8-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported)
September 15, 2008

Wellman, Inc.

(Exact name of registrant as specified in its charter)

Delaware	1-10033	04-1671740
(State or other jurisdiction	(Commission File Number)	(IRS Employer Identification No.)
of incorporation)
1041 521 Corporate Center Drive
Fort Mill, South Carolina		29707
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (803) 835-2000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

TABLE OF CONTENTS

 EX-10.1 Amendment to the Credit Agreement dated September 15, 2008

 EX-99.1 Press Release dated September 16, 2008

 EX-99.2 Wellman, Inc.'s Unaudited Monthly Operating Statements for the month ended August 31, 2008

Item 1.01. Entry into a Material Definitive Agreement.

     On September 15, 2008, Wellman, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) entered into an amendment of its senior secured super-priority Debtor in possession credit agreement dated February 26, 2008 (the “Credit Agreement”) among the Company and certain of its domestic subsidiaries, as borrowers, Deutsche Bank Securities Inc., as sole lead arranger and bookrunner, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, and the lenders that from time to time become party thereto.

     The amendment made the following major modification to the Credit agreement:

1. It replaces all the prior milestones relating to our emergence from bankruptcy with the following milestones:

a.	To file an Amended Plan of Reorganization and Disclosure Statement by September 16, 2008.
b.	To have our Disclosure Statement Order approved by October 20, 2008.
c.	To enter into a backstop agreement by September 30, 2008 that would provide $70 million of additional funding to the Company subject to certain limited conditions.
d.	To obtain an exit financing commitment before October 7, 2008.
e.	To provide documentation in substantially final form by October 31, 2008 for the exit financing, backstop commitment and any other financial accommodations.
f.	To have an order entered by the Bankruptcy Court confirming the Plan by December 5, 2008 and emerge from bankruptcy by December 10, 2008.

2.	It reduces the maximum amount available under the Credit Agreement to $120 million on November 1, 2008.
3.	It eliminates any increase in the required Minimum Available Liquidity so that it remains at $20 million.
4.	It requires us to stop purchasing raw materials for our fibers and engineering resins businesses by October 15, 2008.
5.	It requires us to achieve the following EBITDA targets, considering only the operations of our PET Resins business (specifically excluding any effect of reorganization costs, costs related to the closure of our fibers and engineering resins businesses and FIFO):

	Minimum Monthly
Applicable Month	PET Resin EBITDA
September 2008	$	0
October 2008	$	2,000,000
November 2008	$	2,500,000
December 2008	$	3,000,000
January 2009	$	1,500,000

6.	It limits the amount of cash we can spend before December 1st relating to the closure of our fibers and engineering resins business to $14 million.
7.	It limits the amount we can include in our borrowing base for our fibers and engineering resins business to the following:

	Maximum Non-PET
	Resin Business
Period	Borrowing Base Component
September 30, 2008 to but excluding October 31, 2008	$	68,000,000
October 31, 2008 to but excluding November 30, 2008	$	41,200,000
November 30, 2008 to but excluding December 31, 2008	$	17,600,000
On or after December 31, 2008	$	0

     This description is qualified in its entirety by reference to Exhibit 10.1 hereto.

Item 2.05. Costs Associated With Exit or Disposal Activities.

     On September 16, 2008, Wellman, Inc. (“the Company”) announced that it has filed an amended plan of reorganization (the “Plan”) with the Bankruptcy Court. The Plan is expected to allow the Company to emerge from bankruptcy by the end of the year with a stronger balance sheet, focused on the North American PET resins business. As part of the Plan, the Company will exit its polyester staple fiber and engineering resins businesses and consolidate its PET resin production at its Pearl River facility in Hancock County, Mississippi. The Company will close its Palmetto Plant in Darlington, S.C., its plant in Johnsonville, S.C., and its corporate headquarters in Fort Mill, S.C. The Company expects to exit the polyester staple fiber and engineering resins businesses by November 30, 2008.

     Under the Plan, a group of Second Lien Lenders have committed to provide additional capital to the reorganized Wellman. The major components of the Plan are:

• The holders under the Credit Agreement will be fully repaid. The Company will obtain the funds to repay the Credit Agreement, pay administrative claims and pay exit costs from an exit facility and from a capital contribution of $70 million by certain holders of the Second Lien debt.

• If the First Lien Lenders as a class vote to accept the Plan, they will receive a $75 million promissory note secured by the property, plant and equipment at the Pearl River facility and the proceeds from the sale of the pledged collateral, including the intellectual property and intangible assets on which the second lien lenders hold security interests, at the facilities to be closed in connection with the operational restructuring plan. If the First Lien Lenders as a class vote to reject the Plan, they will receive a promissory note of approximately $70 million secured by the property, plant and equipment at the Pearl River facility and the property plant and equipment from the Palmetto and Johnsonville facilities that was pledged as collateral for their loan. These facilities have a book value of approximately $65 million dollars. The Bankruptcy Court determined the value of the total pledged collateral at all of Wellman’s facilities was $140 million.

• The existing Second Lien Lenders will convert 100% of their debt in exchange for equity of Reorganized Wellman and receive 90% of the proceeds from a Distribution Trust established under the Plan;

• The General Unsecured Creditors will receive 10% of the proceeds from a Distribution Trust established under the Plan; and

• The Plan does not provide for any distributions on the Company’s capital stock which will be cancelled upon confirmation of the Plan.

As a result of the aforementioned closures, the Company expects to terminate approximately 740 employees and incur costs related to notification under the WARN act and severance of approximately $9.1 million that will be paid out over the next four months. We expect to incur approximately $4 to $6 million of other costs related to closing these facilities. The Plan, if confirmed, is subject to closing conditions.

Item 7.01. Regulation FD Disclosure.

     The Company files its unaudited consolidated Monthly Operating Statements for the month ended August 31, 2008 (the “Monthly Operating Statements”), with the United States Bankruptcy Court for the Southern District of New York (the “U.S. Bankruptcy Court”) in the matter of In re Wellman, Inc., et al., Case No. 08-10595 (SMB). Exhibit 99.2 to this Current Report on Form 8-K contains the unaudited consolidated Monthly Operating Statements as filed with the United States Bankruptcy Court.

     The Monthly Operating Statements are limited in scope, cover a limited time period, and have been prepared solely for the purpose of complying with the monthly reporting requirements of the U.S. Bankruptcy Court. The financial information in the Monthly Operating Statements is in a format required by the U.S. Bankruptcy Court and the Company’s Debtor-in-Possession credit agreement, is preliminary and unaudited and does not purport to show the financial statements of any of the Debtors in accordance with accounting principles generally accepted in the United States of America (“GAAP”). Therefore, the Monthly Operating Statements may exclude items required by GAAP, such as certain reclassifications, eliminations, accruals, valuations and disclosure items. The Company cautions readers not to place undue reliance upon the Monthly Operating Statements. There can be no assurance that such information is complete and the Monthly Operating Statements may be subject to revision. The Monthly Operating Statements should be read in conjunction with the Consolidated Financial Statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

     These Monthly Operating Statements have been derived from the books and records of the Company. They, however, have not been subjected to procedures that would typically be applied to financial information presented in accordance with GAAP and, upon the application of such procedures, the Company believes that they could be subject to changes, and these changes could be material. The information furnished in the Monthly Operating Statements includes certain normal recurring adjustments but may not include all of the adjustments that would typically be made for quarterly financial statements in accordance with GAAP. In addition, certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted.

     Access to documents filed with the U.S. Bankruptcy Court and other general information about the Chapter 11 cases is available at www.kccllc.net/wellman. The content of the foregoing website is not a part of this Report.

Limitation on Incorporation by Reference

     The Monthly Operating Statements are being furnished for information purposes only and are not deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, (the “Exchange Act”) or otherwise subject to the liabilities of that section and shall not be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended (the “Securities Act”). Registration statements or other documents filed with the SEC shall not incorporate the Monthly Operating Statements or any other information set forth in this Report by reference, except as otherwise expressly stated in such filing. This Report will not be deemed an admission to the materiality of any information that is required to be disclosed solely by Regulation FD.

Forward-Looking Statements

     In addition to historical information, this Report contains forward-looking statements within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act. Words such as “believe,” “intend”, “expect,” “anticipate,” “plan,” “may,” “will,” and similar expressions are intended to identify forward-looking statements. Such statements include, among others, those concerning the Company’s expected financial performance, as well as all assumptions, expectations, predictions, intentions or beliefs about future events. These Statements are made as of the date of this Report based upon current expectations, and we undertake no obligation to update this information, whether as a result of new information, future developments or otherwise. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: our substantial liquidity needs and liquidity pressure; our substantial indebtedness and its impact on our financial health and operations; risks associated with our indebtedness containing floating interest rate provisions and its effect on our financial health if rates rise significantly; our ability to obtain additional financing in the future; risks associated with claims not discharged in the Chapter 11 cases and their effect on our results of operations and profitability; risks associated with the transfers of our equity, or issuances of equity in connection with our reorganization and our ability to utilize our federal income tax net operating loss carry-forwards in the future; our dependence on our management and employees; the adverse effect of competition on our performance; reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the financial condition of our customers; change in tax risks; environmental risks; natural disasters; regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock.

Item 9.01. Financial Statements and Exhibits.

     (a) Not applicable.

     (b) Not applicable.

     (c) Exhibits

10.1 Amendment to the Credit Agreement, dated September 15, 2008, by and among Wellman, Inc. as Funds Administrator and the other borrowers under the Credit Agreement party hereto, each as Debtor and Debtor-in-possession, Deutsche Bank Trust Company Americas, as Administrative Agent, and the other financial institutions party hereto.

     99.1 Press Release dated September 16, 2008.

     99.2 Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended August 31, 2008.

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SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.

	Wellman, Inc.
September 19, 2008	/s/ Keith R. Phillips
	Keith R. Phillips
	Vice President, Chief Financial Officer

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EXHIBIT INDEX

Exhibit
Number	Description
10.1	Amendment to the Credit Agreement, dated September 15, 2008, by and among Wellman, Inc. as Funds Administrator and the other borrowers under the Credit Agreement party hereto, each as Debtor and Debtor-in-possession, Deutsche Bank Trust Company Americas, as Administrative Agent, and the other financial institutions party hereto.
99.1	Press Release dated September 16, 2008
99.2	Wellman, Inc.’s Unaudited Monthly Operating Statements for the month ended August 31, 2008.

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EX-10.1

Exhibit 10.1

ELEVENTH AMENDMENT TO CREDIT AGREEMENT

     This Eleventh Amendment to Credit Agreement (this “Amendment”) is entered into as of September 15, 2008 by and among Wellman, Inc., a Delaware corporation (the “Funds Administrator”) and the other borrowers under the Credit Agreement party hereto, each as a debtor and debtor-in-possession (collectively, and together with the Funds Administrator, the “Borrowers”), Deutsche Bank Trust Company Americas, as Administrative Agent, and the other financial institutions party hereto.

RECITALS

     A. The Funds Administrator, the Borrowers, the Administrative Agent and the Lenders are party to that certain Credit Agreement dated as of February 26, 2008 (the “Credit Agreement”). Unless otherwise specified herein, capitalized terms used in this Amendment shall have the meanings ascribed to them by the Credit Agreement.

     B. The Funds Administrator, on behalf of itself and the Borrowers, the Administrative Agent and the undersigned Lenders wish to amend the Credit Agreement on the terms and conditions set forth below.

     Now, therefore, in consideration of the mutual execution hereof and other good and valuable consideration, the parties hereto agree as follows:

          1. Amendments to Credit Agreement. Upon the Effective Date (as defined herein):

          (a) Section 1.1 of the Credit Agreement shall be amended by

          (i) adding the following proviso at the conclusion of clause (a) of the definition of “Borrowing Base”:

           “; provided, that in no event shall the amount calculated in (i) through (v) above include amounts attributable to operations other than the PET Resin Business in excess of the amount set forth opposite the relevant time period in the table below:

	Maximum Non-PET
	Resin Business
Period	Borrowing Base Component
September 30, 2008 to but excluding October 31, 2008	$	68,000,000
October 31, 2008 to but excluding November 30, 2008	$	41,200,000
November 30, 2008 to but excluding December 31, 2008	$	17,600,000
On or after December 31, 2008	$	0

          (ii) adding the following definition of “Cash Liquidation Costs”

          “”Cash Liquidation Costs” shall mean all expenditures specifically related to the liquidation of the Borrowers’ polyester fiber and engineering resins business with manufacturing facilities in Darlington, S.C. and Johnsonville, S.C. respectively which shall be identified by a series of line items in the Cash Budget indicating that they are part of the Cash Liquidation Costs”

          (iii) adding the following definition of “Consolidated PET Resin Operating Income”:

          “”Consolidated PET Resin Operating Income” shall mean with respect to any Person, for any period the aggregate of the net operating income (loss) of such Person and its Subsidiaries for such period attributable to the PET Resin Business, on a consolidated basis, determined in accordance with GAAP; provided, that (a) the operating income of any other Person in which such Person or any of its Subsidiaries has an interest (which interest does not cause the operating income of such other Person to be consolidated with the operating income of such Person and its Subsidiaries in accordance with GAAP) shall be included only to the extent of the amount of dividends or distributions actually paid to such Person or such Subsidiary by such other Person during such period; (b) the operating income of any Subsidiary of such Person that is subject to any Payment Restriction shall be excluded to the extent such Payment Restriction would prevent the payment of an amount that otherwise could have been paid to such Person or to a Subsidiary of such Person not subject to any Payment Restriction; and (c) there shall be excluded from Consolidated PET Resin Operating Income:

          (1) all gains and losses realized on the purchase or other acquisition by such Person or any of its Subsidiaries of any Securities of such Person or any of its Subsidiaries,

          (2) all extraordinary gains and losses,

          (3) all deferred financing costs written off or premiums paid in connection with the early extinguishment of any Indebtedness, in each case, incurred by Wellman or any of its Subsidiaries in connection with the Financing Transactions,

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          (4) income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued),

          (5) in the case of a successor to the referent Person by consolidation or merger or as transferee of the referent Person’s assets, any earnings of such successor prior to such consolidation, merger or transfer of assets, and

          (6) the cumulative effect of a change in accounting principles.

          (iv) deleting the definition of ”Minimum Liquidity Availability” and replacing it with the following:

          “”Minimum Liquidity Availability” means $20,000,000.”

          (v) deleting the definition of “EBITDA” and replacing it with the following definition of “PET Resin EBITDA”:

          “”PET Resin EBITDA” shall mean, with respect to any Person, for any period, the result (without duplication) of:

          (1) Consolidated PET Resin Operating Income; plus

          (2) to the extent Consolidated PET Resin Operating Income has been reduced thereby:

          (a) all income taxes of such Person and its Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary gains or losses or non-recurring and non-operational charges or gains other than restructuring charges);

          (b) Consolidated Interest Expense;

          (c) Consolidated Non-cash Charges;

          (d) non-recurring fees, cash charges and other cash expenses made or incurred in connection with the Transaction;

          (e) cash charges for professional fees relating to the bankruptcy;

          (f) Cash Liquidation Costs; and

          (f) any impact from FIFO accounting.”

          (vi) adding the following definition of “PET Resin Business”:

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          “”PET Resin Business” means the operations of Funds Administrator and its Subsidiaries related to the manufacture and sale of PET Resin.”

          (vii) deleting the definition of “Total Commitments” and replacing it with the following:

          “”Total Commitments” shall mean the aggregate of the Commitments of all the Lenders, which in the aggregate shall not exceed $170,000,000, and which in the aggregate as of November 1, 2008 shall not exceed $120,000,000.

          (b) deleting Section 7.1(g) of the Credit Agreement and replacing it with the following:

“(g) within fifteen (15) days after the last day of each fiscal month, commencing September 1, 2008, a report in the form of Exhibit K testing PET Resin EBITDA and reconciling Capital Expenditures as of the last day of the applicable fiscal month;”

          (c) The following is hereby added as Section 7.19 to the Credit Agreement:

“7.19 Borrowers shall cease purchasing raw materials related to their polyester fiber and engineering resins business with manufacturing facilities in Darlington, S.C. and Johnsonville, S.C. respectively no later than October 15, 2008.”

          (d) Section 8.1 of the Credit Agreement is hereby amended by adding the following sentence at the end thereof:

          “Cash Liquidation Costs shall not exceed $14 million in the aggregate for the period commencing September 15, 2008 and ending on December 1, 2008.”

          (e) Section 8.2(a) of the Credit Agreement is deleted in its entirety and replaced with the following:

          “8.2(a) Minimum Monthly PET Resin EBITDA. The Borrowers shall not permit PET Resin EBITDA for any calendar month to be less than the amount listed below opposite such month:

	Minimum Monthly
Applicable Month	PET Resin EBITDA
September 2008	$	0
October 2008	$	2,000,000
November 2008	$	2,500,000
December 2008	$	3,000,000
January 2009	$	1,500,000

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          (f) Section 9.1 of the Credit Agreement is amended by deleting Section (i)(xv) in its entirety and replacing it with the following:

     “(xv) The failure of the Borrowers (i) to have filed a Reorganization Plan and a disclosure statement relating thereto by September 16, 2008, (ii) to have obtained a binding commitment without any due diligence or other similar contingencies in form and substance reasonably satisfactory to the Majority Lenders to backstop a rights offering or other similar commitment of not less than $70 million in connection with such Reorganization Plan by September 30, 2008 (iii) to have obtained a binding, fully underwritten, commitment letter or letters to provide exit financing which are not subject to syndication, due diligence, market material adverse effect and/or other contingencies other than the delivery of customary corporate and loan documentation or the occurrence of confirmation of a Reorganization Plan, to provide the exit financing and any other financial accommodations required to consummate the Reorganization Plan described in (i), above, in form, substance and amount reasonably satisfactory to the Majority Lenders by October 7, 2008, (iv) to have obtained entry of an order by the Bankruptcy Court, in form and substance reasonably satisfactory to the Majority Lenders, approving the disclosure statement described in (i), above, by October 20, 2008, (v) to have provided documentation in substantially final form relating to the rights offering, the exit financing and any other financial accommodations required to consummate the Reorganization Plan described in (i), above, in form and substance reasonably satisfactory to the Majority Lenders by October 31, 2008, (vi) to have obtained entry of an order by the Bankruptcy Court, in form and substance reasonably satisfactory to the Majority Lenders, confirming a Reorganization Plan by December 5, 2008 and (vii) to have caused to occur the Consummation Date by December 10, 2008; or”;

          (g) Annex I of the Credit Agreement is hereby deemed modified as of November 1, 2008 by reducing the amount listed as the Commitment for each Lender by 5/17th of the amount thereof.

          (h) Exhibit K of the Credit Agreement is deleted and replaced with Exhibit K hereto.

          2. Representations and Warranties of the Borrowers. The Borrowers represent and warrant that:

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          (a) The execution, delivery and performance by the Borrowers of this Amendment have been duly authorized by all necessary corporate action and that this Amendment is a legal, valid and binding obligation of the Borrowers enforceable against the Borrowers in accordance with its terms, except as the enforcement thereof may be subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law affecting creditors’ rights generally;

          (b) Each of the representations and warranties of the Borrowers contained in the Credit Agreement (treating this Amendment as a Loan Document for purposes thereof) is true and correct on and as of the date hereof as if made on the date hereof except to the extent any such representation or warranty is stated to relate solely to an earlier date, in which case such representation or warranty shall have been true and correct on and as of such earlier date; and

          (c) After giving effect to this Amendment, no Default or Event of Default has occurred and is continuing.

          3. Amendment Fee. Borrowers shall pay to the Agent, for the ratable benefit of the Lenders, a fee in the amount of $450,000 (the “Amendment Fee”), which fee shall be fully earned on the Effective Date of this Amendment and due and payable in accordance with the terms hereof, shall be nonrefundable for any reason whatsoever and shall be in addition to any other fees, costs or expenses payable pursuant to the Credit Agreement, the Fee Letter or any other Loan Documents, including without limitation the fees payable under the joinder letter dated February 20, 2008. The Amendment Fee shall be paid to the Agent on the earliest to occur of December 10, 2008, the Facility Termination Date, and the Consummation Date.

          4. Waiver. The Administrative Agent and the Lenders hereby waive any Default or Event of Default that exists on the Effective Date due to the Borrowers’ inability to comply with Section 8.2(a) of the Credit Agreement for periods ending on or before August 31. 2008.

          5. Cooperation Covenant. The Borrowers hereby agree that, upon the occurrence of an Event of Default, the Borrowers shall fully cooperate with Agent and Lenders in connection with any exercise of remedies by the Agent and Lenders, including without limitation the filing of a motion to sell the Borrowers’ assets pursuant to section 363 of the Bankruptcy Code, the filing of a Reorganization Plan, or the liquidation or other disposition of the Collateral, in each case on such terms and conditions as are requested by Agent and Lenders.

          6. Effective Date. This Amendment shall become effective on the date of the execution and delivery hereof by the Funds Administrator on behalf of itself and the Borrowers, the Administrative Agent and the Required Lenders (the “Effective Date”).

          7. Reference to and Effect Upon the Credit Agreement.

          (a) Except as specifically amended above, the Credit Agreement and the other Loan Documents shall remain in full force and effect and are hereby ratified and confirmed.

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          (b) The execution, delivery and effectiveness of this Amendment (i) shall not operate as a waiver of any right, power or remedy of the Administrative Agent or any Lender under the Credit Agreement or any Loan Document, nor constitute a waiver of any Default or provision of the Credit Agreement or any Loan Document, except as specifically set forth herein and (ii) shall not give rise to any obligation on the part of the Administrative Agent or the Lenders to further modify or waive any term or condition of the Credit Agreement or any of the other Loan Documents or give rise to any defenses or counterclaims to the right of the Administrative Agent or the Lenders, subject to the terms hereof, to enforce their rights and remedies under the Credit Agreement and the other Loan Documents. Except as expressly limited herein, the Administrative Agent and the Lenders hereby expressly reserve all of their rights and remedies under the Loan Documents and under applicable law with respect to all existing and future Defaults. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement”, “hereunder”, “hereof”, “herein” or words of similar import shall mean and be a reference to the Credit Agreement as amended hereby.

          (c) The parties acknowledge that this Amendment embodies the entire agreement and understanding among the Borrowers, the Administrative Agent and the Lenders with respect to the subject matter hereof and supersedes all prior discussions, agreements and understandings among the Borrowers, the Administrative Agent and the Lenders relating to the subject matter hereof.

          8. Governing Law. This Agreement shall be construed in accordance with and governed by the law of the State of New York.

          9. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not constitute a part of this Amendment for any other purposes.

          10. Counterparts. This Amendment 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 one and the same instrument.

[Signature Pages Follow]

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          IN WITNESS WHEREOF, the parties have executed this Amendment as of the date and year first above written.

[SIGNATURE PAGES FOLLOW]

DEUTSCHE BANK TRUST COMPANY AMERICAS, as Administrative Agent, Collateral Agent and a Lender

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

JPMORGAN CHASE BANK, N.A.

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

GENERAL ELECTRIC CAPITAL CORPORATION

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

LASALLE BUSINESS CREDIT, LLC

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

WACHOVIA CAPITAL FINANCE CORPORATION (CENTRAL)

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

WELLS FARGO FOOTHILL, LLC

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

GMAC COMMERCIAL FINANCE LLC

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

MERRILL LYNCH CAPITAL

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

PNC BANK, NATIONAL ASSOCIATION

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

ALLIED IRISH BANK, PLC

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

WEBSTER BUSINESS CREDIT CORPORATION

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

UPS CAPITAL CORPORATION

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

E*TRADE BANK

By:

Name:

Title:

Eleventh Amendment to Credit Agreement Signature Page

WELLMAN, INC.
By: Name:	/s/ Keith R. Phillips Keith R. Phillips
Title:	Chief Financial Officer
PRINCE, INC.
By: Name:	/s/ Keith R. Phillips Keith R. Phillips
Title:	President
WELLMAN OF MISSISSIPI, INC.
By: Name:	/s/ Keith R. Phillips Keith R. Phillips
Title:	Vice President
CARPET RECYCLING OF GEORGIA, INC.
By: Name:	/s/ Keith R. Phillips Keith R. Phillips
Title:	Vice President
ALG, INC.
By: Name:	/s/ Keith R. Phillips Keith R. Phillips
Title:	President
FIBER INDUSTRIES, INC.
By: Name:	/s/ Keith R. Phillips Keith R. Phillips
Title:	Vice President
PTA RESOURCES, LLC
By: Name:	/s/ Keith R. Phillips Keith R. Phillips
Title:	Authorized Representative

EXHIBIT K
FORM OF PET RESINS EBITDA REPORT

Consolidated Net Income is defined as follows:
Consolidated net income during the measuring period excluding:	$
all gains and losses realized on the purchase or other acquisition by such Person or any of its Subsidiaries of any Securities of such Person or any of its Subsidiaries
all extraordinary gains and losses
all deferred financing costs written off or premiums paid in connection with the early extinguishment of any Indebtedness, in each case, incurred by Wellman or any of its Subsidiaries in connection with the Transactions
income or loss attributable to discontinued operations (including, without limitation, operations disposed of during such period whether or not such operations were classified as discontinued)
in the case of a successor to the referent Person by consolidation or merger or as transferee of the referent Person’s assets, any earnings of such successor prior to such consolidation, merger or transfer of assets
the cumulative effect of a change in accounting principles
Consolidated Net Income	$
EBITDA is defined as follows:
Consolidated Net Income (from above)	$
Plus: (in each case to the extent deducted in the calculation of Consolidated Net Income, but without duplication):
all income taxes of such Person and its Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary gains or losses or non-recurring and non-operational charges or gains other than restructuring charges)
Consolidated Interest Expense
Consolidated Non-cash Charges
non-recurring fees, cash charges and other cash expenses made or incurred in connection with the Transactions
EBITDA	$
PET Resin EBITDA is defined as follows:
EBITDA (from above)	$
Minus: Consolidated Net Income attributable to operations other than the PET Resin Business	$

Eleventh Amendment to Credit Agreement Signature Page

Minus: (in each case to the extent deducted in the calculation of Consolidated Net Income attributable to operations other than the PET Resin Business, but without duplication):
all income taxes of such Person and its Subsidiaries paid or accrued in accordance with GAAP for such period (other than income taxes attributable to extraordinary gains or losses or non-recurring and non-operational charges or gains other than restructuring charges)
Consolidated Interest Expense
Consolidated Non-cash Charges
non-recurring fees, cash charges and other cash expenses made or incurred in connection with the Transactions
PET Resin EBITDA	$
Minimum PET Resin EBITDA requirement for the end of the current month, as set forth in Section 8.2(a) of the Credit Agreement	$
In compliance?	Yes/No

Eleventh Amendment to Credit Agreement Signature Page

EX-99.1

Exhibit 99.1

Contact: Michael Bermish
Investor Relations Officer
(803) 835-2238

FOR IMMEDIATE RELEASE

WELLMAN, INC.’S AMENDED PLAN OF REORGANIZATION

Fort Mill, SC., September 16, 2008 — Wellman, Inc. ([OTC]: WMANQ.OB) announced today that it has filed an amended plan of reorganization (the “Plan”) with the Bankruptcy Court. It is expected that the Plan will allow Wellman to emerge from bankruptcy by the end of the year with a stronger balance sheet, ample liquidity and an efficient operation focused on the North American PET resins business. The reorganized company will centralize operations at its low cost, world class Pearl River facility in Hancock County Mississippi.

As part of our Plan, Wellman will be exiting the polyester staple fiber and engineering resins businesses and consolidating PET resin production at the Pearl River facility. These actions will result in lower debt levels through the monetization of working capital of the polyester staple fiber and engineering resins businesses, improved capacity utilization of the Pearl River facility, and reduced corporate costs. The combination of lower costs, improved capacity utilization and a strong capital structure will allow Wellman to profitably grow its PET business. On a proforma basis, Wellman expects to have a financial position, operating results and cash flows comparable to investment grade companies.

Mark Ruday, Wellman’s Chief Executive Officer stated, “While it is always difficult to restructure operations, we believe these actions will maximize value for our stakeholders and position Wellman for future growth.”

Under the Plan, a group of Second Lien Lenders have committed to provide additional capital to the reorganized Wellman. The major components of the Plan are:

• Certain Second Lien holders have committed to contribute $70 million in new capital to the reorganized Wellman;

• The existing Second Lien Lenders will convert 100% of their debt in exchange for equity of Reorganized Wellman and receive 90% of the proceeds from a Distribution Trust established under the Plan;

• If the First Lien Lenders as a class vote to accept the Plan, they will receive a $75 million promissory note secured by the property, plant and equipment at the Pearl River facility and the proceeds from the sale of the pledged collateral, including the intellectual property and intangible assets on which the second lien lenders hold security interests, at the facilities to be closed in connection with the operational restructuring plan.  If the First Lien Lenders as a class vote to reject the Plan, they will receive a promissory note of approximately $70 million secured by the property, plant and equipment at the Pearl River facility and the pledged collateral at the facilities to be closed in connection with the operational restructuring plan (without the related intellectual property and intangible assets on which the second lien lenders hold security interests);

• The General Unsecured Creditors will receive 10% of the proceeds from a Distribution Trust established under the Plan; and

• The Plan does not provide for any distributions on the company’s capital stock which will be cancelled upon confirmation of the Plan.

Wellman plans to emerge from bankruptcy by the end of the year.

Forward-Looking Statements

Statements contained in this release that are not historical facts, are forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. In addition, words such as will “believes,” “expects,” “anticipates,” and similar expressions are intended to identify forward-looking statements. These statements are made as of the date of this report based upon current expectations, and we undertake no obligation to update this information. These forward-looking statements involve certain risks and uncertainties, including, but not limited to: our substantial liquidity needs and liquidity pressure; our substantial indebtedness and its impact on our financial health and operations; our ability to obtain confirmation of the Plan including the requisite votes from stakeholders, risks associated with our indebtedness containing floating interest rate provisions and its effect on our financial health if rates rise significantly; our ability to obtain additional financing in the future; risks associated with claims not discharged in the Chapter 11 cases and their effect on our results of operations and profitability; risks associated with the transfers of our equity, or issuances of equity in connection with our reorganization and our ability to utilize our federal income tax net operating loss carry-forwards in the future; our dependence on our management and employees; the adverse effect of competition on our performance; reduced raw material margins; availability and cost of raw materials; reduced sales volumes; increase in costs; volumes of textile imports; prices and volumes of polyester staple fiber and PET resin imports; the financial condition of our customers; change in tax risks; environmental risks; natural disasters; regulatory changes; U.S., European, Asian and global economic conditions; work stoppages; levels of production capacity and profitable operations of assets; prices of competing products; acts of terrorism; and maintaining the operations of our existing production facilities. Actual results may differ materially from those expressed herein. Results of operations in any past period should not be considered indicative of results to be expected in future periods. Fluctuations in operating results may result in fluctuations in the price of our common stock.

For a more complete description of the prominent risks and uncertainties inherent in our business, see our filings with the Securities and Exchange Commission including our annual report on Form 10-K for the year ended December 31, 2007.

EX-99.2

Exhibit 99.2

Wellman, Inc.
Debtor-in-Possession
Analysis of Financial Statements for DIP Compliance
August 2008

An analysis of the August 2008 operating results of Wellman, Inc. and subsidiaries (also referred to as “Wellman”, “we”, “our” and “us”) are presented below. Wellman, Inc. and certain subsidiaries filed for bankruptcy protection under the provisions of Chapter 11 on February 22, 2008. References to pre-petition and post-petition amounts are with respect to the February 22, 2008 filing date. In addition, reference to full year 2008 operating results reflects pre-petition and post-petition results.

Consolidated Statement of Operations

The $0.8 million increase in gross profit (from a loss of $5.0 million in July to a loss of $4.2 million in August) was attributable to a decrease in the loss of the chemical-based segment of $1.6 million and an increase in the loss of recycled-based segment of $0.8 million. In the chemical-based segment, current raw material margin, which is the difference between the current month’s per unit selling price and the current month’s per unit purchase price of the raw materials, increased by approximately $6 million. This increase was substantially offset by the effect of the FIFO method of accounting for inventory, which resulted in approximately $5 million of higher raw material costs from prior months being charged against current month’s selling prices. Gross profit for the recycled-based segment decreased due primarily to a decision to sell raw materials that would generally be processed into finished goods to provide additional liquidity. We established a reserve of $1.3 million for this material. SG&A costs decreased by $0.1 million due to continued cost reduction activities. As a result of the above items, we reported an operating loss of $6.5 million in August, compared to a $7.4 million operating loss in July. Interest expense was $1.1 million in August and $1.2 million in July. Interest expense was calculated only on the amount borrowed under our Debtor-in-Possession Credit Agreement (the “DIP Facility”). Reorganization costs, which consisted primarily of legal fees related to the Chapter 11 filing, were $2.2 million in August, compared to $3.9 million in July. As a result, our net loss decreased to $9.8 million in August, compared to $12.5 million for July 2008.

Consolidated Balance Sheet

Our current assets decreased by approximately $10.8 million from July, primarily as a result of lower accounts receivable partly due to lower sales volume. The balance sheet at August 31, 2008, reflected $114.7 million in borrowings under the DIP Facility. This is $2.2 million lower than the comparable net amount in July.

Consolidated Statement of Cash Flows

Net cash flows from operations were $2.1 million in August, which is lower than the $20.7 million provided by operations in July. The cash flow in August related to the aforementioned decrease in receivables and the cash flow in July resulted primarily from our decreasing our accounts receivable and inventory. These cash flows resulted in debt repayments of $2.2 million

in August and $23.9 million for July and August. We paid $3.5 million and $2.0 million in August and July, respectively, for reorganization items.

Other

On September 15, 2008, Wellman, Inc. (the “Company”) and certain of its subsidiaries (collectively, the “Debtors”) entered into an amendment of its senior secured super-priority Debtor in possession credit agreement dated February 26, 2008 (the “Credit Agreement”) among the Company and certain of its domestic subsidiaries, as borrowers, Deutsche Bank Securities Inc., as sole lead arranger and bookrunner, Deutsche Bank Trust Company Americas, as administrative agent and collateral agent, and the lenders that from time to time become party thereto. The amendment made the following material modification to the Credit agreement which related to amounts available under the Credit Agreement and items reported in our financial statements:

1.	It reduces the maximum amount available under the Credit Agreement to $120 million on November 1, 2008.
2.	It eliminates any increase in the required Minimum Available Liquidity so that it remains at $20 million.
3.	It requires us to stop purchasing raw materials for our fibers and engineering resins businesses by October 15, 2008.
4.	It requires us to achieve the following EBITDA targets, considering only the operations of our PET Resins business (specifically excluding any effect of reorganization costs, costs related to the closure of our fibers and engineering resins businesses and FIFO):

	Minimum Monthly
Applicable Month	PET Resin EBITDA
September 2008	$	0
October 2008	$	2,000,000
November 2008	$	2,500,000
December 2008	$	3,000,000
January 2009	$	1,500,000

5.	It limits the amount of cash we can spend before December 1st relating to the closure of our fibers and engineering resins business to $14 million.
6.	It limits the amount we can include in our borrowing base for our fibers and engineering resins business to the following:

	Maximum Non-PET
	Resin Business
Period	Borrowing Base Component
September 30, 2008 to but excluding October 31, 2008	$	68,000,000
October 31, 2008 to but excluding November 30, 2008	$	41,200,000
November 30, 2008 to but excluding December 31, 2008	$	17,600,000
On or after December 31, 2008	$	0

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	August			July
	2008			2008
Net Sales	$	77.3		$	86.2
Cost of Sales		81.5			91.2
Gross Profit (Loss)		(4.2	)		(5.0	)
Selling, General and Administrative Expenses		2.3			2.4
Other (Income) Loss		0.0			0.0
Operating Income (Loss)		(6.5	)		(7.4	)
Interest Expense, Net*		1.1			1.2
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		(7.6	)		(8.6	)
Reorganization Items, Net		2.2			3.9
Earnings (Loss) from Continuing Operations Before Income Taxes		(9.8	)		(12.5	)
Income Tax Expense (Benefit)		0.0			0.0
Earnings (Loss) from Continuing Operations		(9.8	)		(12.5	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			0.0
Net Earnings (Loss)	$	(9.8	)	$	(12.5	)

* - Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.3 for August and $3.4 for July. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Consolidated Statements of Operations
(In Millions)

	For the Month Ended						For the Year-to-Date
	August						Period Ended August
	2008			2007			2008			2007
Net Sales	$	77.3		$	84.1		$	684.6		$	788.4
Cost of Sales		81.5			85.8			682.6			777.6
Gross Profit (Loss)		(4.2	)		(1.7	)		2.0			10.8
Selling, General and Administrative Expenses		2.3			3.6			21.5			29.1
Other (Income) Loss		0.0			(1.3	)		(0.2	)		(9.1	)
Operating Income (Loss)		(6.5	)		(4.0	)		(19.3	)		(9.2	)
Interest Expense, Net*		1.1			5.2			16.3			41.2
Earnings (Loss) from Continuing Operations Before Reorganization Items and Income Taxes		(7.6	)		(9.2	)		(35.6	)		(50.4	)
Reorganization Items, Net		2.2			0.0			20.3			0.0
Earnings (Loss) from Continuing Operations Before Income Taxes		(9.8	)		(9.2	)		(55.9	)		(50.4	)
Income Tax Expense (Benefit)		0.0			0.0			0.0			(0.1	)
Earnings (Loss) from Continuing Operations		(9.8	)		(9.2	)		(55.9	)		(50.3	)
Earnings (Loss) from Discontinued Operations, Net of Tax		0.0			0.0			0.0			(1.4	)
Net Earnings (Loss)	$	(9.8	)	$	(9.2	)	$	(55.9	)	$	(51.7	)

* - Interest expense subsequent to Feb 22, 2008 only reflects interest on the DIP financing. Interest on the compromised debt, per the debt agreements, was $3.3 for the month of August and $21.0 year-to-date after Feb 22, 2008. These amounts are not included in the financial statements.

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	August 31,			July 31,
	2008			2008
Assets
Current assets:
Cash and cash equivalents	$	1.1		$	1.4
Accounts receivable		119.2			130.1
Inventories		72.5			73.7
Prepaid expenses and other current assets		29.0			27.4
Current assets held for sale		—			—
Total current assets		221.8			232.6
Property, plant and equipment:
Land, buildings and improvements		90.4			90.4
Machinery and equipment		340.1			339.9
CIP		4.6			4.6
		435.1			434.9
Less accumulated depreciation		199.7			198.6
Net property, plant and equipment		235.4			236.3
Other assets		11.6			11.6
Noncurrent assets held for sale		—			—
Total Assets	$	468.8		$	480.5
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	2.6		$	0.5
Accrued liabilities		22.1			23.8
Debtor in possession credit agreement		114.7			116.9
Other debt		—			—
Current liabilities associated with assets held for sale		—			—
Total current liabilities		139.4			141.2
Liabilities subject to compromise		531.9			531.9
Long-term debt		—			—
Deferred income taxes and other noncurrent liabilities		37.7			37.8
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		709.0			710.9
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			185.7
Paid-in capital		248.5			248.5
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			—
Accumulated deficit		(629.8	)		(620.0	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(240.2	)		(230.4	)
	$	468.8		$	480.5

Wellman, Inc.
(Debtor-in-Possession)
Condensed Consolidated Balance Sheet
(In millions)

	August 31,			August 31,
	2008			2007
Assets
Current assets:
Cash and cash equivalents	$	1.1		$	—
Accounts receivable		119.2			152.9
Inventories		72.5			105.5
Prepaid expenses and other current assets		29.0			34.3
Current assets held for sale		—			—
Total current assets		221.8			292.7
Property, plant and equipment:
Land, buildings and improvements		90.4			91.6
Machinery and equipment		340.1			950.7
CIP		4.6			13.8
		435.1			1,056.1
Less accumulated depreciation		199.7			520.7
Net property, plant and equipment		235.4			535.4
Other assets		11.6			44.3
Noncurrent assets held for sale		—			—
Total Assets	$	468.8		$	872.4
Liabilities and Stockholders’ Deficit
Liabilities Not Subject to Compromise
Current Liabilities:
Accounts payable — trade	$	2.6		$	56.2
Accrued liabilities		22.1			25.1
Debtor in possession credit agreement		114.7			—
Other debt		—			0.3
Current liabilities associated with assets held for sale		—			—
Total current liabilities		139.4			81.6
Liabilities subject to compromise		531.9			—
Long-term debt		—			592.2
Deferred income taxes and other noncurrent liabilities		37.7			73.2
Noncurrent liabilities associated with assets held for sale		—			—
Total Liabilities		709.0			747.0
Stockholders’ Deficit:
Common stock		—			—
Preferred stock		185.7			178.0
Paid-in capital		248.5			248.2
Common stock warrants		4.9			4.9
Accumulated other comprehensive loss		—			0.1
Accumulated deficit		(629.8	)		(256.3	)
Less common stock in treasury		(49.5	)		(49.5	)
Total Stockholders Deficit		(240.2	)		125.4
	$	468.8		$	872.4

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
(in millions)

	August			July
	2008			2008
Cash flow from operating activities:
Net earnings (loss)	$	(9.8	)	$	(12.5	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0
Depreciation		1.1			1.0
Amortization		1.3			1.4
Amortization in interest expense		0.6			0.6
Deferred taxes on income		0.0			0.0
Reorganization Items		2.2			3.9
Payment of reorganization items		(3.5	)		(2.0	)
Gain on sale of assets		0.0			0.0
Changes in assets and liabilities:
Accounts receivable		10.9			20.9
Inventories		1.3			7.8
Prepaid expenses and other current assets		(3.4	)		(0.5	)
Other assets		(0.0	)		(0.1	)
Accounts payable and accrued liabilities		1.5			0.2
Other liabilities		0.0			(0.0	)
Other		(0.1	)		0.0
Net cash provided (used) by operating activities		2.1			20.7
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.2	)		(0.2	)
Proceeds from sale of assets		0.0			0.0
Net cash used by investing activities		(0.2	)		(0.2	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		(2.2	)		(21.7	)
Dividends paid on common stock		0.0			0.0
Debt and equity issuance costs		0.0			0.0
Net cash provided (used) by financing activities		(2.2	)		(21.7	)
Discontinued Operations:
Operating activities		0.0			0.0
Investing activities		0.0			0.0
Financing activities		0.0			0.0
Net cash provided (used) by discontinued operations		0.0			0.0
Increase (decrease) in cash and cash equivalents		(0.3	)		(1.2	)
Cash and cash equivalents at beginning of period		1.4			2.6
Cash and cash equivalents at end of period	$	1.1		$	1.4

Wellman, Inc.
(Debtor-in-Possession)
Simplified Statement of Cash Flows
(in millions)

	For the Month						For the YTD Period
	Ended August						Ended August
	2008			2007			2008			2007
Cash flow from operating activities:
Net earnings (loss)	$	(9.8	)	$	(9.2	)	$	(55.9	)	$	(51.7	)
Adjustments to reconcile net earnings (loss) to net cash used in operating activities:
Loss from discontinued operations, net of tax		0.0			0.0			0.0			1.4
Depreciation		1.1			2.8			8.9			29.1
Amortization		1.3			1.5			11.0			11.3
Amortization in interest expense		0.6			0.5			2.8			2.9
Deferred taxes on income		0.0			0.0			0.1			1.0
Johnsonville fibers disposal costs		0.0			0.0			0.0			(1.0	)
Payments made against Jville fiber disposal costs		0.0			0.0			0.0			(2.2	)
Reorganization Items		2.2			0.0			20.3			0.0
Payment of reorganization items		(3.5	)		0.0			(15.4	)		0.0
Gain on sale of assets		0.0			0.0			(0.2	)		0.0
Changes in assets and liabilities:
Accounts receivable		10.9			10.3			9.8			8.4
Inventories		1.3			9.0			24.5			8.8
Prepaid expenses and other current assets		(3.4	)		(0.8	)		(11.0	)		0.3
Other assets		0.0			(0.1	)		(1.2	)		0.5
Accounts payable and accrued liabilities		1.5			(17.1	)		6.4			(33.7	)
Other liabilities		0.0			0.0			(1.4	)		(3.2	)
Other		(0.1	)		0.4			(0.2	)		1.0
Net cash provided (used) by operating activities		2.1			(2.7	)		(1.5	)		(27.1	)
Cash flows from investing activities:
Additions to property, plant and equipment (net)		(0.2	)		(1.0	)		(2.6	)		(7.4	)
Proceeds from sale of assets		0.0			0.0			0.3			0.0
Net cash used by investing activities		(0.2	)		(1.0	)		(2.3	)		(7.4	)
Cash flows from financing activities:
Borrowings (Repayments) of long-term debt		(2.2	)		3.7			9.6			15.9
Dividends paid on common stock		0.0			0.0			0.0			(1.3	)
Debt and equity issuance costs		0.0			0.0			(4.7	)		0.0
Net cash provided (used) by financing activities		(2.2	)		3.7			4.9			14.6
Discontinued Operations:
Operating activities		0.0			0.0			0.0			34.2
Investing activities		0.0			0.0			0.0			(10.4	)
Financing activities		0.0			0.0			0.0			(3.9	)
Net cash provided (used) by discontinued operations		0.0			0.0			0.0			19.9
Increase (decrease) in cash and cash equivalents		(0.3	)		0.0			1.1			0.0
Cash and cash equivalents at beginning of period		1.4			0.0			0.0			0.0
Cash and cash equivalents at end of period	$	1.1		$	0.0		$	1.1		$	0.0

Wellman, Inc.
EBITDAR, as defined

     We have provided a non-GAAP measure, “EBITDAR, as defined,” because our DIP Credit Agreement uses this measurement as a key component. In accordance with our DIP Credit Agreement, we must maintain a minimum cumulative EBITDAR (cumulative monthly commencing March 1, 2008, and rolling into trailing twelve months) tested as of the last day of the applicable month, with a report due on the fifteenth day after the end of each month, commencing with the first full month following the Petition Date. We believe it is also an important measurement tool for (1) financial institutions that provide us with capital; (2) investors; and (3) our Board and management. In each instance, we used EBITDAR, as defined because it excluded items that are not expected to impact the long-term cash flow of the businesses and are not an indication of our ongoing operating performance. In addition, EBITDAR, as defined is a measure frequently used to value an enterprise and to enable investors to analyze the efficiency of our operations and to compare and/or rank use with other companies of differing capital structures. Our Board of Directors, CEO (our chief operating decision maker), and our senior management EBITDAR, as defined to evaluate the operating performance of our segments and determine incentive compensation for employees throughout the organization. EBITDAR, as defined, under the DIP Credit Agreement is calculated by adding Earnings (loss) from continuing operations, income tax expense (benefit), interest expense, non-cash charges and non-recurring fees, cash charges, and other cash expenses made or incurred in connection with entering into the DIP Credit Agreement.

     The following table reconciles Loss from continuing operations to EBITDAR, as defined for each month and the eight months ending August 31, 2008.

																									Year-to-
	January			February			March			April			May			June			July			August			Date
	2008			2008			2008			2008			2008			2008			2008			2008			August 2008
Loss from Continuing Operations	$	(5,038	)	$	(15,276	)	$	(2,388	)	$	(4,670	)	$	(1,083	)	$	(5,138	)	$	(12,452	)	$	(9,875	)	$	(55,920	)
Income Tax Expense (Benefit)		—			—			—			—			—			—			—			—			—
Interest Expense, Net		4,675			5,505			925			903			999			1,065			1,166			1,084			16,322
Depreciation & Amortization		2,530			2,441			2,493			2,615			2,393			2,551			2,430			2,436			19,889
Permitted Adjustments:
Reorganization Items		—			3,349			2,798			3,098			2,583			2,390			3,877			2,244			20,340
Inventory Reserves		310			802			27			1,130			—			27			3,530			1,666			7,492
Claims Accrual Non-cash		—			—			—			—			353			—			—			—			353
Uncollectible Accounts		144			—			65			—			—			599			62			—			870
Hurricane Katrina Costs		—			63			—			—			—			—			—			—			63
Sale of Jville Assets		—			—			48			(232	)		—			19			—			—			(165	)
Environmental Reserve		—			—			—			—			—			615			—			—			615
Total permitted adjustments		454			4,214			2,938			3,996			2,936			3,650			7,469			3,910			29,568
EBITDAR, as defined	$	2,621		$	(3,116	)	$	3,968		$	2,844		$	5,245		$	2,128		$	(1,387	)	$	(2,445	)	$	9,859

     Despite the importance of EBITDAR, as defined, we recognize that this non-GAAP financial measure does not replace the presentation of our GAAP financial results and are not intended to represent cash flows or an alternative to net earnings (loss). The EBITDAR, as defined information we provide is simply supplemental information and an additional measurement tool to assist our management and certain investors in analyzing our performance.

In re Wellman, Inc., et al.
Case No. 08-10595 (SMB)
Reporting Period: August 1 — August 31, 2008
Cash Disbursements by Petitioning Entity

			August 1 - August 31,
Petitioning Entities	Case Number:		2008
Wellman, Inc.		081-08-10595	$	85,531,412
Fiber Industries, Inc.		081-08-10607		—
Wellman of Mississippi, Inc.		081-08-10605		—
PTA Resources LLC		081-08-10596		—
Prince, Inc.		081-08-10604		34
ALG, Inc.		081-08-10599		34
Wellman Fibres Ltd.		081-08-10598		—
MRF, Inc.		081-08-10600		—
Warehouse Associates Inc.		081-08-10601		—
MED Resins, Inc.		081-08-10602		—
Carpet Recycling of Georgia Inc.		081-08-10603		—
Josdav, Inc.		081-08-10606		—
			$	85,531,480