EXHIBIT 10.2
Execution Copy
WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED,
a corporation incorporated under the laws of the Province of
Ontario
- and -
THE WOODBRIDGE COMPANY LIMITED, a corporation
incorporated under the laws of the Province of Ontario
- and -
ABITIBI CONSOLIDATED SALES CORPORATION, a
corporation incorporated under the laws of the State of Delaware
- and -
ABITIBIBOWATER INC., a corporation incorporated under the
laws of the State of Delaware (solely for the purpose of the
provisions stated herein)
- and -
AUGUSTA NEWSPRINT COMPANY, a Georgia partnership
- and-
AUGUSTA NEWSPRINT INC., a corporation incorporated
under the laws of the State of Delaware
 
STOCK PURCHASE AGREEMENT
 
December 23, 2010

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TABLE OF CONTENTS

         
ARTICLE 1
       
DEFINITIONS AND SCHEDULES
    2  
1.1 Definitions
    2  
1.2 Schedules
    11  
 
       
ARTICLE 2
       
PURCHASE AND SALE
    12  
2.1 Purchase and Sale
    12  
2.2 Purchase Price
    12  
2.3 Payment Instructions
    13  
2.4 Closing
    13  
2.5 Distribution
    13  
2.6 Intercompany Payables and Receivables
    13  
2.7 Redemption of ANI Preferred Stock
    13  
2.8 Assignment of Bankruptcy Claims
    13  
2.9 Assignment of Administrative Claim
    14  
2.10 Wood Fraud Claim Payment
    14  
2.11 Distribution Adjustment
    15  
2.12 Adjustment Payment
    16  
2.13 Withholding Rights
    16  
 
       
ARTICLE 3
       
CONDITIONS TO CLOSING
    16  
3.1 Mutual Conditions
    16  
3.2 Additional Conditions to ACSC and AbitibiBowater’s Obligations
    16  
3.3 Additional Conditions to Woodbridge’s Obligations
    17  
3.4 Unsatisfied Closing Conditions
    17  
3.5 Releases
    18  
 
       
ARTICLE 4
       
COVENANTS
    18  
4.1 Further Actions
    18  
4.2 Settlement Motion
    19  
4.3 Conduct of Business
    19  
4.4 Bank Account
    20  
4.5 WIHSA Share Transfer
    20  
4.6 Notice of Withdrawal of Appeal
    20  
4.7 Resignation of Directors and Officers of ANI
    20  

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TABLE OF CONTENTS

         
4.8 LLC Conversion
    20  
 
       
ARTICLE 5
       
REPRESENTATIONS AND WARRANTIES
    21  
5.1 ACSC and AbitibiBowater Representations and Warranties
    21  
5.2 Woodbridge and Woodbridge Parent Representations and Warranties
    23  
5.3 Woodbridge Representations and Warranties Regarding ANI
    25  
5.4 Survival of Representations and Warranties
    30  
 
       
ARTICLE 6
       
TAX MATTERS
    30  
6.1 ANI Pre-Closing Tax Returns
    30  
6.2 ANI Straddle Period Returns
    31  
6.3 Cooperation
    31  
6.4 Indemnified Taxes
    32  
6.5 Amended Tax Returns
    32  
6.6 Pre-Closing Period Tax Refund
    33  
6.7 Audits and Proceedings
    33  
6.8 Termination of Tax Sharing Agreements
    34  
6.9 Taxes and Fees
    34  
6.10 Tax Attributes
    34  
 
       
ARTICLE 7
       
DISPUTE RESOLUTION
    34  
7.1 Commercial Arbitration
    34  
7.2 Proposed Adjustment Disputes
    35  
 
       
ARTICLE 8
       
INDEMNIFICATION
    35  
8.1 Indemnification by Woodbridge and Woodbridge Parent
    35  
8.2 Indemnification by ACSC and AbitibiBowater
    36  
8.3 Indemnification by ACSC and AbitibiBowater of Woodbridge Indemnitees
    36  
8.4 Indemnification by Woodbridge and Woodbridge Parent of Abitibi Indemnitees
    37  
8.5 Resolution of Indemnification Claims
    37  
8.6 Indemnification for Tax Contests
    39  
8.7 Limitations on Liability
    39  
8.8 Indemnification Payment
    39  

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TABLE OF CONTENTS

         
ARTICLE 9
       
GENERAL
    39  
9.1 Assignment
    39  
9.2 Notices
    39  
9.3 Governing Law
    42  
9.4 Time of Performance
    42  
9.5 Entire Agreement
    42  
9.6 Amendment
    43  
9.7 Time of the Essence
    43  
9.8 Waiver
    43  
9.9 Further Assurances
    43  
9.10 Costs and Expenses
    43  
9.11 Currency
    43  
9.12 Confidentiality
    43  
9.13 Counterparts
    43  
9.14 Sections and Headings
    44  
9.15 Successors and Assigns
    44  
9.16 Availability of Equitable Relief; Specific Performance
    44  

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          STOCK PURCHASE AGREEMENT made as of the 23rd day of December, 2010
BETWEEN:
WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED, a corporation incorporated under the
laws of the Province of Ontario
- and -
THE WOODBRIDGE COMPANY LIMITED, a corporation incorporated under the laws of the
Province of Ontario
- and -
ABITIBI CONSOLIDATED SALES CORPORATION, a corporation incorporated under the
laws of the State of Delaware
- and -
ABITIBI BOWATER INC., a corporation incorporated under the laws of the State of
Delaware
- and -
AUGUSTA NEWSPRINT COMPANY, a Georgia partnership
- and-
AUGUSTA NEWSPRINT INC., a corporation incorporated under the laws of the State
of Delaware
     WHEREAS Woodbridge owns (beneficially and of record) all of the outstanding
ANI Preferred Stock;
     AND WHEREAS WIHSA owns (beneficially and of record) all of the outstanding
ANI Common Stock;
     AND WHEREAS, prior to the Closing, Woodbridge Parent will cause WIHSA to
sell, transfer and assign all of its rights, title and interest in all of the
outstanding ANI Common Stock to Woodbridge;
     AND WHEREAS as of the Closing, Woodbridge will own all of the outstanding
ANI Preferred Stock and ANI Common Stock;

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     AND WHEREAS ANI owns a 47.5% interest in the Partnership and ACSC owns a
52.5% interest in the Partnership;
     AND WHEREAS Woodbridge Parent is the indirect parent company of Woodbridge
and AbitibiBowater is the indirect parent company of ACSC;
     AND WHEREAS the Debtors have commenced the Bankruptcy Proceedings and
Canadian Debtors have commenced the CCAA Proceedings;
     AND WHEREAS Woodbridge wishes to sell, transfer and assign, and the
Partnership wishes to purchase, the Purchase Stock, on and subject to the terms
and conditions set forth in this Agreement;
     AND WHEREAS in connection with the Bankruptcy Proceedings, AbitibiBowater
has filed the Settlement Motion pursuant to which AbitibiBowater and ACSC is
seeking the approval of the Bankruptcy Court of (i) the terms of settlement of
various disputes concerning (A) the rejection of the Call Agreement and (B) the
motion to compel rejection of the Partnership Agreement, pursuant to Rule 9019
of the Federal Rules of Bankruptcy Procedure (other than the Woodbridge Claims),
and (ii) this Agreement and the transactions contemplated hereby, pursuant to
Sections 363 and 105 of the Bankruptcy Code, and authority for the applicable
Debtors to perform all of the obligations under this Agreement and all documents
and agreements entered into in connection herewith;
     NOW THEREFORE for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) the parties hereto agree as
follows:
ARTICLE 1
DEFINITIONS AND SCHEDULES
1.1 Definitions. Wherever used in this Agreement, unless the context otherwise
requires, the following terms have the following meanings, respectively:
“AbitibiBowater” means AbitibiBowater Inc., a corporation incorporated under the
laws of the State of Delaware, and references to AbitibiBowater shall include
any successor by operation of law to AbitibiBowater Inc.
“AbitibiBowater Release” means the release in the form attached hereto as
Schedule C.
“Accounting Firm” has the meaning set forth in Section 2.11(b).
“Action or Proceeding” means any action, suit, hearing, proceeding, arbitration
or Governmental or Regulatory Authority investigation or audit, whether civil,
criminal, administrative or otherwise. For purposes of this Agreement, “pending”
Actions and Proceedings include written demands, claims, notices of violations
or demand letters.

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“ACSC” means Abitibi Consolidated Sales Corporation, a corporation incorporated
under the laws of the State of Delaware, and references to ACSC shall include
any successor by operation of law to Abitibi Consolidated Sales Corporation.
“Adjustment Payment” has the meaning set forth in Section 2.12.
“Administrative Claim” means the allowed administrative claim held by the
Partnership against ACSC in the amount of $9,246,580.00 pursuant to the Agreed
Order With Respect to Motion of Augusta Newsprint Company for Allowance of
Administrative Expense Claim Pursuant to 11 U.S.C. § 503(b)(9) [D.I. 1457]
entered by the Bankruptcy Court on December 16, 2009.
“Administrative Claim Assignment” has the meaning set forth in Section 2.9.
“Agreement”, “this Agreement”, “the Agreement”, “hereto”, “hereof”, “herein”,
“hereby”, “hereunder”, and similar expressions mean and refer to this Agreement,
including the recitals, as amended, supplemented, restated or replaced from time
to time (including the Schedules hereto, unless indicated to the contrary by the
text), and the expressions “Article”, “Section” and “Schedule” followed by a
number or letter mean and refer to the specified article, section or schedule of
this Agreement.
“ANI” means Augusta Newsprint Inc., a corporation incorporated under the laws of
the State of Delaware, and references to ANI shall include any successor by
operation of law to Augusta Newsprint Inc.
“ANI Class A Preferred Stock” means the outstanding Class A preferred stock, par
value $0.01 per share, in the share capital of ANI.
“ANI Class B Preferred Stock” means the outstanding Class B preferred stock, par
value $0.01 per share, in the share capital of ANI.
“ANI Common Stock” means the outstanding common stock, par value $0.01 per
share, in the share capital of ANI.
“ANI Financial Statements” has the meaning set forth in Section 5.3(i).
“ANI Preferred Stock” means the ANI Class A Preferred Stock and the ANI Class B
Preferred Stock.
“ANI Redemption Amount” has the meaning set forth in Section 2.7.
“Approval Date” means the date on which the Settlement Order is approved by the
Bankruptcy Court.
“Assets and Properties” of any Person means all assets and properties of every
kind, nature, character and description (whether real, personal or mixed,
whether tangible or intangible, whether absolute, accrued, contingent, fixed or
otherwise and wherever situated), operated, owned or leased by such Person,
including cash, cash equivalents,

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Investment Assets, accounts and notes receivable, chattel paper, documents,
instruments, general intangibles, real estate, equipment, inventory, goods and
intellectual property.
“Bankruptcy Claims” means the following Claims made, filed, scheduled or
otherwise asserted by or on behalf of the Partnership in the Bankruptcy
Proceedings: Claim number 3612 made by the Partnership in the Bankruptcy
Proceedings of Alabama River Newsprint Company, Case no. 09-11301, in the amount
of $1,699.49; Claim number 3630 made by the Partnership in the Bankruptcy
Proceedings of Abitibi-Consolidated Corporation, Case no. 09-11302, in the
amount of $1,848.01; Claim numbers 3631 and 3632 made by the Partnership in the
Bankruptcy Proceedings of AbitibiBowater, Inc., Case no. 09-11296, in the
amounts of $25,899.02 and $85,247.34, respectively; the Claim listed on
Schedule F of the Schedules of Assets and Liabilities of Alabama River Newsprint
Company, Case no. 09-11301, in the amount of $2,203.49; and Claim number 10005
made by the Partnership in the Bankruptcy Proceedings of Abitibi-Consolidated
Corporation, Case no. 09-11302, in the amount of $37,458,605.69.
“Bankruptcy Claims Assignment” has the meaning set forth in Section 2.8.
“Bankruptcy Code” means title 11 of the United States Code, as amended from time
to time.
“Bankruptcy Court” means the United States Bankruptcy Court for the District of
Delaware, or such other court that exercises jurisdiction over the Bankruptcy
Proceedings.
“Bankruptcy Proceedings” means the cases filed in the Bankruptcy Court under
chapter 11 of the Bankruptcy Code by AbitibiBowater and its affiliated debtors
and debtors-in-possession, jointly administered as Case No. 09-11296.
“Business Day” means a day of the year, other than a Saturday or a Sunday, on
which banks are generally open for business in each of Montreal, Quebec,
Toronto, Ontario, and New York, New York.
“Call Agreement” means the Amended and Restated Call Agreement, dated as of
July 1, 2004, among Woodbridge, WIHSA, Woodbridge Parent, ACSC and
Abitibi-Consolidated Inc., as amended or supplemented pursuant to amendments
made as of May 27, 2005 and February 23, 2007, respectively.
“Canadian Court” means the Superior Court, Commercial Division, for the Judicial
District of Montreal, Canada.
“Canadian Debtors” means, collectively, AbitibiBowater and those of its
subsidiaries and affiliates who applied for protection from creditors in the
CCAA Proceedings.
“CCAA” means Canada’s Companies’ Creditors Arrangement Act, R.S.C. 1985, c.
C-36, as amended from time to time.

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“CCAA Proceedings” means the proceedings for provisional relief in support of
the Bankruptcy Proceedings commenced in the Canadian Court under section 18.6 of
the CCAA by AbitibiBowater and certain of its subsidiaries.
“Claim Notice” has the meaning set forth in Section 8.5(a).
“Claim” has the meaning ascribed to such term in Section 1.01(5) of the
Bankruptcy Code.
“Closing” means the consummation of the purchase and sale of the Purchase Stock
pursuant to this Agreement.
“Closing Date” means the first fourteenth day of a month following the Approval
Date, or such other date as the parties shall agree in writing, provided that,
if the fourteenth day of the month is not a Business Day, the Closing Date shall
be the first Business Day immediately preceding the fourteenth day.
Notwithstanding the foregoing, in no event shall the Closing Date be earlier
than January 14, 2011.
“Closing Date Cash Statement” has the meaning set forth in Section 2.11(a).
“Closing Time” means 10:00 a.m. (New York time) on the Closing Date.
“Code” means the U.S. Internal Revenue Code of 1986, as amended, and the
regulations promulgated thereunder, and any anomalous provisions of state law,
and any successor legislation to the foregoing.
“Commercial Arbitration Rules” has the meaning set forth in Section 7.1.
“Conditions” means the presence of any Regulated Material in, on, under, above,
or emanating from the real property on which the mill operated by the
Partnership is situated, where the presence of such Regulated Material does not
arise from or pertain to Operations.
“Contract” means any agreement, instrument, lease, deed, evidence of
indebtedness, mortgage, indenture, security agreement or other contract or
understanding (whether written or oral) and “Contractual” means arising under
any such Contract.
“Debtors” means, collectively, AbitibiBowater and its affiliated debtors and
debtors-in-possession in the Bankruptcy Proceedings.
“Encumbrance” means any encumbrance of any kind whatever and includes a security
interest, mortgage, lien, hypothec, pledge, hypothecation, assignment, charge,
trust or deemed trust, right of set-off, adverse claim, or any other Option,
right or claim of others of any kind whatever, whether Contractual, statutory or
otherwise arising.
“Environmental Damages” means any Loss arising from any investigation, notice,
violation, demand, allegation, suit, proceeding, order or claim made by any
third party or Governmental or Regulatory Authority that arises from or pertains
to any Environmental

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Law or the Release or threatened Release of any Regulated Material, including
claims for personal injury, emotional distress, medical monitoring, property
damage, trespass, nuisance, negligence, strict liability, diminution in property
value, compensatory damages, natural resource damages, investigation or
Remediation costs.
“Environmental Law” means any Law relating to environmental health and safety
matters, pollution or protection of the environment (including ambient air,
surface water, groundwater, land surface or subsurface strata), investigation or
Remediation of contaminated sites or the protection of human health and safety
from environmental hazards, including any Law or permit relating to Releases or
threatened Releases of Regulated Materials, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport, handling or Remediation of Regulated Materials, including the
Comprehensive Environmental Response, Compensation and Liability Act, the
Resource Conservation and Recovery Act, the Clean Air Act, the Clean Water Act,
and state Laws, whether or not they embody a delegation of authority under
federal Laws.
“Equity Holder” means (i) in the case of a corporation, a stockholder, (ii) in
the case of a general or limited partnership, a partner, (iii) in the case of a
limited liability company, a member, and (iv) in the case of any other Person
other than an individual, a holder of comparable equity interests therein.
“Equity Interest” means (i) in the case of a corporation, shares of stock,
(ii) in the case of a general or limited partnership, partnership units or
interests, (iii) in the case of a limited liability company, membership units or
interests, and (iv) in the case of any other Person other than an individual,
the comparable equity interests therein.

    “ERISA” means the Employee Retirement Income Security Act of 1974.

    “ERISA Affiliate” means, with respect to any Person, any other Person that
is or may be treated as a single employer together with such first Person within
the meaning of Section 4001 of ERISA or Section 414(b), (c) (m) or (o) of the
Code.

“ERISA Affiliate Liability” means any actual or contingent obligation, liability
or expense of ANI or any of its subsidiaries to, under or in respect of any
employee benefit plan under any statute or regulation that imposes liability on
a so-called “controlled group” basis (as used in Sections 52 and 414 of the
Code) including by reason of ANI’s affiliation with any of its ERISA Affiliates
or ACSC being deemed a successor to any ERISA Affiliate of Woodbridge or its
subsidiaries.
“Estimated Closing Date Cash Statement” has the meaning set forth in
Section 2.5.
“Estimated Partnership Cash” has the meaning set forth in Section 2.5.
“Final Order” means a final and non-appealable order of the Bankruptcy Court.
“Final Partnership Cash Amount” has the meaning set forth in Section 2.11(b).

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“GAAP” means United States generally accepted accounting principles,
consistently applied throughout the specified period.
“Governmental or Regulatory Authority” means any court, tribunal, arbitrator,
board, bureau, department, authority, agency, commission, official or other
instrumentality of the United States, any foreign country or any domestic or
foreign state, county, city or other political subdivision.
“HSR” means the Hart-Scott-Rodino Antitrusts Improvement Act of 1976, as
amended.
“Indemnified Party” and “Indemnifying Party” have the respective meanings set
forth in Section 8.5(a).
“Indemnified Taxes” has the meaning set forth in Section 6.4.
“Indemnity Notice” has the meaning set forth in Section 8.5(c).
“Interim Period” has the meaning set forth in Section 6.4.
“Investment Assets” means all debentures, notes and other evidences of
indebtedness, Equity Interests (including Options for Equity Interests or other
securities), interests in joint ventures, mortgage loans and other investment or
portfolio assets owned beneficially, whether or not of record.
“know” or “knowledge” means, with respect to any Person, the actual knowledge of
such Person or, if not a natural Person, its Managing Persons, in each case
after reasonable inquiry.
“Laws” means all laws (including common law), statutes, rules (including rules
of relevant stock exchanges or similar self-regulatory organizations),
regulations, ordinances, and other pronouncements having the effect of law,
policies and directives of the United States, any foreign country or any
domestic or foreign state, county, city or other political subdivision or of any
Governmental or Regulatory Authority.
“Liabilities” means all indebtedness, obligations and other liabilities of a
Person (whether absolute, accrued, contingent, known or unknown, fixed or
otherwise, or whether due or to become due).
“Licenses” means all identification numbers, licenses, permits, certificates of
authority, authorizations, approvals, registrations, franchises and similar
consents required by any Laws administered by any Governmental or Regulatory
Authority.
“LLC Conversion” has the meaning set forth in Section 4.8.
“Loss” means any and all damages, fines, fees, penalties, deficiencies, losses
and reasonable expenses, including reasonable fees and expenses of attorneys,
accountants and other experts or other expenses of litigation or other
proceedings or of any claim,

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default or assessment (such fees and expenses to include all fees and expenses
incurred in connection with the defense of any third party claims).
“Managing Persons” means, to the extent applicable, (i) in the case of a
corporation, its directors and Senior Officers, (ii) in the case of a general or
limited partnership, its general partners and their respective Senior Officers,
(iii) in the case of a limited liability company, its managers or managing
members, and any Senior Officers, and (iv) in the case of any other Person other
than an individual, Persons holding like positions or performing like functions.
“Measurement Time” means 11:59 p.m. as of the day immediately prior to the
Closing Date.
“Notice” has the meaning set forth in Section 9.2.
“Operations” means any conduct or activity of the Partnership.
“Option” with respect to any Person means any security, right, subscription,
warrant, option, “phantom” stock right, stock appreciation right, convertible
security or other Contract that gives the right to (i) purchase or otherwise
receive (including pursuant to a right of first refusal or offer) or be issued
any Equity Interest of such Person or any security of any kind convertible into
or exchangeable or exercisable for any Equity Interest of such Person, or
(ii) receive any benefits or rights similar to any rights enjoyed by or accruing
to the holder of Equity Interests of such Person, including any rights to
participate in the equity and income or in the election of Managing Persons.
“Order” means any writ, judgment, decree, injunction or similar order of any
Governmental or Regulatory Authority (in each such case whether preliminary or
final).
“Organizational Documents” means with respect to any Person that is a
corporation, its articles or certificate of incorporation or memorandum and
articles of association, as the case may be, and bylaws; with respect to any
Person that is a partnership, its certificate of partnership and partnership
agreement; with respect to any Person that is a limited liability company, its
certificate of formation and limited liability company or operating agreement;
and, with respect to any other Person other than an individual, its comparable
organizational documents.
“Partnership” means Augusta Newsprint Company, a Georgia partnership,
established pursuant to the Partnership Agreement, and references to the
Partnership shall include any successor by operation of law to Augusta Newsprint
Company, or any successor entity following the LLC Conversion.
“Partnership Agreement” means the partnership agreement establishing and
governing the Partnership, dated as of August 17, 1981, as amended or
supplemented from time to time.
“Partnership Cash” means the cash balance of the Partnership as of the
Measurement Time, it being understood and agreed that it is anticipated that
payment for newsprint

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purchased by ACSC from the Partnership for the preceding month will be received
on the first or second Business Day following the day on which the Measurement
Time occurs and such amount shall not be included in the determination of
Partnership Cash at the Measurement Time.
“Partnership Interest” means the 47.5% interest in the Partnership held by ANI.
“Person” means any individual, partnership, limited partnership, joint venture,
syndicate, sole proprietorship, company or corporation with or without share
capital, unincorporated association, trust, trustee, executor, administrator or
other legal personal representative, or Governmental or Regulatory Authority,
however designated or constituted.
“Pre-Closing Periods” has the meaning set forth in Section 6.4.
“Proposed Final Partnership Cash Amount” has the meaning set forth in
Section 2.11(a).
“Purchase Price” has the meaning set forth in Section 2.2, adjusted pursuant
thereto and pursuant to Section 2.11.
“Purchase Stock” means, collectively, the ANI Common Stock and the ANI Preferred
Stock.
“Regulated Material” means any contaminants, chemicals, wastes, petroleum,
petroleum hydrocarbons, petroleum products and compounds containing them
(including kerosene, fuel oil, gasoline, diesel fuel, and fuel additives),
explosives, flammable materials, radioactive materials, polychlorinated
biphenyls, lead and lead-based paint, asbestos or asbestos-containing materials,
underground or aboveground storage tanks (whether empty or containing any
substance), ozone depleting substances, and any and all other substances or
contaminants (whether solid, liquid or gas) now or in the future regulated by
any Environmental Law.
“Release” means any release, deposit, discharge, emission, leaking, leaching,
spilling, seeping, migrating, injecting, pumping, pouring, emptying, escaping,
dumping, disposal, or other movement of any Regulated Material.
“Remediation” means any activity, response, removal or corrective action to
cleanup, decontaminate, contain or otherwise address any Regulated Material, any
action to prevent, cure or mitigate any Release or threatened Release, any
action to comply with any Environmental Law, and any inspection, investigation,
study, monitoring, assessment, audit, sampling, testing, analysis or other
evaluation relating to any Regulated Material.
“Secured Promissory Note” has the meaning set forth in Section 2.2.
“Security Documents” means all documents listed in Section B(II) of Schedule D.

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“Senior Officer” means, in respect of any party, any senior officer of such
party, which shall include the president, treasurer, secretary and any other
senior or executive vice-president thereof (or any comparable authorized
person).
“Settlement Date” has the meaning set forth in Section 2.11(c).
“Settlement Motion” has the meaning set forth in Section 4.2.
“Settlement Order” means, collectively, one or more Final Orders of the
Bankruptcy Court approving (i) the settlement of various disputes concerning
(A) the rejection of the Call Agreement and (B) the motion to compel rejection
of the Partnership Agreement, pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure (other than the Woodbridge Claims), and (ii) this
Agreement, and the transactions contemplated hereby, pursuant to Sections 363
and 105 of the Bankruptcy Code, and authorizing the applicable Debtors to
perform all of the obligations under this Agreement, and all documents and
agreements entered into in connection herewith, which Final Orders shall be in
form and substance reasonably acceptable to Woodbridge.
“Tax” or “Taxes” means all federal, state, local or foreign net or gross income,
gross receipts, net proceeds, sales, use, ad valorem, value added, franchise,
bank interests, withholding, payroll, employment, excise, sales, use, property,
alternative or add-on minimum, transfer, environmental or other taxes,
assessments, duties, fees, levies, customs or other governmental charges of any
nature whatever, whether disputed or not, together with any interest, penalties,
additions to tax or additional amounts with respect thereto.
“Taxing Authority” means any Governmental or Regulatory Authority having or
purporting to exercise jurisdiction with respect to any Tax.
“Tax Returns” means any returns, reports or statements (including any
information returns, claims for refunds, amended returns or declarations of
estimated Tax) required to be filed with respect to a particular Tax and any
schedules or attachment thereto.
“Third Party Claim” has the meaning set forth in Section 8.5(a).
“TNI” means Thomson Newsprint Inc., a corporation incorporated under the laws of
the State of Florida, and references to TNI shall include any successor by
operation of law to Thomson Newsprint Inc.
“Transmission” has the meaning set forth in Section 9.2.
“WIHSA” means Woodbridge International Holdings S.A., and references to WIHSA
shall include any successor by operation of law to Woodbridge International
Holdings S.A..
“WIHSA Transfer Agreement” means the agreement substantially in the form of
Schedule F hereto, to be entered into between WIHSA and Woodbridge pursuant to

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which, prior to the Closing, WIHSA will sell, transfer and assign to Woodbridge
all of the outstanding ANI Common Stock.
“Wood Fraud Claim” means claim number 005-112442 held by AbitibiBowater against
Chartis Insurance Company of Canada, under policy number 138-21-37, in the net
amount of Canadian $1,469,282.04.
“Wood Fraud Claim Payment” means amounts received by the Partnership from time
to time in satisfaction of the Wood Fraud Claim.
“Woodbridge” means Woodbridge International Holdings Limited, and references to
Woodbridge shall include any successor by operation of law to Woodbridge
International Holdings Limited.
“Woodbridge Claims” has the meaning set forth in Section 4.2.
“Woodbridge Indemnitees” has the meaning set forth in Section 8.3.
“Woodbridge Parent” means The Woodbridge Company Limited, and references to
Woodbridge Parent include any successor by operation of law to The Woodbridge
Company Limited.
“Woodbridge Release” means the release in the form attached hereto as
Schedule B.
     Unless the context of this Agreement otherwise requires, (i) words of any
gender include each other gender; (ii) words using the singular or plural number
also include the plural or singular number, respectively; and (iii) the phrases
“include” and “including” shall mean “include without limitation” and “including
without limitation”. All accounting terms used herein and not expressly defined
herein shall have the meanings given to them under GAAP.
1.2 Schedules. The following Schedules and Exhibits are attached to and
incorporated into this Agreement:

         
Schedule A
  —   Form of Secured Promissory Note
Schedule B
  —   Form of Woodbridge Release
Schedule C
  —   Form of AbitibiBowater Release
Schedule D
  —   Closing Deliveries
Schedule E
  —   Form of Settlement Motion
Schedule F
  —   Form of WIHSA Transfer Agreement
Schedule G
  —   Form of Assignment and Assumption of Bankruptcy Claims Agreement
Schedule H
  —   Form of Assignment and Assumption of Administrative Claim Agreement
Schedule I
  —   Known Environmental Conditions

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ARTICLE 2
PURCHASE AND SALE
2.1 Purchase and Sale. Subject to the terms of this Agreement, at the Closing,
Woodbridge shall sell, transfer and assign and the Partnership shall purchase,
the Purchase Stock, constituting all of the issued and outstanding stock in the
share capital of ANI, free and clear of all Encumbrances.
2.2 Purchase Price. The Purchase Price shall consist of the following:

  (a)   An amount in cash equal to the lesser of (i) fifteen million dollars
($15,000,000) and (ii) 52.5% of the Estimated Partnership Cash, payable by the
Partnership at the Closing; plus     (b)   a secured, first priority promissory
note issued, at the Closing, by the Partnership, payable to Woodbridge in the
aggregate original principal amount of ninety million dollars ($90,000,000),
plus the excess, if any, of fifteen million dollars ($15,000,000) over 52.5% of
the Estimated Partnership Cash (the “Secured Promissory Note”); plus     (c)  
an assignment of 47.5% of the Partnership’s right, title and interest in and to
the Bankruptcy Claims pursuant to Section 2.8 hereof, except to the extent such
claims are paid to the Partnership in cash prior to the Measurement Time;    
(d)   an assignment of 47.5% of the Partnership’s right, title and interest in
and to the Administrative Claim pursuant to Section 2.9 hereof, except to the
extent such claims are paid to the Partnership in cash prior to the Measurement
Time; plus     (e)   an amount in cash equal 47.5% of any Wood Fraud Claim
Payments received by the Partnership from time to time to the extent such amount
was not distributed by the Partnership to ANI on or prior to the Closing Date,
including pursuant to Section 2.5 hereof.

The Secured Promissory Note shall be in substantially the form attached hereto
as Schedule A. In connection with the purchase of the Purchase Stock and the
issuance of the Secured Promissory Note, ACSC, ANI and the Partnership shall
enter into the applicable Security Documents as of the Closing and the
Partnership shall deliver (i) a certificate of a senior officer of each of the
Partnership and ACSC as to the solvency of the Partnership and (ii) an opinion
dated the Closing Date, from counsel to ANI, ACSC and the Partnership as to
enforceability and perfection. The Purchase Price shall be allocated as to two
hundred dollars ($200) to the ANI Common Stock and the remainder to the ANI
Preferred Stock.

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2.3 Payment Instructions. Woodbridge shall deliver to the Partnership no later
than two (2) Business Days before the anticipated Closing Date a notice which
shall contain payment instructions.
2.4 Closing. The Closing shall take place at the offices of Paul, Weiss,
Rifkind, Wharton & Garrison LLP, 1285 Avenue of the Americas, New York, New York
10019-6064 at the Closing Time, or at such other location as the parties may
agree in writing.
2.5 Distribution. No later than five (5) Business Days prior to the Closing
Date, ACSC shall deliver a notice to Woodbridge (the “Estimated Closing Date
Cash Statement”) which shall set forth its good faith estimate of the
Partnership Cash (the “Estimated Partnership Cash”). On the Business Day
immediately prior to the Closing, ACSC and ANI shall cause the Partnership to,
and the Partnership shall, distribute to ANI 47.5% of the Estimated Partnership
Cash.
2.6 Payables and Receivables. Immediately prior to the Closing, ANI shall apply
a portion of the distribution of the Estimated Partnership Cash received by ANI
pursuant to Section 2.5 hereof to repay any outstanding accounts payable, and
shall collect or eliminate any accounts receivable.
2.7 Redemption of ANI Preferred Stock. Immediately prior to the Closing, ANI
shall redeem, in exchange for an aggregate amount equal to the sum of the amount
of Estimated Partnership Cash received by ANI pursuant to Section 2.5 hereof
plus the amount of the available cash in ANI, if any, after the settlement of
its accounts payable and accounts receivable pursuant to Section 2.6 (the “ANI
Redemption Amount”), that number of shares of outstanding ANI Class A Preferred
Stock that can be redeemed for the Class A Redemption Amount (as defined in
ANI’s Amended and Restated Certificate of Incorporation) per share with the ANI
Redemption Amount.
2.8 Assignment of Bankruptcy Claims.

  (a)   Subject to Section 2.8(b), prior to Closing, except to the extent that
the Bankruptcy Claims are paid to the Partnership in cash prior to the
Measurement Time, pursuant to an Assignment and Assumption in the form attached
hereto as Schedule G, ACSC and ANI shall cause the Partnership to, and the
Partnership shall, assign, grant, convey and transfer to Woodbridge, 47.5% of
the Partnership’s right, title and interest in and to the Bankruptcy Claims (the
“Bankruptcy Claims Assignment”), which shall include, without limitation or
offset, 47.5% of ((i) through (iv) below collectively, the “Transferred
Bankruptcy Claims Rights”):

  (i)   the Bankruptcy Claims;

  (ii)   the Partnership’s right, title and interest in and to the Bankruptcy
Claims, including all agreements, instruments, subscriptions, statements, proofs
of claim, proofs of investment and other documents evidencing, or supporting the
Bankruptcy Claims and any agreements, stipulations, or

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      other settlement rights or documentation relating to the allowance or
disallowance of the Bankruptcy Claims;

  (iii)   the Partnership’s right to receive principal, interest, fees,
expenses, damages and other amounts in respect of, or in connection with, the
Bankruptcy Claims; and

  (iv)   cash, securities, instruments, proceeds, collateral, guarantees and/or
other property distributed, received or paid from and after the Closing, on
account of, or exchanged in return for the Bankruptcy Claims.

  (b)   Prior to the first distribution in respect of Bankruptcy Claims to be
made in shares of AbitibiBowater, each of AbitibiBowater, ACSC and the
Partnership shall take all necessary actions so that such distribution shall be
deferred until as promptly as practicable following the Closing and the rights
thereto (as to 47.5%) shall be assigned to Woodbridge pursuant to the Bankruptcy
Claims Assignment.

2.9 Assignment of Administrative Claim. Prior to Closing, except to the extent
that the Administrative Claim is paid to the Partnership in cash prior to the
Measurement Time, pursuant to an Assignment and Assumption in the form attached
hereto as Schedule H, ACSC and ANI shall cause the Partnership to, and the
Partnership shall, assign, grant, convey and transfer to Woodbridge, 47.5% of
the Partnership’s right, title and interest in and to the Administrative Claim
(the “Administrative Claim Assignment”), which shall include, without limitation
or offset, 47.5% of ((a) through (d) below collectively, the “Transferred
Administrative Claim Rights”):

  (a)   the Administrative Claim;     (b)   the Partnership’s right, title and
interest in and to the Administrative Claim, including all agreements,
instruments, subscriptions, statements, proofs of claim, proofs of investment
and other documents evidencing, or supporting the Administrative Claim and any
agreements, stipulations, or other settlement rights or documentation relating
to the allowance or disallowance of the Administrative Claim;     (c)   the
Partnership’s right to receive principal, interest, fees, expenses, damages and
other amounts in respect of, or in connection with, the Administrative Claim;
and     (d)   cash, securities, instruments, proceeds, collateral, guarantees
and/or other property distributed, received or paid from and after the Closing,
on account of, or exchanged in return for the Administrative Claim.

2.10 Wood Fraud Claim Payment. Except to the extent that the Wood Fraud Claim is
paid to the Partnership in cash prior to the Measurement Time, the Partnership
shall pay the amount that is 47.5% of any Wood Fraud Claim Payment to Woodbridge
or as Woodbridge otherwise directs

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as soon as practicable after such time as such Wood Fraud Claim Payment is
received by the Partnership. Payments pursuant to this Section 2.10 shall
satisfy the amount payable under Section 2.2(e).
2.11 Distribution Adjustment.

  (a)   Not later than 60 days after the Closing Date, ANI shall cause a
statement (the “Closing Date Cash Statement”) setting forth the amount of the
Partnership Cash (the “Proposed Final Partnership Cash Amount”) to be prepared
and delivered to Woodbridge. The Closing Date Cash Statement shall be prepared
in accordance with the normal procedures of the Partnership.     (b)   If
Woodbridge notifies ANI that it agrees with the Proposed Final Partnership Cash
Amount within 20 days after receipt of the Closing Date Cash Statement or,
within such 20-day period, fails to deliver notice to ANI that it disagrees with
the Proposed Final Partnership Cash Amount or that it believes an error is
contained in the Closing Date Cash Statement, the Proposed Final Partnership
Cash Amount shall be conclusive and binding on the parties to this Agreement and
the parties shall be deemed to have agreed thereto, in the first case, on the
date ANI receives the notice and, in the second case, on such 20th day. If
Woodbridge notifies ANI that it disagrees with the Proposed Final Partnership
Cash Amount or believes that an error is contained in the Closing Date Cash
Statement within the 20-day period immediately following the delivery required
under Section 2.11(a), then ANI and Woodbridge shall meet and attempt, in good
faith, to resolve their differences with respect to such matters and determine
the amount of the Partnership Cash within 30 days after ANI’s receipt of
Woodbridge’s notice of disagreement. If Woodbridge and ANI cannot agree within
such 30-day period, then Deloitte Financial Advisory Services LLP (the
“Accounting Firm”), acting as an expert shall be retained by the parties to
determine the amount of Partnership Cash (the expense of such determination by
the Accounting Firm to be shared equally among ANI and Woodbridge). ANI and
Woodbridge shall use commercially reasonable efforts to cause the Accounting
Firm to determine the amount of Partnership Cash in accordance with the normal
procedures of the Partnership. The amount of Partnership Cash as determined by
such accounting firm shall not be greater than the amount proposed by Woodbridge
or lesser than the amount proposed by ANI. The amount of the Partnership Cash as
determined (or deemed determined) by the parties or by the Accounting Firm
pursuant to this Section 2.11(b), shall be conclusive of the amount of the
Partnership Cash (the amount of the Partnership Cash as so determined, the
“Final Partnership Cash Amount”).     (c)   On the 5th Business Day following
the date on which the Final Partnership Cash Amount is determined pursuant to
Section 2.11(b)(the “Settlement Date”), the payment contemplated by Section 2.12
shall be made.

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2.12 Adjustment Payment. On the Settlement Date, either (i) Woodbridge shall pay
to the Partnership in immediately available funds the amount, if any, by which
47.5% of the Estimated Partnership Cash exceeds 47.5% of the Final Partnership
Cash Amount, or (ii) the Partnership shall pay to Woodbridge in immediately
available funds the amount, if any, by which 47.5% of the Final Partnership Cash
Amount exceeds 47.5% of the Estimated Partnership Cash Amount (any such payment,
the “Adjustment Payment”). Woodbridge shall deliver to the Partnership, or the
Partnership shall deliver to Woodbridge, as applicable, no later than two
(2) Business Days before the Settlement Date, a notice which shall contain
payment instructions.
2.13 Withholding Rights. The Partnership shall be entitled to deduct and
withhold from the consideration otherwise payable pursuant to this Agreement
such amounts as it is required to deduct and withhold with respect to the making
of such payment under the Code, or any provision of state, local or foreign Tax
law. To the extent that such amounts are so withheld by the Partnership, such
withheld and deducted amounts will be treated for all purposes of this Agreement
as having been paid to the holders of the Partnership Interest in respect of
which such deduction and withholding was made by the Partnership.
ARTICLE 3
CONDITIONS TO CLOSING
3.1 Mutual Conditions. Subject to Section 3.2 and 3.3, the Parties’ obligation
to effect the Closing shall be subject to the fulfillment (or express written
waiver), at or prior to Closing of the following conditions:

  (a)   there shall be no Order or Law prohibiting the purchase and sale of the
Purchase Stock;     (b)   any waiting period (and any extension thereof) under
The notification required by Section X of the Final Judgment in United States of
America v. Abitibi-Consolidated Inc. and Bowater Incorporated, Case No. 07-1912,
15-17 (D.D.C. Nov. 6, 2008) (the “DOJ Order”) applicable to the transaction
shall have expired or shall have been terminated;     (c)   the effective date
of the Chapter 11 plans for AbitibiBowater and its affiliated debtors and
debtors-in-possession shall have occurred; and     (d)   the Settlement Order
shall have been approved and entered by the Bankruptcy Court.

3.2 Additional Conditions to ACSC’s and the Partnership’s Obligations. The
obligation of ACSC and the Partnership to effect the Closing shall be subject to
the fulfillment (or express written waiver by ACSC and AbitibiBowater), at or
prior to Closing of the following conditions:

  (a)   the representations and warranties of (i) Woodbridge and Woodbridge
Parent contained in Section 5.2 shall be true and correct when made and as of
the Closing Date as though restated on the Closing Date and (ii) Woodbridge,

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      Woodbridge Parent and ANI contained in Section 5.3 shall be true and
correct when made and as of the Closing Date as though restated on the Closing
Date;   (b)   Woodbridge shall have delivered to the Partnership a certificate
or certificates, in compliance with Treasury Regulations Section 1.1445-2,
certifying that the transactions contemplated hereby are exempt from withholding
under Section 1445 of the Code;     (c)   Woodbridge and Woodbridge Parent shall
have delivered the closing documents set forth on Schedule D that are required
to be delivered by Woodbridge and/or Woodbridge Parent, in form and substance
reasonably acceptable to ACSC and AbitibiBowater;     (d)   all covenants
contained in this Agreement to be performed by Woodbridge, Woodbridge Parent or
ANI at or prior to the Closing Time shall have been performed in all material
respects; and     (e)   as of immediately prior to the Closing Time, Woodbridge
shall own (beneficially and of record) all of the ANI Common Shares, free and
clear of all Encumbrances.

3.3 Additional Conditions to Woodbridge’s Obligations. Woodbridge and Woodbridge
Parent’s obligation to effect the Closing shall be subject to the fulfillment
(or express written waiver by Woodbridge and Woodbridge Parent), at or prior to
Closing of the following conditions:

  (a)   the representations and warranties of ACSC and AbitibiBowater contained
in Section 5.1 shall be true and correct when made and as of the Closing Date as
though restated on the Closing Date;     (b)   ACSC, AbitibiBowater and the
Partnership shall have delivered (i) the closing documents set forth on
Schedule D that are required to be delivered by ACSC, AbitibiBowater and/or the
Partnership, and (ii) the Security Documents, in each case in form and substance
reasonably acceptable to Woodbridge and Woodbridge Parent;     (c)   all
covenants contained in this Agreement to be performed by ACSC, the Partnership
and AbitibiBowater at or prior to the Closing Time shall have been performed in
all material respects; and     (d)   the Bankruptcy Claim and the Administrative
Claim shall be allowed in the full amount as asserted or claimed by the
Partnership.

3.4 Unsatisfied Closing Conditions.

  (a)   In the event that (i) the transactions contemplated by this Agreement
shall not have been consummated on or prior to March 31, 2011; and (ii) the
party seeking to terminate this Agreement pursuant to this Section 3.4(a) shall
not

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      have breached in material respect any obligation under this Agreement in
any manner that shall have proximately caused the failure to consummate the
transactions contemplated by this Agreement prior to March 31, 2011, then this
Agreement may be terminated by such party.   (b)   In the event that either
party shall have breached any of its representations, warranties, covenants or
agreements and such breach is not cured within 20 Business Days of notice to
such party by the other party, then this Agreement may be terminated by such
other party, provided such other party is not then in breach of its
representations, warranties, covenants or agreements where such other party’s
breach would give such first party the right to terminate this Agreement
pursuant to this Section 3.4(b).     (c)   For the purposes of this Section 3.4,
(i) AbitibiBowater and ACSC collectively shall be deemed one party and
(ii) Woodbridge Parent, Woodbridge and ANI collectively shall be deemed one
party.     (d)   If this Agreement is terminated pursuant to this Section 3.4
all further obligations of the parties under or pursuant to this Agreement shall
terminate without further liability of any party to the other except for the
provisions of (i) this Section 3.4(d) (Unsatisfied Closing Conditions),
(ii) Article 7 (Dispute Resolution) and (iii) Article 9 (Miscellaneous);
provided, that neither the termination of this Agreement nor anything in this
Section 3.4(d) shall relieve any party from Liability for any breach of this
Agreement occurring prior to such termination hereof.

3.5 Releases. At the Closing Time:

  (a)   ACSC, AbitibiBowater and the Partnership shall deliver the Woodbridge
Release (attached hereto as Schedule B) to Woodbridge; and     (b)   Woodbridge
and Woodbridge Parent shall deliver the AbitibiBowater Release (attached hereto
as Schedule C) to ACSC.

ARTICLE 4
COVENANTS
4.1 Further Actions. Each of ACSC and Woodbridge shall use all commercially
reasonable efforts to complete the transaction contemplated hereby, including
(a) completing all necessary filings and notices (b) providing such information
as may be requested by Governmental or Regulatory Authorities, and (c) pursuing
the termination of any applicable waiting period under the notification required
by Section X of the DOJ Order. In connection with the foregoing, each of ACSC
and Woodbridge shall cooperate with each other and keep the other informed with
respect to such effort.

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4.2 Settlement Motion. On December 1, 2010, AbitibiBowater filed with the
Bankruptcy Court a motion and order (the “Settlement Motion”) seeking entry of
the Settlement Order in the form of Schedule E. AbitibiBowater shall consult and
cooperate with Woodbridge, and consider in good faith the views of Woodbridge,
with respect to any modifications to the Settlement Motion or Settlement Order.
The Settlement Motion shall not seek to affect in any way the claims of
Woodbridge, Woodbridge Parent, WIHSA, or any of their affiliates, against the
Debtors or the Canadian Debtors, arising from the rejection of the Call
Agreement and the guarantee dated as of September 6, 2001 by
Abitibi-Consolidated Inc. in favor of each of Woodbridge and WIHSA (all such
claims, the “Woodbridge Claims”). For the avoidance of doubt, the Woodbridge
Claims, and all rights thereto and thereunder, are preserved.
4.3 Conduct of Business.

  (a)   From the date hereof until the earlier of the Closing Date or the
termination of this Agreement in accordance with its terms, ACSC and ANI shall
cause the Partnership to, and the Partnership shall, conduct the business of the
Partnership in all material respects in the ordinary course of business on a
basis consistent with past practice, and use commercially reasonable efforts to
preserve its business operation, including the services of its officers and
employees, and its business relationships with customers, suppliers and others
having business dealings with the Partnership. By way of amplification and not
of limitation, from the date hereof until the Closing Date, ACSC and ANI shall
cause the Partnership to, and the Partnership shall, refrain from (i) shortening
or lengthening the customary payment cycles of the Partnership with respect to
accounts payable and accounts receivable, (ii) changing customary payment terms
of the Partnership with respect to accounts receivable and accounts payable, and
(iii) changing the customary inventory management practices of the Partnership.
    (b)   From the date hereof until the earlier of the Closing or the
termination of this Agreement in accordance with its terms, ANI shall not, and
Woodbridge shall cause ANI not do any of the following:

  (i)   enter into any Contract;

  (ii)   (A) issue, sell, transfer, pledge, grant, dispose of, encumber or
deliver (whether through the issuance or granting of any options, warrants,
commitments, subscriptions, rights to purchase or otherwise) any equity
securities of any class or any securities convertible into or exercisable or
exchangeable for voting or equity securities of any class (except for the
issuance of certificates in replacement of lost certificates) or (B) adjust,
split, combine, or reclassify any of its equity securities;

  (iii)   redeem, purchase or otherwise acquire any outstanding shares of the
capital stock of ANI, other than as contemplated by Section 2.7 of this
Agreement.

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  (iv)   acquire in any manner any Assets or Properties;

  (v)   mortgage, pledge or subject to any Encumbrances, any of its Assets or
Properties;

  (vi)   amend or restate, or propose to amend or restate, any Organizational
Document of ANI;

  (vii)   merge or consolidate with or into any other Person or dissolve or
liquidate;

  (viii)   incur or assume any Liabilities, assume, guarantee, endorse or
otherwise become liable or responsible for the Liabilities of any other Person;

  (ix)   lease, sell or otherwise dispose of any Assets or Properties, other
than as contemplated by Section 2.6 of this Agreement;

  (x)   commence or settle any claim, action or proceeding; or

  (xi)   agree in writing or otherwise to do anything contained in this clause
(b).

4.4 Bank Account. ANI shall close its account at UBS in New York, New York as
soon as practicable after the Closing.
4.5 WIHSA Share Transfer. Woodbridge Parent shall cause WIHSA to enter into the
WIHSA Transfer Agreement and pursuant thereto to transfer all right, title and
interest in the ANI Common Shares, free and clear of all Encumbrances, to
Woodbridge prior to the Closing Time. Woodbridge Parent covenants and agrees to
cause WIHSA not to sell, transfer or assign or subject to (or fail to object to
the imposition of) any Encumbrance upon, the ANI Common Shares to any other
Person.
4.6 Notice of Withdrawal of Appeal. Within five (5) Business Days of the Closing
Date, Woodbridge and Woodbridge Parent shall, and shall cause WIHSA to, take
such action as is necessary to withdraw with prejudice the Appeal filed on
November 3, 2009, with the District Court for the District of Delaware (Case
No. 1:09-cv-00907-LPS) from the Order Authorizing the Rejection of a Certain
Call Agreement entered on the docket (Docket No. 1200) in the Bankruptcy
Proceedings on October 27, 2009.
4.7 Resignation of Directors and Officers of ANI. Prior to the Closing,
Woodbridge shall obtain the resignation of all directors and officers of ANI and
releases from such individuals of all claims they may have against ANI in a form
satisfactory to ACSC, which shall be no less favorable than the release set
forth on Schedule C.
4.8 LLC Conversion. Immediately prior to the Closing, the Partnership may elect
to, and, in such case, the parties shall take all reasonable action and execute
such documents as reasonably necessary to, effect a conversion of the
Partnership from a Georgia partnership to a Delaware limited liability company
in accordance with Georgia and Delaware law (such conversion, the “LLC
Conversion”).

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ARTICLE 5
REPRESENTATIONS AND WARRANTIES
5.1 ACSC and AbitibiBowater Representations and Warranties.
     Subject, as applicable, to entry of the Settlement Order and the
application of the Bankruptcy Code in the Bankruptcy Proceedings, each of ACSC
and AbitibiBowater hereby jointly and severally represents and warrants in
respect of itself and the Partnership (except with respect to the
representations and warranties in Section 5.1(f)(iii), which representations and
warranties are made solely by ACSC in respect of itself and the Partnership and
not by AbitibiBowater) to each of Woodbridge and Woodbridge Parent as follows as
at the date hereof and as of the Closing Date, and each of ACSC and
AbitibiBowater acknowledge that each of Woodbridge and Woodbridge Parent is
relying on such representations and warranties in connection with entering into
this Agreement:

  (a)   in the case of ACSC and AbitibiBowater, it is a corporation duly and
validly incorporated under the laws of the jurisdiction of its incorporation
and, in the case of the Partnership, it is a partnership, or, in the case of a
LLC Conversion, at the Closing, will be a limited liability company, duly formed
and validly existing under the laws of its jurisdiction of formation;     (b)  
it has the requisite power and authority to own its Assets and Properties and to
carry on its business as currently conducted;     (c)   in the case of ACSC and
AbitibiBowater, it has the corporate power and corporate capacity and, in the
case of the Partnership, has the partnership power and partnership capacity, or
at Closing, if applicable, it will have the limited liability company power and
limited liability company capacity, to execute and deliver, and to observe and
perform its covenants and obligations under, this Agreement and the documents
being entered into in connection herewith, and to consummate the transactions
contemplated hereby and thereby;     (d)   in the case of ACSC and
AbitibiBowater, it has taken all corporate action and, in the case of the
Partnership, it has taken all partnership action, or at Closing, if applicable,
it will have taken all limited liability company action, necessary to duly and
validly authorize the execution and delivery of, and the observance and
performance of its covenants and obligations under, this Agreement and the
documents being entered into in connection herewith, and to consummate the
transactions contemplated hereby and thereby;     (e)   this Agreement and each
of the documents entered into in connection herewith have been duly and validly
executed and delivered by it, and constitute legal, valid and binding
obligations of it enforceable against it in accordance with their respective
terms, subject to the fact that (i) specific performance, injunctive relief and
other equitable remedies are discretionary and may not be available where
damages are considered an adequate remedy and (ii)

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      enforcement may be limited by bankruptcy, insolvency, liquidation,
reorganization, reconstruction, moratorium, arrangement and other similar Laws
generally affecting the enforceability of creditors’ rights and remedies
generally and general principles of equity;

  (f)   none of the execution and delivery of, or the observance and performance
by it of any covenant or obligation under this Agreement and the documents
entered into in connection herewith and the consummation of the transactions
contemplated hereby:

  (i)   conflicts with or results in a violation or breach of any of the terms,
conditions or provisions of its Organizational Documents;

  (ii)   conflicts with or results in a violation or breach of any term or
provision of any applicable Law or Order applicable to it or to its Assets and
Properties;

  (iii)   (A) conflicts with or results in a violation or breach of, (B)
constitutes (with or without notice or lapse of time or both) a default under,
(C) requires it to obtain any consent, approval or action of, make any filing
with or give any notice to any Person as a result or under the terms of, (D)
results in, or gives to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (E) results in or gives to
any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (F) results in the creation or
imposition of any Encumbrance upon its Assets and Properties under, any material
Contract to which it is a party or by which its material Assets and Properties
are bound or affected, other than the Secured Promissory Note or the Security
Documents; or

      except, in the case of (ii) and (iii) above, as required pursuant to the
DOJ Order and for such defaults, violations, actions and notifications that
would not reasonably be expected to, individually or in the aggregate,
materially delay or prevent, the performance by ACSC or the Partnership of any
of its obligations hereunder or the Partnership’s obligations under the Secured
Promissory Note;     (g)   other than pursuant to the DOJ Order, in connection
with the sale of the Purchase Stock, no consent, approval or action of, filing
with or notice to any Governmental or Regulatory Authority is required by it in
connection with the execution, delivery and performance of this Agreement or any
of the documents being entered into in connection herewith or the consummation
of the transactions contemplated hereby or thereby, except for such defaults,
violations, actions and notifications that would not reasonably be expected to,
individually or in the aggregate, materially delay or prevent, the performance
by ACSC or the Partnership of any of its obligations hereunder or the
Partnership’s obligations under the Secured Promissory Note; and

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  (h)   it has not taken and agrees it will not take any action that would cause
any other party hereto to become liable to any claim or demand for a brokerage
commission, finders fee or other similar payment.

5.2 Woodbridge and Woodbridge Parent Representations and Warranties. Each of
Woodbridge and Woodbridge Parent hereby jointly and severally represents and
warrants (except with respect to the representations and warranties in
Section 5.2(g)(iii), which representations and warranties are made solely by
Woodbridge and not by Woodbridge Parent) to each of the Partnership, ACSC and
AbitibiBowater as follows as at the date hereof and as of the Closing Date, and
each of Woodbridge and Woodbridge Parent acknowledge that each of the
Partnership, ACSC and AbitibiBowater is relying on such representations and
warranties in connection with entering into this Agreement:

  (a)   it is a corporation duly and validly incorporated under the laws of the
jurisdiction of its incorporation;     (b)   no Actions or Proceedings have been
taken or authorized by it, or to the best of its knowledge, by any other Person,
with respect to bankruptcy, insolvency, liquidation, reconstruction, moratorium,
dissolution or winding-up or other similar Actions or Proceedings of or
affecting it;     (c)   it has the requisite power and authority to own its
Assets and Properties and to carry on its business as currently conducted;    
(d)   it has the corporate power and corporate capacity to execute and deliver,
and to observe and perform its covenants and obligations under, this Agreement
and the documents being entered into in connection herewith, and to consummate
the transactions contemplated hereby and thereby;     (e)   it has taken all
corporate action necessary to duly and validly authorize the execution and
delivery of, and the observance and performance of its covenants and obligations
under, this Agreement and the documents being entered into in connection
herewith, and to consummate the transactions contemplated hereby and thereby;  
  (f)   this Agreement and each of the documents entered into in connection
herewith have been duly and validly executed and delivered by it, and constitute
legal, valid and binding obligations of it enforceable against it in accordance
with their respective terms, subject to the fact that (i) specific performance,
injunctive relief and other equitable remedies are discretionary and may not be
available where damages are considered an adequate remedy and (ii) enforcement
may be limited by bankruptcy, insolvency, liquidation, reorganization,
reconstruction, moratorium, arrangement and other similar Laws generally
affecting the enforceability of creditors’ rights and remedies generally and
general principles of equity;

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  (g)   none of the execution and delivery of, or the observance and performance
by it of any covenant or obligation under this Agreement and the documents
entered into in connection herewith and the consummation of the transactions
contemplated hereby:

  (i)   conflicts with or results in a violation or breach of any of the terms,
conditions or provisions of its Organizational Documents;

  (ii)   conflicts with or results in a violation or breach of any term or
provision of any applicable Law or Order applicable to it or to its Assets and
Properties; or

  (iii)   (A) conflicts with or results in a violation or breach of, (B)
constitutes (with or without notice or lapse of time or both) a default under,
(C) requires it to obtain any consent, approval or action of, make any filing
with or give any notice to any Person as a result or under the terms of, (D)
results in, or gives to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (E) results in or gives to
any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (F) results in the creation or
imposition of any Encumbrance upon its Assets and Properties under, any Contract
to which it is a party or by which its Assets and Properties are bound or
affected,

except, in the case of (ii) and (iii) above, for such defaults, violations,
actions and notifications that would not reasonably be expected to, individually
or in the aggregate, materially delay or prevent, the performance by Woodbridge
of any of its obligations hereunder;

  (h)   other than filings under, and waiting periods mandated by HSR in
connection with the sale of the Purchase Stock, no consent, approval or action
of, filing with or notice to any Governmental or Regulatory Authority is
required by it in connection with the execution, delivery and performance of
this Agreement or any of the documents being entered into in connection herewith
or the consummation of the transactions contemplated hereby or thereby, except
for such defaults, violations, actions and notifications that would not
reasonably be expected to, individually or in the aggregate, materially delay or
prevent, the performance by Woodbridge of any of its obligations hereunder; and
    (i)   it has not taken and agrees it will not take any action that would
cause any other party hereto to become liable to any claim or demand for a
brokerage commission, finders fee or other similar payment.

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5.3 Woodbridge, Woodbridge Parent and ANI Representations and Warranties
Regarding ANI. Woodbridge, Woodbridge Parent and ANI hereby jointly and
severally represents and warrants to the Partnership, ACSC and AbitibiBowater as
follows as at the date hereof and as of the Closing Date and acknowledges that
each of the Partnership, ACSC and AbitibiBowater is relying on such
representations and warranties in connection with entering into this Agreement:

  (a)   ANI is a corporation duly and validly incorporated and existing in good
standing under the laws of the State of Delaware;     (b)   ANI is duly
qualified, Licensed or admitted to transact business as a foreign corporation,
and is in good standing, in the State of Georgia, which is the only jurisdiction
in which the ownership, use or leasing of the Assets and Properties of ANI, or
the conduct and nature of the business of ANI, makes such qualification,
Licensing or admission necessary;     (c)   ANI has the corporate power and
corporate capacity to execute and deliver, and to observe and perform its
covenants and obligations under, this Agreement and the documents being entered
into in connection herewith, and to consummate the transactions contemplated
hereby and thereby;     (d)   ANI has taken all corporate action necessary to
duly and validly authorize the execution and delivery of, and the observance and
performance of its covenants and obligations under, this Agreement and the
documents being entered into in connection herewith, and to consummate the
transactions contemplated hereby and thereby;     (e)   this Agreement and each
of the documents entered into in connection herewith have been duly and validly
executed and delivered by ANI, and constitute legal, valid and binding
obligations of it enforceable against it in accordance with their respective
terms, subject to the fact that (i) specific performance, injunctive relief and
other equitable remedies are discretionary and may not be available where
damages are considered an adequate remedy and (ii) enforcement may be limited by
bankruptcy, insolvency, liquidation, reorganization, reconstruction, moratorium,
arrangement and other similar Laws generally affecting the enforceability of
creditors’ rights and remedies generally and general principles of equity;    
(f)   none of the execution and delivery of, or the observance and performance
by ANI of any covenant or obligation under this Agreement and the documents
entered into in connection herewith and the consummation of the transactions
contemplated hereby or thereby:

  (i)   conflicts with or results in a violation or breach of any of the terms,
conditions or provisions of ANI’s Organizational Documents;

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  (ii)   conflicts with or results in a violation or breach of any term or
provision of any applicable Law or Order applicable to ANI or to ANI’s Assets
and Properties; or

  (iii)   (A) conflicts with or results in a violation or breach of, (B)
constitutes (with or without notice or lapse of time or both) a default under,
(C) requires it to obtain any consent, approval or action of, make any filing
with or give any notice to any Person as a result or under the terms of, (D)
results in or gives to any Person any right of termination, cancellation,
acceleration or modification in or with respect to, (E) results in or gives to
any Person any additional rights or entitlement to increased, additional,
accelerated or guaranteed payments under, or (F) results in the creation or
imposition of any Encumbrance upon ANI’s Assets and Properties under, any
Contract to which ANI is a party or by which ANI’s Assets and Properties are
bound or affected;

  (g)   ANI has the requisite power and authority to own its Assets and
Properties;     (h)   ANI has no outstanding Liabilities of any kind other than
(i) Liabilities to the other partners in the Partnership under the terms of the
Partnership Agreement, (ii) the contingent Liabilities of a general partner
arising directly and exclusively from the operation and business of the
Partnership, (iii) Liabilities for Taxes not yet due for which Woodbridge has
agreed to reimburse or indemnify ACSC under this Agreement (provided, however
neither Woodbridge nor Woodbridge Parent has any obligation to reimburse or
indemnify ACSC for Liabilities for Taxes in respect of which
Abitibi-Consolidated Corp. agreed to indemnify ANI pursuant to the Indemnity
Agreement made as of February 23, 2007 between Abitibi-Consolidated Corp., ANI
and ACSC).     (i)   The financial statements delivered to ACSC as of the date
hereof, which are the last annual financial statements of ANI prior to the
Closing Date (the “ANI Financial Statements”), are true and complete copies of
the financial statements of ANI as at the dates provided therein. The ANI
Financial Statements have been prepared in accordance with GAAP, and fairly
present the financial condition, results of operations, changes in equity and
cash flows of ANI as of the date thereof and for the period covered thereby,
except for changes to such amounts resulting from (A) distributions (x) by the
Partnership to ANI, (y) as contemplated by Section 2.5 of this Agreement and
(z) as contemplated by Section 2.6 of this Agreement and (B) the redemption
contemplated by Section 2.7 of this Agreement. Since the date of the ANI
Financial Statements there has not been any change or any event or development,
except for such change, event or development contemplated by this Agreement,
which, individually or together with other such events, could reasonably be
expected to result in a change in the condition, financial or otherwise, of ANI;

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  (j)   ANI has no Assets or Properties other than the Partnership Interest.
Except for the Partnership Agreement, there are no other Contracts to which ANI
is a party or by which ANI or its Assets and Properties are bound as of the date
hereof and at the Closing Date;     (k)   no Actions or Proceedings have been
taken or authorized by ANI, Woodbridge, WIHSA or Woodbridge Parent, or to the
best of ANI’s, Woodbridge’s, WIHSA’s or Woodbridge Parent’s knowledge, by any
other Person, with respect to bankruptcy, insolvency, liquidation,
reconstruction, moratorium, dissolution or winding-up or other similar Actions
or Proceedings of or affecting ANI, other than the Bankruptcy Proceedings;    
(l)   there are no Actions or Proceedings pending or threatened to the best of
ANI’s, Woodbridge’s, WIHSA’s or Woodbridge Parent’s knowledge against ANI, or
affecting ANI’s Assets and Properties;     (m)   ANI is and has at all times
been, in compliance in all material respects with all Licenses, Laws and Orders
applicable to it;     (n)   ANI has never had and now has no employees;     (o)
  ANI has no direct or indirect, contingent or otherwise, ERISA Affiliate
Liability or any other liability that is imposed on a controlled group basis;  
  (p)   attached hereto as Exhibit A is a true and complete copy of the
Certificate of Incorporation of ANI as in effect on the date hereof;     (q)  
attached hereto as Exhibit B is a true and complete copy of the By-laws of ANI
as in effect on the date hereof;     (r)   Woodbridge has provided ACSC with
access to true and correct copies of the transfer ledgers and minute books of
ANI, which accurately reflect all issues and transfers of Equity Interests prior
to the date hereof and all actions taken by the directors and stockholders of
ANI prior to the date hereof;     (s)   except for its interest in the
Partnership, ANI neither owns, nor has it heretofore owned, directly or
indirectly, any Equity Interest in, or any Option with respect to any Equity
Interest in, any Person;     (t)   ANI is the sole legal and beneficial owner of
the Partnership Interest, free of all Encumbrances;     (u)   all of the shares
of Purchase Stock (i) have been duly authorized and validly issued, (ii) are
fully paid and non-assessable, and (iii) have not been issued in violation of
pre-emptive, subscription or other rights or of any Law or Order; the authorized
capital of ANI is 20,000 shares of ANI Class A Preferred Stock, 20,000 shares of
ANI Class B Preferred Stock and 20,000 shares of ANI Common Stock; and the
Purchase Stock constitute all of the issued and

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      outstanding Equity Interests of ANI; and no Person has an Option to
purchase any of the Equity Interests of ANI (other than pursuant to the WIHSA
Transfer Agreement);

  (v)   Woodbridge (together with WIHSA, from which Woodbridge will acquire all
of the outstanding ANI Common Stock prior to Closing pursuant to the WIHSA
Transfer Agreement) is the sole legal and beneficial owner of the Purchase
Stock, free and clear of all Encumbrances, and upon the delivery of certificates
evidencing the Purchase Stock to ACSC, duly endorsed in blank, ACSC shall
acquire good and marketable legal and beneficial title to the Purchase Stock,
free and clear of all Encumbrances; no Person has an Option to purchase any of
the Purchase Stock (other than Woodbridge pursuant to the WIHSA Transfer
Agreement); there are no Actions or Proceedings pending or threatened with
respect to any of the Purchase Stock, Woodbridge’s or WIHSA’s, as applicable,
ownership of the Purchase Stock or Woodbridge’s or WIHSA’s, as applicable, right
to sell the Purchase Stock and there is no basis for any such Action or
Proceeding; and no Person enjoys any right of first refusal, right of first
opportunity, tag along/drag along right or similar right with respect to the
Purchase Stock;     (w)   the Purchase Stock is not subject to any voting trust
agreement or other Contract relating to the voting or transfer of the Purchase
Stock (other than the WIHSA Transfer Agreement);     (x)   ANI conducts no
business, and at no time has conducted any business or operations or pursued any
activities, other than the holding of the Partnership Interest;     (y)   except
as disclosed in writing by Woodbridge to ACSC prior to the date hereof:

  (i)   all Tax Returns that are required to be filed with respect to ANI have
been filed. All such Tax Returns were correct and complete in all material
respects. All Taxes owed by ANI (whether or not shown on any Tax Return) have
been paid. ANI is not currently the beneficiary of any extension of time within
which to file any Tax Return. No claim has ever been made by an authority in a
jurisdiction where ANI does not file Tax Returns that ANI is or may be subject
to taxation by that jurisdiction. There are no Encumbrances on any of the Assets
or Properties of ANI that arose in connection with any failure (or alleged
failure) to pay any Tax;

  (ii)   ANI has withheld and timely paid all Taxes required to have been
withheld and paid in connection with amounts paid or owing to any employee,
independent contractor, creditor, stockholder, or other third party;

  (iii)   there is no dispute or claim concerning any Tax Liability of ANI
either (A) claimed or raised by any Taxing Authority in writing, or (B) as to

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      which Woodbridge and their respective directors and officers (and other
Persons responsible for their Tax matters) has knowledge. Woodbridge has
delivered to ACSC correct and complete copies of all United States federal
income Tax Returns for the years ended June 30, 2010, June 30, 2009 and June 30,
2008, and all Georgia state income Tax Returns for the years ended June 30,
2010, June 30, 2009 and June 30, 2008. There have been no audits of ANI by any
Taxing Authority;

  (iv)   ANI has not waived any statute of limitations in respect of Taxes or
agreed to any extension of time with respect to a Tax assessment or deficiency
and no request for any such waiver or extension is currently pending;

  (v)   ANI has not filed a consent under Code Section 341(f) concerning
collapsible corporations. ANI has not made any payments, is not obligated to
make any payments, and is not a party to any agreement that under certain
circumstances could obligate it to make any payments that will not be deductible
under Code Section 280G. ANI is not a party to any Tax allocation or sharing
agreement. ANI (A) has not been a member of an Affiliated Group (as defined in
Code Section 1504(a)) filing a consolidated federal income Tax Return (other
than a group the common parent of which was ANI), or (B) has no Liability for
the Taxes of any other Person under Code Reg. Section 1.1502-6 or 1.1502-78, as
a transferee or successor, by contract, or otherwise;

  (vi)   ANI has not constituted a “distributing corporation” or a “controlled
corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a
distribution of shares qualifying for tax-free treatment under Section 355 of
the Code (A) in the two years prior to the date of this Agreement or (B) in a
distribution that could otherwise constitute part of a “plan” or “series of
related transactions” (within the meaning of Section 355(e) of the Code) in
conjunction with this acquisition;

  (vii)   except for income recognized by ANI attributable to any transactions
entered into by ACSC, its affiliates or ANI after the Closing Date or occurring
after the Closing Date, ANI will not be required to include in a taxable period
ending after the Closing Date taxable income attributable to income that accrued
in a taxable period prior to the Closing Date but was not recognized for Tax
purposes in such prior taxable period (or to exclude from taxable income in a
taxable period ending after the Closing Date any deduction the recognition of
which was accelerated from such taxable period to a taxable period prior to the
Closing Date) as a result of the installment method of accounting, the completed
contract method of accounting, the long-term contract method of accounting, the
cash method of accounting, Section 481 of the Code or Section 108(i) of the Code
or comparable provisions of state, local or foreign Tax law; and

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  (viii)   ANI has not executed or entered into a closing agreement pursuant to
Section 7121 of the Code or any similar provision of state, local or foreign Tax
law, and is not subject to any private letter ruling of the IRS or comparable
ruling of any other Governmental Authority;

  (z)   ANI has not taken and agrees it will not take any action that would
cause any other party hereto to become liable to any claim or demand for a
brokerage commission, finders fee or other similar payment.

5.4 Survival of Representations and Warranties. The representations and
warranties set out in this Agreement shall terminate on the date that is
eighteen (18) months following the Closing Date, except that the representations
and warranties contained in Sections 5.3(h), 5.3(i), 5.3(j), 5.3(n), 5.3(o),
5.3(p), 5.3(q), 5.3(r), 5.3(s), 5.3(t), 5.3(u), 5.3(v), 5.3(w), 5.3(x) and
5.3(y) shall survive indefinitely. For greater certainty, other than those
representations and warranties contained in Section 5.3(y)(vii) and
5.3(y)(viii), the representations and warranties made refer only to pre-closing
activities of ANI and are not intended to serve as representations and
warranties regarding, or a guarantee of, nor can they be relied upon with
respect to, Taxes attributable to any Tax period (or portion thereof) beginning
after or any Tax position taken after, the Closing Date.
ARTICLE 6
TAX MATTERS
     The following provisions shall govern the allocation of responsibility as
between the Partnership and ACSC, on the one hand, and Woodbridge and Woodbridge
Parent, on the other hand, for certain Tax matters following the Closing Date
(references in this Article 6 to (x) ACSC shall be deemed to include the
Partnership and (y) Woodbridge shall be deemed to include Woodbridge Parent):
6.1 ANI Pre-Closing Tax Returns. Woodbridge shall cause to be prepared, in a
manner consistent with past practice, all Tax Returns for ANI required for the
fiscal period ending on the Closing Date and for all other periods ending prior
to the Closing Date. Woodbridge shall permit ACSC to review and comment on each
such Tax Return required to be filed after the Closing Date described in the
preceding sentence prior to filing (and shall deliver each such return to ACSC
at least thirty (30) days prior to the date such Tax Return is required to be
filed), and ACSC shall cause each such Tax Return to be filed on a timely basis.
If ACSC disputes any item on such Tax Return, it shall notify Woodbridge of such
disputed item (or items) and the basis for its objection. The parties shall act
in good faith to resolve any such dispute prior to the date on which the
relevant Tax Return is required to be filed. If the parties cannot resolve any
disputed item, the item in question shall be resolved by the Accounting Firm as
set forth in Section 2.11(b). The fees and expenses of the Accounting Firm shall
be borne equally by Woodbridge and ACSC. Woodbridge shall be responsible for and
shall reimburse ACSC for Taxes of ANI reflected on such Tax Returns within five
(5) Business Days after payment by ACSC or ANI of such Taxes.

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6.2 ANI Straddle Period Returns. ACSC shall prepare or cause to be prepared and
file or cause to be filed on a timely basis any Tax Returns of ANI for Tax
periods which begin before the Closing Date and end after the Closing Date
(“straddle periods”). Unless otherwise required by law, such Tax Returns shall
be prepared on a basis consistent with the last previous such Tax Returns. ACSC
will use an acquisition structure which will cause the ANI Tax year to close for
United States federal tax purposes on the Closing Date. ACSC shall permit
Woodbridge to review and comment on each such Tax Return prior to filing (and
shall deliver each such Tax Return to Woodbridge at least thirty (30) days prior
to the date such Tax Return is required to be filed). If Woodbridge disputes any
item on such Tax Return, it shall notify ACSC of such disputed item (or items)
and the basis for its objection. The parties shall act in good faith to resolve
any such dispute prior to the date on which the relevant Tax Return is required
to be filed. If the parties cannot resolve any disputed item, the item in
question shall be resolved by an independent accounting firm selected in
accordance with the procedures set forth in Section 6.1(b). The fees and
expenses of such accounting firm shall be borne equally by Woodbridge and ACSC.
Woodbridge shall pay to ACSC within five (5) Business Days after the date on
which Taxes are paid by ACSC or ANI with respect to such straddle periods an
amount equal to the portion of such Taxes that relates to the portion of such
straddle period ending on the Closing Date. For purposes of this Section 6.2, in
the case of any Taxes that are imposed on a periodic basis and are payable for a
straddle period, the portion of such Tax which relates to the portion of such
straddle period ending on the Closing Date shall (x) in the case of any Taxes
other than Taxes based upon or related to income or receipts, be deemed to be
the amount of such Tax for the entire straddle period multiplied by a fraction
the numerator of which is the number of days in the portion of such straddle
period ending on the Closing Date and the denominator of which is the number of
days in the entire straddle period, and (y) in the case of any Tax based upon or
related to income or receipts be deemed equal to the amount which would be
payable if the relevant straddle period ended on the Closing Date. Any credits
relating to a straddle period shall be taken into account as though the relevant
straddle period ended on the Closing Date. All determinations necessary to give
effect to the foregoing allocations shall be made in a manner consistent with
prior practice of ANI, provided that the practice of ANI is not inconsistent
with the books and records of the Partnership.
6.3 Cooperation. Woodbridge, ANI and ACSC shall cooperate fully, as and to the
extent reasonably requested by the other party, in connection with the filing of
Tax Returns pursuant to this Article 6 and in connection with any audit,
litigation or other proceeding with respect to Taxes. Such cooperation shall
include the retention and (upon the other party’s request) the provision of
records and information which are reasonably relevant to any such audit,
litigation or other proceeding and making employees available on a mutually
convenient basis to provide additional information and explanation of any
material provided hereunder. Woodbridge, ANI and ACSC agree (a) to retain all
books and records with respect to Tax matters pertinent to ANI relating to any
Tax period beginning before the Closing Date until the expiration of the
statutory period of limitations (and, to the extent notified by ACSC or
Woodbridge, any extensions thereof) of the respective Tax periods, and to abide
by all record retention agreements entered into with any Taxing Authority, and
(b) to give the other party reasonable written notice prior to transferring,
destroying or discarding any such books and records and, if the other party so
requests, ACSC or Woodbridge, as the case may be, shall allow the other party to
take possession of such books and records. ACSC and Woodbridge further agree,
upon request, to use

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all commercially reasonable efforts to obtain any certificate or other document
from any Taxing Authority or any other Person as may be necessary to mitigate,
reduce or eliminate any Tax that could be imposed (including with respect to the
transactions contemplated hereby). ACSC and Woodbridge further agree, upon
request, to provide the other party with all information that either party may
be required to report pursuant to Section 6043 of the Code and all Treasury
Regulations promulgated thereunder.
6.4 Indemnified Taxes. Subject to the limitations set forth in this Section 6.4,
after the Closing Date, Woodbridge and Woodbridge Parent hereby agree jointly
and severally to indemnify and hold harmless each of ACSC and ANI against the
following amounts (including any Loss incurred in contesting or otherwise in
connection with any such amounts (collectively, the “Indemnified Taxes”)):
(i) Taxes imposed on or required to be withheld by ANI with respect to any Tax
period ending on or before the Closing Date; (ii) with respect to any straddle
period, Taxes imposed on or required to be withheld by ANI which are allocable,
pursuant to Section 6.2 above, to the portion of such straddle period ending at
the end of the day on the Closing Date (an “Interim Period”) (Interim Periods
and any Tax periods that end on or prior to the Closing Date being referred to
collectively hereinafter as “Pre-Closing Periods”); (iii) Taxes imposed on ANI
pursuant to Treasury Regulations Section 1.1502-6, 1.1502-78 or any similar
provision under any Law, as a result of ANI being or having been a member of any
group of companies with which ANI files or has filed a Tax Return on a
consolidated, combined or unitary basis for a taxable year or period (or portion
thereof) ending on or before the Closing Date; (iv) without duplication, Taxes
imposed on ACSC or ANI as a result of (x) a breach of a representation or
warranty set forth in Section 5.3(x) of this Agreement or (y) a breach of a
covenant or agreement set forth Article 6 of this Agreement; provided, that for
purposes of this Section 6.4(iii), any breach of a representation, warranty,
covenant or agreement shall be determined without reference to any materiality
qualifier with respect thereto; (v) Taxes arising out of any transactions
contemplated by this Agreement and (vi) Taxes or other payments required to be
paid after the date hereof by ANI to any party under any Tax Sharing Agreement
(whether written or not) or by reason of being a successor-in-interest or
transferee of another entity. Woodbridge and Woodbridge Parent shall pay any Tax
indemnity required to be paid pursuant to this Section 6.4 within fifteen
(15) days of receipt of written request therefor from ANI or ACSC describing in
reasonable detail the Indemnified Taxes which are the subject of and basis for
such Tax indemnity and the computation of the amount so payable; provided, that
if Indemnified Taxes are being contested in accordance with Section 6.7,
Woodbridge and Woodbridge Parent shall pay any required Tax indemnity within
fifteen (15) days of final resolution of such contest. The indemnification
provided in this Section 6.4 in respect of any particular Tax Period shall
terminate on the date that is 60 days following the expiration of the applicable
statutory period of limitations for that Tax period. Notwithstanding anything to
the contrary in this Section 6.4, neither Woodbridge nor Woodbridge Parent shall
have any obligation to reimburse or indemnify ACSC or ANI for Liabilities for
Taxes in respect of which Abitibi-Consolidated Corp. agreed to indemnify ANI
pursuant to the Indemnity Agreement made as of February 23, 2007 between
Abitibi-Consolidated Corp., ANI and ACSC.
6.5 Amended Tax Returns. Except to the extent required by Law, neither ACSC nor
ANI will amend or adjust any Tax Return of ANI for any Tax period ending on or
before the Closing Date or any straddle period without the prior written consent
of Woodbridge, which consent maybe

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withheld in the reasonable discretion of Woodbridge; provided, that if the
amended Tax Return is to be filed solely to claim a refund arising as a result
of the carryback of a tax attribute from either a Pre-Closing Tax Period or a
Post-Closing Tax Period, such consent may be withheld only if such amended Tax
Return would have an adverse effect on Woodbridge.
6.6 Pre-Closing Period Tax Refund. Any Tax refund relating to a Pre-Closing
Period of ANI shall be the property of Woodbridge and, if received by ANI or
ACSC, shall be paid or caused to be paid to Woodbridge within fifteen
(15) Business Days following receipt thereof, except for any such Tax refunds
attributable to the carry back of losses arising in any Tax period beginning on
or after the Closing Date. For the purpose of this Section 6.6, a refund shall
include actual receipt of a refund or interest, as well as a credit or offset of
or against any other actual or estimated Tax liability or any other interest or
penalties on such Tax liability.
6.7 Audits and Proceedings.

  (a)   After the Closing Date, ANI and ACSC shall promptly notify Woodbridge,
or Woodbridge shall promptly notify ANI and ACSC, in writing, of any written
notice by a Taxing Authority of a proposed Tax assessment or claim against ANI
or an audit or administrative or judicial proceeding involving ANI which, would
reasonably be expected to give rise to indemnification under Section 6.4 (“Tax
Contest”); provided, however, that failure to give prompt written notice of any
such claim shall bar indemnification hereunder only to the extent such failure
materially prejudices Woodbridge.     (b)   Except as provided in Section 6.7(c)
below, in the case of a Tax Contest that relates to any Pre-Closing Period,
Woodbridge shall have the right, at its own expense, to control the conduct of
such a Tax Contest (including any settlement or litigation), provided that ANI
and ACSC also may participate in any such a Tax Contest at their own expense
and, if Woodbridge does not assume the defense of any such a Tax Contest, ANI or
ACSC may defend the same in such manner as it may deem appropriate, including
settling such a Tax Contest, without any effect on any right to indemnification
under Section 6.4.     (c)   Woodbridge and ACSC may each participate in a Tax
Contest relating to a straddle period, and such Tax Contest shall be controlled
by Woodbridge or ACSC, whichever group would bear the burden of the greatest
portion of any potential Tax adjustment to which the Tax Contest relates.    
(d)   All indemnification payments for Losses made pursuant to this Article 6
shall be made on an after-Tax basis. Accordingly, in determining the amount of
any indemnification payment for a Loss suffered or incurred by an indemnitee
hereunder, the amount of such Loss shall be (i) increased to take into account
any additional Tax cost incurred by the indemnitee arising from the receipt of
indemnification payments and (ii) decreased to take into account any deduction,
credit or other Tax benefit actually realized by the indemnitee with respect to
such Loss (“Tax Costs”). In computing the amount of any such Tax Cost or Tax
Benefit, the indemnitee shall be deemed to recognize all other

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      items of income, gain, loss, deduction or credit before recognizing any
item arising from the receipt of any indemnification payment hereunder or the
incurrence or payment of any indemnified Loss; provided, that, if a Tax Cost or
Tax Benefit is not realized in the taxable period during which an indemnifying
party makes an indemnification payment or the indemnitee incurs or pays any
Loss, the parties hereto shall thereafter make payments to one another at the
end of each subsequent taxable period to reflect the net Tax Costs and Tax
Benefits realized by the parties hereto in each such subsequent taxable period.

6.8 Termination of Tax Sharing Agreements. All tax sharing agreements or similar
agreements with respect to or involving ANI shall be terminated as of
immediately prior to the Closing Date and, from and after the Closing Date, ANI
shall not be bound thereby or have any Liability thereunder.
6.9 Taxes and Fees. All transfer, documentary, stamp, registration and other
similar Taxes and fees (including any penalties and interest) incurred in
connection with this Agreement, shall be paid by Woodbridge when due, and
Woodbridge will, at its own expense, file all necessary Tax Returns and other
documentation with respect to all such transfer, documentary, stamp,
registration and other similar Taxes and fees, and, if required by applicable
Law, ACSC will, and will cause its affiliates to, join in the execution of any
such Tax Returns and other documentation.
6.10 Tax Attributes. If ANI has, as of the Closing Date, any available
carryovers of net operating losses, credits or other tax attributes, ACSC agrees
that after the Closing Date it will not cause or permit ANI to relinquish or
waive the ability to carry back (to the extent permitted by applicable law) any
such losses, credits or other tax attributes to any Pre-Closing Period for the
purpose of reducing the amount of Indemnified Taxes for which Woodbridge may be
liable pursuant to Section 6.4.
ARTICLE 7
DISPUTE RESOLUTION
7.1 Commercial Arbitration. Subject to Section 7.2, all disputes, disagreements,
controversies, questions or claims arising out of or relating to this Agreement
and all other agreements entered into pursuant to the terms of this Agreement,
including with respect to its, or their, formation, execution, validity,
application, interpretation, performance, breach, termination or enforcement,
shall be determined by arbitration administered by the American Arbitration
Association under its commercial arbitration rules (the “Commercial Arbitration
Rules”) provided that:

  (a)   any hearing in the course of the arbitration shall be held in New York,
New York in the English language;     (b)   if the parties are able to agree in
writing to a single arbitrator within twenty (20) days of the institution of any
arbitration hereunder, the number of

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      arbitrators shall be one; otherwise, each party shall select one
arbitrator and those two arbitrators shall select a third arbitrator, and the
three arbitrators so chosen shall serve as the arbitrators of such dispute;

  (c)   any award or determination of the arbitrator shall be final and binding
on the parties and there shall be no appeal on any ground, including, for
greater certainty, on the ground of alleged errors of Law;     (d)   despite
Article M-10 of the Commercial Arbitration Rules, the arbitrator shall not,
without the written consent of all parties to the arbitration, retain any
expert;     (e)   all costs and expenses of arbitration shall be split equally
between the parties hereto; and     (f)   all matters in relation to the
arbitration shall be kept confidential to the full extent permitted by Law, and
no individual shall be appointed as an arbitrator unless he or she agrees in
writing to be bound by this dispute resolution provision.

7.2 Proposed Adjustment Disputes. Section 7.1 shall not apply in respect of any
Proposed Adjustment, which dispute is governed by Section 2.11, or any Tax
Dispute, which shall be governed by Section 6.1.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by Woodbridge and Woodbridge Parent.

  (a)   Woodbridge and Woodbridge Parent hereby agree jointly and severally, to
indemnify and to hold ACSC, AbitibiBowater and the Partnership harmless from and
against any and all Loss (other than Losses indemnified pursuant to Section 6.4)
suffered or incurred by ACSC, AbitibiBowater or the Partnership (and following
the Closing, ANI) in connection with or arising from:

  (i)   any breach by Woodbridge or Woodbridge Parent of any of its covenants or
agreements in this Agreement or any failure by Woodbridge or Woodbridge Parent
to perform any of its obligations in this Agreement; and

  (ii)   any breach of any warranty or the inaccuracy of any representation of
Woodbridge or Woodbridge Parent contained in this Agreement.

  (b)   The indemnifications provided for in Section 8.1(a)(i) shall continue
indefinitely. The indemnifications provided for in Section 8.1(a)(ii) shall
terminate on the date that is eighteen (18) months following the Closing Date

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      (and no claims may be made by ACSC, AbitibiBowater or the Partnership (and
following the Closing, ANI) under Section 8.1(a)(ii) thereafter), except that
the indemnification by Woodbridge and Woodbridge Parent shall continue
indefinitely as to the representations and warranties contained in
Sections 5.3(h), 5.3(i), 5.3(j), 5.3(n), 5.3(o), 5.3(p), 5.3(q), 5.3(r), 5.3(s),
5.3(t), 5.3(u), 5.3(v), 5.3(w), 5.3(x) and 5.3(y).

8.2 Indemnification by ACSC and AbitibiBowater.

  (a)   ACSC and AbitbiBowater hereby agree to indemnify and to hold Woodbridge
and Woodbridge Parent harmless from and against any and all Loss suffered or
incurred by Woodbridge or Woodbridge Parent in connection with or arising from:

  (i)   any breach by ACSC, the Partnership or AbitibiBowater of any of its
covenants or agreements in this Agreement or any failure by ACSC, the
Partnership or AbitibiBowater to perform any of its obligations in this
Agreement; and

  (ii)   any breach of any warranty or the inaccuracy of any representation of
ACSC or AbitibiBowater contained or referred to in this Agreement.

  (b)   The indemnifications provided for in Section 8.1(a)(i) shall continue
indefinitely. The indemnifications provided for in Section 8.2(a)(ii) shall
terminate on the date that is eighteen (18) months following the Closing Date
(and no claims may be made by Woodbridge or Woodbridge Parent under
Section 8.2(a)(ii) thereafter).

8.3 Indemnification by ACSC and AbitibiBowater of Woodbridge Indemnitees. ACSC
and AbitibiBowater hereby agree jointly and severally, at any time or times
after the Closing Date, to indemnify Woodbridge, Woodbridge Parent and all
direct and indirect subsidiaries of Woodbridge Parent including Thomson Reuters
Corporation and TNI, and each present and former director, officer, agent,
servant, and employee of each such entity, including any persons who have
maintained a position on the management committee of the Partnership
(collectively, the “Woodbridge Indemnitees”), harmless from and against:

  (a)   52.5% of any and all Environmental Damages incurred by the Woodbridge
Indemnitees that arise from or pertain to Conditions or Operations known to the
parties as listed on Schedule I hereto; and     (b)   100% of

  (i)   any and all Environmental Damages incurred by the Woodbridge Indemnitees
arising from or pertaining to Conditions or Operations that are not covered
under clause (a); and

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  (ii)   any and all Losses and Liabilities incurred by the Woodbridge
Indemnitees arising directly or indirectly by reason of or as a consequence of
the Operations of the Partnership.

  (c)   The indemnifications provided in Section 8.3(a) and 8.3(b) shall
continue indefinitely.

8.4 Indemnification by Woodbridge and Woodbridge Parent of Abitibi Indemnitees.

  (a)   Woodbridge and Woodbridge Parent hereby agree jointly and severally, at
any time or times after the Closing Date, to indemnify ACSC, AbitibiBowater, the
Partnership, ANI and all direct and indirect subsidiaries of AbitibiBowater, and
each present and former director, officer, agent, servant, employee of each such
entity, including any persons who have maintained a position on the management
committee of the Partnership (collectively, the “Abitibi Indemnitees”), harmless
from and against 47.5% of any and all Environmental Damages incurred by the
Abitibi Indemnitees that that arise from or pertain to Conditions or Operations
known to the parties as listed on Schedule I hereto.     (b)   The
indemnifications provided in Section 8.4(a) shall continue indefinitely.

8.5 Resolution of Indemnification Claims. All claims for indemnification under
this Article 8 will be asserted and resolved as follows:

  (a)   The party claiming indemnification (the “Indemnified Party”) in respect
of, arising out of or involving a claim or demand made by a third party against
the Indemnified Party (a “Third Party Claim”) shall deliver notice (a “Claim
Notice”) to the other party (the “Indemnifying Party”) within twenty (20) days
after receipt by such Indemnified Party of written notice of the Third Party
Claim; provided, however, that failure to give such Claim Notice shall not
affect the indemnification provided hereunder except to the extent the
Indemnifying Party shall have been actually prejudiced as a result of such
failure.

  (b)   If a Third Party Claim is made against an Indemnified Party, the
Indemnifying Party shall have the right to assume the defense of such Third
Party Claim with counsel selected by the Indemnifying Party. Should the
Indemnifying Party so assume the defense of a Third Party Claim, except as
provided in this Section 8.5(b), the Indemnifying Party shall not be liable to
the Indemnified Party for legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof. If the Indemnifying
Party assumes such defense, the Indemnified Party shall have the right to
participate in the defense thereof and to employ counsel, at its own expense,
separate from the counsel employed by the Indemnifying Party. If (i) the
Indemnifying Party shall not assume the defense of a Third Party Claim within
thirty (30) days of any Claim Notice, or (ii) legal counsel for the Indemnified
Party notifies the Indemnifying Party that there are or may be legal defenses
available to the Indemnified Party

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      that are different from or additional to those available to the
Indemnifying Party, that, if the Indemnified Party and the Indemnifying Party
were to be represented by the same counsel, would constitute a conflict of
interest for such counsel or prejudice prosecution of the defenses available to
such Indemnified Party, or (iii) if the Indemnifying Party shall assume the
defense of a Third Party Claim and fail to prosecute such defense with
reasonable diligence following notice of such failure by the Indemnified Party,
then in each such case the Indemnified Party, by notice to the Indemnifying
Party, may employ its own counsel and the Indemnifying Party shall be liable for
the reasonable fees, charges and disbursements of one counsel employed by the
Indemnified Party and the Indemnified Party shall be promptly reimbursed for any
such fees, charges and disbursements, as and when incurred. Whether the
Indemnifying Party or the Indemnified Party controls the defense of any Third
Party Claim, the parties shall cooperate in the defense thereof. Such
cooperation shall include the retention and provision to the counsel of the
controlling party of records and information that are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder. The Indemnifying Party shall have the right to settle, compromise or
discharge a Third Party Claim (other than any such Third Party Claim in which
criminal conduct is alleged) without the Indemnified Party’s consent if such
settlement, compromise or discharge (i) constitutes a complete and unconditional
discharge and release of the Indemnified Party (and, if Woodbridge is the
Indemnifying Party, of ANI and the Partnership), and (ii) provides for no relief
other than the payment of monetary damages and such monetary damages are paid in
full by the Indemnifying Party. No Third Party Claim may be settled by the
Indemnified Party without the written consent of the Indemnifying Party.

  (c)   If any Indemnified Party should have a claim under Article 8 against any
Indemnifying Party that does not involve a Third Party Claim, the Indemnified
Party shall deliver notice (an “Indemnity Notice”) within thirty (30) days after
an Indemnified Party first obtains knowledge of any claim that the Indemnified
Party has determined has given or could reasonably be expected to give rise to a
right of indemnification under this Agreement describing in reasonable detail
the facts giving rise to any claim for indemnification hereunder and shall
include in such Indemnity Notice (if then known) the amount or the method of
computation of the amount of the Loss relating to such claim, and a reference to
the provision of this Agreement upon which such claim is based. The failure by
any Indemnified Party to give the Indemnity Notice shall not impair such party’s
rights hereunder except to the extent that an Indemnifying Party shall have been
actually prejudiced as a result of such failure. If the Indemnifying Party
notifies the Indemnified Party that it does not dispute the claim described in
such Indemnity Notice, the Loss in the amount specified in the Indemnity Notice
will be conclusively deemed a liability of the Indemnifying Party under
Article 8 and the Indemnifying Party shall pay such amount to the Indemnified

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      Party on demand. If the Indemnifying Party disputes its liability with
respect to such claim, the Indemnifying Party and the Indemnified Party will
proceed in good faith to negotiate a resolution of such dispute, and if not
resolved through negotiations within thirty (30) days of the Indemnity Notice,
such dispute shall be resolved in accordance with Article 7 hereof.

8.6 Indemnification for Tax Contests. If there shall be any conflicts between
the provisions of this Article 8 and Article 6, the provisions of Article 6
shall control with respect to Tax contests.
8.7 Limitations on Liability. Except for remedies that cannot be waived as a
matter of law and injunctive or provisional relief, from and after the Closing,
none of the parties hereto shall be liable or responsible in any manner
whatsoever to any other party, whether for indemnification or otherwise, except
for the indemnity obligations expressly provided in this Agreement, which
provide the exclusive remedies and causes of action of the parties hereto with
respect to any matter arising out of or in connection with this Agreement.
8.8 Indemnification Payment. ACSC and the Partnership, on the one hand, and
Woodbridge, on the other hand, agree that for purposes of computing the amount
of any indemnification payment under Article 6 or this Article 8, any such
indemnification payment shall be treated as an adjustment to the Purchase Price
for all Tax purposes.
8.9 To the extent ACSC, AbitibiBowater, the Partnership or any other Abitibi
Indemnitee shall be entitled to indemnification pursuant to this Article 8 and
payment in respect of such indemnification is not made within five (5) Business
Days of written notice thereof, ACSC shall have the right, at its election (in
its sole and absolute discretion) to offset all or any portion of the amount of
such indemnification against the principal or interest payable on the Secured
Promissory Note pursuant to Section 2.2(b), payable by the Partnership as of or
following such date.
ARTICLE 9
GENERAL
9.1 Assignment. No party shall assign this Agreement or any of its rights and
benefits hereunder without the written consent of all other parties.
9.2 Notices. Any notice or other communication (a “Notice”) required or
permitted to be given or made hereunder shall be in writing and shall be well
and sufficiently given or made if hand delivered (including by commercial
courier) during normal business hours on a Business Day and left with a
receptionist or other responsible employee of the relevant party at the
applicable address set forth below, sent by facsimile transmission that produces
a paper record (a “Transmission”), charges prepaid and confirmed by prepaid
first class mail.

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      In the case of a Notice to Woodbridge, addressed to it at:
 
   
 
  Woodbridge International Holdings Limited
 
  65 Queen Street West
 
  Suite 2400 
 
  Toronto, Ontario
 
  M5H 2M8   
 
  Attention: Gregory J. Dart
 
   
 
  Facsimile No.:                    416.365.9293 
 
    In the case of a Notice to Woodbridge Parent, addressed to it at:  
 
  The Woodbridge Company Limited
 
  65 Queen Street West
 
  Suite 2400 
 
  Toronto, Ontario
 
  M5H 2M8   
 
  Attention: Gregory J. Dart
 
   
 
  Facsimile No.:                    416.365.9293 
 
    With a copy of any Notice sent to Woodbridge or Woodbridge Parent to:
 
   
 
  Torys LLP
 
  79 Wellington Street West
 
  Suite 3000, Box 270 TD Centre
 
  Toronto, Ontario M5K 1N2 
 
   
 
  Attention: Michael J. Siltala
 
   
 
  Facsimile No.:                    416.865.7380 

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      In the case of a Notice to ACSC, addressed to it at:  
 
  Abitibi Consolidated Sales Corporation
 
  1155 Metcalfe Street, Suite 800 
 
  Montreal, Quebec
 
  H3B 5H2 
 
   
 
  Attention: Executive Vice President Operations and Sales
 
   
 
  Facsimile No.:                    514.394.2241 
 
    In the case of a Notice to AbitibiBowater, addressed to it at:  
 
  AbitibiBowater Inc.
 
  1155 Metcalfe Street, Suite 800 
 
  Montreal, Quebec
 
  H3B 5H2 
 
   
 
  Attention: Executive Vice President Operations and Sales
 
   
 
  Facsimile No.:                    514.394.2241 
 
    With a copy of any Notice sent to ACSC, AbitibiBowater, the Partnership or,
following the Closing, ANI to:
 
   
 
  AbitibiBowater Inc.
 
  1155 Metcalfe Street, Suite 800 
 
  Montreal, Quebec
 
  H3B 5H2 
 
  Attention: Vice President Legal Affairs
 
   
 
  Facsimile No.:                    514.394.3644 
 
   
 
  and to
 
   
 
  Paul, Weiss, Rifkind, Wharton & Garrison LLP
 
  1285 Avenue of the Americas
 
  New York, NY 10019-6064 
 
  Attention: Ariel J. Deckelbaum
 
   
 
  Facsimile No.:                     212.757.3990 

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      In the case of a Notice to the Partnership, addressed to it at:  
 
  Augusta Newsprint Company
 
  c/o AbitibiBowater
 
  1155 Metcalfe Street, Suite 800 
 
  Montreal, Quebec
 
  H3B5H2 
 
   
 
  Attention: Executive Vice President Operations and Sales
 
   
 
  Facsimile No.:                    514.394.3644 
 
    In the case of any pre-Closing Notice to Augusta Newsprint Inc., addressed
to it at:  
 
  Woodbridge International Holdings Limited
 
  65 Queen Street West
 
  Suite 2400 
 
  Toronto, Ontario
 
  M5H 2M8 
 
   
 
  Attention: Gregory J. Dart
 
   
 
  Facsimile No.:                    416.365.9293 

Any Notice given or made in accordance with this Section shall be deemed to have
been given or made and to have been received:

  (i)   on the day it was delivered, if delivered as aforesaid; or

  (ii)   on the day of sending, if sent by Transmission during normal business
hours of the addressee on a Business Day and, if not, then on the first Business
Day after the sending thereof.

Any party may from time to time change its address for Notice by giving notice
to each other party in accordance with the provisions of this Section.
9.3 Governing Law. This Agreement shall be governed by, and interpreted and
enforced in accordance with, the Laws in force in the State of New York
(excluding any conflict of laws rule or principle which might refer such
questions to the Laws of another jurisdiction).
9.4 Time of Performance. If anything is required to be done or any action is
required to be taken pursuant to the Agreement on or by a specified date which
is not a Business Day, then such action shall be valid if taken on or by the
next succeeding Business Day.
9.5 Entire Agreement. This Agreement, the Settlement Order, the Secured
Promissory Note and all Schedules and Exhibits hereto and all related documents
constitute the entire agreement between the parties pertaining to the subject
matter hereof and supersede all prior agreements, negotiations, discussions and
understandings, written or oral, between the parties.

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9.6 Amendment. This Agreement may be amended, modified or supplemented only by a
written agreement signed by each of the parties hereto.
9.7 Time of the Essence. Time shall be of the essence of this Agreement and each
of its provisions.
9.8 Waiver. Any waiver of, or consent to depart from, the requirements of any
provision of this Agreement shall be effective only if it is in writing and
signed by the party giving it, and only in the specific instance and for the
specific purpose for which it has been given. No failure on the part of any
party to exercise, and no delay in exercising, any right under this Agreement
shall operate as a waiver of such right. No exercise or partial exercise of any
such right shall preclude any other or further exercise of such right or the
exercise of any other right.
9.9 Further Assurances. Each party hereto shall do all such acts and shall
execute and deliver all such further agreements, documents, conveyances, deeds,
assignments, transfers, instruments and the like, and shall cause the doing of
all such acts and the execution and delivery of all such further items as are
within its power and as any other party may in writing at any time and from time
to time reasonably request, in order to give full effect to the provisions and
intent of this Agreement.
9.10 Costs and Expenses. Each party shall pay all costs and expenses incurred by
it in connection with entering into this Agreement and completing the
transactions provided for herein; provided that the costs, fees and expenses
charged or paid in connection with HSR filings in connection with the purchase
of the Purchase Stock and the completion of such transaction shall be paid in
equal portions by ACSC and Woodbridge.
9.11 Currency. Unless specified otherwise, all statements of or references to
dollar amounts in this Agreement are to lawful money of the United States.
9.12 Confidentiality. No party shall make any public statement or issue any
press release concerning or otherwise disclose the transactions contemplated by
this Agreement except as may be necessary to comply with the requirements of all
applicable Laws and the requirements of the Bankruptcy Court in connection with
the Bankruptcy Proceedings. If any such public statement or release is so
required, to the extent practicable, the party making such disclosure shall
consult the other party prior to making such statement or release and the
parties shall use reasonable efforts, acting in good faith, to agree upon a text
for such statement or release which is satisfactory to both parties provided
that, if such consultation is not practicable, such first party shall be
entitled to finally determine the timing and content of such disclosure, but
shall use reasonable efforts to cause such disclosure to be redacted to the
extent requested by the other.
9.13 Counterparts. This Agreement may be executed in counterparts. Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Agreement by facsimile, pdf or other
electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement.

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9.14 Sections and Headings. The division of this Agreement into articles,
sections and clauses or other divisions and the insertions of headings and a
table of contents are for convenience of reference only and shall not affect the
construction or interpretation of this Agreement.
9.15 Successors and Assigns. Without limiting Section 9.1, this Agreement shall
be binding upon and enure to the benefit of the parties hereto, their respective
successors by operation of law (including any successor by reason of
amalgamation or statutory arrangement of either party) and permitted assigns,
and shall be binding upon any chapter 7 or chapter 11 trustee or receiver
appointed in the Bankruptcy Proceedings or in any subsequent case under the
Bankruptcy Code or any similar receiver in the CCAA Proceedings or subsequent
proceedings under the CCAA or the Canadian Bankruptcy and Insolvency Act.
9.16 Availability of Equitable Relief; Specific Performance. The Parties agree
that irreparable damage would occur in the event that any of the provisions of
this Agreement were not performed in accordance with their specific terms or
were otherwise breached. Accordingly, subject to the limitations set forth in
this Section 9.16, each of the Parties shall, without the posting of bond or
other security (any requirement for which the Parties hereby waive), be entitled
to equitable relief to prevent or remedy breaches of this Agreement, without the
proof of actual damages, including in the form of an injunction or injunctions
or orders for specific performance in respect of such breaches. Each Party
agrees to waive any requirement for the security or posting of any bond in
connection with any such equitable remedy. Each Party further agrees that the
only permitted objections that it may raise in response to any action for such
equitable relief is that it contests the existence of a breach or threatened
breach of the provisions of this Agreement and no Party will allege, and each
Party hereby waives the defense or counterclaim, that there is an adequate
remedy at Law except as expressly provided in this Section 9.16. For the
avoidance of doubt, the Parties agree that specific performance shall not
constitute the sole and exclusive remedy of the Parties, whether at Law or
equity, for any and all breaches after Closing of the terms and conditions of
this Agreement. In no event shall any Party be liable for special, exemplary,
consequential or punitive damages.
[Remainder of page intentionally left blank]

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          IN WITNESS WHEREOF the parties hereto have duly signed and delivered
this Agreement as of the date first above written.

            WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED
      By:   /s/ Gregory J. Dart         Authorized Officer                THE
WOODBRIDGE COMPANY LIMITED
      By:   /s/ Gregory J. Dart         Authorized Officer               
ABITIBI CONSOLIDATED SALES CORPORATION
      By:   /s/ Pierre Rougeau         Name:   Pierre Rougeau        Title:  
President        ABITIBIBOWATER INC.
      By:   /s/ Pierre Rougeau         Name:   Pierre Rougeau        Title:  
Executive Vice President, Operations and Sales     

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                  AUGUSTA NEWSPRINT COMPANY    
 
           
 
  By:   ABITIBI CONSOLIDATED SALES CORPORATION
its General Partner    
 
           
 
  By:   /s/ Pierre Rougeau
 
Name: Pierre Rougeau    
 
      Title: President    
 
                AUGUSTA NEWSPRINT INC.    
 
           
 
  By:   /s/ Gregory J. Dart
 
Authorized Officer    

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SCHEDULE A
FORM OF SECURED PROMISSORY NOTE
See Exhibit 4.4 of AbitibiBowater Inc.’s Form 10-K
for the fiscal year ended December 31, 2010.

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SCHEDULE B
FORM OF WOODBRIDGE RELEASE
1.            For purposes hereof, the following terms have the respective
definitions set forth below:

  a.   “Stock Purchase Agreement” means that certain Stock Purchase Agreement by
and among the Releasors, Woodbridge, Woodbridge Parent and Augusta Newsprint
Inc. made as of n, 2010 and/or any document entered into in connection
therewith.     b.   “Demands” means all Actions and Proceedings, causes of
action, suits, debts, losses, expenses, judgments, damages, obligations,
Liabilities, dues, accounts, bonds, covenants, Contracts, claims, contributions,
indemnifications, executions and demands whatsoever.     c.   “Releasees” means
The Woodbridge Company Limited (“Woodbridge Parent”), Woodbridge International
Holdings Limited (“Woodbridge”), and all of the other direct and indirect
subsidiaries of Woodbridge Parent (collectively, the “Corporations”), each
present and former director, officer, agent, servant and employee of the
Corporations including, without limitation, any of such persons who have
maintained a position on the management committee of the Partnership, and each
of their respective successors, assigns, heirs, executors, estate trustees,
personal representatives and administrators, as applicable.     d.   “Releasors”
means the undersigned companies, including for these purposes their respective
successors by operation of law.     e.   Terms capitalized herein but not
defined herein shall have the respective meanings set forth in the Stock
Purchase Agreement.

2.            In consideration of the transactions contemplated by the Stock
Purchase Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Releasors hereby
acknowledges and agrees and unconditionally and irrevocably, fully, finally and
forever releases, waives, acquits and discharges each of the Releasees from any
and all Demands (or facts upon which such Demand could be premised) of any kind
or character that the Releasors ever had, now have or may hereafter have, and
each of them, whether, now known or unknown, suspected or unsuspected or
claimed, in contract, at law or in equity, against the Releasees, or any of
them, for or by reason of, or in any way arising out of any cause, matter or
thing existing from the beginning of the world up to the date hereof relating
to, or arising directly or indirectly by reason of or as a consequence of, the
Operations of the Partnership.
3.            Notwithstanding anything provided for herein, this release shall
not in any way limit or restrict the rights of the Releasors (i) to make a claim
against, or to require indemnification by Woodbridge pursuant to and subject to
the terms and conditions of the

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- 2 -

Stock Purchase Agreement or any documents delivered in connection with the
transactions contemplated thereby or (ii) in connection with the Secured
Promissory Note.
4.            Each Releasor hereby represents, warrants and covenants that
(a) such Releasor has not heretofore made or filed and will not make or file any
allegations or any Action against any of the Releasees in connection with, based
upon or arising out of any claim released and discharged pursuant to this
AbitibiBowater Release, and (b) the undersigned cannot, have not and will not
assign to any Person any claim or rights including any claim (or part thereof)
released or discharged pursuant to this AbitibiBowater Release. Each Releasor
hereby acknowledges that the consent and waiver made by such Releasor pursuant
to this AbitibiBowater Release is voluntary, that it has been carefully
considered and that such Releasor has consulted with counsel or has been advised
it should do so in connection therewith.
[Signature Page Follows]

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- 2 -

          DATED:

            ABITIBI CONSOLIDATED SALES CORPORATION
      By:           Name:           Title        ABITIBIBOWATER INC.
      By:           Name:           Title:           AUGUSTA NEWSPRINT INC.
      By:           Name:           Title:           AUGUSTA NEWSPRINT COMPANY
      By:           Name:           Title:        

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SCHEDULE C
FORM OF ABITIBIBOWATER RELEASE
1.            For purposes hereof, the following terms have the respective
definitions set forth below:

  a.   “Stock Purchase Agreement” means that certain Stock Purchase Agreement by
and among the Releasors, ACSC, AbitibiBowater, Augusta Newsprint Company and ANI
made as of n, 2010 and/or any document entered into in connection therewith.    
b.   “Demands” means all Actions and Proceedings, causes of action, suits,
debts, losses, expenses, judgments, damages, obligations, Liabilities, dues,
accounts, bonds, covenants, Contracts, claims, contributions, indemnifications,
executions and demands whatsoever.     c.   “Releasees” means AbitibiBowater
Inc. (“AbitibiBowater”), Abitibi Consolidated Sales Corporation (“ACSC”),
Augusta Newsprint Inc. (“ANI”) and all of the other direct and indirect
subsidiaries of AbitibiBowater (collectively, the “Corporations”) the
Partnership and each present and former director, officer, agent, servant and
employee of the Corporations or the Partnership including, without limitation,
any of such persons who have maintained a position on the management committee
of the Partnership, and each of their respective successors, assigns, heirs,
executors, estate trustees, personal representatives and administrators, as
applicable.     d.   “Releasors” means the undersigned companies, including for
these purposes their respective successors by operation of law.     e.   Terms
capitalized herein but not defined herein shall have the respective meanings set
forth in the Stock Purchase Agreement.

2.            In consideration of the transactions contemplated by the Stock
Purchase Agreement and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, each of the Releasors hereby
acknowledges and agrees and unconditionally and irrevocably, fully, finally and
forever releases, waives, acquits and discharges each of the Releasees from any
and all Demands (or facts upon which such Demand could be premised) of any kind
or character that the Releasors ever had, now have or may hereafter have, and
each of them, whether, now known or unknown, suspected or unsuspected or
claimed, in contract, at law or in equity, against the Releasees, or any of
them, for or by reason of, or in any way arising out of any cause, matter or
thing existing from the beginning of the world up to the date hereof relating
to, or arising directly or indirectly by reason of or as a consequence of, the
Operations of the Partnership.
3.            Notwithstanding anything provided for herein, this release shall
not in any way limit or restrict the rights of the Releasors (i) to make a claim
against, or require

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-2-

indemnification by, either AbitibiBowater and ACSC pursuant to and subject to
the terms and conditions of the Stock Purchase Agreement or any documents
delivered in connection with the transactions contemplated thereby; (ii) in
connection with the Secured Promissory Note; (iii) in connection with the
Administrative Claim; (iv) in connection with the Bankruptcy Claim; or (v) in
connection with the Woodbridge Claims.
4.            Each Releasor hereby represents, warrants and covenants that
(a) such Releasor has not heretofore made or filed and will not make or file any
allegations or any Action against any of the Releasees in connection with, based
upon or arising out of any claim released and discharged pursuant to this
AbitibiBowater Release, and (b) the undersigned cannot, have not and will not
assign to any Person any claim or rights including any claim (or part thereof)
released or discharged pursuant to this AbitibiBowater Release. Each Releasor
hereby acknowledges that the consent and waiver made by such Releasor pursuant
to this AbitibiBowater Release is voluntary, that it has been carefully
considered and that such Releasor has consulted with counsel or has been advised
it should do so in connection therewith.
[Signature Page Follows]

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-2-

          DATED:

            WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED
      By:                
THE WOODBRIDGE COMPANY LIMITED
      By:                        

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SCHEDULE D
CLOSING DELIVERIES
A. Woodbridge Closing Deliveries

1.   The Purchase Stock, together with a stock power with respect to the
Purchase Stock executed in blank;   2.   certificates from the appropriate
authorities, dated not more than ten (10) Business Days prior to the Closing
Date, to the effect that each of Woodbridge, Woodbridge Parent and ANI each is
in good standing in their jurisdiction of incorporation;   3.   a certificate
dated not more than ten (10) Business Days prior to the Closing Date from the
Secretary of State of the State of Georgia to the effect that ANI is duly
qualified as a foreign corporation and in good standing in Georgia;   4.   the
AbitibiBowater Release;   5.   a certificate of a Senior Officer of each of
Woodbridge and Woodbridge Parent to the effect that all of the representations
and warranties made by each of Woodbridge and Woodbridge Parent are true and
correct in all respects and that each of Woodbridge and Woodbridge Parent has
complied with all covenants required to be complied with by it prior to Closing
in all material respects;   6.   at least two (2) Business Days prior to the
Closing Date, the notice contemplated by Section 2.3;   7.   the resignations of
all directors and officers of ANI and releases from such individuals from all
claims ANI, as contemplated by Section 3.5 of the Agreement;   8.   the
Assignment and Assumption of Bankruptcy Claims Agreement;   9.   the Assignment
and Assumption of Administrative Claim Agreement; and   10.   all other
documents reasonably required to be delivered by Woodbridge to ACSC in
connection with the purchase and sale of the Purchase Stock.

B(I). Partnership, ACSC and AbitibiBowater Closing Deliveries

1.   In immediately available funds, an amount equal to the lesser of
(i) fifteen million dollars ($15,000,000) and (ii) 52.5% of the Estimated
Partnership Cash;   2.   the Secured Promissory Note;   3.   at least five
(5) Business Days prior to the Closing Date, the Estimated Closing Date Cash
Statement;

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-2-

4.   a certificate dated not more than ten (10) Business Days prior to the
Closing Date from the appropriate authorities, to the effect that each of ACSC
and AbitibiBowater is in good standing in their jurisdictions of incorporation;
  5.   the Woodbridge Release;   6.   a certificate of a Senior Officer of each
of the Partnership, ACSC and AbitibiBowater to the effect that all of the
representations and warranties made by each of the Partnership, ACSC and
AbitibiBowater are true and correct in all respects and that each of the
Partnership, ACSC and AbitibiBowater has complied with all covenants required to
be complied with by it prior to Closing in all material respects;   7.   a
certified copy of the Settlement Order;   8.   the Assignment and Assumption of
Bankruptcy Claims Agreement;   9.   the Assignment and Assumption of
Administrative Claim Agreement; and   10.   all other documents reasonably
required to be delivered by the Partnership and ACSC to Woodbridge in connection
with the purchase and sale of the Purchase Stock.

B(II). Security Documents

1.   Form UCC-1 financing statements naming ACSC and ANI as debtor and
Woodbridge as secured party in proper form for filing in the appropriate filing
office.   2.   Deed of Trust, dated as of the Closing Date, with respect to all
of the real property and fixtures of the Partnership located at 2434 Doug
Barnard Parkway, Augusta, Georgia 30906, including an assignment of leases and
rents, in form and substance reasonably satisfactory to Noteholder.   3.  
Form UCC-1 financing statements naming the Partnership as debtor and Woodbridge
as secured party in proper form for filing in the appropriate filing offices.  
4.   Deposit account control agreements with respect to the Partnership’s
accounts, other than Excluded Accounts.

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SCHEDULE E
FORM OF SETTLEMENT MOTION
IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

             
 
    )      
 
           
In re:
    )     Chapter 11  
 
    )      
 
           
ABITIBIBOWATER INC., et al.,1
    )     Case No. 09-11296 (KJC)
 
           
 
    )     Jointly Administered  
Debtors.
    )      
 
           
 
    )     Hearing Date: December 22, 2010 at 1:00 p.m. (ET)
Objection Deadline: December 15, 2010 at 4:00 p.m.
 
          (ET)
 
    )      

DEBTORS’ MOTION FOR AN ORDER PURSUANT TO SECTIONS 105
AND 363(b) OF THE BANKRUPTCY CODE AND FEDERAL RULE OF
BANKRUPTCY PROCEDURE 9019: (I) APPROVING A SETTLEMENT
AND COMPROMISE BETWEEN WOODBRIDGE INTERNATIONAL HOLDINGS
LIMITED, THE WOODBRIDGE COMPANY LIMITED, ABITIBI CONSOLIDATED
SALES CORPORATION, ABITIBIBOWATER INC., AUGUSTA NEWSPRINT
 

1   The Debtors in these cases, along with the last four digits of each Debtor’s
federal tax identification number, are: AbitibiBowater Inc. (6415),
AbitibiBowater US Holding 1 Corp. (N/A), AbitibiBowater US Holding LLC (N/A),
AbitibiBowater Canada Inc. (N/A), Abitibi-Consolidated Alabama Corporation
(4396), Abitibi-Consolidated Corporation (9050), Abitibi-Consolidated Finance LP
(4528), Abitibi Consolidated Sales Corporation (7144), Alabama River Newsprint
Company (7247), Augusta Woodlands, LLC (9050), Bowater Alabama LLC (7106),
Bowater America Inc. (8645), Bowater Canada Finance Corporation (N/A), Bowater
Canadian Forest Products Inc. (N/A), Bowater Canadian Holdings Incorporated
(N/A), Bowater Canadian Limited (N/A), Bowater Finance Company Inc. (1715),
Bowater Finance II LLC (7886), Bowater Incorporated (1803), Bowater LaHave
Corporation (N/A), Bowater Maritimes Inc. (N/A), Bowater Newsprint South LLC
(1947), Bowater Newsprint South Operations LLC (0168), Bowater Nuway Inc.
(8073), Bowater Nuway Mid-States Inc. (8290), Bowater South American Holdings
Incorporated (N/A), Bowater Ventures Inc. (8343), Catawba Property Holdings, LLC
(N/A), Coosa Pines Golf Club Holdings LLC (8702), Donohue Corp. (9051), Lake
Superior Forest Products Inc. (9305) and Tenex Data Inc. (5913). The Debtors’
corporate headquarters are located at, and the mailing address for each Debtor
is, 1155 Metcalfe Street, Suite 800, Montreal, Quebec H3B 5H2, Canada.

 

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COMPANY AND AUGUSTA NEWSPRINT INC.; (II) AUTHORIZING ABITIBI
CONSOLIDATED SALES CORPORATION
TO PURCHASE AN INTEREST IN THE AUGUSTA NEWSPRINT
COMPANY; AND (III) GRANTING RELATED RELIEF
          AbitibiBowater Inc. (“AbitibiBowater”) and its affiliated debtors and
debtors-in-possession in the above-captioned cases (each a “Debtor,” and
collectively, the “Debtors”), by and through their undersigned counsel, hereby
move (the “Motion”) this Court, pursuant to sections 105 and 363(b) of title 11
of the United States Code (the “Bankruptcy Code”) and Rule 9019 of the Federal
Rules of Bankruptcy Procedure (the “Bankruptcy Rules”), for entry of an order
substantially in the form attached hereto as Exhibit A (the “Order”):
(i) authorizing the Debtors to enter into a settlement and compromise with
Woodbridge International Holdings Limited (“WIHL”), The Woodbridge Company
Limited (“TWCL”), Augusta Newsprint Company (“Augusta”) and Augusta Newsprint
Inc. (“ANI” and along with WIHL, TWCL, Augusta, AbitibiBowater, Abitibi
Consolidated Sales Corporation (“ACSC”), the “Parties”) with respect to various
disputes among the Parties; (ii) in furtherance of that settlement and
compromise, authorizing ACSC to purchase all of the outstanding shares of the
common and preferred stock of ANI, which would result in the transfer of ANI’s
47.5% interest in Augusta, pursuant to a certain stock purchase agreement,
substantially in the form attached hereto as Exhibit B (the “Stock Purchase
Agreement”), and to enter into a certain Note (defined below) for the partial
payment of the purchase price for such stock and granting of liens thereunder;
and (iii) granting related relief. In support of this Motion, the Debtors
respectfully represent as follows:
JURISDICTION
          1. This Court has jurisdiction to hear this Motion under 28 U.S.C. §§
157 and 1334. This is a core proceeding pursuant to 28 U.S.C. § 157(b). Venue is
proper pursuant to 28 U.S.C. §§ 1408 and 1409.

2

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          2. The statutory predicates for the relief requested herein are
sections 105(a) and 363(b) of the Bankruptcy Code and Bankruptcy Rule 9019.
BACKGROUND
General Background
          3. AbitibiBowater (together with its subsidiaries and affiliates, the
“Company”) is incorporated in Delaware and headquartered in Montreal, Quebec.
The Company is the world’s largest producer of newsprint by capacity and one of
the largest publicly traded pulp and paper manufacturers worldwide. It produces
an extensive range of commercial printing papers, market pulp and wood products,
serving customers in over 90 countries. The Company is also among the world’s
largest recyclers of newspapers and magazines, and has third-party certified
100% of its managed woodlands to sustainable forest management standards. The
Company owns and operates 19 pulp and paper facilities and 24 wood products
facilities located in the United States, Canada and South Korea. Employing
around 11,900 people, the Company realized sales of approximately $4.4 billion2
in 2009.
          4. The Company’s financial performance depends primarily on the market
demand for its products and the prices at which they can be sold. These products
are globally traded commodities, and as such, the balance between supply and
demand drives their pricing and shipment levels. Supply and demand, in turn, are
affected by global economic conditions, changes in consumption and capacity, the
level of customer and producer inventories and fluctuations in currency exchange
rates. The recent downturn in the global economy has resulted in an
unprecedented decline in demand for newsprint, the Company’s primary product. In
addition, substantial price competition and volatility in the pulp and paper
industry, along with
 

2   All monetary figures are presented in U.S. dollars unless specifically noted
otherwise.

3

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negative trends in advertising, electronic data transmission and storage and
continued expansion of the Internet, have exacerbated downward pressure on
revenue. At the same time, the global credit markets suffered a significant
contraction, including the failure of some large financial institutions, which
has resulted in a severe decline in the credit markets and overall availability
of credit. These market disruptions, as well as the Company’s high debt levels
and the overall weakness in consumer demand, have adversely impacted the
Company’s financial performance and have necessitated the commencement of these
Chapter 11 Cases and coordinated Canadian filings.
          5. Specifically, on April 16, 2009 (the “Petition Date”), certain of
the Debtors filed a voluntary petition for relief under chapter 11 of the
Bankruptcy Code (the “Chapter 11 Cases”).3 On April 17, 2009, certain of the
Debtors (the “Cross-Border Debtors”)4 and non-debtor subsidiaries of
AbitibiBowater (the “CCAA Debtors” and together with the Cross-Border Debtors,
the “Canadian Debtors”)5 applied for protection from their creditors under
Canada’s Companies’ Creditors Arrangement Act, R.S.C. 1985, c. C-36, as amended
(the “CCAA”), in the Superior Court, Commercial Division, for the Judicial
District of Montreal, Canada (the “Canadian Court” and the filing, the “Canadian
Proceedings”). Two of the CCAA
 

3   The SPV Debtors commenced their Chapter 11 Cases on December 22, 2009.   4  
The Cross-Border Debtors are: Bowater Canada Finance Corporation, Bowater
Canadian Holdings Incorporated, AbitibiBowater Canada Inc., Bowater Canadian
Forest Products Inc., Bowater Maritimes Inc., Bowater LaHave Corporation and
Bowater Canadian Limited.   5   The CCAA Debtors are: Bowater Mitis Inc.,
Bowater Guerette Inc., Bowater Couturier Inc., Alliance Forest Products (2001)
Inc., Bowater Belledune Sawmill Inc., St. Maurice River Drive Company, Bowater
Treated Wood Inc., Canexel Hardboard Inc., 9068-9050 Quebec Inc., Bowater Canada
Treasury Corporation, Bowater Canada Finance Limited Partnership, Bowater
Shelburne Corporation, 3231078 Nova Scotia Company, Bowater Pulp and Paper
Canada Holdings Limited Partnership, Abitibi-Consolidated Inc.,
Abitibi-Consolidated Company of Canada, Abitibi-Consolidated Nova Scotia
Incorporated, 32117925 Nova Scotia Company, Terra-Nova Explorations Ltd., The
Jonquiere Pulp Company, The International Bridge and Terminal Company, Scramble
Mining Limited, 9150-3383 Quebec Inc., Star Lake Hydro Partnership, Saguenay
Forest Products Inc., 3224112 Nova Scotia Limited, La Tuque Forest Products
Inc., Marketing Donohue Inc., Abitibi-Consolidated Canadian Office Products
Holdings Inc., 3834328 Canada Inc., 6169678 Canada Incorporated, 4042410 Canada
Inc., Donohue Recycling and 1508756 Ontario Inc.

4

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Debtors — Abitibi-Consolidated Inc. (“ACI”) and Abitibi-Consolidated Company of
Canada (“ACCC” and together with ACI, the “Chapter 15 Debtors”) — thereafter
filed petitions for recognition under chapter 15 of the Bankruptcy Code (the
“Chapter 15 Cases”) in this Court seeking relief in support of the Canadian
Proceedings. AbitibiBowater and certain of the Debtors also filed for ancillary
relief in Canada seeking relief in support of the Chapter 11 Cases in Canada
under the Canadian equivalent of chapter 15, section 18.6 of the CCAA.6
          6. On April 28, 2009, the Office of the United States Trustee for the
District of Delaware appointed a statutory Creditors Committee of unsecured
creditors (the “Creditors Committee”) in these Chapter 11 Cases pursuant to
section 1102 of the Bankruptcy Code.
          7. On August 2, 2010, the Debtors filed the Debtors’ Second Amended
Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the
“Plan”) as well as the Disclosure Statement for Debtors’ Second Amended Joint
Plan of Reorganization Under Chapter 11 of the Bankruptcy Code (the “Disclosure
Statement”).
          8. On August 3, 2010, the Court entered an order approving the
Disclosure Statement and scheduling a hearing to consider confirmation of the
Plan for September 24, 2010 at 10:00 a.m. (ET), which was continued for several
dates thereafter (the “Confirmation Hearing”). On November 22, 2010, the Court
rendered an Opinion on Confirmation confirming the Plan and on November 23,
2010, the Court entered its Finding of Facts, Conclusions of Law and Order
Confirming Debtors’ Second Amended Joint Plan of Reorganization under Chapter 11
of the Bankruptcy Code (As Amended). The Effective Date for the Plan has yet to
occur.
 

6   The Debtors who obtained section 18.6 relief are: AbitibiBowater Inc.,
AbitibiBowater US Holding 1 Corp., Bowater Ventures Inc., Bowater Incorporated,
Bowater Nuway Inc., Bowater Nuway-Midstates, Inc., Catawba Property Holdings
LLC, Bowater Finance Company Inc., Bowater South American Holdings Incorporated,
Bowater America Inc., Lake Superior Forest Products Inc., Bowater Newsprint
South LLC, Bowater Newsprint South Operations LLC, Bowater Finance II, LLC,
Bowater Alabama LLC and Coosa Pines Golf Club Holdings LLC.

5

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Augusta Newsprint Company
          9. Augusta is a partnership that owns and operates a newsprint mill in
Augusta, Georgia. AbitibiBowater’s indirect subsidiary, ACSC, and an unrelated
third party, ANI, an indirect subsidiary of TWCL (together with WIHL and
Woodbridge International Holdings S.A., “Woodbridge”), own 52.5% and 47.5% of
the partnership interests in Augusta, respectively. ACSC manages the facility.
Pursuant to the governing agreements, Augusta sells 100% of its product to ACSC
at arm’s length market-determined rates, but otherwise operates as an
independent company with its own employees and accounting systems. Augusta was
created, and is governed, by that certain partnership agreement dated as of
August 17, 1981 (as amended on December 23, 1981, June 23, 1987, September 15,
1989, June 9, 1997, October 8, 1997, September 30, 1999, September 6, 2001 and
July 1, 2004, the “Partnership Agreement”).
          10. On June 15, 2009, the Debtors moved to reject a certain call
agreement (the “Call Agreement”) in respect of Augusta. The Call Agreement
obligated ACSC to either buy-out its partner at a price well above market, or
risk losing all of its equity in the partnership pursuant to forced sale
provisions in the Call Agreement.
          11. The Bankruptcy Court conducted a hearing on the rejection motion
on September 11, 2009, and on October 27, 2009, the Bankruptcy Court issued a
decision authorizing the Debtors’ rejection of the Call Agreement (the
“Rejection Order”). On November 3, 2009, Woodbridge filed its notice of appeal
of the Bankruptcy Court’s order (the “Rejection Appeal”). The appeal is
currently pending in the District Court for Delaware. If the Bankruptcy Court’s
judgment is not upheld and a forced sale is consummated, the Debtors could lose
their equity in Augusta.

6

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          12. On March 9, 2010, Woodbridge filed a motion in the Bankruptcy
Court to compel ACSC to reject the Partnership Agreement (the “Augusta
Partnership Motion”). If ACSC were forced to reject the Partnership Agreement,
the future of the Augusta mill would be uncertain, including the possibility of
a dissolution of the partnership. The Debtors filed an objection to the Augusta
Partnership Motion on April 9, 2010. The Augusta Partnership Motion is now
pending before the Bankruptcy Court.
The Stock Purchase Agreement
          13. The Debtors and Woodbridge have been in discussions to determine
whether a consensual resolution of the various issues surrounding the
Partnership Agreement could be reached. The Parties recently reached an
agreement settling most of the outstanding disputes among them and, in
connection therewith, ACSC has agreed to purchase all of Woodbridge’s interest
in Augusta. The form of the Stock Purchase Agreement pursuant to which ACSC will
purchase Woodbridge’s interest is set forth as Exhibit B annexed hereto.7
          14. This Motion does not seek to affect in any way the claims of
Woodbridge or any of their affiliates, against the Debtors or the Canadian
Debtors, arising from the rejection of the Call Agreement and the guarantee
dated as of September 6, 2001 by ACI in favor of each of WIHL and Woodbridge
International Holdings S.A. (all such claims, the “Woodbridge Claims”). For the
avoidance of doubt, the Woodbridge Claims, and all rights thereto and
thereunder, are preserved. The Woodbridge Claims will be addressed in the claims
processes administered by the Bankruptcy Court and the Canadian Court.
 

7   The descriptions of the Stock Purchase Agreement in this Motion are for
summary purposes only and shall in no way operate to alter, modify, or
contradict the terms of the actual Stock Purchase Agreement. Unless otherwise
defined herein, all capitalized terms shall have the meanings ascribed to them
in the Stock Purchase Agreement.

7

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          15. Through the Stock Purchase Agreement, Woodbridge has agreed to
sell to ACSC its common and preferred stock in ANI, which holds a 47.5% interest
in Augusta. In consideration for the sale, among other things, ACSC will pay an
amount in cash equal to the lesser of (i) $15,000,000 and (ii) 52.5% of the
Partnership Cash (as defined in the Stock Purchase Agreement), and Augusta will
issue a secured first-priority note (the “Note”) in favor of WIHL in the
principal amount of $90 million plus the excess, if any, of $15,000,000 over
52.5% of the Partnership Cash. The Note will have a maturity date occurring on
the fourth anniversary of the issue date of the Note, subject to extension in
certain circumstances as set forth in the Note. The Note will accrue interest at
(i) a rate of 8% per annum so long as the outstanding Principal Amount (as
defined in the Note) on such day is equal to or greater than $60,000,000, (ii) a
rate of 6.5% per annum so long as the outstanding Principal Amount on such day
is less than $60,000,000 and equal to or greater than $30,000,000, and (iii) a
rate of 5.0% per annum so long as the outstanding Principal Amount on such day
is less than $30,000,000.
          16. To induce WIHL to enter into the Stock Purchase Agreement, the
Note will be secured as follows: (i) ACSC has agreed to grant a continuing Lien
on its partnership interest in Augusta and all rights to payment arising
therefrom, including but not limited to, distributions and profits, all of its
rights in the Partnership Agreement or other governing documents and proceeds of
the foregoing, (ii) ANI has agreed to grant a continuing Lien on its partnership
interest in Augusta, all rights to payment arising therefrom, including but not
limited to, distributions and profits, all of its rights in the Partnership
Agreement or other governing documents, and proceedings of the foregoing, and
(iii) Augusta has agreed to grant a continuing Lien on all of its personal and
real property, whether now owned or hereafter acquired.

8

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          17. In addition to the cash and Note, the Purchase Price for the sale
of ANI’s interest will also include the assignment to Woodbridge of 47.5% of
Augusta’s rights, title and interest to (i) certain Bankruptcy Claims against
AbitibiBowater and certain of the Debtors in the aggregate amount of
$37,575,503.04, and (ii) an Administrative Claim against ACSC in the amount of
$9,246,580, all of which are set forth in the Stock Purchase Agreement and are
Allowed Claims (as defined in the Plan) in the Chapter 11 Cases. Finally, the
parties have agreed to indemnify each other for certain liabilities as set forth
in the Stock Purchase Agreement.
RELIEF REQUESTED
          18. By this Motion, the Debtors request the entry of an order under
sections 363(b) and 105(a) of the Bankruptcy Code and Rule 9019 of the
Bankruptcy Rules authorizing and approving the Debtors’ settlement and
compromise of various disputes arising from or relating to the Augusta
partnership.
          19. Further, the Debtors seek entry of an order pursuant to sections
105 and 363(b) of the Bankruptcy Code authorizing and approving the Debtors’
entry into the Stock Purchase Agreement, the Note and related documents.
          20. Under either the standard by which the Court considers the
approval of compromises or settlements, or the standard by which the Court
considers approval of the use of estate property outside of the ordinary course
of business, sufficient grounds exist to approve the Debtors’ compromise with
Woodbridge, including ACSC’s entry into the Stock Purchase Agreement, the Note
and related documents.
A. Bankruptcy Rule 9019

9

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          21. Bankruptcy Rule 9019(a) provides that “on motion by the trustee
and after notice and a hearing, the Court may approve a compromise or
settlement.” Fed. R. Bankr. P. 9019(a). Under Bankruptcy Rule 9019(a), the Court
has the authority to approve a settlement if it is fair and equitable and in the
best interests of the estate. See In re Louise’s Inc., 211 B.R. 798 (D. Del.
1997); Fischer v. Pereira (In re 47-49 Charles St., Inc.), 209 B.R. 618, 620
(S.D.N.Y. 1997). The settlement of time-consuming and burdensome litigation,
especially in the bankruptcy context, is encouraged. See In re Penn Central
Transp. Co., 596 F.2d 1102 (3d Cir. 1979) (“administering reorganization
proceedings in an economical and practical manner it will often be wise to
arrange the settlement of claims”) (quoting In re Protective Comm. for Indep.
Stockholders of TMT Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968)), see also
In re Sassalos, 160 B.R. 646, 653 (D. Or. 1993) (stating that “compromises are
favored in bankruptcy, and the decision of the bankruptcy judge to approve or
disprove a compromise rests in the sound discretion of the judge.”) In
determining the fairness and equity of a compromise in bankruptcy, the United
States Court of Appeals for the Third Circuit has stated that it is important
that the bankruptcy court “apprise itself of all facts necessary to form an
intelligent and objective opinion of the probabilities of ultimate success
should the claims be litigated. .. and estimate the complexity, expense and
likely duration of such litigation, and other factors relevant to a full and
fair assessment of the [claims].” Penn Central, 596 F.2d at 1153.
          22. More recently, the Third Circuit Court of Appeals enumerated the
following four-factor test to be used in deciding whether a settlement should be
approved: “(1) the probability of success in litigation; (2) the likely
difficulties in collection; (3) the complexity of the litigation involved and
the expense, inconvenience and delay necessarily attending it; and

10

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(4) the paramount interest of creditors.” Will v. Northwestern Univ. (In re
Nutraquest, Inc.), 434 F.3d 639, 644 (3d Cir. 2006).
          23. Approval of a proposed settlement is within the “sound discretion”
of the bankruptcy court. See In re Neshaminy Office Bldg. Assocs., 62 B.R. 798,
803 (E.D. Pa. 1986). The bankruptcy court should not substitute its judgment for
that of the debtor. Id. The court is not to decide numerous questions of law or
fact raised by litigation, but rather should canvass the issues to see whether
the settlement falls below the lowest point in the range of reasonableness. See
In re W.T. Grant & Co., 699 F.2d 599, 608 (2d Cir. 1983), cert. denied, 464 U.S.
22 (1983); see also In re Sea Containers Ltd., 2008 WL 4296562, at *5 (Bankr. D.
Del. Sept. 19, 2008).
          24. Entry into the Stock Purchase Agreement and Note as part of a
compromise with Woodbridge resolves several contested matters between the
parties. Approval of this Motion will effectively moot the Rejection Appeal and
the Augusta Partnership Motion, as Woodbridge will no longer be a partner in the
Augusta partnership. Once an order is entered approving this Motion, Woodbridge
will withdraw the Rejection Appeal and the Augusta Partnership Motion.8
          25. Based on the anticipated cost of further litigation with
Woodbridge with respect to the Rejection Appeal and the Augusta Partnership
Motion, the risk of a ruling adverse to the Debtors in connection with either of
those matters, and the likelihood of additional litigation with Woodbridge
(including possible partnership dissolution proceedings in Georgia), the Debtors
determined that a compromise with Woodbridge is in the best interest of the
Debtors, their estates and their creditors.
 

8   While the Rejection Appeal will be resolved by entry of an order approving
this Motion, Woodbridge will retain its right to assert the damages arising from
the rejection of the Call Agreement and the guarantee dated as of September 6,
2001 by ACI in favor of each of WIHL and Woodbridge International Holdings S.A.,
and the Debtors will retain their rights to object to the same.

11

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B. Bankruptcy Code §363
          26. Section 363(b) provides in relevant part that “[t]he trustee,
after notice and a hearing, may use, sell, or lease, other than in the ordinary
course of business, property of the estate.” A court can authorize a debtor to
use property of the estate pursuant to section 363(b)(1) of the Bankruptcy Code
when such use is an exercise of the debtor’s sound business judgment and when
the use of the property is proposed in good faith and for value. See In re
Delaware & Hudson R.R. Co., 124 B.R. 169, 176 (D. Del. 1991) (explaining that
the Third Circuit has adopted the “sound business purpose” test to evaluate
motions brought pursuant to section 363(b)); see also In re Abbotts Dairies of
Pennsylvania, Inc., 788 F.2d 143 (3d Cir. 1986). In addition, section 105(a) of
the Bankruptcy Code further authorizes “[t]he court [to] issue any order,
process, or judgment that is necessary or appropriate to carry out the
provisions of [the Bankruptcy Code].” 11 U.S.C. § 105(a).
          27. The debtor has the burden to establish that a valid business
purpose exists for the use of estate property in a manner that is not in the
ordinary course of business. See In re Lionel Corp., 722 F.2d 1063, 1070-71 (2d
Cir. 1983). Once the debtor has articulated a valid business purpose, however, a
presumption arises that the debtor’s decision was made on an informed basis, in
good faith and in the honest belief the action was in the best interest of the
company. See In re Integrated Resources, Inc., 147 B.R. 650, 656 (S.D.N.Y.
1992).
          28. The Debtors submit that good business reasons justify the Debtors’
entry into the Stock Purchase Agreement and Note as part of a compromise and
resolution between the Debtors and Woodbridge, and that entry into the Stock
Purchase Agreement and Note is in the best interests of the Debtors’ estates.
Specifically, the Stock Purchase Agreement allows ACSC

12

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to obtain 100% ownership of Augusta, which supplies newsprint to ACSC and is a
profitable enterprise, at a fair and reasonable price. The Note is an integral
part of the purchase price under the Stock Purchase Agreement.
          29. Further, the Debtors determined in their business judgment that
reaching a resolution with Woodbridge on these various issues was an important
component to maximizing the value of the Debtors’ estates for the benefit of all
creditors. The Debtors have determined that, rather than litigating with
Woodbridge regarding the assumption of the Partnership Agreement and (presuming
the Debtors’ victory on that point) continuing as a partner in Augusta
post-confirmation, acquiring a 100% interest in Augusta pursuant to the terms of
the Stock Purchase Agreement is a more sound business decision. Thus, the
Debtors entered into the Stock Purchase Agreement and Note for a valid business
purpose, in good faith and in the honest belief that the action was in the best
interests of the Debtors.
NOTICE
          30. Notice of this Motion has been provided to the following parties,
or, in lieu thereof, their counsel: (a) counsel to the Official Committee of
Unsecured Creditors; (b) the Office of the United States Trustee; (c) counsel to
the agents for the Debtors’ prepetition secured bank facilities; (d) counsel to
the agent for the Debtors’ postpetition lenders; (e) counsel to the agent for
the Debtors’ securitization facility; (f) counsel to ANI and Woodbridge; (g) the
Monitor appointed in the Canadian Proceeding; and (h) those parties entitled to
notice pursuant to Bankruptcy Rule 2002, in accordance with Local
Rule 2002-1(b). The Debtors submit that, in light of the nature of the relief
requested, no other or further notice need be given.

13

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PRIOR REQUEST FOR RELIEF
          31. No previous requests for the relief requested herein have been
made to this Court.
          WHEREFORE, the Debtors respectfully request that this Court grant
(i) the relief requested herein by entering an order in the form attached hereto
as Exhibit A authorizing the Debtors to enter into the Stock Purchase Agreement
to purchase Woodbridge’s interest in Augusta and the Note, including the
granting of liens thereunder, and (ii) such other and further relief as this
Court deems just and appropriate.
Dated: Wilmington, Delaware            YOUNG CONAWAY STARGATT & TAYLOR, LLP
December __, 2010

         
 
 
 
Pauline K. Morgan (No. 3650)    
 
  Sean T. Greecher (No. 4484)    
 
  Andrew L. Magaziner (No. 5426)    
 
  The Brandywine Building    
 
  1000 West Street, 17th Floor    
 
  Wilmington, Delaware 19801     
 
  Telephone: (302) 571-6600     
 
  Facsimile: (302) 571-1253     
 
       
 
  - and -    
 
       
 
  PAUL, WEISS, RIFKIND, WHARTON & GARRISON LLP    
 
  Jeffrey D. Saferstein    
 
  Kelley A. Cornish    
 
  Alice Belisle Eaton    
 
  1285 Avenue of the Americas    
 
  New York, New York 10019-6064     
 
  Telephone: (212) 373-3000     
 
  Facsimile: (212) 757-3990     
 
  Counsel for the Debtors and Debtors-in-Possession    

14

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EXHIBIT A

 

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EXHIBIT B

 

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IN THE UNITED STATES BANKRUPTCY COURT
FOR THE DISTRICT OF DELAWARE

             
 
    )      
 
           
In re:
    )     Chapter 11
 
           
 
    )      
 
           
ABITIBIBOWATER INC., et al.,9
    )     Case No. 09-11296 (KJC)
 
           
 
    )     Jointly Administered
 
           
Debtors.
    )      
 
           
 
    )     Ref. Docket No. ____________
 
           
 
    )      

ORDER PURSUANT TO SECTIONS 105 AND 363(b) OF THE BANKRUPTCY CODE
AND FEDERAL RULE OF BANKRUPTCY PROCEDURE 9019:
(I) APPROVING A SETTLEMENT AND COMPROMISE BETWEEN WOODBRIDGE
INTERNATIONAL HOLDINGS LIMITED, WOODBRIDGE COMPANY LIMITED,
ABITIBI CONSOLIDATED SALES CORPORATION, ABITIBIBOWATER INC.,
AUGUSTA NEWSPRINT COMPANY AND AUGUSTA NEWSPRINT INC.; (II)
AUTHORIZING ABITIBI CONSOLIDATED SALES CORPORATION TO PURCHASE
AN INTEREST IN THE AUGUSTA
NEWSPRINT COMPANY; AND (II) GRANTING RELATED RELIEF
 

9   The Debtors in these cases, along with the last four digits of each Debtor’s
federal tax identification number, are: AbitibiBowater Inc. (6415),
AbitibiBowater US Holding 1 Corp. (N/A), AbitibiBowater US Holding LLC (N/A),
AbitibiBowater Canada Inc. (N/A), Abitibi-Consolidated Alabama Corporation
(4396), Abitibi-Consolidated Corporation (9050), Abitibi-Consolidated Finance LP
(4528), Abitibi Consolidated Sales Corporation (7144), Alabama River Newsprint
Company (7247), Augusta Woodlands, LLC (9050), Bowater Alabama LLC (7106),
Bowater America Inc. (8645), Bowater Canada Finance Corporation (N/A), Bowater
Canadian Forest Products Inc. (N/A), Bowater Canadian Holdings Incorporated
(N/A), Bowater Canadian Limited (N/A), Bowater Finance Company Inc. (1715),
Bowater Finance II LLC (7886), Bowater Incorporated (1803), Bowater LaHave
Corporation (N/A), Bowater Maritimes Inc. (N/A), Bowater Newsprint South LLC
(1947), Bowater Newsprint South Operations LLC (0168), Bowater Nuway Inc.
(8073), Bowater Nuway Mid-States Inc. (8290), Bowater South American Holdings
Incorporated (N/A), Bowater Ventures Inc. (8343), Catawba Property Holdings, LLC
(N/A), Coosa Pines Golf Club Holdings LLC (8702), Donohue Corp. (9051), Lake
Superior Forest Products Inc. (9305) and Tenex Data Inc. (5913). The Debtors’
corporate headquarters are located at, and the mailing address for each Debtor
is, 1155 Metcalfe Street, Suite 800, Montreal, Quebec H3B 5H2, Canada.

 

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          Upon the Motion10 (the “Motion”) of AbitibiBowater, Inc.
(“AbitibiBowater”) and its affiliated debtors and debtors-in-possession in the
above captioned cases (collectively, the “Debtors”), requesting entry of an
order (the “Order”), pursuant to sections 105 and 363(b) of title 11 of the
United States Code (the “Bankruptcy Code”) and Rule 9019 of the Federal Rules of
Bankruptcy Procedure (the “Bankruptcy Rules”): (i) authorizing the Debtors to
enter into a settlement and compromise with Woodbridge with respect to various
disputes among the parties, (ii) in furtherance of that settlement and
compromise, authorizing ACSC to purchase all of the outstanding shares of the
common and preferred stock of ANI, which would result in the transfer of ANI’s
47.5% interest in Augusta; and it appearing that the relief requested in the
Motion is in the best interests of the Debtors’ estates, their creditors and
other parties in interest; and it appearing that this Court has jurisdiction
over this matter pursuant to 28 U.S.C. §§ 157 and 1334; and it appearing that
the Motion is a core proceeding pursuant to 28 U.S.C.§ 157(b); and it appearing
that venue is proper before this Court pursuant to 28 U.S.C.§§ 1408 and 1409;
and adequate notice of the Motion and opportunity for objection having been
given; and this Court having reviewed and considered the Motion and any
objections thereto; and it appearing that no other notice need be given; and it
further appearing that the legal and factual bases set forth in the Motion
establish just cause for the relief granted herein; and after due deliberation
and sufficient cause therefor:
IT IS HEREBY FOUND AND DETERMINED THAT:
          A. This Court has core jurisdiction over this matter pursuant to 28
U.S.C. §§ 157(b) and 1334 and this matter is a core proceeding that the Court
can determine pursuant to 28 U.S.C. § 157(b). Venue is proper before this Court
pursuant to 28 U.S.C.§§ 1408 and 1409.
 

10   Capitalized terms used but not otherwise defined herein shall have the
meanings ascribed to them in the Motion.

2

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          B. The Debtors have articulated good and sufficient cause for, among
other things, the purchase of Woodbridge’s interest in ANI and subsequent
ownership of ANI’s 47.5% interest in Augusta by ACSC pursuant to which ACSC
shall thereafter be the sole member of Augusta with all powers, rights and
privileges of ownership attendant thereto.
          C. Good and sufficient notice of the relief sought in the Motion has
been given and no further notice is required.
          D. The Stock Purchase Agreement and Note were negotiated at arm’s
length and entered into in good faith by the Parties and are fair, reasonable
and appropriate and benefit the Debtors’ estates, their creditors and other
parties in interest.
          E. The Debtors have demonstrated a compelling and sound business
justification for authorizing the relief requested in the Motion.
IT IS HEREBY ORDERED AND ADJUDGED THAT:
          1. The Motion is granted. Any objection not made to the Motion is
waived. Any objection made to the Motion is overruled with prejudice.
          2. The Debtors are authorized to enter into the Stock Purchase
Agreement and the Note. The Debtors are authorized to take any and all actions
necessary or appropriate to implement the Stock Purchase Agreement and the Note,
in accordance with the terms thereof and with the agreement of the Parties
thereto.
          3. The Debtors are authorized and empowered to, and may in their
discretion take any action and perform any act necessary to implement and
effectuate the terms of this Order, the Stock Purchase Agreement or the Note.
          4. The Bankruptcy Claims and Administrative Claims shall be Allowed
Claims in the Chapter 11 Cases.

3

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          5. This Order is binding upon the Debtors, all creditors of the
Debtors, any subsequent trustees that may be appointed and all parties in
interest.
          6. Except as otherwise provided in the Stock Purchase Agreement, this
Court shall retain jurisdiction over the Debtors and Woodbridge with respect to
any matters, claims, rights or disputes arising from or related to the Motion or
the implementation of this Order.
Dated: Wilmington, Delaware
     December __ ,2010

         
 
 
 
Honorable Kevin J. Carey    
 
  Chief United States Bankruptcy Judge    

4

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SCHEDULE F
FORM OF WIHSA TRANSFER AGREEMENT
INDENTURE made as of the n day of n, 2011
B E T W E E N:
WOODBRIDGE INTERNATIONAL HOLDINGS S.A., a corporation incorporated under the
laws of Luxembourg
(hereinafter referred to as the “Vendor”)
                    OF THE FIRST PART
- and -
WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED, a corporation incorporated under the
laws of the Province of Ontario
(hereinafter referred to as the “Purchaser”)
                    OF THE SECOND PART
          WHEREAS pursuant to that certain stock purchase agreement made as of n
among the Purchaser, The Woodbridge Company Limited, Abitibi Consolidated Sales
Corporation, AbitibiBowater Inc., Augusta Newsprint Company and Augusta
Newsprint Inc., the Vendor wishes to sell to the Purchaser and the Purchaser
wishes to purchase from the Vendor on the date hereof all of the shares of
common stock of ANI held by the Vendor (the “ANI Common Stock”), free and clear
of all encumbrances;
          NOW THEREFORE for good and valuable consideration (the receipt and
sufficiency of which are hereby acknowledged) the parties hereto agree as
follows:
5. Subject to the terms and conditions herein contained, the Vendor hereby
sells, transfers and assigns to the Purchaser and the Purchaser hereby purchases
all the Vendor’s right, title and interest in and to the ANI Common Stock, free
and clear of all encumbrances.
6. The aggregate purchase price for the ANI Common Stock shall be US$200 (the
“Purchase Price”), such amount being equal to the aggregate fair market value of
the ANI

 

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Common Stock on the date hereof and shall be paid and satisfied in full by
delivery by the Purchaser to the Vendor of a cheque or bank draft in the amount
of the Purchase Price.
7. The Vendor hereby declares that, as to any of the ANI Common Stock, the title
to which may not have passed to the Purchaser by virtue of this Indenture or any
transfer or assignment which may be executed and delivered pursuant to the
provisions hereof on the date hereof or from time to time thereafter, the Vendor
will hold such ANI Common Stock in trust for the Purchaser to transfer and
assign the same as the Purchaser may from time to time direct.
8. The Vendor covenants with the Purchaser to execute and deliver to the
Purchaser at any time after the date hereof when requested to do so by the
Purchaser all such further documents or instruments and to do such further
things as may be necessary to effect the purpose of this Indenture and to carry
out its provisions and to vest the ANI Common Stock fully in the Purchaser.
9. The Vendor hereby constitutes and appoints the Purchaser, its successors and
assigns, the true and lawful attorney of the Vendor for and in the name of or
otherwise on behalf of the Vendor with full power of substitution to do and
execute all deeds, matters and things whatsoever necessary for the assignment,
transfer and/or conveyance of any interest in the ANI Common Stock to the
Purchaser, its successors and assigns.
10. This Indenture shall be construed in accordance with the laws of the
Province of Ontario, which shall be the forum with respect to any and all
actions or suits brought with respect hereto.
11. This Indenture shall enure to the benefit of and be binding upon the
successors and assigns of the parties hereto.
[Signature page follows]

 

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                  WOODBRIDGE INTERNATIONAL HOLDINGS S.A.    
 
           
 
  By:        
 
     
 
   
 
           
 
  By:        
 
     
 
   
 
                WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED    
 
           
 
  By:        
 
     
 
   

 

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SCHEDULE G
FORM OF ASSIGNMENT AND ASSUMPTION OF
BANKRUPTCY CLAIMS AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
          ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of [______________],
(this “Agreement”) by and between Augusta Newsprint Company, a Georgia
partnership (the “Assignor”), Woodbridge International Holdings Limited, an
Ontario corporation (the “Assignee”), and Abitibi Consolidated Sales
Corporation, a Delaware corporation (“ACSC”).
          WHEREAS, the Assignor, the Assignee and ACSC have entered into that
certain Stock Purchase Agreement, dated as of [_________], 2010 (the “Stock
Purchase Agreement”), by and among the Assignor, the Assignee, ACSC,
AbitibiBowater Inc., a Delaware corporation (“AbitibiBowater”), The Woodbridge
Company Limited, an Ontario corporation (“Woodbridge Parent”), and Augusta
Newsprint Inc., a Delaware corporation (“ANI”). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Stock Purchase
Agreement;
          WHEREAS, this Agreement is being delivered pursuant to Section 2.8 of
the Stock Purchase Agreement; and
          WHEREAS, pursuant to and in accordance with the terms and conditions
of this Agreement and the Stock Purchase Agreement, the Assignor will assign,
grant, convey and transfer to the Assignee, 47.5% of the Assignor’s right, title
and interest in and to the following claims made, filed, scheduled or otherwise
asserted by or on behalf of the Assignor in the cases filed in the Bankruptcy
Court under chapter 11 of the Bankruptcy Code by AbitibiBowater and its
affiliated debtors and debtors-in-possession, jointly administered as Case
No. 09-11296 (the “Bankruptcy Proceedings”): Claim number 3612 made by the
Assignor in the Bankruptcy Proceedings of Alabama River Newsprint Company, Case
no. 09-11301, in the amount of $1,699.49; Claim number 3630 made by the Assignor
in the Bankruptcy Proceedings of Abitibi-Consolidated Corporation, Case no.
09-11302, in the amount of $1,848.01; Claim numbers 3631 and 3632 made by the
Assignor in the Bankruptcy Proceedings of AbitibiBowater; Case no. 09-11296, in
the amounts of $25,899.02 and $85,247.34, respectively; the Claim listed on
Schedule F of the Schedules of Assets and Liabilities of Alabama River Newsprint
Company, Case no. 09-11301, in the amount of $2,203.49; and Claim number 10005
made by the Assignor in the Bankruptcy Proceedings of Abitibi-Consolidated
Corporation, Case no. 09-11302, in the amount of $37,458,605.69 (such claims,
collectively, the “Bankruptcy Claims”).
          NOW THEREFORE, in consideration of the mutual promises made herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and upon the terms and subject to the conditions set
forth herein, the parties hereto hereby agree as follows:
     1. Assignment. Pursuant to and in accordance with the terms and conditions
of this Agreement and the Stock Purchase Agreement, effective as of the date
hereof, the Assignor

 

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hereby assigns, grants, conveys and transfers to the Assignee, 47.5% of the
Assignor’s right, title and interest in and to the Bankruptcy Claims, which
shall include, without limitation or offset, 47.5% of ((a) through (d) below,
the “Transferred Bankruptcy Claims Rights”):

  (a)   the Bankruptcy Claims;     (b)   the Assignor’s right, title and
interest in and to the Bankruptcy Claims, including all agreements, instruments,
subscriptions, statements, proofs of claim, proofs of investment and other
documents evidencing, or supporting the Bankruptcy Claims and any agreements,
stipulations, or other settlement rights or documentation relating to the
allowance or disallowance of the Bankruptcy Claims;     (c)   the Assignor’s
right to receive principal, interest, fees, expenses, damages and other amounts
in respect of, or in connection with the Bankruptcy Claims; and     (d)   cash,
securities, instruments, proceeds, collateral, guarantees and/or other property
distributed, received or paid from and after the Closing, on account of, or
exchanged in return for the Bankruptcy Claims;

provided, however, that the Transferred Bankruptcy Claims Rights shall exclude
any Bankruptcy Claims to the extent such claims are paid in cash to the Assignor
prior to the Measurement Time.
     3. Assumption. Effective as of the date hereof, the Assignee hereby accepts
the assignment, grant, conveyance and transfer of the Transferred Bankruptcy
Claims Rights.
     4. Absolute Assignment. This Agreement shall be deemed an absolute and
unconditional assignment of the Transferred Bankruptcy Claims Rights for the
purpose of collection and satisfaction, and shall not be deemed to create a
security interest. If the total amount of the Bankruptcy Claims is more than the
aggregate amount of those claims set forth in the definition of Bankruptcy
Claims in this Agreement or the Stock Purchase Agreement, the Assignee shall
nevertheless be deemed the owner of the Bankruptcy Claims to the extent of the
Transferred Bankruptcy Claims Rights, subject to the terms of this Agreement and
the Stock Purchase Agreement, and shall be entitled to identify itself as owner
of the Bankruptcy Claims to the extent of the Transferred Bankruptcy Claims
Rights on the records of the Bankruptcy Court.
     5. Further Assurances. The Assignor covenants and agrees to take such
actions and execute and deliver to the Assignee such further assignments or
other transfer documents as the Assignee may reasonably request to effectively
assign, grant, transfer and convey and to evidence such assignment, transfer,
grant and conveyance of, the Transferred Bankruptcy Claims Rights, in each case,
at the sole cost and expense of the Assignee and in conformity with the
applicable conditions, terms and provisions of the Stock Purchase Agreement.
     6. Benefit and Binding Effect. Except as provided and in conformity with
assignments permitted herein, no party hereto may assign any of its right or
obligations under this Agreement without the written consent of the other
parties hereto. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and
permitted assigns.

2

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     7. Counterparts. This Agreement may be executed in counterparts. Each
executed counterpart shall be deemed to be an original and all counterparts
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile, pdf or
other electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement.
[Signature page follows]

3

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the ___day of __________, 20_.

                  ASSIGNOR:    
 
                AUGUSTA NEWPRINT CORPORATION    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    
 
                ASSIGNEE:    
 
                WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    
 
                ACSC    
 
                ABITIBI CONSOLIDATED SALES CORPORATION    
 
           
 
  By:        
 
     
 
Name:    
 
      Title:    

 

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SCHEDULE H
FORM OF ASSIGNMENT AND ASSUMPTION OF
ADMINISTRATIVE CLAIM AGREEMENT
ASSIGNMENT AND ASSUMPTION AGREEMENT
          ASSIGNMENT AND ASSUMPTION AGREEMENT, dated as of [______________],
(this “Agreement”) by and between Augusta Newsprint Company, a Georgia
partnership (the “Assignor”), Woodbridge International Holdings Limited, an
Ontario corporation (the “Assignee”), and Abitibi Consolidated Sales
Corporation, a Delaware corporation (“ACSC”).
          WHEREAS, the Assignor, the Assignee and ACSC have entered into that
certain Stock Purchase Agreement, dated as of [_________], 2010 (the “Stock
Purchase Agreement”), by and among the Assignor, the Assignee, ACSC,
AbitibiBowater Inc., a Delaware corporation (“AbitibiBowater”), The Woodbridge
Company Limited, an Ontario corporation (“Woodbridge Parent”), and Augusta
Newsprint Inc., a Delaware corporation (“ANI”). Capitalized terms used but not
defined herein shall have the meanings ascribed to them in the Stock Purchase
Agreement;
          WHEREAS, this Agreement is being delivered pursuant to Section 2.9 of
the Stock Purchase Agreement; and
          WHEREAS, pursuant to and in accordance with the terms and conditions
of this Agreement and the Stock Purchase Agreement, the Assignor will assign,
grant, convey and transfer to the Assignee, 47.5% of the Assignor’s right, title
and interest in and to the allowed administrative claim held by the Assignor
against ACSC in the amount of $9,246,580.00 pursuant to the Agreed Order With
Respect to Motion of Augusta Newsprint Company for Allowance of Administrative
Expense Claim Pursuant to 11 U.S.C. § 503(b)(9) [D.I. 1457] entered by the
Bankruptcy Court on December 16, 2009 (the “Administrative Claim”).
          NOW THEREFORE, in consideration of the mutual promises made herein and
for other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged and upon the terms and subject to the conditions set
forth herein, the parties hereto hereby agree as follows:

1.   Assignment. Pursuant to and in accordance with the terms and conditions of
this Agreement and the Stock Purchase Agreement, effective as of the date
hereof, the Assignor hereby assigns, grants, conveys and transfers to the
Assignee, 47.5% of the Assignor’s right, title and interest in and to the
Administrative Claim, which shall include, without limitation or offset, 47.5%
of ((a) through (d) below, the “Transferred Administrative Claim Rights”):

  (a)   the Administrative Claim;     (b)   the Assignor’s right, title and
interest in and to the Administrative Claim, including all agreements,
instruments, subscriptions, statements, proofs of claim,

 

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      proofs of investment and other documents evidencing, or supporting the
Administrative Claim and any agreements, stipulations, or other settlement
rights or documentation relating to the allowance or disallowance of the
Administrative Claim;

   (c)   the Assignor’s right to receive principal, interest, fees, expenses,
damages and other amounts in respect of, or in connection with the
Administrative Claim; and

   (d)   cash, securities, instruments, proceeds, collateral, guarantees and/or
other property distributed, received or paid from and after the Closing, on
account of, or exchanged in return for the Administrative Claim;

provided, however, that the Transferred Administrative Claim Rights shall
exclude any Administrative Claim to the extent such claim is paid in cash to the
Assignor prior to the Measurement Time.
     2. Assumption. Effective as of the date hereof, the Assignee hereby accepts
the assignment, grant, conveyance and transfer of the Transferred Administrative
Claim Rights.
     3. Absolute Assignment. This Agreement shall be deemed an absolute and
unconditional assignment of the Transferred Administrative Claim Rights for the
purpose of collection and satisfaction, and shall not be deemed to create a
security interest. If the total amount of the Administrative Claim is more than
the aggregate amount of that claim set forth in the definition of Administrative
Claim in this Agreement or the Stock Purchase Agreement, the Assignee shall
nevertheless be deemed the owner of the Administrative Claim to the extent of
the Transferred Administrative Claim Rights, subject to the terms of this
Agreement and the Stock Purchase Agreement, and shall be entitled to identify
itself as owner of the Administrative Claim to the extent of the Transferred
Administrative Claim Rights on the records of the Bankruptcy Court.
     4. Further Assurances. The Assignor covenants and agrees to take such
actions and execute and deliver to the Assignee such further assignments or
other transfer documents as the Assignee may reasonably request to effectively
assign, grant, transfer and convey and to evidence such assignment, transfer,
grant and conveyance of, the Transferred Administrative Claim Rights, in each
case, at the sole cost and expense of the Assignee and in conformity with the
applicable conditions, terms and provisions of the Stock Purchase Agreement.
     5. Benefit and Binding Effect. Except as provided and in conformity with
assignments permitted herein, no party hereto may assign any of its right or
obligations under this Agreement without the written consent of the other
parties hereto. Subject to the foregoing, this Agreement shall be binding upon
and inure to the benefit of the parties hereto and their successors and
permitted assigns.
     6. Counterparts. This Agreement may be executed in counterparts. Each
executed counterpart shall be deemed to be an original and all counterparts
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Agreement by facsimile, pdf or
other electronic means shall be effective as delivery of a manually executed
counterpart of this Agreement.

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[Signature page follows]

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          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the ___day of __________, 20_.

            ASSIGNOR:

AUGUSTA NEWPRINT CORPORATION
      By:           Name:           Title:           ASSIGNEE:

WOODBRIDGE INTERNATIONAL HOLDINGS LIMITED
      By:           Name:           Title:           ACSC

ABITIBI CONSOLIDATED SALES CORPORATION
      By:           Name:           Title:        

 

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SCHEDULE I

  1.   In the 1990’s, the Partnership shipped used oil and a small amount of
chlorinated solvent to the AER hazardous waste storage and management site in
Augusta, Georgia. The site closed, went into bankruptcy and became a superfund
site. The Partnership is part of the Potential Responsible Party group.

  2.   In 2009, the Partnership voluntarily disclosed to U.S. EPA and Georgia
EPD, the discovery of reporting discrepancies under the Emergency Planning and
Community Right-to-Know Act of 1986 (“EPCRA”) section 313 for reporting years
2004 thru 2007. Corrections were submitted for lead, dioxin and dioxin-like
compounds and methanol. The U.S. EPA corrected the federal database to reflect
these changes. Neither Georgia EPD nor U.S. EPA has issued a Notice of Violation
or investigated the matter further as of the date hereof.

 

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EXHIBIT A
CERTIFICATE OF INCORPORATION OF ANI

 

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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AUGUSTA NEWSPRINT INC.
Pursuant to Sections 242 and 245 of the
General Corporation Law of the State of Delaware
     Augusta Newsprint Inc., a corporation existing under the laws of the State
of Delaware (the “Corporation”), does hereby certify as follows:
     (a) the name of the Corporation is Augusta Newsprint Inc.;
     (b) the Certificate of Incorporation of the Corporation was filed with the
Secretary of State of the State of Delaware on the 2nd day of July 2001;
     (c) this Amended and Restated Certificate of Incorporation has been duly
adopted in accordance with the provisions of Sections 242 and 245 of the General
Corporation Law of the State of Delaware, (i) the Board of Directors of the
Corporation having duly adopted a resolution approving such amendment and
declaring its advisability at a meeting of the Board of Directors of the
Corporation duly called and held on November 5, 2001 and (ii) in lieu of a
meeting and vote of the stockholders, the holders of all the capital stock of
the Corporation duly consented in writing to the adoption of such amendment; and
     (d) the Certificate of Incorporation of the Corporation is hereby amended
and restated to read in full as follows:

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AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
AUGUSTA NEWSPRINT INC.
     THE UNDERSIGNED, for the purpose of forming a corporation pursuant to the
provisions of the General Corporation Law of the State of Delaware, hereby
certifies as follows:
     FIRST: The name of the corporation is Augusta Newsprint Inc. (the
“Corporation”).
     SECOND: The address of the Corporation’s registered office in the State of
Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, which
address is located in the County of New Castle, and the name of the
Corporation’s registered agent at such address is Corporation Service Company.
     THIRD: The purpose for which the Corporation is organized is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware (the “Act”).
     FOURTH: The total number of shares of all classes of stock which the
Corporation has authority to issue is Sixty Thousand (60,000) shares, consisting
of Twenty Thousand (20,000) shares of Common Stock, par value $0.01 per share
(the “Common Stock”), Twenty Thousand (20,000) shares of Class A preferred
stock, par value $0.01 per share (the “Class A Preferred Stock”) and Twenty
Thousand (20,000) shares of Class B preferred stock, par value $0.01 per share
(the “Class B Preferred Stock” and, together with the Class A Preferred Stock,
the “Preferred Stock”).
A. PREFERRED STOCK
     The voting powers, preferences and rights (and the qualifications,
limitations, or restrictions thereof) of the Class A Preferred Stock and Class B
Preferred Stock are as follows:
     1. Voting. Except as may be otherwise provided by law, the holders of
Preferred Stock shall vote together and with the holders of all other classes of
stock of the Corporation which have a voting right, as a single class, on all
actions to be taken by the stockholders of the Corporation, other than at
meetings of holders of another class of shares. Each share of Preferred Stock
shall entitle the holder thereof to one vote per share on each such action.
     2. Dividends. The holders of each of the Class A Preferred Stock and
Class B Preferred Stock shall be entitled to receive, and the Corporation shall
pay thereon any dividend declared by the Board of Directors of the Corporation
out of moneys of the Corporation properly applicable to the payment of
dividends, provided that the dividend rate on each of the Class A

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Preferred Stock and Class B Preferred Stock (the “Dividend Rate”) in any fiscal
year shall not exceed on a per annum basis the aggregate of eight percent (8%)
plus, for dividends declared in fiscal years of the Corporation subsequent to
June 30, 2002, any Carry Forward Amount (as defined below) (such aggregate
amount being, the “Maximum Dividend Rate”).
     The Dividend Rate for a share of Class A Preferred Stock will be applied to
the amount of ten thousand Canadian dollars (Cdn $10,000) (the “Class A
Redemption Amount” of a share of Class A Preferred Stock). The Dividend Rate for
a share of Class B Preferred Stock will be applied to the amount of six thousand
U.S. dollars (U.S. $6,000) (the “Class B Redemption Amount” of a share of
Class B Preferred Stock).
     Dividends which are declared pursuant to this subsection A(2) shall be
payable in Canadian or U.S. dollars as determined by the Board of Directors and
at an exchange rate determined by the Board of Directors at the time of
declaration.
     In the event that the Board of Directors does not declare a dividend for
either the Class A Preferred Stock or Class B Preferred Stock for a year or
declares a dividend for either the Class A Preferred Stock or Class B Preferred
Stock for a year which is at a Dividend Rate that is less than the Maximum
Dividend Rate for such year for the Class A Preferred Stock or Class B Preferred
Stock, as applicable, the shortfall shall constitute the “Carry Forward Amount”
for determining the Maximum Dividend Rate of the subsequent year for the Class A
Preferred Stock or Class B Preferred Stock, as applicable.
     The Carry Forward Amount with respect to each outstanding share of
Preferred Stock shall be calculated from the date immediately following the
earlier of the date:

  (i)   on which such share of Preferred Stock was first issued by the
Corporation, or

  (ii)   on which any Predecessor Share (as defined below) was first issued by
the Corporation. The term “Predecessor Share” shall mean the share of Preferred
Stock which was originally issued by the Corporation and which, directly or
indirectly through one or more conversions, was subsequently converted into such
outstanding share of Preferred Stock.

     Declared dividends on shares of Preferred Stock shall be payable on the day
determined by the Board of Directors of the Corporation.

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     In the case of shares of Preferred Stock outstanding for less than a full
fiscal year of the Corporation at the time of a dividend payment, dividends
shall be pro rated based upon the portion of each year during which such shares
of Preferred Stock are outstanding.
     For greater certainty, a dividend may be declared and paid on shares of
Preferred Stock in accordance with the terms of this Amended and Restated
Certificate of Incorporation notwithstanding that a dividend has, or has not
been declared and paid on shares of Common Stock.
     3. Redemption at the Option of the Holder. Subject to the provisions of
this subsection A(3) and subsection A(5) and the Act, a holder of shares of
Preferred Stock shall be entitled to require the Corporation to redeem at any
time and from time to time all or any of the shares of Preferred Stock
registered in the name of such holder on the books of the Corporation by
tendering to the Corporation at its registered office the certificate or
certificates representing the Preferred Stock which such holder desires to have
the Corporation redeem together with a written request specifying that such
holder desires to have all or a specified number and class of the shares of
Preferred Stock represented by such certificate or certificates redeemed by the
Corporation. After receipt of the share certificate or certificates representing
the shares of Preferred Stock which the holder desires the Corporation to redeem
together with a request for redemption specified above (if such notice is not
waived), the Corporation shall, on such redemption date as may be specified by
the Corporation (the “Redemption Date”) but being not later than thirty
(30) days following such receipt, redeem such shares of Preferred Stock by
paying to such registered holder for each share of Class A Preferred Stock or
share of Class B Preferred Stock to be redeemed, the Class A Redemption Amount
or Class B Redemption Amount, as applicable, plus all dividends declared and
unpaid thereon to and including the Redemption Date (the “Class A Redemption
Price” of a share of Class A Preferred Stock and the “Class B Redemption Price”
of a share of Class B Preferred Stock, as applicable). Such payment shall be
made to each holder by check payable in Canadian dollars for shares of Class A
Preferred Stock and in U.S. dollars for shares of Class B Preferred Stock,
provided that the payment may be made in such other manner and in such other
currency as is acceptable to the holder. The shares of Preferred Stock shall be
redeemed on the Redemption Date. From and after the Redemption Date such shares
of Preferred Stock shall cease to be entitled to dividends or any other
participation in the assets of the Corporation and the holders thereof shall not
be entitled to exercise any of the other rights of a holder in respect

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thereof unless payment of the Class A Redemption Price or Class B Redemption
Price, as applicable, shall not be made on the Redemption Date, in which event
the rights of the holder shall remain unaffected. If a part only of the shares
of Preferred Stock represented by any certificate shall be redeemed, a new
certificate representing the balance of such shares of Preferred Stock shall be
issued to the holder thereof at the expense of the Corporation upon the
presentation and surrender of the first mentioned certificate.
     4. Redemption at the Option of the Corporation. Subject to the provisions
of this subsection A(4) and subsection A(5) and the Act, the Corporation may
upon giving written notice as hereinafter provided, redeem at any time the whole
or from time to time any part of the then outstanding shares of Class A
Preferred Stock or Class B Preferred Stock on payment for each share to be
redeemed at the Class A Redemption Price or Class B Redemption Price, as
applicable, thereof. In case a part only of the shares of Preferred Stock is at
any time to be redeemed, the shares so to be redeemed may be selected by lot in
such manner as the directors of the Corporation in their sole discretion shall
by resolution determine or redemption may be effected on a pro rata basis
disregarding fractions. In any case of redemption of shares of Preferred Stock
under this subsection A(4), the Corporation shall at least ten (10) days (which
period may be waived by the holders) before the Redemption Date deliver to each
person who is a registered holder of Preferred Stock to be redeemed a written
notice of the intention of the Corporation to redeem such shares of Preferred
Stock. Such notice shall set out the number and class of shares of Preferred
Stock held by the person to whom it is addressed which are to be redeemed, the
Class A Redemption Price or Class B Redemption Price, as applicable, and the
Redemption Date. On or after the Redemption Date, the Corporation shall pay or
cause to be paid to or to the order of the registered holders of the Class A
Preferred Stock or Class B Preferred Stock to be redeemed the Class A Redemption
Price or Class B Redemption Price, as applicable, of such shares on presentation
and surrender, at the registered office of the Corporation or at any other place
or places specified in such notice of redemption, of the certificate or
certificates representing the shares of Preferred Stock so called for
redemption. Such payment shall be made to each holder by check payable in
Canadian dollars for shares of Class A Preferred Stock and in U.S. dollars for
shares of Class B Preferred Stock, provided that the payment may be made in such
other manner and in such other currency as is acceptable to the holder. From and
after the Redemption Date, the shares of Preferred Stock called for redemption
shall cease to be entitled to dividends or any other participation in the assets
of the

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Corporation and the holders thereof shall not be entitled to exercise any of the
other rights of shareholders in respect thereof unless payment of the Class A
Redemption Price or Class B Redemption Price, as applicable, shall not be made
upon presentation and surrender of the certificates in accordance with the
foregoing provisions, in which case the rights of the holders shall remain
unaffected. If a part only of the shares of Preferred Stock represented by any
certificate shall be redeemed, a new certificate representing the balance of
such shares of Preferred Stock shall be issued to the holder thereof at the
expense of the Corporation upon presentation and surrender of the first
mentioned certificate.
     5. Redemption Subject to Laws. If the Corporation does not have sufficient
funds legally available to redeem all shares to be redeemed on a Redemption
Date, then it shall redeem shares of Preferred Stock pro rata (based on the
portion of the aggregate Class A Redemption Price and Class B Redemption Price,
as applicable, payable to each holder of shares of Preferred Stock to be
redeemed) and shall redeem the remaining shares pro rata as soon as sufficient
funds are legally available.
     6. Liquidation, Dissolution or Winding Up. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation or in the event of any other distribution of assets of the
Corporation among its stockholders for the purpose of winding up its affairs,
the holders of the Class A Preferred Stock and Class B Preferred Stock shall be
entitled to receive from the property and assets of the Corporation a sum equal
to the Class A Redemption Price or Class B Redemption Price, as applicable, for
each share of the Class A Preferred Stock or Class B Preferred Stock held by
them respectively, the whole before any amount shall be paid by the Corporation
or any property or assets of the Corporation shall be distributed to holders of
the shares of Common Stock or the shares of any other class of stock ranking
junior to the Preferred Stock in liquidation preference. After payment to the
holders of the Preferred Stock of the amounts payable to them, they shall not be
entitled to share in any further distribution of the property or assets of the
Corporation.
     7. Conversion of Class A Preferred Stock. Subject to the provisions of this
subsection A(7) and upon written notice to the Corporation as set forth in
subsection A(9), a holder of Class A Preferred Stock shall be entitled to
require the Corporation to convert at any time and from time to time all or any
of the shares of Class A Preferred Stock registered in the name of such holder
on the books of the Corporation into shares of Class B Preferred Stock on the
basis that each share of Class A Preferred Stock to be

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converted will be converted into that number of shares of Class 3 Preferred
Stock equal to the product obtained when 1 2/3 is multiplied by the value of a
Canadian dollar expressed in U.S. dollars as at the Conversion Date (as defined
below) based on a fair market exchange rate as determined by the Board of
Directors of the Corporation.
     8. Conversion of Class B Preferred Stock. Subject to the provisions of this
subsection A(8) and upon written notice to the Corporation as set forth in
subsection A(9), a holder of Class B Preferred Stock shall be entitled to
require the Corporation to convert at any time and from time to time all or any
of the shares of Class B Preferred Stock registered in the name of such holder
on the books of the Corporation into shares of Class A Preferred Stock on the
basis that each share of Class B Preferred Stock to be converted will be
converted into that number of shares of Class A Preferred Stock equal to the
product obtained when 0.6 is multiplied by the value of a U.S. dollar expressed
in Canadian dollars as at the Conversion Date (as defined below) based on a fair
market exchange rate as determined by the Board of Directors of the Corporation.
     9. Notice of Conversion. In order to convert shares of Preferred Stock
pursuant to subsections A(7) or A(8), a holder of shares of Preferred Stock
shall tender to the Corporation at its registered office the certificate or
certificates representing the Preferred Stock which such holder desires to have
the Corporation convert together with a written request specifying that such
holder desires to have all or a specified number and class of shares of
Preferred Stock represented by such certificate or certificates converted by the
Corporation on a certain date (the “Conversion Date”). After receipt of the
share certificate or certificates representing the shares of Preferred Stock
which the holder desires the Corporation to convert together with a request for
conversion specified above (if such notice is not waived), the Corporation
shall, on such Conversion Date, convert such shares of Preferred Stock. The
shares of Preferred Stock shall be converted on the Conversion Date. If a part
only of the shares of Preferred Stock represented by any certificate shall be
converted, a new certificate representing the balance of such shares of
Preferred Stock shall be issued to the holder thereof at the expense of the
Corporation upon the presentation and surrender of the first mentioned
certificate.
     10. Subdivisions, Consolidations and Reclassification. Neither class of
Preferred Stock shall be subdivided, consolidated, reclassified or otherwise
changed unless contemporarily therewith the other class of Preferred Stock shall
be correspondingly

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subdivided, consolidated, reclassified or otherwise changed on the same basis.
     11. Fractional Shares. The shares of Preferred Stock may be issued in
fractions of a share up to six decimal places.
     12. Other Rights. Except as otherwise set forth herein, the Class A
Preferred Stock and the Class B Preferred Stock shall be equal in all respects.
B. COMMON STOCK
     The voting powers, preferences and rights (and the qualifications,
limitations, or restrictions thereof) of the Common Stock are as follows:
     1. Voting Rights. Except as may be otherwise provided by law, the holders
of Common Stock shall vote together and with the holders of all other classes of
stock of the Corporation which have a voting right, as a single class, on all
actions to be taken by the stockholders of the Corporation, other than at
meetings of holders of another class of shares. Each share of Common Stock shall
entitle the holder thereof to one vote per share on each such action.
     2. Dividends. The holders of the Common Stock shall be entitled to receive,
and the Corporation shall pay thereon, any dividends declared by the Board of
Directors of the Corporation in respect of the Common Stock out of moneys
properly applicable to the payment of dividends.
     For greater certainty, a dividend may be declared and paid on shares of
Common Stock in accordance with the terms of this Amended and Restated
Certificate of Incorporation notwithstanding that a dividend has, or has not
been declared and paid on shares of Preferred Stock.
     3. Liquidation Rights. Subject to the prior and superior right of the
Preferred Stock and any other class of stock ranking senior to the Common Stock
in liquidation preference, if any, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs of the Corporation or any
other distribution of the assets of the Corporation among its stockholders for
the purposes of winding up its affairs, the holders of Common Stock shall be
entitled to receive the remaining property and assets of the Corporation. Such
property and assets shall be paid to the holders of Common Stock pro rata on the
basis of the number of shares of Common Stock held by each of them.
     FIFTH: Subject to the provisions of the Act, the number of Directors of the
Corporation shall be determined as provided by the By-Laws of the Corporation.

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     SIXTH: To the fullest extent permitted by Section 145 of the Act, or any
comparable successor law, as the same may be amended and supplemented from time
to time, the Corporation (i) may indemnify all persons whom it shall have power
to indemnify thereunder from and against any and all of the expenses,
liabilities or other matters referred to in or covered thereby, (ii) shall
indemnify each such person if he or she is or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding by reason of
the fact that he or she is or was a director, officer, employee or agent of the
Corporation or because he or she was serving the Corporation or any other legal
entity in any capacity at the request of the Corporation while a director,
officer, employee or agent of the Corporation and (iii) shall pay the expenses
of such a current or former director, officer, employee or agent incurred in
connection with any such action, suit or proceeding in advance of the final
disposition of such action, suit or proceeding. The indemnification and
advancement of expenses provided for herein shall not be deemed exclusive of any
other rights to which those entitled to indemnification or advancement of
expenses may be entitled under any by-law, agreement, contract or vote of
stockholders or disinterested directors or pursuant to the direction (however
embodied) of any court of competent jurisdiction or otherwise, both as to action
in his or her official capacity and as to action in another capacity while
holding such office, and shall continue as to a person who has ceased to be a
director, officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
     SEVENTH: In furtherance and not in limitation of the general powers
conferred by the laws of the State of Delaware, the Board of Directors is
expressly authorized to make, alter or repeal the By-Laws of the Corporation,
except as specifically stated therein.
     EIGHTH: Whenever a compromise or arrangement is proposed between the
Corporation and its creditors or any class of them and/or between the
Corporation and its stockholders or any class of them, any court of equitable
jurisdiction within the State of Delaware may, on the application in a summary
way of the Corporation or of any creditor or stockholder thereof or on the
application of any receiver or receivers appointed for the Corporation under the
provisions of Section 291 of the Act or on the application of trustees in
dissolution or of any receiver or receivers appointed for the Corporation under
the provisions of Section 279 of the Act, order a meeting of the creditors or
class of creditors, and/or of the stockholders or class of stockholders of the
Corporation, as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing three-fourths in value of the
creditors or class of creditors, and/or of the stockholders or class of
stockholders of the Corporation, as the case may be, agree to any compromise or
arrangement and to any reorganization of the Corporation as a consequence of
such compromise or arrangement, the said compromise or arrangement and the said
reorganization shall, if sanctioned by the court to which the said application
has been made, be binding on all the creditors or class of creditors, and/or on
all the stockholders or class of stockholders of the Corporation, as the case
may be, and also on the Corporation.
     NINTH: Except as otherwise required by the laws of the State of Delaware,
the stockholders and directors shall have the power to hold their meetings and
to keep the books, documents and papers of the Corporation outside of the State
of Delaware, and the Corporation shall have the power to have one or more
offices within or without the State of Delaware, at such places as may be from
time to time designated by the By-Laws or by resolution of the stockholders or
Board of Directors of the Corporation.

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     TENTH: Elections of directors need not be by ballot unless the By-Laws of
the Corporation shall so provide.
     ELEVENTH: The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Amended and Restated Certificate of
Incorporation, in the manner now or hereafter prescribed by statute, and all
right; conferred upon stockholders herein are granted subject to this
reservation.
     TWELFTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director’s
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) under Section 174 of the Act, or (iv) for any
transaction from which the director derived any improper personal benefit. If
the Act is amended to further eliminate or limit the personal liability of
directors, then the liability of a director of the Corporation shall be
eliminated or limited to the fullest extent permitted by the Act, as so amended.
Any repeal or modification of this Article TWELFTH by the stockholders of the
Corporation shall be by the affirmative vote of the holders of not less than
eighty percent (80%) of the outstanding shares of each class of stock of the
Corporation and entitled to vote in the election of directors, considered for
the purposes of this Article TWELFTH as one class, shall be prospective only and
shall not adversely affect any right or protection of a director of the
Corporation existing at the time of such repeal or modification.
     THIRTEENTH: The name and address of the incorporator is Darren D. Baccus,
Torys, 237 Park Avenue, New York, New York 10017.
     IN WITNESS WHEREOF, the undersigned, does hereby execute this Amended and
Restated Certificate of Incorporation as of the day of November, 2001.

                  /s/ Joseph J. Romagnoli       Name:   Joseph J. Romagnoli     
Title:   Secretary     

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CERTIFICATE OF INCORPORATION
OF
AUGUSTA NEWSPRINT INC.
     THE UNDERSIGNED, for the purpose of forming a corporation pursuant to the
provisions of the General Corporation Law of the State of Delaware, hereby
certifies as follows:
     FIRST: The name of the corporation is Augusta Newsprint Inc. (the
“Corporation”).
     SECOND: The address of the Corporation’s registered office in the State of
Delaware is 2711 Centerville Road, Suite 400, Wilmington, Delaware 19808, which
address is located in the County of New Castle, and the name or the
Corporation’s registered agent at such address is Corporation Service Company.
     THIRD: The purpose for which the Corporation is organized is to engage in
any lawful act or activity for which corporations may be organized under the
General Corporation Law of the State of Delaware.
     FOURTH: The total number of shares of all classes of stock which the
Corporation has authority to issue is Thirty Three Thousand (33,000) shares,
consisting of Twenty Thousand (20,000) shares of Common Stock, par value $0.01
per share (the “Common Stock”), and Thirteen Thousand (13;000) shares of
Preferred Stock, par value $0.01 per share (the “Preferred Stock”), which
Preferred Stock shall have such designations, powers, preferences and rights as
may be authorized by the Board of Directors from time to time.
A. PREFERRED STOCK
   The voting powers, preferences and rights (and the qualifications,
limitations, or restrictions thereof) of the Preferred Stock are as follows:
     1. Voting. Except as may be otherwise provided in these terms of the
Preferred Stock or by law, the holders of Preferred Stock shall vote together
and with the holders of all other classes of stock of the Corporation which have
a voting right, as a single class, on all actions to be taken by the
stockholders of the Corporation, other than at meetings of holders of another
class of shares. Each share or Preferred Stock shall entitle the holder thereof
to one vote per share on each such action.
     2. Dividends. The holders of the Preferred Stock shall be entitled to
receive, and the Corporation shall pay thereon any dividend declared by the
Board of Directors of the Corporation out of moneys of the Corporation properly
applicable to the payment of dividends, provided that the dividend rate on the
Preferred Stock (the “Dividend Rate”) in any fiscal year shall not exceed on a
per annum basis the aggregate of eight percent (8%) plus, for dividends declared
in fiscal years of the Corporation subsequent to June 30, 2002, any Carry
Forward Amount (as defined below) (such aggregate amount being, the “Maximum
Dividend Rate”).

 

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The Dividend Rate for a share of Preferred Stock will be applied to the amount
of ten thousand Canadian dollars (Cdn $10,000) (the “Redemption Amount” of a
share of Preferred Stock).
     Dividends which are declared pursuant to this Section 2 shall be payable in
Canadian dollars, however the Board of Directors may elect to pay such dividend
in U.S. dollars at an exchange rate determined by the Board of Directors.
     In the event that the Board of Directors declares a dividend for a year
which is at a Dividend Rate that is less than the Maximum Dividend Rate for such
year, the shortfall shall constitute the “Carry Forward Amount” for determining
the Maximum Dividend Rate of the subsequent year.
     Declared dividends on shares of Preferred Stock shall be payable on the day
determined by the Board of Directors of the Corporation.
     In the case of shares of Preferred Stock outstanding for less than a full
fiscal year of the Corporation at the time of a dividend payment, dividends
shall be pro rated based upon the portion of each year during which such shares
of Preferred Stock are outstanding.
     For greater certainty, a dividend may be declared and paid on shares of
Preferred Stock in accordance with the terms of this Certificate notwithstanding
that a dividend has, or has not been declared and paid on shares of Common
Stock.
     3. Redemption at the Option of the Holder. Subject to the provisions of
this clause 3 and clause 5 and the General Corporation Law of the State of
Delaware (the “Act”), a holder of shares of Preferred Stock shall be entitled to
require the Corporation to reject at any time all or any of the shares of
Preferred Stock registered in the name of such holder on the books of the
Corporation by tendering to the Corporation at its registered office the
certificate or certificates representing the Preferred Stock which such holder
desires to have the Corporation redeem together with a written request
specifying that such holder desires to have all or a specified number of the
shares of Preferred Stock represented by such certificate or certificates
redeemed by the Corporation. After receipt of the share certificate or
certificates representing the shares of Preferred Stock which the holder desires
the Corporation to redeem together with a request for redemption specified above
(if such notice is not waived), the Corporation shall, on such redemption date
as may be specified by the Corporation (the “Redemption Date”) but being not
later than thirty (30) days following such receipt, redeem such shares of
Preferred Stock by paying to such registered holder for each share

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of Preferred Stuck to be redeemed the Redemption Amount thereof plus all
dividends declared and unpaid thereon to and including the Redemption Date (the
“Redemption Price” of a share of Preferred Stock). Such payment shall he made by
cheque payable in Canadian dollars. The shares of Stock shall be redeemed on the
Redemption Date. From and after the Redemption Date such shares of Preferred
Stock shall cease to be entitled to dividends or any other participation in the
assets of the Corporation and the holders thereof shall not be entitled to
exercise any of the other rights of a holder in respect thereof unless payment
of the Redemption Price shall not be made on the Redemption Date, in which event
the rights of the holder shall remain unaffected. If a part only of the shares
of Preferred Stock represented by any certificate shall be redeemed, a new
certificate representing the balance of such shares of Preferred Stock shall be
issued to the holder thereof at the expense of the Corporation upon the
presentation and surrender of the first mentioned certificate.
     4. Redemption at the Option of the Corporation. Subject to the provisions
of this clause 4 and clause 5 and the Act, the Corporation may upon giving
notice as hereinafter provided, redeem at any time the whole or from time to
time any part of the then outstanding shares of Preferred Stock on payment for
each share to be redeemed at the Redemption Price thereof. In case a part only
of the shares of Preferred Stock is at any time to be redeemed, the shares so to
be redeemed may be selected by lot in such manner as the directors of the
Corporation in their sole discretion shall by resolution determine or redemption
may be effected on a pro rain basis disregarding fractions. In any case of
redemption of shares of Preferred Stock under this clause 4, the Corporation
shall at least ten (10) days (which period may be waived by the holders) before
the Redemption Date deliver to each person who is a registered holder of
Preferred Stock to be redeemed a notice in writing of the intention of the
Corporation to redeem such shares of Preferred Stock. Such notice shall set out
the number of shares of Preferred Stock held by the person to whom it is
addressed which are to be redeemed, the Redemption Price and the Redemption
Date. On or after the Redemption Date, the Corporation shall pay or cause to be
paid to or to the order of the registered holders of the Preferred Stock to be
redeemed the Redemption Price of such shares on presentation and surrender, at
the registered office of the Corporation or at any other place or places
specified in such notice of redemption, of the certificate or certificates
representing the shares of Preferred Stock so called for redemption. Such
payment shall be made by cheque payable in Canadian dollars. From and after the
Redemption Date, the shares of Preferred Stock called for redemption shall cease
to be entitled

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to dividends or any other participation in the assets of the Corporation and the
holders thereof shall not be entitled to exercise any of the other rights of
shareholders in respect thereof unless payment of the Redemption Price shall not
be made upon presentation and surrender of the certificates in accordance with
the foregoing provisions, in which case the rights of the holders shall remain
unaffected. If a part only of the shares of Preferred Stock represented by any
certificate shall be redeemed, a new certificate representing the balance of
such shares of Preferred Stock shall be issued to the holder thereof at the
expense of the Corporation upon presentation and surrender of the first
mentioned certificate.
     5. Redemption Subject to Laws. If the Corporation does not have sufficient
funds legally available to redeem all shares to be redeemed on a Redemption
Date, then it shall redeem shares of Preferred Stock pro rata (based on the
portion of the aggregate Redemption Price payable to each holder of shares of
Preferred Stock to be redeemed) and shall redeem the remaining shares pro rata
as soon as sufficient funds are legally available.
     6. Liquidation, Dissolution or Winding Up. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the affairs of the
Corporation or in the event of any other distribution of assets of the
Corporation among its Stockholders for the purpose of winding up its affairs,
the holders of the Preferred Stock shall be entitled to receive from the
property and assets of the Corporation a sum equal to the Redemption Price for
each share of the Preferred Stock held by them respectively, the whole before
any amount shall be paid by the Corporation or any property or assets of the
Corporation shall be distributed to holders of the shares of Common Stock or the
shares of any other class of stock ranking junior to the Preferred Stock in
liquidation preference. After payment to the holders of the Preferred Stock of
the amounts payable to them, they shall not be entitled to share in any further
distribution of the property or assets of the Corporation.
B. COMMON STOCK
     The voting powers, preferences and rights (and the qualifications,
limitations, or restrictions thereof) of the Common Stock are as follows:
     1. Voting Rights. Except as may be otherwise provided in these terms of the
Common Stock or by law, the holders of Common Stock shall vote together and with
the holders of all other classes of stock of the Corporation which have a voting
right, as a single class, on all actions to be taken by the stockholders of the
Corporation, other than at meetings of holders

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of another class of shares. Each share of Common Stock shall entitle the holder
thereof to one vote per share on each such action.
     2. Dividends. The holders of the Common Stock shall be entitled to receive,
and the Corporation shall pay thereon, any dividends declared by the Board of
Directors of the Corporation out of moneys properly applicable to the payment of
dividends.
     For greater certainty, a dividend may be declared and paid on shares of
Common Stock in accordance with the terms of this Certificate notwithstanding
that a dividend has, or has not been declared and paid on shares of Preferred
Stock.
     3. Liquidation Rights. Subject to the prior and superior right of the
Preferred Stock and any other class of stock ranking senior to the Common Stock
in liquidation preference, if any, upon any voluntary or involuntary
liquidation, dissolution or winding up of the affairs or the Corporation or any
other distribution of the assets of the Corporation among its Stockholders for
the purposes of winding up its affairs, the holders of Common Stock shall be
entitled to receive the remaining property and assets of the Corporation. Such
property and assets shall be paid to the holders of Common Stock pro rata on the
basis of the number of shares of Common Stock held by each of them.
     4. Merger, Consolidation, Sale of Assets. Subject to the prior and superior
rights of the Preferred Stock, if any, in the event of any merger or
consolidation of the Corporation with or into another corporation in which the
Corporation shall not survive, or the sale or transfer of all or substantially
all of the assets of the Corporation to another entity, or a merger or
consolidation in which the Corporation shall be the surviving entity but its
Common Stock is exchanged for stock, securities or property of another entity,
the holders of Common Stock shall be entitled to receive all cash, securities
and other property received by the Corporation pro rata on the basis of the
number of shares of Common Stock held by each of them.
     5. Residual Rights. All rights accruing to the outstanding shares of the
Corporation not expressly provided for to the contrary in this Certificate of
Incorporation, as it may from time to time be amended or supplemented, including
without limitation any supplement effected pursuant to a certificate of
designations, shall be vested in the Common Stock.
     FIFTH: Subject to the provisions of the Act, the number of Directors of the
Corporation shall be determined as provided by the By-Laws of the Corporation.
     SIXTH: To the fullest extent permitted by Section 145 of the Delaware
General Corporation Law, or any comparable successor law, as the same may be
amended and

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supplemented from time to time, the Corporation (i) may indemnify all persons
whom it shall have power to indemnify thereunder from and against any and all of
the expenses, liabilities or other matters referred to in or covered thereby,
(ii) shall indemnify each such person if he is or is threatened to be made a
party to an action, suit or proceeding by reason of the fact that he is or was a
director, officer, employee or agent of the Corporation or because he was
serving the Corporation or any other legal entity in any capacity at the request
of the Corporation while a director, officer, employee or agent of the
Corporation and (iii) shall pay the expenses of such a current or former
director, officer, employee or agent incurred in connection with any such
action, suit or proceeding in advance of the final disposition of such action,
suit or proceeding. The indemnification and advancement of expenses provided for
herein shall not be deemed exclusive of any other rights to which those entitled
to indemnification or advancement of expenses may be entitled under any by-law,
agreement, contract or vote of stockholders or disinterested Board of Directors
or pursuant to the direction (however embodied) of any court of competent
jurisdiction or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continuo as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
     SEVENTH: In furtherance and not in limitation of the general powers
conferred by the laws of the State of Delaware, the Board of Directors is
expressly authorized to make, alter or repeal the By-Laws of the Corporation,
except as specifically stated therein.
     EIGHTH: Except as otherwise required by the laws of the State of Delaware,
the stockholders and directors shall have the power to hold their meetings and
to keep the book, documents and papers of the Corporation outside of the State
of Delaware, and the Corporation shall have the power to have one or more
offices within or without the State of Delaware, at such places as may be from
time to time designated by the By-Laws or by resolution of the stockholders or
Board of Directors of the Corporation.
     NINTH: Elections of directors need not be by ballot unless the By-Laws of
the Corporation shall so provide.
     TENTH: The Corporation reserves the right to amend, alter, change or repeal
any provision contained in this Certificate of Incorporation, in the manner now
or hereafter prescribed by statute, and all rights conferred upon stockholders
herein are granted subject to this reservation.
     ELEVENTH: A director of the Corporation shall not be personally liable to
the Corporation or its stockholders for monetary damages for breach of fiduciary
duty as a director, except for liability (i) for any breach of the director’s
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) for the unlawful payment of dividends or unlawful stock
purchases under Section 174 of the General Corporation Law of Delaware, or
(iv) for any transaction from which the director derived any improper personal
benefit, if the Act is amended to further eliminate or limit the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Act, as so
amended. Any repeal or modification of this Article by the stockholders of the
Corporation shall be by the affirmative vote of the holders of not less than
eighty percent (80%) of the outstanding shares of each class of stock of the
Corporation and entitled to vote in the election of directors,

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considered for the purposes of this Article ELEVENTH as one class, shall be
prospective only and shall not adversely affect any right or protection of a
director of the Corporation existing at the time of such repeal or modification.
     TWELFTH: The name and address of the incorporator is Alexandra Kau, Tory’s,
237 Park Avenue, New York, New York 10017.
     IN WITNESS WHEREOF, the undersigned, being the incorporator hereinabove
named, does hereby execute this Certificate of Incorporation this 2nd day of
July, 2001.

                  /s/ Alexandra Kau       Alexandra Kau      Incorporator     

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EXHIBIT B
BY-LAWS OF ANI

 

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AUGUSTA NEWSPRINT INC.
BY-LAWS
ARTICLE I
Offices
          The registered office of the Corporation shall be in the City of
Wilmington, County of New Castle, State of Delaware. The Corporation may also
have offices at such other places, both within and without the State of
Delaware, as may from time to time be designated by the Board of Directors.
ARTICLE II
Books
          The books and records of the Corporation may be kept (except as
otherwise provided by the laws of the State of Delaware) outside of the State of
Delaware and at such place or places as may from time to time be designated by
the Board of Directors.
ARTICLE III
Stockholders
          Section 1. Annual Meetings. The annual meeting of the stockholders of
the Corporation for the election of Directors and the transaction of such other
business as may properly come before said meeting shall be held at the principal
business office of the Corporation or at such other place or places either
within or without the State of Delaware as may be designated by the Board of
Directors and stated in the notice of the meeting, on the first Monday of June
in each year, if not a legal holiday, and, if a legal holiday, then on the next
day

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not a legal holiday, at 10:00 o’clock in the forenoon, or such other day and
time as shall be determined by the Board of Directors.
          Written notice of the place designated for the annual meeting of the
stockholders of the Corporation shall be delivered personally or mailed to each
stockholder entitled to vote thereat not less than ten (10) and not more than
sixty (60) days prior to said meeting, but at any meeting at which all
stockholders shall be present, or of which all stockholders not present have
waived notice in writing, the giving of notice as above described may be
dispensed with. If mailed, said notice shall be directed to each stockholder at
such stockholder’s address as the same appears on the stock ledger of the
Corporation unless such stockholder shall have filed with the Secretary of the
Corporation a written request that notices intended for such stockholder be
mailed to some other address, in which case it shall be mailed to the address
designated in such request.
          Section 2. Special Meetings. Special meetings of the stockholders of
the Corporation shall be held whenever called in the manner required by the laws
of the State of Delaware for purposes as to which there are special statutory
provisions, and for other purposes whenever called by resolution of the Board of
Directors, or by the President, or by the holders of a majority of the
outstanding shares of capital stock of the Corporation the holders of which are
entitled to vote on matters that are to be voted on at such meeting. Any such
special meeting of stockholders may be held at the principal business office of
the Corporation or at such other place or places, either within or without the
State of Delaware, as may be specified in the notice thereof. Business
transacted at any special meeting of stockholders of the Corporation shall be
limited to the purposes stated in the notice thereof.

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          Except as otherwise expressly required by the laws of the State of
Delaware, written notice of each special meeting, stating the day, hour and
place, and in general terms the business to be transacted thereat, shall be
delivered personally or mailed to each stockholder entitled to vote thereat not
less than ten (10) and not more than sixty (60) days prior to said meeting, but
at any special meeting at which all stockholders shall be present, or of which
all stockholders not present have waived notice in writing, the giving of notice
as above described may be dispensed with. If mailed, said notice shall be
directed to each stockholder at such stockholder’s address as the same appears
on the stock ledger of the Corporation unless such stockholder shall have filed
with the Secretary of the Corporation a written request that notices intended
for such stockholder be mailed to some other address, in which case it shall be
mailed to the address designated in said request.
          Section 3. List of Stockholders. The officer of the Corporation who
shall have charge of the stock ledger of the Corporation shall prepare and make,
at least ten (10) days before every meeting of stockholders, a complete list of
the stockholders entitled to vote at said meeting, arranged in alphabetical
order and showing the address of each stockholder and the number of shares
registered in the name of each stockholder. Such list shall be open to the
examination of any stockholder, for any purpose germane to the meeting, during
ordinary business hours for a period of at least ten (10) days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.

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          Section 4. Quorum. At any meeting of the stockholders of the
Corporation, except as otherwise expressly provided by the laws of the State of
Delaware, the Certificate of Incorporation or these By-Laws, there must be
present, either in person or by proxy, in order to constitute a quorum,
stockholders owning a majority of the issued and outstanding shares of the
capital stock of the Corporation entitled to vote at said meeting. At any
meeting of stockholders at which a quorum is not present, the holders of, or
proxies for, a majority of the stock which is represented at such meeting, shall
have power to adjourn the meeting from time to time, without notice other than
announcement at the meeting, until a quorum shall be present or represented. At
such adjourned meeting at which a quorum shall be present or represented any
business may be transacted which might have been transacted at the meeting as
originally noticed. If the adjournment is for more than thirty (30) days, or if
after the adjournment a new record date is fixed for the adjourned meeting, a
notice of the adjourned meeting shall be given to each stockholder of record
entitled to vote at the meeting.
          Section 5. Organization. The President, or in the President’s absence
any Vice President, shall call to order meetings of the stockholders and shall
act as chairman of such meetings. The Board of Directors or the stockholders may
appoint any stockholder or any Director or officer of the Corporation to act as
chairman of any meeting in the absence of the President and all of the Vice
Presidents.
          The Secretary of the Corporation shall act as secretary of all
meetings of the stockholders, but in the absence of the Secretary the presiding
officer may appoint any other person to act as secretary of any meeting.
          Section 6. Voting. Except as otherwise provided in the Certificate of
Incorporation or these By-Laws, each stockholder of record of the Corporation
shall, at every

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meeting of the stockholders of the Corporation, be entitled to one (1) vote for
each share of stock standing in such stockholder’s name on the books of the
Corporation on any matter on which such stockholder is entitled to vote, and
such votes may be cast either in person or by proxy, appointed by an instrument
in writing, subscribed by such stockholder or by such stockholder’s duly
authorized attorney, and filed with the Secretary before being voted on, but no
proxy shall be voted after three (3) years from its date, unless said proxy
provides for a longer period. If the Certificate of Incorporation provides for
more or less than one (1) vote for any share of capital stock of the
Corporation, on any matter, then any and every reference in these By-Laws to a
majority or other proportion of capital stock shall refer to such majority or
other proportion of the votes of such stock.
          The vote on all elections of Directors and on any other questions
before the meeting need not be by ballot, except upon demand of any stockholder.
          When a quorum is present at any meeting of the stockholders of the
Corporation, the vote of the holders of a majority of the capital stock entitled
to vote at such meeting and present in person or represented by proxy shall
decide any question brought before such meeting, unless the question is one upon
which, under any provision of the laws of the State of Delaware or of the
Certificate of Incorporation, a different vote is required in which case such
provision shall govern and control the decision of such question.
          Section 7. Consent. Except as otherwise provided by the Certificate of
Incorporation, whenever the vote of the stockholders at a meeting thereof is
required or permitted to be taken in connection with any corporate action by any
provision of the laws of the State of Delaware or of the Certificate of
Incorporation, such corporate action may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth

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the action so taken, shall be signed by the holders of outstanding capital stock
of the Corporation having not less than the minimum number of votes that would
be necessary to authorize or take such action at a meeting at which all shares
entitled to vote thereon were present and voted. Prompt notice of the taking of
the corporate action without a meeting by less than unanimous written consent
shall be given to those stockholders who have not consented thereto in writing.
          Section 8. Judges. At every meeting of the stockholders of the
Corporation at which a vote by ballot is taken, the polls shall be opened and
closed, the proxies and ballots shall be received and taken in charge, and all
questions touching the qualifications of voters, the validity of proxies and the
acceptance or rejection of votes shall be decided by, two (2) judges. Said
judges shall be appointed by the Board of Directors before the meeting, or, if
no such appointment shall have been made, by the presiding officer of the
meeting. If for any reason any of the judges previously appointed shall fail to
attend or refuse or be unable to serve, judges in place of any so failing to
attend, or refusing or unable to serve, shall be appointed in like manner.
ARTICLE IV
Directors
          Section 1. Number, Election and Term of Office. The business and
affairs of the Corporation shall be managed by the Board of Directors. The
number of Directors which shall constitute the whole Board shall be between one
(1) and nine (9). Within such limits, the number of Directors may be fixed from
time to time by vote of the stockholders or of the Board of Directors, at any
regular or special meeting, subject to the provisions of the Certificate of
Incorporation. Directors need not be stockholders. Directors shall be elected at
the annual meeting of the stockholders of the Corporation, except as provided in
Section 2 of this Article, to

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serve until the next annual meeting of stockholders and until their respective
successors are duly elected and have qualified.
     In addition to the powers by these By-Laws expressly conferred upon them,
the Board may exercise all such powers of the Corporation as are not by the laws
of the State of Delaware, the Certificate of Incorporation or these By-Laws
required to be exercised or done by the stockholders.
          Section 2. Vacancies and Newly Created Directorships. Except as
hereinafter provided, any vacancy in the office of a Director occurring for any
reason other than the removal of a Director pursuant to Section 3 of this
Article, and any newly created Directorship resulting from any increase in the
authorized number of Directors, may be filled by a majority of the Directors
then in office or by a sole remaining Director. In the event that any vacancy in
the office of a Director occurs as a result of the removal of a Director
pursuant to Section 3 of this Article, or in the event that vacancies occur
contemporaneously in the offices of all of the Directors, such vacancy or
vacancies shall be filled by the stockholders of the Corporation at a meeting of
stockholders called for the purpose. Directors chosen or elected as aforesaid
shall hold office until the next annual meeting of stockholders and until their
respective successors are duly elected and have qualified.
          Section 3. Removals. At any meeting of stockholders of the Corporation
called for the purpose, the holders of a majority of the shares of capital stock
of the Corporation entitled to vote at such meeting may remove from office, with
or without cause, any or all of the Directors.
          Section 4. Regular Meetings. Regular meetings of the Board of
Directors may be held without notice at such time and place, either within or
without the State of

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Delaware, as shall from time to time be determined by resolution of the Board.
The Board of Directors may appoint any Director or office of the Corporation to
act as chairman of any meeting of the Board of Directors.
          Section 5. Special Meetings. Special meetings of the Board of
Directors may be called by the President or any two Directors on notice given to
each Director, and such meetings shall be held at the principal business office
of the Corporation or at such other place or places, either within or without
the State of Delaware, as shall be specified in the notices thereof.
          Section 6. Annual Meetings. The first meeting of each newly elected
Board of Directors shall be held as soon as practicable after each annual
election of Directors and on the same day, at the same place at which regular
meetings of the Board of Directors are held, or at such other time and place as
may be provided by resolution of the Board. Such meeting may be held at any
other time or place which shall be specified in a notice given, as hereinafter
provided, for special meetings of the Board of Directors.
          Section 7. Notice. Notice of any meeting of the Board of Directors
requiring notice shall be given to each Director by mailing the same, addressed
to the director at such director’s residence or usual place of business, at
least forty-eight (48) hours, or shall be sent to such director at such place by
facsimile transmission, courier, telegraph, cable or wireless, or shall be
delivered personally or by telephone, at least twelve (12) hours, before the
time fixed for the meeting. At any meeting at which every Director shall be
present or at which all Directors not present shall waive notice in writing, any
and all business may, be transacted even though no notice shall have been given.
          Section 8. Quorum. At all meetings of the Board of Directors, the
presence of a majority of the Directors constituting the Board shall constitute
a quorum for the transaction

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of business. Except as may be otherwise specifically provided by the laws of the
State of Delaware, the Certificate of Incorporation or these By-Laws, the
affirmative vote of a majority of the Directors present at the time of such vote
shall be the act of the Board of Directors if a quorum is present. If a quorum
shall not be present at any meeting of the Board of Directors, the Directors
present thereat may adjourn the meeting from time to time, without notice other
than announcement at the meeting, until a quorum shall be present.
          Section 9. Consent. Unless otherwise restricted by the Certificate of
Incorporation or these By-Laws, any action required or permitted to be taken at
any meeting of the Board of Directors may be taken without a meeting, if all
members of the Board consent thereto in writing, and the writing or writings are
filed with the minutes of proceedings of the Board.
          Section 10. Telephonic Meetings. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, members of the Board of Directors
may participate in a meeting of the Board by means of conference telephone or
similar communications equipment by means of which all persons participating in
such meeting can hear each other, and participation in a meeting pursuant to
this Section 10 shall constitute presence in person at such meeting.
          Section 11. Compensation a Directors. Directors, as such, shall not
receive any stated salary for their services, but, by resolution of the Board, a
fixed sum and expenses of attendance, if any, may be allowed for attendance at
each regular or special meeting of the Board, provided that nothing herein
contained shall be construed to preclude any Director from serving the
Corporation in any other capacity and receiving compensation therefor.

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          Section 12. Resignations. Any Director of the Corporation may resign
at any time by giving written notice to the Board of Directors or to the
President or the Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein, or, if the time be not specified, upon
receipt thereof; and unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make is effective.
ARTICLE V
Officers
          Section 1. Number, Election and Term of Office. The officers of the
Corporation shall be a President, a Secretary and an Assistant Secretary, and
may at the discretion of the Board of Directors include one or more Vice
Presidents and Assistant Treasurers. The officers of the Corporation shall be
elected annually by the Board of Directors at its meeting held immediately after
the annual meeting of the stockholders, and shall hold their respective offices
until their successors are duly elected and have qualified. Any number of
offices may be held by the same person. The Board of Directors may from time to
time appoint such other officers and agents as the interest of the Corporation
may require and may fix their duties and terms of office.
          Section 2. President. The President shall be the chief executive
officer of Corporation and shall have general and active management of the
business of the Corporation, and shall see that all orders and resolutions of
the Board are carried into effect. The President shall ensure that the books,
reports, certificates and other records of the Corporation are kept, made or
filed in accordance with the laws of the State of Delaware. The President shall
preside at all meetings of the Board of Directors and at all meetings of the
stockholders unless all of the directors authorize another director to preside
at a meeting. The President shall cause to be

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called regular and special meetings of the stockholders and of the Board of
Directors in accordance with these By-Laws. The President may sign, execute and
deliver in the name of the Corporation all deeds, mortgages, bonds, contracts or
other instruments authorized by the Board of Directors, except in cases where
the signing, execution or delivery thereof shall be expressly delegated by the
Board of Directors or by the By-Laws to some other officer or agent of the
Corporation or where any of them shall be required by law otherwise to be
signed, executed or delivered. The President may sign, with the Treasurer or an
Assistant Treasurer, or the Secretary or an Assistant Secretary, certificates of
stock of the Corporation. The President shall appoint and remove, employ and
discharge, and fix the compensation of all servants, agents, employees and
clerks of the Corporation other than the duly elected or appointed officers,
subject to the approval of the Board of Directors. In addition to the powers and
duties expressly conferred upon the President by these By-Laws, the President
shall, except as otherwise specifically provided by the laws of the State of
Delaware, have such other powers and duties as shall from time to time be
assigned to the President by the Board of Directors.
          Section 3. Vice Presidents. The Vice Presidents shall perform such
duties as the President or the Board of Directors shall require. Any Vice
President shall, during the absence or incapacity of the President, assume and
perform the President’s duties.
          Section 4. Secretary. The Secretary may sign all certificates of stock
of the Corporation. The Secretary shall record all the proceedings of the
meetings of the Board of Directors and of the stockholders of the Corporation in
books to be kept for that purpose. The secretary shall have custody of the seal
of the Corporation and may affix the same to any instrument requiring such seal
when authorized by the Board of Directors, and when so affixed the Secretary may
attest the same by the Secretary’s signature. The Secretary shall keep the

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transfer books, in which all transfers of the capital stock of the Corporation
shall be registered, and the stock books, which shall contain the names and
addresses of all holders of the capital stock of the Corporation and the number
of shares held by each; and the Secretary shall keep such stock and transfer
books open daily during business hours to the inspection of every stockholder
and for transfer of stock. The Secretary shall notify the Directors and
stockholders of their respective meetings as required by law or by these
By-Laws, and shall perform such other duties as may be required by law or by
these By-Laws, or which may be assigned to the Secretary from time to time by
the Board of Directors.
          Section 5. Assistant Secretaries. The Assistant Secretaries shall,
during the absence or incapacity of the Secretary, assume and perform all
functions and duties which the Secretary might lawfully do if present and not
under any incapacity.
          Section 6. Treasurer. The Treasurer shall have charge of the funds and
securities of the Corporation. The Treasurer may sign all certificates of stock.
The Treasurer shall keep full and accurate accounts of all receipts and
disbursements of the Corporation in books belonging to the Corporation and shall
deposit all monies and other valuable effects in the name and to the credit of
the Corporation in such depositories as may be designated by the Board of
Directors. The Treasurer shall disburse the funds of the Corporation as may be
ordered by the Board, and shall render to the President or the Directors,
whenever they may require it, an account of all the Treasurer’s transactions as
Treasurer and an account of the business and financial position of the
Corporation.
          Section 7. Assistant Treasurers. The Assistant Treasurers shall,
during the absence or incapacity of the Treasurer, assume and perform all
functions and duties which the Treasurer might lawfully, do if present and not
under any incapacity.

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          Section 8. Treasurer’s Bond. The Treasurer and Assistant Treasurers
shall, if required so to do by the Board of Directors, each give a bond (which
shall be renewed every six (6) years) in such sum and with such surety or
sureties as the Board of Directors may require.
          Section 9. Transfer of Duties. The Board of Directors in its absolute
discretion may transfer the power and duties, in whole or in part, of any
officer to any other officer, or persons, notwithstanding the provisions of
these By-Laws, except as otherwise provided by the laws of the State of
Delaware.
          Section 10. Vacancies. If the office of President, Vice President,
Secretary or Treasurer, or of any other officer or agent becomes vacant for any
reason, the Board of Directors may choose a successor to hold office for the
unexpired term.
          Section 11. Removals. At any meeting of the Board of Directors called
for each purpose, any officer or agent of the Corporation may be removed from
office, with or without cause, by the affirmative vote of a majority of the
Board of Directors.
          Section 12. Compensation of Officers. The officers shall receive such
salary or compensation as may be determined by the Board of Directors.
          Section 13. Resignations. Any officer or agent of the Corporation may
resign at any time by giving written notice to the Board of Directors or to the
President or the Secretary of the Corporation. Any such resignation shall take
effect at the time specified therein or, if the time be not specified, upon
receipt thereof; and unless otherwise specified therein, acceptance of such
resignation shall not be necessary to make it effective.

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ARTICLE VI
Contracts, Checks and Notes
          Section 1. Contracts. Unless the Board of Directors shall otherwise
specifically direct, all contracts of the Corporation shall be executed in the
name of the Corporation by the President.
          Section 2. Checks and Notes. All checks, drafts, bills of exchange and
promissory notes and other negotiable instruments of the Corporation shall be
signed by such officers or agents of the Corporation as may be designated by the
Board of Directors.
ARTICLE VII
Stock
          Section 1. Certificates of Stock. The certificates for shares of the
stock of the Corporation shall be in such form, not inconsistent with the
Certificate of Incorporation, as shall be prepared or approved by the Board of
Directors. Every holder of stock in the Corporation shall be entitled to have a
certificate signed by, or in the name of the Corporation by, the President or a
Vice President, and by the Treasurer or an Assistant Treasurer or the secretary
or an Assistant Secretary certifying the number of shares owned by the
stockholder and the date of issue; and no certificate shall be valid unless so
signed. All certificates shall be consecutively numbered and shall be entered in
the books of the Corporation as they are issued.
          Where a certificate is countersigned (1) by a transfer agent other
than the Corporation or its employee, or, (2) by a registrar other than the
Corporation or its employee, any other signature on the certificate may be
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the Corporation with the same effect as if the
officer, transfer agent or registrar were such officer, transfer agent or
registrar at the date of issue.

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          All certificates surrendered to the Corporation shall be cancelled
and, except in the case of lost or destroyed certificates, no new certificates
shall be issued until the former certificates for the same number of shares of
the same class of stock shall have been surrendered and cancelled.
          Section 2. Transfer of Stock. Upon surrender to the Corporation or the
transfer agent of the Corporation of a certificate for shares duly endorsed or
accompanied by proper evidence of succession, assignment or authority to
transfer, it shall be the duty of the Corporation to issue a new certificate to
the person entitled thereto, cancel the old certificate and record the
transaction upon its books.
ARTICLE VIII
Registered Stockholders
          The Corporation shall be entitled to treat the holder of record of any
share or shares of stock as the holder in fact thereof and, accordingly, shall
not be bound to recognize any equitable or other claim to, or interest in, such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, save as expressly provided by the laws of the
State of Delaware.
ARTICLE IX
Lost Certificates
     Any person claiming a certificate of stock to be lost or destroyed, shall
make an affidavit or affirmation of the fact and advertise the same in such
manner as the Board of Directors may require, and the Board of Directors may, in
its discretion, require the owner of the lost or destroyed certificate, or such
person’s legal representative, to give the Corporation a bond in a

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sum sufficient, in the opinion of the Board of Directors, to indemnify the
Corporation against any claim that may be made against it on account of the
alleged loss of any such certificate. A new certificate of the same tenor and
for the same number of shares as the one alleged to be lost or destroyed may be
issued without requiring any bond when, in the judgment of the Directors, it is
proper so to do.
ARTICLE X
Fixing of Record Date
          In order that the Corporation may determine the stockholders entitled
to notice of or to vote at any meeting of stockholders or any adjournment
thereof, or to express consent to corporate action in writing without a meeting,
or to receive payment of any dividend or other distribution or allotment of any
rights, or to exercise any rights in respect of any change, conversion or
exchange of stock or for the purpose of any other lawful action, the Board of
Directors may fix, in advance, a record date, which shall not be more than sixty
(60) nor less than ten (10) days before the date of such meeting, nor more than
sixty (60) days prior to any other action. A determination of stockholders of
record entitled to notice of or to vote at a meeting of stockholders shall apply
to any adjournment of the meeting; provided, however, that the Board of
Directors may fix a new record date for the adjourned meeting.
ARTICLE XI
Dividends
          Subject to the relevant provisions of the Certificate of
Incorporation, dividends upon the capital stock of the Corporation may be
declared by the Board of Directors as any regular or special meeting, pursuant
to law. Dividends may be paid in cash, in property, or in

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shares of the capital stock of the Corporation, subject to the provisions of the
Certificate of Incorporation.
          Before payment of any dividend, there may be set aside out of any
funds of the Corporation available for dividends such sums as the Directors from
time to time, in their absolute discretion, think proper as a reserve or
reserves to meet contingencies, or for equalizing dividends, or for repairing or
maintaining any property of the Corporation, or for such other purpose as the
Directors shall think conducive to the interest of the Corporation, and the
Directors may modify or abolish any such reserve in the manner in which it was
created.
ARTICLE XII
Waiver of Notice
          Whenever any notice whatever is required to be given by statute or
under the provisions of the Certificate of Incorporation or these By-Laws, a
waiver thereof in writing signed by the person or persons entitled to said
notice, whether before or after the time stated therein, shall be equivalent
thereto.
ARTICLE XIII
Seal
          The corporate seal of the Corporation shall have inscribed thereon the
name of the Corporation, the year of its organization and the words “Corporate
Seal, Delaware.”

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ARTICLE XIV
Amendments
          Subject to the provisions of the Certificate of Incorporation, these
By-Laws may be altered, amended or repealed or new By-Laws may be adopted by the
stockholders or by the Board of Directors, at any regular meeting of the
stockholders or of the Board of Directors or at any special meeting of the
stockholders or of the Board of Directors if notice of such alteration,
amendment or repeal of the By-Laws or of adoption of new By-Laws be contained in
the notice of such special meeting.

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