Exhibit 10.23

 

EXECUTION VERSION

 

 

 

 

 

ASSET PURCHASE AGREEMENT

 

between

 

BRASCAN POWER INC.,

 

as Buyer,

 

RUMFORD FALLS POWER COMPANY,

 

as Seller,

 

and

 

RUMFORD PAPER COMPANY,

 

as

 

Mill Owner

 

 

 

 

 

January 6, 2006

 

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ASSET PURCHASE AGREEMENT

 

THIS AGREEMENT is made this 6th day of January, 2006 between BRASCAN POWER INC.,
an Ontario corporation (“Buyer”), RUMFORD FALLS POWER COMPANY, a Maine
corporation (“Seller”) and, solely for purposes of Section 5.06, Section 7.05
and Section 9.05 of this Agreement, RUMFORD PAPER COMPANY, a Delaware
Corporation (“Mill Owner”), under the following circumstances:

 

A.  Seller owns and operates a project consisting of two hydroelectric
generating plants and related facilities located on the Androscoggin River in
Rumford, Oxford County, Maine comprised of approximately 40 megawatts in total
(Federal Energy Regulatory Commission Project No. 2333) (collectively, the
“Project”).

 

B.  Seller desires to sell to Buyer, and Buyer desires to purchase from Seller,
the Purchased Assets (as defined below) on the terms and conditions set forth
herein.

 

NOW, THEREFORE, in consideration of the foregoing, the representations,
warranties and covenants contained in this Agreement and for other good and
valuable consideration, the receipt and sufficiency of which hereby is
acknowledged, and intending to be legally bound, the parties hereby agree as
follows:

 

ARTICLE 1

 

DEFINITIONS

 

1.01  Definitions.  For purposes of this Agreement, the terms set forth below
shall be defined as follows:

 

“Affiliate” with respect to any party, means a party, person or entity that,
directly, or indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, such party.  For purposes of
this definition, “control” means, when used with respect to any Person, the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise, and the terms
“controlling” and “controlled” have correlative meanings.

 

“Agreement” means this Asset Purchase Agreement.

 

“Ancillary Agreements” has the meaning set forth in Section 7.05 hereof.

 

“Assumed Agreements” has the meaning given that term in Section 2.01(d).

 

“Assumed Obligations” has the meaning given that term in Section 2.03(c).

 

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“Attachments” has the meaning given that term in Section 5.01(a)(ix).

 

“Bank” has the meaning given that term in Section 10.08.

 

“Basket Amount” has the meaning given that term in Section 10.07(a).

 

“Business Day” means a day other than a Saturday, Sunday or other day on which
commercial banks in New York City, New York, Dayton, Ohio, or Portland, Maine,
are authorized or required by Law to be closed.

 

“Buyer” has the meaning given that term in the preamble to this Agreement.

 

“Buyer Group” has the meaning given that term in Section 10.02.

 

“Cash Purchase Price” has the meaning given that term in Section 2.04(a)(i).

 

“Change” means a material change in the use of the Project after the Closing
Date, provided that a material change in use does not include a cessation in
operations other than a voluntary decommissioning or demolition (or involuntary
decommissioning or demolition that is not required by Environmental Law) of all
or substantially all of the Project or the operations conducted thereon.

 

“Claim” has the meaning given that term in Section 10.04.

 

“Closing” has the meaning given that term in Section 7.01.

 

“Closing Date” has the meaning given that term in Section 7.01.

 

“CMP” means Central Maine Power Company.

 

“Code” means the Internal Revenue Code of 1986, as amended, and the regulations
adopted thereunder.

 

“Corrected Schedule” has the meaning given that term in Section 8.02(a).

 

“Damages” means all claims, liabilities, losses, damages, expenses, costs of
settlement and demands of any character whatsoever (including, without
limitation, the reasonable fees and expenses of counsel).

 

“Effective Time” has the meaning given that term in Section 7.02.

 

“Employee Agreements” has the meaning given that term in Section 3.10.

 

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“Encumbrance” means any lien, mortgage, pledge, security interest, license,
easement, quasi-easement, covenant, condition, declaration, imperfection of
title, or other encumbrance or restriction.

 

“Environment” means any surface water, groundwater, drinking water supply, land
surface, subsurface strata, river sediment, plant or animal life, natural
resources, air, water vapor, surface soil, subsurface soil and any other natural
resource.

 

“Environmental Claims” refers to any complaint, summons, citation, notice,
directive, order, claim, litigation, investigation, notice of violation,
judicial or administrative proceeding, judgment, letter or other communication
from any Governmental Entity, department, bureau, office or other authority, or
any third party involving violations of Environmental Laws, Handling of
Hazardous Materials or Releases of Hazardous Materials from, on or under (i) any
assets or properties used by the Project; (ii) from any adjoining properties or
businesses; or (iii) from or onto any facilities which received Hazardous
Materials generated by the Purchased Assets.

 

“Environmental Conditions” means any condition, known or unknown, foreseen or
unforeseen, arising out of:  (1) the Release, threat of Release, or exposure of
Persons to Hazardous Materials; (2) any violation of any Environmental Law;
(3) the Handling of Hazardous Materials or (4) any Environmental Claim.

 

“Environmental Damages” means all claims, judgments, causes of action,
liabilities, obligations, damages, losses, deficiencies, costs, penalties,
interest and expenses (including, without limitation, the reasonable fees and
expenses of counsel).

 

“Environmental Laws” means any Law related to:  (i) the protection of the
Environment and/or (ii) the Handling of Hazardous Materials.  “Environmental
Laws” include, without limitation: the Comprehensive Environmental Response,
Compensation, and Liability Act, as amended, 42 U.S.C. §9601 et seq.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. §6901 et seq.; the
Clean Air Act, as amended, 42 U.S.C. §7401 et seq.; the Federal Water Pollution
Control Act, as amended, 33 U.S.C. §1251 et seq.; the Toxic Substances Control
Act, as amended, 15 U.S.C. §2601 et seq.; the Emergency Planning and Community
Right to Know Act, as amended, 42 U.S.C. §11001 et seq.; the Safe Drinking Water
Act, as amended, 42 U.S.C. §300f et seq.; the Occupational Health and Safety
Act, as amended, 29 U.S.C. §655 et seq.; the Federal Insecticide, Fungicide and
Rodenticide Act, 7 U.S.C. §136 et seq.; the Hazardous Materials Transportation
Act, as amended, 49 U.S.C. §5101 et seq.; Oil Discharge Prevention and Pollution
Control Law, 38 M.R.S.A. §541; Underground Oil Storage Facilities and
Groundwater Protection Law, 38 M.R.S.A. § 561 et seq., and any other comparable
foreign, federal, state, municipal or local Laws.

 

“Environmental Liabilities” means any Environmental Damages, including without
limitation, costs of investigation, Remedial Action or other response actions,
known or unknown, foreseen or unforeseen, with regard to the Purchased Assets
arising out of:  (i) Environmental Conditions, (ii) Historical Environmental
Liabilities, or (iii) any violation of any Environmental

 

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Permit.  For the avoidance of doubt, Environmental Liabilities shall not include
Environmental Damages after the Closing Date resulting from increases in
operating expenses of the Purchased Assets, including but not limited to,
depreciation, wages, administration of environmental programs, chemicals,
materials, sewer fees and permit fees.

 

“Environmental Permits” means any approvals, authorizations, certificates,
consents, licenses, or permits required under any Environmental Law for
operation of the Purchased Assets.

 

“Equipment” has the meaning given that term in Section 2.01(b).

 

“Exceptions” has the meaning given that term in Section 5.06(a).

 

“Excluded Assets” has the meaning given that term in Section 2.01.

 

“Excluded Obligations” has the meaning given that term in Section 2.03.

 

“Expiration Date” has the meaning given that term in Section 8.01(b).

 

“Federal Power Act” means the Federal Power Act, as amended, codified at 16
U.S.C. §§ 791 et seq. and the regulations adopted thereunder as of the effective
date of this Agreement.

 

“FERC” means the Federal Energy Regulatory Commission.

 

“FERC Boundary” means the real property located within the Project boundary as
depicted in the FERC License.

 

“FERC License” means the hydropower license issued pursuant to Part I of the
Federal Power Act for FERC Project No. 2333, as amended from time to time,
together with all regulations, orders, issuances, filings and correspondence
applicable to the Project and arising under the Federal Power Act or regulations
promulgated thereunder.

 

“Governmental Entity” means any nation, state, city, locality, municipality, or
other political subdivision and any body or authority exercising judicial,
legislative, regulatory or administrative functions for any of the foregoing
(including, without limitation, any agency, department, board or commission), or
any court or arbiter.

 

“Handling” means any manner of manufacturing, using, generating, accumulating,
storing, treating, disposing of, recycling, processing, distributing, handling,
labeling, producing, releasing, or transporting, as any such terms may be
defined in any Environmental Law, of Hazardous Materials.

 

“Hazardous Materials” means any substance or material that has been defined or
otherwise listed as a “hazardous material,” “hazardous waste” or “hazardous
substance” or words of similar import under any Environmental Law or any other
waste substance or material that is regulated under any

 

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Environmental Law, including, without limitation, petroleum and petroleum
products, polychlorinated biphenyls, and asbestos-containing materials.

 

“Historical Environmental Liabilities” means any Historical On-Site
Environmental Liabilities or Historical Off-Site Environmental Liabilities.

 

“Historical Off-Site Environmental Liabilities” means any Environmental
Liabilities (other than Historical On-Site Environmental Liabilities) that arise
from operations, practices, Handling of Hazardous Materials, transfers,
disposals or other activities (or omissions) of or on behalf of Seller prior to
the Closing Date, including but not limited to Environmental Liabilities related
to dioxin and furans, polychlorinated biphenyls and chlorinated solvents and
contamination related to the pre-Closing removal of underground storage tanks.

 

“Historical On-Site Environmental Liabilities” means any Environmental
Liabilities (other than Historical Off-Site Environmental Liabilities) arising
from Environmental Conditions at, on, under or migrating from the Purchased
Assets existing prior to the Closing Date, or that arise from operations,
practices, Handling of Hazardous Materials, transfers, disposals or other
activities (or omissions) of or on behalf of Seller at or on the Purchased
Assets prior to the Closing Date, including but not limited to Environmental
Liabilities related to dioxin and furans, polychlorinated biphenyls and
chlorinated solvents, and contamination related to the pre-Closing removal of
underground storage tanks; provided, however, that any Environmental Liabilities
associated with subsurface groundwater contaminated with Hazardous Materials
that flows beneath a Purchased Asset, where such Hazardous Materials were not
Released, or alleged to be Released, from a Purchased Asset or the Mill, is not
considered a Historical On-Site Environmental Liability; provided, further,
notwithstanding anything to the contrary in this Agreement, Seller shall have no
liability for historical on-site asbestos-containing materials (other than waste
asbestos-containing material that is not in compliance with the Environmental
Laws as of the Closing Date).

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended.

 

“Indemnified Party” has the meaning given that term in Section 10.04.

 

“Indemnifying Party” has the meaning given that term in Section 10.04.

 

“Independent Consultant Award” has the meaning given that term in
Section 10.08(iv).

 

“Knowledge of Seller” or “Seller’s Knowledge” means, and is limited to, the
actual knowledge of John Fuller, General Manager (Pulp and Utilities); Larry
Souther, former Operating Superintendent; Rick Delaney, Operating
Superintendent; Scott Reed, Environmental Manager; Matt Jesch, Chief Financial
Officer of New Page Corporation; and Ron Guay, Associate General Counsel of New
Page Corporation, and each of their respective immediate subordinates.

 

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“Laws” means applicable laws, statutes, charters, ordinances, decisional law,
common law, rules and regulations.

 

“Legal Proceeding” means any judicial, administrative or arbitral action, suit,
proceeding (public or private) or governmental proceeding or investigation with
regard to Environmental Law or Environmental Liabilities.

 

“Letter of Credit” has the meaning given that term in Section 10.08.

 

“Lowest-Cost Commercially Reasonable Manner” has the meaning given that term in
Section 10A.04(e).

 

“Material Contract” has the meaning given that term in Section 3.08.

 

“MeadWestvaco” means MeadWestvaco Corporation, a Delaware corporation that is
the seller in that certain Equity and Asset Purchase Agreement by and between
Maple Acquisition LLC and MeadWestvaco Corporation dated January 14, 2005.

 

“Mill” means Rumford Paper Company’s pulp and paper mill operated on and about
the Mill Real Property.

 

“Mill Owner” has the meaning given that term in the preamble to this Agreement.

 

“Mill Real Property” means the real property owned by Mill Owner as of the
Closing Date.

 

“Order” means any order, injunction, judgment, decree, ruling, writ, assessment
or arbitration award of a Governmental Entity.

 

“Permit” means any license, permit, approval or authorization of a Governmental
Entity which relates to, or is necessary for, the ownership or the operation of
the Project in substantially the same manner as it currently is being operated
by Seller, but shall exclude any and all Environmental Permits.

 

“Permitted Encumbrances” means:  (i) liens for Taxes not yet delinquent or for
Taxes that Seller is contesting in good faith through appropriate proceedings,
provided in each case that adequate reserves have been established therefor,
(ii) purchase money liens and liens securing rental payments under capital lease
arrangements, (iii) liens of mechanics, materialmen, carriers, workers,
repairers and other similar liens arising in the ordinary course of the
operation of the Project, provided such liens can be and are insured against or
bonded over, and (iv) other Encumbrances arising in the ordinary course of the
operation of the Project which, in the aggregate, do not have a material adverse
effect on the Purchased Assets (including, without limitation, the Real
Property), taken as a whole.

 

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“Person” means an individual, partnership, corporation, limited liability
company, association, joint stock company, joint venture, trust, estate,
unincorporated organization, labor union, Governmental Entity or any other
entity.

 

“Project” has the meaning given that term in the recitals.

 

“Project Employees” has the meaning given that term in Section 3.10.

 

“Property Tax Year” has the meaning given that term in Section 2.05(b).

 

“Protocol Agreement” has the meaning set forth in Section 9.05 hereof.

 

“Purchase Price” has the meaning given that term in Section 2.04(a).

 

“Purchased Assets” has the meaning given that term in Section 2.01.

 

“Real Estate Documents” has the meaning given that term in Section 5.01(a)(ix).

 

“Real Estate Title Documents” has the meaning given that term in
Section 5.06(a).

 

“Real Property Permitted Encumbrances” means: (a) the Permitted Encumbrances and
(b) the following:

 

(i)  zoning, entitlement and other land use and building and fire Laws;

 

(ii)  Exceptions in the Title Insurance Commitment that are not Title Defects or
Title Objections;

 

(iii)  the Encumbrances created by the Retained Real Property Instruments (to
the extent agreed to pursuant to the provisions of Section 5.01(a)(ix) and
5.06);

 

(iv)  the cohabitation protocol and relocation rights, as set forth in Exhibit I
to this Agreement, and the provisions of Section 9.04; and

 

(v)  those Title Defects and Title Objections accepted by Buyer in accordance
with Section 5.06.

 

“Real Property to be Conveyed” has the meaning given that term in
Section 2.01(a).

 

“Recipient” has the meaning given that term in Section 9.01.

 

“Records” has the meaning given that term in Section 2.01(f).

 

“Reduction Agreement” has the meaning given that term in Section 10.08(iii).

 

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“Reduction Amount” has the meaning given that term in Section 10.08.

 

“Reduction Date” has the meaning given that term in Section 10.08.

 

“Reduction Dispute Notice” has the meaning given that term in
Section 10.08(iii).

 

“Release” means any release, spill, emission, leaking, pumping, injection,
deposit, disposal, discharge, dispersal, leaching, or migration at, into or onto
the Environment, including movement or migration through or in the air, soil,
surface water or groundwater, whether sudden or non-sudden and whether
accidental or non-accidental, or any release, emission or discharge as those
terms are defined in any applicable Environmental Law.

 

“Remedial Action” means any response action, removal action, remedial action,
corrective action, monitoring program, sampling program, investigation or other
actions taken to (i) clean up, remove, remediate, treat, monitor, assess or
evaluate Hazardous Materials in the environment; (ii) prevent or minimize a
Release or threatened Release of Hazardous Materials so that they do not migrate
or endanger or threaten to endanger, public health or welfare or the
environment; or (iii) perform pre-remedial studies and investigations and
post-remedial operation and maintenance activities, or any other actions
authorized by 42 U.S.C. § 9601 et seq. or 38 M.R.S.A. § 1361 et seq.

 

“Retained Real Property Instruments” means the instruments creating or otherwise
evidencing the Real Property Rights to be Retained.

 

“Retained Real Property Rights” has the meaning given that term in
Section 2.01(a).

 

“Schedule” means any of the disclosure schedules delivered by Seller to Buyer
concurrently with the execution of this Agreement by the parties, subject to the
provisions of Section 8.02 hereof.

 

“Seller” has the meaning given that term in the preamble to this Agreement.

 

“Seller Group” has the meaning given that term in Section 10.03.

 

“Seller Reduction Notice” has the meaning given that term in Section 10.08(i).

 

“Seller Title Notice” has the meaning given that term in Section 5.06(c).

 

“Services Agreement” has the meaning given that term in Section 5.01(a)(ix).

 

“Specified Consents” has the meaning given that term in Section 6.01(d).

 

“Survey” has the meaning given that term in Section 5.06(a).

 

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“Tax” or “Taxes” means any foreign, federal, state or local income, gross
receipts, occupation, environmental (including taxes under Section 59A of the
Code), customs, duties, registration, alternative or add-on minimum, estimated,
withholding, payroll, employment, unemployment insurance, social security (or
similar), excise, sales, use, value-added, franchise, real property, personal
property, business and occupation, capital stock,  stamp or documentary,
transfer, workman’s compensation or other tax, governmental fee or imposition of
any kind whatsoever, including any interest, penalties, additions, assessments
or deferred liability with respect thereto, whether disputed or not.

 

“Tax Return” means any return, report, declaration, true and perfect list under
36 M.R.S.A. § 706, claim for refund or reimbursement, estimate, election, or
information statement or bill relating to any Tax, including any schedule or
attachment thereto and any amendment thereto.

 

“Third Party Claim” has the meaning given that term in Section 10.04.

 

“Title Defects” has the meaning given that term in Section 5.06(b).

 

“Title Insurance Commitment” has the meaning given that term in Section 5.06(a).

 

“Title Notice” has the meaning given that term in Section 5.06(b).

 

“Title Objections” has the meaning given that term in Section 5.06(b).

 

“Transfer Taxes” has the meaning given that term in Section 2.05(d).

 

“Undivided Interest Agreement” has the meaning given that term in Section 7.05.

 

“Water Rights Agreement” has the meaning given that term in Section 7.05.

 

1.02  United States Dollars. All references to money and dollar amounts in this
Agreement shall mean dollars and currency of the United States of America.

 

ARTICLE 2

 

PURCHASE AND SALE OF ASSETS

 

2.01  Purchase and Sale of Assets.  Subject to the terms and conditions of this
Agreement, at the Closing, Seller shall sell to Buyer, and Buyer shall purchase
from Seller, the following assets (collectively, the “Purchased Assets”), as the
same shall exist on the Closing Date free and clear of all Encumbrances other
than Permitted Encumbrances (and, in the case of Real Property, the Real
Property Permitted Encumbrances):

 

(a)  without limitation, Seller’s real property located within the FERC
Boundary, the other real property described in Schedule 2.01(a)(A), and, as and
to the extent agreed by Buyer, Seller and

 

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Mill Owner in accordance with Section 5.06 hereof, (i) sufficient real property
easement rights in Mill Owner’s real property located within the FERC Boundary
that are necessary to operate the Project, (ii) such other real estate rights
necessary for Buyer to construct the third penstock in the vicinity of the two
existing penstocks near the Lower Station (as depicted in the FERC License), and
(iii) such easements or other rights necessary for the delivery by Buyer of
electrical energy and ancillary products from the Project to the ISO-NE for sale
into NEPOOL in accordance with good operating practices, in compliance with Laws
and Seller’s Permits (except as otherwise contemplated by this Agreement) and
Environmental Permits, as more particularly described in
Schedule 2.01(a) (collectively, the “Real Property to be Conveyed”),  but
excluding therefrom, without limitation, the real property and related rights
set forth under the heading of “Retained Real Property Rights” on
Schedule 2.01(a)(B) and other real property and related rights agreed to by the
parties in accordance with Section 5.06 or not expressly agreed to be sold or
conveyed to Buyer (collectively, the “Retained Real Property Rights”);

 

(b)  the machinery, equipment, tools, furniture, furnishings and other fixed
assets listed on Schedule 2.01(b) (collectively, the “Equipment”);

 

(c)  the inventory of supplies, stores, parts and materials used in the
operation of the Project and located on the Real Property on the Closing Date;

 

(d)  all of Seller’s rights under the contracts, agreements, purchase orders,
understandings, and arrangements set forth on Schedule 2.01(d) (collectively,
the “Assumed Agreements”);

 

(e)  all of Seller’s rights in, to and under the Permits and Environmental
Permits that are listed on Schedule 2.01(e), in each case to the extent
assignable; and

 

(f)  all of Seller’s documents and records with respect to the ownership and
operation of the Project (including, without limitation, (i) with respect to the
Real Property, the Equipment, the Assumed Agreements, the Permits and the
Environmental Permits; (ii) as required by and pertaining to the FERC License;
and (iii) cost reports including property tax assessments for the last three
years) (collectively, the “Records”), subject to Seller’s right to retain copies
of any such Records;

 

provided, however, that notwithstanding anything to the contrary contained in
this Agreement, the term “Purchased Assets” shall not include any of the
following assets of Seller or any assets not described above (which shall be
retained by Seller and hereinafter are referred to as the “Excluded Assets”):

 

(i)  cash and cash equivalents and bank accounts;

 

(ii)  any real property of Seller not described on Schedule 2.01(a) as “Real
Property to be Conveyed”, the Retained Real Property Rights and any personal
property of Seller not listed on Schedule 2.01(b);

 

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(iii)  subject to Section 2.01(d) and Section 2.05, any receivables or other
rights to receive payments (with the exception of insurance proceeds resulting
from the destruction of any Purchased Asset required to be conveyed under
Section 2.01 which Purchased Asset is not replaced prior to the Closing, which
proceeds shall be paid to Buyer at or after the Closing, as the case may be);

 

(iv)  all financial statements, tax returns and official corporate records,
including the corporate minute books and stock ledgers;

 

(v)  all (A) “employee benefit plans” (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended), (B) employment,
consulting, non-competition, non-solicitation or other compensation agreements,
and all collective bargaining agreements, and (C) bonus or other incentive
compensation, equity or equity based compensation, stock purchase, deferred
compensation, change in control, severance, leave of absence, vacation, salary
continuation, medical, life insurance, section 125 cafeteria, dependant care,
pension or welfare benefit plans, policies, agreements or arrangements, in each
case as to which the Seller has any liability, contingent or otherwise,
thereunder for current or former employees, directors or individual consultants
of Seller;

 

(vi)  Seller’s shares in Androscoggin Reservoir Company, a Maine corporation;
and

 

(vii)  the other assets, if any, listed on Schedule 2.01(vii).

 

2.02  Conditional Assignment of Assumed Agreements, Permits and Environmental
Permits.  To the extent that the assignment of any of the Assumed Agreements,
the Permits, or the Environmental Permits by Seller to Buyer is not permitted
without the consent or approval of any other party or parties thereto, this
Agreement shall not be deemed to constitute an undertaking to assign the same if
such consent or approval is not given; provided, however, that Buyer and Seller
each shall use commercially reasonable efforts to secure any such consent or
approval.  If a consent or approval to the assignment of an Assumed Agreement is
required and is not obtained prior to Closing, Seller shall cooperate with Buyer
following the Closing in any commercially reasonable arrangement designed to
provide Buyer with the benefits under the Assumed Agreements to the extent not
assigned.

 

2.03.  Assumption of Obligations.  At the Closing, Buyer shall assume and agree
to perform and pay on a timely basis, in accordance with the applicable terms
and conditions,  the following liabilities and obligations of Seller relating to
the Project and the Purchased Assets:

 

(a)  all liabilities or obligations of Seller that (i) accrue, are assessed or
are required to be performed under the terms of the Assumed Agreements after the
Closing, or (ii) are assessed prior to the Closing but are due and payable after
the Closing, or (iii) are assessed after the Closing but relate to a period
prior to the Closing, and in the cases of clauses (ii) and (iii), only to the
extent disclosed to Buyer on Schedule 2.03(a);

 

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(b)  all liabilities or obligations of Seller that accrue and are required to be
performed under the terms of the Permits and Environmental Permits, to the
extent assigned to Buyer, excluding, however, any fines, penalties or
administrative charges imposed by a Governmental Entity relating to the period
prior to the Closing; and

 

(c)  all liabilities or obligations of Seller that accrue and are required to be
performed by Seller under the terms of the Real Property Permitted Encumbrances
((a) through (c), collectively, the “Assumed Obligations”);

 

provided, however, that notwithstanding anything to the contrary contained in
this Agreement, the term “Assumed Obligations” shall not include any other
liabilities or obligations of Seller including, without limitation, the
following liabilities and obligations of Seller (all of which other liabilities
and obligations shall be retained by Seller and hereinafter are referred to as
the “Excluded Obligations”):

 

(i)  all liabilities and obligations not relating to the Project;

 

(ii)  all liabilities and obligations (including, without limitation, Historical
Environmental Liabilities and obligations unless and only to the extent Buyer
breaches any covenants under Sections 5.02(d) or 9.04) relating to or arising
out of the operation of the Project prior to the Closing Date;

 

(iii)  all liabilities and obligations for Taxes (x) of Seller or (y) subject to
the provisions of Section 2.05(b) or (d) hereof, relating to or arising out of
the Purchased Assets or the operation of the Project prior to the Closing Date;
and

 

(iv)  all liabilities and obligations relating to or arising out of (A) the
employment by Seller, or (B) the termination of employment by Seller, of any
employees of Seller or Mill Owner at the Project arising at any time.

 

2.04  Purchase Price.  (a) The consideration to be given by Buyer to Seller for
the purchase and sale of the Purchased Assets (the “Purchase Price”) shall
consist of:

 

(i)  One Hundred Forty-Four Million Dollars ($144,000,000) (the “Cash Purchase
Price”), and

 

(ii)  the assumption by Buyer of the Assumed Obligations as provided in
Section 2.03.

 

(b)  The Cash Purchase Price shall be paid by Buyer at the Closing by wire
transfer of immediately available funds to the account or accounts specified by
Seller in writing to Buyer.

 

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2.05  Prorations and Expenses; Certain Tax Matters.

 

(a)  Except as otherwise specifically provided in this Agreement, all income,
expenses and costs pertaining to the conduct and operation of the Project and
the ownership of the Purchased Assets, other than real and personal property
taxes, which are addressed in Sections 2.05(b) and (c) hereof, and obligations
under Assumed Agreements, which are addressed in Section 2.03(a) hereof, shall
be prorated as of the Closing Date, so that as between Seller and Buyer, Seller
shall receive all revenues and shall be responsible for all expenses, costs and
liabilities allocable to the period prior to the Closing Date, and Buyer shall
receive all revenues and shall be responsible for all expenses, costs and
liabilities allocable to the Closing Date and the period thereafter.

 

(b)  Real and personal property Taxes with respect to the Property Tax Year in
which the Closing occurs that are attributable to the Purchased Assets shall be
apportioned between Seller and Buyer in the following manner and shall be an
adjustment to the Purchase Price.  Seller’s proportionate share of such Taxes
shall be based on the number of days in the Property Tax Year that Seller owned
the real and personal property at issue up through and including the day before
the date of the Closing.  Buyer’s proportionate share of such Taxes with respect
to such property shall be based on the proportionate number of days in the
Property Tax Year on and after the date of the Closing.  For purposes of this
Section 2.05, the term “Property Tax Year” means the fiscal year of the taxing
jurisdiction imposing the real or personal property tax. If the Closing occurs
before the Tax rates or values for the real or personal property Taxes are fixed
for the Property Tax Year, the apportionment of such Taxes shall be based upon
the Tax rates for the immediately preceding Property Tax Year applied to the
most recent assessed valuation of the Purchased Assets. Seller’s proportionate
share of such Taxes shall be reduced by the amount of any real and personal
property Taxes paid prior to the Closing in respect of the current Property Tax
Year.

 

(c)  Any refunds or credits of real property Taxes or personal property Taxes
relating to the Purchased Assets with respect to: (i) any Property Tax Years
occurring prior to the Property Tax Year in which the Closing occurs shall be
for the account of Seller, and if received or utilized by the Buyer, shall be
paid to Seller within five Business Days after Buyer receives such refund or
utilizes such credit, and Buyer shall notify Seller of such receipt or
utilization within such time period, and (ii) the Property Tax Year that
includes the Closing Date shall be apportioned between Seller and Buyer, pro
rata in the same manner as such Taxes originally were allocated pursuant to
Section 2.05(b), based on the portion of the Property Tax Year in which such
Purchased Assets were owned by Seller and Buyer, respectively.

 

(d)  Notwithstanding any other provision of this Agreement to the contrary, any
and all sales, use, transfer, stamp, duties, recording and similar Taxes
(“Transfer Taxes”) incurred in connection with the transactions contemplated by
this Agreement shall be borne by Buyer.  The party charged by Law with the duty
of making the necessary filing and Tax Returns with respect to such Transfer
Taxes shall do so in accordance with applicable Law and make the required
Transfer Tax payment.  If Seller has such duty to file and pay any Transfer Tax,
Buyer shall reimburse Seller within five Business Days following receipt of
notice of the amount thereof.

 

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2.06  Purchase Price Allocation.  For purposes of Section 1060 of the Code, the
Purchase Price shall be allocated among the Purchased Assets in the manner set
forth on Schedule 2.06.  Buyer and Seller shall: (i) be bound by such allocation
for purposes of determining any Taxes, (ii) prepare and file their Tax Returns
on a basis consistent with such allocation, and (iii) take no position
inconsistent with such allocation on any Tax Return or in any proceeding before
any taxing authority.  The obligations of Buyer and Seller under this
Section 2.06 shall survive the Closing.

 

ARTICLE 3

 

REPRESENTATIONS AND WARRANTIES OF SELLER

 

Except as expressly set forth in Section 3.05, Seller represents and warrants to
Buyer as of the date hereof as follows:

 

3.01  Corporate Organization and Authority of Seller.  Seller is a corporation
duly organized, validly existing and in good standing under the Laws of the
State of Maine with full power and authority to own and operate the Project and
the Purchased Assets and carry on its business as now being conducted.  Seller
has all requisite corporate power and authority to execute, deliver and perform
this Agreement.  Seller is duly qualified or authorized to do business as a
foreign corporation and is in good standing under the Laws of each jurisdiction
in which the conduct of its business or the ownership of its properties requires
such qualification or authorization, except where the failure to be so
qualified, authorized or in good standing would not reasonably be expected to
have a material adverse effect on the Purchased Assets or Seller’s ability to
consummate the transactions contemplated hereby.  Seller’s execution and
delivery of this Agreement and any other agreements to be executed and delivered
by Seller at the Closing and the performance by Seller of the transactions
contemplated by this Agreement and any such other agreements has been duly
authorized by all necessary corporate action on the part of Seller.

 

3.02  Enforceability.  This Agreement is, and each other Ancillary Agreement to
be executed and delivered by Seller at the Closing will be, duly and validly
executed and delivered by Seller, and this Agreement is, and each other
Ancillary Agreement to be executed and delivered by Seller will be, a valid and
legally binding obligation of Seller, enforceable against Seller in accordance
with their respective terms.  Neither the execution and delivery of this
Agreement or any such other agreement nor the performance by Seller of the terms
and provisions hereof or thereof will:  (i) violate the Articles of
Incorporation or Bylaws of Seller, (ii) violate any Law or Order by which
Seller, the Project or any of the Purchased Assets are bound, or (iii) except as
set forth on Schedule 3.02, result in a breach or violation of any term or
provision of, constitute a default under, or give rise to any right of
termination or cancellation under, or result in or permit an acceleration of,
any indenture, mortgage, lease or other agreement or instrument to which Seller
is a party or by which Seller or any of the Purchased Assets is bound, other
than as would not reasonably be expected to have a material adverse effect on
Seller’s ability to perform its obligations hereunder, or the Project or the
Purchased Assets.

 

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3.03  Subsidiaries; Mill Owner.  Except as otherwise set forth on Schedule 3.03,
Seller does not own, directly or indirectly, any capital stock, membership
interest or other equity interest in any Person.  All of the outstanding capital
stock of Seller is owned by Mill Owner.

 

3.04  Third Party Consents.  Except as otherwise set forth on Schedule 3.04, no
material authorization, consent, waiver or approval of, or filing with, or
notification to, any third party (including, without limitation, any
Governmental Entity) is required to be obtained by Seller in connection with its
sale and transfer of the Purchased Assets to Buyer on the terms and conditions
set forth in this Agreement, and to permit Seller to perform its other
obligations hereunder.

 

3.05  Title to Purchased Assets; Sufficiency.  Except as otherwise set forth on
Schedule 3.05, Seller has:  (i) good and defensible title to all of the tangible
and intangible personal property constituting part of the Purchased Assets, free
and clear of all Encumbrances other than the Permitted Encumbrances, and
(ii) good and marketable fee simple title to the Real Property to be Conveyed,
free and clear of all Encumbrances, other than the Real Property Permitted
Encumbrances.  Except for the Excluded Assets and except as set forth in
Schedule 3.05 hereof, the Purchased Assets constitute all of the properties and
assets used in or held for use in the operation of the Project as currently
operated by Seller, and are sufficient for Buyer to operate the Project as the
Project is currently operated by Seller.  Notwithstanding anything to the
contrary in this Section 3.05, Seller makes no representation and warranty
whatsoever with respect to the Real Property to be Conveyed as of the date of
this Agreement, which representation and warranty in this Section 3.05 as it
relates to the Real Property to be Conveyed shall be made only as of the Closing
Date.

 

3.06  Environmental.  Except as described on Schedule 3.06:  (i) to the
Knowledge of Seller, the Real Property is in compliance with all applicable
Environmental Laws, except where the failure to be in compliance would not have
a material adverse effect on the Purchased Assets, taken as a whole; (ii) Seller
has not received written notification within the three-year period preceding the
date of this Agreement from any Governmental Entity with respect to any current
material violations of or liability under any Environmental Laws concerning the
Purchased Assets; (iii) to the Knowledge of Seller, there are no claims,
actions, suits or Legal Proceedings pending or threatened, at law or equity,
relating to violation of or liability under any Environmental Law concerning the
Purchased Assets; (iv) to the Knowledge of Seller, there has been no Release or
threatened Release at, on, under or from the Purchased Assets of any Hazardous
Materials except such matters as would not reasonably be expected to have a
material adverse effect on the Purchased Assets, taken as a whole; (v) to the
Knowledge of Seller, there are no facts or circumstances that could reasonably
be expected to result in the imposition of liability pursuant to Environmental
Law upon Buyer with respect to the Purchased Assets, except such matters as
would not reasonably be expected to have a material adverse effect on the
Purchased Assets, taken as a whole;  (vi) Seller has provided to Buyer copies of
the reports and investigations within its possession or control regarding the
environmental condition of the Purchased Assets that are listed on
Schedule 3.06(vi); (vii) Schedule 3.06(vii) contains a true, correct and
complete list of all material Environmental Permits pertaining to the Project;
(viii) Seller currently has all material Environmental Permits that are required
for the operation of the

 

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Project as presently operated, all of which are in full force and effect; and
(ix) to the Knowledge of Seller (a) Seller is not in violation of any terms or
conditions of any such Environmental Permit, other than any such violation,
breach or default that would not reasonably be expected to have a material
adverse effect on Seller, the Project or the Purchased Assets, (b) no written
notice of a pending violation of any material Environmental Permit has been
received by Seller, and (c) no proceeding is pending or threatened to revoke,
prevent the renewal of, or limit any such material Environmental Permit.  The
representations and warranties contained in this Section 3.06 are the exclusive
representation and warranties by Seller related to Environmental Laws,
Environmental Conditions and Environmental Permits.

 

3.07  Equipment.  Except as otherwise described on Schedule 3.07, the Equipment
constitutes all material machinery, equipment, tools, furniture and furnishings
required for the operation of the Project in substantially the same manner as it
was being operated by Seller immediately prior to the date of this Agreement. 
Except as otherwise described on Schedule 3.07, all of the Equipment is located
on the Real Property.

 

3.08  Contracts.  Schedule 3.08 contains a list of all contracts, leases,
commitments and agreements to which Seller is a party as of the date of this
Agreement which relate to the Project and either:  (i) require the payment or
receipt by Seller of more than Fifty Thousand Dollars ($50,000) during the term
of such contract or agreement and which are not terminable by Seller on ninety
(90) or fewer days notice without penalty, or (ii) which are described in
Subsections 3.08(i) through (vii) below (collectively, the “Material
Contracts”).  Except as set forth on Schedule 3.08, Seller has made true and
complete copies of the Material Contracts available to Buyer.  To the Knowledge
of Seller, each of the Material Contracts is in full force and effect and is the
legal, valid, binding and enforceable obligation of Seller; no material default
exists thereunder.   Material Contracts shall include:

 

(i)  contracts and agreements for the future purchase, exchange or sale of
electric power or ancillary services that extend beyond the Closing Date;

 

(ii)  contracts and agreements for the future transmission of electric power;

 

(iii) interconnection contracts and agreements;

 

(iv) contracts and agreements related to reservoir, water management and river
operations;

 

(v)  contracts and agreements for the sale of any Purchased Asset or that grant
a right or option to purchase any Purchased Asset;

 

(vi)  contracts and agreements under which Seller has imposed a security
interest on any of the Purchased Assets; and

 

(vii)  contracts and agreements that purport to limit the Project’s freedom to
compete in any line of business or in any geographic area.

 

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3.09  Permits.  Schedule 3.09 contains a true, correct and complete list of all
material Permits pertaining to the Project.  Except as set forth on
Schedule 3.09, Seller currently has all material Permits that are required for
the operation of the Project as presently operated, all of which are in full
force and effect.  Except as set forth on Schedule 3.09, to Seller’s Knowledge
(a) Seller is not in violation of any terms or conditions of any such Permit,
other than any such violation, breach or default that would not reasonably be
expected to have a material adverse effect on Seller, the Project or the
Purchased Assets, (b) no written notice of a pending violation of any material
Permit has been received by Seller, and (c) no proceeding is pending or
threatened to revoke, prevent the renewal of, or limit any such material Permit.

 

3.10  Employees.  Schedule 3.10 contains a list of the names of each employee of
Mill Owner who, as of the date of this Agreement, directly and primarily
performs services for the Project (the “Project Employees”) and a list of any
collective bargaining agreement or employment agreement currently in effect
covering any such Project Employee (collectively, the “Employee Agreements”). 
Copies of the Employee Agreements have been made available to Buyer.  Except as
otherwise set forth on Schedule 3.10: (i) to the Knowledge of Seller, there is
no labor strike, dispute or work stoppage or lockout involving any of the
Project Employees actually pending or threatened, and (ii) Mill Owner is in
compliance in all material respects with all applicable Laws respecting
employment and employment practices with respect to the Project Employees.

 

3.11  Compliance with Law.  Except as otherwise set forth on Schedule 3.11 and
excluding any representation or warranty regarding Environmental Laws, which is
governed exclusively by Section 3.06, (i) to the Knowledge of Seller, the
Project is being operated in compliance with all applicable Laws except for
non-compliance which would not reasonably be expected to have a material adverse
effect on Seller, the Project or the Purchased Assets; (ii) Seller has not been
given written notice of any violation of any Law with respect to the ownership
or operation of the Purchased Assets; and (iii) to the Knowledge of Seller, no
investigation or review relating to Seller with respect to the ownership or
operation of the Purchased Assets by any Governmental Entity is pending or
threatened.

 

3.12  Litigation.  Except as described on Schedule 3.12, to the Knowledge of
Seller, there are no claims, actions, suits or proceedings pending or threatened
against Seller or the Purchased Assets, at law or in equity, before or by any
Governmental Entity nor is Seller subject to any Order: (i) relating to the
ownership or operation of the Project or the Purchased Assets, (ii) which could
materially impair the ability of Seller to perform its obligations under this
Agreement or any other agreement to be entered into by Seller at the Closing, or
(iii) which questions the validity or propriety of this Agreement or any such
other agreement or of any action to be taken hereunder or thereunder.

 

3.13  Changes in the Project.  Since December 31, 2004, except as otherwise set
forth in Schedule 3.13:  (i) there has not occurred any development or event
that has caused or would reasonably be expected to cause a material adverse
change in the physical condition or operating capability of the Purchased
Assets, taken as a whole; (ii) there has been no sale, lease, transfer,

 

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Encumbrance or disposition of assets used in the operation of the Project with
an aggregate book value of more than $50,000, other than the use of supplies in
the ordinary course of business and other than the distribution of cash to Mill
Owner; (iii) there has been no capital expenditures or commitments in respect
thereto in excess of $50,000; and (iv) Seller has not entered into any agreement
with respect to any of the foregoing.

 

3.14  Taxes.  Seller has filed in a timely manner all requisite Tax Returns
required to be filed by it, all such Tax Returns are true, correct and complete
in all material respects, and all material amounts of Taxes required to be paid
by Seller have been paid in a timely manner for all periods ending prior to the
Closing Date. There is no material dispute or pending or threatened claim, or
any audit, investigation, protest or similar proceeding concerning any Tax with
respect to the Purchased Assets.  None of the Purchased Assets is (i) property
required to be treated as being owned by another Person pursuant to the
provisions of Section 168(f)(8) of the Internal Revenue Code of 1954, as amended
and in effect immediately prior to the enactment of the Tax Reform Act of 1986,
(ii) “tax-exempt use property” within the meaning of Section 168(h)(1) of the
Code, (iii) “tax-exempt bond financed property” within the meaning of
Section 168(g) of the Code, (iv) “limited use property” within the meaning of
Rev. Proc. 2001-28, (v) subject to Section 168(g)(1)(A) of the Code, or
(vi) subject to any provision of state, local or foreign Law comparable to any
of the provisions listed above.  None of the Purchased Assets are subject to any
Encumbrances for unpaid Taxes.  Seller is not a foreign person within the
meaning of Section 1445 of the Code.

 

3.15  No Commissions.  Except for a fee payable by Seller to Competitive Energy
Services, LLC, no commissions or brokers’ or finders’ fees are payable by,
through or on account of any acts of Seller or Mill Owner in connection with
this Agreement or the transactions contemplated hereby.

 

3.16.  Insurance.  Seller or one or more of its Affiliates have the insurance
policies listed at Schedule 3.16, all of which are in full force and effect.

 

EXCEPT AS EXPRESSLY SET FORTH IN THIS ARTICLE 3, BUYER IS ACQUIRING THE
PURCHASED ASSETS “AS IS, WHERE IS” AND SELLER HAS NOT MADE AND DOES NOT MAKE ANY
REPRESENTATION OR WARRANTY OF ANY NATURE AS TO THE PURCHASED ASSETS OR THE
PROJECT (INCLUDING, WITHOUT LIMITATION, ANY WARRANTY OF MERCHANTABILITY OR
FITNESS FOR A PARTICULAR PURPOSE), AND BUYER HEREBY EXPRESSLY ACKNOWLEDGES THAT
NO SUCH OTHER REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE BY SELLER OR RELIED
UPON BY BUYER.  SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY EXPRESSED OR
IMPLIED WARRANTIES, GUARANTIES, PROMISES, STATEMENTS, REPRESENTATIONS OR
INFORMATION PERTAINING TO THE PROJECT OR THE PURCHASED ASSETS MADE OR FURNISHED
BY ANY AGENT, EMPLOYEE, SERVANT OR OTHER PERSON REPRESENTING OR PURPORTING TO
REPRESENT SELLER, UNLESS SUCH WARRANTIES, GUARANTIES, PROMISES, STATEMENTS,
REPRESENTATIONS OR INFORMATION ARE EXPRESSLY AND SPECIFICALLY SET FORTH IN THIS
ARTICLE 3.

 

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ARTICLE 4

 

REPRESENTATIONS AND WARRANTIES OF BUYER

 

Buyer represents and warrants to Seller as of the date hereof as follows:

 

4.01  Corporate Organization and Authority.  Buyer is a corporation duly
organized, validly existing and in good standing under the Laws of the Province
of Ontario and has full power and authority to execute, deliver and perform this
Agreement.  Buyer is duly qualified or authorized to do business as a foreign
corporation and is in good standing under the Laws of each jurisdiction in which
the conduct of its business or the ownership of its properties requires such
qualification or authorization, except where the failure to be so qualified,
authorized or in good standing would not reasonably be expected to have a
material adverse effect on Buyer’s assets or Buyer’s ability to consummate the
transactions contemplated hereby.  Buyer’s execution and delivery of this
Agreement and any other agreements to be executed and delivered by Buyer at the
Closing and the performance by Buyer of the transactions contemplated by this
Agreement and any such other agreements have been duly authorized by all
necessary corporate or other actions and proceedings on the part of Buyer.

 

4.02  Enforceability.  This Agreement is, and each Ancillary Agreement to be
executed and delivered by Buyer at the Closing will be, duly and validly
executed and delivered by Buyer, and this Agreement is, and each other Ancillary
Agreement to be executed and delivered by Buyer will be, a valid and legally
binding obligation of Buyer, enforceable against Buyer in accordance with their
respective terms.  Neither the execution of this Agreement or any such other
agreement by Buyer nor the performance by Buyer of the various terms and
provisions hereof or thereof will:  (i) violate the articles or certificate of
incorporation or bylaws of Buyer, (ii) violate any Law or Order by which Buyer
or any of its property is bound, or (iii) result in a breach or violation of any
term or provision of, constitute a default under, or give rise to any right of
termination or cancellation under, or result in or permit an acceleration of,
any indenture, mortgage, lease or other agreement or instrument to which Buyer
is a party or by which it or any of its property is bound, except in the case of
the foregoing clauses (ii) and (iii), as would not reasonably be expected to
result in a material adverse effect on Buyer’s ability to perform its
obligations hereunder.

 

4.03  Litigation.  To the knowledge of Buyer, there are no claims, actions,
suits or proceedings now pending or threatened against or affecting Buyer, at
law or in equity, or before or by any Governmental Entity which may impair the
ability of Buyer to perform this Agreement or any other agreement to be entered
into at the Closing or which questions the validity or propriety of this
Agreement or any such other agreement or of any action taken hereunder or
thereunder in connection with this Agreement.

 

4.04  Third Party Consents.  Except as otherwise set forth on Schedule 4.04, no
authorization, consent, waiver or approval of or filing with, or notification
to, any third party (including, without limitation, any Governmental Entity) is
required to be obtained by Buyer in

 

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connection with its purchase of the Purchased Assets on the terms and conditions
set forth in this Agreement, and to permit Buyer to perform its other
obligations hereunder.

 

4.05  Buyer’s Investigation.  Buyer is an informed and sophisticated purchaser
of assets similar to the Project and, in connection with the transactions
contemplated hereby, has sought the advice of experts who are experienced in the
evaluation and purchase of assets similar to the Project.  Subject to the
provisions of Sections 2.01(a), 5.06 and 6.01(g), Buyer has undertaken such
investigation of the Project and the Purchased Assets as it has deemed necessary
to enable it to make an informed decision with respect to this Agreement and the
transactions contemplated hereby.  Buyer acknowledges that Seller has provided
Buyer with such access to the personnel, properties, premises and Records of
Seller and Mill Owner as Buyer has requested, subject to the limitations on
certain activities set forth in Section 5.02(d).  In entering into this
Agreement, in purchasing the Purchased Assets and in consummating the other
transactions contemplated herein, Buyer has relied solely upon its own
investigation and the express representations and warranties of Seller set forth
in Article 3 of this Agreement, and neither Seller nor Mill Owner nor any of
their respective officers, directors, shareholders, employees, affiliates,
agents or representatives has made any representation or warranty as to Seller,
the Purchased Assets, this Agreement or the Project, except as expressly set
forth in this Agreement.  To the fullest extent permitted by Law, neither Seller
nor Mill Owner nor any of their respective officers, directors, shareholders,
employees, Affiliates, agents or representatives shall have any liability to
Buyer for any information made available to, or statements made to, Buyer (or
any of its agents, officers, directors, employees, Affiliates or
representatives), other than (x) the express obligation of Seller to indemnify
Buyer following the Closing to the extent set forth in Article 10 and
Article 10A; (y) pursuant to the Guaranty of New Page Corporation in the form
attached hereto and only to the extent executed and delivered to Buyer; and (z)
as provided in Section 8.03.  Nothing contained in this Section 4.05 shall limit
or restrict any of the representations and warranties of Seller contained in
this Agreement or any other Ancillary Agreement to be executed and delivered by
Seller at the Closing.

 

4.06  Ability to Perform.  Buyer currently has available to it sufficient
funding to enable Buyer to consummate the purchase of the Purchased Assets on
the terms set forth in this Agreement, to pay all expenses to be incurred by
Buyer in connection therewith and to perform all of its other obligations under
this Agreement and any other agreement to be entered into by Buyer pursuant to
this Agreement.

 

4.07  No Commissions.  No commissions or brokers’ or finders’ fees are payable
by, through or on account of any acts of Buyer or its representatives in
connection with this Agreement or the transactions contemplated hereby.

 

4.08  Buyer’s Knowledge.  Buyer hereby represents and warrants that it has
informed Seller of any material mistakes or omissions on the Schedules of which
Buyer is aware, including, without limitation, anything that Buyer is aware of
that might give rise to a claim by Buyer against Seller under the terms of this
Agreement or any Ancillary Agreements.

 

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ARTICLE 5

 

PRE-CLOSING COVENANTS

 

5.01  Covenants of Seller.

 

(a)  Except as otherwise contemplated by this Agreement, as required by
applicable Law or as may be approved by Buyer, during the period from the date
of this Agreement to the earlier of the Closing Date or the termination of this
Agreement in accordance with Article 8, Seller shall:

 

(i)  operate the Project in the ordinary course, consistent with Seller’s past
practices, in accordance with good operating practices and in compliance with
Laws and Seller’s Permits and Environmental Permits;

 

(ii)  continue to maintain the Purchased Assets consistent with Seller’s past
practices, in accordance with good operating practices and in compliance with
Laws and Seller’s Permits and Environmental Permits;

 

(iii) use reasonable efforts to preserve intact the present business
organization and operations of the Project, to keep available the services of
its contractors and to preserve its relationships with licensors, suppliers,
dealers, customers and others having business relationships with the Project;

 

(iv)  promptly commence and diligently pursue with commercially reasonable
efforts, in consultation with Buyer, at Seller’s expense, a ring bus
interconnection or a dedicated interconnection between the Project and pool
transmission facilities currently operated by ISO New England via an
interconnection agreement with ISO New England or, in the discretion of CMP,
with the transmission facilities grid of CMP via an interconnection arrangement
with CMP, all as further described on Exhibit B hereto;

 

(v)  promptly disclose to Buyer any event occurring after the date of this
Agreement which, to the Knowledge of Seller, results in any of the
representations and warranties of Seller set forth in Article 3 becoming
inaccurate or untrue in any material respect;

 

(vi)  use commercially reasonable efforts to obtain, prior to the Closing, all
of the Specified Consents required to be obtained by Seller;

 

(vii)  provide Buyer’s officers, employees, counsel, accountants and other
representatives with reasonable access, during normal business hours, to the
Project, the books and Records of Seller with respect to the Project and
personnel of Seller and Mill Owner who are reasonably familiar with the Project;

 

(viii)  subject to the provisions of Section 5.02(d) hereof, provide reasonable
access to Buyer and Buyer’s representatives for the purpose of investigating and

 

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designing its remote control systems and communication equipment, provided that
Buyer shall conduct such activities so as to avoid interference with Seller’s
operations; and

 

(ix)  use diligent efforts and negotiate in good faith with Buyer in accordance
with Section 5.06 (1) the deeds and easements necessary to transfer the Real
Property to be Conveyed, the Retained Real Property Instruments and real
property attachment to the Undivided Interest Agreement, and all other real
estate documents reasonably required to effect the transactions contemplated by
this Agreement at the Closing (collectively, the “Real Estate Documents”); (2) a
services agreement for the provision of certain maintenance and operation
services to Buyer after the Closing (the “Services Agreement”); and (3) the
other attachments to the Undivided Interest Agreement (the “Attachments”).

 

(b)  Except as specifically contemplated by this Agreement, Seller shall not,
from the date hereof until the Closing, without the written consent of Buyer,
which consent shall not be unreasonably withheld, delayed or conditioned:

 

(i)  sell or transfer any of the Purchased Assets having a value more than
Twenty Five Thousand Dollars ($25,000) in the aggregate, provided, however,
Seller shall have the right to transfer the Retained Real Property Rights
without limitation;

 

(ii)  sell or transfer any spare parts or inventory comprising a portion of the
Purchased Assets;

 

(iii)  make any capital expenditures, series of capital expenditures or
commitments for capital expenditures related to the Project to the extent the
capital improvements related to such capital expenditure will not be completed
and fully paid for prior to the Closing;

 

(iv)  amend, modify, cancel, or waive any rights under or grant any consent
(1) relating to, any Permits or Environmental Permits, or, (2) in any material
manner with respect to the Assumed Agreements or Material Contracts, except in
each case as specifically provided herein, or enter into any material contract
that extends beyond the Closing Date relating to the Purchased Assets or the
Project;

 

(v)  incur any obligations or liabilities not in existence on the date hereof
that will become an Assumed Liability or otherwise become the obligation of
Buyer in connection with the acquisition of the Purchased Assets;

 

(vi)  permit, allow, or suffer any Purchased Asset to be subjected to any
Encumbrances other than Permitted Encumbrances, the Real Property Permitted
Encumbrances or Encumbrances that will otherwise be discharged prior to or at
the time of the Closing;

 

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(vii)  make any Tax election or settle or compromise any Tax liability that
could reasonably be expected to create or otherwise cause any liability to
Buyer, or with respect to which the Project or the Purchased Assets may be
subject, levied or assessed;

 

(viii)  grant, issue or give any Person any rights or options with respect to
the Project or the Purchased Assets; or

 

(ix)  agree or commit to do any of the foregoing.

 

(c)  Except as specifically contemplated by this Agreement, Seller shall not,
from the date hereof until the Closing, without the written consent of Buyer:

 

(i)  liquidate, dissolve, recapitalize, reorganize or otherwise wind up its
business or operations, or enter into any merger or consolidation with any
corporation or other entity; or

 

(ii)  enter into any contract that restrains, restricts, limits or impedes the
ability of the Project to compete with or conduct any business or any line of
business in any geographic area.

 

5.02  Covenants of Buyer.  Except as otherwise contemplated by this Agreement,
as required by applicable Laws or as may be approved by Seller, during the
period from the date of this Agreement to the earlier of the Closing Date or the
termination of this Agreement in accordance with Article 8:

 

(a)  Buyer shall have available, on the Closing Date, sufficient funding to
enable Buyer to consummate the purchase of the Purchased Assets from Seller in
accordance with this Agreement and otherwise to perform all of Buyer’s
obligations under this Agreement and the other agreements to be entered into by
Buyer pursuant to this Agreement;

 

(b)  Buyer shall use commercially reasonable efforts to obtain, prior to the
Closing, all of the Specified Consents required to be obtained by Buyer;

 

(c)  Buyer shall promptly disclose to Seller any event occurring after the date
of this Agreement of which Buyer becomes aware which results in any of the
representations and warranties of Buyer set forth in Article 4, or any of the
representations or warranties of Seller set forth in Article 3, being inaccurate
or untrue in any material respect;

 

(d)  Neither Buyer nor any of its Affiliates shall undertake or cause to be
undertaken any non-subsurface sampling or analysis, subsurface investigation, or
any communication with any Governmental Entity by or on behalf of Buyer or its
Affiliates with regard to any Environmental Liabilities or Environmental
Conditions regarding the Purchased Assets.  In the event that any Governmental
Entity initiates any communication (written, electronic or verbal) with Buyer

 

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pre-closing, (1) in the case of written or electronic communication, Buyer shall
not respond to such communication and shall refer such communication to Seller
for response, and (2) in the case of a verbal communication, shall immediately
refer the representative of the Governmental Entity to Seller’s Representative;
and

 

(e)  Buyer shall use diligent efforts and negotiate in good faith with Seller
the Real Estate Documents as contemplated by Section 5.06(e), the Services
Agreement and the Attachments.

 

5.03  Filings.  Promptly after the execution of this Agreement, Buyer and Seller
each shall prepare and make or cause to be made any required filings,
submissions and notifications under applicable Law (including, without
limitation, under the HSR Act and under the Federal Power Act) to the extent
that such filings are necessary to consummate the transactions contemplated
hereby and shall use all commercially reasonable efforts to take all other
actions necessary to consummate the transactions contemplated by this Agreement
in a manner consistent with applicable Law.  Except with respect to the transfer
and/or amendment of the FERC License, which is governed by this Section 5.03,
and the filings required under HSR Act, which the parties shall prepare
collaboratively, Buyer shall be responsible for making all filings and obtaining
each consent listed on Schedule 4.04 and Seller shall be responsible for making
all filings and obtaining subdivision approval, if applicable.  Each party shall
furnish to the other party such necessary information and reasonable assistance
as such other party may reasonably request in connection with their respective
obligations under this Agreement and a copy of each filing and all
correspondence related thereto.  All such filings shall be made as promptly as
practicable.  Seller shall work with Buyer to draft and jointly file with FERC
(i) an application for transfer and/or amendment of license pursuant to the
Federal Power Act Sections 8 and/or 9, 16 U.S.C. §§ 801-02, and FERC’s
regulations at 18 C.F.R. Part 9, which application shall recognize, among other
things, the Water Requirements (as they are defined in the Water Rights
Agreement) and related water easements to be granted to Mill Owner; and (ii) an
application for authorization of Seller’s disposition and Buyer’s acquisition of
the FERC-jurisdictional Purchased Assets pursuant to the Federal Power Act
Section 203, 16 U.S.C. § 824b, and FERC’s regulations at 18 C.F.R. Part 33. 
Buyer shall be responsible for filing its acknowledgement of acceptance of
license with FERC within sixty (60) days after the date of issuance by FERC of
an order of transfer and/or amendment and shall concurrently submit a certified
copy of documents evidencing the purchase of the Purchased Assets.  Buyer shall
also be responsible for filing a notice of consummation of transaction with FERC
in the Federal Power Act Section 203 proceeding within ten (10) days after
Closing.  The parties shall use all commercially reasonable efforts, diligently
take all necessary and proper actions and provide any additional information
requested by the FERC and other regulatory agencies in connection with any
required approvals and shall jointly file such additional information that may
be required by FERC in connection with the application for transfer and/or
amendment of the FERC License and the application for authorization under the
Federal Power Act Section 203.  Buyer and Seller will communicate with FERC on a
cooperative basis, including joint communications on material matters in the
transfer and/or amendment of the FERC License.  Buyer’s obligations in this
Section 5.03 shall survive the Closing.

 

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5.04  Efforts to Complete the Transactions.  Subject to the terms and conditions
set forth in this Agreement, Buyer and Seller each shall use all commercially
reasonable efforts to take, or cause to be taken, all action, and to do, or
cause to be done, all things necessary or appropriate to consummate the
transactions contemplated by this Agreement.

 

5.05  Publicity.  Neither Buyer nor Seller shall, without the prior written
consent of the other (which consent shall not unreasonably be withheld or
delayed), make any public disclosure (by means of public announcement, press
release or otherwise) concerning the subject matter of this Agreement or any of
the transactions contemplated hereby, unless otherwise required by Law.

 

5.06  Real Estate Due Diligence, Real Estate Documents and the Attachments.

 

(a)  On or before the date that is thirty (30) Business Days from the date of
this Agreement, Seller shall deliver to Buyer:  (i) a binding commitment for
real estate title insurance (the “Title Insurance Commitment”), issued by Ticor
Insurance Company or another title insurance company authorized to do business
in Maine and reasonably acceptable to Buyer, insuring the Real Property to be
Conveyed, together with copies of all of the documents referred to therein as
exceptions (the “Exceptions”), all source deeds, chains of title and plans
referred to in such documents, (ii) a final modified ALTA survey and Surveyor’s
Report (collectively, the “Survey”) showing the boundary of the Real Property to
be Conveyed , the Retained Real Property Rights located within the FERC
Boundary, the real estate rights to be granted by Mill Owner to Buyer pursuant
to this Agreement to the extent they can be generally depicted on a survey, the
Mill Owner’s real property within the FERC Boundary, and the location of each
Exception to the extent it can generally be located on a survey, excluding
therefrom Seller’s flowage rights upstream from the Upper Station (as depicted
on Exhibit K to the FERC License), (iii) the Real Estate Documents (together
with the Title Insurance Commitment, the Exceptions, and the Survey,
collectively the “Real Estate Title Documents”), and (iv) the Attachments.

 

(b) Within thirty (30) Business Days of receipt of all of the Real Estate Title
Documents, Buyer shall advise Seller in writing and with reasonable detail (the
“Title Notice”) of (i) objections to the form or substance of the Real Estate
Title Documents to the extent that they do not satisfy in Buyer’s reasonable
judgment the requirements of Section 2.01(a), (ii) any defects in title
(excluding those created by the Retained Real Property Instruments) that would
prevent Seller or Mill Owner, as applicable, from conveying title insurable to
Buyer’s reasonable satisfaction to the Real Property to be Conveyed (the “Title
Defects”), (iii) any Title Objections, and (iv) any objection to the form or
substance of the Attachments.  For purposes of this Agreement, “Title
Objections” means only those real estate title and real estate permitting
matters that would prevent, in Buyer’s reasonable judgment, (1) the ownership
and operation of the Project in accordance with Section 2.01(a), or (2) a
transfer and/or amendment of the FERC License as contemplated by this Agreement.

 

(c)  Seller shall provide written notice (the “Seller Title Notice”) to Buyer
within thirty (30) days of receipt of the Title Notice if Seller determines that
it will be unable or is unwilling to cure any Title Defect or Title Objection
prior to or at the Closing, in which case Buyer may

 

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elect either to (i) accept title to the Purchased Assets subject to the uncured
Title Defects or Title Objections and the Attachments; or (ii) negotiate with
Seller and Mill Owner for the period set forth in Section 5.06(e).  If Buyer
fails to notify Seller in writing of its option to elect one of the foregoing
options within twenty (20) days of Seller Title Notice, Buyer shall be deemed to
have agreed to accept title to the Purchased Assets subject to such uncured or
uncurable Title Defects or Title Objections described in Seller Title Notice and
the form and substance of the Attachments.  In all events, Seller shall be
required to remove as to any fee simple interests comprising the Real Property
to be Conveyed or, to the extent an easement or interest other than fee simple
is to be conveyed as part of the Real Property to be Conveyed, subordinate, any
mortgage liens, tax liens, or mechanics’ lien encumbering the Purchased Assets.

 

(d)  The parties hereby agree that the Real Estate Documents shall include, but
not be limited to, an easement and/or such other real estate rights conveying to
Mill Owner the right to use water, including without limitation, riparian rights
to use such water, located in the Androscoggin River on or about the Real
Property to be Conveyed below the Upper Station (as depicted in the FERC
License), which easement rights and/or such other real property rights shall be
appurtenant to and benefit the Mill Real Property.  Such easement rights and/or
other real property rights shall be broader in ways that the parties will
negotiate in good faith than those water rights to be granted to Mill Owner
under the Water Rights Agreement, with the scope, terms and conditions to be
reasonably acceptable to Buyer, Seller and Mill Owner.  Buyer acknowledges that
the granting of these easement rights and/or other real property rights are a
material inducement to Seller entering into, and Mill Owner joining for limited
purposes, this Agreement.

 

(e)  In  the event the form and substance of the Real Estate Documents and
Attachments are not agreed to by the parties within thirty (30) days from the
date of the Seller Title Notice as contemplated in Section 5.06(c), after
negotiating in good faith during this period, then either party shall have the
right to terminate this Agreement, and upon such termination all obligations of
the parties hereunder shall cease and neither party shall have any claim against
the other by reason of this Agreement, except as provided in Section 8.03.

 

(f)  The parties hereby agree that upon finalizing the Real Property to be
Conveyed and the Real Estate Permitted Encumbrances, Schedule 3.05 shall be
updated and modified in a manner reasonably acceptable to the parties without
reference to, or any liability as contemplated by, Section 8.02.

 

ARTICLE 6

 

CONDITIONS TO THE CLOSING

 

6.01  Conditions to the Obligations of Buyer.  The obligations of Buyer to
effect the transactions contemplated by this Agreement at the Closing shall be
subject to the fulfillment (or waiver by Buyer) on or prior to the Closing Date
of the following conditions:

 

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(a)  all agreements and covenants required by this Agreement to be complied with
or performed by Seller at or prior to the Closing shall have been complied with
or performed in all material respects;

 

(b)  all of the representations and warranties of Seller contained in this
Agreement (i) that are qualified as to material adverse effect shall be true and
correct as of the Closing as if made at and as of such time (except to the
extent a different time expressly is stated therein, in which case they shall be
true and correct at such time) and (ii) that are not so qualified shall be true
and correct in all material respects as of the Closing as if made at and as of
such time (except to the extent a different time expressly is stated therein, in
which case they shall be so true and correct at such time), in each case, except
for matters that would not reasonably be expected to have a negative financial
impact on the Purchased Assets or the Project in excess of Two Million Dollars
($2,000,000) in the aggregate;

 

(c)  all filing and waiting period requirements under and the Federal Power Act
and HSR Act, if any, shall have been satisfied;

 

(d)  all of the consents and approvals listed on Schedule 6.01(d) (the
“Specified Consents”) shall have been obtained, including a final,
non-appealable order from FERC transferring and/or amending the FERC License;

 

(e)  there shall not be any effective preliminary or permanent injunction or
other order issued by any Governmental Entity which enjoins the consummation of
any of the transactions contemplated by this Agreement;

 

(f)  Seller shall have delivered to Buyer a title insurance commitment insuring
the Real Property to be Conveyed and reflecting only those Real Property
Permitted Encumbrances as determined in accordance with Section 5.06, for which
the sole condition to the issuance of a title insurance policy is the payment of
the title insurance premium, to be paid by Buyer; and

 

(g)  an affidavit in form attached as Exhibit K executed on behalf of Seller.

 

6.02  Conditions to the Obligations of Seller.  The obligation of Seller to
effect the transactions contemplated by this Agreement shall be subject to the
fulfillment (or waiver by Seller) on or prior to the Closing Date of the
following conditions:

 

(a)  all agreements and covenants required by this Agreement to be complied with
or performed by Buyer at or prior to the Closing shall have been complied with
and performed in all material respects;

 

(b)  all of the representations and warranties of Buyer contained in this
Agreement (i) that are qualified as to material adverse effect shall be true and
correct as of the Closing as if made at and as of such time (except to the
extent a different time expressly is stated therein, in which case they shall be
true and correct at such time) and (ii) that are not so qualified shall be true
and correct in all material respects as of the Closing as if made at and as of
such time (except to the

 

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extent a different time expressly is stated therein in which case they shall be
so true and correct at such time);

 

(c)  all filing and waiting period requirements under the Federal Power Act and
the HSR Act, if any, shall have been satisfied;

 

(d)  all of the Specified Consents shall have been obtained, including a final,
non-appealable order from FERC transferring and/or amending the FERC License;
and

 

(e)  there shall not be any effective preliminary or permanent injunction or
other order issued by any Governmental Entity which enjoins the consummation of
any of the transactions contemplated by this Agreement.

 

ARTICLE 7

 

THE CLOSING

 

7.01  Closing.  The closing of the transactions contemplated by this Agreement
(the “Closing”) shall take place at the Portland, Maine office of Preti,
Flaherty, Beliveau, Pachios & Haley LLP (or such other place as the parties may
agree), commencing at 10:00 a.m. on the third Business Day following the first
date on which all of the conditions specified in Article 6 have been satisfied
or waived, or at such other time as Buyer and Seller may agree (the “Closing
Date”).

 

7.02  Timing and Effectiveness of Actions.  At the Closing, the parties shall
take the actions described in this Article 7.  All actions shall be deemed to
have occurred simultaneously and as of 12:01 a.m. on the Closing Date (the
“Effective Time”) and, unless Buyer and Seller otherwise agree, the
effectiveness of any action taken at the Closing shall be conditioned upon the
taking of all other actions required by this article.

 

7.03  Seller’s Deliveries.  At the Closing, Seller shall deliver:

 

(a)  One or more Quitclaim Deeds with Covenant or such other appropriate
documents or instruments of transfer, as the case may require to transfer the
Real Property to be Conveyed and the Attachments, in the form agreed pursuant to
Section 5.06;

 

(b)  A Bill of Sale and Assignment and Assumption Agreement in the form of
Exhibit D executed by Seller;

 

(c)  Assignment and Assumption Agreements in the forms attached hereto of
Exhibit E;

 

(d)  A certificate signed by the President or a Vice President of Seller and
dated the Closing Date as to the matters set forth in Section 6.01(a) and
Section 6.01(b);

 

(e)  Evidence reasonably satisfactory to Buyer of the receipt of the Specified
Consents for which Seller is responsible to obtain and the assignment to Buyer
of the Assumed Agreements,

 

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the Permits and the Environmental Permits, to the extent Buyer has obtained
consent, as contemplated by this Agreement;

 

(f)  An affidavit of non-foreign status certifying that the sale of the Real
Property by Seller is exempt from withholding under Section 1445 of the Code,
and, if applicable, a certificate in the form required by Maine Revenue Services
certifying that the sale of the Real Property by Seller is exempt from Maine
income tax withholding under 36 M.R.S.A. § 5250 A, and a tax clearance
certificate from Maine Revenue Services with respect to Seller pursuant to 36
M.R.S.A. § 177(6);

 

(g) The Protocol Agreement in the form of Exhibit L, executed by Seller; and

 

(h)  Such other certificates, documents and instruments as reasonably may be
requested by Buyer in connection with the transactions contemplated by this
Agreement, including without limitation the affidavits and indemnities
reasonably required for the issuance of Buyer’s title insurance policy.

 

7.04  Buyer’s Deliveries.  At the Closing, Buyer shall deliver:

 

(a)  The Cash Purchase Price, paid in the manner provided in Section 2.04;

 

(b)  The Bill of Sale and Assignment and Assumption Agreement in the Form of
Exhibit D, executed by Buyer;

 

(c)  The Assignment and Assumption Agreements in the form of Exhibit E executed
by Buyer, and the assumption by Buyer of the Permits and Environmental Permits
in form and substance reasonably satisfactory to Seller and its counsel, as
contemplated by this Agreement;

 

(d)  A certificate signed by the President or a Vice President of Buyer and
dated the Closing Date as to the matters set forth in Section 6.02(a) and
Section 6.02(b);

 

(e)  The Protocol Agreement in the form of Exhibit L, executed by Buyer; and

 

(f)  Such other certificates, documents and instruments as reasonably may be
requested by Seller in connection with the transactions contemplated by this
Agreement.

 

7.05  Other Actions.  At the Closing, Seller, Buyer and Mill Owner, as
applicable, shall execute and deliver the Water Rights Agreement among Mill
Owner, Seller and Buyer substantially in the form attached hereto as Exhibit F
(the “Water Rights Agreement”); and an Undivided Ownership, Operation, and
Maintenance Agreement between Mill Owner and Buyer substantially in the form
attached hereto as Exhibit G (the “Undivided Interest Agreement”); the Protocol
Agreement between Mill Owner and Buyer substantially in the form attached hereto
as Exhibit L; and a Services Agreement between Mill Owner and Buyer in form and
substance reasonably acceptable to Buyer, Seller and Mill Owner (the agreements
and documents

 

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referenced in this section and in Section 7.03 and 7.04 above collectively the
“Ancillary Agreements”).

 

ARTICLE 8

 

TERMINATION

 

8.01  Termination.  Notwithstanding anything in this Agreement to the contrary,
this Agreement may be terminated at any time prior to the Closing:

 

(a)  By mutual written consent of Buyer and Seller.

 

(b)  By either Buyer or Seller if the transactions contemplated by this
Agreement have not been consummated on or before August 31, 2006 (or such later
date as Buyer and Seller may agree to in writing) (the “Expiration Date”),
except that the right to terminate this Agreement under this
Section 8.01(b) shall not be available to a party if the failure of such party
to perform any material obligation under this Agreement or to fulfill any
material condition under this Agreement within the control of such party has
been the proximate cause of, or resulted in, the failure of the transactions
contemplated by this Agreement to be consummated on or before the Expiration
Date.

 

(c)  By Buyer:

 

(i) if events occur that render one or more of the conditions to the obligations
of Buyer set forth in Section 6.01 (other than Section 6.01(b) thereof)
impossible of satisfaction and such condition or conditions are not waived by
Buyer;

 

(ii) if a material breach by Seller of any covenant or agreement is not cured as
soon as reasonably practicable (and, in any event, within thirty (30) days,
provided that if such breach is not curable within thirty (30) days and Seller
is diligently pursuing a cure, the thirty (30) day period shall be extended by
an additional fifteen (15) days) after written notice thereof is given by Buyer
to Seller;

 

(iii)  in the case of a breach by Seller of a representation or warranty that
would reasonably be expected to have a negative financial impact on the
Purchased Assets or the Project in excess of Two Million Dollars ($2,000,000)
that is not cured as soon as reasonably practicable (and, in any event, within
thirty (30) days, provided that if such breach is not curable within thirty (30)
days and Seller is diligently pursuing a cure, the thirty (30) day period shall
be extended by an additional fifteen (15) days) after written notice thereof is
given by Buyer to Seller.

 

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(d)  By Seller, if:

 

(i)  events occur that render one or more of the conditions to the obligations
of Seller as set forth in Section 6.02 impossible of satisfaction and such
condition or conditions are not waived by Seller; or

 

(ii)  a material breach by Buyer of any representation, warranty, covenant or
agreement in this Agreement occurs that is not cured as soon as reasonably
practicable (and, in any event, within thirty (30) days, provided that if such
breach is not curable within thirty (30) days and Buyer is diligently pursuing a
cure, the thirty (30) day period shall be extended by an additional fifteen (15)
days) after written notice thereof is given by Seller to Buyer; or

 

(e)  By Buyer pursuant to Section 8.02(a) hereof.

 

If this Agreement is terminated by either Buyer or Seller pursuant to this
Section 8.01, such termination shall become effective at such time as the
terminating party gives written notice of the termination to the other party.

 

8.02  Disclosure Supplements.

 

(a)  Prior to Closing, Seller shall have the right to modify or supplement any
of the Schedules to this Agreement to reflect facts or information coming to the
attention of Seller following the execution of this Agreement that cause any
representation herein not to be correct as of the date hereof or to be true as
of the Closing Date (any such modified or supplemented Schedule being referred
to herein as a “Corrected Schedule”).  In the event that Seller provides a
Corrected Schedule, subject to subsection 8.02(b) below, such Corrected
Schedule, as so modified or supplemented, shall be deemed to be incorporated in
the Schedules attached to this Agreement; provided, however, that if, in the
absence of such modification or supplementation, the condition to the
obligations of Buyer set forth in Section 6.01(b) would not be satisfied, then
Buyer shall have the option of not proceeding to the Closing and terminating
this Agreement, and upon such termination all obligations of the parties
hereunder shall cease and neither party shall have any claim against the other
by reason of this Agreement, except as provided in Section 8.03.

 

(b)  In the event that Buyer desires to preserve a claim for indemnification
pursuant to Article 10 or Article 10A, as applicable, hereof with respect to any
change made in a Corrected Schedule, Buyer shall notify Seller in writing within
thirty (30) days of receipt of such Corrected Schedule and Seller shall have a
period of thirty (30) days (or, if less, to the Expiration Date), to fully cure
such condition.   Unless Seller shall have fully cured such condition, Buyer
shall have the right to proceed to Closing and reserve its right to assert a
claim after the Closing for indemnification pursuant to, and to the extent
provided in, Article 10 or Article 10A, as applicable, hereof with respect to
any modification or supplementation made in the Corrected Schedule.  Nothing
contained in this Section 8.02 is intended to, or shall, give Buyer an
indemnification right independent of, or in addition to, those rights set forth
in Article 10 and Article 10A, as applicable, hereof.

 

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8.03  Effect of Termination.  In the event this Agreement is terminated pursuant
to Section 8.01, the provisions of this Agreement immediately shall become void
and of no further force and effect (except that the provisions of the
Confidentiality Agreement  shall survive such termination), and there shall be
no liability of Seller, on the one hand, or of Buyer, on the other hand, other
than with respect to (i) any fraudulent or willful material breach by such party
or parties of any representation, warranty or obligation on the part of such
party which occurred and was not cured prior to such termination and (ii) any
breach by Buyer of its obligations under Section 5.02(d).

 

ARTICLE 9

 

CERTAIN POST-CLOSING OBLIGATIONS

 

9.01  Post-Closing Access.  After the Closing, Seller shall provide Buyer with
reasonable access during normal business hours to the books and Records of
Seller included in the Excluded Assets which relate to the Purchased Assets
prior to the Closing for the purpose of enabling Buyer to prepare its financial
statements and Tax Returns, or for the purpose of dealing with Tax audits,
investigations, refund claims, appeals, protests and similar proceedings, and to
perform any other acts reasonably related to the purchase of the Purchased
Assets by Buyer.  After the Closing, Buyer shall provide Seller with reasonable
access during normal business hours to any books and Records of Seller included
in the Purchased Assets which relate to the Purchased Assets prior to the
Closing for the purpose of enabling Seller to prepare its financial statements
and Tax Returns, or for the purpose of dealing with Tax audits, investigations,
refund claims, appeals, protests and similar proceedings, and to perform any
other acts reasonably related to the sale of the Purchased Assets to Buyer or
Seller’s ownership thereof prior to the Closing Date.  Nothing contained in this
paragraph shall be construed as requiring Buyer or Seller to grant the other
party access to any Tax Returns other than a Tax Return filed pursuant to 35
M.R.S.A. § 706 or to any financial statements, unless access to such Tax Returns
or financial statements is necessary for the preparation of financial statements
or Tax Returns or for the purpose of enabling either party to deal with Tax
audits, investigations, refund claims, appeals, protests and similar
proceedings, or to perform any other acts reasonably related to the purchase of
the Purchased Assets or Seller’s ownership thereof prior to the Closing Date. 
The parties agree to retain any documents or Records that may be relevant to Tax
audits, investigations, refund claims, appeals, protests and similar proceedings
for at least the period of the applicable statute of limitations plus six
months. If either party shall desire to dispose of any of such books and Records
prior to the expiration of such period, such party shall, prior to such
disposition, give the other party (the “Recipient”) a reasonable opportunity, at
the Recipient’s expense, to segregate and remove such books and Records as
Recipient may select. The parties further agree to cooperate and allow
reasonable access to the appropriate personnel of the other party for the
purpose of dealing with any Tax audits, investigations, refund claims, appeals,
protests and similar proceedings.

 

9.02  Further Assurances.  Each party shall execute and deliver, or cause to be
executed and delivered, all such other assignments, deeds, easements,
instruments and other documents

 

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and shall take all such other actions as the other party reasonably may request
from time to time in order to effectuate the provisions of this Agreement.

 

9.03  Interconnection Agreement.  After the Closing, Seller shall, at its
expense and in consultation with Buyer, use all commercially reasonable actions
necessary to (a) present to Buyer an interconnection agreement with ISO-New
England for approval by Buyer, which approval shall not be unreasonably
withheld, delayed or denied, and (b) cause to be constructed to completion the
improvements and interconnection infrastructure referenced in such agreement
necessary to connect the Project with the grid at the point specified therein,
all within twenty-four (24) months from the date of Closing, which time period
shall be extended as necessary so long as Seller is diligently pursuing such
interconnection agreement and improvements, and all as further described in
Exhibit B hereto and the Undivided Interest Agreement, provided, however, that
if it should become impossible to present such interconnection agreement with
ISO-New England as described in this Section 9.03, the parties shall continue to
operate in accordance with the terms and conditions of the Undivided Interest
Agreement and the Letter of Credit shall be terminated; provided, that in no
event shall the Letter of Credit be terminated prior to a date that is four
hundred fifty-one (451) days after the Closing.

 

9.04  Limitations on Investigation, Testing and Communications.

 

(a)  With regard to Historical Environmental Liabilities Buyer agrees that
neither Buyer nor any of its Affiliates shall undertake or cause to be
undertaken any non-subsurface sampling or analysis, subsurface investigation, or
any communication with any Governmental Entity by or on behalf of Buyer or its
Affiliates after the Closing Date unless (and only to the extent) such sampling,
analysis, investigation, or communication is (1) required by any Environmental
Law; (2) in response to a request of a Governmental Entity; or (3) during the
normal course of business arising out of repairs, modifications, maintenance or
construction activities that are conducted consistent with normal business
practices; provided, however, any such sampling or analysis, subsurface
investigation, or communication with a Governmental Entity shall not be
considered “required by Environmental Law” for purposes of this Section 9.04 if
such sampling, analysis, investigation or communication occurs as a result of:
(a) a Change; or (b) due diligence conducted by a future prospective purchaser,
investor or financing source.  For purposes of this Section 9.04(a),
installation of a third wheel and penstock for hydroelectric power generating,
and actions related thereto, shall not be considered a Change.  For avoidance of
doubt, the phrase “non-subsurface sampling or analysis” as used herein shall not
encompass a Phase I Environmental Site Assessment performed in accordance with
the U.S. Environmental Protection Agency’s Innocent Landowners, Standards for
Conducting All Appropriate Inquiries, 40 C.F.R. Part 312 and Standard E 1507-05
of the American Society for Testing and Materials (“Standard Practice for
Environmental Site Assessments:  Phase I Environmental Site Assessment
Process”); provided, however, that such Phase I Environmental Site Assessment
may not include communication with any Governmental Entity beyond that necessary
to obtain access to review records in the possession or control of a
Governmental Entity.  With regard to Historical On-Site Environmental
Liabilities, Buyer’s obligations under this Section 9.04(a) shall survive until
May 1, 2013.

 

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(b)  The covenants contained in this Section 9.04 shall be included in the Real
Estate Documents, as applicable, in such a manner as to impose the same
restrictions on Buyer and any transferee of Buyer and (1) for Historical
Off-Site Environmental Liabilities shall run with the Real Property to be
Conveyed in perpetuity for the benefit of all and any portion of the Mill
Owner’s property and (2) for Historical On-Site Environmental Liabilities shall
run with the Real Property to be Conveyed until May 1, 2013 for the benefit of
all and any portion of the Mill Owner’s property.

 

(c)  Buyer agrees to make all commercially reasonable efforts to provide Seller
and the Mill Owner with advance notice of any repairs, modifications,
maintenance or construction activities that might cause or result in the
creation or imposition of Environmental Liabilities for purposes of consultation
with Seller.  Buyer and Seller hereby agree that any communications between the
parties during such consultation are made without prejudice and shall be treated
as confidential settlement discussions not to be used in evidence in any
dispute.

 

9.05  Cohabitation Protocol; Dispute Resolution.  The parties agree that the
cohabitation protocol and relocation rights set forth in Exhibit I shall be
included in the Real Estate Documents as applicable.  Buyer and Mill Owner shall
execute and deliver at closing the agreement attached as Exhibit L (the
“Protocol Agreement”).

 

ARTICLE 10

 

INDEMNIFICATION GENERALLY

 

10.01  Survival of Representations and Warranties.  The representations and
warranties of the parties set forth in this Agreement shall survive the Closing
but shall terminate and expire fifteen (15) months after the Closing Date.  With
the exception of Buyer’s pre-closing covenants set forth in
Section 5.02(d) which shall survive without limit as to time, the pre-closing
covenants of the parties hereto shall terminate and expire upon Closing.

 

10.02  Indemnification by Seller.  From and after the Closing Date, Seller shall
indemnify and hold Buyer and each of its Affiliates, directors, shareholders,
officers and employees (collectively, the “Buyer Group”), harmless from and
against Damages imposed upon or incurred by any of them which arise out of: 
(i) any misrepresentation or inaccuracy of a representation or warranty made by
Seller in this Agreement (other than the representations and warranties made in
Section 3.06 hereof, which are addressed solely in Article 10A hereof), subject
to the provisions of Section 8.02 hereof (disregarding for this purpose any
materiality, material adverse effect or similar qualifiers contained in such
representations); (ii) any breach or non-fulfillment of a post-closing covenant
or agreement on the part of Seller set forth in this Agreement; (iii) the fee
payable to Competitive Energy Services, LLC referred to in Section 3.15; and
(iv) all actions, suits, proceedings and judgments incident to any of the
foregoing.

 

10.03  Indemnification by Buyer.  From and after the Closing Date, Buyer shall
indemnify and hold Seller and each of its Affiliates, directors, shareholders,
officers and employees (the

 

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“Seller Group”), harmless from and against all Damages imposed upon or incurred
by any of them and which arise out of:  (i) the Assumed Obligations, (ii) any
misrepresentation or inaccuracy of a representation or warranty made by Buyer in
this Agreement (disregarding for this purpose any materiality, material adverse
effect or similar qualifiers contained therein), (iii) any breach or
non-fulfillment of any covenant or agreement on the part of Buyer set forth in
this Agreement, other than breach or non-fulfillment of the Buyer’s covenants in
Section 5.02(d) or 9.04 hereof, which are addressed solely in Article 10A
hereof; (iv) the ownership, use or operation of the Project or the Purchased
Assets after the Closing, and (v) all actions, suits, proceedings and judgments
incident to any of the foregoing.

 

10.04  Indemnification Procedures.  Any claim for indemnification under
Section 10.02 or Section 10.03 (a “Claim”) shall be valid only if the party
seeking indemnification notifies the other party in writing of, and setting
forth in such writing with particularity, the basis for the Claim within the
period provided in Section 10.10.  If a claim for indemnification is to be made
by a party (an “Indemnified Party”) against another party (the “Indemnifying
Party”), the Indemnified Party shall give written notice to the Indemnifying
Party promptly after the Indemnified Party becomes aware of any fact, condition,
or event which gives rise to a Claim for which indemnification may be sought
under this Article 10 (provided that failure to notify the Indemnifying Party
shall not relieve the Indemnifying Party of any liability it may have to the
Indemnified Party, except to the extent that the Indemnifying Party has been
prejudiced by such failure and provided further that nothing contained herein
shall extend the time limits set forth in Section 10.10 hereof).  Each
Indemnified Party shall use commercially reasonable efforts to mitigate Damages
for which it seeks indemnification under this Article 10.  If any lawsuit,
enforcement action, demand or claim is brought or made by any other Person (a
“Third Party Claim”) against an Indemnified Party involving a matter for which
the Indemnified Party is entitled to indemnification pursuant to Section 10.02
or Section 10.03, written notice thereof shall be given promptly to the
Indemnifying Party (provided that failure to notify the Indemnifying Party shall
not relieve the Indemnifying Party of any liability it may have to the
Indemnified Party, except to the extent that the Indemnifying Party has been
prejudiced by such failure and provided further that nothing contained herein
shall extend the time limits set forth in Section 10.10 hereof).  After such
notice is given, the Indemnifying Party shall be entitled, if it so elects, to
take control of the defense and investigation of such Third Party Claim and to
employ and engage attorneys of its own choice reasonably acceptable to the
Indemnified Party to handle and defend the same, at the Indemnifying Party’s
cost, risk and expense, provided that any such exercise of the Indemnifying
Party’s rights to take control of the defense and investigation of any Third
Party Claim shall not be deemed a waiver of the Indemnifying Party’s right to
determine at a later date that such Third Party Claim is not entitled to
indemnification under this Agreement, in which case Indemnifying Party may, in
the exercise of its sole discretion, determine not to continue to defend any
such Third Party Claim and any action taken by the Indemnifying Party in
connection with such determination shall be undertaken in a manner so as not to
materially prejudice the defense or the rights of the Indemnified Party.  The
Indemnified Party shall cooperate with the Indemnifying Party so as to minimize
the risk of any such prejudice.  The Indemnified Party shall cooperate in all
reasonable respects with the Indemnifying Party and such attorneys in the
investigation, trial and defense of such Third Party Claim and any appeal
arising therefrom, which shall include:  (i) furnishing such records,

 

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information and testimony, and attending such conferences, discovery
proceedings, hearings, trials and appeals, as reasonably may be requested in
connection therewith, (ii) affording access during normal business hours to the
Indemnifying Party to, and reasonable retention by the Indemnified Party of,
records and information which are reasonably relevant to such Third Party Claim,
and (iii) making its employees available on a mutually convenient basis to
provide additional information and explanation of any material provided to the
Indemnifying Party hereunder.  The Indemnified Party nevertheless may, at its
own cost, participate in the investigation, trial and defense of such Third
Party Claim or any appeal arising from any such Third Party Claim.

 

10.05  Settlement or Compromise of Third Party Action; Failure to Assume
Defense.  If the Indemnifying Party has assumed control of the defense of a
Third Party Claim pursuant to Section 10.04, the Indemnifying Party may consent
to a settlement or compromise of, or the entry of any monetary judgment arising
from such Third Party Claim without the prior written consent of the Indemnified
Party if, and only if, the proposed settlement, compromise or entry: (A) does
not contain an admission of guilt or wrongdoing on the part of the Indemnified
Party, and (B) does not provide for any remedy or sanction against the
Indemnified Party other than the payment of money which the Indemnifying Party
agrees to pay and does pay.  If the Indemnifying Party does not assume the
defense of the Third Party Claim in accordance with Section 10.04 within 20 days
after the receipt of notice thereof, the Indemnified Party may, at the
Indemnifying Party’s expense, defend the Third Party Claim, but may settle
and/or compromise the Third Party Claim only with the consent of the
Indemnifying Party.

 

10.06  Adjustment to Purchase Price.  Amounts paid with respect to
indemnification pursuant to this Article 10 or Article 10A shall be treated as
an adjustment to the Purchase Price paid by Buyer for the Purchased Assets, and
appropriate adjustments shall be made to the allocation of the Purchase Price
among the Purchased Assets which was made pursuant to Section 2.06.

 

10.07  General Limitations.  (a)  Neither Seller nor Buyer shall be liable under
this Article 10 or Article 10A for any Damages or Environmental Damages unless
and until the aggregate cumulative amount of Damages and Environmental Damages
exceeds $2,000,000 (the “Basket Amount”) and then shall be liable only to the
extent that the aggregate cumulative amount of such damages exceeds the Basket
Amount, provided, however, that the Basket Amount shall not apply to Seller’s
obligations under Section 9.03.

 

(b)  In no event shall the aggregate cumulative amount of Seller’s or Buyer’s
liabilities under this Article 10 and Article 10A exceed twenty percent (20%) of
the Cash Purchase Price.

 

(c)  Except as otherwise expressly provided in Section 10A.02(e), in no event
shall either Buyer or Seller be liable for indemnification under this Article 10
or Article 10A for indirect, incidental, consequential, special, liquidated,
punitive or exemplary Damages or indirect, incidental, consequential, special,
liquidated, punitive or exemplary Environmental Damages.

 

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(d)  In calculating the amount of Damages and Environmental Damages for which an
Indemnified Party is entitled to indemnification under  Articles 10 and 10A, the
amount of Damages and Environmental Damages, as applicable, shall be reduced
by:  (i) any insurance proceeds actually received by the Indemnified Party from
an insurance carrier with respect to such Damages and Environmental Damages, as
applicable, provided that if the Indemnified Party fails to either diligently
pursue any such insurance proceeds reasonably available to it or assign a valid
right to the Indemnifying Party to pursue such insurance proceeds, the
Indemnifying Party’s obligation shall be reduced by the amount of insurance
proceeds reasonably available to the Indemnified Party, and (ii) any amounts
actually received by the Indemnified Party from third parties with respect to
Damages and Environmental Damages, as applicable, pursuant to indemnification,
warranty or other similar rights, provided that if the Indemnified Party fails
to diligently pursue such rights, the Indemnifying Party’s obligation shall be
reduced by the amounts available to the Indemnified Party.  If any Damages or
Environmental Damages, as applicable, for which indemnification is provided
under this Article 10 or 10A subsequently are reduced by any insurance payment
or recovery from a third party, the Indemnified Party promptly shall remit the
amount of such reduction to the Indemnifying Party.

 

10.08  Letter of Credit. On the Closing Date, Seller shall cause to be issued to
Buyer an irrevocable standby letter of credit issued by JPMorgan Chase Bank N.A.
(the “Bank”) in the amount of Seven Million Two Hundred Thousand Dollars
($7,200,000) in the form attached hereto as Exhibit J (as the same may be
amended from time to time, the “Letter of Credit”), securing Seller’s
obligations under Articles 10 and 10A hereto, provided that the face amount of
the Letter of Credit shall be reduced to $3,000,000 on the four hundred fifty
first (451st) day after the Closing, and further reduced thereafter in six
(6) month intervals (each six (6) month interval, a “Reduction Date”) to reflect
only the amounts (if any) remaining to be paid by Seller in connection with the
permanent interconnection arrangements contemplated by Section 9.03.  The amount
of the reduction (the “Reduction Amount”) on each Reduction Date shall be
determined as follows:

 

(i)  No later than sixty (60) days prior to each Reduction Date, Seller shall
furnish to Buyer a dated and signed notice (the “Seller Reduction Notice”),
stating Seller’s good faith calculation of the Reduction Amount for such
Reduction Date.

 

(ii)  If, within thirty (30) days after the date of receipt of the Seller
Reduction Notice, Buyer does not furnish Seller with a Reduction Dispute Notice
(as defined below), Buyer and Seller shall provide the Bank with joint written
instructions, executed by each of Buyer and Seller, that the Letter of Credit
shall be reduced by the Reduction Amount as set forth in the Seller Reduction
Notice.

 

(iii)  If Buyer in good faith disputes the Reduction Amount set forth in the
Seller Reduction Notice, then Buyer shall, within thirty (30) days after the
date of receipt of the Seller Reduction Notice, notify Seller in writing of such
dispute (a “Reduction Dispute Notice”) in reasonable detail specifying the
grounds of the dispute.  If a Reduction Dispute Notice is delivered to Seller
within such thirty (30) day period, then Seller and Buyer shall attempt to
resolve the matter or matters in dispute within thirty (30) days

 

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after the receipt by Seller of the Reduction Dispute Notice.  In the event
Seller and Buyer are able to resolve the matter or matters in dispute within
such thirty (30) day period, the Letter of Credit shall be reduced upon receipt
by the Bank of a written agreement executed by each of Buyer and Seller
directing the Bank to make a reduction (a “Reduction Agreement”) and the Bank
shall be authorized to rely on any such Reduction Agreement and to make the
reduction in accordance therewith.

 

(iv)  If the disputed matter or matters cannot be resolved by Seller and Buyer
within thirty (30) days after receipt by Seller of the Reduction Dispute Notice,
the matter or matters in dispute shall be promptly submitted to the EPRO
engineering firm, located in Augusta, Maine, which firm shall not later than
thirty (30) days after such submission, render its opinion directing the bank to
make a reduction and specifying the Reduction Amount (the “Independent
Consultant Award”).  The Letter of Credit shall be reduced upon receipt by the
Bank of a copy of the Independent Consultant Award directing the Bank to make a
reduction, and the Bank shall be authorized to rely on any such Independent
Consultant Award and to make the reduction in accordance therewith.

 

Notwithstanding anything in this Agreement to the contrary, the Letter of Credit
shall be terminated (i) as contemplated in Section 9.03, or (ii) upon completion
of the permanent interconnection arrangements, whichever occurs first, provided
that in no event shall the Letter of Credit be terminated prior to a date that
is four hundred fifty-one (451) days after the Closing.

 

10.09  Additional Limitations.

 

(a)    Notwithstanding anything to the contrary contained in this Agreement,
Seller shall not be liable for any Damages imposed upon or incurred or accrued
by Buyer Group relating to acts, omissions, or other events arising or occurring
after the Closing.

 

(b)  Seller shall have no indemnification obligations under Article 10 to the
extent that, as a result of any negligence or willful misconduct of Buyer or its
Affiliates after the Closing Date, the amount of Damages subject to
indemnification by Seller is exacerbated.

 

10.10  Time Limits.  Notwithstanding any other provision of this Agreement, no
claim with respect to the misrepresentation or inaccuracy in any material
respect of a representation and warranty made by a party or parties shall be
valid unless notice of such claim is given to the Indemnifying Party within
fifteen (15) months after the Closing Date.

 

10.11  Exclusive Remedies.  From and after the Closing Date, the rights of
indemnification provided for under Articles 10 and 10A hereto shall be the sole
remedy which any party to this Agreement may have at law or in equity
(including, without limitation, rescission) in the event of any breach of the
provisions of this Agreement.

 

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ARTICLE 10A

 

ENVIRONMENTAL INDEMNITY

 

10A.01  Survival.

 

(a)  The representations and warranties of Seller made in Section 3.06 shall
survive the Closing, but shall terminate and expire at the close of business on
the date that is fifteen (15) months after the Closing Date, it being understood
that any indemnity obligations of Seller with respect to such representations
and warranties shall be governed exclusively in the manner provided for in the
proviso to Section 10A.02(a).

 

(b)  Except as specifically set forth in this Agreement, effective as of the
Closing Date, Buyer (on behalf of itself and its Affiliates) waives any rights
and claims it may have against either Seller or any of its Affiliates and their
respective directors, officers, employees, Affiliates, controlling persons or
representatives, whether in law or in equity, relating to Environmental
Liabilities.  The rights and claims waived pursuant to the immediately preceding
sentence include, without limitation, any rights to rescission and any claims
for contribution or other rights of recovery arising out of or relating to any
Environmental Laws.

 

(c)  Notwithstanding any other provision of this Article 10A to the contrary,
with the exception of the indemnification obligations of Buyer under
Section 10A.02(e), no party shall be liable to any Indemnified Party for
indirect, incidental, consequential, special, liquidated, punitive or exemplary
Damages or for indirect, incidental, consequential, special, liquidated,
punitive or exemplary Environmental Damages.

 

10A.02  Environmental Indemnification.

 

(a)  Subject to Sections 10A.02(b), 10A.02(d), 10A.04(f) and 10A.04(g), Seller
hereby agrees to indemnify and hold the Buyer Group harmless from and against
any and all Environmental Damages arising out of or resulting from any
inaccuracy of any representation or any breach of warranty on the part of Seller
in Section 3.06, subject to the provisions of Section 8.02 hereof (disregarding
for this purpose any materiality, material adverse effect or similar qualifiers
contained in such representations); provided, however, that all indemnity
obligations of Seller under that Section 3.06 will be governed exclusively by
Sections 10A.03 and 10A.04.  For the avoidance of doubt, the sole and exclusive
obligations of Seller to indemnify the Buyer Group for Environmental Damages for
inaccuracy of any representation or any breach of warranty of Section 3.06 are
set forth in this Section 10A.02(a).

 

(b)  Notwithstanding anything in this Agreement to the contrary, (1) Seller
shall not be liable for any Environmental Damages with respect to the matters
set forth in Section 10A.02(a) unless (x) a claim is timely asserted during the
applicable survival period specified in Section 10A.01(a) and (y) the aggregate
of all indemnifiable Damages and Environmental Damages under Article 10 and
Section 10A.02(a) exceeds, on a cumulative basis, the Basket Amount, and
(2) Seller shall not be required to pay an aggregate amount in excess of 20% of
the Cash Purchase Price in respect of all Damages and Environmental Damages for
the matters set forth in Articles 10 and 10A.  For the avoidance of doubt,
Seller shall not be liable for any Damages or Environmental Damages arising out
of any breach of the representations contained in Section 3.06

 

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(Environmental) other than exclusively in the manner provided for in the proviso
to Section 10A.02(a).

 

(c)  Notwithstanding the limitations contained in Section 10.07, and provided
that Buyer has not breached its covenants under Sections 5.02(d) or 9.04, Seller
hereby agrees to indemnify and hold the Buyer Group harmless from and against
any and all Environmental Damages incurred by Buyer arising out of or resulting
from any Historical Environmental Liabilities that accrue and are asserted by
Buyer before May 1, 2013; provided, however, that Seller’s obligation under this
Section 10A.02(c) shall be limited to the amounts actually received by Seller,
less any reasonable costs and expenses, including legal fees, incurred by Seller
in collecting such amounts, from MeadWestvaco with respect to such Environmental
Damages any of which amounts would be received pursuant to and in accordance
with the terms and procedures contained in the Equity and Asset Purchase
Agreement by and Between MeadWestvaco Corporation and Maple Acquisition LLC,
dated as of January 14, 2005 (as amended from time to time)(hereinafter the
“MeadWestvaco Indemnity”); provided further, that Seller shall use commercially
reasonable efforts to obtain recovery pursuant to the MeadWestvaco Indemnity
and, to the extent Buyer requests Seller to pursue a claim under the
MeadWestvaco Indemnity, all costs of prosecuting such claim shall be paid by
Buyer.  Seller shall invoice Buyer for reasonable costs of pursuing a claim on
behalf of Buyer on a monthly basis and Buyer shall promptly pay all reasonable
expenses.

 

(d)  Notwithstanding anything in this Agreement to the contrary, Seller
(1) shall have no indemnification obligations under this Article 10A for any
Environmental Damages resulting from changes in any Environmental Law occurring
after the Closing Date, provided that any Remedial Action of Historical
Environmental Liabilities may be governed by applicable post-Closing
requirements for conducting Remedial Actions, so long as any Remedial Action is
conducted in a Lowest-Cost Commercially Reasonable Manner and (2) shall not be
liable for any Environmental Damages imposed upon or incurred or accrued by
Buyer Group relating to acts or omissions of Buyer or its Affiliates, or the
existence of Environmental Conditions to the extent first arising or existing
after the Closing Date.

 

(e)  Buyer hereby agrees to indemnify and hold Seller Group harmless from and
against (1) any and all Environmental Damages imposed upon or incurred or
accrued by Seller or its Affiliates relating to acts or omissions of Buyer or
its Affiliates, or the existence of conditions to the extent first arising or
existing after the Closing Date, and (2) with regard to Historical Environmental
Liabilities, any and all Damages and Environmental Damages arising out of or
resulting from violation or breach by Buyer or its Affiliates of Buyer’s
obligations under Section 5.02(d) or Section 9.04 hereof; provided, however, the
obligations of Buyer to indemnify and hold harmless Seller Group hereunder with
regard to Historical Off-Site Environmental Liabilities caused by Buyer’s breach
of Section 9.04 hereof shall be without limitation as to duration; provided
further, however, that the obligations of Buyer to indemnify and hold harmless
Seller Group hereunder with regard to Historical On-Site Environmental
Liabilities caused by Buyer’s breach of Sections 5.02(d) and/or 9.04 shall
terminate on May 1, 2013.  The provisions of Section 10.07 shall apply to
Buyer’s indemnification obligations under this Section 10A.02(e); provided,
however, that the limitations in Sections 10.07(c) shall not apply to Buyer’s

 

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indemnification obligations in the event of a violation or breach by Buyer or
its Affiliates of Buyer’s obligations under Section 5.02(d) or Section 9.04, in
which case Buyer shall indemnify and hold Seller Group harmless from and against
any and all Damages, Environmental Damages, and special, indirect and
consequential damages, but in no event shall the aggregate cumulative amount of
Buyer’s liabilities under Article 10 and Article 10A exceed the amount set forth
in Section 10.07(b) and in no event shall Buyer be liable for punitive or
exemplary Damages.  Buyer’s obligations under this Section 10A.02(e) shall be
come effective (i) with regard to breach of Section 5.02(d), upon the effective
date of this Agreement, and (ii) with regard to breach of Section 9.04, on the
Closing Date.  For the avoidance of doubt with respect to Section 10A.02(e)(1),
Buyer shall not be obligated to indemnify Seller under Section 10A.02(e)(1) for
Historical Environmental Liabilities, except in the event of a breach by Buyer
of its covenants or obligations under Section 5.02(d) or Section 9.04, in which
case Buyer’s indemnification obligations under this Section 10A.02(e) shall
apply.

 

10A.03  Procedures for Indemnification.  Subject to the following sentence,
whenever a claim shall arise for indemnification under this Article 10A, the
Indemnified Party shall promptly notify the  Indemnifying Party of such claim
within the period provided in Section 10.01 and, when known, the facts
constituting the basis for such claim; provided, however, that in the event of
any claim for indemnification under this Article 10A resulting from or in
connection with any claim or Legal Proceeding by a third party, the Indemnified
Party shall give such notice thereof to the Indemnifying Party not later than
ten (10) Business Days prior to the time any response to the asserted claim is
required, if possible, and in any event within five (5) Business Days following
receipt of notice thereof.  Notwithstanding the foregoing, in the case of claims
for indemnification hereunder not arising in connection with any claim or Legal
Proceeding by a third party, the Indemnified Party shall not submit such claims
to the Indemnifying Party in increments aggregating less than $50,000.  The
Indemnified Party’s failure to give timely notice or to furnish the Indemnifying
Party with any relevant facts in connection with any third party claim shall not
constitute a defense (in part or in whole) to any claim for indemnification by
such party, except and only to the extent that such failure shall result in any
prejudice to the Indemnifying Party and provided further that nothing contained
herein shall extend the time limits set forth in Section 10.10 hereof.  In the
event of any such claim for indemnification resulting from or in connection with
a claim or Legal Proceeding by a third party, the Indemnifying Party may, at its
sole cost and expense, assume the defense thereof by written notice within ten
(10) Business Days, using counsel that is reasonably satisfactory to the
Indemnified Party, provided that any such exercise of the Indemnifying Party’s
rights to take control of the defense and investigation of any third party claim
shall not be deemed a waiver of the Indemnifying Party’s right to determine at a
later date that such third party claim is not entitled to indemnification under
this Agreement, in which case the Indemnifying Party may, in the exercise of its
sole discretion, determine not to continue to defend any such third party claim
and any action taken by the Indemnifying Party in connection with such
determination shall be undertaken in a manner so as not to materially prejudice
the defense or the rights of the Indemnified Party.  The Indemnified Party shall
cooperate with the Indemnifying Party so as to minimize risk of any such
prejudice.  Each Indemnified Party shall use commercially reasonable efforts to
mitigate Environmental Damages for which it seeks indemnification under this
Article 10A.  If an Indemnifying Party assumes the defense of any such claim or
Legal Proceeding, the

 

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Indemnifying Party shall be entitled to take all steps necessary in the defense
thereof including the settlement of any case that involves solely monetary
damages without the consent of the Indemnified Party; provided, however, that
the Indemnified Party may, at its own expense, participate in any such
proceeding with the counsel of its choice without any right of control thereof. 
The Indemnifying Party, if it has assumed the defense of any claim or Legal
Proceeding by a third party as provided herein, shall not consent to, or enter
into, any compromise or settlement of (which settlement (i) commits the
Indemnified Party to take, or to forbear to take, any action or (ii) does not
provide for a full and complete written release by such third party of the
Indemnified Party), or consent to the entry of any judgment that does not relate
solely to monetary damages arising from, any such claim or Legal Proceeding by a
third party without the Indemnified Party’s prior written consent, which shall
not be unreasonably withheld, conditioned or delayed.  The Indemnifying Party
and the Indemnified Party shall cooperate fully in all aspects of any
investigation, defense, pre-trial activities, trial, compromise, settlement or
discharge of any claim in respect of which indemnity is sought pursuant to this
Article 10A, including, but not limited to, by providing the other party with
reasonable access to employees and officers (including as witnesses) and other
information, provided, that in each case, such access shall be given at
reasonable times and upon reasonable notice and without undue interruption to
such party’s business or personnel.  So long as the Indemnifying Party is in
good faith defending such claim or proceeding, the Indemnified Party shall not
compromise or settle such claim without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld,
conditioned or delayed.  If the Indemnifying Party does not assume the defense
of any such claim or litigation in accordance with the terms hereof, the
Indemnified Party may defend against such claim or litigation in such manner as
it may deem appropriate, including settling such claim or litigation (after
giving prior written notice of the same to the Indemnifying Party and obtaining
the prior written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned or delayed) on such terms as the Indemnified
Party may reasonably deem appropriate, and the Indemnifying Party will promptly
indemnify the Indemnified Party in accordance with the provisions of this
Section 10A.03.

 

10A.04  Limitations and Procedures Applicable to Indemnification for
Environmental Liabilities.

 

(a)  Subject to the terms of this Section 10A.04, whenever a claim shall arise
for indemnification under Section 10A.02(a), the claim shall be submitted by the
Indemnified Party to the Indemnifying Party in accordance with the timelines and
procedures set out in Section 10A.03.

 

(b)  In the event that Buyer submits a claim for indemnification under
Section 10A.02(a) relating to any Environmental Damages, except such
Environmental Damages that are or relate to an Historical Environmental
Liability, the claims shall be submitted by the Indemnified Party to the
Indemnifying Party in accordance with the timelines and procedures set out in
Section 10A.03.  Following submission of such a claim, except as otherwise
expressly provided in Section 10A.03 and 10A.04, the procedures in Section 10.04
shall apply.

 

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(c)  In the event that an Indemnified Party submits a claim for indemnification
under Section 10A.02(c) or (e) relating to an Historical Environmental
Liability, the Indemnifying Party or its designee (which may include, but shall
not be limited to, Seller’s predecessor in interest in the Purchased Assets) may
assume the defense and/or resolution (including without limitation, undertaking
Remedial Action) thereof.  The Indemnifying Party (or its designee) shall be
entitled to take all steps necessary in the defense and/or resolution thereof,
including the settlement thereof (which settlement shall require the consent of
the Indemnified Party, such consent not to be unreasonably withheld, delayed or
conditioned); provided, however, that the Indemnified Party may, at its expense,
monitor any proceeding with counsel of its choice without any right of control
thereof.  Where a Remedial Action is required, the Indemnifying Party (or its
designee) agrees to use commercially reasonable efforts to avoid
(i) unreasonable interference with the operations of the Project or the Mill
provided there is no Change after the Closing Date, or (ii) unreasonably
restricting the ability to use the Project or the Mill for the use it was
employed on the Closing Date or for substantially similar uses, without the
consent of the affected party, which consent shall not be unreasonably withheld,
conditioned or delayed.

 

(d)  Seller (or its designee) and Buyer shall cooperate fully in all aspects of
any investigation, defense, pre-trial activities, trial, compromise, settlement,
discharge or Remedial Action arising in connection with any claim in respect of
which indemnity is sought, including, but not limited to, by providing the other
party with reasonable access to: 1) employees and officers (including as
witnesses); 2) other relevant information; and 3) facilities, provided, that in
each case, such access shall be given at reasonable times and upon reasonable
notice and without undue interruption to such party’s business or personnel.  So
long as Seller (or its designee) is in good faith defending and/or resolving a
Historical Environmental Liability under this Section, Buyer shall not
compromise, settle or in any manner interfere with the defense or resolution of
such Historical Environmental Liability.  If Seller (or its designee) does not
assume the defense and/or resolution of any such Historical Environmental
Liability claim or litigation in accordance with the terms hereof, Buyer may
defend and/or resolve such Historical Environmental Liability in a commercially
reasonable manner, including settling claims or litigation (after giving prior
written notice of the same to the Seller and obtaining the prior written consent
of Seller, which consent shall not be unreasonably withheld, conditioned or
delayed).

 

(e)  In connection with any Remedial Action covered by the indemnity in
Section 10A.02(a), (c) or (e), the Indemnifying Party shall only be required to
undertake or reimburse Environmental Damages incurred in the course of Remedial
Action conducted in a “Lowest-Cost Commercially Reasonable Manner,” which shall
mean, the lowest cost methods permitted by applicable Environmental Law
determined from the perspective of a reasonable business person acting without
regard to the availability of indemnification hereunder to achieve compliance
with Environmental Law (taking all relevant circumstances into consideration,
including, without limitation, the lowest-cost method that would minimize
exposure to additional Environmental Damages that would be subject to
indemnification hereunder).  Such Lowest-Cost Commercially Reasonable Manner
shall include, where appropriate, the use of risk-based remedies, institutional
or engineering controls, or deed restrictions, provided such remedies, controls,
or restrictions do not: (1) unreasonably interfere with the operations of the
Project or the Mill provided there is no Change after the Closing Date, or
(2) unreasonably restrict the ability to use the Project or the

 

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Mill for the use it was employed on the Closing Date or for substantially
similar uses, without the consent of the affected party, which consent shall not
be unreasonably withheld, conditioned or delayed.  Seller shall have no
indemnification obligations under Section 10A.02 to the extent Environmental
Damages arise or result from any Change after the Closing Date caused by Buyer
or any subsequent owner or operator of the Purchased Assets.

 

(f)  Notwithstanding anything in this Agreement to the contrary, Seller shall
have no indemnification obligations for Historical Environmental Liabilities
arising or resulting from a breach by Buyer of Sections 5.02(d) or 9.04.

 

(g)  Seller shall have no indemnification obligations under Article 10 or
Article 10A to the extent that, as a result of any negligence or willful
misconduct of Buyer or its Affiliates after the Closing Date, the amount of
Damages or Environmental Damages subject to indemnification by Seller is
exacerbated.

 

ARTICLE 11

 

MISCELLANEOUS

 

11.01  Expenses.  Whether or not the transactions contemplated by this Agreement
are consummated, Seller shall pay all costs and expenses attributable to the
performance of, and compliance with, all agreements and conditions to be
performed or complied with by Seller under this Agreement (including, without
limitation, all fees and expenses of Seller’s counsel and accountants), and
Buyer shall pay all costs and expenses attributable to the performance of and
compliance with, all agreements and conditions to be performed or complied with
by Buyer under this Agreement (including, without limitation, all fees and
expenses of Buyer’s legal counsel and accountants).

 

11.02  Entire Agreement; Amendment.  This Agreement, including the exhibits and
schedules attached hereto and the documents and agreements referred to herein
(which exhibits, schedules and documents are incorporated herein by this
reference) shall constitute the complete and entire agreement between the
parties hereto with respect to the subject matter hereof and shall supersede all
previous oral and written negotiations and commitments and any other writings
with respect to such subject matter, other than the Confidentiality Agreement. 
This Agreement cannot be modified or amended except in writing duly executed by
each  party hereto.

 

11.03  Notices.  All notices, requests, demands and other communications
hereunder shall be in writing and shall be deemed to have been given: (i) when
delivered personally, (ii) one Business Day after being sent by nationally
recognized overnight delivery service, (iii) when sent by facsimile
transmission, if the sending facsimile machine receives and prints a
confirmation of receipt by the receiving facsimile machine, or (iii) three
Business Days after being deposited in the United States mail, certified and
with proper postage prepaid, addressed as follows:

 

If to Seller:                             Rumford Falls Power Company

c/o New Page Corporation

 

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Courthouse Plaza Northeast

Dayton, Ohio  45403

Attention:  Vice President, General Counsel & Secretary

Facsimile No.:  (937) 242-9459

 

and

 

Preti Flaherty Beliveau Pachios & Haley LLP

45 Memorial Circle

Augusta, ME 04330

Attention: Anthony W. Buxton, Esq.

Facsimile: (207) 623-2914

 

and

 

Preti Flaherty Beliveau Pachios & Haley LLP

One City Center

P.O. Box 9546

Portland, Maine  04112-9546

Attention:  Bonnie L. Martinolich, Esq.

Facsimile No.:  (207) 791-3111

 

If to Buyer:

 

Brascan Power Inc.

Suite 300, BCE Place

181 Bay Street, P.O. Box 762

Toronto, Ontario, Canada M5J 2T3

Attention:  Harry A. Goldgut

Facsimile: (416) 363-2856

 

and to:

 

Brascan Power Corporation

480 de la Cite Blvd

Gatineau, Quebec, Canada J8T 8R3

Attention:  Louis-Philippe Denis

Facsimile: (819) 561-7188

 

With a copy to:

 

Weil, Gotshal & Manges LLP

767 Fifth Avenue

New York, New York 10153

 

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Attention:  Simeon Gold, Esq.

Facsimile: (212) 310-8007

 

and to:

 

Pierce Atwood LLP

One Monument Square

Portland, Maine 04101-0111

Attention:  Matthew Manahan, Esq.

Facsimile: (207) 791-1350

 

Any party may change the address to which notices or other communications are to
be directed to it by giving notice of such change to the other party in the
manner provided in this section.

 

11.04  Counterparts.  This Agreement may be executed simultaneously in two or
more counterparts (which may be by facsimile or electronic transmission), each
of which shall be deemed to be original, but all of which together shall
constitute one and the same instrument.

 

11.05 Parties in Interest; Assignment.  This Agreement and all of the provisions
hereof shall be binding upon, shall inure to the benefit of, and shall be
enforceable by the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor any of the rights, interests or
obligations hereunder shall be assigned by either party hereto without the prior
written consent of the other party, except that, with notice to Seller, Buyer
may assign this Agreement in whole to an Affiliate pursuant to an instrument
reasonably satisfactory to Seller by which the Affiliate assumes all of Buyer’s
obligations under this Agreement and, upon the Closing, including without
limitation, the payment of the Cash Purchase Price, Buyer shall be deemed fully
released from all of Buyer’s obligations hereunder.

 

11.06  No Waiver.  The failure of any party hereto to enforce at any time any of
the provisions of this Agreement shall in no way be construed to be a waiver of
any such provision, nor in any way to affect the validity of this Agreement or
any part thereof or the right of such party thereafter to enforce each and every
such provision.  No waiver of any breach of this Agreement shall be held to be a
waiver of any other or subsequent breach.

 

11.07  Interpretation.  The headings contained in this Agreement are for
convenience of reference only and shall in no way affect the meaning or
interpretation of this Agreement.  Unless the context of this Agreement
expressly otherwise indicates, any singular term in this Agreement includes the
plural, and any plural term includes the singular.  If any term or condition of
this Agreement is found to be ambiguous, the ambiguity shall not be construed
against any one particular party and/or in favor of any one particular party,
and such ambiguous language shall be in all cases construed as a whole according
to its fair meaning.

 

11.08  No Third Party Beneficiaries.  This Agreement is for the sole benefit of
the parties hereto and their permitted assigns, and nothing herein expressed or
implied shall give or be

 

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construed to give to any Person, other than the parties hereto and their
permitted assigns, any legal or equitable rights hereunder (except as otherwise
expressly provided in  Articles 10 and 10A hereof).

 

11.09  ARBITRATION.  EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, ANY
CONTROVERSY, CLAIM OR DISPUTE ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR
ANY ALLEGED BREACH OR NON-PERFORMANCE OF THIS AGREEMENT, SHALL BE REFERRED TO
THE AMERICAN ARBITRATION ASSOCIATION TO BE SETTLED BY ARBITRATION CONDUCTED  IN
ACCORDANCE WITH THE COMMERCIAL ARBITRATION RULES OF THE AMERICAN ARBITRATION
ASSOCIATION BEFORE A SINGLE ARBITRATOR IN PORTLAND, MAINE (OR SUCH OTHER
LOCATION AS THE PARTIES MAY AGREE), SUCH ARBITRATOR TO BE CHOSEN BY MUTUAL
AGREEMENT OF THE PARTIES OR, ABSENT SUCH AGREEMENT, BY THE AMERICAN ARBITRATION
ASSOCIATION.  JUDGMENT UPON THE AWARD OF THE ARBITRATOR MAY BE ENTERED IN ANY
COURT HAVING JURISDICTION THEREOF.  THE FEES AND EXPENSES OF THE ARBITRATOR
SHALL BE APPORTIONED BETWEEN THE PARTIES BY THE ARBITRATOR WITH THE FINDINGS AND
RESULTS OF THE ARBITRATION.  ANY AWARD SHALL BE A CONCLUSIVE DETERMINATION OF
THE DISPUTED MATTER; SHALL BE FINAL AND BINDING UPON THE PARTIES AND SHALL NOT
BE CONTESTED BY THE PARTIES.  ANY AWARD OF DAMAGES BY AN ARBITRATOR WILL BE
DETERMINED, LIMITED, AND CONTROLLED BY THE LIMITATION OF DAMAGES PROVISIONS IN
THIS AGREEMENT.  NOTHING IN THIS SECTION 11.09 WILL PRECLUDE, OR BE CONSTRUED TO
PRECLUDE, THE RESORT BY EITHER PARTY TO A COURT OF COMPETENT JURISDICTION SOLELY
FOR THE PURPOSES OF SECURING AN INJUNCTION OR FOR THE SPECIFIC PERFORMANCE OF A
PARTY’S OBLIGATIONS HEREUNDER.

 

11.10  Governing Law.  This Agreement shall be construed in accordance with, and
the legal relations among the parties shall be governed by, the Laws of the
State of Maine as applicable to agreements executed and fully performed in the
State of Maine.

 

11.11.      Non-Recourse.  No past, present or future director, officer,
employee, incorporator, member, partner, stockholder, affiliate, agent, attorney
or representative of Buyer or its Affiliates on the one hand, or (except as
expressly provided in the guaranty of New Page Corporation), Seller or its
Affiliates on the other hand, shall have any liability for any obligations or
liabilities of Buyer or Seller, as applicable, under this Agreement or the other
documents delivered by Buyer or Seller, as applicable, in connection herewith,
of or for any claim based on, in respect of, or by reason of, the transactions
contemplated hereby and thereby.

 

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IN WITNESS WHEREOF, this Agreement has been executed by the parties on the date
first above written.

 

 

 

RUMFORD FALLS POWER COMPANY

 

 

 

 

 

 

 

By

  /s/Peter H. Vogel, Jr.

 

 

 

Name:

Peter H. Vogel, Jr.

 

 

Title:

President

 

 

 

 

 

 

 

BRASCAN POWER INC.

 

 

 

 

 

 

 

By

  /s/ Richard Legault

 

 

 

Name:

Richard Legault

 

 

Title:

President and Chief Operating Officer

 

The Mill Owner hereby executes this Agreement for the limited purposes set forth
in the preamble and hereby agrees to perform its obligations under Sections
5.06, 7.05 and 9.05.

 

 

RUMFORD PAPER COMPANY

 

 

 

 

 

 

 

By

  /s/  Douglas K. Cooper

 

 

 

Name:

Douglas K. Cooper

 

 

Title:

Vice President

 

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GUARANTY

 

In consideration for and as an inducement to Buyer entering into the foregoing
Asset Purchase Agreement with Seller (the “Agreement”), New Page Corporation
(“Guarantor”) does hereby unconditionally and irrevocably guaranty to Buyer,
subject to the limitations on Seller’s indemnification obligations set forth in 
the Agreement, the due and punctual performance of Seller’s payment obligations
pursuant to Article 10  and Article 10A of the Agreement.  Any and all defenses
available to Seller with respect to any demand for payment by any Buyer
Indemnified Party under Article 10 and Article 10A shall be available to
Guarantor as a defense to any demand for payment pursuant to this guaranty. 
Guarantor hereby unconditionally waives (i) any and all notices that may be
required by statute, rule of law or otherwise, now or hereafter in effect,
including promptness, diligence, demand, presentment, protest, notice of
acceptance and any other notice with respect to this Guaranty or any of Seller’s
obligations pursuant to Article 10 or Article 10A of the Agreement and (ii) any
requirement that Buyer proceed or make a demand first against the Seller or
otherwise exhaust any right, power or remedy under the Agreement before
requesting payment or performance by Guarantor hereunder or that Buyer protect,
secure, perfect or insure any security interest or lien on any property subject
thereto or exhaust any other right to take any action against the Seller or any
collateral or any other guarantee or source of payment.

 

 

IN WITNESS WHEREOF, Guarantor has executed this Guaranty this                 
day of January, 2006.

 

 

 

NEW PAGE CORPORATION

 

 

 

 

 

By

 

 

 

 

Its:

 

 

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