
	Name:	Donald R. Gross
	Title:	Treasurer

GLATFELTER HOLDINGS, LLC
By:	/s/ Thomas V. Bosley
	Name:	Thomas V. Bosley
	Title:	Vice President and General Manager Of Glatfelter Pulp Wood Company Member of Glatfelter Holdings, LLC

GLATFELTER HOLDINGS II, LLC
By:	/s/ Thomas V. Bosley
	Name:	Thomas V. Bosley
	Title:	Vice President and General Manager Of Glatfelter Pulp Wood Company Member of Glatfelter Holdings II, LLC

EX-10.6.(D)

Exhibit 10.6(d)

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

THIRD AMENDMENT TO CREDIT AGREEMENT

     THIS THIRD AMENDMENT TO CREDIT AGREEMENT (the “Amendment”), dated as of June 8, 2007, by and among P.H. GLATFELTER COMPANY, a Pennsylvania corporation (the “Company”), each of the other Loan Parties under the Credit Agreement (as hereinafter defined), the BANKS (as defined under the Credit Agreement) parties hereto, PNC BANK, NATIONAL ASSOCIATION, in its capacity as agent for the Banks (the “Agent”).

WITNESSETH:

     WHEREAS, the parties hereto are parties to that certain Credit Agreement, dated as of April 3, 2006, as amended by that First Amendment thereto dated April 25, 2006 and that Second Amendment thereto dated December 22, 2006 (as so amended, the “Credit Agreement”);

     WHEREAS, the parties hereto desire to amend the Credit Agreement as provided herein.

     NOW, THEREFORE, the parties hereto, in consideration of their mutual covenants and agreements hereinafter set forth and intending to be legally bound hereby, covenant and agree as follows (Defined terms used herein unless otherwise amended or defined herein shall have the meanings ascribed to them in the Credit Agreement as amended by this Amendment.):

1. Amendment to Section 1.1 [Definitions] of the Credit Agreement.

     (A) Existing Definitions. The following definitions contained in Section 1.1 of the Credit Agreement are hereby amended and restated to read as follows:

     “Permitted EBITDA Add Backs shall mean the following charges, in each case to the extent such charges are deducted in the computation of net income of the Loan Parties in their computation of EBITDA during the period specified, with appropriate adjustments for the tax effects of such add-backs:

     (a) Certain Shut-Down, Transfer and Integration Charges Incurred after January 1, 2006 and before March 31, 2007. The following cash or non cash charges incurred after January 1, 2006 and before March 31, 2007 subject to the proviso below: charges related to the shut-down of the Neenah, WI, production facility, the transfer of production from the Neenah facility to assets acquired in the Financed Domestic Acquisition, and the integration costs for the Financed Domestic Acquisition, provided that (1) the total amount of such charges which may be so added back to net income may not exceed $80,000,000 over the term of this Agreement, and (2) the total amount of such cash charges which may be so added back to net income may not exceed $40,000,000.

     (b) Fox River, Wisconsin, Environmental Remediation:

          (i) Fox River OU1-2—QE March 31, 2007. The charge in the amount of $6,000,000 incurred by the Loan Parties during the fiscal quarter ended March 31, 2007 in connection with their environmental remediation at the Fox River, Wisconsin, OU1-2.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

          (ii) Fox River OU3-5—After March 31, 2007. Charges incurred by the Loan Parties after March 31, 2007 in connection with their environmental remediation, natural resource damages or reimbursement of the EPA for incurred costs at the Fox River, Wisconsin OU3-5, provided that the total amount of such charges incurred during the term of this Agreement may not exceed $[************].

     (c) Lydney Mill, UK, Integration Charges—FY 2007. Charges incurred by the Loan Parties in 2007 related to the integration costs for the Lydney Mill, Gloucestershire, UK, facility provided that the total amount of such charges may not exceed $4,000,000.

     (d) Chillicothe/Freemont, Ohio, Work Force Reduction. The following charges incurred by the Loan Parties prior to June 30, 2008:

          (i) cash and non-cash charges related to the severance, fixed asset write-downs and other non-recurring expenses related to any reduction in work force, in each case at the Chillicothe and Freemont, Ohio facilities, provided that the total amount of all of the foregoing charges may not exceed $10,000,000, and

          (ii) non-cash pension charges related to the reduction in work force described in clause (d)(i) above.

     (B) New Definitions. The following new definitions are hereby added to Section 1.1 in alphabetical order:

     “Fox River OU3-5 Environmental Charges Event” shall mean the date on which both the following events shall have occurred:

          (A) the Loan Parties incur any charge described in clause (b)(ii) of the definition of “Permitted EBITDA Add Backs” related to the Fox River, Wisconsin, OU3-5 (if the Loan Parties incur more than one such charge, this clause (A) refers only to the first such charge), and

          (B) the Loan Parties incur Indebtedness to finance the payment of the charge referred to in clause (A) of this definition (if the Loan Parties incur Indebtedness on more than one occasion to finance such payment, this clause (B) refers only to the first such incurrence).

     “Fox River OU3-5 Related Debt shall mean the amount of Indebtedness referred to in clause (B) of the definition of Fox River OU3-5 Environmental Charges Event.

2. Amendment of Section 8.2.3 [Guaranties].

     Section 8.2.3 [Guaranties] of the Credit Agreement is hereby amended and restated to read as follows:

     “8.2.3 Guaranties.

     Each of the Loan Parties shall not, and shall not permit any of its Subsidiaries to, at any time, directly or indirectly, become or be liable in respect of any Guaranty, or assume, guarantee, become surety for, endorse or otherwise agree, become or remain

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

directly or contingently liable upon or with respect to any obligation or liability of any other Person, except for Guaranties of Indebtedness of the Loan Parties and their Subsidiaries permitted hereunder.”

3. Amendment of Section 8.2.16 [Maximum Leverage Ratio].

     Section 8.2.16 [Maximum Leverage Ratio] of the Credit Agreement is hereby amended and restated to read as follows:

     “8.2.16 Maximum Leverage Ratio.

     The Borrowers shall not permit the Leverage Ratio, measured as of the end of each fiscal quarter to exceed the ratio (the “Applicable Leverage Ratio”) set forth in the grid below as of any fiscal quarter ending during the periods specified in such grid; subject to the sentence immediately following such grid.

Period	Ratio
Closing Date through 3/31/07	3.75 to 1.00
6/30/07	4.00 to 1.00
9/30/07 through 3/31/08	3.75 to 1.00
6/30/08 and thereafter	3.50 to 1.00

Notwithstanding the foregoing, if a Fox River OU3-5 Environmental Charges Event shall occur, then the Applicable Leverage Ratio (determined by the grid above) shall be increased by the amount specified in the table below based on the amount of the Fox River OU3-5 Related Debt on the date of such Fox River OU3-5 Environmental Charges Event. Such increase shall apply to the end quarter in which such Fox River OU3-5 Environmental Charges Event occurs and for the end of each of the five (5) quarters thereafter:

	Increase in the Applicable
Amount of Fox River OU3-5 Related Debt	Leverage Ratio
$[*********] to $[*********]	.05 to 1.00
$[*********] to $[*********]	.10 to 1.00
$[*********] to $[*********]	.15 to 1.00
$[*********] to $[*********]	.20 to 1.00
$[*********] to $[*********]	.25 to 1.00

(For example: If the Applicable Leverage Ratio would otherwise be 3.75 to 1.00, a Fox River OU3-5 Environmental Charges Event shall occur and the Loan Parties have incurred $[*********]of Fox River OU3-5 Related Debt on the date of such event, the Applicable Leverage Ratio would be increased to 3.95 to 1.00 (3.75 + .20 = 3.95) for the end of the current quarter and the end of the following 5 quarters.)

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

4. Amendment of Section 8.2.17 [Minimum Interest Coverage Ratio ].

     Section 8.2.17 [Minimum Interest Coverage Ratio] of the Credit Agreement is hereby amended and restated to read as follows:

     “8.2.17 Minimum Interest Coverage Ratio.

     The Borrowers shall not permit the ratio (the “Interest Coverage Ratio”) of Consolidated Adjusted EBITDA to consolidated interest expense (excluding Timber Installment Sale Interest Expense) of the Borrowers and their Subsidiaries, measured as of the end of each fiscal quarter, for the four (4) fiscal quarters then ended, to be less than 3.50 to 1.00, provided, however, that if a Fox River OU3-5 Environmental Charges Event shall occur, then the Interest Coverage Ratio shall be decreased by the amount specified in the table below based on the amount of the Fox River OU3-5 Related Debt on the date of such Fox River OU3-5 Environmental Charges Event. Such decrease shall apply to the end quarter in which such Fox River OU3-5 Environmental Charges Event occurs and for the end of each of the five (5) quarters thereafter:

	Decrease in the Interest
Amount of Fox River OU3-5 Related Debt	Coverage Ratio
$[*********] to $[*********]	.05 to 1.00
$[*********] to $[*********]	.10 to 1.00
$[*********] to $[*********]	.15 to 1.00
$[*********] to $[*********]	.20 to 1.00
$[*********] to $[*********]	.25 to 1.00

(For example: If a Fox River OU3-5 Environmental Charges Event shall occur and the Loan Parties have incurred $[*********]of Fox River OU3-5 Related Debt on the date of such event, the Interest Coverage Ratio would be decreased to 3.30 to 1.00 (3.50 — .20 = 3.30) for the end of the current quarter and the end of the following 5 quarters.)

5. Conditions to the Effectiveness of this Amendment.

     This Amendment shall be effective when (a) it has been signed and delivered by the Loan Parties, the Required Banks and the Agent, (b) the representations and warranties of the Loan Parties in Section 6 hereof shall be true and correct, and (c) the Borrowers have paid to the Agent the Amendment Fees referred to below and any other fees and expenses in connection herewith.

6. Amendment Fee.

     The Borrowers shall pay to the Administrative Agent for the benefit of each Bank which signs its signature page hereto and returns such signed signature page to counsel for the Administrative Agent (under directions to be provided by the Administrative Agent or such counsel) on or before 5:00 pm on June 8, 2007 a fee (the “Amendment Fee”) equal to 12.5 basis points times the sum of such Bank’s Revolving Credit Commitment plus its Term Loan Commitment. Such Amendment Fee shall be payable on the effective date of this Amendment.

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

7. Representations and Warranties.

     The Loan Parties hereby represent and warrant to the Agent and the Banks that (a) the representations and warranties of the Loan Parties contained in the Credit Agreement and the other Loan Documents are true and correct on and as of the date hereof with the same force and effect as though made by the Loan Parties on such date, except to the extent that any such representation or warranty expressly relates solely to a previous date, and (b) the Loan Parties are in compliance with all terms, conditions, provisions, and covenants contained in the Credit Agreement and the other Loan Documents and there exists no Event of Default or Potential Default and (c) all of the terms and conditions, provisions and covenants in the Credit Agreement, the Loan Documents and all other documents delivered to the Banks and the Agent in connection with any of the foregoing documents and obligations secured thereby are in full force and effect, are hereby ratified and confirmed and remain unaltered, except as expressly modified by this Amendment. This Amendment has been duly executed by an authorized officer of each Loan Party. The execution, delivery, and performance of this Amendment have been duly authorized by all necessary corporate action, require no governmental approval, and will neither contravene, conflict with, nor result in the breach of any law, charter, articles, or certificate of incorporation or organization, bylaws, operating agreement or other agreement governing or binding upon any of the Loan Parties or any of their property. Each Loan Party is in good standing in its jurisdiction of organization.

8. Force and Effect.

     Each of the parties hereto reconfirms and ratifies the Credit Agreement and all other documents executed in connection therewith, and confirms that all such documents remain in full force and effect since the date of their execution, except to the extent modified by this Amendment.

9. Governing Law.

     This Amendment shall be deemed to be a contract under the laws of the Commonwealth of Pennsylvania and for all purposes shall be governed by and construed and enforced in accordance with the internal laws of the Commonwealth of Pennsylvania without regard to its conflict of laws principles.

10. Counterparts.

     This Amendment may be signed by telecopy or original in any number of counterparts each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties have executed this instrument under seal as of the day and year first above written.

[SIGNATURE PAGES FOLLOW]

Exhibit 10.3

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 1 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

BORROWERS:
P.H. GLATFELTER COMPANY
By:	/s/ John P. Jacunski
Name:	John P. Jacunski
Title:	Sr. Vice President & Chief Financial Officer
PHG TEA LEAVES, INC.
By:	/s/ George B. Amoss, Jr.
Name:	George B. Amoss, Jr.
Title:	President
GLATFELTER GERNSBACH GMBH & CO. KG
By: Glatfelter Verwaltungsgesellschaft mbH, its General Partner
By:	/s/ John P. Jacunski
Name:	John P. Jacunski
Title:	Managing Director
GLATFELTER VERWALTUNGSGESELLSCHAFT MBH
By:	/s/ George B. Amoss, Jr.
Name:	George B. Amoss, Jr.
Title:	Director
GLATFELTER LYDNEY, LTD.
By:	/s/ John P. Jacunski
Name:	John P. Jacunski
Title:	Director

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

MOLLANVICK, INC.
By:	/s/ Donald R. Gross
Name:	Donald R. Gross
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 2 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

GUARANTORS:
THE GLATFELTER PULP WOOD COMPANY
By:	/s/ David C. Elder
Name:	David C. Elder
Title:	Assistant Secretary
GLT INTERNATIONAL FINANCE, LLC
By:	/s/ George B. Amoss, Jr.
Name:	George B. Amoss, Jr.
Title:	Treasurer
GLATFELTER HOLDINGS, LLC
By:	/s/ David C. Elder
Name:	David C. Elder
Title:	Treasurer
GLATFELTER HOLDINGS II, LLC
By:	/s/ David C. Elder
Name:	David C. Elder
Title:	Treasurer

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 3 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

BANKS AND AGENT:
PNC BANK, NATIONAL ASSOCIATION, individually and as Agent
By:	/s/ Brian T. Vesey
Name:	Brian T. Vesey
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 4 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

CREDIT SUISSE, CAYMAN ISLANDS BRANCH
By:	/s/ David Dodd       /s/ Rianka Mohan
Name:	David Dodd            Rianka Mohan
Title:	Vice President         Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 5 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

LASALLE BANK NATIONAL ASSOCIATION
By:	/s/ Philip R. Medsger
Name:	Philip R. Medsger
Title:	First Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 6 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

MANUFACTURERS AND TRADERS TRUST COMPANY
By:	/s/ Kellie M. Matthews
Name:	Kellie M. Matthews
Title:	Admin. Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 7 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

SUNTRUST BANK
By:	/s/ William C. Washburn, Jr.
Name:	William C. Washburn, Jr.
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 8 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

BANK OF AMERICA, N.A.
By:	/s/ Charles R. Dickerson
Name:	Charles R. Dickerson
Title:	Managing Director

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 9 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

HSBC BANK USA
By:	/s/ Colleen Glackin
Name:	Colleen Glackin
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 10 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

CITIBANK, N.A.
By:	/s/ Christopher D. Pannacciulli
Name:	Christopher D. Pannacciulli
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 11 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

CITIBANK, N.A., CANADIAN BRANCH
By:	/s/ Sheryl Holmes
Name:	Sheryl Holmes
Title:	Authorized Signer

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 12 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

CITIZENS BANK OF PENNSYLVANIA
By:	/s/ Michael J. Gillig
Name:	Michael J. Gillig
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 13 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

COMMERZBANK AG, NEW YORK AND GRAND CAYMAN BRANCHES
By:	/s/ Robert S. Taylor
Name:	Robert S. Taylor
Title:	Senior Vice President
By:	/s/ Barbara Peters
Name:	Barbara Peters
Title:	Assistant Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 14 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

COMERICA BANK
By:	/s/ Richard C. Hampson
Name:	Richard C. Hampson
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 15 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

FIFTH THIRD BANK
By:	/s/ Jim Janovsky
Name:	Jim Janovsky
Title:	Vice President

THIS EXHIBIT HAS BEEN REDACTED AND IS THE A SUBJECT OF A CONFIDENTIAL TREATMENT REQUEST. REDACTED MATERIAL IS MARKED WITH “*” AND BRACKETS AND HAS BEEN FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.

[SIGNATURE PAGE 16 OF 16 TO

THIRD AMENDMENT TO CREDIT AGREEMENT]

COBANK, ACB
By:	/s/ Michael Tousignant
Name:	Michael Tousignant
Title:	VP

EX-31.1

EXHIBIT 31.1

CERTIFICATION PURSUANT TO SECTION 302 (a) OF THE SARBANES-OXLEY ACT OF 2002

I, George H. Glatfelter II certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, of P. H. Glatfelter Company (“Glatfelter”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.	Glatfelter’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Glatfelter and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Glatfelter, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of Glatfelter’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in Glatfelter’s internal control over financial reporting that occurred during Glatfelter’s most recent fiscal quarter (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Glatfelter’s internal control over financial reporting.

5. Glatfelter’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Glatfelter’s auditors and the audit committee of Glatfelter’s board of directors (or persons performing similar functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Glatfelter’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in Glatfelter’s internal control over financial reporting.

August 6, 2010

By	/s/ George H. Glatfelter II
	George H. Glatfelter II
	Chairman and Chief Executive Officer

GLATFELTER

-35-

EX-31.2

EXHIBIT 31.2

CERTIFICATION PURSUANT TO SECTION 302 (a) OF THE SARBANES-OXLEY ACT OF 2002

I, John P. Jacunski certify that:

1.	I have reviewed this Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, of P. H. Glatfelter Company (“Glatfelter”);
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report.
4.	Glatfelter’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for Glatfelter and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to Glatfelter, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of Glatfelter’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in Glatfelter’s internal control over financial reporting that occurred during Glatfelter’s most recent fiscal quarter (the fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, Glatfelter’s internal control over financial reporting.

5. Glatfelter’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to Glatfelter’s auditors and the audit committee of Glatfelter’s board of directors (or persons performing similar functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect Glatfelter’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in Glatfelter’s internal control over financial reporting.

August 6, 2010

By	/s/ John P. Jacunski
	John P. Jacunski
	Senior Vice President and Chief Financial Officer

GLATFELTER

-36-

EX-32.1

EXHIBIT 32.1

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, of P. H. Glatfelter Company (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, George H. Glatfelter II, Chairman and Chief Executive Officer of the Company, certify to the best of my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Glatfelter and will be retained by Glatfelter and furnished to the Securities and Exchange Commission or its staff upon request.

August 6, 2010

By	/s/ George H. Glatfelter II
	George H. Glatfelter II
	Chairman and Chief Executive Officer

GLATFELTER

-37-

EX-32.2

EXHIBIT 32.2

CERTIFICATION PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 18 U.S.C. SECTION 1350

In connection with the Quarterly Report on Form 10-Q for the quarter ended June 30, 2010, of P. H. Glatfelter Company (the “Company”) as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, John P. Jacunski, Senior Vice President and Chief Financial Officer of the Company, certify to the best of my knowledge, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

A signed original of this written statement required by Section 906 has been provided to Glatfelter and will be retained by Glatfelter and furnished to the Securities and Exchange Commission or its staff upon request.

August 6, 2010

By	/s/ John P. Jacunski
	John P. Jacunski
	Senior Vice President and Chief Financial Officer

GLATFELTER

-38-