Document:

Exhibit
10.26

 

 

 

ASSET PURCHASE
AGREEMENT

 

 

Among

 

NEWPAGE
CORPORATION,

 

CHILLICOTHE
PAPER INC.

 

and

 

P. H.
GLATFELTER COMPANY

 

Dated as of
February 21, 2006

 

 

TABLE OF
CONTENTS

 

	
   

  	
  Page

  
	
  ARTICLE I

  	
   

  
	
   

  	
   

  
	
  DEFINITIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 1.01. Certain Defined
  Terms

  	
  1

  
	
  SECTION 1.02. Definitions

  	
  13

  
	
  SECTION 1.03. Interpretation
  and Rules of Construction

  	
  15

  
	
   

  	
   

  
	
  ARTICLE
  II

  	
   

  
	
   

  	
   

  
	
  PURCHASE
  AND SALE

  	
   

  
	
   

  	
   

  
	
  SECTION 2.01. Purchase and
  Sale of Purchased Assets

  	
  16

  
	
  SECTION 2.02. Assumption and
  Exclusion of Liabilities

  	
  19

  
	
  SECTION 2.03. Purchase Price;
  Allocation of Purchase Price

  	
  21

  
	
  SECTION 2.04. Closing

  	
  22

  
	
  SECTION 2.05. Closing
  Deliveries by the Seller

  	
  22

  
	
  SECTION 2.06. Closing
  Deliveries by the Purchaser

  	
  23

  
	
  SECTION 2.07. Adjustment of
  Purchase Price

  	
  23

  
	
   

  	
   

  
	
  ARTICLE
  III

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  OF THE
  SELLER AND PARENT

  	
   

  
	
   

  	
   

  
	
  SECTION 3.01. Organization,
  Authority and Qualification

  	
  26

  
	
  SECTION 3.02. No Conflict

  	
  27

  
	
  SECTION 3.03. Governmental
  Consents and Approvals

  	
  27

  
	
  SECTION 3.04. Financial
  Information; Books and Records

  	
  27

  
	
  SECTION 3.05. Absence of
  Undisclosed Liabilities

  	
  28

  
	
  SECTION 3.06. Receivables

  	
  28

  
	
  SECTION 3.07. Inventories

  	
  28

  
	
  SECTION 3.08. Conduct in the
  Ordinary Course; Absence of Certain Changes, Events and Conditions

  	
  29

  
	
  SECTION 3.09. Litigation

  	
  31

  
	
  SECTION 3.10. Compliance with
  Laws

  	
  31

  
	
  SECTION 3.11. Environmental
  Matters

  	
  31

  
	
  SECTION 3.12. Material
  Contracts

  	
  32

  
	
  SECTION 3.13. Intellectual
  Property

  	
  34

  
	
  SECTION 3.14. Real Property

  	
  35

  
	
  SECTION 3.15. Tangible
  Personal Property

  	
  36

  
	
  SECTION 3.16. Assets

  	
  37

  
	
  SECTION 3.17. Customers

  	
  37

  

 

i

 

	
  SECTION 3.18. Suppliers

  	
  38

  
	
  SECTION 3.19. Employee
  Benefit Matters

  	
  38

  
	
  SECTION 3.20. Labor Matters

  	
  40

  
	
  SECTION 3.21. Key Employees

  	
  40

  
	
  SECTION 3.22. Taxes

  	
  41

  
	
  SECTION 3.23. Insurance

  	
  41

  
	
  SECTION 3.24. Brokers

  	
  42

  
	
  SECTION 3.25. Licenses and
  Permits

  	
  42

  
	
   

  	
   

  
	
  ARTICLE
  IV

  	
   

  
	
   

  	
   

  
	
  REPRESENTATIONS
  AND WARRANTIES

  	
   

  
	
  OF THE
  PURCHASER

  	
   

  
	
   

  	
   

  
	
  SECTION 4.01. Organization
  and Authority of the Purchaser

  	
  42

  
	
  SECTION 4.02. No Conflict

  	
  42

  
	
  SECTION 4.03. Governmental
  Consents and Approvals

  	
  43

  
	
  SECTION 4.04. Financing

  	
  43

  
	
  SECTION 4.05. Litigation

  	
  43

  
	
  SECTION 4.06. Brokers

  	
  43

  
	
  SECTION 4.07. Knowledge of
  Breach

  	
  43

  
	
  SECTION 4.08. Disclaimer of
  Warranties

  	
  43

  
	
   

  	
   

  
	
  ARTICLE V

  	
   

  
	
   

  	
   

  
	
  ADDITIONAL
  AGREEMENTS

  	
   

  
	
   

  	
   

  
	
  SECTION 5.01. Conduct of
  Business Prior to the Closing

  	
  44

  
	
  SECTION 5.02. Access to
  Information

  	
  44

  
	
  SECTION 5.03. Confidentiality

  	
  45

  
	
  SECTION 5.04. Regulatory and
  Other Authorizations; Notices and Consents

  	
  46

  
	
  SECTION 5.05. Notice of
  Developments

  	
  48

  
	
  SECTION 5.06. Non-Competition

  	
  48

  
	
  SECTION 5.07. Excluded
  Liabilities; Assumed Liabilities

  	
  49

  
	
  SECTION 5.08. Tax Cooperation
  and Exchange of Information; Other Tax Matters

  	
  50

  
	
  SECTION 5.09. Conveyance
  Taxes

  	
  50

  
	
  SECTION 5.10. Further Action

  	
  51

  
	
  SECTION 5.11. Risk of Loss

  	
  51

  
	
  SECTION 5.12. Proration;
  Certain Charges and Taxes

  	
  51

  
	
  SECTION 5.13. Compliance with
  Environmental Transfer Statutes

  	
  52

  
	
  SECTION 5.14. Historical
  Off-Site Environmental Liabilities Limitations

  	
  52

  
	
  SECTION 5.15. Environmental
  Reports

  	
  53

  
	
  SECTION 5.16. Provision of
  Business Records to the Purchaser

  	
  53

  
	
  SECTION 5.17. Use of
  Intellectual Property

  	
  53

  
	
  SECTION 5.18. Intracompany
  Arrangements

  	
  55

  
	
  SECTION 5.19. Preparation of
  Stand-Alone Financial Statements

  	
  55

  
	
  SECTION 5.20. Title
  Insurance; Objections

  	
  55

  

 

ii

 

	
  SECTION 5.21. Coated
  Converting Agreement

  	
  58

  
	
  SECTION 5.22. Letter of
  Credit

  	
  58

  
	
   

  	
   

  
	
  ARTICLE
  VI

  	
   

  
	
   

  	
   

  
	
  EMPLOYEE
  MATTERS

  	
   

  
	
   

  	
   

  
	
  SECTION 6.01. Offer of
  Employment

  	
  59

  
	
  SECTION 6.02. Post Closing
  Benefits

  	
  59

  
	
  SECTION 6.03. Transition to
  New Health Plans; Past Service Credit

  	
  59

  
	
  SECTION 6.04. Hourly Pension
  Plan

  	
  60

  
	
  SECTION 6.05. Certain Other
  Employee-Related Costs

  	
  62

  
	
  SECTION 6.06. Existing
  Welfare Benefit Plans; Retiree Medical Benefits

  	
  62

  
	
  SECTION 6.07. Collective Bargaining
  Agreements

  	
  62

  
	
  SECTION 6.08. Cooperation
  With Respect to Certain Pre-Closing Retained Liabilities

  	
  63

  
	
   

  	
   

  
	
  ARTICLE
  VII

  	
   

  
	
   

  	
   

  
	
  CONDITIONS
  TO CLOSING

  	
   

  
	
   

  	
   

  
	
  SECTION 7.01. Conditions to
  Obligations of the Seller and Parent

  	
  63

  
	
  SECTION 7.02. Conditions to
  Obligations of the Purchaser

  	
  64

  
	
   

  	
   

  
	
  ARTICLE
  VIII

  	
   

  
	
   

  	
   

  
	
  INDEMNIFICATION

  	
   

  
	
   

  	
   

  
	
  SECTION 8.01. Survival of
  Representations and Warranties

  	
  65

  
	
  SECTION 8.02. Indemnification
  by the Seller and Parent

  	
  66

  
	
  SECTION 8.03. Indemnification
  by the Purchaser

  	
  68

  
	
  SECTION 8.04. Limits on
  Indemnification

  	
  69

  
	
  SECTION 8.05. Notice of Loss;
  Third Party Claims

  	
  69

  
	
  SECTION 8.06. Tax Treatment

  	
  70

  
	
  SECTION 8.07. Limitations and
  Procedures Applicable to Indemnification for Historical Environmental
  Liabilities

  	
  70

  
	
  SECTION 8.08. Procedures for
  Allocation of Responsibility for Straddle Environmental Liabilities

  	
  73

  
	
  SECTION 8.09. Procedures
  Applicable to Indemnification by the Purchaser for Reserved Pre-Closing
  Environmental 

  	
   

  
	
   

  	
   Liabilities and Post-Closing Environmental
  Liabilities

  	
  76

  
	
   

  	
   

  	
   

  
	
  ARTICLE
  IX

  	
   

  
	
   

  	
   

  
	
  TERMINATION

  	
   

  
	
   

  	
   

  
	
  SECTION 9.01. Termination

  	
  76

  
	
  SECTION 9.02. Effect of
  Termination

  	
  76

  

 

iii

 

	
  ARTICLE X

  	
   

  
	
   

  	
   

  
	
  GENERAL
  PROVISIONS

  	
   

  
	
   

  	
   

  
	
  SECTION 10.01. Expenses

  	
  76

  
	
  SECTION 10.02. Notices

  	
  77

  
	
  SECTION 10.03. Public
  Announcements

  	
  78

  
	
  SECTION 10.04. Severability

  	
  78

  
	
  SECTION 10.05. Entire
  Agreement

  	
  78

  
	
  SECTION 10.06. Assignment

  	
  78

  
	
  SECTION 10.07. Amendment

  	
  79

  
	
  SECTION 10.08. Waiver

  	
  79

  
	
  SECTION 10.09. Joint and
  Several Liability

  	
  79

  
	
  SECTION 10.10. No Third Party
  Beneficiaries

  	
  79

  
	
  SECTION 10.11. Specific
  Performance

  	
  79

  
	
  SECTION 10.12. Governing Law

  	
  79

  
	
  SECTION 10.13. Waiver of Jury
  Trial

  	
  80

  
	
  SECTION 10.14. Counterparts

  	
  80

  

 

iv

 

EXHIBITS

 

	
  1.01(a)(i)

  	
  Form of Assignment
  of Intellectual Property

  
	
  1.01(a)(ii)

  	
  Form of
  Assignment of Intellectual Property

  
	
  1.01(b)

  	
  Form of
  Assignment of Lease

  
	
  1.01(c)

  	
  Form of
  Assumption Agreement

  
	
  1.01(d)

  	
  Form of Bill
  of Sale and Assignment

  
	
  1.01(e)

  	
  Form of Deed

  
	
  1.01(f)

  	
  Form of
  Transition Services Agreement

  
	
  5.17(a)

  	
  Form of
  Temporary Trademark License Agreement

  
	
  5.17(b)

  	
  Form of
  Technology License Agreement

  
	
  5.17(c)

  	
  Form of
  Technology License-Back Agreement

  
	
  5.17(d)

  	
  Form of
  Technology Sub-License Agreement

  
	
  5.21

  	
  Term Sheet
  for Coated Converting Agreement

  
	
  5.22

  	
  Form of
  Letter of Credit

  
	
  6.01

  	
  Transferred
  Employees

  
	
  7.02(e)

  	
  Consents

  

 

v

 

DISCLOSURE
SCHEDULE

 

The Disclosure
Schedule shall include the following Sections:

 

	
  1.01(a)

  	
  Licensed-Back
  Intellectual Property

  
	
  1.01(b)

  	
  Licensed
  Business Intellectual Property

  
	
  1.01(c)

  	
  Licensed
  Carbonless Paper Business Intellectual Property

  
	
  1.01(d)

  	
  Mead
  Licensed Carbonless Paper Business Intellectual Property

  
	
  1.01(e)

  	
  Owned
  Business Intellectual Property

  
	
  1.01(f)

  	
  Owned
  Carbonless Paper Business Intellectual Property

  
	
  1.01(g)

  	
  Working
  Capital

  
	
  2.01(a)(xv)

  	
  Collective
  Bargaining Agreements

  
	
  2.01(b)(ix)

  	
  Excluded
  Intellectual Property

  
	
  2.01(b)(xii)

  	
  Excluded
  Intercompany Receivables and Payables

  
	
  3.02

  	
  No Conflict

  
	
  3.03

  	
  Governmental
  Consents and Approvals

  
	
  3.04(a)(i)

  	
  Unaudited
  Financial Statements

  
	
  3.05

  	
  Absence of
  Undisclosed Liabilities

  
	
  3.06

  	
  Receivables

  
	
  3.07(a)

  	
  Inventories

  
	
  3.07(b)

  	
  Inventories

  
	
  3.08(a)

  	
  Conduct in
  the Ordinary Course; Absence of Certain Changes, Events and Conditions

  
	
  3.08(b)

  	
  Conduct in
  the Ordinary Course; Absence of Certain Changes, Events and Conditions

  
	
  3.09

  	
  Litigation

  
	
  3.10(a)

  	
  Compliance
  with Laws

  
	
  3.10(b)

  	
  Governmental
  Orders

  
	
  3.11

  	
  Environmental
  Matters

  
	
  3.12(a)

  	
  Material
  Contracts

  
	
  3.12(a)(ii)

  	
  Material
  Purchase Orders

  
	
  3.12(b)

  	
  Material
  Contracts

  
	
  3.12(f)

  	
  Material
  Contracts

  
	
  3.12(g)

  	
  Material
  Contracts

  
	
  3.12(h)

  	
  Material
  Contracts

  
	
  3.12(i)

  	
  Material
  Contracts

  
	
  3.13(a)

  	
  Intellectual
  Property

  
	
  3.13(b)

  	
  Intellectual
  Property

  
	
  3.13(c)

  	
  Intellectual
  Property

  
	
  3.13(d)

  	
  Intellectual
  Property

  
	
  3.14(a)

  	
  Owned Real
  Property

  
	
  3.14(b)

  	
  Leased Real
  Property

  
	
  3.14(c)

  	
  Real
  Property

  
	
  3.14(d)

  	
  Real
  Property

  
	
  3.14(e)

  	
  Transferred
  Real Property

  
	
  3.15(b)

  	
  Tangible
  Personal Property

  
	
  3.16(a)

  	
  Assets

  

 

vi

 

	
  3.16(c)

  	
  Assets

  
	
  3.17

  	
  Customers

  
	
  3.18

  	
  Suppliers

  
	
  3.19(a)

  	
  Employee
  Benefit Matters

  
	
  3.20

  	
  Labor
  Matters

  
	
  3.21

  	
  Key
  Employees

  
	
  3.22(l)

  	
  Taxes

  
	
  3.22(m)

  	
  Taxes

  
	
  3.25

  	
  Licenses and
  Permits

  
	
  5.01(a)

  	
  Conduct of
  Business Prior to the Closing

  
	
  5.01(b)

  	
  Conduct of
  Business Prior to the Closing

  
	
  5.04(f)

  	
  Guarantees

  
	
  5.06(c)

  	
  Non-Competition
  with Non-Carbonless Paper Business Customers

  
	
  5.20(b)(viii)

  	
  Title
  Insurance

  
	
  6.04(d)

  	
  Assumptions
  and Methodologies for Calculation of Transfer Amount

  
	
  8.02(g)

  	
  Historical On-Site
  Environmental Liabilities

  
	
  8.02(i)

  	
  Straddle
  Environmental Liabilities

  
	
  8.08(g)

  	
  Straddle
  Environmental Liabilities

  

 

A copy of the
Schedules and Exhibits will be furnished supplementally to the Commission upon
request.

 

vii

 

ASSET PURCHASE AGREEMENT, dated as of February 21, 2006, among NewPage
Corporation, a Delaware corporation (“Parent”), Chillicothe Paper Inc.,
a Delaware corporation and a wholly-owned and direct subsidiary of Parent (the
“Seller”), and P. H. Glatfelter Company, a Pennsylvania corporation (the
“Purchaser”).

 

WHEREAS, the Seller is engaged in the business of manufacturing,
marketing and distribution of carbonless papers at the Operating Sites and the
use or sale of products derived therefrom (the “Carbonless Paper Business”);

 

WHEREAS, the Seller is also engaged in the business of manufacturing,
marketing and distribution of coated and uncoated papers at the Operating Sites
and the use or sale of products derived therefrom, which Parent also engages in
at other sites (as conducted by the Seller at the Operating Sites, the “Non-Carbonless
Paper Business,” and together with the Carbonless Paper Business, the “Business”);
and

 

WHEREAS, the Seller wishes to sell to the Purchaser, and the Purchaser
wishes to purchase from the Seller, the Business, including all right, title
and interest of the Seller in and to the property and assets of the Business,
and in connection therewith the Purchaser is willing to assume certain
liabilities of the Seller relating thereto, all upon the terms and subject to
the conditions set forth herein;

 

NOW, THEREFORE, in consideration of the premises and the mutual
agreements and covenants hereinafter set forth, and intending to be legally
bound, the Seller, Parent and the Purchaser hereby agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

SECTION
1.01.  Certain Defined Terms.  For purposes of this Agreement:

 

“Action” means any claim, action, suit, arbitration, inquiry,
proceeding or investigation by or before any Governmental Authority.

 

“Affiliate” means, with respect to any specified Person, any
other Person that directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, such specified
Person.

 

“Agreement” or “this Agreement” means this Asset Purchase
Agreement between the parties hereto (including the Exhibits hereto and the
Disclosure Schedule) and all amendments hereto made in accordance with the
provisions of Section 10.07.

 

“Ancillary Agreements” means the Bill of Sale, the Deeds, each
Assignment of Lease, the Assignments of Intellectual Property, the Technology
License Agreement, the Temporary Trademark License Agreement, the Technology
License-Back Agreement, the Technology Sub-License Agreement, the Transition
Services Agreement, the Coated Converting Agreement and the Assumption
Agreement.

 

 

“Assignments of Intellectual Property” means the Assignments of
Intellectual Property to be executed by the Seller and the Purchaser at the
Closing, substantially in the form of Exhibits 1.01(a)(i) and (ii).

 

“Assignment of Lease” means the Assignment of Lease to be
executed by the Seller and the Purchaser at the Closing with respect to each
parcel of Leased Real Property listed on Section 3.14(b) of the Disclosure Schedule,
substantially in the form of Exhibit 1.01(b).

 

“Assumption Agreement” means the Assumption Agreement to be
executed by the Seller and the Purchaser at the Closing, substantially in the
form of Exhibit 1.01(c).

 

“Bill of Sale” means the Bill of Sale and Assignment to be
executed by the Seller at the Closing, substantially in the form of Exhibit
1.01(d).

 

“Business Day” means any day that is not a Saturday, a Sunday or
other day on which banks are required or authorized by Law to be closed in The
City of New York.

 

“Business Intellectual Property” means the Owned Business
Intellectual Property and the Licensed Business Intellectual Property.

 

“CERCLA” means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, 42 U.S.C. 9601 et seq.

 

“Carbonless Paper Business Intellectual Property” means the
Owned Carbonless Paper Business Intellectual Property and the Licensed
Carbonless Paper Business Intellectual Property.

 

“Carbonless Paper Business IP Agreements” means (a) licenses of
Licensed Carbonless Paper Business Intellectual Property (excluding licenses
pursuant to which the licensor is MeadWestvaco) and (b) the Laser License
Agreement.

 

“Chillicothe Services Agreement” means the Chillicothe Services
Agreement, effective as of April 30, 2005, between MW Custom Papers, LLC, a
Delaware limited liability company, and the Seller.

 

“Claims” means any and all administrative, regulatory or
judicial actions, suits, petitions, appeals, demands, demand letters, claims,
liens, notices of noncompliance or violation, investigations, proceedings,
consent orders or consent agreements.

 

“Closing Date” means the date on which the Closing occurs.

 

“Code” means the Internal Revenue Code of 1986, as amended
through the date hereof.

 

“Computer Software” means computer software programs, in source
code or object code form, including operating systems and specifications,
utilities, graphical user interfaces, software engines, platforms, and all
versions, updates, corrections, enhancements and modifications thereof, and all
related documentation.

 

2

 

“control” (including the terms “controlled by” and “under
common control with”), with respect to the relationship between or among
two or more Persons, means the possession, directly or indirectly or as
trustee, personal representative or executor, of the power to direct or cause
the direction of the affairs or management of a Person, whether through the
ownership of voting securities, as trustee, personal representative or
executor, by contract, credit arrangement or otherwise.

 

“Conveyance Taxes” means all sales, use, value added, transfer,
stamp, stock transfer, realty or real property transfer or gains and similar
Taxes, but does not include any Income Taxes.

 

“Deeds” means the deeds to be executed by the Seller at the
Closing, substantially in the form of Exhibit 1.01(e), in order to convey to
the Purchaser each parcel of Owned Real Property.

 

“Disclosure Schedule” means the Disclosure Schedule attached
hereto, dated as of the date hereof, delivered by the Seller to the Purchaser
in connection with this Agreement.

 

“Encumbrance” means any security interest, pledge, mortgage,
lien (statutory or otherwise), charge, lease, license, encumbrance, easement,
restrictive covenant, condition or any other restriction, which restriction is
set forth in recorded documents.

 

“Environment” means any surface water, groundwater, land
surface, subsurface strata, sediment, plant or animal life, natural resources,
air and soil.

 

“Environmental Annex” means the Environmental Annex, dated as of
May 2, 2005, by and between MW Custom Papers, LLC, a Delaware limited liability
company, and the Seller.

 

“Environmental Claims” refers to any complaint, summons,
citation, notice, directive, order, claim, litigation, investigation, notice of
violation, notice of liability, request for information sent pursuant to
Section 104(e) of CERCLA or any equivalent section of a state statute that is
analogous to CERCLA, judicial or administrative proceeding, judgment, letter or
other communication from any Governmental Authority or any Person involving (a)
violations of Environmental Laws, (b) exposure to Hazardous Materials, (c) the
handling of Hazardous Materials or (d) Releases of Hazardous Materials from, on
or under (i) any Real Property or other assets or properties used in the
Business, (ii) any adjoining properties or businesses or (iii) any facilities
which received Hazardous Materials generated or used by the Business.

 

“Environmental Conditions” means any condition, known or
unknown, foreseen or unforeseen, arising out of (a) the Release, threat of
Release, or exposure of Persons to Hazardous Materials, (b) any violation of
any Environmental Law, (c) the handling of Hazardous Materials or (d) any Environmental
Claim.

 

“Environmental Laws” includes CERCLA, as amended; the Resource
Conservation and Recovery Act, 42 U.S.C. 6901 et seq., as amended; the Clean
Air Act, 42 U.S.C. 7401 et seq., as amended; the Clean Water Act, 33 U.S.C.
1251 et seq., as amended; the Occupational Safety and Health Act, 29 U.S.C. 655
et seq., as amended; the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.,
as amended; the Hazardous Materials Transportation Act, 49 

 

3

 

U.S.C.
5101 et seq., as amended; the Federal Insecticide, Fungicide, and Rodenticide
Act, 7 U.S.C. 136-136y et seq., as amended; the Emergency Planning and
Community Right-to-Know Act of 1986, 42 U.S.C. 11001 et seq., as amended; and
any other foreign, federal, state, local or municipal laws (including common
law), statutes, regulations, rules or ordinances relating to the protection of
the environment, health and safety, exposure to Hazardous Materials, or natural
resource damages.

 

“Environmental Liabilities” means any Losses, including costs of
investigation, Remedial Action or other response actions, known or unknown,
foreseen or unforeseen, arising out of: 
(a) Environmental Conditions, (b) any violation of or liability under
any Environmental Law, (c) the handling of Hazardous Materials or (d) any
Environmental Claim.  For the avoidance
of doubt, Environmental Liabilities shall not include Losses after the Closing
Date resulting from increases in operating expenses of the Business, including
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 the operation of the Business.

 

“Equity and Asset Purchase Agreement” means that certain Equity
and Asset Purchase Agreement, dated January 14, 2005, by and between Ultimate
Parent and MeadWestvaco.

 

“ERISA Affiliate” means any entity that is a member of a
controlled group for purposes of Section 4001(a)(14) of ERISA.

 

“Excluded
Taxes” means any and all (a) Income Taxes owed by Parent, the Seller, or
any of Parent’s other Affiliates for any period, (b) Taxes relating to the
Excluded Assets or Excluded Liabilities for any period, (c) Taxes relating to
the Purchased Assets, the Business or the Assumed Liabilities imposed with
respect to or otherwise attributable to any Pre-Closing Period except to the
extent an amount for any such Tax is set forth as an asset (if prepaid) or a
Liability on the Closing Date Working Capital Statement, including employment,
payroll and similar Taxes, (d) Taxes of Parent, the Seller or any of Parent’s
other Affiliates or any other Person by reason of being a member of a
consolidated, combined, unitary or affiliated group that includes the Seller or
any of its current or past Affiliates prior to the Closing, by reason of a tax
sharing, tax indemnity or similar agreement entered into by Parent, the Seller
or any of Parent’s current or past Affiliates with any Person prior to the
Closing (other than this Agreement) or by reason of transferee or successor
liability arising in respect of a transaction undertaken by Parent, the Seller
or any of their current or past Affiliates prior to the Closing, and (e)
Conveyance Taxes for which Parent, the Seller or any of Parent’s other
Affiliates are liable under Section 5.09.

 

“GAAP” means United States generally accepted accounting
principles and practices in effect from time to time applied consistently throughout
the periods involved.

 

“Governmental Authority” means any federal, national,
supranational, state, provincial, local, or similar government, governmental,
regulatory or administrative authority, agency or commission or any court,
tribunal, or judicial or arbitral body.

 

4

 

“Governmental Order” means any order, writ, judgment,
injunction, decree, stipulation, determination, ruling or award entered by or
with any Governmental Authority.

 

“Hazardous Materials” means any substance or material that has
been defined or otherwise listed as hazardous or toxic or as a pollutant,
contaminant or waste, or words of similar import, under any Environmental Law,
or any other substance or material that is regulated under any Environmental
Law, including petroleum and petroleum products, polychlorinated biphenyls,
asbestos-containing materials or toxic mold.

 

“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, the handling of Hazardous
Materials, transfers, disposals or other activities (or omissions) of or on
behalf of the Business, the Seller or any predecessor of the Seller, including
MeadWestvaco and Mead Corporation, prior to the Closing Date, including
Environmental Liabilities related to dioxin and furans, polychlorinated
biphenyls and chlorinated solvents and contamination related to the pre-Closing
removal of underground storage tanks (“USTs”) and including any
Environmental Liabilities relating to the Chillicothe Retained Properties as
that term is defined in the Chillicothe Services Agreement; provided, further,
that the term “Historical Off-Site Environmental Liabilities” shall not include
Straddle Environmental Liabilities.

 

“Historical On-Site Environmental Liabilities” means any
Environmental Liabilities arising from Environmental Conditions on or under the
Real Property existing prior to the Closing Date or that arise from operations,
practices, the handling of Hazardous Materials, transfers, disposals or other
activities (or omissions) of or on behalf of the Business, the Seller or any
predecessor of the Seller, including MeadWestvaco Corporation and Mead
Corporation, prior to the Closing Date, including Environmental Liabilities
related to dioxin and furans, polychlorinated biphenyls and chlorinated
solvents, and contamination related to the pre-Closing removal of USTs; provided,
however, that any Environmental Liabilities associated with subsurface
groundwater contaminated with Hazardous Materials that flows beneath a Real
Property, where such Hazardous Materials were not Released, or alleged to be
Released, from the Real Property or by the Business, is not considered a
Historical On-Site Environmental Liability; provided  further,
notwithstanding anything to the contrary in this Agreement, the Seller shall
have no liability for historical on-site asbestos-containing materials (other
than waste asbestos-containing material that is not in compliance with
Environmental Laws as of the Closing Date); provided  further that
the term “Historical On-Site Environmental Liabilities” shall not include
Straddle Environmental Liabilities.

 

“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act
of 1976 and the rules and regulations promulgated thereunder.

 

“Income Statements” means the combined statements of operations
of the Business and its predecessor (reflecting only the Purchased Assets and
the Assumed Liabilities) for the four-month period ended April 30, 2005, and
for the eight-month period ended December 31, 2005, copies of which are set forth
in Section 3.04(a)(ii) of the Disclosure Schedule.

 

5

 

“Income
Taxes” means Taxes imposed on or measured by reference to gross or net
income or receipts, and franchise, net worth, capital or other doing business
Taxes, including the commercial activities Tax of the State of Ohio.

 

“Indebtedness” means, with respect to any Person, (a) all
indebtedness of such Person, whether or not contingent, for borrowed money, (b)
all obligations of such Person for the deferred purchase price of property or
services, (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all obligations of
such Person as lessee under leases that have been or should be, in accordance
with GAAP, recorded as capital leases, (f) all obligations, contingent or
otherwise, of such Person under acceptance, letter of credit or similar
facilities, (g) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any capital stock of such Person or any
warrants, rights or options to acquire such capital stock, valued, in the case
of redeemable preferred stock, at the greater of its voluntary or involuntary liquidation
preference plus accrued and unpaid dividends and (h) all Indebtedness referred
to in clauses (a) through (g) above secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Encumbrance on property (including accounts and contract rights) owned by
such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.

 

“Indemnified Party” means a Purchaser Indemnified Party or a
Seller Indemnified Party, as the case may be.

 

“Indemnifying Party” means the Seller or Parent pursuant to
Section 8.02 or the Purchaser pursuant to Section 8.03, as the case may be.

 

“Intellectual Property” means: 
(i) patents, patent applications and statutory invention registrations;
(ii) trademarks, service marks, domain names, trade dress, logos, trade names,
corporate names and other identifiers of source or goodwill, including
registrations and applications for registration thereof and including the
goodwill of the business symbolized thereby or associated therewith; (iii)
copyrights, including copyrights in Computer Software and Internet Web content,
and registrations and applications for registration thereof; (iv) all other
proprietary information, including trade secrets, know-how and invention
rights, including records of invention; and (v) all rights to sue or recover
and retain damages and costs and attorneys’
fees for past, present and future infringement, dilution, misappropriation or
other violation of any of the foregoing.

 

“Inventories” means
all inventories and supplies of merchandise, works-in-process, finished
products, finished goods, raw materials, packaging materials, labels, supplies
and other personal property used by the Seller in the operation of the Business
or related to the Business and maintained, held or stored by or for the Seller
at the Closing, and any prepaid deposits for any of the same.

 

“IRS” means the
Internal Revenue Service of the United States.

 

6

 

“Knowledge”
means the actual knowledge of Matt Jesch, Doug Cooper, Jim Tyrone, John Kurila,
David Bonistall, Eric Johnson, Robert Campbell, Dan Clark, A. Keith Moore,
Linda Sheffield and Chuck Aardema after due inquiry.

 

“Laser License Agreement”
means that certain License Agreement effective as of the 30th day of April
2005, by and between MeadWestvaco and Parent, concerning methods and
applications for laser imaging.

 

“Law” means any
federal, national, supranational, state, provincial, local or similar statute,
law, ordinance, regulation, rule, code, order, requirement or rule of law
(including common law).

 

“Leased Real Property”
means the real property leased by Parent or any of its Affiliates, as tenant,
that is related to the Business, together with, to the extent leased by Parent
or any of its Affiliates (in connection with the Business), all buildings and
other structures, facilities or improvements currently or hereafter located
thereon, all fixtures of Parent or any of its Affiliates (related to the
Business) attached or appurtenant thereto and all easements, licenses, rights
and appurtenances relating to the foregoing.

 

“Liabilities” means
any and all debts, liabilities and obligations, whether accrued or fixed,
absolute or contingent, matured or unmatured or determined or determinable,
including those arising under any Law (including any Environmental Law), Action
or Governmental Order and those arising under any contract, agreement,
arrangement, commitment or undertaking.

 

“Licensed-Back
Intellectual Property” means Owned Carbonless Paper Business Intellectual
Property that is not used exclusively in connection with the Carbonless Paper
Business, including the Intellectual Property that is set forth on Section
1.01(a) of the Disclosure Schedule.

 

“Licensed Business
Intellectual Property” means Intellectual Property used in connection with
the Business as currently conducted that is licensed to Parent or any of its
Affiliates by any Person and that is not Licensed Carbonless Paper Business
Intellectual Property, including the Intellectual Property set forth on Section
1.01(b)(i) of the Disclosure Schedule; provided, however, with
respect to Computer Software, the term “Licensed Business Intellectual
Property” means only the Computer Software licensed to Parent or any of its
Affiliates that is set forth on Section 1.01(b)(ii) of the Disclosure Schedule.

 

“Licensed Carbonless Paper
Business Intellectual Property” means Intellectual Property used primarily
in connection with the Carbonless Paper Business as currently conducted that is
licensed to Parent or any of its Affiliates by any Person, including the
Intellectual Property set forth on Section 1.01(c)(i) of the Disclosure
Schedule; provided, however, with respect to Computer Software,
the term “Licensed Carbonless Paper Business Intellectual Property” means only
the Computer Software licensed to Parent or any of its Affiliates that is set
forth on Section 1.01(c)(ii) of the Disclosure Schedule.

 

“Material Adverse Effect”
means any circumstance, change in or effect on the Business or the Seller that,
individually or in the aggregate with all other circumstances, changes in or
effects on the Business or the Seller is, or is reasonably likely to be,
materially adverse to the 

 

7

 

business, results of operations or
financial condition of the Business; provided, however, that
“Material Adverse Effect” shall not include any circumstance, change in or
effect on, the Business or the Seller directly or indirectly arising out of or
attributable to (i) changes or effects that generally affect the industries in
which the Business operates to the extent they do not disproportionately affect
the Business, (ii) changes in general economic, regulatory or political
conditions that do not disproportionately affect the Business, (iii) changes in
Laws generally applicable to entities engaged in businesses similar to the
Business, (iv) changes or developments resulting from any actions taken by the
Purchaser, the Seller or Parent or any of their respective representatives in
accordance with the terms of this Agreement, or resulting from the Purchaser’s
withholding of consent to the Seller’s request to take any action prohibited by
Section 5.01 (but only to the extent such consent is unreasonably withheld or
delayed on the part of the Purchaser), (v) changes in financial, currency or
securities markets or the economy in general, (vi) changes or developments
resulting from acts of terrorism or war (whether or not declared) except to the
extent causing damage to the physical facilities of the Business or the
Transferred Employees, or (vii) changes in the Business consistent in amount
and timing with the downward trend in the Business previously disclosed by
Parent to the Purchaser.

 

“Mead License Agreement”
means that certain License Agreement (by Parent and the Seller to MeadWestvaco)
made and entered into as of April 30, 2005, by and between MeadWestvaco, Parent
and the Seller.

 

“Mead Licensed Carbonless
Paper Business Intellectual Property” means Intellectual Property that is
owned by Parent or any of its Affiliates and used primarily in connection with
the Carbonless Paper Business and that is licensed by Parent or its Affiliates
to MeadWestvaco pursuant to the Mead License Agreement, including the
Intellectual Property set forth in Section 1.01(d) of the Disclosure Schedule.

“MeadWestvaco” means
MeadWestvaco Corporation, a Delaware corporation.

 

“MeadWestvaco Trademark
License Agreement” means that certain Trademark License Agreement
(Transitional) made effective as of the 30th day of April, 2005, by
and between MeadWestvaco and the Seller.

 

“NewPage License Agreement”
means that certain License Agreement (by MeadWestvaco to Parent) made and
entered into as of April 30, 2005, by and between MeadWestvaco and Parent.

 

“Operating Sites”
means the list of properties set forth in Section 3.14(a) of the Disclosure
Schedule, which includes the following properties (addresses provided for
information only and do not constitute representations of any kind):

 

(a)           the Chillicothe mill, including the following real property,
buildings, and adjacent properties along 8th Street and Paint Street
in Chillicothe, Ohio:

 

(i)            the main mill located at 401
S. Paint Street, Chillicothe, Ohio 45601;

 

8

 

(ii)           the wood procurement building located at 327 S. Paint
Street, Chillicothe, Ohio 45601;

 

(iii)          the engineered products building located at 350 S. Paint
Street, Chillicothe, Ohio 45601;

 

(iv)          the offices on Paint Street located at 353 S. Paint Street,
Chillicothe, Ohio 45601;

 

(v)           the Chilpaco mill located at Corner Bridge and Eastern
Avenue, Chillicothe, Ohio 45601;

 

(vi)          the Fremont plant located at 2275 Commerce Drive, Fremont,
Ohio 43420;

 

(vii)         the research building located at 8th Street and
Hickory Street, Chillicothe, Ohio, 45601;

 

(viii)        the OPAS/annex building located at 1101 River Road,
Chillicothe, Ohio;

 

(b)           the two (2) woodyard areas in Ohio located at (i) 200
Schuster Road, Piketon, Ohio 45661 and (ii) Sternberger Road, Oak Hill, Ohio
45656; and

 

(c)           the three (3) woodyard areas in West Virginia located at (i)
100 Paper Drive, Washington, West Virginia 26181, (ii) Route 2 South, Millwood,
West Virginia 25262 and (iii) Old U.S. Route 21, Mineral Wells, West Virginia
26150.

 

“Owned Business
Intellectual Property” means Intellectual Property that is owned by Parent
or any of its Affiliates and used in connection with the Business as currently
conducted and that is not Owned Carbonless Paper Business Intellectual
Property, including the Intellectual Property set forth on Section 1.01(e) of
the Disclosure Schedule.

 

“Owned Carbonless Paper
Business Intellectual Property” means (a) Intellectual Property that is
owned by Parent or any of its Affiliates and used primarily in the Carbonless
Paper Business as currently conducted, including the Intellectual Property set
forth on Section 1.01(f) of the Disclosure Schedule, and (b) the Mead Licensed
Carbonless Paper Business Intellectual Property.

 

“Owned Real Property”
means the Operating Sites, together with all buildings and other structures,
facilities or improvements currently or hereafter located thereon, all fixtures
attached or appurtenant thereto and all easements, licenses, rights and
appurtenances relating to the foregoing.

 

“Permitted Encumbrances”
means such of the following as to which no enforcement, collection, execution,
levy or foreclosure proceeding shall have been commenced:  (a) liens for Taxes not yet due and payable
or which are being contested in good faith in proper proceedings; (b)
Encumbrances imposed by Law, such as materialmen’s, mechanics’, carriers’, 

 

9

 

workmen’s and repairmen’s liens and
other similar liens arising in the ordinary course of business securing
obligations that (i) are not overdue for a period of more than 30 days and (ii)
are not in excess of $50,000 in the case of a single property or $250,000 in
the aggregate at any time (which in no event shall include any Voluntary Seller
Encumbrances); (c) pledges or deposits to secure obligations under workers’
compensation laws or similar legislation or to secure public or statutory
obligations; and (d) all other Permitted Exceptions.

 

“Person” means any
individual, partnership, firm, corporation, limited liability company,
association, trust, unincorporated organization or other entity, as well as any
syndicate or group that would be deemed to be a person under Section 13(d)(3)
of the Securities Exchange Act of 1934, as amended.

 

“Post-Closing
Environmental Liabilities” means any Environmental Liabilities relating to
the Business or the Real Property that relate to events, actions, conditions or
circumstances that occur or arise after the Closing Date.

 

“Post-Closing Period” means any
taxable period (or portion thereof) beginning after the Closing Date.

 

“Pre-Closing Period” means any taxable
period (or portion thereof) ending on or prior to the Closing Date.

 

“Prime Rate” means the rate publicly
quoted from time to time by The Wall Street Journal as the “prime rate”
(or, if The Wall Street Journal ceases quoting a prime rate, the highest
per annum rate of interest published by the Federal Reserve Board in Federal
Reserve statistical release H.15 (519) entitled “Selected Interest Rates” as
the Bank prime loan rate or its equivalent).

 

“Property Taxes” means real and
personal ad valorem property Taxes and any other Taxes (other than Income
Taxes) imposed on a periodic basis against property or in respect of property
and measured by the level of any item.

 

“Purchase Price Bank
Account” means a bank account in the United States to be designated by the
Seller in a written notice to the Purchaser at least five Business Days before
the Closing.

 

“Purchaser’s Accountants”
means Deloitte & Touche LLP, independent accountants of the Purchaser.

 

“Real Property” means
the Leased Real Property and the Owned Real Property, but shall not include the
Chillicothe Retained Properties, as the term is defined in the Chillicothe
Services Agreement.

 

“Receivables” means
any and all accounts receivable, notes and other amounts receivable from third
parties, including customers and employees, arising from the conduct of the
Business before the Closing, whether or not in the ordinary course, together
with any unpaid financing charges accrued thereon.

 

10

 

“Reference Balance Sheet”
means the combined balance sheet of the Business and its predecessor
(reflecting only the Purchased Assets and the Assumed Liabilities), dated as of
December 31, 2005, together with the notes thereto, a copy of which is set
forth in Section 3.04(a)(i) of the Disclosure Schedule.

 

“Regulations” means
the Treasury Regulations (including Temporary Regulations) promulgated by the
United States Department of the Treasury with respect to the Code or other
federal tax statutes.

 

“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, sediment, 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.

 

“Reserved Pre-Closing
Environmental Liabilities” means any Environmental Liabilities (other than
Historical Off-Site Environmental Liabilities) relating to the Business or the
Real Property arising from any events, conditions or circumstances in existence
or occurring on or prior to the Closing Date, which Environmental Liabilities
are specifically identified and reserved for in the balance sheet, reserves,
capital expenditure budgets, accruals, transferred financial assurance
instruments, working capital statements or operating budget of the Business
disclosed to the Purchaser prior to the date hereof as set forth on Sections
8.02(g) or (i) of the Disclosure Schedule.

 

“Seller’s Accountants”
means PricewaterhouseCoopers LLP, independent accountants of the Seller.

 

“Shared Contracts”
means contracts or agreements in which (a) Parent or any of its Affiliates has
rights or Liabilities thereunder that relate to the Business (other than
contracts or agreements for the Computer Software set forth on Section
2.01(b)(ix)(2) of the Disclosure Schedule) including contracts and agreements
for Computer Software set forth on Section 1.01(b)(ii) of the Disclosure
Schedule, and (b) Parent or any of its Affiliates (other than the Seller) have
rights and Liabilities thereunder that do not relate to the Business.

 

“Straddle Environmental
Liabilities” means any Environmental Liabilities of the Business occurring
on any Real Property that arise from practices, activities, operating
procedures and courses of conduct that occurred prior to the Closing Date and
that the Purchaser continues or aggravates after the Closing Date.

 

11

 

“Straddle Environmental
Liability Claim Notice” means a claim submitted by a duly authorized
officer of the Purchaser or the Seller setting out with reasonable specificity
the basis for the claim with respect to an alleged Straddle Environmental
Liability, including, to the extent available, the following:  (a) the type, volume and concentration of any
Hazardous Material Released or otherwise involved with the subject Straddle
Environmental Liability; (b) the location, aerial extent, depth and media
impacted by any Release of Hazardous Materials associated with the subject
Straddle Environmental Liability; (c) the Environmental Laws violated or
otherwise giving rise to the subject Straddle Environmental Liability; (d) the
date and circumstances of discovery of the subject Straddle Environmental
Liability; (e) the name, address and other identifying information regarding
any third party or Governmental Authority involved with the subject Straddle
Environmental Liability; and (f) the anticipated cost of remedying the subject
Straddle Environmental Liability.  Either
party can dispute the adequacy hereunder of such a Straddle Environmental
Liability Claim Notice; provided that, any such written dispute shall
set forth in reasonable detail the basis for the dispute.  If after good faith efforts, the parties are
unable to resolve their dispute, they shall have the opportunity to present the
dispute to a committee consisting of one senior manager from each party with authority
to bind the Purchaser and the Seller, respectively, which committee shall
endeavor to resolve the dispute in good faith. 
If these efforts are not successful, the dispute shall be resolved by an
independent arbitrator, selected by the parties.  The independent arbitrator shall be jointly
retained and the Purchaser and the Seller will share equally the arbitrator’s
fees and expenses.  If the Purchaser and
the Seller are unable to agree on the selection of an arbitrator within three
months of the submittal of the subject Claim, either party may pursue any and
all rights and remedies, including any judicial remedy, relating to such Claim.

 

“Straddle Period” means any taxable
period beginning on or prior to and ending after the Closing Date.

 

“Tangible Personal Property” means any
machinery, equipment, tools, supplies, furniture, fixtures, personalty,
vehicles, rolling stock, office equipment, computer hardware, Computer Software
and other tangible personal property of the Seller or its Affiliates that is
used primarily in the Carbonless Paper Business and solely in the
Non-Carbonless Paper Business (wherever located) or otherwise owned or held by
the Seller or its Affiliates at the Closing for use primarily in the conduct of
the Carbonless Paper Business and solely in the conduct of the Non-Carbonless
Paper Business, other than Inventory.

 

“Target Working Capital” means
$87,000,000.

 

“Tax Returns” means
any return, declaration, report, election, claim for refund or information
return or other statement or form filed or required to be filed with any
Governmental Authority relating to Taxes, including any schedule or attachment
thereto or any amendment thereof.

 

“Taxes” means Income
Taxes, Property Taxes, Conveyance Taxes and any and all other taxes, fees, levies,
duties, tariffs, imposts, and other charges of any kind (together with any and
all interest, penalties, additions to tax and additional amounts imposed with
respect thereto) imposed by any Governmental Authority, including taxes or
other charges on or with respect to income, franchises, windfall or other
profits, gross receipts, property, sales, use, capital stock, 

 

12

 

payroll, employment, social
security, workers’ compensation, unemployment compensation, or net worth; taxes
or other charges in the nature of excise, withholding, ad valorem, stamp,
transfer, value added, or gains taxes; license, registration and documentation
fees; any transferee or secondary liability in respect of Taxes; and customs’ duties,
tariffs, and similar charges.

 

“Transition Services
Agreement” means the transition services agreement pursuant to which the
Purchaser, on the one hand, and the Seller, Parent and certain of its
Affiliates, on the other hand, provide certain services to the other party or
parties, substantially in the form attached hereto as Exhibit 1.01(f).

 

“Unaudited Financial
Statements” means the Reference Balance Sheet, the Income Statements, the
statements of combined equity of the Business and its predecessors (reflecting
only the Purchased Assets and the Assumed Liabilities) at April 30, 2005, and at
December 31, 2005, and the combined statements of cash flows of the Business
and its predecessor (reflecting only the Purchased Assets and the Assumed
Liabilities) for the four-month period ended April 30, 2005, and the eight-month
period ended December 31, 2005, copies of which are set forth in Section
3.04(a)(i) of the Disclosure Schedule.

 

“Workers’ Compensation
Liabilities” means all Liabilities relating to workers’ compensation for
injuries or illness incurred at the Operating Sites by persons currently or
previously employed in the Business whether before or following the Closing.

 

“Working Capital”
means current assets less the sum of (a) current liabilities and (b) Workers’
Compensation Liabilities (without duplication of any Workers’ Compensation
Liabilities that are current liabilities) other than any such Liabilities that
are categorized as “incurred but not reported” in accordance with GAAP as
calculated consistent with Section 1.01(g) of the Disclosure Schedule, in each
case calculated in accordance with GAAP; provided that (i) such current
assets shall not include any cash or cash equivalents or Excluded Assets, (ii)
current liabilities shall not include any Excluded Indebtedness, any Excluded
Liabilities or any Liabilities in respect of the commercial activities Tax and
sales and use Taxes of the State of Ohio and (iii) any deferred Taxes (whether
liabilities or assets) established to reflect timing differences between book
and Tax income shall be excluded.

 

SECTION 1.02.  Definitions.  The following terms have the meanings set
forth in the Sections set forth below:

 

	
  Definition

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
  “Allocation”

  	
   

  	
  2.03(b)

  
	
  “Allocation
  Accounting Firm”

  	
   

  	
  2.03(b)

  
	
  “Assumed
  Liabilities”

  	
   

  	
  2.02(a)

  
	
  “Business”

  	
   

  	
  Recitals

  
	
  “Business Records”

  	
   

  	
  2.01(a)(vi)

  
	
  “Carbonless
  Paper Business”

  	
   

  	
  Recitals

  
	
  “Change”

  	
   

  	
  8.07(e)

  
	
  “Closing”

  	
   

  	
  2.04

  

 

13

 

	
  Definition

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
  “Closing
  Date Working Capital”

  	
   

  	
  2.07(c)

  
	
  “Closing
  Date Working Capital Statement”

  	
   

  	
  2.07(c)

  
	
  “Coated
  Converting Agreement”

  	
   

  	
  5.21

  
	
  “Confidentiality
  Agreement”

  	
   

  	
  5.03(b)

  
	
  “Continuation
  Report”

  	
   

  	
  5.20(c)

  
	
  “Controlling
  Party”

  	
   

  	
  8.08(c)

  
	
  “Employee
  Amounts”

  	
   

  	
  6.05

  
	
  “Enterprise Zone Agreement”

  	
   

  	
  3.22

  
	
  “ERISA”

  	
   

  	
  3.19(a)

  
	
  “Estimated
  Closing Date Working Capital”

  	
   

  	
  2.07(a)

  
	
  “Estimated
  Closing Date Working Capital Statement”

  	
   

  	
  2.07(a)

  
	
  “Excluded
  Assets”

  	
   

  	
  2.01(b)

  
	
  “Excluded
  Indebtedness”

  	
   

  	
  2.02(b)(v)

  
	
  “Excluded
  Intellectual Property”

  	
   

  	
  2.01(b)(ix)

  
	
  “Excluded
  Liabilities”

  	
   

  	
  2.02(b)

  
	
  “Final
  Closing Date Working Capital”

  	
   

  	
  2.07(e)(ii)

  
	
  “Final
  Term”

  	
   

  	
  5.22(a)

  
	
  “Guarantees”

  	
   

  	
  5.04(f)

  
	
  “Independent
  Accounting Firm”

  	
   

  	
  2.07(e)(ii)

  
	
  “Initial
  Term”

  	
   

  	
  5.22(a)

  
	
  “Initial
  Transfer Amount”

  	
   

  	
  6.04(e)

  
	
  “Initial
  Transfer Date”

  	
   

  	
  6.04(e)

  
	
  “Interest
  Rate”

  	
   

  	
  2.07(d)(iii)

  
	
  “lease”

  	
   

  	
  3.12(a)

  
	
  “Letter
  of Credit”

  	
   

  	
  5.22(a)

  
	
  “Licenses
  and Permits”

  	
   

  	
  2.01(a)(xiii)

  
	
  “LIFO”

  	
   

  	
  3.07

  
	
  “Loss”

  	
   

  	
  8.02

  
	
  “Lowest-Cost
  Commercially Reasonable Manner”

  	
   

  	
  8.07(e)

  
	
  “Market
  Risk Period”

  	
   

  	
  6.04(g)

  
	
  “Material
  Contracts”

  	
   

  	
  3.12(a)

  
	
  “Money
  Market Vehicle”

  	
   

  	
  6.04(g)

  
	
  “Multiemployer
  Plan”

  	
   

  	
  3.19(b)

  
	
  “Multiple
  Employer Plan”

  	
   

  	
  3.19(b)

  
	
  “Non-Carbonless
  Paper Business”

  	
   

  	
  Recitals

  
	
  “Non-Controlling
  Party”

  	
   

  	
  8.08(c)

  
	
  “NPDES”

  	
   

  	
  7.02(j)

  
	
  “OHEPA”

  	
   

  	
  7.02(j)

  
	
  “Parent”

  	
   

  	
  Preamble

  
	
  “Permitted
  Exceptions”

  	
   

  	
  5.20(b)(ix)

  
	
  “Plans”

  	
   

  	
  3.19(a)

  
	
  “Purchase
  Price”

  	
   

  	
  2.03(a)

  
	
  “Purchased
  Assets”

  	
   

  	
  2.01(a)

  
	
  “Purchaser”

  	
   

  	
  Preamble

  
	
  “Purchaser
  Indemnified Party”

  	
   

  	
  8.02

  

 

14

 

	
  Definition

  	
   

  	
  Location

  
	
   

  	
   

  	
   

  
	
  “Purchaser’s
  Actuary”

  	
   

  	
  6.04(d)

  
	
  “Purchaser’s
  Hourly Pension Plan”

  	
   

  	
  6.04(a)

  
	
  “Purchaser’s
  Title Policies”

  	
   

  	
  5.20(a)

  
	
  “Qualification Document”

  	
   

  	
  6.04(a)

  
	
  “Restricted
  Period”

  	
   

  	
  5.06(a)

  
	
  “Retained
  Names and Marks”

  	
   

  	
  5.17(a)

  
	
  “Section
  414(l) Amount”

  	
   

  	
  6.04(d)

  
	
  “Seller”

  	
   

  	
  Preamble

  
	
  “Seller
  Indemnified Party”

  	
   

  	
  8.03

  
	
  “Seller’s
  Actuary”

  	
   

  	
  6.04(d)

  
	
  “Seller’s
  Hourly Pension Plan”

  	
   

  	
  6.04(a)

  
	
  “Seller’s
  Title Policies”

  	
   

  	
  5.20(a)

  
	
  “Stand-Alone
  Financial Statements”

  	
   

  	
  5.19

  
	
  “Straddle
  Environmental Liability Reserves”

  	
   

  	
  8.02(i)

  
	
  “Technology
  License Agreement”

  	
   

  	
  5.17(b)

  
	
  “Technology
  License-Back Agreement”

  	
   

  	
  5.17(c)

  
	
  “Technology
  Sub-License Agreement”

  	
   

  	
  5.17(d)

  
	
  “Temporary
  Trademark License Agreement”

  	
   

  	
  5.17(a)

  
	
  “Third
  Party Claim”

  	
   

  	
  8.05(b)

  
	
  “Title
  Companies”

  	
   

  	
  5.20(a)

  
	
  “Title
  Defect”

  	
   

  	
  5.20(d)

  
	
  “Title
  Endorsements”

  	
   

  	
  5.20(a)

  
	
  “Transfer
  Amount”

  	
   

  	
  6.04(d)

  
	
  “Transferred
  Benefit Liabilities”

  	
   

  	
  6.04(b)

  
	
  “Transferred
  Employee”

  	
   

  	
  6.01

  
	
  “True-Up
  Amount”

  	
   

  	
  6.04(e)

  
	
  “True-Up
  Date”

  	
   

  	
  6.04(e)

  
	
  “Voluntary
  Seller Encumbrances”

  	
   

  	
  5.20(d)

  

 

SECTION 1.03.  Interpretation and Rules of Construction.  In this Agreement, except to the extent
otherwise provided or that the context otherwise requires:

 

(a)           when a reference is made in this Agreement to an Article,
Section or Exhibit, such reference is to an Article or Section of, or Exhibit
to, this Agreement unless otherwise indicated;

 

(b)           the table of contents and headings for this Agreement are
for reference purposes only and do not affect in any way the meaning or
interpretation of this Agreement;

 

(c)           whenever the words “include,” “includes” or “including” are
used in this Agreement, they are deemed to be followed by the words “without
limitation”;

 

15

 

(d)           the words “hereof,” “herein” and “hereunder” and words of
similar import, when used in this Agreement, refer to this Agreement as a whole
and not to any particular provision of this Agreement;

 

(e)           all terms defined in this Agreement have the defined
meanings when used in any certificate or other document made or delivered pursuant
hereto, unless otherwise defined therein;

 

(f)            the definitions contained in
this Agreement are applicable to the singular as well as the plural forms of
such terms;

 

(g)           any Law defined or referred to herein or in any agreement or
instrument that is referred to herein means such Law or statute as from time to
time amended, modified or supplemented, including by succession of comparable
successor Laws;

 

(h)           references to a Person are also to its successors and
permitted assigns; and

 

(i)            the use of “or” is not
intended to be exclusive unless expressly indicated otherwise.

 

ARTICLE II

 

PURCHASE AND
SALE

 

SECTION 2.01.  Purchase and Sale of Purchased Assets.  (a) 
Upon the terms and subject to the conditions of this Agreement, at the
Closing, Parent shall, and shall cause the Seller and Parent’s other Affiliates
to, sell, assign, transfer, convey and deliver, or cause to be sold, assigned,
transferred, conveyed and delivered, to the Purchaser, and the Purchaser shall
purchase from such Persons, all of such Persons’ rights, title and interests in
and to the following assets (the “Purchased Assets”):

 

(i)            the Business as a going
concern, including all goodwill relating thereto;

 

(ii)           all the Owned Real Property and all rights in respect of the
Leased Real Property;

 

(iii)          all Tangible Personal Property;

 

(iv)          all Inventories at the Closing Date;

 

(v)           all Receivables at the Closing Date;

 

(vi)          to the extent permitted by applicable Law, all books of
account, general, financial, Tax (as provided under Section 2.01(a)(xiv)) and
personnel records, invoices, shipping records, supplier lists, correspondence
and other documents, records and files, including all management performance
records and historical, financial, sales, purchasing and operating data and
information related to the operation of the Business since January 1, 2003 (the
“Business Records”) owned, associated with or employed solely in the
conduct 

 

16

 

of the Business or
solely used in, or solely relating to, the Business at the Closing Date, unless
any of such documents are subject to confidentiality agreements limiting their
release and consent shall not have obtained to their release;

 

(vii)         all right, title and interest in, to and under the Owned
Carbonless Paper Business Intellectual Property and the Carbonless Paper
Business IP Agreements, subject, however, in the case of the Mead Licensed
Carbonless Paper Business Intellectual Property, to the Mead License Agreement;

 

(viii)        all claims, defenses, causes of action, choses in action,
rights of recovery, rights of reimbursement and rights of setoff of any kind
solely pertaining to or arising out of the Purchased Assets, the Assumed
Liabilities or the conduct of the Business following the Closing and inuring to
the benefit of Parent, the Seller or any of Parent’s other Affiliates;

 

(ix)           all sales and promotional literature, customer lists and
other sales-related materials owned, previously or currently used, associated
with or employed by Parent, the Seller or any of Parent’s other Affiliates at
the Closing Date for use solely in the conduct of the Carbonless Paper Business
(or copies thereof); provided, however, that Parent and its
Affiliates shall retain the right to use such lists in the conduct of its Non-Carbonless
Paper Business to the extent such use does not violate Section 5.06 of this
Agreement;

 

(x)            all rights under the Material
Contracts and under any other contracts or agreements that primarily relate to
the Carbonless Paper Business or that solely relate to the Non-Carbonless Paper
Business, including all contracts, purchase orders or other agreements relating
to the purchase of materials, equipment, services, supplies, warehousing and
transportation that primarily relate to the Carbonless Paper Business or that
solely relate to the Non-Carbonless Paper Business;

 

(xi)           all rights of the Seller under the (x) Chillicothe Services
Agreement and (y) Environmental Annex;

 

(xii)          rights under the Shared Contracts as set forth in Section
5.04(e);

 

(xiii)         all municipal, state and federal franchises, permits,
licenses, agreements, waivers and authorizations held or used in connection
with, or required for, the Business (the “Licenses and Permits”), to the
extent transferable;

 

(xiv)        copies of all Tax records (including Tax Returns and related
work papers) relating to the Purchased Assets or the Business, other than Tax
records relating to Income Taxes of Parent or any of its Affiliates;

 

(xv)         all rights of the Seller and Parent under the collective
bargaining agreements listed on Section 2.01(a)(xv) of the Disclosure Schedule;

 

(xvi)        all refunds, credits, rebates or similar payments of Taxes
for Post-Closing Periods and similar Tax items set forth as an asset on the
Closing Date Working Capital Statement;

 

17

 

(xvii)       to the extent assignable, any insurance policies or rights
to coverage thereunder, if any, related to any of the Purchased Assets acquired
by Parent or any of its Affiliates pursuant to the Equity and Purchase Asset
Agreement;

 

(xviii)      assets of any Plan required to be transferred in accordance
with Article VI; and

 

(xix)         all rights, title and interests of Parent, the Seller and
Parent’s other Affiliates on the Closing Date in, to and under all other assets,
rights and claims of every kind and nature used or intended to be used
primarily in the operation of the Carbonless Paper Business or solely in
connection with the Non-Carbonless Paper Business.

 

(b)           Excluded Assets.  Notwithstanding anything in Section 2.01(a)
to the contrary, none of the Seller, Parent or any of its Affiliates shall
sell, assign, transfer, convey or deliver, or cause to be sold, assigned,
transferred, conveyed or delivered, to the Purchaser, and the Purchaser shall
not purchase, and the Purchased Assets shall not include, any of the Seller’s,
Parent’s or any of its Affiliates’ rights, title and interests to the following
assets (the “Excluded Assets”):

 

(i)            all cash, cash equivalents,
bank deposits, investment accounts, certificates of deposit, securities or
similar cash items, and negotiable instruments of Parent, the Seller or any of
Parent’s other Affiliates on hand, in lock boxes, in financial institutions or
elsewhere;

 

(ii)           except as otherwise expressly included in the Purchased
Assets, all assets, business lines, properties, rights, contracts and claims of
Parent or any of its Affiliates not used or held for use primarily in the
conduct of the Carbonless Paper Business or solely in the conduct of the
Non-Carbonless Paper Business; provided that it is understood and agreed
that this Section 2.01(b)(ii) is not intended to and does not change or
otherwise affect assets to be conveyed to the Purchaser under Section
2.01(a)(i), (ii), (vii) or (x);

 

(iii)          the Purchase Price Bank Account;

 

(iv)          all rights of Parent or any of its Affiliates under this
Agreement and the Ancillary Agreements;

 

(v)           Tax records of Parent, the Seller or any of Parent’s other
Affiliates (including Tax Returns and related work papers), other than those
relating to the Purchased Assets or the Business (except to the extent copies
have been provided to the Purchaser under Section 2.01(a)(xiv) or relating to
Income Taxes of Parent or any of its Affiliates);

 

(vi)          except as expressly provided in Article VI of this Agreement,
any assets of any Plan;

 

(vii)         all refunds, credits, rebates or similar payments of
Excluded Taxes (other than any similar Tax items set forth as an asset on the
Closing Date Working Capital Statement);

 

18

 

(viii)        any and all
insurance policies, binders and claims of Parent or any of its Affiliates and
rights thereunder relating to, or otherwise in respect of, the Excluded Assets
or any Excluded Liability, including with respect to any insurance settlement
agreements, and the proceeds thereof and all prepaid insurance premiums;

 

(ix)           except as provided in Section 5.17, all right, title and
interest in the “NewPage” mark, the “Sterling Ultra” mark and any name,
trademark, trade dress, internet address, trade name, service mark or logo, or
any derivation of any of the foregoing, together with all of the goodwill
represented thereby, or pertaining thereto listed on Section 2.01(b)(ix)(1) of
the Disclosure Schedule, all right, title and interest in and to the Business
Intellectual Property, and all right, title and interest in and to the
Intellectual Property set forth on Section 2.01(b)(ix)(2) of the Disclosure
Schedule (collectively, the “Excluded Intellectual Property”);

 

(x)            copies of any books, records
and other materials that Parent or any of its Affiliates is required by Law to
retain and all “NewPage” marked sales and promotional materials and brochures;

 

(xi)           all claims, defenses, causes of action, choses in action or
claims of any kind that are available to or being pursued by Parent or any of
its Affiliates whether as plaintiff, claimant, counterclaimant or otherwise, to
the extent relating to Excluded Assets or Excluded Liabilities; and

 

(xii)          except as set forth on Section 2.01(b)(xii) of the Disclosure
Schedule, all intercompany receivables, payables, loans and investments between
the Seller, on the one hand, and any of its Affiliates, on the other hand.

 

SECTION 2.02.  Assumption and Exclusion of Liabilities.  (a) 
Upon the terms and subject to the conditions of this Agreement, at the
Closing, the Purchaser shall assume and shall agree to pay, perform and
discharge the following Liabilities of Parent, the Seller and any of Parent’s
other Affiliates (the “Assumed Liabilities”):

 

(i)            all Liabilities reflected on
the Closing Date Working Capital Statement finally resolved in accordance with
Section 2.07(e)(ii), including Workers’ Compensation Liabilities;

 

(ii)           all Liabilities of Parent or its Affiliates arising under
the contracts and agreements assumed by the Purchaser pursuant to Sections
2.01(a)(x) and (xi) (other than Liabilities or obligations attributable to any
failure by Parent or its Affiliates to comply with the terms thereof prior to
the Closing Date);

 

(iii)          any liabilities relating to a Plan that are to be assumed
pursuant to the express terms of Article VI;

 

(iv)          solely to the extent provided in Article VIII, Post-Closing
Environmental Liabilities, Historical On-Site Environmental Liabilities, and
Straddle Environmental Liabilities;

 

19

 

(v)           all Liabilities assigned to the Purchaser under Article VI;

 

(vi)          all accounts and trade payables, in each case to the extent
such Liabilities are reflected, or are expressly reserved for, in the Closing
Date Working Capital Statement;

 

(vii)         all Liabilities that the Purchaser expressly has assumed or
agreed to pay, or be responsible for, pursuant to the terms hereof or of any
Ancillary Agreement;

 

(viii)        all Liabilities of the Seller arising from commitments (in
the form of accepted purchase orders), or outstanding quotations, proposals or
bids to (A) sell products or (B) purchase or acquire raw materials, components,
supplies or services (provided that, in each case, with respect to such
commitments, outstanding quotations, proposals or bids arising between the date
hereof and the Closing Date, such commitments, outstanding quotations,
proposals or bids have been made in accordance with Section 5.01 hereof);

 

(ix)           all Taxes for Post-Closing
Periods relating to the Purchased Assets or the Business and, without
duplication of any Taxes included under Section 2.02(a)(i), any Taxes relating to
the Purchased Assets or the Business for a Pre-Closing Period to the extent an
amount for any such Tax is set forth as a Liability on the Closing Date Working
Capital Statement, in each case, other than Excluded Taxes; and

 

(x)            all
Workers’ Compensation Liabilities.

 

(b)           Notwithstanding
subsection (a) above to the contrary, Parent, the Seller and Parent’s other Affiliates shall
retain, and shall be responsible for paying, performing and discharging when
due, and the Purchaser shall not assume or have any responsibility for, all
Liabilities as of the Closing other than the Assumed Liabilities (the “Excluded
Liabilities”), including:

 

(i)            all Liabilities relating to,
resulting from, caused by or arising out of, directly or indirectly, the
conduct of the Business or any Purchased Assets prior to the Closing Date,
except for any Liabilities expressly assumed under Section 2.02(a) and any
Liabilities related to the Employee Amounts;

 

(ii)           all Excluded Taxes;

 

(iii)          all Liabilities arising out of or relating to the Excluded
Assets;

 

(iv)          except to the extent such are Assumed Liabilities and
subject to the provisions set forth in Article VIII, all Environmental
Liabilities; provided, however, with respect to Historical
Off-Site Environmental Liabilities, such liabilities shall be subject to the
procedures set forth in Section 8.07;

 

(v)           any Indebtedness of the Business (the “Excluded
Indebtedness”);

 

(vi)          except for Workers’ Compensation Liabilities, any
Liabilities relating to any current or former employees, independent
contractors, officers or agents of the Seller other than the Transferred
Employees;

 

20

 

(vii)         except (A) as and to the extent expressly provided in
Article VI and (B) for Workers’ Compensation Liabilities, any Liabilities
relating to the Plans and any Liabilities relating to the Transferred Employees
incurred prior to the Closing Date;

 

(viii)        all Liabilities for which Parent or any of its Affiliates
expressly has retained or agreed to pay, or be responsible for, pursuant to the
terms hereof or of any Ancillary Agreement;

 

(ix)           all intercompany receivables, payables, loans and
investments related to the Business;

 

(x)            all Liabilities assigned to
or retained by the Seller under Article VI; and

 

(xi)           all Liabilities to the extent arising out of Actions
relating to the matters constituting Excluded Liabilities specified in the
foregoing clauses (i) – (x) of this Section 2.02(b).

 

SECTION 2.03.  Purchase Price; Allocation of Purchase
Price.  (a)  Subject to the adjustments set forth in
Section 2.07, the purchase price for the Purchased Assets shall be $80 million
(such amount less the Employee Amounts, the “Purchase Price”).  The Purchaser shall deduct $250,000 from the
Purchase Price in respect of the commercial activities Tax and sales and use
Taxes of the State of Ohio and such amount shall be remitted by the Purchaser
to the appropriate Governmental Authority on a timely basis or at the request
of the Seller, if permitted by applicable Law, paid over by the Purchaser to
the Seller upon delivery by the Seller to the Purchaser of an official receipt,
certification or other statement from the Governmental Authority that such
Taxes have been paid to the Governmental Authority on a timely basis or that no
such Taxes are due.

 

(b)           The sum of the Purchase Price and the Assumed Liabilities
and any other consideration payable by the Purchaser hereunder shall be
allocated among the Purchased Assets as of the Closing in accordance with
Section 1060 of the Code and the Regulations thereunder (the “Allocation”).  Within 30 Business Days after the
finalization of any Purchase Price adjustment pursuant to Section 2.07 but in
any event, no later than 90 calendar days after the Closing Date, the Purchaser
shall provide the Seller with a proposed Allocation for the Seller’s review and
comment.  If the Seller does not provide
any comments to the Purchaser in writing within 45 Business Days following
delivery by the Purchaser of the proposed Allocation, then the Allocation
proposed by the Purchaser shall be deemed to be final and binding absent
manifest error.  If, however the Seller
submits comments to the Purchaser within such 45-Business Day period, the
Purchaser and the Seller shall negotiate in good faith to resolve any
differences within 30 Business Days.  If
the Seller and the Purchaser are unable to reach a resolution within such 30-Business
Day period, then all remaining disputed items shall be submitted for resolution
by an internationally recognized, independent accounting firm mutually selected
by the Purchaser and the Seller (the “Allocation Accounting Firm”),
which shall make a final determination as to the disputed items within 30
Business Days after such submission, and such determination shall be final,
binding and conclusive on the Seller and the Purchaser absent manifest
error.  The fees and disbursements of the
Allocation Accounting Firm shall be shared equally between the Seller and the
Purchaser.  Any subsequent adjustments to
the sum of the Purchase Price and Assumed Liabilities and any other 

 

21

 

consideration payable by the Purchaser hereunder shall be reflected in
the Allocation in a manner consistent with Section 1060 of the Code and the
Regulations thereunder.  For all Tax
purposes, each of the Purchaser, Parent and the Seller agree that the
transactions contemplated in this Agreement shall be reported in a manner
consistent with the terms of this Agreement, including the Allocation, and that
none of them will take any position inconsistent therewith in any Tax Return,
in any refund claim, in any litigation, or otherwise.  Each of Parent, and the Seller, on the one
hand, and the Purchaser, on the other hand, agrees to cooperate with the other
in preparing IRS Form(s) 8594, and to furnish the other with a copy of such
Form(s) prepared in draft form within a reasonable period before its filing due
date, but in any event no later than 120 calendar days after the Closing Date.

 

SECTION 2.04.  Closing.  Subject to the terms and conditions of this
Agreement, the sale and purchase of the Purchased Assets and the assumption of
the Assumed Liabilities contemplated by this Agreement shall take place at a
closing (the “Closing”) to be held at the offices of Shearman &
Sterling LLP, 599 Lexington Avenue, New York, New York at 10:00 A.M. New York
time on the last Business Day of the calendar month in which all conditions to
the obligations of the parties set forth in Article VII shall have been waived
or satisfied or at such other place or at such other time or on such other date
as the Seller and the Purchaser may mutually agree upon in writing; provided
that if the Closing occurs on March 31, 2006, it shall be effective as of April
1, 2006.

 

SECTION 2.05.  Closing Deliveries by the Seller.  At the Closing, the Seller shall deliver or
cause to be delivered to the Purchaser:

 

(a)           the Bill of Sale, the Deeds with all required documentary
and Conveyance Tax stamps affixed or paid in connection with the Closing (or
the proper amounts delivered to the Title Companies to be paid) and such other
instruments, in form and substance reasonably satisfactory to the Purchaser, as
may be required to transfer the Purchased Assets to the Purchaser or evidence
such transfer on the public records;

 

(b)           counterparts of each Ancillary Agreement to which Parent,
the Seller or any of Parent’s other Affiliates is a party, duly executed by
Parent, the Seller or such Affiliate, as the case may be;

 

(c)           affidavits of title and such other affidavits in form
reasonably satisfactory to the parties as may be required by the Title Company
in connection with the conveyance of the Owned Real Property;

 

(d)           a receipt for the Purchase Price;

 

(e)           a true and complete copy, certified by the Secretary or an
Assistant Secretary of Parent, the Seller or any of Parent’s other Affiliates,
as the case may be, of the resolutions duly and validly adopted by the Board of
Directors of each of such Person and the stockholder of the Seller evidencing
their authorization of the execution and delivery of this Agreement or any of
the Ancillary Agreements, as applicable, and the consummation of the transactions
contemplated hereby and thereby;

 

22

 

(f)            a
certificate of the Secretary or an Assistant Secretary of each of Parent, the
Seller and any of Parent’s other Affiliates certifying the names and signatures
of the officers of such Person, as the case may be, authorized to sign this
Agreement or any of the Ancillary Agreements, as applicable, and the other
documents to be delivered hereunder and thereunder;

 

(g)           a certificate of a duly
authorized officer of each of the Seller and Parent certifying as to the
matters set forth in Section 7.02(a); and

 

(h)           a certificate of non-foreign
status for each of Parent, the Seller and any of Parent’s other Affiliates
transferring Purchased Assets (in a form reasonably acceptable to the
Purchaser) pursuant to Section 1.1445-2(b)(2) of the Regulations.

 

SECTION 2.06.  Closing
Deliveries by the Purchaser.  At the
Closing, the Purchaser shall deliver to the Seller:

 

(a)           the Purchase Price by wire
transfer in immediately available funds to the Purchase Price Bank Account;

 

(b)           counterparts of each
Ancillary Agreement to which the Purchaser is a party duly executed by the
Purchaser;

 

(c)           a true and complete copy,
certified by the Secretary or an Assistant Secretary of the Purchaser, of the
resolutions duly and validly adopted by the Board of Directors of the Purchaser
evidencing its authorization of the execution and delivery of this Agreement
and the Ancillary Agreements to which it is a party and the consummation of the
transactions contemplated hereby and thereby;

 

(d)           a certificate of the
Secretary or an Assistant Secretary of the Purchaser certifying the names and
signatures of the officers of the Purchaser authorized to sign this Agreement
and the Ancillary Agreements and the other documents to be delivered hereunder
and thereunder; and

 

(e)           a certificate of a duly
authorized officer of the Purchaser certifying as to the matters set forth in
Section 7.01(a).

 

SECTION 2.07.  Adjustment
of Purchase Price.  The Purchase
Price shall be subject to adjustment as specified in this Section 2.07:

 

(a)           Estimated
Closing Date Working Capital Statement.  At least five Business Days prior to the
Closing Date, Parent shall prepare, or cause to be prepared and delivered to
the Purchaser, a good faith estimated statement of Working Capital of the
Business as of the close of business on the Closing Date (the “Estimated
Closing Date Working Capital Statement”), setting forth a good faith
estimate of Working Capital as of the close of business on the Closing Date
(the “Estimated Closing Date Working Capital”), and the calculation
thereof.  The Estimated Closing Date
Working Capital Statement shall be prepared in a manner consistent with the
Reference Balance Sheet except as set forth in the definition of Working
Capital.

 

23

 

(b)           Closing
Date Purchase Price Adjustment. 
On the Closing Date, a Purchase Price adjustment shall be made as
follows:

 

(i)            in
the event that the Estimated Closing Date Working Capital reflected on the
Estimated Closing Date Working Capital Statement is less than the Target
Working Capital, then the Purchase Price shall be adjusted downward in an
amount equal to such difference; and

 

(ii)           in the event that the
Estimated Closing Date Working Capital reflected on the Estimated Closing Date
Working Capital Statement exceeds the Target Working Capital, then the Purchase
Price shall be adjusted upward in an amount equal to such excess.

 

(c)           Closing
Date Working Capital Statement. 
As promptly as practicable, but in any event within 60 calendar days
following the Closing, the Seller shall deliver to the Purchaser a statement of
Working Capital of the Business as of the close of business on the Closing Date
(as such may be adjusted following resolution of disputes in accordance with
Section 2.07(e), the “Closing Date Working Capital Statement”), setting
forth the Working Capital of the Business as of the close of business on the
Closing Date (the “Closing Date Working Capital”), and the calculation
thereof.  The Closing Date Working
Capital Statement shall be prepared in a manner consistent with the Reference
Balance Sheet except as set forth in the definition of Working Capital.  The Closing Date Working Capital Statement
shall be deemed final for the purposes of this Section 2.07 upon the earliest
of (x) the failure of the Purchaser to notify the Seller of a dispute within 60
calendar days of the Seller’s delivery of the Closing Date Working Capital
Statement to the Purchaser, (y) the written resolution of all disputes,
pursuant to Section 2.07(e)(ii), by the Seller and the Purchaser, and (z) the
written resolution of all disputes, pursuant to Section 2.07(e)(ii), by the
Independent Accounting Firm.

 

(d)           Post-Closing
Purchase Price Adjustment. 
Within three Business Days after the Closing Date Working Capital
Statement being deemed final, a Purchase Price adjustment shall be made as
follows:

 

(i)            in
the event that the Closing Date Working Capital reflected on the Closing Date
Working Capital Statement is less than the Estimated Working Capital, then the
Purchase Price shall be adjusted downward in an amount equal to such
difference;

 

(ii)           in the event that the Closing
Date Working Capital reflected on the Closing Date Working Capital Statement
exceeds the Estimated Closing Date Working Capital, then the Purchase Price
shall be adjusted upward in an amount equal to such excess;

 

(iii)          to the extent a net downward
adjustment is made to the Purchase Price, the Seller shall pay, within three
Business Days of such determination, the amount of such difference to the
Purchaser by wire transfer in immediately

 

24

 

available funds together with
interest thereon at a rate per annum equal to the sum of (A) the Prime Rate and
(B) 1% (the “Interest Rate”); and

 

(iv)          to the extent a net upward
adjustment is made to the Purchase Price, the Purchaser shall pay, within three
Business Days of such determination, the amount of such excess to the Seller by
wire transfer in immediately available funds together with interest thereon at
the Interest Rate.

 

(e)           Disputes.  (i) 
Subject to the Purchaser’s right to dispute the Closing Date Working
Capital Statement in accordance with clause (ii) of this Section 2.07(e), the
Closing Date Working Capital Statement delivered by the Seller to the Purchaser
shall be final, conclusive and binding on the parties hereto.

 

(ii)           The Purchaser may dispute
items reflected in the calculation of the Closing Date Working Capital, but only
on the basis that such amounts were not arrived at in a manner consistent with
the preparation of the Reference Balance Sheet, were arrived at based on
mathematical or clerical error or were otherwise not prepared in accordance
with this Agreement; provided, however, that the Purchaser shall
have notified the Seller and the Seller’s Accountants in writing of each
disputed item, specifying the estimated amount thereof in dispute and setting
forth, in reasonable detail, the basis for such dispute, within 45 calendar
days of the Seller’s delivery of the Closing Date Working Capital Statement to
the Purchaser.  In the event of such a
dispute, the Seller and the Purchaser shall attempt to reconcile their
differences, and any written resolution by them as to any disputed amounts
shall be final, conclusive and binding on the parties hereto.  If the Seller and the Purchaser are unable to
reach a resolution with such effect within 20 Business Days after the receipt
by the Seller and the Seller’s Accountants of the Purchaser’s written notice of
dispute and the items remaining in dispute are such that the Purchase Price
would be adjusted, the Seller’s Accountants and the Purchaser’s Accountants
shall submit the items remaining in dispute for resolution to KPMG (the “Independent
Accounting Firm”), which shall, within 30 calendar days after such
submission, determine and report to the Seller and the Purchaser upon such
remaining disputed items, and such report shall be final, conclusive and
binding on the Seller and the Purchaser, absent fraud or manifest error.  Any amounts payable pursuant to this Section
2.07 that are not in dispute shall be paid in accordance with paragraph (d) of
this Section 2.07.  The fees and
disbursements of the Independent Accounting Firm shall be allocated between the
Seller and the Purchaser in the same proportion that the aggregate amount of
such remaining disputed items so submitted to the Independent Accounting Firm
that is unsuccessfully disputed by each such party (as finally determined by
the Independent Accounting Firm) bears to the total amount of such remaining
disputed items so submitted.  The term “Final
Closing Date Working Capital” shall mean the definitive Closing Date
Working Capital agreed to (or deemed to be agreed to) by the Purchaser and the
Seller in accordance with the terms of this Section 2.07(e) or resulting from
the determinations made by the Independent Accounting Firm in accordance with
this Section 2.07(e) (in addition to those items theretofore agreed by the
Purchaser and the Seller).

 

25

 

(iii)          In acting under this
Agreement, the Seller’s Accountants, the Purchaser’s Accountants and the
Independent Accounting Firm shall be entitled to the privileges and immunities
of arbitrators.

 

(f)            Access.  From the date hereof until the Closing Date,
and thereafter in connection with the preparation of the Closing Date Working
Capital Statement, the Seller and Parent shall, and shall cause their
respective employees and advisors, including the Seller’s Accountants, to,
afford the Purchaser and its employees and advisors, including the Purchaser’s
Accountants, access upon reasonable notice and during normal business hours to
the Seller’s and Parent’s respective employees and advisors and to the books,
papers, records and other documents, including work papers of the Seller’s
Accountants (to the extent the Seller’s Accountants agree to provide such work
papers), relating to the preparation of the Reference Balance Sheet, the
Estimated Closing Date Working Capital Statement and the Closing Date Working
Capital Statement.

 

(g)           Following the Seller’s
delivery of the Closing Date Working Capital Statement to the Purchaser, the
Purchaser shall, and shall cause its respective employees and advisors,
including the Purchaser’s Accountants, to, afford the Seller and Parent and
their respective employees and advisors, including the Seller’s Accountants,
access upon reasonable notice and during normal business hours to the
Purchaser’s employees and advisors and to the books, papers, records and other
documents, including work papers of the Purchaser’s Accountants (to the extent
the Purchaser’s Accountants agree to provide such work papers), relating to the
preparation of disputed items.

 

ARTICLE III

 

REPRESENTATIONS AND WARRANTIES

OF THE SELLER AND PARENT

 

As an inducement to the Purchaser to enter into this
Agreement, each of the Seller and Parent hereby jointly and severally
represents and warrants to the Purchaser as follows:

 

SECTION 3.01.  Organization,
Authority and Qualification.  Each of
the Seller and Parent is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware and has all necessary
corporate power and authority to enter into this Agreement and the Ancillary
Agreements, to the extent applicable, to carry out its obligations hereunder
and thereunder, to the extent applicable, and to consummate the transactions
contemplated hereby and thereby, to the extent applicable.  Each of the Seller and Parent is duly
licensed or qualified to do business and is in good standing in each
jurisdiction which the properties owned or leased by it or the operation of its
business makes such licensing or qualification necessary, except to the extent
that the failure to be so licensed or qualified and in good standing would not
adversely affect (a) the ability of such Person to carry out its obligations
under, and to consummate the transactions contemplated by, this Agreement and
the Ancillary Agreements, to the extent applicable, and (b) the ability of the
Seller to conduct the Business.  The
execution and delivery of this Agreement and the Ancillary Agreements by the
Seller and Parent, to the extent applicable, the performance by each of the
Seller and Parent of its obligations hereunder and thereunder, to the extent
applicable, and the consummation by each of the Seller and Parent of the
transactions contemplated hereby

 

26

 

and thereby,
to the extent applicable, have been duly authorized by all requisite action on
the part of the Seller and Parent.  This
Agreement has been, and upon their execution the Ancillary Agreements shall
have been, duly executed and delivered by the Seller and Parent, to the extent
applicable, and (assuming due authorization, execution and delivery by the
Purchaser) this Agreement constitutes, and upon their execution the Ancillary
Agreements shall constitute, legal, valid and binding obligations of the Seller
and Parent, enforceable against the Seller and Parent in accordance with their
respective terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar Laws
affecting the enforcement of creditors’ rights generally, and general
principles of equity (regardless of whether such enforceability is considered
in a proceeding in Law or equity).

 

SECTION 3.02.  No
Conflict.  Assuming that all
consents, approvals, authorizations and other actions described in Section 3.03
have been obtained and all filings and notifications listed in Section 3.03 of
the Disclosure Schedule have been made and any applicable waiting period has
expired or been terminated, the execution, delivery and performance of this
Agreement and the Ancillary Agreements by the Seller and Parent do not and will
not (a) violate, conflict with or result in the breach of any provision of the
charter or by-laws or similar organizational documents of the Seller or Parent,
or (b) conflict with or violate any Law or Governmental Order applicable to the
Seller or Parent, or any of their respective assets, properties or businesses,
including the Business, or (c) except as set forth in Section 3.02 of the
Disclosure Schedule, conflict with, result in any breach of, constitute a
default (or event which with the giving of notice or lapse of time, or both,
would become a default) under, require any consent under, or give to others any
rights of termination, amendment, acceleration, suspension, revocation or
cancellation of or additional rights under, or result in the creation of any
Encumbrance on any of the Purchased Assets pursuant to, any Material Contract,
except, in the case of clause (b) or (c), as would not have a Material Adverse
Effect or prevent or materially delay the consummation by the Seller or Parent
of the transactions contemplated hereby.

 

SECTION 3.03.  Governmental
Consents and Approvals.  The
execution, delivery and performance of this Agreement and each Ancillary
Agreement by each of the Seller and Parent do not and will not require any
consent, approval, authorization or other order of, action by, filing with or
notification to, any Governmental Authority, except (a) as described in Section
3.03 of the Disclosure Schedule, (b) the pre-merger notification and waiting
period requirements of the HSR, (c) pursuant to the applicable rules of the
German Act against Restraints of Competition Act and (d) where failure to
obtain such consent, approval, authorization or action, or to make such filing
or notification, would not prevent or materially delay the consummation by the
Seller and Parent of the transactions contemplated by this Agreement or would
not have a Material Adverse Effect.  The
Seller and Parent filed a Notification and Report Form under the HSR Act with
respect to the transactions contemplated hereby on January 26, 2006.

 

SECTION 3.04.  Financial
Information; Books and Records. 
(a)  (i) A true and complete copy
of the Unaudited Financial Statements has been delivered by the Seller to the
Purchaser.  The Unaudited Financial
Statements (A) have been prepared in accordance with the books of account and
other financial records of the Seller, (B) present fairly in all material
respects the financial condition, results of operations and cash flows of the
Business as of the date thereof or for the period covered thereby, (C) have
been prepared in accordance with GAAP applied on a basis consistent with the
past practices of the Seller and its predecessors and (D) includes all

 

27

 

adjustments
(consisting only of normal recurring accruals) that are necessary for a fair
presentation of the financial condition, results of operations and cash flows
of the Business as of the date thereof or for the period covered thereby.

 

 

(ii)           The Stand-Alone Financial
Statements will (A) be prepared in accordance with the books of account and
other financial records of the Seller, (B) present fairly the financial
condition of the Business as of the date thereof or for the period covered
thereby, (C) be prepared in accordance with GAAP applied on a basis consistent
with the past practices of the Seller and its predecessors and (D) include all
adjustments (consisting only of normal recurring accruals) that are necessary
for a fair presentation of the financial condition of the Business as of the
date thereof or for the period covered thereby.

 

(b)            The books of account and
other financial records of the Business: 
(i) reflect all items of income and expense and all assets and
Liabilities required to be reflected therein in accordance with GAAP applied on
a basis consistent with the past practices of the Seller, (ii) are in all
material respects complete and correct, and do not contain or reflect any
material inaccuracies or discrepancies and (iii) have been maintained in
accordance with good business and accounting practices.

 

SECTION 3.05.  Absence
of Undisclosed Liabilities.  There
are no Liabilities of the Business that would be required to be disclosed on
the balance sheet of the Business or the notes thereto in accordance with GAAP,
other than Liabilities (a) reflected or reserved against on the Reference
Balance Sheet, (b) set forth in Section 3.05 of the Disclosure Schedule, (c)
incurred since December 31, 2005, in the ordinary course of business consistent
with past practice, of the Seller and which do not have a Material Adverse
Effect or (d) solely relating to the Excluded Assets or the Excluded
Liabilities.  The true and accurate
amounts of the Liabilities are reflected on the Reference Balance Sheet, other
than Liabilities relating to the Excluded Assets and Excluded Liabilities, and
such amounts have been established on a basis consistent with the past
practices of the Seller and in accordance with GAAP.

 

SECTION 3.06.  Receivables.  Section 3.06 of the Disclosure Schedule
contains an aged list of the Receivables as of December 31, 2005, showing
separately those Receivables that as of such date had been outstanding for (a)
29 days or less, (b) 30 to 59 days, (c) 60 to 89 days, (d) 90 to 119 days and
(e) more than 119 days.  Except to the
extent, if any, reserved for on the Reference Balance Sheet, all Receivables
reflected on the Reference Balance Sheet arose from, and the Receivables
existing as of the Closing will have arisen from, the sale of Inventory or
services to third parties, including customers and employees, and in the
ordinary course of business consistent with past practice and, except as
reserved against on the Reference Balance Sheet, constitute or will constitute,
as the case may be, only valid, undisputed claims of the Seller not subject to
valid claims of setoff or other defenses or counterclaims other than normal
cash discounts accrued in the ordinary course of business consistent with past
practice.

 

SECTION 3.07.  Inventories.  Subject to amounts reserved therefor on the
Reference Balance Sheet, the values at which all Inventories are carried on the
Reference Balance Sheet reflect the historical inventory valuation policy of
the Seller of stating such Inventories at the lower of cost or market.  Cost is determined using the last-in, first
out (“LIFO”) method for substantially all raw materials, finished goods
and production materials.  The base LIFO
layer was

 

28

 

established
at the date of acquisition from MeadWestvaco Corporation utilizing the forward
linked chain method.  Cost of other
inventories, mainly stores and supplies inventories, is determined by the
average cost method.  Except as set forth
in Section 3.07(a) of the Disclosure Schedule, the Seller has good and
marketable title to the Inventories free and clear of all Encumbrances.  Except as set forth in Section 3.07(a) of the
Disclosure Schedule, the Inventories do not consist of any items held on
consignment.  The Seller is not under any
obligation or liability with respect to accepting returns of Inventory in the
possession of its customers other than in the ordinary course of business
consistent with past practice.  No
clearance or extraordinary sale of the Inventories has been conducted since
December 31, 2005.  Since May 2, 2005,
the Seller has not acquired or committed to acquire or manufacture Inventory
for sale which is not of a quality and quantity usable in the ordinary course
of business within a reasonable period of time and consistent with past
practice.  Section 3.07(b) of the
Disclosure Schedule contains a complete list of the addresses of all warehouses
and other facilities in which the Inventories are located.  In all material respects, the Inventories are
in good and merchantable condition and are suitable and usable for the purposes
for which they are intended and are in a condition such that they can be sold
in the ordinary course of the Business consistent with past practice.

 

SECTION 3.08.  Conduct
in the Ordinary Course; Absence of Certain Changes, Events and Conditions.  (a) 
Since December 31, 2005, except as set forth in Section 3.08(a) of the
Disclosure Schedule, (i) the Business has been conducted in all material
respects in the ordinary course of business consistent with past practice and
(ii) there has been no Material Adverse Effect.

 

(b)           As amplification and not
limitation of the foregoing, except as set forth in Section 3.08(b) of the
Disclosure Schedule, since December 31, 2005, none of Parent or any of its
Affiliates have:

 

(i)            permitted
or allowed any of the Purchased Assets (whether tangible or intangible) to be
subjected to any Encumbrance, other than Permitted Encumbrances and
Encumbrances that will be released at or prior to the Closing;

 

(ii)           except in the ordinary course
of business consistent with past practice, paid or otherwise discharged any
Liability related to the Business, other than current liabilities reflected on
the Reference Balance Sheet and current liabilities incurred in the ordinary
course of business consistent with past practice since December 31, 2005;

 

(iii)         written down or written up
(or failed to write down or write up in accordance with GAAP consistent with
past practice) the value of any Inventories or Receivables or revalued any of
the Purchased Assets other than in the ordinary course of business consistent
with past practice and in accordance with GAAP;

 

(iv)          made any change in any method
of accounting or accounting practice or policy used by the Seller, other than
such changes required by GAAP;

 

(v)           amended, terminated,
cancelled or compromised any material claims of Parent or any of its Affiliates
(related to the Business) or waived any other rights of substantial value to
such Persons (related to the Business);

 

29

 

(vi)          sold, transferred, leased,
subleased, licensed or otherwise disposed of any properties or assets, real,
personal or mixed (including leasehold interests and intangible property) of Parent
or any of its Affiliates (related to the Business), other than the sale of
Inventories in the ordinary course of business consistent with past practice;

 

(vii)         merged with, entered into a
consolidation with or acquired an interest of 5% or more in any Person engaged
in the Carbonless Paper Business or acquired a substantial portion of the
assets or business of any Person engaged in the Carbonless Paper Business or
any division or line of business engaged in the Carbonless Paper Business, or
otherwise acquired any material assets for the Business other than in the
ordinary course of business consistent with past practice;

 

(viii)        made any capital expenditure
or commitment for any capital expenditure, in each case relating to the
Business, in excess of $50,000 individually or $250,000 in the aggregate;

 

(ix)           except for Shared Contracts
and renewals of existing contracts or the entering into of similar renewal or
replacement contracts with different suppliers and customers on substantially
the same terms (disregarding reasonable cost or similar increases), entered
into any Material Contract which is for a term of two years or more and
involves the annual payment of more than $250,000;

 

(x)            made
any material change in the customary methods of operations of the Business,
including practices and policies relating to manufacturing, purchasing,
Inventories, marketing, selling and pricing (other than in response to changes
in market conditions in the ordinary course of business consistent with past
practice);

 

(xi)           except with respect to U.S.
federal or state income or franchise Taxes, made, revoked or changed any Tax
election or method of Tax accounting, or settled or compromised any liability
with respect to Taxes, in each case, relating to the Purchased Assets or the
Business in a material amount;

 

(xii)          made any loan to any Person
in connection with the Business;

 

(xiii)         failed to pay any creditor
any material amount owed to such creditor when due (other than amounts being
disputed in good faith);

 

(xiv)        (A) granted any increase, or
announced any increase, in the wages, salaries, compensation, bonuses,
incentives, pension or other benefits payable by the Seller to any of its
employees to whom offers of employment will be made pursuant to Section 6.01,
including any increase or change pursuant to any Plan, or (B) established or
increased or promised to increase any benefits under any Plan, in either case
except (x) as required by Law, any Plan or any collective bargaining agreement
or (y) involving ordinary increases consistent with the past practices of the
Seller;

 

(xv)         entered into any agreement,
arrangement or transaction relating to the Business with any of its directors,
officers or employees (or with any relative, beneficiary, spouse or Affiliate
of such Persons);

 

30

 

(xvi)        terminated, discontinued,
closed or disposed of any Operating Site, or laid off any employees employed in
connection with the Business (other than layoffs of less than 50 employees in
any six-month period in the ordinary course of business consistent with past
practice) or implemented any early retirement, separation or program providing
early retirement window benefits within the meaning of Section 1.401(a)-4 of
the Regulations or announced or planned any such action or program for the
future;

 

(xvii)       disclosed (other than
pursuant to customary confidentiality agreements) to any third party any secret
or confidential Intellectual Property relating to the Carbonless Paper Business
(except by way of issuance of a patent) or permitted to lapse or become
abandoned any registered Owned Carbonless Paper Business Intellectual Property
or registered Mead Licensed Intellectual Property;

 

(xviii)      allowed any insurance policy,
Permit or Environmental Permit required in connection with the Business to
lapse or terminate;

 

(xix)         suffered any casualty loss or
damage with respect to any of the Purchased Assets which in the aggregate have
a replacement cost of more than $250,000, whether or not such loss or damage
shall have been covered by insurance;

 

(xx)          amended, modified, renewed,
cancelled or consented to the termination of any Material Contract or Parent’s
or any of its Affiliates’ rights thereunder except in the ordinary course of
business consistent with past practice; or

 

(xxi)         agreed, whether in writing or
otherwise, to take any of the actions specified in this Section 3.08(b), except
as expressly contemplated by this Agreement and the Ancillary Agreements.

 

SECTION 3.09.  Litigation.  Except as set forth in Section 3.09 of the
Disclosure Schedule, there are no Actions by or pending or, to the Knowledge of
the Seller, threatened against Parent or any of its Affiliates thereof and
relating to, or arising out of, the Business or affecting any of the Purchased
Assets or the Business that would have a Material Adverse Effect.

 

SECTION 3.10.  Compliance
with Laws.  (a)  Except as set forth in Section 3.10(a) of the
Disclosure Schedule, (i) the Business has been conducted and continues to be
conducted in material compliance with all Laws and Governmental Orders
applicable to the Purchased Assets and the Business, and (ii) none of Parent or
any of its Affiliates is in violation of any such Law or Governmental Order.

 

(b)           Section 3.10(b) of the
Disclosure Schedule sets forth a brief description of each material
Governmental Order applicable to Parent or any of its Affiliates (related to
the Business), any of their properties or assets (relating to the Business),
including the Purchased Assets, or the Business, and no such Governmental Order
has or has had a Material Adverse Effect or could affect the legality, validity
or enforceability of this Agreement, any Ancillary Agreement or the
consummation of the transactions contemplated hereby or thereby.

 

SECTION 3.11.  Environmental
Matters.  Except as set forth in
Section 3.11 of the Disclosure Schedule or as would not reasonably be expected
to have a Material Adverse Effect:  (a)

 

31

 

to the
Knowledge of the Seller, the Business as currently operated is being conducted
by Parent and its Affiliates in compliance with all applicable Environmental
Laws; (b) to the Knowledge of the Seller, the Business as currently operated is
in possession of and in compliance with all necessary Environmental Permits;
(c) there have been no Releases of Hazardous Materials that require any
Remedial Action under, or in violation of, Environmental Laws at, on or under
the Real Properties; (d) to the Knowledge of the Seller, there are no violations
of Environmental Law or any Releases of Hazardous Materials at any of the
woodyards used in the Business on the Closing Date which are reasonably likely
to result in Environmental Liabilities; (e) no Environmental Claims have been
asserted or threatened in writing against Parent or any of its Affiliates in
connection with the Business and, to the Knowledge of the Seller and Parent, no
Environmental Claims have been asserted in writing against facilities that
received Hazardous Materials generated or used by the Business; (f) since May
2, 2005, none of Parent or any of its Affiliates has received a written notice
or otherwise has Knowledge that any Governmental Authority intends to cancel or
terminate any Environmental Permit required to carry on the Business as
currently conducted and (g) Parent and the Seller have provided to the
Purchaser all environmental assessments, audits and studies of the Real
Property or the Business that are in the possession or control of Parent or the
Seller.

 

SECTION 3.12.  Material
Contracts.  (a)  Section 3.12(a) of the Disclosure Schedule
lists each of the following contracts and agreements (including oral
agreements) to which Parent or any of its Affiliates is a party that relate to
the Business (such contracts and agreements, together with all contracts,
agreements, leases and subleases concerning the use, occupancy, management or
operation of any Real Property (including all contracts, agreements, leases and
subleases listed or otherwise set forth in Section 3.14(a) of the Disclosure
Schedule), all Carbonless Paper Business IP Agreements, including those listed
or otherwise set forth in Section 3.13(a) of the Disclosure Schedule, the
purchase orders with the parties listed in Section 3.12(a)(ii) of the
Disclosure Schedule and all contracts, agreements, leases and subleases
relating to Tangible Personal Property listed or otherwise set forth in Section
3.15(b) of the Disclosure Schedule, being “Material Contracts”):

 

(i)            each
contract, agreement, invoice and other arrangement, for the sale or purchase of
Inventory, spare parts, other materials or personal property, with any supplier
or for the furnishing of services to Parent or any of its Affiliates relating
primarily to the Carbonless Paper Business and solely to the Non-Carbonless
Paper Business, under the terms of which such Person:  (A) is likely to receive or pay or otherwise
give consideration of more than $250,000 in the aggregate during the calendar
year ended December 31, 2006 or (B) is likely to receive or pay or otherwise
give consideration of more than $1,000,000 in the aggregate over the remaining
term of such contract;

 

(ii)           all broker, distributor,
dealer, manufacturer’s representative, franchise, agency, sales promotion,
market research, marketing, consulting and advertising contracts and agreements
to which Parent or any of its Affiliates is a party in excess of $100,000 and
which relate primarily to the Carbonless Paper Business or solely to the
Non-Carbonless Paper Business;

 

(iii)          all management contracts and
contracts with independent contractors or consultants (or similar arrangements)
relating primarily to the Carbonless Paper Business

 

32

 

or solely to the Non-Carbonless
Paper Business to which Parent or any of its Affiliates is a party and which
cannot be cancelled by such Person without penalty or further payment and
without more than 30 days’ notice;

 

(iv)          all contracts and agreements
with any Governmental Authority relating primarily to the Carbonless Paper Business
or solely to the Non-Carbonless Paper Business to which Parent or any of its
Affiliates is a party;

 

(v)           all contracts and agreements
that limit or purport to limit the ability of Parent or any of its Affiliates
(relating to the Business) to compete in any line of business or with any
Person or in any geographic area or during any period of time;

 

(vi)          all contracts and agreements
between or among Parent or any of its Affiliates (relating to the Business), on
the one hand, and one or more Affiliates of Parent, on the other hand;

 

(vii)         all contracts and agreements
providing for benefits under any Plan; and

 

(viii)        all other contracts and
agreements, whether or not made in the ordinary course of business, the absence
of which would have a Material Adverse Effect.

 

For
purposes of this Section 3.12 and Sections 3.14, 3.15 and 3.16, the term “lease”
shall include any and all leases, subleases, sale/leaseback agreements or
similar arrangements.

 

(b)           Except as set forth in
Section 3.12(b) of the Disclosure Schedule, each Material Contract:  (i) is valid and binding on the parties
thereto and is in full force and effect, (ii) is freely and fully assignable to
the Purchaser without penalty or other adverse consequences and (iii) upon
consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except to the extent that any consents set forth in
Section 3.03 of the Disclosure Schedule are not obtained, shall continue in
full force and effect without penalty or other adverse consequence.  Except as set forth in Section 3.12(b) of the
Disclosure Schedule, the Seller is not in breach of, or default under, any
Material Contract.

 

(c)           The Seller has made available
to the Purchaser true and complete copies of all Material Contracts.

 

(d)           There is no contract,
agreement or other arrangement granting any Person any preferential right to
purchase any of the Purchased Assets.

 

(e)           Article XI of the Equity and
Asset Purchase Agreement is valid and binding on the parties thereto and is in
full force and effect, and is enforceable by Ultimate Parent, Parent, the
Seller and their respective subsidiaries and Affiliates.

 

(f)            Except
as set forth in Section 3.12(f) of the Disclosure Schedule or under supply
contracts entered into in the ordinary course of business consistent with past
practice or under the Equity and Asset Purchase Agreement, none of Parent or
any of its Affiliates is currently obligated to indemnify any other Person for
an amount exceeding $1,000,000 that relates to the Business.

 

33

 

(g)           Except as set forth in
Section 3.12(g) of the Disclosure Schedule, none of Parent or any of its
Affiliates is party to any sales contract relating primarily to the Carbonless
Paper Business or solely to the Non-Carbonless Paper Business for the sale of
goods or services in an amount, individually or in the aggregate, in excess of
$250,000, containing a provision of the type commonly referred to as a “most
favored nation” provision.

 

(h)           Except in respect of Shared
Contracts or as set forth in Section 3.12(h) of the Disclosure Schedule, none
of Parent or any of its Affiliates is party to any contract for the purchase of
any product or service in an amount, individually or in the aggregate, in
excess of $250,000, under which any Person has the right to be the exclusive
provider of any product or service to the Business or to supply a fixed
percentage of the requirements of any product or service of the Business.

 

(i)            Except
as set forth in Section 3.12(i) of the Disclosure Schedule, none of Parent or
any of its Affiliates is party to any contract (relating to the Business) for
the sale of goods or services in an amount, individually or in the aggregate,
in excess of $250,000, under which any Person has the right to be the exclusive
or a preferred recipient of any product or service of the Business.

 

SECTION 3.13.  Intellectual
Property.  (a)  Section 3.13(a) of the Disclosure Schedule
sets forth a true and complete list of (i) all patents and pending patent
applications, registered trademarks and pending trademark applications,
registered copyrights and pending copyright applications, and domain names, in
each case that is Owned Carbonless Paper Business Intellectual Property and
Owned Business Intellectual Property, (ii) all Carbonless Paper Business IP
Agreements and (iii) all other Intellectual Property material to the Business.

 

(b)           Except for the licenses set
forth on Section 3.13(b) of the Disclosure Schedule, the Seller is the
exclusive owner of the entire right, title and interest in and to the Owned
Carbonless Paper Business Intellectual Property and the Owned Business
Intellectual Property, free of all Encumbrances, and has a valid license to use
the Licensed Carbonless Paper Business Intellectual Property and all the
Licensed Business Intellectual Property in the continued operation of the
Business without limitation.  The Owned
Carbonless Paper Business Intellectual Property, the Owned Business
Intellectual Property and, to the Knowledge of the Seller, the Licensed
Carbonless Paper Business Intellectual Property and the Licensed Business
Intellectual Property have not been adjudged invalid or unenforceable in whole
or in part.  To the Knowledge of the
Seller, the Owned Carbonless Paper Business Intellectual Property and the Owned
Business Intellectual Property are valid and enforceable.

 

(c)           To the Knowledge of the
Seller, the conduct of the Business does not infringe or misappropriate or
otherwise violate the Intellectual Property of any third party, and, except as
disclosed in Section 3.13(c) of the Disclosure Schedule, no Action alleging any
of the foregoing is pending, and no unresolved, written Claim has been
threatened or asserted against Parent or any of its Affiliates alleging any of
the foregoing.  To the Knowledge of the
Seller, no Person is engaging in any activity that infringes or misappropriates
the Owned Carbonless Paper Business Intellectual Property or the Owned Business
Intellectual Property.

 

34

 

(d)           Except as disclosed in
Section 3.13(d) of the Disclosure Schedule, no Owned Carbonless Paper Business
Intellectual Property, no Owned Business Intellectual Property, and, to the
Knowledge of the Seller, no Licensed Carbonless Paper Business Intellectual
Property and no Licensed Business Intellectual Property is subject to any
outstanding decree, settlement, consent, order, injunction, judgment or ruling
restricting the use of all such Intellectual Property or that would impair the
validity or enforceability of all such Intellectual Property.

 

(e)           Parent and its Affiliates
have taken reasonable steps in accordance with normal industry practice to
maintain the confidentiality of the trade secrets that are material to the
Business.  To the Knowledge of the
Seller, no unauthorized disclosure of any such trade secrets has been made.

 

(f)            To
the Knowledge of the Seller, the Computer Software used in and material to the
Business is free of all viruses, worms, Trojan horses, and other material known
contaminants and does not contain any bugs, errors, or problems of a material
nature that would disrupt the operation of the Business.

 

(g)           All Intellectual Property
owned by or licensed to Parent, the Seller or any of Parent’s other Affiliates
that is necessary for the conduct of the Business as contemplated by the
“Carbonless Systems Business Overview” presented to the Purchaser by Parent on
October 3, 2005, is included in the Intellectual Property being assigned,
licensed or sub-licensed to the Purchaser in connection with the transactions
contemplated by this Agreement and in accordance with the terms hereof.

 

SECTION 3.14.  Real
Property.  (a)  Section 3.14(a) of the Disclosure Schedule
lists:  (i) each parcel of Owned Real
Property, (ii) the current owner of each parcel of Owned Real Property, and
(iii) the numbers of the Seller’s Title Policies corresponding to each parcel.

 

(b)           Section 3.14(b) of the
Disclosure Schedule lists:  (i) each
parcel of Leased Real Property and (ii) the identity of the lessor, lessee and
current occupant (if different from lessee) of each such parcel of Leased Real
Property.

 

(c)           Except as described in
Section 3.14(c) of the Disclosure Schedule, to the Knowledge of the Seller and
Parent there is no violation of any Law (including any building, planning or
zoning law) relating to any of the Real Property.  The Seller has made available to the
Purchaser true and complete copies of each deed for each parcel of Owned Real
Property and, to the extent in the possession of Parent or any of its
Affiliates, for each parcel of Leased Real Property, and of each lease, title
insurance policy, title report, survey, certificate of occupancy and appraisal
relating to or otherwise affecting the Real Property or the operations of
Parent and its Affiliates (as they relate to the Business) thereon.  All existing water, sewer, steam, gas,
electricity, telephone, cable, fiber optic cable, Internet access and other
utilities required for the construction, use, occupancy, operation and
maintenance of the Real Property are adequate for the conduct of the Business
as it currently is conducted.  Except as
set forth in Section 3.14(c) of the Disclosure Schedule, none of Parent or any
of its Affiliates has leased any parcel or any portion of any parcel of Real
Property to any other Person and none of Parent or any of its Affiliates has
granted to any Person any license or other occupancy agreement relating to the
Real Property, nor has Parent or

 

35

 

any
of its Affiliates assigned its interest under any lease listed in Section
3.14(b) of the Disclosure Schedule to any third party.

 

(d)           Section 3.14(d) of the
Disclosure Schedule sets forth a true and complete list of all leases relating
to the Real Property and any and all amendments, modifications, supplements,
exhibits, schedules, addenda and restatements thereto and thereof.  All such leases are in full force and effect,
and with respect to each of such leases (i) there are no existing monetary
defaults or material non-monetary defaults by Parent or any of its Affiliates
or by the lessor thereof and (ii) no event has occurred which (with notice,
lapse of time or both) would constitute an uncured monetary default or material
non-monetary default by Parent or any of its Affiliates.  With respect to each of such leases, except
as otherwise set forth in Section 3.14(b) of the Disclosure Schedule, none of
Parent or any of its Affiliates has exercised or given any notice of exercise
of, nor has any lessor or landlord exercised or received any notice of exercise
by a lessor or landlord of, any option, right of first offer or right of first
refusal contained in any such lease or sublease, including any such option or
right pertaining to purchase, expansion, renewal, extension or relocation.

 

(e)           Except as set forth in
Section 3.14(e) of the Disclosure Schedule, the interests of the Seller in the
Owned Real Property and Parent and its Affiliates in the Leased Real Property
to be transferred pursuant to this Agreement are sufficient for the continued
conduct of the Business after the Closing in substantially the same manner as
conducted prior to the Closing.

 

(f)            There
are no condemnation proceedings or eminent domain proceedings of any kind
pending or, to the Knowledge of the Seller and Parent, threatened in writing
against the Real Property.

 

(g)           To the Knowledge of the
Seller and Parent no improvements on the Real Property and none of the current
uses and conditions thereof violate any Encumbrance, applicable deed
restrictions or other applicable covenants, restrictions and agreements in any
material way.

 

(h)           Neither the Seller nor Parent
has received any written notice that any improvement on any Real Property is
not wholly within the lot limits of such Real Property or encroaches on any
adjoining premises or Encumbrance benefiting such Real Property, and neither
the Seller nor Parent has any Knowledge of any encroachments on any Real
Property or any easement or property right or benefit appurtenant thereto by
any improvements located on any adjoining premises that materially and
adversely affect the Business currently operated thereon.

 

(i)            The
Seller has good and valid fee title to each parcel of Owned Real Property, free
and clear of all liens except for Permitted Encumbrances.  Parent and its Affiliates have valid
leasehold or subleasehold interests in all Leased Real Property, in each case
free and clear of all liens except for Permitted Encumbrances and rights of the
landlord under the applicable lease and applicable Law.

 

SECTION 3.15.  Tangible
Personal Property.  (a)  The Tangible Personal Property currently used
in the Business is reflected in all material respects on the Reference Balance
Sheet.

 

(b)           Section 3.15(b) of the
Disclosure Schedule sets forth a true and complete list of all leases for
Tangible Personal Property and any and all material ancillary documents

 

36

 

pertaining
thereto (including all amendments and consents) providing for payments in
excess of $250,000.

 

SECTION 3.16.  Assets.  (a) 
Except as set forth in Section 3.16(a) of the Disclosure Schedule,
Parent and its Affiliates own, lease or have the legal right to use all the
properties and assets, including the Carbonless Paper Business Intellectual
Property, the Carbonless Paper Business IP Agreements, the Business
Intellectual Property, the Real Property and the Tangible Personal Property,
used in the conduct of the Business as currently conducted and, with respect to
contract rights, is a party to and enjoys the right to the benefits of all
contracts, agreements and other arrangements used by Parent and its Affiliates
(as such relate to the Business) or in or relating to the Business, all of
which properties, assets and rights are included in the Purchased Assets.

 

(b)           Except for those assets and
services to be provided pursuant to the Transition Services Agreement and
except for the Excluded Intellectual Property, the Purchased Assets, the
Intellectual Property to be licensed under the Technology License Agreement and
the Technology Sub-License Agreement and the rights to be provided to the
Purchaser in respect of Shared Contracts constitute all the properties, assets
and rights forming a part of, used, held or intended to be used in, and all
such properties, assets and rights as are necessary in the conduct of, the
Business.  At all times since December
31, 2005, Parent and its Affiliates have caused the Purchased Assets to be
maintained in accordance with good business practice consistent with past practice,
and all the Purchased Assets are in all material respects in good operating
condition and repair, wear and tear excepted, and are suitable in all material
respects for the purposes for which they are currently used.

 

(c)           Except as set forth in
Sections 3.12(b), 3.14(c), 3.16(a) and 3.16(c) of the Disclosure Schedule and
subject to the receipt of the consents listed on Sections 3.02 and 3.03 of the
Disclosure Schedule, Parent and its Affiliates have, or immediately prior to
Closing will have, the complete and unrestricted power and unqualified right to
sell, assign, transfer, convey and deliver the Purchased Assets to the
Purchaser without penalty or other adverse consequences.  Following the consummation of the transactions
contemplated by this Agreement and the execution of the instruments of transfer
contemplated by this Agreement, the Purchaser will own, with good, valid and
marketable title, or lease, under valid and subsisting leases, or otherwise
acquire the interests of Parent and its Affiliates in, the Purchased Assets,
free and clear of any Encumbrances, other than Permitted Encumbrances, and
without incurring any penalty or other adverse consequence, including any
increase in rentals, royalties, or license or other fees imposed as a result
of, or arising from, the consummation of the transactions contemplated by this
Agreement.

 

SECTION 3.17.  Customers.  Listed in Section 3.17 of the Disclosure
Schedule are the names of the ten most significant customers of the Business,
on the basis of revenues generated, for the twelve-month period ended December
31, 2005, and the amount for which each such customer was invoiced during such
period.  Except as set forth in Section
3.17 of the Disclosure Schedule, as of the date hereof, none of Parent or any
of its Affiliates has received any written notice and, to the Knowledge of the
Seller and Parent, has no reason to believe that any such customer has ceased,
or will cease, to purchase the products or goods manufactured by the Seller in

 

37

 

connection
with the Business, or has substantially reduced, or will substantially reduce,
the purchase of such products or goods at any time.

 

SECTION 3.18.  Suppliers.  Listed in Section 3.18 of the Disclosure
Schedule are the names and addresses of each of the ten most significant
suppliers of raw materials, supplies, merchandise and other goods for the
Business, on the basis of expenditures, for the twelve-month period ended
December 31, 2005 and the amount for which each such supplier invoiced Parent
or any of its Affiliates during such period. 
Except as set forth in Section 3.18 of the Disclosure Schedule, as of
the date hereof, none of Parent or any of its Affiliates has received any
written notice and, to the Knowledge of the Seller or Parent, has no reason to
believe that any such supplier will not sell raw materials, supplies,
merchandise and other goods to the Purchaser at any time after the Closing on
terms and conditions substantially similar to those used in its current sales
to the Business, subject only to general and customary price increases.  Except as set forth on Section 3.18 of the
Disclosure Schedule, all of the raw materials, supplies, merchandise and other
goods supplied to the Business necessary to operate the Business are generally
available in the market from more than one source.

 

SECTION 3.19.  Employee
Benefit Matters.  (a)  Plans and Material Documents.  Section 3.19(a) of the Disclosure Schedule
lists (i) all employee benefit plans (as defined in Section 3(3) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”))
and all material bonus, stock option, stock purchase, restricted stock,
incentive, deferred compensation, retiree medical or life insurance,
supplemental retirement, severance or other benefit plans, programs or
arrangements, and all employment, termination, severance or other contracts or
agreements to which the Seller is a party, with respect to which the Seller has
any obligation or which are maintained, contributed to or sponsored by the
Seller for the benefit of any current or former employee, officer or director
of the Seller who performs or performed services with the Business, (ii) any
material plan in respect of which the Seller could incur liability under Section
4212(c) of ERISA, and (iii) any contracts, arrangements or understandings
between the Seller or any of its Affiliates and any employee of the Seller,
including any contracts, arrangements or understandings relating to the sale of
the Purchased Assets (collectively, the “Plans”).  Each Plan is in writing and, with respect to
each Plan in which persons employed in the Business currently participate, the
Seller has furnished to the Purchaser a complete and accurate copy of each Plan
and, with respect to the Seller’s Hourly Pension Plan, a complete and accurate
copy of each material document prepared in connection with each such Plan,
including a copy of (I) each trust or other funding arrangement, (II) each
summary plan description and summary of material modifications, (III) the most
recently filed IRS Form 5500, (IV) the most recently received IRS determination
letter for each such Plan, and (V) the most recently prepared actuarial report
and financial statement in connection with each such Plan.  With respect to employees covered by a
collective bargaining agreement, the Seller has no express or implied
commitment, whether legally enforceable or not, (1) to create, incur liability
with respect to, or cause to exist, any other employee benefit plan, program or
arrangement that would be a Plan if it were established, (2) to enter into any
contract or agreement to provide compensation or benefits to any individual who
performed or performs services with the Business, or (3) to modify, change or
terminate any Plan, other than with respect to a modification, change or
termination required by ERISA or the Code.

 

38

 

(b)           Absence
of Certain Types of Plans. 
None of the Plans is a multiemployer plan (within the meaning of Section
3(37) or 4001(a)(3) of ERISA) (a “Multiemployer Plan”) or a single
employer pension plan (within the meaning of Section 4001(a)(15) of ERISA) for
which the Seller or any ERISA Affiliate could incur liability under Section
4063 or 4064 of ERISA (a “Multiple Employer Plan”).  None of the Plans obligates the Seller to pay
separation, severance, termination or similar benefits to any such person
solely as a result of any transaction contemplated by this Agreement.  Each of the Plans is subject only to the Laws
of the United States or a political subdivision thereof.

 

(c)           Compliance
with Applicable Law. 
Each Plan is now and, during any period for which the applicable statute
of limitation has not expired, has been operated in all material respects in accordance
with the requirements of all applicable Law, including ERISA and the Code.  The Seller has performed all material
obligations required to be performed by it under, is not in any respect in
material default under or in material violation of, and has no knowledge of any
default or violation by any party to, the Seller’s Hourly Pension Plan (as
defined in Section 6.04).  No Action is
pending or, to the Knowledge of the Seller, threatened with respect to the Seller’s
Hourly Pension Plan (other than claims for benefits in the ordinary course) and
no fact or event exists that could give rise to any such Action.

 

(d)           Qualification
of Certain Plans.  Each Plan that is
intended to be qualified under Section 401(a) of the Code or Section 401(k) of
the Code has received a favorable determination letter from the IRS that it is
so qualified, and each trust established in connection with any Plan that is
intended to be exempt from federal income taxation under Section 501(a) of the
Code has received a determination letter from the IRS that it is so exempt, and
no fact or event has occurred since the date of such determination letter from
the IRS to adversely affect the qualified status of any such Plan or the exempt
status of any such trust.  Each trust
maintained or contributed to by the Seller or any of its ERISA Affiliates that
is intended to be qualified as a voluntary employees’ beneficiary association
and that is intended to be exempt from federal income taxation under Section
501(c)(9) of the Code has received a favorable determination letter from the
IRS that it is so qualified and so exempt, and no fact or event has occurred
since the date of such determination by the IRS to adversely affect such
qualified or exempt status.

 

(e)           Absence
of Certain Liabilities and Events.  There has been no prohibited transaction
(within the meaning of Section 406 of ERISA or Section 4975 of the Code) with
respect to the Seller’s Hourly Pension Plan. 
Neither the Seller nor any of its ERISA Affiliates has incurred any
liability under, arising out of or by operation of Title IV of ERISA (other
than liability for premiums to the Pension Benefit Guaranty Corporation arising
in the ordinary course), including any liability in connection with (i) the
termination or reorganization of any employee benefit plan subject to Title IV
of ERISA or (ii) the withdrawal from any Multiemployer Plan or Multiple
Employer Plan, and no fact or event exists or is contemplated (including the
transactions contemplated by this Agreement) that could reasonably be expected
to give rise to any such liability.  No
complete or partial termination has occurred within the five years preceding
the date hereof with respect to any Plan. 
None of the assets of the Seller or any of its ERISA Affiliates is the
subject of any lien arising under Section 302(f) of ERISA or Section 412(n) of
the Code; neither the Seller nor any Affiliate has been required to post any
security under Section 307 of ERISA or Section 401(a)(29) of the Code; and no
fact or event exists which could give rise to any such lien or requirement to
post any such security.

 

39

 

SECTION 3.20.  Labor
Matters.  Except as set forth in
Section 3.20 of the Disclosure Schedule, (a) the Seller is not a party to any
collective bargaining agreement or other labor union contract applicable to
persons employed by the Seller in connection with the Business, and currently
there are no organizational campaigns, petitions or other unionization
activities seeking recognition of a collective bargaining unit which could
affect the Business, (b) there are no controversies, strikes, slowdowns or work
stoppages pending or, to the Knowledge of the Seller, threatened between the
Seller and any of its employees employed in connection with the Business, and
the Seller has not experienced any such controversy, strike, slowdown or work
stoppage within the past three years, (c) the Seller has not breached or
otherwise failed to comply in any material respect with the provisions of any collective
bargaining or union contract applicable to employees employed in connection
with the Business, and there are no grievances outstanding against the Seller
under any such agreement or contract which could result in any material
liability, (d) there are no unfair labor practice complaints pending against
the Seller before the National Labor Relations Board or any other Governmental
Authority which could result in any material liability, (e) the Seller is
currently in compliance in all material respects with all applicable Laws
relating to the employment of labor with respect to the Business, including
those related to wages, hours, collective bargaining and the payment and
withholding of taxes and other sums as required by the appropriate Governmental
Authority and has withheld and paid to the appropriate Governmental Authority
or is holding for payment not yet due to such Governmental Authority all
amounts required to be withheld from current and former employees of the Seller
employed in connection with the Business and is not liable for any arrears of
wages, Taxes, penalties or other sums for failure to comply with any of the
foregoing, (f) the Seller has paid in full to all of the current and former
employees of the Seller employed in connection with the Business or adequately
accrued for in accordance with GAAP all wages, salaries, commissions, bonuses,
benefits and other compensation due to or on behalf of such employees, (g)
there is no material claim with respect to payment of wages, salary or overtime
pay that has been asserted or is now pending or, to the Knowledge of the
Seller, threatened against the Seller before any Governmental Authority with
respect to any Persons currently or formerly employed by the Seller in
connection with the Business, (h) the Seller is not a party to, or otherwise
bound by, any consent decree with, or citation by, any Governmental Authority
relating to employees or employment practices relating to the Business, (i)
there is no charge or proceeding with respect to a material violation of any
occupational safety or health standard that has been asserted or is now pending
or, to the Knowledge of the Seller, threatened with respect to the Seller
relating to the Business and (j) there is no charge of discrimination in employment
or employment practices, for any reason, including age, gender, race, religion
or other legally protected category, which has been asserted or is now pending
or, to the Knowledge of the Seller, threatened before the United States Equal
Employment Opportunity Commission, or any other Governmental Authority in any
jurisdiction in which the Seller has employed or currently employs any Person
in connection with the Business.

 

SECTION 3.21.  Key
Employees.  A letter provided by
Parent and the Seller to the Purchaser prior to the date hereof lists the name,
place of employment, current annual salary rates, bonuses and accrued vacation
during the period from May 2, 2005 through December 31, 2005, and in 2006, the
date of employment and position of each current salaried employee, officer,
director or consultant of the Seller who is employed or retained in connection
with the Business and whose annual compensation exceeded (or, in 2006, is
expected to exceed) $100,000.

 

40

 

SECTION 3.22.  Taxes.  (a) 
All Tax Returns required to be filed by or with respect to the Seller,
the Purchased Assets or the Business (including any consolidated, combined or
unitary Tax Return that includes the Seller) have been timely filed (taking
into account any validly obtained extensions), (b) all Taxes required to be
shown on such Tax Returns or otherwise due by or with respect to the Seller,
the Purchased Assets or the Business have been timely paid, (c) all such Tax
Returns (insofar as they relate to the Seller, the Purchased Assets or the
Business) are true, correct and complete in all material respects, (d) no
adjustment relating to such Tax Returns has been proposed in writing by any
Governmental Authority (insofar as either relates to the Seller, the Purchased
Assets or the Business), (e) there are no pending or, to the best Knowledge of
the Seller or Parent after due inquiry, overtly threatened Actions for the
assessment or collection of Taxes against the Seller, the Purchased Assets or
the Business or any Person that was included in the filing of a Tax Return with
the Seller on a consolidated, combined or unitary basis, in each case, relating
to the Purchased Assets or the Business, (f) there are no Tax liens on any of
the Purchased Assets except for Taxes not yet due and payable, (g) there are no
written requests for information outstanding from a Tax authority in respect of
Taxes that could affect the Taxes relating to the Business, (h) neither the
Seller nor Parent has received any notice or inquiry from any jurisdiction
where the Seller or Parent does not currently file Tax Returns to the effect
that such filings may be required with respect to the Business or that the
Business may otherwise be subject to taxation by such jurisdiction, (i) Parent,
the Seller and Parent’s other Affiliates have properly and timely withheld,
collected or deposited all amounts required to be withheld, collected or
deposited in respect of Taxes relating to the Purchased Assets or the Business,
(j) except as
disclosed in Section 3.22(j) of the Disclosure Schedule,
there are no Tax claims or audits by any Tax authority in progress or pending
relating to the Purchased Assets or the Business, nor has the Seller or Parent
received any written notice indicating that a Governmental Authority intends to
conduct or assert such a claim, audit, other investigation or inquiry, (k) no
Assumed Liabilities consist of any tax sharing or tax indemnity agreements
pursuant to which the Purchaser will have an obligation to make a payment to
any Person after the Closing, (l) (A) the Seller is entitled to the reduced
rates of Tax or other Tax benefits under the Enterprise Zone Agreement entered
into between the Board of Commissioners of Ross County and MW Custom Papers, LLC on October 15, 2003 (the “Enterprise
Zone Agreement”) and (B) except as disclosed in Section 3.22(l) of the
Disclosure Schedule none of Parent, Seller or any of Parent’s other Affiliates,
are a party to, or otherwise entitled to the benefits of, any similar agreement
relating to the Purchased Assets or the Business, (m) Section 3.22(m) of the
Disclosure Schedule lists all state and local jurisdictions in which the Seller
has made estimated or other Tax payments of sales Taxes, use Taxes or Income
Taxes, and (n) any unpaid liability of the Seller for the commercial activities
Tax and sales Taxes of the State of Ohio that have accrued but that are not yet
due and payable does not exceed $10,000 in the aggregate.

 

SECTION 3.23.  Insurance.  All material assets, properties and risks of
Parent, the Seller and Parent’s other Affiliates (relating
to the Business) are, and since May 2, 2005, have been, covered by valid and,
except for insurance policies that have expired under their terms in the
ordinary course, currently effective insurance policies or binders of insurance
(including general liability insurance, property insurance and workers’
compensation insurance) issued in favor of Parent, the Seller and Parent’s
other Affiliates with responsible insurance companies, in such types and
amounts and covering such risks as are consistent with customary practices and
standards of companies engaged in businesses and operations similar to those of
Parent, the Seller and Parent’s other Affiliates.

 

41

 

SECTION 3.24.  Brokers.  There is no brokerage, finder’s or other fee
or commission in connection with the transactions contemplated by this
Agreement.

 

SECTION 3.25.  Licenses
and Permits.  Except as set forth in
Section 3.25 of the Disclosure Schedule, Parent, the Seller and Parent’s other
Affiliates have all governmental licenses, permits and authorizations necessary
to conduct the Business, except for such governmental licenses, permits and
authorizations the absence of which would not have a Material Adverse Effect; provided,
however, that this Section 3.25 shall not cover the Seller’s possession
of Environmental Permits necessary to conduct the Business.  Since May 2, 2005, none of Parent, the Seller
or any of Parent’s other Affiliates has received a written notice or otherwise
has Knowledge that any Governmental Authority intends to cancel or terminate
any material license, permit, certificate or other authorization required to
carry on the Business as currently conducted.

 

ARTICLE IV

 

REPRESENTATIONS AND WARRANTIES

OF THE PURCHASER

 

As an inducement to Parent and the Seller to enter into this
Agreement, the Purchaser hereby represents and warrants to Parent and the
Seller as follows:

 

SECTION 4.01.  Organization
and Authority of the Purchaser.  The
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and has all
necessary corporate power and authority to enter into this Agreement and the
Ancillary Agreements to which it is a party, to carry out its obligations
hereunder and thereunder and to consummate the transactions contemplated hereby
and thereby.  The execution and delivery
by the Purchaser of this Agreement and the Ancillary Agreements to which it is
a party, the performance by the Purchaser of its obligations hereunder and
thereunder and the consummation by the Purchaser of the transactions
contemplated hereby and thereby have been duly authorized by all requisite
corporate action on the part of the Purchaser. 
This Agreement has been, and upon their execution the Ancillary
Agreements to which the Purchaser is a party shall have been, duly executed and
delivered by the Purchaser, and (assuming due authorization, execution and
delivery by Parent and the Seller) this Agreement constitutes, and upon their
execution the Ancillary Agreements to which the Purchaser is a party shall
constitute, legal, valid and binding obligations of the Purchaser, enforceable
against the Purchaser in accordance with their respective terms, except as such
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar Laws affecting the enforcement of
creditors’ rights generally, and general principles of equity (regardless of
whether such enforceability is considered in a proceeding in Law or equity).

 

SECTION 4.02.  No
Conflict.  Assuming the termination
or expiration of the waiting periods under the HSR Act and the making and
obtaining of all filings, notifications, consents, approvals, authorizations
and other actions referred to in Section 4.03, the execution, delivery and
performance by the Purchaser of this Agreement and the Ancillary Agreements to
which it is a party do not and will not (a) violate, conflict with or result in
the breach of any provision of the certificate of incorporation or by-laws of
the Purchaser, (b) conflict with or violate any Law or Governmental Order
applicable to the Purchaser, or (c) conflict with, or result in any

 

42

 

breach of,
constitute a default (or event which with the giving of notice or lapse of
time, or both, would become a default) under, require any consent under, or
give to others any rights of termination, amendment, acceleration, suspension,
revocation or cancellation of, any note, bond, mortgage or indenture, contract,
agreement, lease, sublease, license, permit, franchise or other instrument or
arrangement to which the Purchaser is a party, which would, in the case of
clause (b) or (c), prevent or materially delay the ability of the Purchaser to
carry out its obligations under, or the consummation of the transactions
contemplated by, this Agreement or the Ancillary Agreements.

 

SECTION 4.03.  Governmental
Consents and Approvals.  The
execution, delivery and performance by the Purchaser of this Agreement and each
Ancillary Agreement to which the Purchaser is a party do not and will not
require any consent, approval, authorization or other order of, action by,
filing with, or notification to any Governmental Authority, except (a) the
pre-merger notification and waiting period requirements of the HSR Act, and (b)
pursuant to the applicable rules of the German Act against Restraints of
Competition.  The Purchaser filed a
Notification and Report Form under the HSR Act with respect to the transactions
contemplated hereby on January 26, 2006.

 

SECTION 4.04.  Financing.  The Purchaser has or will have all funds
necessary to consummate the transactions contemplated by this Agreement.

 

SECTION 4.05.  Litigation.  No Action by or against the Purchaser is
pending or, to the knowledge of the Purchaser after due inquiry, threatened,
which could affect the legality, validity or enforceability of this Agreement,
any Ancillary Agreement or the consummation of the transactions contemplated
hereby or thereby or the ability of the Purchaser to consummate the
transactions contemplated hereby or thereby.

 

SECTION 4.06.  Brokers.  Except for Credit Suisse First Boston, no
broker, finder or investment banker is entitled to any brokerage, finder’s or
other fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of the
Purchaser.  The Purchaser shall be solely
responsible for payment of the fees and expenses of Credit Suisse First Boston.

 

SECTION 4.07.  Knowledge
of Breach.  As of the date hereof,
none of the executive officers of the Purchaser has actual knowledge of any
breach of any representation or warranty contained in Article III.

 

SECTION 4.08.  Disclaimer
of Warranties.  THE PURCHASER ACKNOWLEDGES THAT, EXCEPT AS OTHERWISE
SPECIFICALLY STATED IN THIS AGREEMENT, IT IS PURCHASING THE PURCHASED ASSETS
AND ASSUMING THE ASSUMED LIABILITIES IN THEIR PRESENT CONDITION, “AS IS, WHERE
IS,” AND THAT NEITHER THE SELLER NOR PARENT HAS MADE OR IS MAKING ANY WARRANTY
OR REPRESENTATION WHATSOEVER, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, CONCERNING
THE PURCHASED ASSETS OR THE ASSUMED LIABILITIES, WHETHER AS TO CONDITION OR

 

43

 

VALUE OR OTHERWISE, OTHER THAN AS
SPECIFICALLY STATED IN THIS AGREEMENT.

 

ARTICLE V

 

ADDITIONAL
AGREEMENTS

 

SECTION 5.01.  Conduct
of Business Prior to the Closing. 
(a)  Parent and the Seller
covenant and agree that, with respect to the Business and the Purchased Assets,
except as described in Section 5.01(a) of the Disclosure Schedule, between the
date hereof and the time of the Closing, the Seller shall not, and Parent shall
not permit the Seller to, conduct the Business other than in the ordinary
course and consistent with the Seller’s prior practice.  Without limiting the generality of the
foregoing, except as described in Section 5.01(a) of the Disclosure Schedule,
Parent and its Affiliates shall (as it relates to the Business) (i) continue
their advertising and promotional activities, and pricing and purchasing
policies, in accordance with past practice, (ii) maintain the customary payment
cycles for any payables or receivables incurred in connection with the Business
consistent with past practice in all material respects, (iii) use their
reasonable best efforts to (A) preserve intact the business organization of the
Business, (B) keep available the services of the employees of the Seller, (C)
continue in full force and effect without material modification all existing
policies or binders of insurance currently maintained in respect of the
Business, and (D) preserve their current relationships with the customers and
vendors of the Business and other Persons with which they have had significant
business relationships relating to the Business, (iv) exercise, but only after
notice to the Purchaser and receipt of the Purchaser’s prior written approval,
any rights of renewal pursuant to the terms of any of the leases or subleases
set forth in Section 3.14(b) of the Disclosure Schedule that by their terms
would otherwise expire, (v) except for this Agreement, any Ancillary Agreement
or any contract or agreement entered into in the ordinary course of business
consistent with past practice that are on terms no less favorable to the
Business than those that would be obtained in similar transactions with
unaffiliated Persons, not enter into any contract or agreement with any
Affiliate that will be an Assumed Liability and (vi) not enter into any
retention or similar arrangement with employees of the Seller to whom offers of
employment are to be made pursuant to Section 6.01 without the prior written
consent of the Purchaser.

 

(b)           Except as described in
Section 5.01(b) of the Disclosure Schedule, the Seller covenants and agrees
that, between the date hereof and the time of the Closing, without the prior
written consent of the Purchaser (which consent shall not be unreasonably
withheld or delayed or conditioned), the Seller will not do any of the things
specified in Section 3.08(b) (other than Section 3.08(b)(xix)).

 

SECTION 5.02.  Access
to Information.  (a)  From the date hereof until the Closing, upon
reasonable notice and subject to such limitations as may be required by
applicable Law, each of Parent, the Seller and Parent’s other Affiliates shall
cause its officers, directors, employees, agents, representatives, accountants
and counsel to:  (i) afford the officers,
employees, agents, accountants, counsel, financing sources and representatives
of the Purchaser reasonable access, during normal business hours, to the
offices, properties, plants, other facilities, books and records of Parent, the
Seller and Parent’s other Affiliates (relating to the Business), including
access to enter upon such properties, plants and facilities to conduct an ASTM
1527-00 Phase I

 

44

 

Environmental Site Assessment, provided that as part
of the Phase I Environmental Site Assessment the Purchaser and its agents
cannot contact any Governmental Authority to discuss any environmental matters
involving or in any way associated with the Seller, MeadWestvaco or the
Operating Sites without the express written consent of the Seller explicitly
approving such communication, and to those officers, directors, employees,
agents, accountants and counsel of the Seller who have any Knowledge relating
to the Business and (ii) furnish to the officers, employees, agents,
accountants, counsel, financing sources and representatives of the Purchaser
such additional financial and operating data and other information regarding
the assets, properties, liabilities and goodwill of the Business (or legible
copies thereof) as the Purchaser may from time to time reasonably request; provided,
however, that the Purchaser, its agents and consultants shall not meet
and confer with any Governmental Authority or have access to enter upon such
properties, plants and facilities to investigate and collect air, surface
water, groundwater and soil samples or to conduct any other type of testing
without the prior written consent of the Seller explicitly approving such
prohibited activity.

 

(b)           In order to facilitate the
resolution of any claims made against or incurred by the Seller prior to the
Closing, for a period of seven years after the Closing, the Purchaser shall (i)
retain the books and records relating to the Business relating to periods prior
to the Closing in a manner reasonably consistent with the prior practice of the
Seller and (ii) upon reasonable notice, afford the officers, employees, agents
and representatives of the Seller reasonable access (including the right to
make, at the Seller’s expense, photocopies), during normal business hours, to
such books and records.

 

(c)           In order to facilitate the
resolution of any claims made by or against or incurred by the Purchaser after
the Closing or for any other reasonable purpose, for a period of seven years
following the Closing, Parent, the Seller and Parent’s other Affiliates shall
(i) retain the books and records of such Person which relate to the Business
and its operations for periods prior to the Closing and which shall not
otherwise have been delivered to the Purchaser and (ii) upon reasonable notice,
afford the officers, employees, agents and representatives of the Purchaser
reasonable access (including the right to make photocopies, at the Purchaser’s
expense), during normal business hours, to such books and records.

 

SECTION 5.03.  Confidentiality.  (a) 
The Seller and Parent agree to, and Parent shall cause its agents,
representatives, Affiliates, employees, officers and directors to:  (i) treat and hold as confidential (and not
disclose or provide access to any Person to) all information relating to trade
secrets, processes, patent applications, product development, price, customer
and supplier lists, pricing and marketing plans, policies and strategies,
details of client and consultant contracts, operations methods, product development
techniques, business acquisition plans, new personnel acquisition plans and all
other confidential or proprietary information with respect to the Business,
(ii) in the event that Parent, the Seller or any such agent, representative,
Affiliate, employee, officer or director of either of them becomes legally
compelled to disclose any such information, provide the Purchaser with prompt
written notice of such requirement so that the Purchaser may seek a protective
order or other remedy or waive compliance with this Section 5.03, (iii) in the
event that such protective order or other remedy is not obtained, or the
Purchaser waives compliance with this Section 5.03, furnish only that portion
of such confidential information which is legally required to be provided and
exercise its best efforts to obtain assurances that confidential treatment will
be accorded such information, and (iv) promptly furnish (prior to, at, or

 

45

 

as soon as
practicable following, the Closing) to the Purchaser any and all copies (in
whatever form or medium) of all such confidential information then in the
possession of Parent, the Seller or any of their respective agents,
representatives, Affiliates, employees, officers or directors and, except as
otherwise required by Section 5.02(c), destroy any and all additional copies
then in the possession of Parent, the Seller or any of their respective agents,
representatives, Affiliates, employees, officers or directors of such
information and of any analyses, compilations, studies or other documents
prepared, in whole or in part, on the basis thereof; provided, however,
that this sentence shall not apply to any information that, at the time of
disclosure, is available publicly and was not disclosed in breach of this
Agreement by Parent, the Seller, or any of their respective agents,
representatives, Affiliates, employees, officers or directors; and provided
further that, with respect to Intellectual Property, specific
information shall not be deemed to be within the foregoing exception merely
because it is embraced in general disclosures in the public domain.  The provisions of this Section 5.03(a) shall
not apply to the coated and uncoated paper business operated by Parent and its
Affiliates other than the Seller, or to the Seller’s Non-Carbonless Paper
Business except with respect to any of the Purchased Assets and the Assumed
Liabilities that solely relate to the Seller’s Non-Carbonless Paper
Business.  In addition, with respect to
Intellectual Property, any combination of features shall not be deemed to be
within the foregoing exception merely because the individual features are in
the public domain unless the combination itself and its principle of operation
are in the public domain.  In addition,
nothing in this Section 5.03(a) shall require Parent or the Seller to disclose
any information that such Person is required to keep confidential by Law or
pursuant to agreements or contracts with third parties.

 

(b)           The Purchaser acknowledges
that the information being provided to it in connection with the transactions
contemplated by this Agreement is subject to the terms of a confidentiality
agreement among the Purchaser, the Seller and Parent (the “Confidentiality
Agreement”), the terms of which are incorporated herein by reference.  Effective upon, and only upon, the Closing,
the Confidentiality Agreement shall terminate as to confidentiality with
respect to information relating to the Business; provided, however,
that the Purchaser acknowledges that any and all other terms and conditions of
the Confidentiality Agreement (including relating to the confidentiality of
information relating to Parent and its Affiliates other than information
relating to the Business) shall survive the Closing Date in accordance with the
terms of the Confidentiality Agreement.

 

SECTION 5.04.  Regulatory
and Other Authorizations; Notices and Consents.  (a) 
Each of the Purchaser, Parent and the Seller shall use its reasonable
best efforts to obtain all authorizations, consents, orders and approvals of
all Governmental Authorities that may be or become necessary for its execution
and delivery of, and the performance of its obligations pursuant to, this
Agreement and the Ancillary Agreements and will cooperate fully with each other
party in promptly seeking to obtain all such authorizations, consents, orders
and approvals, including pursuant to the applicable rules of the German Act
against Restraints of Competition.  Each
party hereto agrees to, if necessary, supply as promptly as practicable to the
appropriate Governmental Authorities any additional information and documentary
material that may be requested pursuant to the HSR Act and the applicable rules
of the German Act against Restraints of Competition.

 

(b)           The Seller and Parent shall
give promptly such notices to third parties and use their reasonable best
efforts to obtain such third party consents and estoppel certificates as the
Purchaser may reasonably require in connection with the transactions
contemplated by this

 

46

 

Agreement
and the Ancillary Agreements; provided, however, that neither the
Seller nor Parent shall have any obligation to give any guarantee or other
consideration in connection with any such notice, consent or estoppel
certificate or to consent to any change in the terms of any agreement or
arrangement which the Seller or Parent may reasonably determine to be adverse
to their interests.

 

(c)           The Purchaser shall cooperate
and use all reasonable efforts to assist the Seller and Parent in giving such
notices and obtaining such consents and estoppel certificates; provided,
however, that, except as required pursuant to Section 5.04(f), the
Purchaser shall have no obligation to give any guarantee or other consideration
of any nature in connection with any such notice, consent or estoppel
certificate or to consent to any change in the terms of any agreement or
arrangement which the Purchaser may reasonably determine to be adverse to the
interests of the Purchaser or the Business.

 

(d)           The Seller, Parent and the
Purchaser agree that, in the event that any consent, approval or authorization
necessary or desirable to preserve for the Business any right or benefit under
any lease, license, contract, commitment or other agreement or arrangement to
which Parent or any of its Affiliates is a party is not obtained prior to the
Closing, the Seller and Parent will, subsequent to the Closing, cooperate with
the Purchaser in attempting to obtain such consent, approval or authorization
as promptly thereafter as practicable. 
If such consent, approval or authorization cannot be obtained, the
Seller and Parent shall use their reasonable best efforts to provide the
Purchaser with the rights and benefits of the affected lease, license,
contract, commitment or other agreement or arrangement for the term of such
lease, license, contract or other agreement or arrangement, and, if the Seller
and Parent provide such rights and benefits, the Purchaser, as the case may be,
shall assume the obligations and burdens thereunder.

 

(e)           The Seller, Parent and the
Purchaser agree to use their reasonable best efforts to provide the Purchaser
with the rights and benefits under any lease, license, contract, commitment or
other agreement or arrangement to which Parent or any of its Affiliates is a
party pursuant to a Shared Contract for the term of such Shared Contracts; provided
that, for contracts or agreements for the purchase of Inventory, other
materials or personal property from any supplier, the term of rights and
benefits to be provided by the Seller and Parent pursuant to this Section
5.04(e) shall be through December 31, 2006, and, if the Seller and Parent
provide such rights and benefits, the Purchaser, as the case may be, shall
assume the obligations and burdens thereunder; provided, however,
that, in connection with providing the Purchaser with rights and benefits
pursuant to Shared Contracts, neither the Seller nor Parent shall have any
obligation to give any guarantee or other consideration or to consent to any
change in the terms of any agreement or arrangement which the Seller or Parent
may reasonably determine to be adverse to their interests.

 

(f)            The
Purchaser shall use its reasonable best efforts to cause itself to be
substituted for Parent or any of its Affiliates, effective as of the Closing
Date or as promptly thereafter as reasonably practicable, in respect of all
obligations of Parent and any of its Affiliates under each of the guarantees
and other financial assurance arrangements or commitments obtained or entered
into by Parent or any of its Affiliates for the benefit of the Business set
forth in Section 5.04(f) of the Disclosure Schedule (the “Guarantees”).  To the extent such substitution contemplated
by the first sentence of this Section 5.04(f) has been effected, Parent and its
Affiliates shall from and after the Closing cease to have any obligation
whatsoever arising from or in connection with the Guarantees.  To the extent such substitution contemplated
by the first

 

47

 

sentence
of this Section 5.04(f) has not been effected, the Purchaser shall (i) use its
reasonable best efforts to effect such substitution as soon as practicable and
(ii) indemnify Parent and its Affiliates with respect to any such Guarantees in
accordance with Article VIII.

 

SECTION 5.05.  Notice
of Developments.  Prior to the
Closing, each of the Seller and Parent, on the one hand, and the Purchaser, on
the other hand, shall promptly notify the other party in writing of all events,
circumstances, facts and occurrences arising subsequent to the date of this
Agreement which could result in any breach of a representation or warranty or
covenant of such party in this Agreement or which could have the effect of making
any representation or warranty of such party in this Agreement untrue or
incorrect in any respect to the extent that any such breach would reasonably be
expected to cause the conditions to the obligations of the Seller, Parent or
the Purchaser to consummate the transactions contemplated hereby not to be
satisfied.

 

SECTION 5.06.  Non-Competition.  (a) 
None of Parent or any of its Affiliates shall, for a period of three
years after the Closing (the “Restricted Period”), engage, directly or
indirectly, in any business anywhere that manufactures, produces, distributes
or supplies products or services of the kind manufactured, produced,
distributed or supplied by the Carbonless Paper Business on the Closing Date or
as contemplated by the “Carbonless Systems Business Overview” presented by
Parent on October 3, 2005, to be manufactured, produced, distributed or
supplied or, without the prior written consent of the Purchaser, directly or
indirectly, own an interest in, manage, operate, join, control or participate
in or be connected with, as an officer, employee, partner, stockholder or
consultant, any Person anywhere that manufactures, produces, distributes or
supplies products or services of the kind manufactured, produced, distributed
or supplied by the Carbonless Paper Business on the Closing Date or as
contemplated by the “Carbonless Systems Business Overview” presented by Parent
on October 3, 2005, to be manufactured, produced, distributed or supplied.  Except as expressly set forth in Section
5.06(c), nothing in Section 5.06(c) shall be deemed to restrict in any manner
the conduct by Parent or any of its Affiliates of the coated and uncoated paper
business.

 

(b)           As a separate and independent
covenant, Parent agrees with the Purchaser that, during the Restricted Period,
none of Parent or any of its Affiliates will in any way, directly or
indirectly, for the purpose of engaging in any business that manufactures,
produces, distributes or supplies products or services of the kind
manufactured, produced, distributed or supplied by the Carbonless Paper
Business on the Closing Date or as contemplated by the “Carbonless Systems
Business Overview” presented by Parent on October 3, 2005, to be manufactured,
produced, distributed or supplied, do any business with, or solicit any
customers of, the Carbonless Paper Business with whom the Carbonless Paper
Business or Parent or any of its Affiliates had any dealings in connection with
the Carbonless Paper Business during the period of time in which the Carbonless
Paper Business was owned by Parent and its Affiliates, or induce or attempt to
induce any of the officers or employees of the Carbonless Paper Business or the
Purchaser to leave the employ of the Purchaser or to violate the terms of their
employment contracts, or any employment arrangements, with the Purchaser; provided,
however, that the foregoing will not prohibit a general solicitation to
the public through general advertising.

 

(c)           As a separate and independent
covenant, Parent agrees with the Purchaser that, during the Restricted Period,
none of Parent or any of its Affiliates will solicit any customer

 

48

 

listed
in Section 5.06(c) of the Disclosure Schedule for the purchase of any of the
products listed opposite such customer’s name on Section 5.06(c) of the
Disclosure Schedule.

 

(d)           Notwithstanding anything to
the contrary contained in Section 5.06(a):

 

(i)            Parent
or any of its Affiliates may directly or indirectly hold interests or
securities of any Person who is engaged in the manufacture, production,
distribution and supply of products and services of the kind manufactured,
produced, distributed or supplied by the Carbonless Paper Business on the
Closing Date or as contemplated by the “Carbonless Systems Business Overview”
presented by Parent on October 3, 2005, to be manufactured, produced,
distributed or supplied and whose securities are listed on any national
securities exchange, to the extent that such investment does not directly or
indirectly confer on Parent or any of its Affiliates more than 5% of the
outstanding voting power of such Person, as long as the Person owning such
securities has no other connection or relationship with such competitor; and

 

(ii)           Parent or any of its
Affiliates may acquire a business, assets and/or more than 50% of the
outstanding capital stock or other equity interests in any Person that derived
less than 10% of its total annual revenues in its most recent fiscal year from
the manufacture, production, distribution and supply of products and services
of the kind manufactured, produced, distributed or supplied by the Carbonless
Paper Business on the Closing Date or as contemplated by the “Carbonless
Systems Business Overview” presented by Parent on October 3, 2005, to be
conducted.

 

(e)           Except for the persons listed
in the letter provided by the Purchaser to Parent on the date hereof, as a
separate and independent covenant, the Purchaser agrees with Parent that,
during the Restricted Period, the Purchaser will not, in any way, directly or
indirectly, induce or attempt to induce any of the officers or employees of
Parent or any of its Affiliates (other than the officers or employees listed on
Exhibit 6.01) to leave the employ of Parent or its Affiliates or to violate the
terms of their employment contracts, or any employment arrangements, with
Parent or its Affiliates; provided, however, that the foregoing
will not prohibit a general solicitation to the public through general
advertising.

 

(f)            Each
of the Seller, Parent and the Purchaser acknowledge that the covenants of the
Seller, Parent and the Purchaser set forth in this Section 5.06 are an
essential element of this Agreement and that, but for the agreement of the
Seller, Parent and the Purchaser to comply with these covenants, the other
party or parties would not have entered into this Agreement.  Each of the Seller, Parent and the Purchaser
acknowledge that this Section 5.06 constitutes an independent covenant that
shall not be affected by performance or nonperformance of any other provision
of this Agreement by the Seller, Parent or the Purchaser.  Each of the Seller, Parent and the Purchaser
has independently consulted with its counsel and after such consultation agrees
that the covenants set forth in this Section 5.06 are reasonable and proper.

 

SECTION 5.07.  Excluded
Liabilities; Assumed Liabilities. 
Parent or the Seller shall pay and discharge the Excluded Liabilities as
and when the same become due and payable. 
The Purchaser shall pay and discharge the Assumed Liabilities as and
when the same become due and payable.

 

49

 

SECTION 5.08.  Tax
Cooperation and Exchange of Information; Other Tax Matters.  (a)  In
addition to the terms set forth in Section 5.02 of this Agreement, Parent, the
Seller and Parent’s other Affiliates, on the one hand, and the Purchaser, on
the other hand, shall provide each other with such cooperation and information
as either of them reasonably may request of the other in (i) filing any Tax
Return, amended Tax Return or claim for refund, (ii) determining a liability
for Taxes or a right to a refund of Taxes or (iii) participating in or
conducting any audit or other proceeding in respect of Taxes.  Such cooperation and information shall
include providing copies of relevant Tax Returns or portions thereof, together
with accompanying schedules, related work papers and documents in their
possession relating to rulings or other determinations by Tax authorities.  Parent, the Seller and Parent’s other
Affiliates, on the one hand, and the Purchaser, on the other hand, shall make
themselves (and their respective employees) available on a basis mutually
convenient to both parties to provide explanations of any documents or
information provided under this Section 5.08. 
Each of Parent and the Purchaser shall retain all Tax Returns, schedules
and work papers, records and other documents in its possession (or in the
possession of its Affiliates) relating to Tax matters relevant to the Purchased
Assets or the Business for the first taxable period ending after the Closing
and for all prior taxable periods until the later of (i) the expiration of the
statute of limitations of the taxable periods to which such Tax Returns and
other documents relate, without regard to extensions except to the extent
notified by the other party in writing of such extensions for the respective
Tax periods and (ii) six years following the due date (without extension) for
such Tax Returns.  After such time, before
Parent or the Purchaser shall dispose of any such documents in its possession
(or in the possession of its Affiliates), the other party shall be given the
opportunity, after 90 days’ prior written notice, to remove and retain all or
any part of such documents as such other party may select (at such other
party’s expense).  Any information
obtained under this Section 5.08 shall be kept confidential in accordance with
Section 5.03, except as may be otherwise necessary in connection with the
filing of Tax Returns or claims for refund or in conducting an audit or other
proceeding.

 

(b)           Parent
agrees to (and shall cause its Affiliates to) assist and otherwise cooperate
with the Purchaser in obtaining the transfer to the Purchaser of the employer
rate of the Seller in respect of unemployment Taxes in Ohio and any other jurisdiction that the Purchaser may
identify or in which the Purchased Assets are located or the Business is
conducted, including joining the Purchaser in the timely and proper filing of
any elections required under applicable law to effect the foregoing or filing
any such election on behalf of the Purchaser.

 

(c)           Parent agrees to (and shall cause its
Affiliates to) assist and otherwise cooperate with the Purchaser in obtaining
the transfer to the Purchaser of the reduced rates of Tax and other Tax
benefits to which Parent, the Seller or any of Parent’s other Affiliates are
entitled to under the Enterprise Zone Agreement and the agreements listed in
Section 3.22(l) of the Disclosure Schedule to the extent relating to the
Purchased Assets or the Business, including, requesting, filing and executing
any elections, agreements and any other necessary documents required for the
transfer or assignment of such agreements to the Purchaser from the appropriate
Governmental Authority or any other counterparty to such agreements.

 

SECTION 5.09.  Conveyance Taxes.  Each of Parent and the Purchaser shall be
liable for one-half of the Conveyance Taxes up to an aggregate amount equal to
$40,000 (or $20,000 each) which become payable in connection with the transactions
contemplated by this Agreement.  Parent
shall be liable for and shall hold the Purchaser harmless against any

 

50

 

Conveyance Taxes in
excess of $40,000 which become payable in connection with the transactions
contemplated by this Agreement.  Parent
or the Seller, after the review and consent by the Purchaser, shall file such
applications and documents as shall permit any such Conveyance Tax to be
assessed and paid on or prior to the Closing in accordance with any available
pre-sale filing procedure.  The Purchaser
shall execute and deliver all instruments and certificates necessary to enable
Parent and the Seller to comply with the foregoing.  The Purchaser shall complete and execute a
resale or other exemption certificate with respect to the inventory items sold
hereunder, and shall provide Parent with an executed copy thereof.

 

SECTION 5.10.  Further Action.  Each of the parties hereto shall use all
reasonable efforts to take, or cause to be taken, all appropriate action, do or
cause to be done all things necessary, proper or advisable under applicable
Law, and to execute and deliver such documents and other papers, as may be
required to carry out the provisions of this Agreement and the Ancillary
Agreements to which it is a party and consummate and make effective the
transactions contemplated hereby and thereby.

 

SECTION 5.11.  Risk of Loss.  (a) 
The risk of loss or damage by fire or other casualty to any Owned Real
Property, Leased Real Property or Tangible Personal Property before the Closing
is assumed by Parent.  In the event that
any Owned Real Property, Leased Real Property or Tangible Personal Property
shall suffer any fire or casualty or any injury before the Closing, Parent
agrees to (i) repair the damage at its sole cost and expense before the date
set for delivery of the deed or assignment, as applicable, hereunder, or (ii)
make an appropriate reduction in the Purchase Price based on a reasonable
approximation of the cost of such repair as agreed by the parties, or (iii)
assign to the Purchaser the proceeds of any insurances covering such fire,
casualty or injury.  The risk of loss or
damage by fire or other casualty to any Owned Real Property, Leased Real
Property or Tangible Personal Property after the Closing is assumed by the
Purchaser.

 

(b)           The risk of loss or damage to the Owned Real Property or the Leased
Real Property by condemnation before delivery of the applicable deed or
assignment is assumed by Parent or the Seller, as applicable.  In the event any condemnation proceeding is
commenced after the date hereof, Parent or the Seller shall assign to the
Purchaser at the Closing all of the Seller’s right, title and interest
in and to all awards made in respect of such condemnation and shall pay over to
the Purchaser all amounts theretofore received by the Seller in connection with
such condemnation.  The risk of loss or
damage to any Owned Real Property or the Leased Real Property by condemnation
after the Closing is assumed by the Purchaser.

 

SECTION 5.12.  Proration;
Certain Charges and Taxes.  (a)  Except as provided in Section 5.09 or
otherwise under this Agreement, all Property Taxes levied with respect to the
Purchased Assets or the Business for the Straddle Period, whether imposed or
assessed before or after the Closing Date, shall be prorated between the Seller
and Parent, on the one hand, and the Purchaser, on the other hand, as of 12:01
A.M. on the day after the Closing.  If
any Taxes subject to proration are paid by the Purchaser, on the one hand, or
the Seller or Parent, on the other hand, the proportionate amount of such Taxes
paid (or in the event a refund of any portion of such Taxes previously paid is
received, such refund) shall be paid promptly by (or to) the other after the
payment of such Taxes (or promptly following the receipt of any such refund)
and a request is made for such amount. 
All Taxes (other than Property Taxes) with respect to the Purchased
Assets

 

51

 

or the
Business for the Straddle Period shall be computed as if such taxable period
ended as of the close of business on the Closing Date.

 

(b)           Except as otherwise provided
in this Agreement, all installments of special assessments or other charges on
or with respect to the Purchased Assets payable by the Seller for any period in
which the Closing shall occur (including base rent, common area maintenance,
royalties, all municipal, utility or authority charges for water, sewer,
electric or gas charges, garbage or waste removal, and cost of fuel) shall be
apportioned as of the Closing and each party shall pay its proportionate share
promptly upon the receipt of any bill, statement or other charge with respect
thereto.  If such charges or rates are
assessed either based upon time or for a specified period, such charges or
rates shall be prorated as of 12:01 A.M. on the day after the Closing.  If such charges or rates are assessed based
upon usage of utility or similar services, such charges shall be prorated based
upon meter readings taken on the Closing Date.

 

(c)           All refunds, reimbursements,
installments of base rent, additional rent, license fees or other use related
revenue receivable by any party to the extent attributable to the operation of
the Business for any period in which the Closing shall occur shall be prorated
so that the Seller shall not be entitled to that portion of any such
installment applicable to any period from and after the Closing Date, and if
the Purchaser or the Seller, as the case may be, shall receive any such
payments after the Closing Date, it shall promptly remit to such other party
its share of such payments.

 

(d)           The prorations pursuant to
this Section 5.12 may be calculated after the Closing, as each item to be
prorated (including any such Tax, obligation, assessment, charge, refund,
reimbursement, rent installment, fee or revenue) accrues or comes due; provided
that, in any event, any such proration shall be calculated not later than
thirty (30) days after the party requesting the proration of any item obtains
the information required to calculate such proration.

 

SECTION 5.13.  Compliance
with Environmental Transfer Statutes. 
The Seller shall, at its own cost and expense, be responsible for
complying with the notice requirements of any Environmental Laws regarding the
sale or transfer of the Operating Sites. 
Such notice requirements shall be satisfied, to the extent possible,
prior to the Closing Date.

 

SECTION 5.14.  Historical
Off-Site Environmental Liabilities Limitations.  The Purchaser agrees that, with regard to
Historical Off-Site Environmental Liabilities, neither the Purchaser nor any of
its Affiliates shall undertake any non-subsurface sampling or analysis,
subsurface investigation, or any communication with any Governmental Authority
by or on behalf of the Purchaser or its Affiliates after the Closing Date
unless such sampling, analysis, investigation, or communication is (1) required
by any Environmental Law; (2) in response to a request of a Governmental
Authority; or (3) during the normal course of business arising out of repairs,
modifications, maintenance, or construction activities that are conducted
consistent with normal industrial practices (provided, however,
any such sampling or analysis, subsurface investigation, or communication with
a Governmental Authority shall not be considered “required by Environmental
Law” if such sampling, analysis, investigation or communication occurs as a
result of:  (a) a Change at an Operating
Site; or (b) due diligence conducted by a future purchaser or financing
source).  Subject to the limitations set
forth in Section 8.07, the Seller shall have the right to recover for Losses
from the Purchaser for a breach of this provision, notwithstanding the

 

52

 

status of
Historical Off-Site Environmental Liabilities as Excluded Liabilities, if and
solely to the extent that the action taken constituting the breach of this
provision was taken by an employee of the Purchaser who, at the time of such action,
was (i) a managerial employee, (ii) a person whose principal responsibility is
environmental compliance, (iii) an officer of the Purchaser, or (iv) any Person
acting at the request, or with the authorization, of any of the foregoing.  In the event of a sale of the Business or
change in control involving the Business, the foregoing limitation shall apply
to a comparable employee or agent of any successor entity or its
Affiliates.  For the avoidance of doubt,
the Seller’s right to pursue a contractual claim to recover any Losses from the
Purchaser caused by a breach of this provision by the Purchaser shall in no way
affect Parent’s, the Seller’s and the Purchaser’s rights or obligations under
Article VIII with respect to Historical Off-Site Environmental Liabilities, and
any amount paid by the Purchaser as damages resulting from such a breach shall
not be considered a Loss that is subject to indemnification by Parent or the
Seller under Section 8.02.

 

SECTION 5.15.  Environmental
Reports.  The Seller agrees to
transfer with the Business copies of all material environmental reports,
studies, investigations and correspondence regarding Environmental Liabilities
of the Business in the possession of Parent, any Affiliate of Parent, including
the Seller, or any of their counsel or environmental consultants on the Closing
Date or, on request, within a reasonable period thereafter.

 

SECTION 5.16.  Provision
of Business Records to the Purchaser. 
Notwithstanding the provisions of Section 2.01(a)(vii), the Seller shall
provide to the Purchaser on the Closing Date copies of all of the material
Business Records and copies of all other material business records (including
customer lists) to the extent related to the Business.  Thereafter, at any reasonable time upon reasonable
prior notice and from time to time, the Seller shall provide to the Purchaser
such access to and copies of such materials as the Purchaser may from time to
time reasonably request.

 

SECTION 5.17.  Use
of Intellectual Property.  (a)  Except as expressly set forth in this
Agreement or the Ancillary Agreements, no interest in or right to use the name
“NewPage”, “Sterling Ultra” or any logo (with or without the word “NewPage”),
trademark or trade name or any derivation thereof of “NewPage” or any of the
Seller’s Affiliates with respect to, or associated with, the foregoing
(collectively, the “Retained Names and Marks”) is being transferred to
the Purchaser pursuant to the transactions contemplated hereby.  Except as set forth herein or expressly
provided in the temporary trademark license agreement to be executed pursuant
to this Section 5.17(a), the use of any Retained Names and Marks in connection
with the Business by the Purchaser shall cease as of the Closing Date.  At the Closing, Parent shall grant to the
Purchaser a temporary trademark license to use the Retained Names and Marks for
a period of twelve months from the Closing Date solely in connection with (i)
the Carbonless Paper Business and (ii) the Non-Carbonless Paper Business, but
only in connection with finished and packaged coated paper in Inventory as of
the Closing Date, in each case, pursuant to a license agreement (the “Temporary
Trademark License Agreement”), substantially in the form attached hereto as
Exhibit 5.17(a).  Except as expressly
authorized in the Temporary Trademark License Agreement or otherwise provided
in this Section 5.17(a), the Purchaser, promptly following the Closing Date
and, in any event, within twelve months thereafter, will remove or obliterate
all the Retained Names and Marks from its signs, purchase orders, invoices,
sales orders, labels, letterheads, and shipping documents, and not put into use
after the Closing Date any such items and materials not in existence on the
Closing Date that bear any Retained Name or Mark or any name, mark or logo

 

53

 

confusingly
similar thereto; provided that, after such twelve month period, the
Purchaser may continue to sell goods that have been packaged prior to such time
using materials bearing any of the Retained Names and Marks.  Except as expressly provided herein or in any
other Ancillary Agreement, the Purchaser agrees that none of Parent or any of
its Affiliates shall have any responsibility for claims by third parties
arising out of, or relating to, the use after the Closing Date by the Purchaser
or any Affiliate thereof of any Retained Name or Mark.  Notwithstanding anything to the contrary in
this Agreement, the Purchaser shall have the right to:  (i) keep records and other historical or
archived documents containing or referencing the Retained Names and Marks and
(ii) refer to the historical fact that the Business was previously conducted
under the Retained Names and Marks; provided that with respect to any
such reference, the Purchaser shall not use the Retained Names or Marks to
promote any of the products of the Business and the Purchaser shall make
explicit that the Business is no longer affiliated with the Seller, Parent or
MeadWestvaco.

 

(b)           Except as expressly provided
in the Technology License Agreement, substantially in the form attached hereto
as Exhibit 5.17(b) (the “Technology License Agreement”), pursuant to
which, at the Closing, Parent, the Seller and Parent’s other Affiliates shall
grant to the Purchaser a world wide, non-exclusive, perpetual, fully paid royalty-free
license to use all Owned Business Intellectual Property, no ownership interest
in, or right to use, any Owned Business Intellectual Property is being
transferred to the Purchaser pursuant to the transactions contemplated hereby.  Except as expressly provided in the
Technology License Agreement, neither the Purchaser nor any of its Affiliates
shall use any of the Owned Business Intellectual Property.

 

(c)           At the Closing, Parent and
the Purchaser shall enter into a Technology License-Back Agreement in the form
attached as Exhibit 5.17(c) hereto (the “Technology  License-Back
Agreement”), pursuant to which the Purchaser shall grant to Parent and its
Affiliates a worldwide, non-exclusive, perpetual, fully paid royalty-free
license to use the Licensed-Back Intellectual Property.

 

(d)           No ownership interest in or
right to use the Licensed Business Intellectual Property is being transferred
to the Purchaser pursuant to the transactions contemplated hereby, except as
provided in the Technology Sub-License Agreement, substantially in the form
attached hereto as Exhibit 5.17(d) (the “Technology Sub-License Agreement”),
whereby, at the Closing, the Seller and/or Parent shall grant to the Purchaser
a perpetual, royalty-free, fully-paid, non-exclusive sublicense to use,
practice, lease, license, reproduce, modify and make derivative works of, and
to make, sell and distribute goods and services utilizing or incorporating, the
Licensed Business Intellectual Property (excluding Computer Software), in
accordance with and subject to, to the extent applicable, the rights and
obligations of Parent and its Affiliates pursuant to the NewPage License
Agreement.  Except as expressly provided
in the Technology Sub-License Agreement, none of the Purchaser or any of its
Affiliates shall use any of the Licensed Business Intellectual Property
(excluding Computer Software).

 

(e)           The Seller agrees to transfer
all of its rights and obligations under the MeadWestvaco Trademark License
Agreement to the Purchaser and promptly following the date hereof, and in any
event prior to the Closing, to provide MeadWestvaco with prior written notice

 

54

 

of
such transfer in accordance with the terms and conditions of the MeadWestvaco
Trademark License Agreement.

 

(f)            Prior
to the Closing, Parent will take all actions necessary pursuant to Section 12.3
of the “SAP America, Inc. R/3 Software End-User Value License Agreement”
between SAP America, Inc. and Parent, dated as of May 12, 2005, including
execution of any necessary agreements, to effectuate the transfer of 550 user
licenses to the Purchaser, all at the Purchaser’s sole cost and expense.

 

SECTION 5.18.  Intracompany
Arrangements.  Notwithstanding any
other provision of this Agreement to the contrary (other than pursuant to any
Ancillary Agreement or Shared Contract), as of the Closing, all services,
commitments, agreements or other arrangements that existed prior to the Closing
between the Seller and Parent or any other Affiliate of Parent with respect to
the Business shall cease or be terminated. 
Any such cessation or termination shall be without penalty to, and shall
not require any action by, the Purchaser or any of its Affiliates.

 

SECTION 5.19.  Preparation
of Stand-Alone Financial Statements. 
(a)  On or before seven calendar
days prior to the Closing Date, the Seller shall deliver to the Purchaser
audited stand-alone financial statements of the Business (reflecting only the
Purchased Assets and the Assumed Liabilities) including the balance sheet,
statement of income, statement of cash flows and associated notes to the
foregoing financial statements required under GAAP and Rule 3-05 of Regulation
S-X, as of, or for the twelve-month period ended, December 31, 2005, prepared
by the Seller and with the opinion of the Seller’s Accountants attached (the “Stand-Alone
Financial Statements”).

 

(b)           Between the date hereof and
Closing, and thereafter in accordance with Section 2.07, the Seller and Parent
shall, and shall cause their respective employees and advisors, including the
Seller’s Accountants, to afford the Purchaser and its employees and advisors,
including the Purchaser’s Accountants, access upon reasonable notice and during
normal business hours to the Seller’s and Parent’s respective employees and
advisors and to the books, papers, records and other documents, including work
papers of the Seller’s Accountants (even though such work papers may be “in
process” and not final and to the extent the Seller’s Accountants agree to
provide such work papers), relating to the preparation of the Stand-Alone
Financial Statements.

 

SECTION 5.20.  Title
Insurance; Objections.  (a)  The Purchaser acknowledges that the Seller
has provided to the Purchaser copies of the Seller’s title policies relating to
the Owned Real Property listed in Section 3.14(a) of the Disclosure Schedule (“Seller’s
Title Policies”), together with copies of all Encumbrances and exceptions
described therein, prior to the date hereof, and that the Seller, upon the
execution of this Agreement, shall, on behalf of the Purchaser, order from
First American Title Insurance Company (attention: Phillip Salomon) and
Fidelity National Title Insurance Company of New York (attention: Neil Clark)
(collectively the “Title Companies”) updated title commitments for title
insurance policies to be issued at the Closing insuring the Purchaser’s title
to the Owned Real Property (“Purchaser’s Title Policies”).  The Purchaser hereby acknowledges and agrees
that it has no objection to any exceptions listed in the Seller’s Title
Policies previously delivered to the Purchaser (except for mortgages,
assignments of leases and rents, UCC filings and other exceptions or matters
relating to existing

 

55

 

financing
(inclusive of Voluntary Seller Encumbrances) and excluded from the definition
of Permitted Exception pursuant to Section 5.20(b)(ix)), and that all such
exceptions set forth therein shall be deemed “Permitted Exceptions” as
described below.  The Purchaser agrees to purchase
Purchaser’s Title Policies from the Title Companies at the Closing, in an
aggregate amount equal to the Purchase Price, on a 50-50 co-insurance
basis.  Subject to the Permitted
Exceptions and subject to the following provisions of this Section 5.20,
Purchaser’s Title Policies shall be in substantially the same form as Seller’s
Title Policies and shall include all affirmative coverages and endorsements
contained in Seller’s Title Policies (collectively, the “Title Endorsements”)
except for the so-called “subsequent purchase endorsement”, together with such
additional endorsements and/or affirmative coverages as the Purchaser may
reasonably request from the Title Companies.

 

(b)           The Purchaser shall not
object to and shall accept the following matters, which shall be deemed to be
Permitted Exceptions, as to each parcel of Owned Real Property:

 

(i)            liens
for taxes or assessments, general or special, or other governmental charges
which are not yet due and payable as of the Closing;

 

(ii)           all land use, building and
zoning laws, regulations, codes and ordinances affecting such parcel and other
laws, ordinances, regulations, rules, orders, licenses or determinations of any
Governmental Authority heretofore, now or hereafter enacted, made or issued by
any such authority which do not materially adversely affect the current use and
operation of the Owned Real Property;

 

(iii)          any rights of the United
States of America, the State in which such parcel is located or others in the
use and continuous flow of any brooks, streams or other natural water courses
or water bodies within, crossing or abutting such parcel, or title to the
submerged lands including, riparian rights and navigational servitudes;

 

(iv)          title to that portion of such
parcel, if any, lying below the mean high water mark of abutting tidal waters;

 

(v)           all existing public and
private roads and streets and all railroad and utility lines, pipelines,
service lines and facilities which would be disclosed by an accurate survey of
such parcel which do not materially adversely affect the current use and
operation of the Owned Real Property;

 

(vi)          all encroachments, overlaps,
boundary line disputes, shortages in area, persons in possession, cemeteries
and burial grounds and other matters not of record which would be disclosed by
an accurate survey of such parcel which do not materially adversely affect the
current use and operation of the Owned Real Property;

 

(vii)         any loss or claim due to lack
of access to any portion of such parcel, which portion is not the subject of
affirmative insurance regarding access contained in Seller’s Title Policies; provided
that such lack of access does not materially adversely affect the current use
and operation of the Owned Real Property; provided, however, that
receipt of an access endorsement in the form contained in Seller’s Title
Policies shall constitute the cure of any such lack of access;

 

56

 

(viii)        the matters set forth in
Section 5.20(b)(viii) of the Disclosure Schedule; and

 

(ix)           all title exceptions and
other matters, except for any mortgages, assignments of leases and rents, UCC
filings or any other exceptions or matters relating to any existing financing,
described in Seller’s Title Policies previously delivered to the Purchaser
(together with the items listed above, the “Permitted Exceptions”).

 

(c)           For purposes of this
Agreement, a “Continuation Report” shall mean a so-called “continuation
search” report identifying with specificity (and providing copies of) any
exceptions appearing of record as of the effective date of such Continuation
Report which are not set forth in, and which first arose of record after the
date of, Seller’s Title Policies and, which the Title Companies propose to
include in Purchaser’s Title Policies at the Closing.  In the event that any of such additional
exceptions are not Permitted Exceptions, then the provisions of Section 5.20(d)
shall control and be governing in respect thereof.

 

(d)           With regard to any matter
contained in any Purchaser’s Title Policy or Continuation Report or in any new
or additional title matter hereafter raised by the Title Companies not less
than ten days prior to the Closing which is not a Permitted Exception and to
which the Purchaser objects in writing within ten days of the Purchaser’s
receipt thereof (a “Title Defect”), the Seller may, but shall have no
obligation to, attempt to cure and remove such Title Defects; provided, however,
that Seller shall be required to remove (or cause to be removed), by payment,
bonding or otherwise the following (“Voluntary Seller Encumbrances”):
(i) title exceptions corresponding to documents securing (x) that certain $575,000,000
loan made by Bank of New York to NewPage Corporation, NewPage Holding
Corporation and certain subsidiaries of NewPage Corporation, on May 2, 2005, as
collateral trustee for the parity lien claimholders, and (y) that certain
$750,000,000 loan made by Bank of New York to NewPage Corporation, NewPage
Holding Corporation and certain subsidiaries of NewPage Corporation, on May 2,
2005, as collateral trustee for the lenders, and (ii) Title Defects securing
the payment of Indebtedness that have been voluntarily recorded or otherwise
authorized by Seller (or Parent) to be recorded against any of the Owned Real
Property on or following the date hereof.. 
The Seller shall be deemed to have cured a Title Defect if (i) the Title
Companies are willing to insure over such Title Defect (without additional cost
to the Purchaser or if the Seller elects to pay for any such additional cost on
the Purchaser’s behalf); (ii) the Title Companies are willing to provide
affirmative insurance against such Title Defect whether through the Title
Endorsements or otherwise (without additional cost to the Purchaser or if the
Seller elects to pay for any such additional cost on the Purchaser’s behalf);
(iii) such Title Defect will be extinguished or removed upon the transfer of the
property to the Purchaser at Closing; or (iv) the Seller extinguishes or
removes such Title Defect of record.  If
the Seller is unwilling to or fails to cure or remove any Title Defects, then
within five Business Days of the Seller notifying the Purchaser in writing that
it will not cure such Title Defect, the Purchaser may (i) by written notice to
the Seller waive its objection and proceed with Closing and receive no credit
against, or reduction of, the Purchase Price on account of the Title Defects or
(ii) notify the Seller in writing that Purchaser is unwilling to close the
transactions contemplated by this Agreement pursuant to Section 7.02(g) unless
the Title Defect is cured.  If the
Purchaser fails to timely object in writing to any Title Defect as described in
the first sentence of this subsection (d), such Title Defect shall be deemed a
Permitted Exception; provided, however, that Purchaser’s failure
to timely object in writing to any Voluntary Seller Encumbrance shall not
result in any such Voluntary Seller Encumbrance being deemed to be a Permitted
Exception and Seller shall be

 

57

 

required
to remove any such Voluntary Seller Encumbrance notwithstanding any such
failure of Purchaser to timely object thereto.

 

SECTION 5.21.  Coated
Converting Agreement.  Between the
date hereof and prior to the Closing, the Seller, Parent and the Purchaser
shall negotiate in good faith to execute the Coated Converting Agreement
(having substantially the terms set forth in the term sheet attached hereto as
Exhibit 5.21, the “Coated Converting Agreement”), which shall be
effective as of the Closing Date, substantially in accordance with the terms
set forth in the term sheet attached hereto.

 

SECTION 5.22.  Letter of Credit.  (a)  On
or prior to the Closing Date, to secure the indemnification obligations of
Parent and the Seller pursuant to Article VIII, Parent shall obtain one or more
letters of credit in an aggregate amount of $10 million (the “Letter of
Credit”) from JP Morgan Chase Bank, N.A., or another financial institution
reasonably acceptable to the Purchaser, which Letter of Credit shall be
substantially in the form of Exhibit 5.22 hereto.  During the five-year period following the
Closing Date (the “Initial Term”), Parent shall maintain, or caused to
be maintained, for the benefit of the Purchaser, the Letters of Credit in an
aggregate amount of $10,000,000, and for the two-year period following the
Initial Term (the “Final Term”), Parent shall maintain, or caused to be
maintained, for the benefit of the Purchaser, the Letters of Credit in an
aggregate amount of at least $5,000,000.

 

(b)           The Purchaser shall have the
right to draw upon the Letter of Credit at any time during the Initial Term or
the Final Term, for an amount determined as specified below, if each of the
following conditions have been satisfied:

 

(i)            the
Purchaser has given the Parent or the Seller notice in accordance with Section
8.05 of a matter that could give rise to indemnification by Parent or Seller
pursuant to Section 8.02;

 

(ii)           Parent shall not have
objected to the amount claimed for indemnification with respect to such
indemnifiable Loss in accordance with the procedures set forth in Article VIII,
or Parent shall have delivered notice of its disagreement as to the amount of
the indemnification requested and either (A) Parent and the Purchaser shall
have, subsequent to the giving of such notice, mutually agreed that Parent or
the Seller is obligated for the indemnification for a specified amount or (B) a
final nonappealable judgment shall have been rendered by the court having
jurisdiction over the matters relating to such claim that provides for an award
against Parent or Seller of an amount in respect of such claim;

 

(iii)          in the case of a Third-Party
Claim, the liability for such Third-Party Claim shall have been finally
determined in accordance with Article VIII or clause (ii) of this Section
5.22(b); and

 

(iv)          Parent or the Seller shall
have failed to pay the amount so determined to be due within five days of the
due date of such amount, or if the amount so determined to be due does not have
a due date, within five days of written demand by the Purchaser to Parent
therefor.

 

58

 

(c)           If at any time during the
Initial Term or the Final Term, either the Purchaser reasonably ascertains, or the
issuer notifies the Purchaser, that a Letter of Credit will not be renewed or
will otherwise expire by its terms, and Parent does not cause to be issued for
the Purchaser’s benefit at least 30 days prior to the expiration of such Letter
of Credit, a replacement Letter of Credit substantially in the form of Exhibit
5.22 and issued by a financial institution reasonably acceptable to the
Purchaser, then the Purchaser may draw the full available amount under the
Letter of Credit that is about to expire. 
The Purchaser shall hold the proceeds thereof as cash collateral for the
indemnification obligations of Parent and the Seller under Article VIII until
the end of the Final Term or until a replacement Letter of Credit satisfying
the requirements of this Section 5.22 is issued to the Purchaser; provided
that, at any time during the Initial Term or the Final Term, the Purchaser
shall have the right to withdraw from such cash collateral the amount
determined in accordance with Section 5.22(b) to be payable to the
Purchaser.  If such a draw upon an
expiring Letter of Credit is made during the Initial Term in an amount in
excess of $5,000,000, then at the expiration of the Initial Term, the Purchaser
shall return to Parent any amount in excess of $5,000,000 that the Purchaser
continues to hold as cash collateral at such time.

 

(d)           The Purchaser may assign its
rights in respect of the Letter of Credit to one or more of its Affiliates and
may pledge its rights in respect of the Letter of Credit to one or more
financial institutions to secure the obligations of the Purchaser or any of its
Affiliates in respect of a secured loan or other financing.

 

ARTICLE VI

 

EMPLOYEE
MATTERS

 

SECTION 6.01.  Offer
of Employment.  As of the Closing,
the Purchaser shall offer employment to each of the then-current employees of
the Sellers and Parent listed on Exhibit 6.01 (including those employees on
such Exhibit that are on vacation, short-term disability, vacation or leave of
absence with a definite return date).  As
used herein, “Transferred Employee” shall mean each employee who accepts
such offer.

 

SECTION 6.02.  Post Closing Benefits.  The Purchaser shall, for the period
immediately following the Closing through and including December 31, 2006,
provide Transferred Employees who are not members of a collective bargaining
unit with salaries, wages and employee benefits that are in the aggregate
comparable to the current salaries, wages and employee benefits provided to
such Transferred Employees by the Seller immediately prior to the Closing.  Nothing herein shall be deemed to be a
guarantee of employment for any Transferred Employee.  The Purchaser shall, for the period
immediately following the Closing through and including the first anniversary
of the Closing, provide each Transferred Employee who is not a member of a
collectively bargained unit with participation in a severance plan or
arrangement that provides for a severance benefit upon a qualifying termination
of employment that is no less favorable than the severance benefit that would
be payable to similarly situated employees of the Purchaser.

 

SECTION 6.03.  Transition
to New Health Plans; Past Service Credit. 
To the extent that, after the Closing, the Transferred Employees
participate in welfare benefit plans of the Purchaser, the Purchaser shall (a)
waive all limitations as to preexisting and at-work conditions, if

 

59

 

any, with respect to participation and coverage requirements
applicable to each Transferred Employee to the same extent such limitations had
been waived under the corresponding plans of the Seller and (b) with respect to
the plan year in which the change was made, provide a credit to each
Transferred Employee for any co-payments, deductibles and out-of-pocket
expenses paid by such Transferred Employee under the corresponding plans of the
Seller during the relevant plan year, up to and including the Closing.  The Purchaser shall give Transferred
Employees full credit for purposes of eligibility and vesting and benefit accrual
(including service for benefit accruals and eligibility for forms of benefits
or subsidies under the Purchaser’s Hourly Pension Plan pursuant to Section 6.04
below but excluding benefit accrual under any other defined benefit pension
plan or otherwise where duplication of benefits would occur) under the employee
benefit plans or arrangements maintained by the Purchaser or its Affiliates in
which such Transferred Employees participate for such Transferred Employees’
service with the Seller or its affiliates or predecessors to the same extent recognized
by the Seller immediately prior to the Closing Date.

 

SECTION 6.04.  Hourly
Pension Plan.  (a)  Effective as of the Closing Date, the
Transferred Employees shall no longer be eligible to participate in the
Retirement Plan for Chillicothe Bargained Hourly Employees of Pace 731 and 988
of OPEIU 422 (the “Seller’s Hourly Pension Plan”), and the Seller shall
take all action prior to the Closing Date as may be required to achieve this
result.  The Purchaser agrees to
establish or maintain a defined benefit plan (the “Purchaser’s Hourly
Pension Plan”) which is intended to be qualified under Section 401(a) of
the Code and a related trust that is intended to be exempt from taxation under
Section 501(a) of the Code for the benefit of the Transferred Employees who
participated in the Seller’s Hourly Pension Plan and which shall credit such
Transferred Employees for their service with the Seller prior to the Closing
Date for all purposes, but solely to the extent such service was recognized
under the Seller’s Hourly Pension Plan. 
The Purchaser agrees that the Purchaser’s Hourly Pension Plan and its
related trust shall be operative in all respects effective as of the Closing
Date, and the Purchaser shall deliver to the Seller an officer’s certificate, a
favorable determination letter or an opinion of counsel reasonably satisfactory
to the Seller (a “Qualification Document”) to the effect that the
Purchaser’s Hourly Pension Plan substantially complies by its terms with the
requirements for qualification under Section 401(a) of the Code.

 

(b)           As soon as practicable after
the Closing Date, the Seller shall cause to be transferred from the Seller’s
Hourly Pension Plan to the Purchaser’s Hourly Pension Plan (i) liability for
all benefits accrued by the Transferred Employees under the Seller’s Hourly
Pension Plan as of the Closing Date and other liabilities of the Seller’s
Hourly Pension Plan relating to the Transferred Employees (the “Transferred
Benefit Liabilities”), and (ii) an asset amount equal to the Transfer Amount
(as defined in Section 6.04(d)). 
Following completion of the transfer of assets and liabilities from the
Seller’s Hourly Pension Plan, the Seller shall have no further liability
whatsoever with respect to the Transferred Employees for benefits under the
Seller’s Hourly Pension Plan.

 

(c)           As a condition of making the
transfer of assets and liabilities described below in this section, the
Purchaser shall be entitled to receive the following:  a copy of the most recent favorable
determination from the Internal Revenue Service to the effect that the Seller’s
Hourly Pension Plan meet the requirements for qualification under Section
401(a) of the Code and an officer’s certificate or an opinion of counsel that
nothing has occurred since the date of such letter which would cause the loss
of such qualification.

 

60

 

(d)           The Seller shall cause an
actuarial firm designated by the Seller (the “Seller’s Actuary”) to
determine the amount of assets required by Section 414(l) of the Code for the
Transferred Benefit Liabilities based on allocating assets by priority
categories described in Section 4044(a) of ERISA (the “Section 414(l) Amount”).  Subject to compliance with Section 414(l) of
ERISA and Section 4044 of ERISA, the Seller’s Hourly Pension Plan shall
transfer to the Purchaser’s Hourly Pension Plan an amount equal to the greater
of $80.4 million and the Section 414(l) Amount (the “Transfer Amount”).  The actuarial calculations of the Section 414
Amount and other calculations by Seller’s Actuary shall be reviewed, verified
and agreed by an actuarial firm designated by the Purchaser (the “Purchaser’s
Actuary”).  The Section 414(l) Amount
shall be determined as of the Closing Date on the basis of the assumptions and
methodologies set forth in Section 6.04(d) of the Disclosure Schedule.  The Seller hereby represents that, to the
extent that a transfer of assets and liabilities of the accrued benefits of the
Transferred Employees under the Seller’s Hourly Pension Plan occurred as of
January 1, 2006, the Seller’s Hourly Pension Plan would be permitted, pursuant
to Section 414(l) of ERISA, to transfer assets at least equal to $80.4 million,
based on (x) allocating assets by priority categories described in Section 4044
of ERISA and (y) the assumptions and the methodologies set forth on Section
6.04(d) of the Disclosure Schedule.  The
foregoing representation shall not be subject to the limits on indemnification
contained in Section 8.04.

 

(e)           As soon as practicable after
the Closing Date, but in no event later than 30 days from the Closing Date, the
Seller shall prepare and file Form 5310A with respect to the transfer required
by this section, and 30 days following the filing of the Form 5310A (the “Initial
Transfer Date”), the Seller shall subject to receipt of a Qualification
Document, cause to be transferred from the trust for the Seller’s Hourly
Pension Plan to the trust established or maintained with respect to the
Purchaser’s Hourly Pension Plan an amount, in cash and marketable securities
determined by the trustee of the Seller’s Hourly Pension Plan and reasonably
acceptable to the Purchaser, equal to 85% of the estimated Transfer Amount (the
“Initial Transfer Amount”).  As
soon as practicable after the final determination of the Transfer Amount,
calculated as of the Closing, but in no event later than 60 days from the
Initial Transfer Date (the “True-Up Date”), the Seller shall cause a
second transfer to be made to the Purchaser’s Hourly Pension Plan (or the
Purchaser shall cause a transfer to be made to the Seller’s Hourly Pension
Plan, as applicable), in cash and marketable securities determined by the
trustee of the Seller’s Hourly Pension Plan and reasonably acceptable to the
Purchaser, of the True-Up Amount.  The “True-Up
Amount” means an amount equal to the Transfer Amount (i) minus the sum of
(A) the Initial Transfer Amount and (B) distributions, if any, made directly
from Seller’s Hourly Pension Plan with respect to Transferred Employees from
the Closing Date through the True-Up Date, and (ii) plus earnings in the Money
Market Vehicle (as defined in Section 6.04(g)). 
Such True-Up Amount shall be determined by the Seller’s Actuary, after
verification and approval by the Purchaser’s Actuary.  Once the Seller’s Actuary and the Purchaser’s
Actuary shall reach agreement, the Seller’s Actuary shall verify that the
completed transfers comply with the requirements of Section 414(l) of the
Code.  Nothing in this Section 6.04 shall
prevent the Seller from filing the Form 5310A in its discretion prior to the
Closing Date.

 

(f)            The
Seller’s Actuary shall provide the Purchaser’s Actuary with the results of the
calculations made under the foregoing paragraphs and with records and other
information in support of such calculations as required by the Purchaser’s
Actuary to verify and approve such calculations.  The Seller and the Purchaser will cause their
respective actuaries to work together in

 

61

 

good
faith to promptly resolve any differences between them with respect to such
calculations.  The expenses of the
Seller’s Actuary shall be borne by the Seller, and the expenses of the
Purchaser’s Actuary shall be borne by the Purchaser.  In the event such differences cannot be
resolved, the two actuaries shall appoint a third actuary to resolve such
differences, and the cost of such third actuary shall be borne equally by the
Seller and the Purchaser.  The decision
of such third actuary shall be final and binding on the Seller and the
Purchaser.

 

(g)           Notwithstanding any
provisions to the contrary in this Section 6.04, it is the intention of the
parties that the Seller shall attempt to minimize the market risk from the
Closing Date to the True-Up Date (the “Market Risk Period”) by placing
125% of the Initial Transfer Amount into a money market account or other fixed
income investment vehicle offered by the trustee of the Seller’s Hourly Pension
Plan on the Closing Date (the “Money Market Vehicle”), and it is agreed
that the return on such Transfer Amount during the Market Risk Period shall be
paid to the Purchaser’s Hourly Pension Plan on the True-Up Date.  The Initial Transfer Amount shall be paid
from the Money Market Vehicle.

 

SECTION 6.05.  Certain
Other Employee-Related Costs.  Five
Business Days prior to the Closing, the Seller shall provide the Purchaser with
a complete and accurate statement of any amounts expected to be payable by the
Purchaser following the Closing that relate to any service by any Transferred
Employee with the Seller through the Closing, including any salary or wages,
any accrued vacation, sick or personal days or any bonuses, except to the
extent that such amounts will be reflected as Liabilities on the Estimated Date
Working Capital Statement (the “Employee Amounts”).  In the event that the amounts payable by the
Purchaser following the Closing that relate to service by any Transferred
Employee with the Seller through the Closing exceed the Employee Amounts, the
Seller shall indemnify the Purchaser for such excess pursuant to Section 8.02.

 

SECTION 6.06.  Existing
Welfare Benefit Plans; Retiree Medical Benefits.  The Seller shall retain responsibility for
and continue to pay all medical, life insurance, disability and other welfare
plan expenses and benefits for each Transferred Employee with respect to claims
incurred by such Transferred Employees or their covered dependents prior to the
Closing Date.  Expenses and benefits with
respect to claims incurred by Transferred Employees or their covered dependents
on or after the Closing Date shall be the responsibility of the Purchaser.  For purposes of this paragraph, a claim is
deemed incurred when the services that are the subject of the claim are
performed; in the case of life insurance, when the death occurs; in the case of
long-term disability benefits, when the disability occurs; and, in the case of
a hospital stay, when the employee first enters the hospital.  Following the Closing Date, the Purchaser
shall (x) assume all liabilities, obligations and responsibilities of the
Seller to provide post-retirement medical, health and life insurance benefits
for union Transferred Employees and former union employees of the Business who
separated from service after May 2, 2005, pursuant to the terms of any Plan
that provides such benefits and (y) hold harmless the Seller from any claim for
such benefits.

 

SECTION 6.07.  Collective
Bargaining Agreements.  The Purchaser
agrees to recognize the unions representing the employees of the Business and
shall assume all obligations and liabilities under each collective bargaining
agreement set forth on Section 2.01(a)(xv) of the Disclosure Schedule.

 

62

 

SECTION 6.08.  Cooperation
With Respect to Certain Pre-Closing Retained Liabilities. 
Without affecting the status of such grievances or claims as Excluded
Liabilities under Section 2.02(b), the Purchaser shall cooperate with, and
provide all reasonable assistance to, the Seller in connection with the
response by the Seller to or the resolution of (a) any grievances under the
collective bargaining agreements assumed by the Purchaser pursuant to Section
6.07 or (b) any equal employment opportunity or other discrimination or
employment law claims relating to persons currently or formerly employed in the
Business, in each case arising prior to the Closing.  With respect to Transferred Employees such
reasonable assistance may include the Purchaser providing for reasonable
nonmonetary remedies.

 

ARTICLE VII

 

CONDITIONS TO
CLOSING

 

SECTION 7.01.  Conditions to Obligations of the Seller
and Parent.  The obligations of the
Seller and Parent to consummate the transactions contemplated by this Agreement
shall be subject to the fulfillment or written waiver, at or prior to the
Closing, of each of the following conditions:

 

(a)           Representations, Warranties and Covenants.  (i)
The representations and warranties of the Purchaser contained in this Agreement
(x) that are not qualified by “materiality” (including the word “material”)
shall have been true and correct in all material respects when made and shall
be true and correct in all material respects as of the Closing, except to the
extent such representations and warranties are as of another date, in which
case, such representations and warranties shall be so true and correct as of
that date, and (y) that are qualified by “materiality” (including the word
“material”) shall have been true and correct when made and shall be true and
correct as of the Closing, except to the extent such representations and
warranties are as of another date, in which case, such representations and
warranties shall be so true and correct as of that date, (ii) the covenants and
agreements contained in this Agreement to be complied with by the Purchaser on
or before the Closing shall have been complied with in all material respects
and (iii) the Seller and Parent shall have received a certificate from the
Purchaser certifying as to clauses (i) and (ii) above signed by a duly
authorized officer thereof;

 

(b)           HSR Act.  Any waiting period (and any
extension thereof) under the HSR Act applicable to the purchase of the
Purchased Assets contemplated by this Agreement shall have expired or shall
have been terminated;

 

(c)           No Governmental Order.  No
Governmental Order restraining, enjoining or prohibiting the consummation of
the transactions contemplated by this Agreement shall be in effect; and

 

(d)           Ancillary Agreements.  The
Purchaser shall have delivered to Parent counterparts of each of the Technology
License-Back Agreement, the Converting Services Agreement and the Transition
Services Agreement duly executed by the Purchaser.

 

63

 

SECTION 7.02.  Conditions to Obligations of the Purchaser.  The obligations of the Purchaser to
consummate the transactions contemplated by this Agreement shall be subject to
the fulfillment or written waiver, at or prior to the Closing, of each of the
following conditions:

 

(a)           Representations, Warranties and Covenants. 
(i)  The representations and
warranties of the Seller and Parent contained in this Agreement shall have been
true and correct (in each case, disregarding materiality qualifications
contained therein, including “Material Adverse Effect”) when made and shall be
true and correct as of the Closing, except to the extent such representations
and warranties are as of another date, in which case, such representations and
warranties shall be so true and correct as of that date, except for any such
failure to have been true or correct that would not have a Material Adverse
Effect, (ii) the covenants and agreements contained in this Agreement to be
complied with by the Seller and/or Parent on or before the Closing shall have
been complied with in all material respects, and (iii) the Purchaser shall have
received a certificate from each of the Seller and Parent certifying as to
clauses (i) and (ii) above signed by a duly authorized officer thereof;

 

(b)           HSR Act; German Act Against Restraints on
Competition.  Any waiting period (and any extension
thereof) under the HSR Act applicable to the purchase of the Purchased Assets
contemplated by this Agreement shall have expired or shall have been
terminated, and all applicable approvals and waiting periods pursuant to the
applicable rules of the German Act against Restraints of Competition shall have
been obtained or expired;

 

(c)           No Proceeding or Litigation.  No
Action shall have been commenced or threatened by or before any Governmental
Authority against any of Parent, the Seller or the Purchaser, seeking to
restrain or materially and adversely alter the transactions contemplated by
this Agreement;

 

(d)           No Governmental Order.  No
Governmental Order restraining, enjoining or prohibiting the consummation of the
transactions contemplated by this Agreement shall be in effect;

 

(e)           Consents and Approvals. 
Parent and its Affiliates shall have obtained, each in form and
substance reasonably satisfactory to the Purchaser, (i) the third party written
consents required under the agreements set forth on Exhibit 7.02(e), and (ii)
such other written consents, the failure of which to obtain would have Material
Adverse Effect;

 

(f)            No Material Adverse Effect.  No
event or events shall have occurred which, have, or would reasonably be
expected to have, a Material Adverse Effect;

 

(g)           Title Insurance for Owned Real Property.  The
Purchaser shall receive from the Title Companies an owner’s
policy of title insurance, or irrevocable and unconditional binder to issue the
same, dated, or updated to, the Closing Date, insuring, or committing to insure
the Purchaser’s title in fee simple to each parcel of Owned Real Property
listed in Section 3.14(a) of the Disclosure Schedule, subject only to the
Permitted Encumbrances.  Each of Parent
and the Purchaser shall pay one-half of the basic title insurance premiums

 

64

 

(i.e., premiums exclusive of the
cost for endorsements) charged by the Title Companies for such owner’s policy
of title insurance (or binder), up to an aggregate amount of $40,000, and the
Purchaser shall pay all title insurance premiums charged in excess of such
aggregate amount, as well as the costs for all endorsements and all other
charges which are payable to the Title Companies (including, without
limitation, all search and update fees) in respect of the title insurance
policies issued in connection with the transactions contemplated by this
Agreement;

 

(h)           Ancillary
Agreements.  Parent, the Seller
and each of Parent’s other Affiliates shall have delivered to the Purchaser
counterparts of each Ancillary Agreement duly executed by Parent, the Seller or
any of Parent’s other Affiliates, as applicable;

 

(i)            Stand-Alone
Financial Statements. 
The Purchaser shall have received from the Seller the Stand-Alone
Financial Statements, which shall be, in all material respects, consistent with
the Unaudited Financial Statements of the Business provided to the Purchaser by
the Seller prior to the date hereof;

 

(j)            NPDES
Permits.  The Purchaser shall
have received no written notification from the Ohio Environmental Protection
Agency (“OHEPA”) that OHEPA will not approve the transfer of any
National Pollutant Discharge Elimination System (“NPDES”) permit
(including the NPDES permits numbered 0IA0002*HD and OHR000003) from the Seller
to the Purchaser; and

 

(k)           Letters
of Credit.  The Purchaser shall
have received the Letters of Credit in an aggregate amount of $10 million.

 

ARTICLE VIII

 

INDEMNIFICATION

 

SECTION 8.01.  Survival
of Representations and Warranties. 
(a)  The representations and
warranties of the Seller and Parent contained in this Agreement shall survive
the Closing for a period of eighteen months following the Closing Date; provided,
however, that (i) the representations and warranties made pursuant to
Sections 3.01, 3.16 and 3.24 shall survive indefinitely, (ii) the
representations and warranties dealing with Tax matters shall survive until 60
days after the expiration of the relevant statute of limitations for the Tax
liabilities in question, (iii) insofar as any claim is made by the Purchaser
for the breach of any representation or warranty of the Seller or Parent
contained herein, which claim arises out of allegations of personal injury or
property damage suffered by any third party on or prior to the Closing or
attributable to products or Inventory sold or shipped, or activities or
omissions that occur, on or prior to the Closing, such representations and
warranties shall, for purposes of such claim by the Purchaser, survive until
thirty calendar days after the expiration of the applicable statute of
limitations governing such claims, (iv) the representations and warranties made
pursuant to Section 3.11 shall not survive the Closing and (v) the
representations and warranties made pursuant to Section 3.14 with respect to title
to the Owned Real Property and Leased Real Property shall terminate as of the
Closing Date

 

65

 

with respect to such properties for which the Purchaser
obtained a Purchaser’s Title Policy pursuant to Section 5.20 hereof, and
neither the Seller nor Parent shall have any Liability whatsoever with respect
to such representations or warranties after each such date as applicable.  Neither the period of survival nor the
liability of the Seller or Parent with respect to the Seller’s or Parent’s
representations and warranties shall be reduced by any investigation made at
any time by or on behalf of the Purchaser. 
If written notice of a claim has been given prior to the expiration of
the applicable representations and warranties by the Purchaser to the Seller or
Parent, then the relevant representations and warranties shall survive as to
such claim, until such claim has been finally resolved.

 

(b)           The representations and
warranties of the Purchaser contained in this Agreement shall survive the
Closing for a period of eighteen months following the Closing Date, and the
Purchaser shall have no Liability whatsoever with respect to the Purchaser’s
representations and warranties after such date; provided, however,
that the representations and warranties made pursuant to Sections 4.01 and 4.06
shall survive indefinitely.  If written
notice of a claim has been given prior to the expiration of the applicable
representations and warranties by the Seller to the Purchaser, then the relevant
representations and warranties shall survive as to such claim, until such claim
has been finally resolved.

 

(c)           Notwithstanding anything
herein to the contrary, no party shall be liable to any Indemnified Party for
special, incidental or consequential damages that are not reasonably foreseeable
by the Indemnifying Party nor for any punitive or exemplary Losses.

 

(d)           The Purchaser, the Seller and
Parent acknowledge and agree that, in the absence of fraud or willful
misconduct on the part of any party hereto, following the Closing the indemnification
provisions of this Article VIII shall be the sole and exclusive remedies of any
Purchaser Indemnified Party or any Seller Indemnified Party for any matter that
is the subject of Section 8.02 or 8.03, as applicable.

 

(e)           In calculating any amount of
Losses recoverable pursuant to this Article VIII, the amount of such Losses
shall be reduced by (i) any insurance proceeds actually received from any
unaffiliated insurance carrier offsetting the amount of such Loss, net of any
expenses incurred by the Indemnified Party in obtaining such insurance proceeds
(provided that the
Indemnified Party shall be obligated to reasonably seek any such proceeds to
which it may be entitled) and (ii) any recoveries from third parties pursuant
to indemnification (or otherwise) with respect thereto, net of any expenses
incurred by the Indemnified Party in obtaining such third party payment.  If any Losses for which indemnification is
provided hereunder are subsequently reduced by any insurance payment or other
recovery from a third party, the Indemnified Party shall promptly remit the
amount of such reduction to the Indemnifying Party.

 

SECTION 8.02.  Indemnification
by the Seller and Parent.  From and
after the Closing, the Purchaser and its Affiliates, officers, directors,
employees, agents, successors and assigns (each, a “Purchaser Indemnified
Party”) shall be indemnified and held harmless by the Seller and Parent,
jointly and severally, for and against any and all Liabilities, losses,
damages, claims, costs and expenses, interest, awards, judgments and penalties
(including attorneys’ and consultants’ fees and expenses) actually suffered or
incurred by them (including any Action

 

66

 

brought or otherwise initiated by any of them) (hereinafter
a “Loss”), arising out of or resulting from:

 

(a)           the breach of any
representation or warranty made by the Seller or Parent in this Agreement (it
being understood that such representations and warranties shall be interpreted
without giving effect to any limitations or qualifications as to “materiality”
(including the word “material” or “Material Adverse Effect” set forth therein)
except for the limitations set forth in Section 3.04 and Section 3.08(a)(ii)); provided,
however, that in the case of the representations and warranties contained
in Section 3.11 (Environmental Matters) all indemnity obligations of the Seller
and Parent will be governed exclusively by Sections 8.02(g), 8.02(h), 8.02(i),
8.07 and 8.08;

 

(b)           the breach of any covenant or
agreement by the Seller or Parent in this Agreement;

 

(c)           any and all Losses suffered
or incurred by the Purchaser by reason of or in connection with any claim or
cause of action of any third party to the extent arising out of any action,
inaction, event, condition, liability or obligation of the Seller occurring or
existing prior to the Closing;

 

(d)           the excess of the amounts
payable by the Purchaser following the Closing that relate to service by any
Transferred Employee with the Seller through the Closing over the Employee
Amounts;

 

(e)           Liabilities arising from or
related to any failure to comply with laws relating to bulk transfers or bulk
sales with respect to the transactions contemplated by this Agreement;

 

(f)            the
Excluded Liabilities;

 

(g)           Historical On-Site
Environmental Liabilities in excess of any amounts designated to cover
Historical On-Site Environmental Liabilities specifically identified and
reserved for in the balance sheet, reserves, capital expenditure budgets,
accruals, transferred financial assurance instruments, working capital
statements or operating budgets of the Business disclosed to the Purchaser
prior to the date hereof as set forth on Section 8.02(g) of the Disclosure
Schedule in accordance with and subject to the limitations and procedures set
out in Section 8.07;

 

(h)           Historical Off-Site
Environmental Liabilities in accordance with and subject to the procedures set
out below in Section 8.07; and

 

(i)            The
Seller’s share of Losses arising from Straddle Environmental Liabilities
allocated to the Seller pursuant to Section 8.08, in accordance with and
subject to the limitations and procedures set out below in Section 8.08 and in
excess of any amounts designated to cover Straddle Environmental Liabilities
identified and reserved for in the balance sheet, reserves, capital expenditure
budgets, accruals, transferred financial assurance instruments, working capital
statements or operating budgets of the Business

 

67

 

disclosed to the Purchaser prior to
the date hereof as set forth on Section 8.02(i) of the Disclosure Schedule (“Straddle
Environmental Liability Reserves”).

 

To
the extent that either the Seller’s or Parent’s undertakings set forth in this
Section 8.02 may be unenforceable, the Seller or Parent (subject to the
limitations set forth in Section 8.04) shall contribute the maximum amount that
it is permitted to contribute under applicable Law to the payment and
satisfaction of all Losses incurred by the Purchaser Indemnified Parties.

 

Notwithstanding
anything in this Agreement to the contrary, the Seller shall have no indemnification
obligations under Sections 8.02(g) (subject to the limitations set forth in
Section 8.07) and 8.02(i) (subject to the limitations set forth in Section
8.08) for any Losses resulting from changes in any Environmental Law occurring
after the Closing Date, provided that any Remedial Action of Straddle
Environmental Liabilities or Historical On-Site 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.

 

SECTION 8.03.  Indemnification
by the Purchaser.  From and after the
Closing, the Seller and its Affiliates, officers, directors, employees, agents,
successors and assigns (each a “Seller Indemnified Party”) shall be
indemnified and held harmless by the Purchaser for and against any and all
Losses, arising out of or resulting from:

 

(a)           the breach of any
representation or warranty made by the Purchaser in this Agreement (it being
understood that any representation and warranty made by the Purchaser in this
Agreement shall be interpreted without giving effect to any limitations or
qualifications as to “materiality” (including the word “material” set forth
therein));

 

(b)           the breach of any covenant or
agreement by the Purchaser in this Agreement;

 

(c)           the Purchaser’s ownership or
operation of the Business or the Purchased Assets from and after the Closing
Date (excluding Excluded Liabilities or Liabilities for which the Seller has
agreed to indemnify the Purchaser hereunder);

 

(d)           the Assumed Liabilities;

 

(e)           Reserved Pre-Closing
Environmental Liabilities;

 

(f)            Post-Closing
Environmental Liabilities;

 

(g)           the Purchaser’s
responsibility for Losses arising from Straddle Environmental Liabilities
allocated to the Purchaser pursuant to Section 8.08;

 

(h)           any Guarantee that is set
forth in Section 5.04(f) of the Disclosure Schedule for which the Purchaser has
not been substituted for Parent or its Affiliates or for which Parent or its
Affiliates have not otherwise been released effective as of the Closing Date.

 

To
the extent that the Purchaser’s undertakings set forth in this Section 8.03 may
be unenforceable, the Purchaser shall contribute the maximum amount that it is
permitted to contribute under

 

68

 

applicable
Law to the payment and satisfaction of all Losses incurred by the Seller
Indemnified Parties.

 

SECTION 8.04.  Limits
on Indemnification.  Notwithstanding
anything to the contrary contained in this Agreement, except with respect to
claims relating to Taxes or claims for breach of the representation contained
in Section 6.04(d):  (a) an Indemnifying
Party shall not be liable for any claim for indemnification pursuant to Section
8.02(a), 8.02(g), 8.02(i) or 8.03(a), unless and until the aggregate amount of
indemnifiable Losses which may be recovered from the Indemnifying Party equals
or exceeds $800,000, after which the Indemnifying Party shall be liable for all
Losses (excluding such amount), subject to subparagraph (c) below; (b) no
Losses may be claimed under Section 8.02(a) or 8.03(a) by an Indemnified Party
or shall be reimbursable by an Indemnifying Party or shall be included in
calculating the aggregate Losses set forth in clause (a) above other than
Losses in excess of $25,000 resulting from any single or aggregated claims
arising out of the same facts, events or circumstances; and (c) the maximum
amount of indemnifiable Losses that may be recovered from an Indemnified Party
arising out of or resulting from the causes set forth in Section 8.02(a),
8.02(g), 8.02(i) or 8.03(a), as the case may be, shall be an amount equal to
$16,000,000.

 

SECTION 8.05.  Notice
of Loss; Third Party Claims. 
(a)  An Indemnified Party shall
give the Indemnifying Party notice of any matter that an Indemnified Party has
determined has given or could give rise to a right of indemnification under
this Agreement, within 60 days of such determination, stating the amount of the
Loss, if known, and method of computation thereof, and containing a reference
to the provisions of this Agreement in respect of which such right of
indemnification is claimed or arises.

 

(b)           If an Indemnified Party shall
receive notice of any Action, audit, demand or assessment (each, a “Third
Party Claim”) against it which may give rise to a claim for a Loss under
this Article VIII, within 30 days of the receipt of such notice, the
Indemnified Party shall give the Indemnifying Party notice of such Third Party
Claim; provided, however, that the failure to provide such notice
shall not release the Indemnifying Party from any of its obligations under this
Article VIII except to the extent that the Indemnifying Party is materially
prejudiced by such failure and shall not relieve the Indemnifying Party from
any other obligation or Liability that it may have to any Indemnified Party
otherwise than under this Article VIII. 
If the Indemnifying Party acknowledges in writing its obligation to
indemnify the Indemnified Party hereunder against any Losses that may result
from such Third Party Claim, then the Indemnifying Party shall be entitled to
assume and control the defense of such Third Party Claim at its expense and
through counsel of its choice if it gives notice of its intention to do so to
the Indemnified Party within five days of the receipt of notice from the
Indemnified Party of such Third Party Claim; provided, however,
that if there exists or is reasonably likely to exist a conflict of interest
that would make it inappropriate in the judgment of the Indemnified Party in
its sole and absolute discretion for the same counsel to represent both the
Indemnified Party and the Indemnifying Party, then the Indemnified Party shall
be entitled to retain its own counsel in each jurisdiction for which the
Indemnified Party determines counsel is required, at the expense of the
Indemnifying Party; and provided  further that in the event of a
third party claim relating to Taxes, the Indemnified Party shall have the right
to retain control to the extent that the third party claim involves matters in
excess of $100,000 that are not indemnified hereunder and which cannot be
separately contested or increase the Tax liability for a Post-Closing Period by
more than $100,000.  In the event that
the

 

69

 

Indemnifying
Party exercises the right to undertake any such defense against any such Third
Party Claim as provided above, the Indemnified Party shall cooperate with the
Indemnifying Party in such defense and make available to the Indemnifying
Party, at the Indemnifying Party’s expense, all witnesses, pertinent records,
materials and information in the Indemnified Party’s possession or under the
Indemnified Party’s control relating thereto as is reasonably required by the
Indemnifying Party.  Similarly, in the
event the Indemnified Party is, directly or indirectly, conducting the defense
against any such Third Party Claim, the Indemnifying Party shall cooperate with
the Indemnified Party in such defense and make available to the Indemnified
Party, at the Indemnifying Party’s expense, all such witnesses, records,
materials and information in the Indemnifying Party’s possession or under the
Indemnifying Party’s control relating thereto as is reasonably required by the
Indemnified Party.  No such Third Party
Claim may be settled by the Indemnifying Party without the prior written consent
of the Indemnified Party.

 

SECTION 8.06.  Tax
Treatment.  Parent, the Seller and
Parent’s other Affiliates, on the one hand, and the Purchaser, on the other
hand, agree that all payments made by either of them to or for the benefit of
the other under this Article VIII, under other indemnity provisions of this
Agreement and for any misrepresentations or breaches of warranties or covenants
shall be treated as adjustments to the Purchase Price for Tax purposes and that
such treatment shall govern for purposes hereof except to the extent that the
Laws of a particular jurisdiction provide otherwise, in which case such
payments shall be made in an amount sufficient to indemnify the relevant party
on an after-Tax basis.  The amount of any Loss indemnified under this
Agreement shall be adjusted to take account of any Tax cost and any Tax benefit
reasonably realizable by the Indemnified Party arising in connection with the
receipt of indemnity payments under this Agreement or from the incurrence or
payment of any such Loss (including the net present value of any Tax cost and
any Tax benefit reasonably realizable in subsequent taxable years, calculated
using a discount rate of 5% and assuming the highest applicable combined
statutory rate of Tax then in effect).

 

SECTION 8.07.  Limitations and Procedures Applicable to
Indemnification for Historical Environmental Liabilities.  (a) 
Subject to the terms of this Section 8.07, whenever a claim shall arise
for indemnification under Section 8.02(g) or (h), the claim shall be submitted
by the Indemnified Party to the Indemnifying Party in accordance with Section
8.05.

 

(b)           In the event that the Purchaser submits a claim for indemnification
under Section 8.02(h) relating to an Historical Off-Site Environmental
Liability, the Seller may, at its sole cost and expense, assume the defense
and/or resolution (including undertaking Remedial Action) by written notice to
the Purchaser given within 20 Business Days of receipt of the Purchaser’s
written notice of claim.  If the Seller
assumes the defense and/or resolution of any Historical Off-Site Environmental
Liability, the Seller shall be entitled to take all steps necessary in the
defense and/or resolution thereof.  Where
Remedial Action is required, the Seller agrees to use commercially reasonable
efforts to avoid (i) unreasonable interference with the operations of any Real
Property provided there is no Change after the Closing Date or (ii)
unreasonably restrict the ability to use any Real Property for the use it was
employed on the Closing Date or for substantially similar uses, without the
consent of the Purchaser, which consent shall not be unreasonably withheld,
conditioned or delayed.  The Purchaser
may, at its own expense, monitor any proceeding with counsel of its choice
without any right of control thereof.  If
the Seller does not assume the defense and/or resolution of any Environmental Claim
relating to any Historical

 

70

 

Off-Site Environmental Liability, then the Purchaser may defend and/or
resolve such liability in a commercially reasonable manner, including settling
claims or litigation (after giving prior notice of the same to the Seller and
obtaining the prior written consent of the Seller which consent shall not be
unreasonably withheld, conditioned or delayed).

 

(c)           In the event that the Purchaser submits a claim for
indemnification under Section 8.02(g) relating to an Historical On-Site
Environmental Liability, the Seller shall assume the defense and/or resolution
(including undertaking Remedial Action) thereof.  The Seller 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
Purchaser, such consent not to be unreasonably withheld, delayed or conditioned);
provided, however, that (i) the Purchaser may, at its expense,
monitor any proceeding with counsel of its choice without any right of control
thereof, and (ii) the Seller shall consult with the Purchaser regarding the
defense and resolution thereof, allowing the Purchaser reasonable participation
therein.  “Reasonable participation”
shall be broadly construed and shall include, by way of example and not
limitation, being given reasonable advanced notice for conduct of
investigations and an opportunity to participate in significant meetings or
communications with any Governmental Authority. 
The Seller shall afford the Purchaser or its designees with the
opportunity to review draft documents prepared in connection with such matters
and shall reasonably consider the Purchaser’s comments.  The Seller shall provide all plans, reports,
pleadings and other documents in draft form to the Purchaser in a reasonable
time prior to delivering such documents to a governmental entity or claimant,
and the Seller shall reasonably consider the Purchaser’s comments thereon.  Where an onsite Remedial Action is required,
the Seller agrees to use commercially reasonable efforts to avoid (i)
unreasonable interference with the operations of any Real Property provided
there is no Change after the Closing Date or (ii) unreasonably restricting the
ability to use any Real Property for the use it was employed on the Closing
Date or for substantially similar uses, without the consent of the Purchaser,
which consent shall not be unreasonably withheld, conditioned or delayed.

 

(d)           The Seller and the Purchaser 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:  (i) employees and officers (including as
witnesses); (ii) other relevant information; and (iii) 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 the Seller is in
good faith defending and/or resolving a Historical Environmental Liability
under this Section, the Purchaser shall not compromise, settle or in any manner
interfere with the defense or resolution of such Historical Environmental
Liability.  If the Seller does not assume
the defense and/or resolution of any such Historical Environmental Liability
claim or litigation in accordance with the terms hereof, the Purchaser may
defend and/or resolve 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 the Seller which consent shall not be unreasonably withheld,
conditioned or delayed).

 

(e)           In connection with any Remedial Action covered by the
indemnities in Sections 8.02(g) and 8.02(h), the Seller shall only be required
to undertake or reimburse Losses incurred in the course of Remedial Action
conducted in a “Lowest-Cost Commercially Reasonable 

 

71

 

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 the lowest-cost method that would
minimize exposure to additional Losses 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:  (i) unreasonably interfere with the
operations of any Real Properties provided there is no Change to such
properties after the Closing Date, or (ii) unreasonably restrict the ability to
use any Real Property for the use it was employed on the Closing Date or for
substantially similar uses, without the consent of the Purchaser, which consent
shall not be unreasonably withheld, conditioned or delayed.  The Seller shall have no indemnification
obligations under Section 8.02(g) to the extent Losses result from any Change
after the Closing Date caused by the Purchaser or any subsequent owner or
operator of the Real Property.  For
purposes of this Article VIII, “Change” means a material change in the
use of a Real Property 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 a
Real Property or the operations conducted thereon.

 

(f)            The Seller or Parent shall
have no indemnification obligations under Section 8.02(g) for Losses arising
from any non-subsurface sampling or analysis, subsurface investigation, or any
communication with any Governmental Authority by or on behalf of the Purchaser
after the Closing Date unless (and only to the extent) such sampling, analysis,
investigation or communication is:  (i)
required by any Environmental Law; (ii) in response to a request of a
Governmental Authority; or (iii) during the normal course of business arising
out of repairs, modifications or maintenance activities, or demolition,
construction or physical expansion activities that are conducted consistent
with normal industrial practices; (provided, however, that any
such sampling, analysis, investigation or communication with a Governmental
Authority shall not be considered “required by Environmental Law” for purposes
of this Article VIII if such sampling, analysis, investigation or communication
occurs as a result of:  (1) a Change at a
Real Property; or (2) due diligence conducted by a future purchaser or
financing source).

 

(g)           The Seller or Parent, shall have no indemnification
obligations under Section 8.02(g) to the extent that, as a result of any
negligence or willful misconduct of the Purchaser, the amount of Losses subject
to indemnification by the Seller or Parent is exacerbated.

 

(h)           The Purchaser or its designees agree to make commercially
reasonable efforts to provide the Seller with advance notice of repairs,
modifications, maintenance or construction activities that might cause Losses
related to items disclosed in Section 3.11 of the Disclosure Schedule (to the
extent that the location of the environmental matter is reasonably identified
therein) for purposes of consultation with the Seller.  The Purchaser and the Seller 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.

 

72

 

SECTION 8.08.  Procedures for Allocation of
Responsibility for Straddle Environmental Liabilities.  (a)  A party seeking to have responsibility for
that Straddle Environmental Liability allocated pursuant to this Section 8.08
shall promptly notify the other party in writing of the matter and the facts
constituting the basis for the notifying party’s belief that the matter
qualifies as a Straddle Environmental Liability.

 

(b)           For purposes of Section 8.02(i) and 8.03(g), responsibility
for Losses arising from Straddle Environmental Liabilities will be allocated as
follows:

 

(i)            Responsibility for Losses
that are the subject of a Straddle Environmental Liability Claim Notice
delivered by one party to another on or before the first anniversary of the
Closing Date shall be allocated 70% to the Seller and 30% to the Purchaser.

 

(ii)           Responsibility for Losses that are the subject of a Straddle
Environmental Liability Claim Notice delivered by one party to another after
the first anniversary of the Closing Date and on or before the second
anniversary of the Closing Date shall be allocated 60% to the Seller and 40% to
the Purchaser.

 

(iii)          Responsibility for Losses that are the subject of a Straddle
Environmental Liability Claim Notice delivered by one party to another after
the second anniversary of the Closing Date and on or before the fifth
anniversary of the Closing Date shall be allocated 50% to the Seller and 50% to
the Purchaser.

 

(iv)          Responsibility for Losses that are the subject of a Straddle
Environmental Liability Claim Notice delivered by one party to another after
the fifth anniversary of the Closing Date and on or before the sixth
anniversary of the Closing Date shall be allocated 40% to the Seller and 60% to
the Purchaser.

 

(v)           Responsibility for Losses that are the subject of a Straddle
Environmental Liability Claim Notice delivered by one party to another after
the sixth anniversary of the Closing Date and on or before the seventh
anniversary of the Closing Date shall be allocated 30% to the Seller and 70% to
the Purchaser.

 

(vi)          Responsibility for any and all Losses arising from Straddle
Environmental Liabilities incurred after the seventh anniversary of the Closing
Date shall reside with the Purchaser.

 

(c)           The Seller shall have the right to control the defense
and/or resolution of any Straddle Environmental Liabilities covered by the
allocation ratios set out in Sections 8.08(b)(i) and (b)(ii).  The Purchaser shall have the right to control
the defense and/or resolution of any Straddle Environmental Liabilities covered
by the allocation ratios set out in Sections 8.08(b)(iii), (b)(iv), (b)(v) and
(b)(vi).  The party controlling defense
and/or resolution of a Straddle Environmental Liability under either of the two
immediately preceding sentences (the “Controlling Party”) shall be
entitled to take all steps necessary in the defense and/or resolution thereof including
the settlement of any matter without the consent of the other party (the “Non-Controlling
Party”) (so long as such settlement obtains for the Non-Controlling Party a
complete release of future liability in connection with the subject matter); provided,
however, that the Non-Controlling Party may, at its own expense, monitor
any proceeding with the counsel of its 

 

73

 

choice without any right of control thereof.  If the Controlling Party elects to control
the defense and/or resolution of any Straddle Environmental Liabilities with
respect to which it has such election right, the Controlling Party alone shall
control all Remedial Action or other actions (including all communications with
Governmental Authorities) undertaken in connection with the defense or
resolution of the Straddle Environmental Liabilities for which it is
responsible; provided, however, that any Remedial Action
responsibility for which is allocated under this Section 8.08 shall be
conducted in a Lowest-Cost Commercially Reasonable Manner; provided, further,
that where any Remedial Action is required, the Seller agrees to use
commercially reasonable efforts to avoid (i) unreasonable interference with the
operations of any Real Properties provided there is no Change after the Closing
Date or (ii) unreasonably restricting the ability to use any Real Property for
the use it was employed on the Closing Date or for substantially similar uses,
without the consent of the Purchaser, which consent shall not be unreasonably
withheld, conditioned or delayed. The Controlling Party shall afford the
Non-Controlling Party or its designees with the opportunity to review draft
documents prepared in connection with such matters and shall reasonably
consider such other party’s comments. 
The Controlling Party to shall provide all plans, reports, pleadings and
other documents in draft form to the Non-Controlling Party in a reasonable time
prior to delivering such documents to a governmental entity or claimant, and
the Non-Controlling Party and the Controlling Party shall each use its
reasonable best efforts not to delay the filing or submission of such
documents.

 

(d)           The Seller or Parent shall have no obligation under Section
8.02(i) to contribute its allocated share of Losses arising from any Straddle Environmental
Liability to the extent such Losses result from:  (i) any Change after the Closing Date caused
by the Purchaser or any subsequent owner or operator of the Real Properties;
(ii) any Remedial Action not conducted in a Lowest-Cost Commercially Reasonable
Manner; (iii) any gross negligence or willful misconduct of the Purchaser after
the Closing Date; or (iv) any non-subsurface sampling or analysis, or any
subsurface investigation, or any communication with any Governmental Authority
by or on behalf of the Purchaser after the Closing Date related thereto, unless
(and only to the extent) such sampling, analysis, subsurface investigation or
communication is:  (x) required by any
Environmental Law; (y) in response to a request of a Governmental Authority; or
(z) during the normal course of business arising out of repairs, modifications
or maintenance activities, or demolition, construction or physical expansion
activities that are conducted consistent with normal industrial practices; provided,
further, that any sampling or analysis, subsurface investigation, or
communication with a Governmental Authority shall not be considered “required
by Environmental Law” for purposes of this Article VIII if such sampling,
analysis, investigation or communication occurs as a result of:  (1) a Change at an Operating Site; or (2) due
diligence conducted by a future purchaser or financing source.

 

(e)           The Purchaser or its designees agree to make commercially
reasonable efforts to provide the Seller with advance notice of repairs,
modifications, maintenance or construction activities that might cause Losses
related to items disclosed in Section 3.11 of the Disclosure Schedule for
purposes of consultation with the Seller. 
The Purchaser and the Seller 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.

 

74

 

(f)            The Seller and the Purchaser
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 covered by this Section 8.08.  So long as the Controlling Party is in good
faith defending and/or resolving a Straddle Environmental Liability under this
Section, the Non-Controlling Party shall not compromise, settle or in any
manner interfere with the defense or resolution of such Straddle Environmental
Liability.  If the Controlling Party does
not assume the defense and/or resolution of any such Straddle Environmental
Liability claim or litigation in accordance with the terms hereof, the
Non-Controlling Party may defend and/or resolve such Straddle Environmental
Liability in such manner as it may deem appropriate, including settling claims
or litigation (after giving prior written notice of the same to the Controlling
Party and obtaining the prior written consent of the Controlling Party, which
consent shall not be unreasonably withheld, conditioned or delayed) on such
terms as the Non-Controlling Party may reasonably deem appropriate, and the
Controlling Party will promptly indemnify the Non-Controlling Party in
accordance with the provisions of this Article VIII.

 

(g)           Section 8.08(g) of the Disclosure Schedule includes
identified items that the parties agree meet the definition of “Straddle
Environmental Liability”.  The inclusion
of any matter on Section 8.08(g) of the Disclosure Schedule shall not in any
way be construed as an admission of the existence of any liability with respect
to or breach of a representation or warranty.

 

SECTION 8.09.  Procedures Applicable to Indemnification
by the Purchaser for Reserved Pre-Closing Environmental Liabilities and
Post-Closing Environmental Liabilities. 
(a)  In the event that the Seller
submits a claim for indemnification under Section 8.03(e) or (f), the Purchaser
may, at its sole cost and expense, assume the defense and/or resolution
(including undertaking Remedial Action) thereof by written notice to the Seller
within 20 Business Days of receipt of the Seller’s written notice of
claim.  If the Purchaser assumes the
defense and/or resolution of any Reserved Pre-Closing Environmental Liabilities
or Post-Closing Environmental Liability, the Purchaser shall be entitled to
take all steps necessary in the defense and/or resolution thereof including the
settlement of any matter without the consent of the Seller (so long as such
settlement obtains for the Seller a complete release of future liability in
connection with the subject matter); provided, however, that the
Seller may, at its own expense, monitor any proceeding with the counsel of its
choice without any right of control thereof. 
If the Purchaser elects to assume the defense and/or resolution of any
Reserved Pre-Closing Environmental Liability or Post-Closing Environmental
Liability, the Purchaser alone shall control all Remedial Action or other
actions (including all communications with Governmental Authorities) undertaken
pursuant to the indemnity in Section 8.03(e) or 8.03(f); provided, however,
that such Remedial Action and other actions shall be conducted in a Lowest-Cost
Commercially Reasonable Manner.

 

(b)           The Seller and the Purchaser 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 the Purchaser is in good faith
defending and/or resolving a Reserved Pre-Closing Environmental Liability or
Post-Closing 

 

75

 

Environmental Liability under this Section, the Seller shall not
compromise, settle or in any manner interfere with the defense or resolution of
such Reserved Pre-Closing Environmental Liability or Post-Closing Environmental
Liability.  If the Purchaser does not
assume the defense and/or resolution of any such Reserved Pre-Closing
Environmental Liability or Post-Closing Environmental Liability in accordance
with the terms hereof, the Seller may defend and/or resolve such Reserved
Pre-Closing Environmental Liability or Post-Closing Environmental Liability in
a commercially reasonable manner, including settling claims or litigation
(after giving prior written notice of the same to the Purchaser and obtaining
the prior written consent of the Purchaser, which consent shall not be
unreasonably withheld, conditioned or delayed).

 

ARTICLE IX

 

TERMINATION

 

SECTION 9.01.  Termination.  This Agreement may be terminated at any time
prior to the Closing:

 

(a)           by the Purchaser if any of the conditions set forth in
Section 7.02 shall have become incapable of fulfillment, and shall not have
been waived by the Purchaser;

 

(b)           by the Seller if any of the conditions set forth in Section
7.01 shall have become incapable of fulfillment, and shall not have been waived
by the Seller;

 

(c)           by either the Purchaser or the Seller if the Closing shall
not have occurred by June 30, 2006; provided, however, that the
right to terminate this Agreement under this Section 9.01(c) shall not be
available to any party whose failure to fulfill any obligation under this
Agreement shall have been the cause of, or shall have resulted in, the failure
of the Closing to occur on or prior to such date;

 

(d)           by either the Purchaser or the Seller in the event that any
Governmental Order restraining, enjoining or otherwise prohibiting the
transactions contemplated by this Agreement shall have become final and nonappealable;
or

 

(e)           by the mutual written consent of the parties hereto.

 

SECTION 9.02.  Effect of Termination.  In the event of
termination of this Agreement as provided in Section 9.01, this Agreement shall
forthwith become void and there shall be no liability on the part of either
party hereto except (a) as set forth in Section 5.03(b) and Article X and (b)
that nothing herein shall relieve either party from liability for any breach of
this Agreement.

 

ARTICLE X

 

GENERAL
PROVISIONS

 

SECTION 10.01.  Expenses.  Except as otherwise specified in this
Agreement, all costs and expenses, including fees and disbursements of counsel,
financial advisors and accountants, incurred in connection with this Agreement
and the transactions contemplated by this 

 

76

 

Agreement shall be paid by the party
incurring such costs and expenses, whether or not the Closing shall have
occurred.

 

SECTION 10.02.  Notices.  All notices, requests, claims, demands and
other communications hereunder shall be in writing and shall be given or made
(and shall be deemed to have been duly given or made upon receipt) by delivery
in person, by an internationally recognized overnight courier service, by
facsimile or by registered or certified mail (postage prepaid, return receipt
requested) to the respective parties hereto at the following addresses (or at
such other address for a party as shall be specified in a notice given in
accordance with this Section 10.02):

 

	
  (a)

  	
   

  	
  if to the Seller and Parent:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NewPage Corporation

  
	
   

  	
   

  	
  Courthouse Plaza NE

  
	
   

  	
   

  	
  Dayton, OH 45463

  
	
   

  	
   

  	
  Facsimile: (937) 242-9459

  
	
   

  	
   

  	
  Attention: General Counsel

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Schulte Roth & Zabel LLP

  
	
   

  	
   

  	
  919 Third Avenue

  
	
   

  	
   

  	
  New York, NY 10022

  
	
   

  	
   

  	
  Facsimile: (212) 756-2000

  
	
   

  	
   

  	
  Attention: Stuart D. Freedman

  
	
   

  	
   

  	
   

  
	
  (b)

  	
   

  	
  if to the Purchaser:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  P. H. Glatfelter Company

  
	
   

  	
   

  	
  96 South George Street, Suite 500

  
	
   

  	
   

  	
  York, PA 17401

  
	
   

  	
   

  	
  Facsimile: (717) 846-2419

  
	
   

  	
   

  	
  Attention: General Counsel

  

 

77

 

	
   

  	
   

  	
  with a copy to:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Shearman & Sterling LLP

  
	
   

  	
   

  	
  599 Lexington Avenue

  
	
   

  	
   

  	
  New York, NY 10022-6069

  
	
   

  	
   

  	
  Facsimile: (212) 848-7179

  
	
   

  	
   

  	
  Attention: Clare O’Brien

  

 

SECTION 10.03.  Public Announcements.  The initial press
release relating to this Agreement and the transactions contemplated hereby
shall be a joint press release the text of which has been agreed to by Parent
and the Purchaser.  Thereafter, the
parties hereto shall consult with each other before issuing, and give each
other the opportunity to review and comment upon, any press release or other
communication with any news media in respect of this Agreement or the
transactions contemplated hereby, and shall not make any such press release
prior to such consultation, except as such party may reasonably conclude may be
required by applicable Law, court process or by obligations pursuant to any
listing agreement with any national securities exchange or national securities
quotation system.

 

SECTION 10.04.  Severability.  If any term or
other provision of this Agreement is invalid, illegal or incapable of being
enforced by any Law or public policy, all other terms and provisions of this
Agreement shall nevertheless remain in full force and effect for so long as the
economic or legal substance of the transactions contemplated hereby is not
affected in any manner materially adverse to any of the parties hereto.  Upon such determination that any term or
other provision is invalid, illegal or incapable of being enforced, the parties
hereto shall negotiate in good faith to modify this Agreement so as to effect
the original intent of the parties as closely as possible in an acceptable
manner in order that the transactions contemplated hereby are consummated as
originally contemplated to the greatest extent possible.

 

SECTION 10.05.  Entire Agreement.  This Agreement, the
Confidentiality Agreement and the Ancillary Agreements constitute the entire
agreement of the parties hereto with respect to the subject matter hereof and
thereof and supersede all prior agreements and undertakings, both written and
oral, among the Seller, Parent and the Purchaser with respect to the subject
matter hereof and thereof.

 

SECTION 10.06.  Assignment.  This Agreement may not be assigned by
operation of law or otherwise without the express written consent of the
parties hereto (which consent may be granted or withheld in the sole discretion
of the parties hereto) and any such assignment or attempted assignment without
such consent shall be void; provided, however, that the Purchaser
may assign this Agreement or any of its rights and obligations hereunder to one
or more Affiliates of the Purchaser upon notice to the Seller and Parent but
without the consent of the Seller or Parent, so long as any such assignment (a)
does not relieve the Purchaser of its obligations hereunder to the extent any
such Affiliate does not satisfy its obligations hereunder and (b) is not likely
to delay 

 

78

 

the Closing.  If Parent sells all or substantially all of
the assets of Parent, then Parent shall cause the purchaser of such assets to
assume all of Parent’s obligations under Article VIII hereof.

 

SECTION 10.07.  Amendment.  This Agreement may not be amended or modified
except (a) by an instrument in writing signed by, or on behalf of, the parties
hereto or (b) by a waiver in accordance with Section 10.08.

 

SECTION 10.08.  Waiver.  The parties to this Agreement may (a) extend
the time for the performance of any of the obligations or other acts of the
other party, (b) waive any inaccuracies in the representations and warranties
of the other party contained herein or in any document delivered by the other
party pursuant hereto, or (c) waive compliance with any of the agreements of
the other party or conditions to such party’s obligations contained
herein.  Any such extension or waiver
shall be valid only if set forth in an instrument in writing signed by the
party to be bound thereby.  Any waiver of
any term or condition shall not be construed as a waiver of any subsequent
breach or a subsequent waiver of the same term or condition, or a waiver of any
other term or condition of this Agreement. 
The failure of any of the parties hereto to assert any of their rights
hereunder shall not constitute a waiver of any of such rights.  All rights and remedies existing under this
Agreement are cumulative to, and not exclusive of, any rights or remedies
otherwise available.

 

SECTION 10.09.  Joint and Several Liability.  Parent shall be
jointly and severally liable with the Seller for all of the Seller’s
obligations under this Agreement.

 

SECTION 10.10.  No Third Party Beneficiaries.  Except for the
provisions of Article VIII relating to indemnified parties, this Agreement
shall be binding upon and inure solely to the benefit of the parties hereto and
their respective successors and permitted assigns and nothing herein, express
or implied, is intended to or shall confer upon any other Person, including any
union or any employee or former employee of the Seller or Parent, any legal or
equitable right, benefit or remedy of any nature whatsoever, including any
rights of employment for any specified period, under or by reason of this
Agreement.

 

SECTION 10.11.  Specific Performance.  Each of the Seller and Parent acknowledges
and agrees that the Purchaser would be irreparably damaged if any of the
provisions of this Agreement are not performed in accordance with their specific
terms and that any breach of this Agreement by the Seller or Parent could not
be adequately compensated in all cases by monetary damages alone.  Accordingly, in addition to any other right
or remedy to which the Purchaser may be entitled, at law or in equity, it shall
be entitled to enforce any provision of this Agreement by a decree of specific
performance and to temporary, preliminary and permanent injunctive relief to
prevent breaches or threatened breaches of any of the provisions of this Agreement,
without posting any bond or other undertaking.

 

SECTION 10.12.  Governing Law.  This Agreement
shall be governed by, and construed in accordance with, the laws of the State
of New York applicable to contracts executed in and to be performed in that State.  All Actions arising out of or relating to
this Agreement shall be heard and determined exclusively in any New York
federal court sitting in the Borough of Manhattan of The City of New York; provided,
however, that if such federal court does not have jurisdiction over such
Action, such Action shall be heard and determined exclusively in any New 

 

79

 

York state court sitting in the
Borough of Manhattan of The City of New York. 
Consistent with the preceding sentence, the parties hereto hereby (a) submit
to the exclusive jurisdiction of any federal or state court sitting in the
Borough of Manhattan of The City of New York for the purpose of any Action
arising out of or relating to this Agreement brought by any party hereto and
(b) irrevocably waive, and agree not to assert by way of motion, defense, or
otherwise, in any such Action, any claim that it is not subject personally to
the jurisdiction of the above-named courts, that its property is exempt or
immune from attachment or execution, that the Action is brought in an
inconvenient forum, that the venue of the Action is improper, or that this
Agreement or the transactions contemplated by this Agreement may not be
enforced in or by any of the above-named courts.

 

SECTION 10.13.  Waiver of Jury Trial.  Each of the parties
hereto hereby waives to the fullest extent permitted by applicable Law any
right it may have to a trial by jury with respect to any litigation directly or
indirectly arising out of, under or in connection with this Agreement or the transactions
contemplated by this Agreement.  Each of
the parties hereto hereby (a) certifies that no representative, agent or
attorney of the other party has represented, expressly or otherwise, that such
other party would not, in the event of litigation, seek to enforce the
foregoing waiver and (b) acknowledges that it has been induced to enter into
this Agreement and the transactions contemplated by this Agreement, as
applicable, by, among other things, the mutual waivers and certifications in
this Section 10.13.

 

SECTION 10.14.  Counterparts.  This Agreement may
be executed and delivered (including by facsimile transmission) in one or more
counterparts, and by the different parties hereto in separate counterparts,
each of which when executed shall be deemed to be an original, but all of which
taken together shall constitute one and the same agreement.

 

80

 

IN WITNESS WHEREOF, each of
the Seller, Parent and the Purchaser have caused this Agreement to be executed
as of the date first written above by their respective officers thereunto duly
authorized.

 

	
   

  	
  CHILLICOTHE PAPER INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew Jesch

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Matthew Jesch

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Chief 

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  NEWPAGE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Matthew Jesch

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Matthew Jesch

  
	
   

  	
   

  	
  Title:

  	
  Vice President and Chief 

  Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  P. H. GLATFELTER COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ George H. Glatfelter II

  	
   

  
	
   

  	
   

  	
  Name:

  	
  George H. Glatfelter II

  
	
   

  	
   

  	
  Title:

  	
  Chairman and Chief Executive 

  OfficerEXHIBIT 10.27

 

FIRST AMENDMENT

TO REVOLVING CREDIT AND GUARANTY AGREEMENT

 

THIS FIRST AMENDMENT TO REVOLVING CREDIT AND
GUARANTY AGREEMENT (this “Amendment”) is dated as of September 23, 2005 and is
entered into by and among NEWPAGE CORPORATION,
a Delaware corporation (the “Borrower”),
NEWPAGE HOLDING CORPORATION, a Delaware
corporation (“Holdings”), CERTAIN FINANCIAL INSTITUTIONS listed on
the signature pages hereto (the “Lenders”),
GOLDMAN SACHS CREDIT PARTNERS L.P. (“GSCP”),
as Joint Lead Arranger, Joint Bookrunner and Co-Syndication Agent, UBS SECURITIES LLC, as Joint Lead Arranger, Joint Bookrunner
and Co-Syndication Agent, WACHOVIA CAPITAL MARKETS,
LLC, as Co-Syndication Agent, BANK OF AMERICA, N.A., as Documentation Agent, JPMORGAN CHASE BANK, N.A., as
Collateral Agent (“Collateral Agent”),
and GSCP, as Administrative Agent (“Administrative Agent”) and, for purposes
of Section IV hereof, the CREDIT SUPPORT
PARTIES listed on the signature papers hereto, and is made with
reference to that certain REVOLVING CREDIT AND GUARANTY AGREEMENT
dated as of May 2, 2005 (as amended through the date hereof, the “Credit Agreement”) by and among Borrower,
Holdings, the subsidiaries of Borrower named therein, Lenders, Co-Syndication
Agents, Documentation Agent, Collateral Agent and Administrative Agent.
Capitalized terms used herein without definition shall have the same meanings
herein as set forth in the Credit Agreement after giving effect to this
Amendment.

 

RECITALS

 

WHEREAS, the Credit
Parties have requested that Requisite Lenders agree to amend certain provisions
of the Credit Agreement as provided for herein; and

 

WHEREAS, subject to
certain conditions, Requisite Lenders are willing to agree to such amendment
relating to the Credit Agreement.

 

NOW, THEREFORE, in consideration
of the premises and the agreements, provisions and covenants herein contained,
the parties hereto agree as follows:

 

SECTION I.    AMENDMENTS TO CREDIT AGREEMENT

 

1.1                               Amendments.

 

A.    Section 1.1 of the
Credit Agreement is hereby amended by amending and restating the definition of “Issuing
Bank” in its entirety as follows:

 

“Issuing Bank” means (i) JP Morgan Chase Bank, N.A., with respect
to any Letter of Credit issued hereunder by JP Morgan Chase Bank, N.A. and (ii) Wachovia
Bank, National Association, with respect to any Letter of Credit issued
hereunder by Wachovia Bank, National Association, in each case together with
its respective successors and assigns in such capacity. References to the “Issuing
Bank” under this Agreement or any other Credit Document shall mean either or
both of JP Morgan Chase Bank, N.A. and Wachovia Bank, National Association, as
applicable.

 

 

B.    Section 1.1 of the Credit Agreement is hereby
further amended by amending and restating the definition of “Swing Line Lender”
in its entirety as follows:

 

“Swing Line Lender” means
Wachovia Bank, National Association, in its capacity as Swing Line Lender
hereunder, together with its permitted successors and assigns in such capacity.

 

C.    Section 1.1 of the Credit Agreement is hereby
further amended by amending and restating the definition of “Swing Line
Sublimit” in its entirety as follows:

 

“Swing Line Sublimit” means the lesser of (i) $25,000,000, and (ii) the
aggregate unused amount of Revolving Commitments then in effect.

 

D.    Section 2.3(b)(ii) of the Credit Agreement
is hereby amended by amending and restating the first sentence in its entirety
and adding a new second sentence thereafter as follows:

 

(ii)                                  Whenever NewPageCo desires
that Swing Line Lender make a Swing Line Loan, NewPageCo shall deliver to Swing
Line Lender and Administrative Agent a Funding Notice no later than 12:00 p.m.
(New York City time) on the proposed Credit Date. Unless Swing Line Lender has
received notice from the Administrative Agent to the contrary, Swing Line
Lender shall be entitled to rely on any certification from NewPageCo contained
in any Funding Notice to the effect that the conditions precedent to the
issuance of any requested Swing Line Loan have been satisfied in full, including,
without limitation, that after giving effect to the making of such Swing Line
Loan, the Total Utilization of Revolving Commitments would not exceed the
lesser of (1) the Revolving Commitments then in effect and (2) the
Borrowing Base then in effect.

 

E.    Section 2.3(b)(iii) of the Credit Agreement
is hereby amended by amending and restating the first sentence in its entirety
as follows:

 

Unless Swing Line Lender has received notice from
Administrative Agent that the conditions precedent to the making of any
requested Swing Line Loan have not been satisfied in full, then Swing Line
Lender shall make the amount of its Swing Line Loan available to Administrative
Agent by no later than 2:00 p.m. (New York City time) on the applicable
Credit Date by wire transfer of same day funds in Dollars, at Administrative
Agent’s Principal Office.

 

F.    Section 2.3(b) of the Credit Agreement is
hereby amended by adding a new paragraph (vii) immediately after paragraph
(vi) as follows:

 

(vii)                           Upon the request by Swing Line
Lender to have a Revolving Loan made for the purpose of repaying any Refunded
Swing Line Loan pursuant to the immediately preceding paragraph (iv) or
the request by Swing Line Lender to have Lender purchase a participation in any
unpaid Swing Line Loans pursuant to the immediately preceding paragraph (v),
unless Swing Line Lender has received notice from the Administrative Agent that
the conditions precedent under Section 3.2 were not satisfied in full at
the time

 

2

 

that the Swing Line Loan was made to NewPageCo to
which such Refunded Swing Line Loan relates or to which such participation in
any unpaid Swing Line Loans relates, Swing Line Lender shall be deemed to have
satisfied the condition of possessing a good faith belief that all conditions
precedent under Section 3.2 have been satisfied for purposes of the
immediately preceding paragraph (vi).

 

G.    Section 2.4(a) of the Credit Agreement is
hereby amended to add the following sentence at the end thereof:

 

NewPageCo shall have the right to select the Issuing
Bank for each Letter of Credit it requests.

 

H.    Section 2.4(b) of the Credit Agreement is
hereby amended to add the following sentence at the end thereof:

 

Unless the Issuing Bank has received notice from the
Administrative Agent to the contrary, the Issuing Bank shall be entitled to
rely on any certification from NewPageCo contained in any Issuance Notice to
the effect that the conditions precedent to the issuance of any requested
Letter of Credit have been satisfied in full, including, without limitation,
that after giving effect to such issuance, the Total Utilization of Revolving
Commitments would not exceed the lesser of (1) the Revolving Commitments
then in effect and (2) the Borrowing Base then in effect.

 

I.    Section 2.7(b) of the Credit Agreement is
hereby amended by amending and restating the second sentence contained therein
in its entirety as follows:

 

The Register, as in effect at the close of business on
the preceding Business Day, shall be available for inspection by NewPageCo, any
Lender or any Issuing Bank at any reasonable time and from time to time upon
reasonable prior notice.

 

J.    Section 3.2(a)(i)of the Credit Agreement is
hereby deleted and replaced with a new paragraph (i) as follows:

 

(i)                                     Administrative Agent shall have
received a fully executed and delivered Funding Notice or Issuance Notice, as
the case may be, and (A) in the case of any Swing Line Loan, Swing
Line Lender shall also have received such fully executed and delivered Funding
Notice with respect to such Swing Line Loan and (B) in the case of any
Letter of Credit, the applicable Issuing Bank shall also have received such
fully executed and delivered Issuance Notice with respect to the issuance of
such Letter of Credit;

 

K.    Section 9 of the Credit Agreement is hereby amended
by adding a new Section 9.3 to read as follows:

 

9.3.                              Appointment of Collateral Agent as “Fondé de Pouvoir”. Without prejudice to the
foregoing, each Secured Party hereby irrevocably appoints and authorizes
JPMorgan Chase Bank, N.A. (and any successor acting as Collateral Agent) to act
as the person holding the power of attorney (fondé de pouvoir) (in such
capacity “Attorney”) of the Secured Parties as
contemplated under Article 2692 of the Civil Code of Quebec, and

 

3

 

to enter into, to take and to hold on their behalf,
and for their benefit, any hypothec, and to exercise such powers and duties
which are conferred upon the Attorney under any hypothec. Moreover, without
prejudice to such appointment and authorization to act as the person holding
the power of attorney as aforesaid, each Secured Party hereby irrevocably
appoints and authorizes JPMorgan Chase Bank, N.A. (and any successor acting as
Collateral Agent) (in such capacity, the “Custodian”) to
act as agent and custodian for and on behalf of the Secured Parties to hold and
to be the sole registered holder of any bond which may be issued under any
hypothec, the whole notwithstanding Section 32 of the Act respecting the
special powers of legal persons (Quebec) or any other applicable law. In this
respect: (i) the Custodian shall keep a record indicating the names and
addresses of, and the pro rata portion of the obligations and indebtedness
secured by any pledge of any such bond and owing to each Secured Party, and (ii) each
Secured Party will be entitled to the benefits of any charged property covered
by any hypothec and will participate in the proceeds of realization of any such
charged property, the whole in accordance with the terms hereof. Each of the
Attorney and the Custodian shall: (a) have the sole and exclusive right
and authority to exercise, except as may be otherwise specifically
restricted by the terms hereof, all rights and remedies given to the Attorney
and the Custodian (as applicable) pursuant to any hypothec, bond, pledge,
applicable laws or otherwise, (b) benefit from and be subject to all
provisions hereof with respect to the Collateral Agent mutatis mutandis,
including, without limitation, all such provisions with respect to the
liability or responsibility to and indemnification by the Secured Parties, and (c) be
entitled to delegate from time to time any of its powers or duties under any
hypothec, bond, or pledge on such terms and conditions as it may determine
from time to time. Any person who becomes a Secured Party shall be deemed to
have consented to and confirmed: (i) the Attorney as the person holding
the power of attorney as aforesaid and to have ratified, as of the date it
becomes a Secured Party, all actions taken by the Attorney in such capacity,
and (ii) the Custodian as the agent and custodian as aforesaid and to have
ratified, as of the date it becomes a Secured Party, all actions taken by the
Custodian in such capacity.

 

L.    Section 10.3(a) of the Credit Agreement is
hereby amended by amending and restating the last sentence contained therein in
its entirety as follows:

 

Anything contained herein to the contrary
notwithstanding, neither Administrative Agent nor Swing Line Lender shall have
any liability arising from confirmations of the amount of outstanding Loans or
the component amounts thereof and neither Administrative Agent nor any Issuing
Bank shall have any liability arising from confirmations of the amount of the
Letter of Credit Usage or the component amounts thereof.

 

M.    Section 10.7 is hereby amended by (i) amending
the title to such Section to read “Successor Administrative Agent” and (ii) deleting
the last two sentences contained therein.

 

N.    Section 11.5(c)(iii) of the Credit Agreement
is hereby deleted and replaced with a new paragraph (iii) as follows:

 

4

 

(iii)                               amend, modify, terminate or
waive any obligation of Lenders relating to the purchase of participations in
Letters of Credit as provided in Section 2.4(e) or any other
provision relating to Letter of Credit Usage or Letters of Credit without the
written consent of Administrative Agent and of Issuing Bank;

 

SECTION II.    CONDITIONS TO EFFECTIVENESS

 

This Amendment shall become effective as of the date hereof only upon
the satisfaction of all of the following conditions precedent (the date of
satisfaction of such conditions being referred to herein as the “First Amendment Effective Date”):

 

A.    Execution.
Administrative Agent shall have received a counterpart signature page of
this Amendment duly executed by each of the Credit Parties and Requisite
Lenders.

 

B.    Necessary Consents. Each Credit Party shall have obtained all material consents
necessary or advisable in connection with the transactions contemplated by this
Amendment.

 

C.    Other Documents. Administrative Agent and Lenders shall have received such
other documents, information or agreements regarding Credit Parties as
Administrative Agent or Collateral Agent may reasonably request,
including, without limitation, the issuance of a new Swing Line Note payable to
the order of Wachovia Bank, National Association in the original principal
amount of $25,000,000 to replace the existing Swing Line Note payable to the
order of GSCP in the original principal amount of $15,000,000.

 

SECTION III.    REPRESENTATIONS AND WARRANTIES

 

In order to induce Lenders to enter into this Amendment and to amend
the Credit Agreement in the manner provided herein, each Credit Party which is
a party hereto represents and warrants to each Lender that the following
statements are true and correct in all material respects:

 

A.    Corporate Power and Authority. Each Credit Party, which is party hereto, has all requisite
power and authority to enter into this Amendment and to carry out the
transactions contemplated by, and perform its obligations under, the
Credit Agreement as amended by this Amendment (the “Amended Agreement”) and the other Credit Documents.

 

B.    Authorization of Agreements. The execution and delivery of this Amendment and the
performance of the Amended Agreement and the other Credit Documents have been
duly authorized by all necessary action on the part of each Credit Party.

 

C.    No Conflict. The
execution and delivery by each Credit Party of this Amendment and the
performance by each Credit Party of the Amended Agreement and the other Credit
Documents do not and will not (i) violate (A) any provision of any
law,

 

5

 

statute, rule or
regulation, or of the certificate or articles of incorporation or partnership
agreement, other constitutive documents or by-laws of Holdings, Borrower or any
Credit Party or (B) any applicable order of any court or any rule,
regulation or order of any Governmental Authority, (ii) be in conflict
with, result in a breach of or constitute (alone or with notice or lapse of
time or both) a default under any Contractual Obligation of the applicable
Credit Party, where any such conflict, violation, breach or default referred to
in clause (i) or (ii) of this Section III.C., could reasonably
be expected to have a Material Adverse Effect, (iii) except as permitted
under the Amended Agreement, result in or require the creation or imposition of
any Lien upon any of the properties or assets of each Credit Party (other than
any Liens created under any of the Credit Documents in favor of Administrative
Agent on behalf of Lenders), or (iv) require any approval of stockholders
or partners or any approval or consent of any Person under any Contractual
Obligation of each Credit Party, except for such approvals or consents which
will be obtained on or before the First Amendment Effective Date and except for
any such approvals or consents the failure of which to obtain will not have a
Material Adverse Effect.

 

D.    Governmental Consents. No action, consent or approval of, registration or filing
with or any other action by any Governmental Authority is or will be required
in connection with the execution and delivery by each Credit Party of this
Amendment and the performance by Borrower and Holdings of the Amended Agreement
and the other Credit Documents, except for such actions, consents and approvals
the failure to obtain or make could not reasonably be expected to result in a
Material Adverse Effect or which have been obtained and are in full force and
effect.

 

E.    Binding Obligation. This Amendment and the Amended Agreement have been duly
executed and delivered by each of the Credit Parties party thereto and each
constitutes a legal, valid and binding obligation of such Credit Party to the
extent a party thereto, enforceable against such Credit Party in accordance with
its terms, except as enforceability may be limited by bankruptcy,
insolvency, moratorium, reorganization or other similar laws affecting
creditors’ rights generally and except as enforceability may be limited by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

 

F.    Incorporation of Representations and
Warranties From Credit Agreement. The
representations and warranties contained in Section 4 of the Amended
Agreement are and will be true and correct in all material respects on and as
of the First Amendment Effective Date to the same extent as though made on and
as of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct in all material respects on and as of such earlier date.

 

G.    Absence of Default. No event has occurred and is continuing or will result from
the consummation of the transactions contemplated by this Amendment that would
constitute an Event of Default or a Default.

 

6

 

SECTION IV.    ACKNOWLEDGMENT AND CONSENT

 

Each Domestic Subsidiary listed on the signature pages hereto and
Holdings are referred to herein as a “Credit
Support Party” and collectively as the “Credit Support Parties”, and the Credit Documents to which
they are a party are collectively referred to herein as the “Credit Support Documents”.

 

Each Credit Support Party hereby acknowledges that it has reviewed the
terms and provisions of the Credit Agreement and this Amendment and consents to
the amendment of the Credit Agreement effected pursuant to this Amendment. Each
Credit Support Party hereby confirms that each Credit Support Document to which
it is a party or otherwise bound and all Collateral encumbered thereby will
continue to guarantee or secure, as the case may be, to the fullest extent
possible in accordance with the Credit Support Documents the payment and
performance of all “Obligations” under each of the Credit Support Documents to
which is a party (in each case as such terms are defined in the applicable
Credit Support Document).

 

Each Credit Support Party acknowledges and agrees that any of the
Credit Support Documents to which it is a party or otherwise bound shall
continue in full force and effect and that all of its obligations thereunder
shall be valid and enforceable and shall not be impaired or limited by the
execution or effectiveness of this Amendment. Each Credit Support Party
represents and warrants that all representations and warranties contained in
the Amended Agreement and the Credit Support Documents to which it is a party
or otherwise bound are true and correct in all material respects on and as of
the First Amendment Effective Date to the same extent as though made on and as
of that date, except to the extent such representations and warranties
specifically relate to an earlier date, in which case they were true and
correct in all material respects on and as of such earlier date.

 

Each Credit Support Party acknowledges and agrees that (i) notwithstanding
the conditions to effectiveness set forth in this Amendment, such Credit
Support Party is not required by the terms of the Credit Agreement or any other
Credit Support Document to consent to the amendments to the Credit Agreement
effected pursuant to this Amendment and (ii) nothing in the Credit
Agreement, this Amendment or any other Credit Support Document shall be deemed
to require the consent of such Credit Support Party to any future amendments to
the Credit Agreement.

 

SECTION V.    MISCELLANEOUS

 

A.    Reference to and Effect on the Credit
Agreement and the Other Credit Documents.

 

(i)    
On and after the First Amendment Effective Date, each reference in the
Credit Agreement to “this Amendment”, “hereunder”, “hereof”, “herein” or words
of like import referring to the Credit Agreement, and each reference in the
other Credit Documents to the “Credit Agreement”, “thereunder”, “thereof” or
words of like import referring to the Credit Agreement shall mean and be a
reference to the Credit Agreement as amended by this Amendment.

 

7

 

(ii)    
Except as specifically amended by this Amendment, the Credit Agreement
and the other Credit Documents shall remain in full force and effect and are
hereby ratified and confirmed.

 

(iii)    
The execution, delivery and performance of this Amendment shall not
constitute a waiver of any provision of, or operate as a waiver of any right,
power or remedy of any Agent or Lender under, the Credit Agreement or any of
the other Credit Documents.

 

B.    Headings. Section and
Subsection headings in this Amendment are included herein for convenience
of reference only and shall not constitute a part of this Amendment for
any other purpose or be given any substantive effect.

 

C.    Applicable Law. THIS AMENDMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
(INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS
LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.

 

D.    Counterparts. This
Amendment may be executed in any number of counterparts and by different
parties hereto in separate counterparts, each of which when so executed and
delivered shall be deemed an original, but all such counterparts together shall
constitute but one and the same instrument; signature pages may be
detached from multiple separate counterparts and attached to a single counterpart so
that all signature pages are physically attached to the same document.

 

[Remainder of this page intentionally left blank.]

 

8

 

IN WITNESS WHEREOF,
the parties hereto have caused this Amendment to be duly executed and delivered
by their respective officers thereunto duly authorized as of the date first
written above.

 

	
   

  	
   

  	
  NEWPAGE CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Linda Sheffield

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Linda Sheffield

  
	
   

  	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NEWPAGE HOLDING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Linda Sheffield

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Linda Sheffield

  
	
   

  	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  CHILLICOTHE PAPER INC.

  
	
   

  	
   

  	
  WICKLIFFE PAPER COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Linda Sheffield

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Linda Sheffield

  
	
   

  	
   

  	
   

  	
  Title: Treasurer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ESCANABA PAPER COMPANY

  
	
   

  	
   

  	
  LUKE PAPER COMPANY

  
	
   

  	
   

  	
  RUMFORD PAPER COMPANY

  
	
   

  	
   

  	
  NEWPAGE ENERGY SERVICES LLC

  
	
   

  	
   

  	
  UPLAND RESOURCES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter H. Vogel, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Peter H.
  Vogel, Jr.

  
	
   

  	
   

  	
   

  	
  Title: President & CEO

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RUMFORD COGENERATION, INC.

  
	
   

  	
   

  	
  RUMFORD FALLS POWER COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Peter H. Vogel, Jr.

  	
   

  
	
   

  	
   

  	
   

  	
  Name: Peter H.
  Vogel, Jr.

  
	
   

  	
   

  	
   

  	
  Title: President & CEO

  

 

 

	
   

  	
   

  	
  GOLDMAN SACHS CREDIT PARTNERS L.P.,

  
	
   

  	
   

  	
  as Administrative Agent, Joint
  Lead Arranger, Joint Bookrunner, Co-Syndication Agent, and a Lender

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Robert Schatzman

  	
   

  
	
   

  	
   

  	
   

  	
   Robert Schatzman

  
	
   

  	
   

  	
   

  	
   Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  JPMORGAN CHASE BANK, N.A.

  
	
   

  	
   

  	
   

  	
  as Collateral Agent, an Issuing
  Bank and a Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Peter S. Predun

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Peter S. Predun

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  UBS SECURITIES LLC,

  
	
   

  	
   

  	
   

  	
  as Joint Lead Arranger, Joint Bookrunner and Co-Syndication Agent

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    By:

  	
  /s/ Daniel W. Ladd III

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Daniel W. Ladd III

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Managing Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    By:

  	
  /s/ Francisco Pinto-Leite

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Francisco Pinto-Leite

  
	
   

  	
   

  	
   

  	
   

  	
  Title:

  	
  Director and Counsel

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  Region Americas Legal

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  WACHOVIA
  BANK, NATIONAL ASSOCIATION, as an Issuing Bank, Swingline Lender and a Lender

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
    By:

  	
  /s/ Thomas Grabosky

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Thomas Grabosky

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Director

  
										

 

 

	
   

  	
   

  	
   

  	
  WACHOVIA CAPITAL MARKETS, LLC,

  
	
   

  	
   

  	
   

  	
  as Co-Syndication Agent

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     By:

  	
  /s/ Thomas Grabosky

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Thomas Grabosky

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  BANK OF AMERICA, N.A.,

  
	
   

  	
   

  	
   

  	
  as Documentation Agent and as a
  Lender

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
     By:

  	
  /s/ Jang S. Kim

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  Name: Jang S. Kim

  
	
   

  	
   

  	
   

  	
   

  	
  Title: Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  LENDERS:

  	
   

  	
   

  	
   

  	
   

  	
  UBS LOAN FINANCE LLC,

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  as a Lender

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Wilfred V. Saint

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Wilfred V. Saint

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Banking Products

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Services, US

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
  By:

  	
  /s/ Joselin Fernandes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Name:

  	
  Joselin Fernandes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Title: 

  	
  Associate Director

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Banking Products

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Services, US

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  WELLS FARGO FOOTHILL, LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Eunnie Kim

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Eunnie Kim

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
													

 

 

	
   

  	
   

  	
  GE CAPITAL

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ James Miller

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  James Miller

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Duly Authorized Signatory

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  THE CIT GROUP/BUSINESS CREDIT, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Evelyn Kusold

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Evelyn Kusold

  
	
   

  	
   

  	
   

  	
  Title:

  	
  AVP

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  FARM CREDIT SERVICES OF MISSOURI, PCA

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Lee Fuchs

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Lee Fuchs

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President, Capital Markets

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ISRAEL DISCOUNT BANK OF NEW YORK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Ron Bongiovanni

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Ron Bongiovanni

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Andy Balta

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Andy Balta

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SIEMENS FINANCIAL SERVICES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Frank Amodio

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Frank Amodio

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President - Credit

  
						

 

 

	
   

  	
   

  	
  LASALLE BUSINESS CREDIT, LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Steven Friedlander

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Steven Friedlander

  
	
   

  	
   

  	
   

  	
  Title:

  	
  SVP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  NATIONAL CITY BANK

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Jack Koch

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Jack Koch

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Account Officer

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  SENIOR DEBT PORTFOLIO

  
	
   

  	
   

  	
  By: Boston Management and Research

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EATON VANCE SENION INCOME TRUST

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EATON VANCE INSTITUTIONAL SENIOR LOAN FUND

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

 

	
   

  	
   

  	
  EATON VANCE CDO III, LTD.

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COSTANTINUS EATON VANCE CDO V, LTD.

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthoff

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EATON
  VANCE CDO VI, LTD.

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  GRAYSON & CO.

  
	
   

  	
   

  	
  By: Boston Management and Research

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BIG SKY SENIOR LOAN FUND, LTD.

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

 

	
   

  	
   

  	
  THE NORINCHUKIN BANK, NEW YORK BRANCH

  
	
   

  	
   

  	
  Through State Street Bank and Trust
  Company, N.A. as Fiduciary Custodian

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  BIG SKY III SENIOR LOAN TRUST

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EATON VANCE

  
	
   

  	
   

  	
  VT FLOATING-RATE INCOME FUND

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EATON VANCE

  
	
   

  	
   

  	
  LIMITED DURATION INCOME FUND

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
						

 

 

	
   

  	
   

  	
  EATON VANCE

  
	
   

  	
   

  	
  SENIOR FLOATING-RATE TRUST

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EATON VANCE FLOATING-RATE

  
	
   

  	
   

  	
  INCOME TRUST

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EATON VANCE SHORT DURATION

  
	
   

  	
   

  	
  DIVERSIFIED INCOME FUND

  
	
   

  	
   

  	
  By: Eaton Vance Management

  
	
   

  	
   

  	
     As
  Investment Advisor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Michael B. Botthof

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Michael B. Botthof

  
	
   

  	
   

  	
   

  	
  Title:

  	
  Vice President

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00102-of-00352.parquet"}]]