EXHIBIT 3 

Case 1:01-cv-00109-SSB Document 60-4 Filed 12/12/2003 Page 1 of 15
ASSET PURCHASE AGREEMENT 

between 

CHAMPION INTERNATIONAL CORPORATION 

and 

SMART PAPERS LLC 

Dated as of 

December 29, 2000 

Case 1:01-cv-00109-SSB Document 60-4 Filed 12/12/2003 Page 2 of 15
ASSE"URCHASE AGREEMENT 

ASSET PURCHASE AGREEMENT, dated as of December 29, 2000, between 

CHAMPION INTERNATIONAL CORPORATION, a New York corporation ("Setter") and 

SMART PAPERS LLC, a Delaware limited liability company ("Buyer"). 

Seller owns and operates a paper will located in Hamilton, Ohio at which-Seller engages 

in the manufacture of certain premium cast-coated and uncoated papers (the "Business"). Buyer 

desires to purchase, and Seller desires to sell, the Business as a going concern and substantially 

all of the assets related to the Business located at the Facility upon the tams and conditions set 

forth herein . 

Accordingly, in consideration of the mutual agreements contained hervin, and intending 

to be legally bound hereby, the parties hereto agree as follows: 

ARTICLE 1. DEFINED TERMS 

1 .1 Defined Terms. As used in this Agreement, the following terns have the 

meanings indicated: 

"Actual Working Capital" means the sum of all current assets of the Business 

transferred to Buyer pursuant hereto minus all current liabilities of the Business assumed by 

Buyer pursuant hereto, as reflected on the Closing Balance Shat and calculated in accordance 

with Section 2.5(a) hemf and GAAP, except as set forth on Section 5.4 of the Disclosure 

Schedules. In addition, all Inventory of the Business shall be recorded on the Closing Balance 

Sheet at the lower of cost or market value on a first-in-first-out basis, in accordance with GAAP. 

"Afliate" has the meaning set forth in Rule 12b-2 of the regulations pmraulgated 

under the Securities Exchange Act of 1933, as amended. 

"Benefit Plans" means, with respect to Seller, each employee benefit plan, 

program, arrangement and contract (including, without lirnitation, any "employee benefit plan", 

as defined in Section 3(3) of ERISA, and any bonus, incentive, deferred compensation, stock 

bonus, stock purchase, restricted stock, stock option, employment, termination, stay agreement 

or bonus, change in control and severance plan, program, arrangement and contract) in effect on 

the date of this Agreement to which Seller or any MUSA Affiliate of Seller is a party and which 

is maintained or contributed to by Seller or any ERISA Affiliate of Seller in which present or 

former employees of Seller who are or were employed in the Business participate. 

"Business Day" means any day other than a Saturday, Sunday or legal holiday on 

which banks in the States of Florida and New York are or may elect to be closed. 

",Environmental Laws" means all federal, state and local, provincial and foreign, 

civil and criminal laws, regulations, rules, ordinances, codes, decrees, judgments, directives or 

Case 1:01-cv-00109-SSB Document 60-4 Filed 12/12/2003 Page 3 of 15
judicial or administrative orders relating to pollution or protection of the environment, natural 

resources or human health and safety, including, without limitation, laws relating to releases or 

threatened releases of Hazardous Substances (including, without limitation, releases to ambient 

air, surface water, groundwater, land, surface and subsurface strata) or otherwise relating to the 

manufacture processing, distribution, use, treatment, storage, release, transport, disposal or 

handling of Hazardous Substances. "Environmental Laws" include, without limitation, the 

Comprehensive Environmental Response, Compensation and liability Act (42 U.S .C. §§ 601 et 

seq.) ("CERCLA"), the Hazardous Materials Transportation Act (49 U.S .C, §§ 1801 et seq.), the 

Resource Conservation and Recovery Act (42 U.S .C. §§ 6901 et seq.), the Federal Water 

Pollution Control Act (33 U.S .C. §§ 251 et seq.), the Clew Air Act (42 U.S.C. §§ 7401 et seq.), 

the Toxic Substances Control Act (15 U.S .C. §§ 2601 et sag.), the Oil Pollution Act (33 U.S .C. 

§§ 2701 et seq.), the Emergency Planning and Community Right-to-Know Act (42 U.S .C. §§ 

11001 et seq.), the Occupational Safety and Health Act (29 U.S.C. §§ 651 et seq.) and all other 

state laws analogous to any of the above. 

"Environmental Liabilities" means all liabilities of Seller relating to the Business, 

the Assets or the Facility that (i) arise under or relate to violations of Environmental Laws 

(including, without limitation, those liabilities disclosed in any environmental inspection report 

for the Facility prepared prior to the Closing by an independent environmental consultant 

engaged by Buyer) or arise in connection with or related to any matter disclosed or required to 

be disclosed on Section 5 .23 of the Disclosure Schedules and (ii) are attributable to actions 

occurring or conditions existing on or prior to the Closing Date. 

amended. 

"Estimated Working Capital" means the good faith estimate by Seller of the 

amount of the Actual Working Capital, which shall be calculated in a manner consistent with the 

calculation of Actual Working Capital, to be set forth on a Schedule to be delivered to Buyer not 

less than three (3) days prior to the Closing Date. 

"GAAP" means United States generally accepted accounting principles as in 

effect as of the Closing Date or as of such date as otherwise specified herein. 

"Hazardous Substances" means any pollutants, contaminants, chemicals or 

industrial, toxic or otherwise hazardous materials, substances or wastes that are regulated under 

Environmental Laws. 

amended. 

"ERISA" means the Employee Retirement Income Security Act of 1974, as 

"HSR Act" means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as 

"including" means including but not limited to . 

"January 31, 2000 Balance Sheet" means the balance sheet of the Business as of 

January 31, 2000 as previously provided to Buyer and prepared in accordance with GAAP, 

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"Release" means any release, spill, leak, discharge, disposal of, pumping, pouring, 

emitting, emptying, injecting, leaching, dumping or allowing to escape into or through the 

environment. 

"Remediation" means an action of any kind to investigate and/or clean up a 

Release of Hazardous Substances into an environmental medium, including, but not limited to, 

the following activities : (a) monitoring, investigation, assessment, treatment, cleanup, 

contaitmrent, removal, mitigation, tune or restoration work; (b) obtaining any 

consents, approvals or authorizations of any governmental authority necessary to conduct any 

such activity ; (c) preparing and implementing any plans or studies for any such activity; 

(d) obtaining a written notice font a governmental authority with jurisdiction over the site being 

investigated and/or cleaned up under Environmental Laws that no additional work is required by 

such governmental authority: and (e) the use, implementation, application, installation, operation 

or maintenance of removal actions, remedial technologies applied to the surface or subsurface 

soils, excavation and treatment or disposal of soils at an off-site location, in-situ treatment, 

-tam treatment of surface water or groundwater, engineering controls or 

institutional controls, or any other activity constituting a response action under CERCLA. 

"Subsidiary" of a Person means any corporation (a) of which such Person, 

directly or indirectly, owns or controls at the time outstanding shares of stock or other equity 

securities that have in ordinary circumstances (not dependent upon the happening of a 

contingency) voting power to elect a majority of the board of directors of such corporation, or 

(b) of which shares of stock or other equity securities of the character described in the foregoing 

clause (a) shall at the time be owned or controlled, directly or indirectly, by such Person and one 

or more of its Subsidiaries or by one or more of its Subsidiaries. 

"Warking Capital Target" means $54,200,1)()0 . 

1.2 Locatign of Certain Other Defined Terms. The following teems used in this 

Agreement are defined in the Section indicated: 

Term Section 

Adjusted Purchase Price 2.5(a) 

Allocation Statement 2.3 

Assets 2.1(a) 

Assignment 2.1(c)(iv) 

Assignment and Assumption Agreement 2.1(cXiii) 

Assumed Contracts 2.1(c)(iii) 

Assurned Liabilities 2.4 

Balance Sheet Date 5.5 

Bill of Sale . 2.1(c)(ii) 

Books and Records 3.2(aXxvi) 

Business Preamble 

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(iv) assignments with respect to all patents, trademarks, trade or 

service names and marks, assumed names and copyrights and all applications therefor (other 

than Excluded Assets) owned by Seller and which are used primarily in the conduct of the 

Business as now conducted, in each case as specifically listed on Schedule 2. 1 (000 all in 

recordable form, in substantially the forms of Exhibits DI to D hereto (each, an "Assignment", 

and collectively, the "Assignments"}; 

(v) a lease assignment and assumption agreement in substantially the 

form attached hereto as x i jhj (the "Lease Assignment Agreement"), whereby Seller shall 

assign to Buyer (i) all of its rights as tenant in and to Pipeline Lease and the Railyard Lease and 

(ri) alt of its rights as Landlord in and to those real property leases listed on Section 5.8 of the 

Disclosure Schedules, in each case subject to the provisions of the Lease Assignment 

Agreement, and whereby Buyer shall assume and agree to perform, pay and discharge the 

liabilities and obligations of Seller relating to the Business and the Assets specified therein, 

provided, however, that such assumption shall not extend to and Buyer shall have no 

responsibility for any liabilities or obligations which relate solely to the period of time prior to 

the Closing Date; 

10 

(vi) an assignment and assumption agreement re : licenses, permits and 

warranties in substantially the form attached hereto as Exhibit J (the "Licenses, Permits and 

Warranties Assignment Agreement"), whereby Seller shall assign to Buyer all of its rights in and 

to any licenses, permits and warranties relating to the Real Property Assets, to the extent such 

licenses, permits and warranties are assignable, in each case subject to the provisions of the 

Licenses, Permits and Warranties Assignment Agreement, and whereby Buyer shall assume and 

agree to perform, pay and discharge the liabilities and obligations of Seller relating to the 

Business and the Assets specified therein, provided, however, that such assumption shall not 

extend to and Buyer shall have no responsibility for any liabilities or obligations which relate 

solely to the period of time prior to the Closing Date; 

(vii) such other good and sufficient instruments of conveyance and 

transfer as shall be necessary to vest in Buyer good and valid title to the Assets (collectively, the 

"Other Instruments"), free and clear of all liabilities, obligations, claims and Liens (whether 

absolute, accrued, contingent or otherwise), except the Assumed Liabilities and Permitted Liens. 

2.2 Purchase Price. The purchase price for the Assets shall be comprised of the 

consideration set forth in Section 2.2(a)(i), subject to adjustment pursuant to Section 2.5 of this 

Agreement, plus the assumption of the Assumed Liabilities, payable by delivery from Buyer to 

Seller of the following: 

(i) $23,200,000 plus or minus the amount, if any, by which the 

Estimated Working Capital is more or less than the Working Capital Target, as the case 

may be, by wire transfer of immediately available funds to such account as Setter 

specifies to Buyer in writing not less than two Business Days before the Closing Date 

(the "Cash Purchase Price") ; and 

Case 1:01-cv-00109-SSB Document 60-4 Filed 12/12/2003 Page 6 of 15
(ii) the Assignment and Assumption Agreement 

2.3 Allocation of purchase price. If completed prior to the date of execution hereof, 

attached hereto as Scbedute 2 .3 is a statement sating forth the prelitninary allocation of the Cash 

Purchase Price among the Assets, as agreed by the parties hereto, in accordance with applicable 

law including, without limitation. Section 1060 of the Internal Revenue Code of 1986, as 

amended (the "Code") (the "Allocation Statement"); provided, that if Schedule 2.3 is not 

completed as of the date of execution hereof, Seller and Buyer shall negotiate in good faith to 

allocate the Cash Purchase Price among the Assets being purchased by Purchaser pursuant to this 

Agreement and in accordance with applicable taw, including, without limitation, Section 1060 o£ 

the Code, within sixty (60) days after the Closing Date. The Allocation Statement shall be 

revised by the parties following the determination of the Adjusted Purchase Price, in accordance 

with Section 2 .5 hereof, applying the same allocation methodology used in preparing the 

preliminary allocation set forth in Schedule 2.3 . Each of Seller and Buyer will report the 

allocation of the Adjusted Purchase Price in a manner consistent with the Allocation Statement, 

as so revised, and will otherwise act in accordance with the Allocation Statement, as so revised, 

in the preparation and filing of all Tax returns, Tax audits, Tax reviews, and Tax litigation 

relating to the sale of the Assets or any of the other transactions contemplated hereby. Neither 

Seller nor Buyer will challenge any of the allocations set forth in the Allocation Statement, as so 

revised, or otherwise assert or represent that any such allocations are incorrect in any proceeding 

concerning either party's Tax basis in or Tax liability with respect to the Business, the Assets, or 

any of the transactions contemplated hereby. 

2.4 Assume 'an of Liabilities; Retained Li ilities. Subject to the terms and 

conditions of this Agreement, at the Closing, Buyer shall assume and agree to perform,.pay or 

discharge all of the liabilities and obligations of the Business (known or unknown, contingent or 

otherwise) other than the Retained Liabilities (the "Assumed Liabilities"). Except as set forth in 

this Section 2.4 and the Assignment and Assumption Agreement, Buyer shall not assume or be 

responsible for any liabilities or obligations of Seller, including, without limitation, the Retained 

Liabilities. The tern "Retained Liabilities" shall mean any debt, liabilities or obligations#) to 

the extent arising out of the Excluded Assets, (ii) to the extent arising from any Benefit Plan 

(other than accrued vacation liabilities to the extent provided in Section 4.1(c)) or the 

employment of any employees of the Business on or prior to the Closing, (iii) that are retained 

by Seller pursuant to the terms hereof, (iv) that are not related to the Business, (v) for Taxes 

attributable to the Business with respect to periods ending on or prior to the Closing Date and for 

Taxes attributable to any period beginning before the Closing Date and ending after the Closing 

Date, but only with respect to that portion of such period ending on the Closing Date, (vi) for any 

indebtedness and accounts payable of the Business to Seller and its Affiliates, (vii) with respect 

to all of the items listed on Section 5.7 of the Disclosure Schedules, or (viii) which arise upon 

the revocation, termination or expiration of any permit or agreement and which pertain to the 

removal and/or relocation of any structures or other improvements not in use by Seller on the 

Closing Date, and any associated restoration obligations with respect thereto. 

2.5 Working Clglital Adjusimmtc, 

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(b) At or prior to the Closing, Seller shall pay 100°16 of all transfer, stamp, 

sales, use, excise or similar Taxes payable in connection with the sale of the Assets contemplated 

hereby . 

(e) At or prior to the Closing, Seller shall deliver to the title company an 

executed title affidavit and indemnity in a form reasonably acceptable to Buyer and such title 

company. 

the following: 

Buyer, 

3.3 Deliveries by Buyer Pavmect of Taxes. 

executed by Buyer, 

executed by Buyer; 

executed by Seller, 

(a) At the Closing, Buyer shall deliver to Seller (unless delivered previously) 

4.1 Employee Matters. 

(i) the Cash Purchase Price; 

(ii) the Assignment and Assumption Agreement duly executed by 

(iii) the Pulp Supply Agreement referred to in Section 9.12 duly 

(iv) the Transition Services Agreement referred to in Section 9.13 duly 

(v) the Lease Assignment Agreement relating to the Leased Real 

Property, duly executed by Buyer, 

(vi) the Lease Assignment Agreement relating to the real property 

leases set forth on Section 5.8 of the Disclosure Schedules, duly executed by Buyer; 

the Licenses, Permits and Warranties Assignment Agreement, duly 

(viii) the officer's certificate referred to in Section 10.4 ; 

(ix) the secretary's certificate referred to in Section 10.5 ; and 

(x) all other previously undelivered documents, instruments and 

writings required to be delivered by Buyer to Seller at or prior to the Closing pursuant to this 

Agramcnt or otherwise required in connection herewith . 

ARTICLE IV. RELATED MATTERS 

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(a) Employees. Immediately prior to the Closing, the employment of all of 

the employees of the Business shall be terminated by the Seller, and all such employees shall 

have the right to apply for employment with Buyer. Seller recognizes that Buyer intends to make 

offers of employment to a substantial number of employees of the Business, at terms and 

conditions of employment different from that provided by Seller, and that it is uncertain how 

many employees of the Seller will accept employment with Buyer. The number of offers of 

employment made by Buyer, and the terms and conditions of such offers, shall be determined by 

Buyer in its sole discretion and in accordance with applicable law; provided, that all such offers 

shall provide that all earned but unused vacation of such employees who accept offers of 

employment from the Buyer as of the Closing shall be honored by Buyer as set forth in Section 

4.1(c). Asset forth in Section 4.1(c), the Seller shall be responsible for any and all wages, 

bonuses, commissions, employee benefits and other compensation (including all obligations 

under any Benefit Plans, other than tamed but unused vacation as set forth in Section 4.1(c)) due 

to the employees of the Business arising out of their employment with Seller prior to and as of 

the Closing, subject to the reimbursement requirements of Section 4.1(f) . Buyer shall be 

responsible for any and all (i) wages, bonuses, commissions, employee benefits and other 

compensation that become due to the Hired Employees arising out of their employment with 

Buyer after the Closing, and (ii) any earned but unused vacation for Hired Employees as set forth 

in Section 4.1(c). Buyer shall not be responsible before, after, or as of the Closing for any of 

Seller's obligations to Seller's employees whom Buyer does not hire, except as set forth in 

Section 4, I(f). Buyer shall not be responsible before, after, or as of the Closing for any of 

Seller's obligations to Hired Employees, except as set forth in Section 4.1 (c) and subject to the 

reimbursement requirements in Section 4.1 (f) as applicable to Temporary Employees who are 

terminated by Buyer as a result of outsourcing or relocation of operations or layoffs at the 

Facility within 18 months following the Closing Date. Nothing contained in this Section 4.1 

shall be construed to confer upon or give to any person other than the parties to this Agreement 

and their successors or permitted assigns any rights or remedies hereunder. Seller shall 

cooperate' with Buyer and shall permit Buyer a reasonable period prior to the Closing Date (i) to 

meet with employees of Seller (including managers and supervisors) who are employed in the 

Business at such times as Buyer shall reasonably request, on the terms and subject to the 

conditions set forth on Schedule 4.1 hereto, (ii) to review personnel files and other relevant 

employment information regarding employees of Seller and to speak with such employees' 

managers and supervisors (in each case with appropriate authorizations and releases from such 

employees) who are being considered for employment by Buyer, and (iii) to distribute to such 

employees of Seller such forms and other documents relating to potential employment by Buyer 

after the Closing as Buyer may reasonably request. Buyer shall be responsible for complying 

with all applicable laws in the interviewing and hiring process, and any liability incurred in the 

interviewing and hiring process based on conduct of Buyer shall be the responsibility of Buyer, 

provided, that in no event will Buyer be responsible for any severance payments to employees of 

Seller (subject to the reimbursement requirements of Section 4.1(f)) or any strike or 

strike-related conduct by employees or the Paperworkers Union as of or prior to the Closing. In 

addition, at such times selected by Buyer no earlier than two (2) business days after the date 

hereof and prior to the Closing Date, Buyer may consult with representatives of the 

Paperworkers Union on matters of mutual interest consistent with the National Labor Relations 

1 6 

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Act, and Seller recognizes and agrees (i) that Buyer will not be assuming the collective 

bargaining agreement in effect between Seller and the Paperworkers Union or any of Seller's 

liabilities or obligations to the Paperworkers Union, other than any obligation to bargain with the 

Paperworkers Union that may be imposed by law, and (ii) that Buyer will not be responsible for 

any strike or strike-related conduct by employees or the Paperworkers Union against Seller 

arising out of or relating to such consultations . Further, in respect of notices and payments 

relating to events occurring on or prior to the Closing, Seller shall be responsible and assume all 

liability for any and all notices, payments, fines or assessments due to any government authority, 

pursuant to any applicable federal, state or local law, common law, statute, rule or regulation 

with respect to the employment, discharge or layoff of employees by the Seller as of or before 

the Closing, including but not limited to the Worker Adjustment and Retraining Notification Act 

and any rules or regulations as have been issued in connection with the foregoing (the "WARN 

Act"). Likewise, in respect of notices and payments relating to events occurring after the 

Closing, Buyer shall be responsible and assume all liability for any and all notices, payments, 

fines or assessments due to any government authority, pursuant to any applicable federal, state or 

local law, common law, statute, rule or regulation, including but not limited to the WARN Act, 

with respect to the employment, discharge or layoff of employees employed by the Buyer after 

the Closing. 

(b) Benefits . With respect to all claims by current and former employees of 

Seller who are or were employed in the Business ("Seller Employees") arising prior to or as of 

the Closing under any Benefit Plans, whether insured or otherwise (including, but not limited to, 

life insurance, medical and disability programs), Seller shall, at its own expense, honor or cause 

its insurance carriers to honor such claims, whether made before or after the Closing, in 

accordance with the terms and conditions of such Benefit Plans without regard to the 

employment by Buyer of any such Seller Employees after the Closing. 

(c) Wages. Vacation Pay. 

(i) As soon as practicable after the Closing Date, Seller shall pay or 

cause to be paid to all Seller Employees the amount of (y) all wages, bonuses, commissions and 

other compensation, and (z) to the extent any Seller Employee is not hired by Buyer, the 

aggregate dollar value of any unused vacation time, if any, as such Seller Employee shall have 

earned under Seller's vacation plan in effect for such Seller Employee as of the Closing, in each 

case due in respect of periods ending prior to and as of the Closing. 

(ii) To the extent Seller Employees become Hired Employees of the 

Buyer (including those employees hired as Temporary Employees), Buyer (x) shall be 

responsible for all earned but unused vacation for Hired Employees as each such Hired 

Employee shall have earned under Seller's vacation plan in effect for such Hired Employee as of 

the Closing (it being understood that a corresponding dollar-for-dollar accrual for such liability 

shall be made on the Closing Balance Sheet), (y) shall permit all such Hired Employees time off 

for such vacation days at reasonable times as approved by Buyer's managers, and (z) shall pay 

each such Hired Employee vacation pay for the time taken off at the rate that such Hired 

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Employee would have received as of the day prior to the Closing Date for accrued unused 

vacation earned prior to the Closing, but not after the Closing; provided, however, that the 

provisions of this Section 4.1 (c) shall not affect Buyer's right to establish a new vacation poli 

for all Faired Employees for vacation time canned after the Closing. 

y 

(d) Benefit Plans. Except as otherwise expressly provided in this Section 4.1, 

Buyer shall not assume or be responsible for any liability or obligation whatsoever with respect 

to the Benefit Plans, and Buyer shall provide such benefits to those Seller Employees who 

become employees of Buyer as of or after the Closing as Buyer, in its sole discretion, shall 

determine. Seller shall indemnify, defend and hold harmless Buyer from and against any and all 

liabilities or obligations relating to Seller Employees under the Benefit Plans prior to the 

Closing, except for those liabilities and obligations assumed by Buyer pursuant to this Section 

4.1 . 

(e) Union Agreement and Union Obligations. Buyer shall not assume the 

collective bargaining agreement in effect (the "Union Agreement") between Seller and the 

United Paperworkers International Union, Local 1469, or their successors (the "Paperworkers 

Union") and shall have no liability thereunder to Seller or to any Seller Employees for any 

obligation of Seller under the Union Agreement, including, without limitation, obligations with 

respect to the payment of wages, pensions or other benefits which may have accrued, vested or 

been earned prior to the Closing or any other term or condition of employment in effect as of or 

prior to the Closing relating to employees of Seller covered by the Union Agreement. Seller 

shall indemnify, defend and hold harmless Buyer from and against all liabilities or obligations (i) 

accrued by Seller Employees or the Paperworkers Union under the Union Agreement, and (ii) to 

the extent arising as a result of Seller's conduct or actions, under the National Labor Relations 

Act or the Labor-Management Relations Act, in each case as of or prior to the Closing. 

(f) Severance Benefits . 

(i) (A) In the event that Buyer fails to offer employment to more 

than two hundred and nineteen (214) (the "Union Severance Target Number") Seller Employees 

who are covered by the Union Agreement and are employed by Seller immediately prior to the 

Closing Date (the "Union Employees') (1) to whom Seller is obligated to pay severance pursuant 

to any severance plans or programs established by Seller in the course of "effects" bargaining 

with the Paperworkers Union with respect to the Union Employees (collectively, the "Union 

Severance Plan"), and (2) who have not failed a drug test administered by or on behalf of Buyer, 

Buyer shall reimburse Seller for an amount equal to : 

the product of (x) (a) the actual number of Union Employees not made offers of 

employment by Buyer to whom Seller is obligated to pay severance and who have not 

failed a drug-test minus the Union Severance Target Number, divided by (b) the total 

number of Union Employees to whom Seller is obligated to pay severance under the 

Union Severance Plan, and (y) the total dollar amount of the cash portion of the 

severance paid to Union Employees pursuant to the Union Severance Plan ; 

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provided, however, that in the event Buyer makes offers to Union Employees listed by Buyer as 

temporary employees on Schedule 4.1 MGM) to be delivered by Buyer to Seller at Closing 

("Union Temporary Employees"}, and such Union Temporary Employees are terminated by 

Buyer as a result of outsourcing or relocation of operations or layoffs at the Facility within 18 

months following the Closing Date, such Union Temporary Employees shall be treated as not 

having been offered employment for purposes of this Section 4.1(f)(i)(A) only. Notwithstanding 

the foregoing, other than Union Temporary Employees who are terminated by Buyer as a result 

of outsourcing or relocation of operations or layoffs at the Facility within 18 months following 

the Closing Date, it is understood that Union Temporary Employees shall be treated for purposes 

of this Section 4.2(f)(iXA) as having been offered employment. 

Notwithstanding the foregoing, in the event that Buyer fails to offer employment 

in accordance with Section 4.1(f)(i)(B) to Non-Union Employees in a number fewer than the 

Non-Union Severance Target Number but Buyer fails to offer employment to more Union 

Employees than the Union Severance Target Number, then the Union Severance Target Number 

shall be increased by the difference between (x) the Non-Union Severance Target Number and 

(y) the actual number of Non-Union Employees to whom the Buyer failed to make offers of 

employment (such difference is referred to herein as the "Excess Non-Union Severance Target 

Number"). 

(B) In the event that Buyer fails to offer employment to more 

than thirty five (35) (the "Non-Union Severance Target Number") Seller Employees who are not 

covered by the Union Agreement and are employed by Seller immediately prior to the Closing 

Date (the "Non-Union Employees") (1) to whom Seller is obligated to pay severance pursuant to 

the Champion International Corporation Reorganization Plan #828 as in effect as of the Closing 

Date ( the "Non-Union Severance Plan"), and (2) who have not failed a drug test administered by 

or on behalf of Buyer, Buyer shall reimburse Seller for an amount equal to : 

the product of (x) (a) the actual number of Non-Union Employees not made offers of 

employment by Buyer to whom Seller is obligated to pay severance and who have not 

failed a drug-test minus the Non-Union Severance Target Number, divided by (b) the 

total number of Non-Union Employees to whom Seller is obligated to pay severance 

under the Non-Union Severance Plan, and (y) the total dollar amount of the cash portion 

of the severance paid to Non-Union Employees pursuant to the Non-Union Severance 

Plan, excluding any "Flex 6" enhanced severance and retirement benefits and any other 

enhanced pension and retirement benefits payable to such employees; 

provided, however, that in the event Buyer makes offers to Non-Union Employees listed by 

Buyer as temporary employees on Schedule 4.1 ffKi)(Bl to be delivered by Buyer to Seller at 

Closing ("Non-Union Temporary Employees"), and such Non-Union Temporary Employees are 

terminated by Buyer as a result of outsourcing or relocation of operations or layoffs at the 

Facility within I8 months following the Closing Date, such Non-Union Temporary Employees 

shall be treated as not having been offered employment for purposes of this Section 4.t(f)(i)(B) 

only . Notwithstanding the foregoing, other than Non-Union Temporary Employees who are 

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terminated by Buyer as a result of outsourcing or relocation of operations or layoff's at the 

Facility within 18 months following the Closing Date, it is understood that Non-Union 

Temporary Employees shall be treated for purposes of this Section 4.1(f)(i)(B) as having been 

offered employment. 

In the event that Buyer does not fail to offer employment to more Union 

Employees than the Union Severance Target Number but Buyer fails to offer employment to 

more Non-Union Employees than the Non-Union Severance Target Number, then the amount 

reimbursable by Buyer pursuant to this Section 4 .1(f)(i)(B) shall be reduced by an amount equal 

to : 

the product of (x) the difference between (a) the number of Union Employees not made 

offers of employment in accordance with Section 4.1(f)(iXA) and (b) the Union 

Severance Target Number, and (y) the average cost of severance paid per Union 

Employee under the Union Severance Agreement. 

For purposes of this Section 4.1(f)(i)(B), the average cost of severance paid per Union Employee 

shall be equal to the total amount of the cash portion of the severance paid to Union Employees 

pursuant to the Union Severance Plan divided by the total number of Union Employees to whom 

Seller is obligated to pay severance under the Union Severance Plan 

(ii) (A) Seller hereby agrees, subject to the provisions of Section 

4.2(f)(i), to pay severance in accordance with the terms of the Union Severance Plan to Union 

Temporary Employees, if and when the employment of any such Union Temporary Employees 

is terminated by Buyer to the extent that such ter minations occur within 18 months following the 

Closing as a result of outsourcing or relocation of operations or layoffs at the Facility. The 

severance benefits to which such Union Temporary Employees would be entitled if terminated 

within 18 months following the Closing will be equal to the severance benefits such employees 

would have received in accordance with the Union Severance Plan had they not been offered 

employment by the Buyer. 

(B) Seller further agrees, subject to the provisions of Section 

4.2(f)(i), to pay severance in accordance with the terms of the Non-Union Severance Plan to 

Non-Union Temporary Employees, if and when the employment of any such Non-Union 

Temporary Employee is terminated by Buyer to the extent that such terminations occur within 

18 months following the Closing as a result of outsourcing or relocation of operations or layoffs 

at the Facility . The severance benefits to which such Non-Union Temporary Employees would 

be entitled if terminated within 18 months following the Closing will be equal to the severance 

benefits such employees would have received in accordance with the Non-Union Severance Plan 

had they not been offered employment by the Buyer. 

(iii) Buyer shall reimburse Seller in accordance with this Section 4.1(f) 

within fifteen (15) days after Seller delivers to Buyer a statement setting forth, in reasonable 

detail, the reimbursements paid or due and payable, the calculation of such reimbursements in 

accordance with this Section 4.1(1), the Union Severance Plan and the Non-Union Severance 

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Plan, and other documents, if any, used by Seller in determining the amount of such 

reimbursements or as reasonably requested by Buyer. 

(iv) As soon as practicable after the Closing, but in no event later than 

15 days after the Closing, Buyer will provide Seller with (1) the names of all Union and 

Non-Union Employees to whom Buyer has made offers of employment, (2) the names of all 

Union and Non-Union Employees who were not made offers of employment, (3) the total 

number of all Union and Non-Union Employees who failed a drug test and were not made offers 

of employment, and (4) the names of all Union Employees and Non-Union Employees to whom 

Buyer made offers of employment and who became Hired Employees. For any Union or NonUnion Temporary Employee whose employment is terminated within 18 months of the Closing 

as a result of outsourcing or relocation of operations or layoffs at the Facility, Buyer will provide 

Seller on a confidential basis with the name of each such Temporary Employee within 45 days 

after such employee's termination of employment with Buyer and whether such Temporary 

Employee was terminated as a result of outsourcing or relocation of operations or layoffs at the 

Facility . Buyer will cooperate with Seller to implement the provisions of this Section 4.1(f) by 

providing Seller with any of Buyer's employment records or other documents requested and 

needed by Seller to implement the provisions of this Section 4.1(f), provided that Seller obtains 

from the applicable employee an appropriate authorization and release authorizing Buyer to 

disclose the requested information to Seller and releasing Buyer from any and all liability 

associated with such disclosure. 

(v) Buyer agrees that : 

(A) for a period of six (6) months from and after the Closing Date, Buyer shall 

not hire any Non-Union Employee not offered employment by Buyer as of the Closing to 

whom Seller has or is required to pay severance benefits under the Non-Union Severance 

Plan, including, without limitation, such employees who have received or are eligible to 

receive "Flex 6" enhanced severance and retirement benefits, unless Buyer reimburses 

Seller for the amounts paid or payable to such employee under the Non-Union Severance 

Plan, including the actuarial value of the "Flex 6" enhanced severance and retirement 

benefits paid or payable to such employee by Seller, and 

(B) for a period of six (6) months from and after the date on which a Non-Union 

Temporary Employee is terminated by Buyer, but in no event later than eighteen (18) 

months after the Closing Date, Buyer shat! not re-hire any such Non-Union Temporary 

Employee to whom Seller has or is required to pay severance benefits under the NonUnion Severance Plan, including, without limitation, such employees who have received 

or are eligible to receive "Flex 6" enhanced severance and retirement benefits, unless 

Buyer reimburses Seller for the amounts paid or payable to such employee under the 

Non-Union Severance Plan, including the actuarial value of the "Flex 6" enhanced 

severance and retirement benefits paid or payable to such employee by Seller, 

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provided, however, that both subsections (A) and (B) of this Section 4.1(f)(v) shall apply only in 

the event that Buyer fails to offer employment in accordance with Section 4.1(f)(i)(B) to NonUnion Employees in a number fewer than the Non-Union Severance Target Number, after taking 

into account the portion of the Excess Non-Union Severance Target Number actually counted 

towards the Union Severance Target Number pursuant to Section 4.1(f)(i)(A). 

Notwithstanding the above, (x) if Buyer reimburses Seller for an employee in 

accordance with this Section 4.1(f)(v), the employee for which reimbursement was made shall be 

treated as having been offered employment for purposes of Section 4.1(f)(i)(B); (_v) the 

provisions of this Section 4.1(f)(v) shall not apply if Buyer hires such Non-Union Employees or 

rehires such Non-Union Temporary Employees in the event of a strike by the Paperworkers 

Union; and (z) there shall be no limitation upon Buyer's ability to hire or re-hire any Union 

Employee to whom Seller has or is required to pay severance benefits. 

4.2 Aonortionments . 

	Real (a) Estate Taxes and Assessments. 

(i) Real estate Taxes, charges and assessments (on the basis of the 

actual fiscal years for which such Taxes are assessed) affecting the Facility, personal property 

Taxes on the other Assets, water and sewer rentals, prepaid license fees and other charges for 

licenses and permits for the Facility which will remain in effect for Buyer's benefit after Closing 

which, in each case, are listed on Schedule 4.2 attached hereto, and municipal rubbish removal 

charges shall be apportioned pro rata between Seller and Buyer on a per diem basis as of the 

Closing Date, disregarding any penalty assessed prior to the Closing Date or any penalty 

with respect to Taxes assessed for periods occurring prior to the Closing Date. Seller 

shall pay all such Taxes, rentals, fees and charges for all years prior to the Closing on or before 

the Closing Date. 

(ii) If the Mill Facility or the Treatment Facility is not separately 

assessed for real estate Tax purposes as of the Closing Date, the real estate Tax assessment 

attributable to the Mill Facility or the Treatment Facility, as applicable, shall be deemed to be 

that portion of the total assessment of the buildings on the larger parcel with which the Mill 

Facility or the Treatment Facility, as applicable, is assessed which bears the same ratio to such 

total assessment of buildings as the ground floor area of buildings on the Mill Facility or the 

Treatment Facility, as applicable, bears to the total ground floor area of buildings on the larger 

parcel ; and that portion of the total assessment of the land constituting the larger parcel with 

which the Mill Facility or the Treatment Facility, as applicable, is assessed which bears the same 

ratio to such total assessment of land as the area in the Mill Facility or the Treatment Facility, as 

applicable, bears to the total land area in the larger parcel. 

(iii) If bills for real estate Taxes on the Mill Facility or the Treatment 

Facility, as applicable, have not been issued as of the Closing Date, and if the amount of teal 

estate Taxes of the then current Tax fiscal year is not then known, the apportionment of real 

estate Taxes shall be made at Closing on the basis of the prior year's real estate Taxes. After 

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