STATE OF SOUTH CAROLINA

COUNTY COUNCIL FOR NEWBERRY COUNTY

ORDINANCE NO. 09-26-07

AN ORDINANCE AUTHORIZING PURSUANT TO CHAPTER 44 OF TITLE 12, SOUTH CAROLINA CODE OF LAWS, 1976, AS AMENDED, THE EXECUTION AND DELIVERY OF A FEE AGREEMENT BETWEEN NEWBERRY COUNTY, SOUTH CAROLINA AND SCHWEITZER-MAUDUIT INTERNATIONAL, INC.; THE APPLICATION OF AN INFRASTRUCTURE CREDIT TO FEE-IN-LIEU OF TAX PAYMENTS; AND MATTERS RELATING THERETO.

WHEREAS, Newberry County (the “County”), a public body corporate and politic organized and existing under the laws of the State of South Carolina has, by an Inducement Resolution adopted on May 31, 2007 (the “Resolution”), committed to enter into a Fee Agreement with Schweitzer-Mauduit International, Inc. (the “Company”) and/or one or more existing or to-be-formed affiliated entities of the Company, which shall provide for payments of fees-in-lieu of taxes for a project qualifying under the provisions of Title 12, Chapter 44 of the Code of Laws of South Carolina, 1976, as amended (the “Act”);

WHEREAS, the County and the Company desire to enter into a Fee Agreement as defined in the Act concerning new and/or additional manufacturing, testing, research, development and/or operational capacity and/or an expansion at an existing manufacturing facility located in the County and any and all activities relating thereto, and which will consist of certain land, buildings or other improvements thereon and/or all machinery, apparatus, equipment, office facilities, furnishings and other personal property to be installed therein (which properties and facilities constitute a project under the Act and are referred to hereinafter as the “Project”). The Project is expected to provide significant economic benefits to the County and surrounding areas. In order to induce the Company to locate the Project in the County, the County hereby agrees to charge a fee-in-lieu of taxes with respect to the Project and otherwise make available to the Company the benefits intended by the Act;

WHEREAS, it is anticipated that the Project will represent an investment of approximately $21 million or more in the County (without regard to whether some or all of the investment is included as economic development property under the Act but excluding property tax exempt investments);

WHEREAS, Newberry County Council (the “County Council”) has caused to be prepared and presented to this meeting substantially the form of the Fee Agreement between the County and the Company, which the County proposes to execute and deliver;

WHEREAS, it appears that the Fee Agreement, which is now before this meeting, is in appropriate form and is an appropriate instrument to be executed and delivered or approved by the County for the purposes intended;

WHEREAS, as further inducement to the Company, the County has or will establish a Multi-County Industrial Park to include the site of the Project (the “MCIP”) under the provisions of Article VIII, Section 13 of the Constitution of the State of South Carolina of 1895, as amended (the “State Constitution”), and Section 4-1-170 of the Code of Laws of South Carolina, 1976, as amended (collectively, the “MCIP Law”);

WHEREAS, under the provisions of Sections 4-1-175 of the Code of Laws of South Carolina, 1976, as amended, and Section 12-44-70 of the Act (collectively, the “Infrastructure Law”), the County is authorized to use revenues received from payments of fees-in-lieu of taxes under the Infrastructure Law, the Act and/or the MCIP Law for the purpose of defraying a portion of the cost of designing, acquiring, constructing, improving or expanding the infrastructure serving the County and for improved or unimproved real property, buildings and structural components of buildings used in the operation of a manufacturing or commercial enterprise in order to enhance the economic development of the County;

WHEREAS, the Company has requested the County to use a portion of the above aforementioned payments for the purpose of defraying the costs of designing, acquiring, constructing, improving or expanding the infrastructure serving the County and for improved or unimproved real property, buildings and structural components of buildings used in the operation of the Project as permitted by the Infrastructure Law (the “Infrastructure”); and

WHEREAS, the County Council, having found that the Infrastructure will serve the County and, as a direct result of the acquisition thereof, assist the County in its economic development efforts by inducing the Company to locate and/or expand an industrial facility in the County, proposes to provide an Annual Infrastructure Credit (as defined in the Fee Agreement) against payments of fees-in-lieu of taxes to be made concerning the Project pursuant to the Infrastructure Law, the Act and/or the MCIP Law;

NOW, THEREFORE, BE IT ORDAINED by the County Council in meeting duly assembled as follows:

Section 1. Pursuant to the Act and particularly Section 12-44-40(H) thereof, the County Council has made and hereby makes the following findings on the basis of the information supplied to it by the Company:

(a) The Project constitutes a “project” as said term is referred to and defined in Section 12-44-30 of the Act;

(b) It is anticipated that the Project will benefit the general public welfare of the County by providing services, employment and other public benefits not otherwise adequately provided locally;

(c) Neither the Project nor any documents or agreements entered into by the County in connection therewith will give rise to any pecuniary liability of the County or incorporated municipality or to any charge against their general credit or taxing power;

(d) The purposes to be accomplished by the Project are proper governmental and public purposes;

(e) The benefits of the Project are greater than the costs; and

(f) Having evaluated the purposes to be accomplished by the Project as proper governmental and public purposes, the anticipated dollar amount and nature of the investment to be made, and the anticipated costs and benefits to the County, the County has determined that the Project is properly classified as economic development property.

Section 2. In order to promote industry, develop trade and utilize the manpower, agricultural products and natural resources of the State, the form, terms and provisions of the Fee Agreement which is before this meeting and filed with the Clerk to County Council are hereby approved and all of the terms, provisions and conditions thereof are hereby incorporated herein by reference as if the Fee Agreement was set out in this Ordinance in its entirety. The Chair of the County Council is hereby authorized, empowered and directed to execute, acknowledge and deliver the Fee Agreement to the Company. The Fee Agreement is to be in substantially the form now before this meeting and hereby approved, or with such changes therein as shall be approved by the officials of the County executing the same, their execution thereof to constitute conclusive evidence of their approval of any and all changes or revisions therein from the form of Fee Agreement now before this meeting.

Section 3. The Chair of County Council, the County Administrator and the Clerk to County Council, for and on behalf of the County, are hereby each authorized and directed to do any and all things necessary to effect the execution and delivery of the Fee Agreement and the performance of all obligations of the County under and pursuant to the Fee Agreement.

Section 4. In consideration of the investment in the Project and the Infrastructure made by the Company pursuant to the Infrastructure Law and for the purpose of defraying the cost of the Infrastructure, the County Council hereby determines and approves that beginning with respect to the property tax year after the year in which Project property is first placed in service, the Company automatically shall be entitled to receive and take a credit against any fee-in-lieu of tax payments payable by the Company under one or more of the Act, the Infrastructure Law and the MCIP Law in an amount equal to the Annual Infrastructure Credit, as defined in and to the extent set forth in the Fee Agreement, even if the fee-in-lieu of taxes arrangement in the Fee Agreement shall be terminated and the right to the Annual Infrastructure Credit survives the termination of the fee-in-lieu of taxes arrangement in the Fee Agreement as specified therein. In order to ensure that the Company receives the full benefit of the Annual Infrastructure Credit and an enhanced jobs tax credit incentive as provided under Section 12-6-3360 of the Code of Laws of South Carolina, 1976, as amended, the County Council hereby determines and agrees that the MCIP shall not be terminated or, to the extent within the control of the County Council, allowed to be terminated before 2019; and further determines and agrees that, in the event that the MCIP is terminated, the County Council will use its best efforts to promptly take such steps as may be necessary or appropriate to place the Project site in another Multi-County Industrial Park in order that the Company will receive the full benefit of the Annual Infrastructure Credit and such enhanced job tax credit incentives.

Section 5. The consummation of all transactions contemplated by the Fee Agreement is hereby approved and authorized.

Section 6. This Ordinance shall be construed and interpreted in accordance with the laws of the State of South Carolina.

Section 7. The provisions of this Ordinance are hereby declared to be separable and if any section, phrase or provision shall for any reason be declared by a court of competent jurisdiction to be invalid or unenforceable, such declaration shall not affect the validity of the remainder of the sections, phrases and provisions hereunder. The provisions of this Ordinance pertaining to Section 4 and to the Annual Infrastructure Credit are hereby declared to be a validly binding contract and shall be enforceable as such.

Section 8. All orders, resolutions, ordinances and parts thereof in conflict herewith are, to the extent of such conflict, hereby repealed and this Ordinance shall take effect and be in full force from and after its passage and approval.

DONE, RATIFIED AND ADOPTED this 3^rd day of October, 2007.

NEWBERRY COUNTY COUNCIL

By:_________________________________

Henry B. Summer, Chair

(SEAL) Newberry County Council

Reviewed and approved as to form:

ATTEST:

______________________________ ____________________________________

Susan C. Fellers, Clerk to Council Gary T. Pope, County Attorney

First Reading: September 5, 2007 ____________________________________

Second Reading: September 19, 2007 Wayne Adams, County Administrator

Public Hearing: September 19, 2007

Third Reading: October 3, 2007