Document:

Disclosure Statement to Third Amended Joint Chapter 11 Plan of Reorganization

 Exhibit 10.2 
 UNITED STATES BANKRUPTCY COURT 
 SOUTHERN DISTRICT OF NEW YORK 
  

							
	  
	 		 	
		 		 	)	 	
	In re	 		 	)	 	Chapter 11
		 		 	)	 	
	Ampex Corporation, et al.,	 		 	)	 	Case No. 08-11094
		 		 	)	 	
	Debtors.	 		 	  )	 	Jointly Administered
		 		 	)	 	
	  
	 		 	

 DISCLOSURE STATEMENT WITH RESPECT TO THIRD 
 AMENDED JOINT CHAPTER 11 PLAN OF REORGANIZATION 
 FOR AMPEX CORPORATION AND ITS AFFILIATED DEBTORS 
  

			
	Dated:	 	New York, New York
		 	June 11, 2008

  

	
	WILLKIE FARR & GALLAGHER LLP
	Counsel for Debtors
	and Debtors In Possession
	787 Seventh Avenue
	New York, New York 10019
	(212) 728-8000

 INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. THIS DISCLOSURE STATEMENT SHALL NOT CONSTITUTE AN
OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY NOR WILL THERE BE ANY DISTRIBUTION OF THE SECURITIES DESCRIBED HEREIN UNTIL THE EFFECTIVE DATE OF THE PLAN. THIS DISCLOSURE STATEMENT IS NOT AN OFFER TO SELL THE SECURITIES DESCRIBED HEREIN AND IS
NOT A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY STATE WHERE SUCH OFFER OR SALE IS NOT PERMITTED. 
 THE VOTING DEADLINE TO ACCEPT OR REJECT THE
PLAN IS 4:00 P.M. PREVAILING EASTERN TIME ON JULY 14, 2008, UNLESS EXTENDED BY THE DEBTORS (THE “VOTING DEADLINE”). TO BE COUNTED, BALLOTS MUST BE RECEIVED BY THE VOTING AGENT (AS DEFINED HEREIN) ON OR BEFORE THE
VOTING DEADLINE. 
 THE CONFIRMATION AND EFFECTIVENESS OF THE PLAN ARE SUBJECT TO MATERIAL CONDITIONS PRECEDENT. THERE IS NO ASSURANCE THAT THESE CONDITIONS
WILL BE SATISFIED OR WAIVED. 
 HOLDERS OF CLAIMS AGAINST, AND HOLDERS OF INTERESTS IN, THE DEBTORS ARE ENCOURAGED TO READ AND CAREFULLY CONSIDER THE MATTERS
DESCRIBED IN THIS DISCLOSURE STATEMENT. 
 IF THE PLAN IS CONFIRMED BY THE BANKRUPTCY COURT AND THE EFFECTIVE DATE OCCURS, ALL HOLDERS OF CLAIMS AGAINST, AND
HOLDERS OF INTERESTS IN, THE DEBTORS (INCLUDING, WITHOUT LIMITATION, THOSE HOLDERS OF CLAIMS OR INTERESTS WHO DO NOT SUBMIT BALLOTS TO ACCEPT OR REJECT THE PLAN OR WHO ARE NOT ENTITLED TO VOTE ON THE PLAN) WILL BE BOUND BY THE TERMS OF THE PLAN AND
THE TRANSACTIONS CONTEMPLATED THEREBY. 
 THIS DISCLOSURE STATEMENT HAS NOT BEEN FILED WITH OR REVIEWED BY, AND THE PLAN SECURITIES TO BE ISSUED ON OR AFTER
THE EFFECTIVE DATE WILL NOT HAVE BEEN THE SUBJECT OF A REGISTRATION STATEMENT FILED WITH, THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”) UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES
ACT”), OR WITH ANY SECURITIES REGULATORY AUTHORITY OF ANY STATE UNDER ANY STATE SECURITIES OR “BLUE SKY” LAWS. THE PLAN HAS NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION, AND NEITHER THE SEC
NOR ANY STATE SECURITIES COMMISSION HAS PASSED UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED HEREIN. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS DISCLOSURE STATEMENT DOES NOT CONSTITUTE AN OFFER OR SOLICITATION IN ANY
STATE OR OTHER JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED. 
 THE DEBTORS BELIEVE THAT THE SOLICITATION OF VOTES ON THE PLAN MADE BY
THIS DISCLOSURE STATEMENT, AND THE OFFER OF THE NEW SECURITIES THAT MAY BE DEEMED TO BE MADE PURSUANT TO THE SOLICITATION ARE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND RELATED STATE STATUTES BY REASON OF THE EXEMPTIONS PROVIDED BY
SECURITIES ACT SECTIONS 3(a)(9) AND 4(2), OR OTHER APPLICABLE EXEMPTIONS, AND EXPECT THAT THE ISSUANCE OF THE NEW SECURITIES UNDER THE PLAN WILL BE EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT AND RELATED STATE STATUTES BY REASON OF THE
APPLICABILITY OF BANKRUPTCY CODE SECTIONS 1145(a)(1) AND (2) AND SECURITIES ACT SECTION 4(2), OR OTHER APPLICABLE EXEMPTIONS. 

 EXCEPT AS OTHERWISE SET FORTH HEREIN, THE STATEMENTS CONTAINED IN THIS DISCLOSURE STATEMENT ARE MADE BY THE DEBTORS AS OF
THE DATE HEREOF, AND THE DELIVERY OF THIS DISCLOSURE STATEMENT WILL NOT, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE DATE HEREOF. 
 NO PERSON HAS BEEN AUTHORIZED BY THE DEBTORS IN CONNECTION WITH THE PLAN OR THE SOLICITATION TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION OTHER THAN AS
CONTAINED IN THIS DISCLOSURE STATEMENT, THE PLAN AND THE EXHIBITS AND SCHEDULES ATTACHED OR INCORPORATED BY REFERENCE OR REFERRED TO IN THE DISCLOSURE STATEMENT AND/OR PLAN, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MAY NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE DEBTORS. 
 FOR THE CONVENIENCE OF HOLDERS OF CLAIMS AND INTERESTS, THIS DISCLOSURE STATEMENT SUMMARIZES THE TERMS OF
THE PLAN AND CERTAIN OF THE PLAN DOCUMENTS. IF ANY INCONSISTENCY EXISTS BETWEEN THE PLAN OR THE APPLICABLE PLAN DOCUMENTS AND THIS DISCLOSURE STATEMENT, THE TERMS OF THE PLAN OR THE APPLICABLE PLAN DOCUMENTS ARE CONTROLLING. THE SUMMARIES OF THE
PLAN AND THE PLAN DOCUMENTS IN THIS DISCLOSURE STATEMENT DO NOT PURPORT TO BE COMPLETE AND ARE SUBJECT TO, AND ARE QUALIFIED IN THEIR ENTIRETY BY REFERENCE TO, THE FULL TEXT OF THE PLAN AND THE APPLICABLE PLAN DOCUMENTS. ALL HOLDERS OF CLAIMS AND
INTERESTS ARE ENCOURAGED TO REVIEW THE FULL TEXT OF THE PLAN AND THE PLAN DOCUMENTS, AND TO READ CAREFULLY THIS ENTIRE DISCLOSURE STATEMENT, INCLUDING ALL EXHIBITS HERETO. 
 THIS DISCLOSURE STATEMENT MAY NOT BE RELIED ON FOR ANY PURPOSE OTHER THAN TO DETERMINE WHETHER TO VOTE TO ACCEPT OR REJECT THE PLAN, AND NOTHING STATED HEREIN SHALL CONSTITUTE AN ADMISSION OF ANY FACT OR LIABILITY BY
ANY PERSON, OR BE ADMISSIBLE IN ANY PROCEEDING INVOLVING THE DEBTORS OR ANY OTHER PERSON, OR BE DEEMED CONCLUSIVE EVIDENCE OF THE TAX OR OTHER LEGAL EFFECTS OF THE PLAN ON THE DEBTORS OR HOLDERS OF CLAIMS OR INTERESTS. 
 HOLDERS OF CLAIMS OR INTERESTS SHOULD NOT CONSTRUE THE CONTENTS OF THIS DISCLOSURE STATEMENT AS PROVIDING ANY LEGAL, BUSINESS, FINANCIAL OR TAX ADVICE. EACH HOLDER
SHOULD CONSULT WITH ITS OWN LEGAL, BUSINESS, FINANCIAL AND TAX ADVISORS WITH RESPECT TO ANY SUCH MATTERS CONCERNING THIS DISCLOSURE STATEMENT, THE SOLICITATION OF VOTES TO ACCEPT THE PLAN, THE PLAN, THE PLAN DOCUMENTS AND THE TRANSACTIONS
CONTEMPLATED HEREBY AND THEREBY. 
 THE DEBTORS SUPPORT CONFIRMATION OF THE PLAN. THE DEBTORS URGE ALL HOLDERS OF CLAIMS WHOSE VOTES ARE BEING
SOLICITED TO ACCEPT THE PLAN. 

 TABLE OF CONTENTS 
  

					
	 	  	 	  	Page
	ARTICLE I.	  	INTRODUCTION	  	1
	           1.1
	  	General.	  	1
	           1.2
	  	The Confirmation Hearing.	  	3
	           1.3
	  	Classification of Claims and Interests.	  	4
	           1.4
	  	Voting; Holders of Claims Entitled to Vote.	  	4
	           1.5
	  	Important Matters.	  	6
			
	ARTICLE II.	  	SUMMARY OF PLAN AND CLASSIFICATION AND TREATMENT OF CLAIMS AND INTERESTS THEREUNDER	  	6
			
	ARTICLE III.	  	BUSINESS DESCRIPTION AND CIRCUMSTANCES THAT LED TO THESE REORGANIZATION CASES	  	13
	           3.1
	  	The Debtors’ Businesses.	  	13
	           3.2
	  	Facilities and Offices.	  	18
	           3.3
	  	Employees and Pension Issues.	  	18
	           3.4
	  	Prepetition Indebtedness and Capital Structure.	  	20
			
	ARTICLE IV.	  	EVENTS LEADING TO CHAPTER 11 FILING	  	21
	           4.1
	  	The Debtors’ Financial Position.	  	21
	           4.2
	  	Events Leading Up to the Formulation of the Plan.	  	23
			
	ARTICLE V.	  	REASONS FOR THE SOLICITATION; RECOMMENDATION	  	24
			
	ARTICLE VI.	  	THE PLAN	  	25
	           6.1
	  	Overview of Chapter 11.	  	25
	           6.2
	  	Settlement of Certain Inter-Creditor Issues.	  	26
	           6.3
	  	Substantive Consolidation of Debtors for Purposes of Voting, Confirmation and Distribution.	  	26
	           6.4
	  	Claims Between Debtors and Non-Debtor Affiliates.	  	27
	           6.5
	  	Limitations of Distributions to Equity Interests.	  	27
	           6.6
	  	The Pension Plans.	  	27
	           6.7
	  	Overview of the Plan.	  	28
	           6.8
	  	Summary of Capital Structure of Reorganized Debtors.	  	35
	           6.9
	  	Acceptance or Rejection of the Plan; Effect of Rejection by One or More Classes of Claims or Equity Interests.	  	43
	           6.10
	  	Means for Implementation.	  	44
	           6.11
	  	Distributions.	  	47
	           6.12
	  	Procedures for Resolving Claims.	  	53
	           6.13
	  	Executory Contracts and Unexpired Leases.	  	55
	           6.14
	  	Conditions Precedent to Confirmation and Consummation of the Plan.	  	57
	           6.15
	  	Effect of Confirmation.	  	59
	           6.16
	  	Releases.	  	61
	           6.17
	  	Retention of Jurisdiction.	  	65
	           6.18
	  	Miscellaneous Provisions.	  	67

  

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	ARTICLE VII.	  	CONFIRMATION OF THE PLAN OF REORGANIZATION	  	71
	           7.1
	  	Confirmation Hearing.	  	71
	           7.2
	  	Confirmation.	  	72
	           7.3
	  	Classification of Claims and Interests.	  	80
	           7.4
	  	Consummation.	  	80
			
	ARTICLE VIII.	  	ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN	  	81
	           8.1
	  	Liquidation Under the Bankruptcy Code.	  	81
	           8.2
	  	Alternative Plan(s) of Reorganization.	  	81
	           8.3
	  	Dismissal of the Debtors’ Reorganization Cases.	  	81
			
	ARTICLE IX.	  	SUMMARY OF VOTING PROCEDURES	  	82
			
	ARTICLE X.	  	DESCRIPTION AND HISTORY OF REORGANIZATION CASES	  	83
	         10.1
	  	General Case Background.	  	83
	         10.2
	  	Retention of Professionals.	  	83
	         10.3
	  	Appointment of a Creditors’ Committee.	  	84
	         10.4
	  	Section 341 Meeting	  	84
	         10.5
	  	Employment Obligations.	  	85
	         10.6
	  	Continuing Supplier Relations.	  	85
	         10.7
	  	Stabilization of Debtors’ Business Operations.	  	85
	         10.8
	  	Utilities.	  	86
	         10.9
	  	Schedules, Statements and Bar Date.	  	86
			
	ARTICLE XI.	  	GOVERNANCE OF REORGANIZED DEBTORS	  	87
	         11.1
	  	Board of Directors and Management.	  	87
	         11.2
	  	Indemnification of Directors and Officers.	  	87
	         11.3
	  	New Stockholders Agreement.	  	87
	         11.4
	  	The Credit Agreement.	  	87
	         11.5
	  	The Amended Senior Secured Note Indenture.	  	87
			
	ARTICLE XII.	  	CERTAIN RISK FACTORS TO BE CONSIDERED	  	88
	         12.1
	  	Certain Bankruptcy Considerations.	  	88
	         12.2
	  	Risks Relating to the Amended Senior Secured Notes, the Credit Agreement, the New Preferred Stock and the New Common Stock.	  	90
	         12.3
	  	Risks Relating to Tax and Accounting Consequences of the Plan.	  	97
	         12.4
	  	Risks Associated with the Business.	  	98
			
	ARTICLE XIII.	  	SECURITIES LAW MATTERS	  	104
	         13.1
	  	Plan Securities.	  	104
	         13.2
	  	Issuance and Resale of Plan Securities Under the Plan.	  	106
			
	ARTICLE XIV.	  	CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN	  	107
	         14.1
	  	Introduction.	  	107
	         14.2
	  	Federal Income Tax Consequences to the Debtors.	  	109
	         14.3
	  	Federal Income Tax Consequences to Holders of Certain Claims.	  	113
			
	ARTICLE XV.	  	CONCLUSION	  	122

  

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 ARTICLE I. 
 INTRODUCTION 
  

	1.1	General. 

 Ampex Corporation,
Ampex Data Systems Corporation, Ampex Data International Corporation, Ampex Finance Corporation, AFC Holdings Corporation, Ampex Holdings Corporation, and Ampex International Sales Corporation (collectively, the “Debtors”)
hereby transmit this disclosure statement (as it may be amended, supplemented or otherwise modified from time to time, the “Disclosure Statement”) pursuant to section 1125 of title 11 of the United States Code, 11 U.S.C.
§§ 101-1532, as amended (the “Bankruptcy Code”), in connection with the Debtors’ solicitation of votes (the “Solicitation”) to confirm the Third Amended Joint Chapter 11 Plan for
Reorganization of Ampex Corporation and its Affiliated Debtors dated as of June 11, 2008 (the “Plan”), a copy of which is attached to this Disclosure Statement as Exhibit 1). 
 The purpose of this Disclosure Statement is to set forth information: (i) regarding the
history of the Debtors and their businesses; (ii) describing the Reorganization Cases;1 (iii) concerning the Plan and alternatives to the
Plan; (iv) advising the holders of Claims and Equity Interests of their rights under the Plan; and (v) assisting the holders of Claims entitled to vote on the Plan in making an informed judgment regarding whether they should vote to accept
or reject the Plan. 
 Annexed as Exhibits to this Disclosure Statement are copies of the following documents: 
  

	 	•	 	 Plan (Exhibit 1); 

  

	 	•	 	 Plan Support Agreement (Exhibit 2); 

  

	 	•	 	 Prepetition Organizational Chart (Exhibit 3); 

  

	 	 •
	 	 Consolidated Financial Statements for the Debtors for the fiscal year ended December 31, 2007 (Exhibit 4);
2 

  

	 	•	 	 Liquidation Analysis (Exhibit 5); and 

  

	 	•	 	 Reorganized Debtors’ Projected Financial Information (Exhibit 6); 

  

	 	•	 	 Disclosure Statement Order (Exhibit 7); 

  

	 1
	 All capitalized terms used but not defined herein shall have the meanings ascribed in the Plan.

	 2
	 The Debtors have filed their 10-K for the year ended December 31, 2007, which is available at no cost to parties in
interest on the following website: http://chapter11.epiqsystems.com/ampex. 

 On June 11, 2008, after notice and a hearing, the Bankruptcy Court (i) entered an order
approving this Disclosure Statement (the “Disclosure Statement Order”) as containing “adequate information” to enable a hypothetical, reasonable investor typical of holders of Claims against or Interests in the
Debtors to make an informed judgment as to whether to accept or reject the Plan and (ii) authorized the Debtors to use this Disclosure Statement in connection with the solicitation of votes to accept or reject the Plan. The Disclosure
Statement Order establishes July 14, 2008 at 4:00 p.m. (Prevailing Eastern Time) as the deadline for the return of Ballots accepting or rejecting the Plan (the “Voting Deadline”). APPROVAL OF THIS DISCLOSURE STATEMENT DOES NOT,
HOWEVER, CONSTITUTE A DETERMINATION BY THE COURT AS TO THE FAIRNESS OR MERITS OF THE PLAN. 
 The Disclosure Statement Order sets forth
in detail the deadlines, procedures and instructions for voting to accept or reject the Plan, and for filing objections to confirmation of the Plan, the record date for voting purposes and the applicable standards for tabulating Ballots. In
addition, detailed voting instructions accompany each Ballot. Each holder of a Claim entitled to vote on the Plan should read this Disclosure Statement, the Plan, the Disclosure Statement Order and the instructions accompanying the Ballot in their
entirety before voting on the Plan. These documents contain important information concerning the classification of Claims and Interests for voting purposes and the tabulation of votes. No solicitation of votes may be made except pursuant to this
Disclosure Statement and section 1125 of the Bankruptcy Code. In voting on the Plan, holders of Claims entitled to vote should not rely on any information relating to the Debtors and their businesses other than the information contained in this
Disclosure Statement, the Plan and all exhibits hereto and thereto. PURSUANT TO THE PLAN SUPPORT AGREEMENT, 100% IN AMOUNT AND 100% IN NUMBER OF HOLDERS OF CLASS 4 CLAIMS HAVE AGREED TO SUPPORT AND NOT OBJECT TO THE PLAN AND HOLDERS OF
APPROXIMATELY 80% IN AMOUNT OF CLASS 2 CLAIMS HAVE AGREED TO SUPPORT AND NOT OBJECT TO THE PLAN. 
 THE DEBTORS BELIEVE THAT THE PLAN
PROVIDES FOR THE BEST AVAILABLE RECOVERY TO THEIR STAKEHOLDERS. THE DEBTORS RECOMMEND THAT HOLDERS OF CLAIMS IN CLASS 2–SENIOR SECURED NOTES, CLASS 4–HILLSIDE SECURED CLAIMS AND CLASS 5–GENERAL UNSECURED CLAIMS VOTE TO ACCEPT THE
PLAN. 
 THIS DISCLOSURE STATEMENT IS NOT INTENDED TO REPLACE A CAREFUL AND DETAILED REVIEW AND ANALYSIS OF THE PLAN BY EACH HOLDER OF A
CLAIM OR EQUITY INTEREST. THIS DISCLOSURE STATEMENT IS INTENDED TO AID AND SUPPLEMENT THAT REVIEW. THE DESCRIPTION OF THE PLAN HEREIN IS ONLY A SUMMARY. HOLDERS OF CLAIMS AND EQUITY INTERESTS AND OTHER PARTIES-IN-INTEREST ARE CAUTIONED TO REVIEW THE
PLAN AND ANY RELATED ATTACHMENTS FOR A FULL UNDERSTANDING OF THE PLAN’S PROVISIONS. THIS DISCLOSURE STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN. 
 Additional copies of this Disclosure Statement (including the Exhibits hereto) are available upon request made to the office of the Debtors’ counsel, at Willkie Farr & Gallagher 

  

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LLP, 787 Seventh Avenue, New York, New York 10019, Attention: Matthew A. Feldman, Esq. and Rachel C. Strickland, Esq. (212) 728-8000 (phone) or
(212) 728-8111 (facsimile). Additional copies of this Disclosure Statement (including the Exhibits hereto) can also be accessed free of charge from the following website: http://chapter11.epiqsystems.com/ampex. 
 In addition, a Ballot for voting to accept or reject the Plan is enclosed with this Disclosure Statement for the holders of Claims that are entitled to
vote to accept or reject the Plan. If you are a holder of a Claim entitled to vote on the Plan and did not receive a Ballot, received a damaged Ballot or lost your Ballot, or if you have any questions concerning the procedures for voting on the
Plan, please call: Angharad Bowdler or Bridget Gallerie at (646) 282-2500, or send your written inquiry to: 
 Epiq Bankruptcy Solutions,
LLC 
 757 Third Avenue, 3rd
 Floor 
 New York, NY 10017 
 Attn: Angharad Bowdler & Bridget Gallerie 
 Each holder of a Claim entitled to
vote on the Plan should read this Disclosure Statement, the Plan, the other Exhibits attached hereto and the instructions accompanying the Ballots in their entirety before voting on the Plan. These documents contain important information concerning
the classification of Claims and Interests for voting purposes and the tabulation of votes. 
  

	1.2	The Confirmation Hearing. 

 In
accordance with the Disclosure Statement Order and section 1128 of the Bankruptcy Code, a hearing will be held before the Honorable Arthur J. Gonzalez, United States Bankruptcy Judge for the Southern District of New York, United States Bankruptcy
Court, Courtroom 523, One Bowling Green, New York, New York 10004 on July 31, 2008, at 10:00 a.m (Prevailing Eastern Time), to consider confirmation of the Plan. The Debtors will request confirmation of the Plan, as it may be modified
from time to time, under section 1129(b) of the Bankruptcy Code, and they have reserved the right to modify the Plan with the consent of the Consenting Holders to the extent, if any, that confirmation pursuant to section 1129(b) of the Bankruptcy
Code requires modification. Objections, if any, to confirmation of the Plan must be served and filed so that they are received on or before July 14, 2008, at 4:00 p.m. (Prevailing Eastern Time), in the manner set forth in the Disclosure
Statement Order. The hearing on confirmation of the Plan, with the consent of the Consenting Holders, may be adjourned from time to time without further notice except for the announcement of the adjourned date and time at the hearing on confirmation
or any adjournment thereof. 
  

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	1.3	Classification of Claims and Interests. 

 The following table designates the Classes of Claims against and Interests in the Debtors, and specifies which Classes are (a) impaired or unimpaired by the Plan, (b) entitled to vote to accept or reject the
Plan in accordance with section 1126 of the Bankruptcy Code, or (c) deemed to accept or reject the Plan. 
  

							
	 Class
	    	 Designation
	  	 Impairment
	    	 Entitled to Vote

	Class 1	    	Priority Non-Tax Claims	  	Unimpaired	    	No (deemed to accept)
	Class 2	    	Senior Secured Note Claims	  	Impaired	    	Yes
	Class 3	    	Other Secured Claims	  	Unimpaired	    	No (deemed to accept)
	Class 4	    	Hillside Secured Claim	  	Impaired	    	Yes
	Class 5	    	General Unsecured Claims	  	Impaired	    	Yes
	Class 6	    	Existing Common Stock Interests	  	Impaired	    	No (deemed to reject)
	Class 7	    	Existing Securities Laws Claims	  	Impaired	    	No (deemed to reject)
	Class 8	    	Other Existing Interests	  	Impaired	    	No (deemed to reject)

  

	1.4	Voting; Holders of Claims Entitled to Vote. 

 Pursuant to the provisions of the Bankruptcy Code, only holders of allowed claims or equity interests in classes of claims or equity interests that are impaired and that are not deemed to have rejected a plan of
reorganization are entitled to vote to accept or reject such proposed plan. Generally, a claim or interest is impaired under a plan if the holder’s legal, equitable or contractual rights are altered under such plan. Classes of claims or equity
interests under a chapter 11 plan in which the holders of claims or equity interests are unimpaired are deemed to have accepted such plan and are not entitled to vote to accept or reject the proposed plan. In addition, classes of claims or equity
interests in which the holders of claims or equity interests will not receive or retain any property are deemed to have rejected the plan and are not entitled to vote to accept or reject the plan. 
 In connection with the Plan: 
  

	 	•	 	 Holders of Claims in Classes 2, 4, and 5 are impaired and the holders of such Claims will receive distributions under the Plan. As a result, holders of Claims in
those Classes are entitled to vote to accept or reject the Plan; 

  

	 	•	 	 Holders of Claims in Classes 1 and 3 are unimpaired. As a result, holders of Claims and Interests in those Classes are deemed to have accepted the Plan and are not
entitled to vote to accept or reject the Plan. 

  

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	 	•	 	 Holders of Claims and Interests in Classes 6, 7 and 8 are impaired and are deemed to have rejected the Plan. As a result, holders of Claims and Interests in those
Classes are not entitled to vote to accept or reject the Plan. 

 The Bankruptcy Code defines “acceptance” of a
plan by a class of claims as acceptance by creditors in that class that hold at least two-thirds in dollar amount and more than one-half in number of the claims that cast ballots for acceptance or rejection of the plan. Your vote on the Plan is
important. The Bankruptcy Code requires as a condition to confirmation of a plan of reorganization that each class that is impaired and entitled to vote under a plan vote to accept such plan, unless the provisions of section 1129(b) of the
Bankruptcy Code are met. 
 If a Class of Claims entitled to vote on the Plan rejects the Plan, the Debtors reserve the right to amend the
Plan and/or to request confirmation of the Plan pursuant to section 1129(b) of the Bankruptcy Code. Section 1129(b) permits the confirmation of a plan of reorganization notwithstanding the non-acceptance of a plan by one or more impaired
classes of claims or equity interests, so long as at least one impaired class of claims or interests votes to accept the plan. Under that section, a plan may be confirmed by a bankruptcy court if it does not “discriminate unfairly” and is
“fair and equitable” with respect to each non-accepting class. 
 If you are entitled to vote to accept or reject the Plan, a
Ballot is enclosed for the purpose of voting on the Plan. This Disclosure Statement, the Exhibits attached hereto, the Plan and the related documents are the only materials the Debtors are providing to creditors for their use in determining whether
to vote to accept or reject the Plan, and such materials may not be relied upon or used for any purpose other than to vote to accept or reject the Plan. 
 Please complete, execute and return your Ballot(s) to the Debtors’ claims and voting agent (the “Voting Agent”) at the address below: 
 Epiq Bankruptcy Solutions, LLC 
 757 Third Avenue, 3rd Floor 
 New York, NY 10017 
 Tel. (646) 282-2500 
 Attn: Angharad Bowdler & Bridget Gallerie 
 TO BE
COUNTED, YOUR ORIGINAL BALLOT INDICATING ACCEPTANCE OR REJECTION OF THE PLAN MUST BE ACTUALLY RECEIVED BY THE VOTING AGENT NO LATER THAN 4:00 P.M., PREVAILING EASTERN TIME, ON JULY 14, 2008, UNLESS EXTENDED BY THE DEBTORS. YOUR BALLOT
MAY BE SENT VIA MAIL, OVERNIGHT COURIER OR MESSENGER. ALL BALLOTS MUST BE SIGNED. 
 The Ballots have been specifically designed for the
purpose of soliciting votes on the Plan from the Classes entitled to vote with respect thereto. Accordingly, in voting on the Plan, please use only the Ballots sent to you with this Disclosure Statement or provided by the Debtors’ Voting Agent.

 The Debtors have fixed 5:00 p.m., prevailing Eastern Time, on June 12, 2008 (the “Voting Record Date”)
as the time and date for the determination of Persons who are 

  

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entitled to receive a copy of this Disclosure Statement and all of the related materials and to vote whether to accept the Plan. Accordingly, only holders of
record of Claims or Interests as of June 12, 2008, that are otherwise entitled to vote on the Plan, will receive a Ballot and may vote on the Plan. 
 All properly completed Ballots received prior to the Voting Deadline will be counted for purposes of determining whether each voting Class of impaired Claims has accepted the Plan. The Voting Agent will prepare and
file with the Bankruptcy Court a certification of the results of the balloting with respect to the Plan on a Class-by-Class basis with respect to the Classes entitled to vote. 
 THE DEBTORS BELIEVE THAT CONFIRMATION OF THE PLAN IS IN THE BEST INTERESTS OF ALL HOLDERS OF CLAIMS AND RECOMMEND THAT ALL HOLDERS OF CLAIMS ENTITLED TO
VOTE ON THE PLAN VOTE TO ACCEPT THE PLAN. 
  

	1.5	Important Matters. 

 This
Disclosure Statement contains projected financial information and certain other forward-looking statements, all of which are based on various estimates and assumptions and will not be updated to reflect events occurring after the date hereof. Such
information and statements are subject to inherent uncertainties and to a wide variety of significant business, economic and competitive risks, including, among others, those described herein. Consequently, actual events, circumstances, effects and
results may vary significantly from those included in or contemplated by such projected financial information and such other forward-looking statements. The projected financial information contained herein and in the Exhibits annexed hereto is,
therefore, not necessarily indicative of the future financial condition or results of operations of the Debtors, which in each case may vary significantly from those set forth in such projected financial information. Consequently, the projected
financial information and other forward-looking statements contained herein should not be regarded as representations by any of the Debtors, their advisors, or any other Person that the projected financial conditions or results of operations can or
will be achieved. 
 ARTICLE II. 
 SUMMARY OF PLAN AND CLASSIFICATION AND 
 TREATMENT OF CLAIMS AND INTERESTS THEREUNDER 
 The overall purpose of the Plan is to provide for the restructuring of the Debtors’ liabilities in a manner designed to maximize recovery to all
stakeholders and to enhance the financial viability of the Reorganized Debtors. Generally, the Plan provides for a balance sheet restructuring which swaps the Debtors’ current debt including, but not limited to, debt evidenced by the Senior
Secured Notes and the Hillside Notes for cash, new notes and/or equity, as applicable. Other secured and unsecured creditors will receive cash or equity as applicable. All of the Debtors’ Existing Common Stock will have no value and will be
cancelled. Upon emergence, at least 80% of the Reorganized Debtors’ New Common Stock will be owned by Hillside. The New Common Stock will not be registered and will not trade on any public exchange. Holders of Existing Common Stock that do not
object to confirmation of the Plan will 

  

 - 6 - 

 
be eligible to receive Distribution Rights entitling such holder to receive certain future payments if the net proceeds of future monetization of the
Debtors’ patents that are not currently revenue bearing produce proceeds sufficient to meet certain obligations and funding needs of Reorganized Ampex. The resulting debt structure of the Reorganized Debtors will substantially deliver the
Company and provide additional needed liquidity. 
 The following table classifies the Claims against, and Interests in, the Debtors into
separate Classes and summarizes the treatment of each Class under the Plan. The table also identifies which Classes are entitled to vote on the Plan based on rules set forth in the Bankruptcy Code. Finally, the table indicates the estimated recovery
for each Class. As described in Article XII below, the Debtors’ businesses are subject to a number of risks. The uncertainties and risks related to the Reorganized Debtors make it difficult to determine a precise value for the Reorganized
Debtors, the New Common Stock of Reorganized Ampex and other distributions under the Plan. The recoveries and estimates described in the following tables represent the Debtors’ best estimates given the information available on the date of this
Disclosure Statement. All statements in this section to the amount of Claims and Interests are only estimates based on information known to the Debtors at the date hereof, and the final amounts of Claims Allowed by the Bankruptcy Court may vary
significantly from these estimates. 
 In connection with preparing the estimation of recoveries set forth herein, the following
assumptions were made: 
  

	 	•	 	 The ongoing enterprise value of the Reorganized Debtors for purposes of the Plan, based on the valuation prepared by Conway MacKenzie & Dunleavy
(“CM&D”), the Debtors’ financial advisors, is approximately $79 million. 

  

	 	•	 	 The aggregate Allowed amount of Administrative Expense Claims will be approximately $0.1 million. 

  

	 	•	 	 The aggregate Allowed amount of U.S. Trustee Fees will be approximately $38,000. 

  

	 	•	 	 The aggregate Allowed amount of Fee Claims will be approximately $2.9 million. 

  

	 	•	 	 The aggregate Allowed amount of unpaid Priority Tax Claims (including Secured Tax Claims) will be approximately $0.2 million. 

  

	 	 •
	 	 The aggregate Allowed amount of Priority Non-Tax Claims will be approximately $0.3 

  

	 3
	 The Debtors believe that as of the Effective Date there will be approximately $2.8 million in accrued employee wages and
other benefits. The Debtors received authority to satisfy prepetition employee wages and benefits subject to priority pursuant to sections 507(a)(4) and (a)(5). Accordingly, it is anticipated that all other accrued postpetition wages and benefits
will be satisfied in the ordinary course. 

  

 - 7 - 

	 	•	 	 The aggregate Allowed amount of Senior Secured Note Claims will be approximately $6.9 million plus non-default rate interest, fees and expenses.

  

	 	•	 	 The aggregate Allowed amount of Other Secured Claims will be approximately $0 (which may be paid in the ordinary course of business). 

 

	 	 •
	 	 The aggregate Allowed amount of Hillside Secured Claims will be approximately $11 million plus interest, fees and
expenses.4 

  

	 	 •
	 	 The aggregate Allowed amount of General Unsecured Claims will be approximately $51.6 million.5 

 The following table briefly
summarizes the classification and treatment of Claims and Interests under the Plan. The summaries in this table are qualified in their entirety by the description of the treatment of such Claims in Articles III and V of the Plan. In accordance with
section 1123(a)(1) of the Bankruptcy Code, Administrative Expense Claims, U.S. Trustee Fees, Fee Claims, and Priority Tax Claims have not been classified. Except as specifically noted therein, the Plan does not provide for payment of postpetition
interest with respect to Allowed Claims. 
  

												
	 Class
	  	 Description
	  	 Treatment
	  	Entitled
to Vote	  	 Estimated
Amount of
Claims or
Interests in
Class

	  	Estimated
Recovery	 
	 Unclassified
	  	Administrative Expense Claims	  	Each holder of an Allowed Administrative Expense Claim shall receive, unless such holder agrees to different treatment, Cash in an amount equal to such Allowed Claim, (b) such other less
favorable treatment to which such holder, the Consenting Holders and the Debtors agree, or (c) such other treatment such that the Claim will not be impaired.	  	No.	  	$0.1 million	  	100	%
						
	 Unclassified
	  	U.S. Trustee Fees	  	On the Effective Date or as soon as practicable thereafter, the	  	No	  	$38,000	  	100	%

  

	 4
	 Includes direct recovery and value of Distribution Rights gifted to the holders of Allowed Existing Common Stock
Interests who do not object to confirmation of the Plan. 

	 5
	 This amount does not include approximately $1.7 million in contingent customer claims on account of customer programs
authorized to be performed in the ordinary course. 

  

 - 8 - 

												
	 Class
	  	 Description
	  	 Treatment
	  	Entitled
to Vote	  	 Estimated
Amount of
Claims or
Interests in
Class

	  	Estimated
Recovery	 
		  		  	Debtors shall pay all U.S. Trustee Fees that are due and owing on the Effective Date, including those statutory fees arising under 28 U.S.C. § 1930(a)(6) and accrued interest under 31
U.S.C. § 3717.	  		  		  		
						
	 Unclassified
	  	Fee Claims	  	Each holder of an Allowed Fee Claim for which a Fee Application has been properly and timely filed and served shall be paid to the extent approved by order of the Bankruptcy Court.	  	No.	  	$2.9 million	  	100	%
						
	 Unclassified
	  	Priority Tax Claims	  	Each holder of an Allowed Priority Tax Claim shall receive, at the Debtors’ option, and with the consent of the Consenting Holders, either (a) Cash in an amount equal to the amount of such
Claim, or (b) deferred Cash payments following the Effective Date, over a period ending not later than five (5) years after the Commencement Date, in an aggregate amount equal to the Allowed amount of such Priority Tax Claim.	  	No.	  	$0.2 million	  	100	%

  

 - 9 - 

												
	 Class
	  	 Description
	  	 Treatment
	  	Entitled
to Vote	  	 Estimated
Amount of
Claims or
Interests
in
Class
	  	Estimated
Recovery	 
	Class 1	  	Priority Non-Tax Claims	  	Claims in this Class are not impaired. Except to the extent that a holder of an Allowed Non-Tax Claim agrees to less favorable treatment, each holder of an Allowed Claim in Class 1 shall receive
Cash in an amount equal to the amount of such Claim.	  	No.
Deemed
to have
accepted
the Plan.	  	$06	  	100	%
						
	Class 2	  	Senior Secured Note Claims	  	Claims in this Class are impaired. Each holder of an Allowed Claim in Class 2 shall be entitled to receive, in full and final satisfaction of such Allowed Senior Secured Note Claim, its Pro Rata
Share of the Senior Secured Note Claim Distribution.	  	Yes.	  	$6.9 million (plus non-default rate interest, fees and expenses)	  	100	%
						
	Class 3	  	Other Secured Claims	  	Claims in this Class are not impaired. On the Effective Date, any and all holders of Allowed Class 3 Claims shall receive (a) Cash in an amount equal to such Claim; or (b) such other treatment
such that it will not be impaired pursuant to section 1124 of the Bankruptcy Code; provided, however, that Class 3 Claims incurred in the ordinary course of business may be paid in the ordinary course of business in accordance with the
terms and conditions of any agreements relating thereto in	  	No;
Deemed
to have
accepted
the Plan.	  	$0 (plus interest, fees and expenses)	  	100	%

  

	 6
	 The Debtors believe that as of the Effective Date there will be approximately $2.8 million in accrued employee wages and
other benefits. The Debtors received authority to satisfy prepetition employee wages and benefits subject to priority pursuant to sections 507(a)(4) and (a)(5). Accordingly, it is anticipated that all other accrued postpetition wages and benefits
will be satisfied in the ordinary course. 

  

 - 10 - 

												
	 Class
	  	 Description
	  	 Treatment
	  	Entitled
to Vote	  	 Estimated
Amount of
Claims or
Interests in

 Class
	  	Estimated
Recovery	 
		  		  	the discretion of the applicable Debtor or Reorganized Debtor, and with the consent of the Consenting Holders.	  		  		  		
						
	  
 Class 4
	  	  
 Hillside Secured Claims
	  	  
 Claims in this Class are impaired. In full and final satisfaction of
its Hillside Secured Claim, the Reorganized Debtors shall incur the Tranche A Loan Obligations in the aggregate original principal amount of $10,500,000.00
	  	Yes	  	$11 million	  	100	%7
	  	  	  		  		  		
	  	  	  		  		  		
	  	  	  		  		  		
						
	Class 5	  	General Unsecured Claims	  	Claims in this Class are impaired. Except to the extent that a holder of an Allowed General Unsecured Claim agrees to different treatment, the holder of such Allowed General Unsecured Claim
shall be entitled to receive, in full and final satisfaction of such General Unsecured Claim, either (a) its Pro Rata Share of the Unsecured Claim Distribution or (b) subject to the occurrence of the Effective Date, by electing on such holder’s
ballot for voting on the Plan, its applicable Lump Sum Cash Payment.	  	Yes.	  	$51.6 million8	  	10	%
						
	Class 6	  	Existing Common Stock Interests	  	Interests in this Class are impaired. Shares of Existing Common Stock shall be cancelled and holders of	  	No.
Deemed
to have
rejected
the Plan.	  	$0	  	0	%

  

	 7
	 Includes direct recovery and value of Distribution Rights gifted to the holders of Allowed Existing Common Stock
Interests who do not object to confirmation of the Plan. 

	 8
	 This amount does not include approximately $1.7 million in contingent customer claims on account of customer programs
authorized to be performed in the ordinary course. 

  

 - 11 - 

												
	 Class
	  	 Description
	  	 Treatment
	  	Entitled
to Vote	  	 Estimated
Amount of
Claims or
Interests in
Class
	  	Estimated
Recovery	 
		  		  	Existing Common Stock Interests shall not be entitled to any distribution under the Plan; provided, however, that as part of the settlement and compromise embodied in the Plan,
each holder of an Existing Common Stock Interest that does not object to confirmation of the Plan shall, within 10 Business Days of the CPR Administrator’s receipt of the Initial Company Notice (as defined in the CPR Agreement), receive a CPR
Administrator Rights Notice setting forth such holder’s right to receive its Pro Rata Percentage of the CPR Distributions, subject to the terms and conditions of the CPR Agreement. Hillside has agreed to forego a portion of its recovery on
account of the Hillside Secured Claim in order to gift the CPR Distributions to certain holders of Allowed Existing Common Stock Interests.	  		  		  		
						
	Class 7	  	Existing Securities Laws Claims	  	Interests in this Class are impaired. Holders of Existing Securities Laws Claims shall not receive or retain any distribution under the Plan.	  	No.
Deemed
to have
rejected
the Plan.	  	$0	  	0	%
						
	Class 8	  	Other Existing Interests	  	Interests in this Class are impaired. Holders of Other Existing Interests shall not receive or retain any distribution under the Plan.	  	No.
Deemed
to have
rejected
the Plan.	  	$0	  	0	%

 The recoveries set forth above are estimates that are contingent upon approval of the Plan as proposed.

  

 - 12 - 

 ARTICLE III. 
 BUSINESS DESCRIPTION AND CIRCUMSTANCES 
 THAT LED TO THESE REORGANIZATION CASES 

  

	3.1	The Debtors’ Businesses. 

  

	 	(a)	Description of Debtors’ Businesses: Overview. 

 The
Debtors and their non-debtor affiliates (the “Company”) are leading innovators and licensors of visual information technology. In 1944, Ampex Electric and Manufacturing Company, the predecessor to Ampex, was formed in San
Carlos, California. Over the last 63 years the Debtors have developed substantial proprietary technology relating to the electronic storage, processing and retrieval of data, particularly images. The Debtors currently hold approximately 370 patents
and patent applications covering digital image processing, digital image compression and recording technologies. The Debtors’ corporate licensing division licenses their patents to manufacturers of professional and consumer electronics
products. Through Ampex Data Systems Corporation (“Data Systems”), one of the Debtors, the Company also develops and incorporates its proprietary technology in the design and manufacture of high performance data storage
products, principally used in defense applications to gather digital images and other data from aircraft, satellites and submarines. These products are also used in flight and sensor test applications. 
 The Debtors’ two business segments include a “Recorders” segment and a “Licensing” segment. The Recorders segment primarily
includes the sale and service of data acquisition and instrumentation recorders (which record data and images rather than computer information), and to a lesser extent mass data storage products (the “Recorders Segment”). All
of the Debtors’ products are made by their manufacturing company, Data Systems. The Licensing segment involves the licensing of the Debtors’ intellectual property to manufacturers of professional and consumer digital video products (the
“Licensing Segment”). The Debtors’ products and licensing activities are described below. 
  

	 	(b)	Licensing Segment. 

 The Debtors’ Licensing Segment
generates revenues from licenses granted to companies covering a variety of technologies that were developed in prior years when the Debtors’ designed and manufactured digital video tape recorders and special effects products used in the
professional television broadcast and post production industries. Historically, the Debtors’ licensees included other competitive manufacturers of professional products as well as manufacturers of consumer products where the Debtors did not
directly compete but where their technology was relevant to consumer products’ functionality. The Licensing Segment has been a steady source of revenue since 1968. In 1968, the Debtors first licensed their intellectual property to a
manufacturer of consumer videocassette recorders (“VCRs”) and subsequently licensed such patents to essentially every significant manufacturer of VCRs in the world. As the older patents expired, the Debtors developed new
technology used in VCRs and licensees continued to pay royalties to be able to incorporate these new patents in their VCRs. In the period from 1990 to 2000, the Debtors’ licensing income fluctuated significantly but averaged 

  

 - 13 - 

 
approximately $16 million per year. VCRs were based on analog video technology. The Debtors ceased to develop analog technology many years ago. Most of the
patents related to this technology expired in 2001, and the Debtors’ licensees no longer pay significant royalties on analog products. However, the Debtors’ research and development in the field of digital video recording resulted in
patents which have found application in digital camcorders, digital still cameras and potentially other products that record still or motion video images. Today, substantially all of the Debtors’ licensing revenue comes from manufacturers of
digital camcorders that have licensed the Company’s patents that do not expire until after 2012. The Debtors continue to explore additional ways, including possible arrangements with independent patent research and evaluation companies and
other third parties, to monetize their intellectual property. There can be no assurance that these expanded efforts will be successful. 
  

	 	(1)	Technology. 

 In the 1980s the Company was the leader in
the development of digital video technology for use in such products as digital special effects, digital graphics, digital time base correctors and many others. The Debtors received limited royalty income from licensing these patents for use in
broadcast television products, but the market for such technology was small and image-based consumer products did not employ digital technology at that time for various reasons, including the cost of such technology. 
 As part of its development of digital video technology, Ampex made advances in digital image compression, and in the mid 1990’s introduced the first
professional videotape recorder to successfully use digital image compression. These devices were part of a family of products marketed by Ampex under the DCT trademark. The patents that the Debtors received as a result of designing these products
could have significant appeal to the manufacturers of digital video imaging consumer products. Hence, such technology is now among the most potentially valuable resources to the Licensing Segment. 
 In 2004 through 2006, Ampex continued to generate significant royalties from digital video camcorders but the majority of their licensing revenue came
from digital still cameras. Ampex also generated royalties from DVD recorders. In April 2006, the Ampex’s Rapid Image Retrieval patent (the “121 Patent”) used in digital still cameras and camera-equipped cellular phones
expired. All of the digital still camera and camera-equipped cellular phone licensees have discontinued royalty payments to the Debtors subsequent to the expiration of the 121 Patent. 
  

	 	(2)	Patents. 

 Ampex’s 121 Patent had been responsible for
the majority of the license income recently earned by the Company as a result of settlements of liability for past infringement. The 121 Patent revenue was paid by manufacturers of digital still cameras and, to a lesser extent, manufacturers of
camera-equipped cellular phones. Ampex owns other patents that relate to digital imaging, and continues to receive royalties from several manufacturers of digital camcorders and one manufacturer of DVD recorders. 
  

 - 14 - 

 Ampex’s image data shuffling patents are used to reduce the amount of data required to transmit or
record an image. These patents expire at various dates through 2013 and have been issued in the United States of America (the “U.S.”), France, Great Britain, Germany and Taiwan. The Debtors believe that these patents are
necessary for the production of digital video camcorders because they are included in applicable technical standards. Such patents also may be used in DVD recorders and set top cable boxes that are equipped to record video (“Cable
Boxes”). The Company’s technology is useful in compressing either still or motion video images and it is possible that these patents may be used or useful in digital still cameras and possibly in camera-equipped cellular
telephones. 
 Ampex’s “feed forward quantization” patents are also useful in reducing the amount of data required to transmit
or record images, principally video images. These patents expire at various dates through 2012, and have been issued in the U.S., France, Great Britain, Germany and Taiwan. These patents are used in the production of digital video camcorders
complying with applicable technical standards. Such patents may be used in DVD recorders, cable boxes and may be used or useful now, or in the future, in digital still cameras and camera-equipped cellular telephones that have the capability to
record still and motion video. 
 Ampex’s high-speed data decoding patents may be useful in any digital device that displays video. The
patents expire at various dates through 2014, and are issued in the U.S., Austria, France, Great Britain and Germany, and an application is pending in Japan. The Debtors continue to investigate the extent to which these patents may be used in many
consumer digital devices, but have not yet reached a conclusion as to which products, if any, may currently infringe these patents. 
 The
major product categories from which Ampex receives royalty income at present are digital video camcorders and DVD recorders. 
  

	 	(c)	Recorders Segment 

 The Recorders Segment includes the sale
and service of data storage systems, instrumentation recorders and professional video products, substantially all of which are made by Data Systems. 
  

	 	(1)	Product Sales. 

 Data Systems’ products are comprised
primarily of high performance instrumentation products and, to a lesser extent, mass data storage products. High performance instrumentation recorders reproduce data at higher speeds and store larger volumes of data than in general purpose recording
devices. Instrumentation recorders capture digital data that is usually generated by a sensor or other devices. Examples include satellite telemetry information and flight test data. Data Systems’ mass data storage products consist of their
19-millimeter scanning recorders and robotic library systems and related tape and after-market parts. Data Systems also continues to offer spare parts for the repair of professional video recorders and other products that it previously manufactured
and marketed to the television production and post-production industries. However, sales of spare parts of legacy television products accounted for less than ten percent (10%) of total Recorders segment revenue in 2006. 
  

 - 15 - 

 Data Acquisition/Instrumentation Products. Data Systems has been well established for more than 50
years as a supplier of instrumentation recorders. Data Systems has supplied these recorders primarily to governmental agencies for use in airborne and ground-based data collection, satellite surveillance and other defense-related applications, as
well as to defense contractors and aerospace and other industrial users primarily for test and measurement purposes. Data Systems’ instrumentation recorders have been used on almost every advanced commercial and U.S. military aircraft, as well
as on foreign aircraft. 
 Data Systems’ principal data acquisition/instrumentation products currently are the DDRs 400, DSRs 440 and
DSRs 400B. These are disk- and solid state memory-based recorders, which are plug-compatible replacements for Ampex tape-based DCRsi instrumentation recorders for ease of data transfer, analysis and archival storage. In 2006, the Debtors began
shipment of the HRR 700 High Definition Video Recorder. This recorder is a compact, solid state-based recorder that provides up to 224 gigabytes (“GB”) of removable storage and sustained data rates of up to 600 megabits per
second (“Mb/s”). As the Debtors’ customers’ data storage requirements increase, solid state memory becomes cost prohibitive. Accordingly, the Debtors are designing ruggedized disk-based recorders that offer the
economics of disk storage without sacrificing the superior functionality of solid state. The Debtors’ WDS 2000 FC is a wide band, compact disk array that has been ruggedized for airborne data acquisition and storage and is capable of recording
multiple data streams of uncompressed high definition video with RAID 3 reliability in high vibration environments. 
 Data Systems continues
to offer its tape-based digital instrumentation recorders. Tapes from these recorders are fully interchangeable. These recorders are rugged, highly reliable and compact recorders that permit uninterrupted data capture from fractions of Mb/s up to
240 Mb/s over very long periods of time, such as during test flights of new aircraft. These products are designed for data interchange between locations and agencies. 
 These recorders are used extensively in airborne and naval intelligence acquisition and for the collection of test data during the design and qualification of aircraft. The Debtors’ data acquisition and
instrumentation recorders (including their DIS 19-millimeter tape drives) are sold primarily to prime contractors who in turn sell to government agencies involved in data collection, satellite surveillance and defense-related activities, as well as
to defense contractors and other industrial users for testing and measurement purposes. Sales of instrumentation recorders are made through Data Systems’ internal domestic and international sales forces, as well as through independent sales
organizations in foreign markets. These products are used by U.S. and foreign military and intelligence agencies (including those of China, Germany, India, Japan, South America and the United Kingdom), as well as by manufacturers of commercial
airplanes, such as The Boeing Corporation (“Boeing”), and foreign airframe manufacturers. Government programs, which utilize these products, have lead times of several years before significant revenues are generated.
Significant portions of data acquisition and instrumentation recorder sales reflect purchases by prime contractors to the federal government, which can be subject to significant fluctuations in volume. 
 19-millimeter Products. Data Systems’ 19-millimeter tape-based products include their DST and DIS tape drives and library systems and use
core technology developed by the Debtors for their digital video recorders when they were active in the professional television 

  

 - 16 - 

 
market until 1992. Data Systems’ DST tape drives are used to store digital data in formats such as SCSI and fibre channel that are typically utilized in
the computer industry. Data Systems’ DIS tape drives use specialized instrumentation formats that are primarily used in intelligence gathering. 
 Data Systems currently distributes their 19-millimeter products (including DST and DIS recorders) directly through their internal sales force, as well as through independent value-added resellers. Data Systems
manufactures their 19-millimeter products to customer order. Data Systems’ 19-millimeter mass storage tape drives and library systems are optimized for applications that must handle large amounts of data, such as those that process and store
images, digital video and streaming data. Government intelligence data gathering and archival storage are Data Systems’ principal markets. 
 Other Products. Data Systems’ other products are primarily television after-market products (including spare parts) relating to television products that they manufactured in prior periods and continue to support. 
  

	 	(2)	Product Service. 

 The Debtors’ servicing business
consists principally of maintenance contracts on Data Systems’ products. As the installed base of tape-based instrumentation recorders come out of service and are replaced with disk or solid state memory based recorders, which do not require a
significant amount of support, the servicing business has declined over time. Total service revenue generated by the Recorders Segment in the year ended December 31, 2006 was $8.3 million compared to $8.9 million for the year ended
December 31, 2005 and $8.7 million for December 31, 2004. In addition, Data Systems has a small division that sells spare parts needed to repair professional video recorders and other products that it previously manufactured and marketed
to companies involved in television production and post-production. 
  

	 	(d)	Patents, Licenses and Trademarks. 

 As a result of ongoing
research and development expenditures, the Debtors have developed substantial proprietary technology, certain of which they have elected to patent or to seek to patent. As of December 31, 2007, the Debtors held approximately 370 patents and
patent applications, including approximately 140 patents in the U.S. and approximately 230 corresponding patents in other countries. Also, there are approximately 25 U.S. and foreign patent applications pending. The majority of these patents and
pending patents relate to the Debtors’ recording technology. The Debtors continually review their patent portfolio and allow non-strategic patents to lapse, thereby minimizing substantial renewal fees. 
 It is not possible to predict the amount of royalty revenue that will be received by the Debtors in the future. The Debtors’ royalty revenue stream
has historically fluctuated widely due to a number of factors that the Debtors cannot predict, such as the extent of use of their patented technology by third parties, the extent by which they must pursue litigation in order to enforce their
patents, and the ultimate success of their licensing and litigation activities. The Debtors continue to explore additional ways, including possible arrangements with independent patent research and evaluation companies and other third parties, to
monetize their intellectual property. There can be no assurance that these expanded efforts will be successful. 
  

 - 17 - 

	3.2	Facilities and Offices. 

 The
Debtors’ headquarters are located in Redwood City, California. Product design, engineering and manufacturing primarily occur at another Redwood City facility and a second facility in Colorado Springs, Colorado. The office of the Chief Financial
Officer is maintained in New York, New York. Sales and services are performed in Redwood City and Colorado Springs. 
  

	3.3	Employees and Pension Issues. 

 The Debtors employ a total of 99 people. None of the Debtors’ employees are covered by a collective bargaining agreement. 
 Ampex is the sponsor of two defined benefit plans. The Ampex Corporation Retirement Plan (the “Ampex Pension Plan”) and the Quantegy Media Retirement Plan (the “Media Pension Plan,” and,
together with the Ampex Pension Plan, the “Pension Plans”). Ampex became the sponsor of the Media Pension Plan in 1994 when NH Holding Incorporated (“NHI”), Ampex’s former parent, commenced a case
under chapter 11 of the Bankruptcy Code. Obligations under these Pension Plans underlie the Debtors’ most significant liability and, as set forth more fully below, are the primary reason for the commencement of these cases. Effective as of
February 1, 1994, the Debtors amended the Pension Plans to suspend further benefit service and compensation accruals in order to reduce payments that would otherwise be required thereunder. As of December 31, 2007, the Media Pension Plan
and the Ampex Pension Plan were underfunded by $13.5 million and $44.2 million, respectively. 
 As of December 31, 2007, the fair value
of the assets of the Pension Plans determined under GAAP totaled $188,893,000. The accumulated benefit obligations for the Pension Plans determined under GAAP amounted to $246,554,000 at December 31, 2007. The Pension Plans’ actuaries have
forecasted that substantial pension contributions will be required through 2013 in order to fully fund benefits payable to plan participants. The Debtors’ annual estimated contributions for the Ampex Pension Plan and Media Pension Plan through
2013 are as follows: 
  

							
	 	  	Estimated Contributions
	 	  	Ampex
Pension Plan	  	Media
Pension Plan
	 	  	(in thousands)
	 2008
	  	 	11,883	  	 	3,808
	 2009
	  	 	5,736	  	 	1,788
	 2010
	  	 	7,386	  	 	2,288
	 2011
	  	 	6,366	  	 	1,855
	 2012
	  	 	7,337	  	 	2,314
	 2013
	  	 	1,695	  	 	509
			
	 Total
	  	$	40,403	  	$	12,562

  

 - 18 - 

 The following table reflects the total expected future benefit payments by Pension Plans to plan
participants through 2017: 
  

					
	 	  	Ampex
Pension Plan	  	Media
Pension Plan
	 	  	(in thousands)
	 2008
	  	15,022	  	3,990
	 2009
	  	15,019	  	3,998
	 2010
	  	15,019	  	3,961
	 2011
	  	15,068	  	3,947
	 2012
	  	15,130	  	3,998
	 2013-2017
	  	74,132	  	20,601

 In 1994, in connection with the NHI chapter 11 reorganization, the Pension Benefit Guaranty
Corporation (the “PBGC”), Ampex, and certain other entities, including Hillside and SHI, that the PBGC asserted were members of a “group under common control” for purposes of the Employee Retirement Income Security
Act (“ERISA”) (which assertion Hillside contests), entered into a joint settlement relating to the Pension Plans (the “PBGC Agreement”). PBGC is a wholly-owned United States government corporation, and
an agency of the United States, that administers the defined benefit pension plan termination insurance program under Title IV of the ERISA, 29 U.S.C. §§ 1301-1461 (2000 & Supp. V 2005). PBGC guarantees the payment of certain
pension benefits upon the termination of a single-employer pension plan covered by Title IV of ERISA. When an underfunded plan terminates, PBGC generally becomes trustee of the plan and, subject to certain statutory limitations, pays the plan’s
unfunded benefits with its insurance funds. Under the terms of the PBGC Agreement, Ampex and Hillside are jointly and severally liable to the PBGC to fund certain minimum funding contributions (the “Required Contributions”)
to the Pension Plans, but Ampex remained the sponsor of the Pension Plans. Hillside does not agree with the preceding sentence. Hillside asserts that, pursuant to the PBGC Agreement and the HSA Agreement (defined below), Ampex retained primary
responsibility to fund the Required Contributions and that Hillside, pursuant to the PBGC Agreement, became responsible to provide back-up funding for the Required Contributions. 
 Pursuant to a related settlement agreement dated as of December 1, 1994, between Hillside, Ampex and certain entities affiliated with SHI (the
“HSA Agreement”), Ampex is 

  

 - 19 - 

 
required to “make all commercially reasonable efforts” to obtain the funds necessary to make the Required Contributions from sources other than
Hillside. Each time Hillside is required to make all or any portion of the Required Contributions, pursuant to the HSA Agreement, Ampex is required to issue a note to Hillside (the “Hillside Notes”) in the amount of such
contribution. The Hillside Notes are secured by the inventory of Data Systems, including all goods owned or hereafter acquired by Data Systems which are held for sale or lease, raw materials, work in process, or materials used or consumed in the
business of Data Systems, and all accessions thereto and products thereof (the “Data Systems’ Inventory”), and all cash and non-cash proceeds and products of any and all of Data Systems’ Inventory, including,
without limitation, all current or hereafter acquired proceeds, whether such proceeds constitute Data Systems’ Inventory, accounts, accounts receivable, general intangibles, instruments, securities, credits, documents, letters of credit,
chattel paper, documents of title, warehouse receipts, leases, deposit accounts, money, control rights, supporting obligations or goods, but not including certain excluded property (collectively, the “Hillside Collateral”).

  

	3.4	Prepetition Indebtedness and Capital Structure. 

 As of March 30, 2008, the Debtors had approximately $59.6 million of outstanding notes issued by the Debtors. Approximately $6.9 million of such amount represents amounts due under an indenture dated as of
February 28, 2002 (as amended, the “Indenture”), between Ampex, as Issuer, and U.S. Bank, National Association, as successor trustee to State Street Bank and Trust Company, as initial trustee (the “Indenture
Trustee”). Pursuant to the Indenture, Ampex issued those certain 12% Senior Secured Notes due 2008 (the “Senior Secured Notes”), which are secured by liens on Ampex’s future royalty receipts. 
 Approximately $52.7 million of the Debtors’ outstanding indebtedness is represented by the Hillside Notes that have been issued in connection with
Hillside’s satisfaction of Required Contribution obligations under the Pension Plans. 
 The remainder of the Debtors’ outstanding
indebtedness relates to its various liabilities in connection with its Pension Plans, certain environmental liabilities, and General Unsecured Claims. 
 Ampex is a publicly held corporation. Ampex’s authorized capital stock consists of Class A Common Stock (“Class A Stock”), Class C Common Stock (“Class C
Stock”, and collectively with Class A Stock, the “Existing Common Stock”), and preferred stock (the “Preferred Stock”). Currently, there is no outstanding Class C Stock or Preferred
Stock. Moreover, even if these securities had been issued, shares of Class C Stock and Preferred Stock are generally non-voting except in circumstances specified in Ampex’s charter documents or as otherwise required by applicable corporate law.
Accordingly, holders of Class A Stock are the only stockholders with voting rights. The Class A Stock has been listed on the NASDAQ Capital Market (formerly the NASDAQ SmallCap Market) since September 1, 2006, under the symbol
“AMPX.” From June 24, 2005 to August 31, 2006, the Class A Stock was listed on the NASDAQ Global Market (formerly the NASDAQ National Market). From November 21, 2003 to June 23, 2005, the Class A Stock was
listed for quotation on the OTC Bulletin Board under the symbol “AEXCA.” As of March 25, 2008, there were 393 holders of record of the Class A Stock. As of December 31, 2007, certain of the Debtors’ executive officers,
directors and their affiliates beneficially owned or controlled, in the aggregate, approximately 2.3% of the outstanding Existing Common Stock. 
  

 - 20 - 

 ARTICLE IV. 
 EVENTS LEADING TO CHAPTER 11 FILING 
 As noted above, the Debtors operate two business
segments—Licensing and Recorders. The Licensing Segment, although presently a stable source of predictable revenue, may not experience growth. Absent new developments, this segment will cease to be profitable once the patents on which current
revenue is based expire over the next four to seven years. The Recorders Segment, a business reliant on developing high performance data instrumentation recorders and mass storage systems, generated $5.7 million of EBIDTA in 2007. Data Systems is
pursuing new product initiatives and hopes to broaden its customer base to multiple branches of the U.S. military and other defense markets which will require additional investments in research and engineering as well as sales and marketing during
2008. Accordingly, EBITDA in 2008 is forecasted to be at lower levels than amounts realized in recent years. These investments are intended to position Data Systems for profitable growth in 2009 and beyond. Unfortunately, given the Company’s
debt structure, most notably its legacy liabilities, the Company is unable to sustain its current leverage through its operations and needs to restructure its obligations. 
  

	4.1	The Debtors’ Financial Position. 

 The amount of cash on hand will be insufficient to operate the business as a going concern. In an effort to find additional liquidity for operations from the Company’s assets, the Company continued to pursue the monetization of its
unlicensed intellectual property. Over the past year, the Debtors have worked with M-CAM, Inc., Commercial Strategies, LLC and ThinkFire Services USA, Ltd., third party consultants with extensive experience in valuing, monetizing and otherwise
exploiting unlicensed intellectual property. However, the Debtors have received no third-party offers that would provide value for the unlicensed intellectual property. The Company did not have the time or the liquidity to continue to further pursue
these options outside of a restructuring. 
 Further, the projections assume that Hillside continues to advance funds for or directly pay
scheduled Required Contributions in 2008 and beyond. Beginning in early 2008, and thereafter, the levels of principal and interest on the Hillside Notes that the Debtors would have to satisfy substantially exceed the amount of cash flow that their
businesses, as presently configured, are projected to generate. The Debtors currently project cash flow shortfalls of approximately $17 million in 2010, $41 million in 2011, and $65 million in 2012, respectively. The Debtors have pursued
opportunities to reduce their costs, restructure their existing indebtedness, raise additional capital and generate additional revenues in order to eliminate or defer these projected cash flow shortfalls. However, these efforts have not been
adequate to enable their businesses to continue to operate without seeking protection under the Bankruptcy Code. 
 At March 30, 2008,
Ampex had $59.6 million of outstanding indebtedness. The scheduled debt maturities over the next five (5) years are as follows (in thousands): 
  

				
	 2008
	  	$	11,141
	 2009
	  	$	1,050
	 2010
	  	$	9,850
	 2011
	  	$	23,506
	 2012
	  	$	8,418
	 TOTAL
	  	$	53,964

  

 - 21 - 

 The above debt maturities include $6.9 million of Senior Secured Notes at March 30, 2008, that are
due on August 15, 2008, and which will continue to accrue interest at 12% per annum. The balance of the outstanding debt is comprised of debt payable to Hillside, as more fully discussed below. 
 In addition, the Debtors have estimated contributions under the Pension Plans that total $52.9 million through 2013 (in thousands): 
  

				
	 2008
	  	$	15,691.00
	 2009
	  	$	7,524.00
	 2010
	  	$	9,674.00
	 2011
	  	$	8,221.00
	 2012
	  	$	9,651.00
	 2013
	  	$	2,204.00
	 TOTAL
	  	$	52,965.00

 As noted above, pursuant to the PBGC Agreement, Hillside is obligated to advance the Required
Contributions for the Pension Plans in the event that the Debtors are unable to make the Required Contributions necessary to satisfy the minimum funding standard of ERISA. Failure by Hillside to advance funds as may be required may entitle the PBGC
to terminate the Pension Plans and seek recovery of termination benefits from Hillside and the Debtors. 
 When Hillside makes all or any
portion of a Required Contribution to the Pension Plans under the PBGC Agreement, pursuant to the HSA Agreement, the Debtors issue additional Hillside Notes. Under the terms of the Hillside Notes, $150,000 of principal is due on the first
anniversary of each of the notes with the remaining principal due on the fourth anniversary of the notes. As of March 30, 2008, the outstanding obligations under the Hillside Notes, including interest, totaled approximately $52.7 million.

 The Debtors presented a debt restructuring plan to Hillside in April 2007. The goal of the plan was to obtain additional liquidity without
raising additional third-party debt so that the Debtors might pursue additional “non-litigation” patent monetization strategies and their 

  

 - 22 - 

 
plans to grow Data Systems. Hillside issued a counter-proposal which the Company rejected on the basis that it did not maximize the value of the Company for
all relevant stakeholders. Over the last several months, the Debtors have engaged in discussions with Hillside regarding a possible restructuring of their indebtedness. These discussions have focused on a myriad of different restructuring
possibilities. 
 In early July 2007, the Company approached a variety of business development corporations, as well as its senior lenders to
obtain $15 million of new debt financing that the Company proposed be secured by the common stock of Data Systems. Discussions regarding a more modest financing were held with one of the Company’s Senior Secured Noteholders. In total six firms
were contacted. 
 Also during this period, the Debtors contacted a number of financial institutions and other interested parties, including
holders of the Existing Common Stock to solicit their interest in raising a minimum of $15 million of additional capital through a rights offering. 
 Unfortunately, this and other efforts proved unsuccessful. This issue was further compounded by the threat of acceleration of long term indebtedness, the cost of Required Contributions, and recent tightening in the credit markets. In
addition, as set forth above, efforts to deploy a new patent strategy with advisors identified by certain shareholders were unsuccessful. Given a lack of meaningful alternatives, the Company devoted its efforts to negotiating a consensual
restructuring plan with Hillside on the best terms possible. 
  

	4.2	Events Leading Up to the Formulation of the Plan. 

 On July 13, 2007, the Debtors received notice from Hillside alleging that the Debtors had breached the HSA Agreement by failing to use commercially reasonable means to make the Required Contribution or any
portion thereof. Such notice further alleged that, if the breach was not cured within ten days, it would constitute an event of default under the HSA Agreement, which would entitle Hillside to declare all of the Hillside Notes immediately due and
payable (approximately $45 million) as of that time. The Debtors believed and continue to believe that they did not breach the HSA Agreement and that Hillside had no valid basis to declare a default under the HSA Agreement, which Hillside continues
to dispute. Nonetheless, any acceleration of the Hillside Notes, unless waived or rescinded, would have resulted in the occurrence of an event of default under certain of the Debtors’ other obligations, including approximately $6.9 million of
Senior Secured Notes, which would have entitled the holders of such Senior Secured Notes to accelerate the maturity of those obligations. 
 On September 12, 2007, the Debtors disclosed that they had entered into a Standstill Agreement with Hillside, whereby Hillside agreed not to accelerate the maturity of the Hillside Notes or commence legal actions against the Debtors
for sixty (60) days while the parties worked to complete documentation of a restructuring of the Hillside Notes, clarify how future pension contributions would be funded and permit the Debtors to raise additional equity financing to pursue its
patent monetization program (as the same was amended and or modified from time to time, the “Standstill Agreement”). From September 12, 2007 through January 14, 2008 (the “Standstill
Period”), the Debtors operated under the Standstill Agreement, and during that time, attempted to restructure the Hillside Notes. Prior to the expiration of the Standstill 

  

 - 23 - 

 
Agreement, which was due to expire on its own terms on January 15, 2008, Hillside terminated the Standstill Agreement and demanded immediate payment of
approximately $1.3 million of outstanding principal due on the Hillside Notes, and demanded payment of approximately $1.4 million of accrued interest due on the Hillside Notes within ten (10) days. At that time, Hillside further reasserted its
allegation that the Debtors had breached the HSA Agreement. Hillside stated in its notice to the Debtors that if they failed to make the principal and interest payments then due on the Hillside Notes and cure the alleged breach within the specified
periods, it would constitute an event of default under the HSA Agreement, which would entitle Hillside to accelerate repayment of the outstanding Hillside Notes. Based upon the Company’s cash position, the Company determined that it was not
financially prudent to repay the $2.7 million demanded by and due to Hillside but would continue its efforts to negotiate a restructuring plan for the Hillside debt. 
 During and after the Standstill Period, the Debtors and Hillside engaged in negotiations over the terms of a consensual restructuring. Several different proposals were presented and considered by the Debtors’
management (the “Management”) and Ampex’s board of directors (the “Board”). The Debtors also analyzed several other possibilities for reorganizing its capital structure. On January 29, 2008,
Hillside delivered a revised restructuring proposal (as the same was amended or modified from time to time, the “Hillside Term Sheet”). The Board and Management reviewed the Hillside Term Sheet and determined that it
presented the best option for a consensual restructuring of the Hillside Notes and the best opportunity to maximize value for the Debtors’ stakeholders and perhaps the only opportunity to realize the value of Ampex’s unlicensed Patents.
The Plan is based substantially on the Hillside Term Sheet, as amended during the course of the Debtors’ and Hillside’s negotiations. A summary of the terms of the Plan is contained in Article VI of this Disclosure Statement, and the Plan
is attached hereto as Exhibit 1. 
 Following extensive negotiations with Hillside and certain holders of the Senior Secured
Notes (each, a “Consenting Senior Secured Noteholder”), representing approximately 80% in amount of the outstanding Senior Secured Notes, on March 31, 2008, the Debtors announced that they had entered into a plan support
agreement, dated March 30, 2008 (as amended, the “Plan Support Agreement”), with the Consenting Senior Secured Noteholders and Hillside. (A copy of the Plan Support Agreement is attached hereto as Exhibit
2). Pursuant to the terms of the Plan Support Agreement, Hillside and the Consenting Senior Secured Noteholders agreed to support the Plan upon the satisfaction of certain conditions. Moreover, the Debtors believe that the Plan provides for
appropriate treatment of all Classes of Claims and Interests, taking into account the valuation of the Company and the differing natures and priorities of the Claims and Interests. 
 ARTICLE V. 
 REASONS FOR THE SOLICITATION; RECOMMENDATION

 Chapter 11 of the Bankruptcy Code provides that unless the terms of section 1129(b) of the Bankruptcy Code are satisfied, for the
Bankruptcy Court to confirm the Plan as a consensual plan, the holders of impaired Claims against the Debtors in each Class of impaired Claims must accept the Plan by the requisite majorities set forth in the Bankruptcy Code. An 

  

 - 24 - 

 
impaired Class of Claims shall have accepted the Plan if (a) the holders of at least two-thirds in amount of the Claims in such Class actually voting on
the Plan have voted to accept it, and (b) more than one-half in number of the holders in such Class actually voting on the Plan have voted to accept it (such votes, the “Requisite Acceptances”). 
 In light of the significant benefits to be attained by the Debtors and the Debtors’ creditors pursuant to consummation of the transactions
contemplated by the Plan, the Debtors’ recommend that all holders of Claims in those Classes entitled to vote to accept the Plan. The officers and directors of each of the Debtors (collectively, the “Company Boards”)
have reached this decision after considering available alternatives to the Plan and their likely effect on the Debtors businesses operations, creditors, and shareholders. These alternatives include liquidation of the Debtors under chapter 7 or 11 of
the Bankruptcy Code or an alternative reorganization under chapter 11 of the Bankruptcy Code. The Debtors’ determined, after consulting with their legal and financial advisors, that the Plan, if consummated will maximize the value of these
estates for stakeholders, as a result of the compromises and settlements embodied therein, than would any other out of court refinancing scenario reasonably available, any other chapter 11 reorganization strategy or a liquidation under chapter 7 or
11. For all of these reasons, the Debtors’ officers and directors support the Plan and urge the holders of Claims entitled to vote on the Plan to accept and support it. 
 ARTICLE VI. 
 THE PLAN 
  

	6.1	Overview of Chapter 11. 

 Chapter 11 is the principal business reorganization chapter of the Bankruptcy Code. Under chapter 11, a debtor is authorized to reorganize its business for the benefit of itself, its creditors and its equity interest holders. In addition to
permitting the rehabilitation of a debtor, another goal of chapter 11 is to promote equality of treatment for similarly situated creditors and similarly situated equity interest holders with respect to the distribution of a debtor’s assets.

 The commencement of a chapter 11 case creates an estate that is comprised of all of the legal and equitable interests of the debtor as of
the petition date. The Bankruptcy Code provides that the debtor may continue to operate its business and remain in possession of its property as a “debtor in possession.” 
 The consummation of a plan of reorganization is the principal objective of a chapter 11 reorganization case. A plan of reorganization sets forth the
means for satisfying claims against and interests in a debtor. Confirmation of a plan of reorganization by the bankruptcy court makes the plan binding upon the debtor, any issuer of securities under the plan, any Person acquiring property under the
plan and any creditor or equity interest holder of a debtor. Subject to certain limited exceptions, the order approving confirmation of a plan discharges a debtor from any debt that arose prior to the date of confirmation of the plan and substitutes
therefor the obligations specified under the confirmed plan. 
  

 - 25 - 

 In general, a chapter 11 plan of reorganization (a) divides claims and equity interests into
separate classes, (b) specifies the property, if any, that each class is to receive under the plan, and (c) contains other provisions necessary to the reorganization of the debtor and required or permitted by the Bankruptcy Code.

 Pursuant to section 1125 of the Bankruptcy Code, acceptance or rejection of a plan may not be solicited after the commencement of the
Reorganization Cases until such time as the court has approved the Disclosure Statement as containing adequate information. Pursuant to section 1125(a) of the Bankruptcy Code, “adequate information” is information of a kind, and in
sufficient detail, to enable a hypothetical reasonable investor to make an informed judgment regarding the plan. To satisfy applicable disclosure requirements, the Debtors are submitting this Disclosure Statement to holders of Claims that are
impaired and not deemed to have rejected the Plan. 
  

	6.2	Settlement of Certain Inter-Creditor Issues. 

 The treatment of Claims against and Interests in the Debtors under the Plan represents, among other things, the settlement and compromise of certain inter-creditor disputes. 
  

	6.3	Substantive Consolidation of Debtors for Purposes of Voting, Confirmation and Distribution. 

 a. The Plan provides for substantive consolidation of the Debtors’ Estates, but solely for purposes of voting, confirmation, and making distributions
to the holders of Allowed Claims and Allowed Interests under the Plan. On the Effective Date: (a) all guarantees of any Debtor of the payment, performance or collection of another Debtor with respect to Claims against such Debtor shall be
deemed eliminated and cancelled; (b) any obligation of any Debtor and all guarantees by a Debtor with respect to Claims thereof executed by one or more of the other Debtors shall be treated as a single obligation; (c) each Claim against
any Debtor shall be deemed to be against the consolidated Debtors and shall be deemed a single Claim against, and a single obligation of, the consolidated Debtors; and (d) all Intercompany Claims shall be deemed eliminated as a result of the
substantive consolidation of the Debtors, and therefore holders thereof shall not be entitled to vote on the Plan, or receive any Plan Distribution or other allocations of value. On the Effective Date, and in accordance with the terms of the Plan
and the consolidation of the assets and liabilities of the Debtors, all Claims based upon guarantees of collection, payment, or performance made by a Debtor as to the obligation of another Debtor shall be released and of no further force and effect.
Except as set forth in Section 2.2 of the Plan, such substantive consolidation shall not (other than for purposes related to the Plan) (a) affect the legal and corporate structure of the Reorganized Debtors, or (b) affect any
obligations under any leases or contracts assumed in the Plan or otherwise after the Commencement Date. 
 b. Notwithstanding the substantive
consolidation of the Estates for the purposes set forth in Section 2.2(a) of the Plan, each Reorganized Debtor shall pay all U.S. Trustee Fee Claims on all disbursements, including Plan Distributions and disbursements in and outside of the
ordinary course of business, until the entry of a Final Decree in its Reorganization Case, dismissal of its Reorganization Case, or conversion of its Reorganization Case to a case under chapter 7 of the Bankruptcy Code. 
  

 - 26 - 

	6.4	Claims Between Debtors and Non-Debtor Affiliates. 

 Any Claim against a Debtor held by its non-Debtor affiliate, and any Claim held by a Debtor against its non-Debtor affiliate, including not less than $1,525,000 owed in the aggregate by Ampex Great Britain Limited and
Amex Japan Limited to Data Systems, shall survive unimpaired and unaffected by entry of the Confirmation Order and Effective Date, irrespective of whether such Claim is owed for a transaction or event occurring before or after the Commencement Date.

  

	6.5	Limitations of Distributions to Equity Interests. 

 No Plan Distributions shall be made on account of any Interests in any Debtor regardless of whether such Interests are held by a Person which is not a Debtor; provided, however, that any Debtor
that owns Interests in another Debtor shall retain such Interests. As part of the settlement and compromises set forth herein, holders of Allowed Existing Common Stock Interests that do not object to confirmation of the Plan will receive
Distribution Rights, as set forth in Section 5.7 of the Plan. 
 If the Plan is Confirmed, pursuant to Section 5.7 of the Plan, a
portion of the recovery of the holders of Class 4 Claims will be reallocated to the holders of Existing Common Stock Interests who do not object to Confirmation of the Plan. 
  

	6.6	The Pension Plans. 

 Under
ERISA, Ampex and the members of its controlled group are jointly and severally liable to PBGC for unfunded benefit liabilities, as defined in 29 U.S.C. § 1301(a)(18), if any of the Pension Plans terminate. In addition, Ampex and members of its
controlled group are jointly and severally liable for the contributions necessary to satisfy ERISA’s minimum funding standards (“Minimum Funding Contributions”). See 29 U.S.C. §§ 1082 and 1362(c); 26 U.S.C.
§ 412. Also, Ampex and members of its controlled group are jointly and severally liable for premiums, interest, and penalties imposed by ERISA for plans covered by Title IV or ERISA. See 29 U.S.C. § 1307(a), (b), (e); 29 C.F.R. §
4007.12(a). 
 Ampex intends to continue the Pension Plans, fund the Pension Plans in accordance with the minimum funding standards under the
Internal Revenue Code and ERISA, pay all required PBGC insurance premiums, and continue to administer and operate the Pension Plans in accordance with the terms of the Pension Plans and provisions of ERISA. Ampex’s reorganization proceedings,
and, in particular, the Plan of Reorganization, shall not be in any way construed as discharging, releasing or relieving Ampex, the reorganized Ampex, or any party, in any capacity, from any liability with respect to the Pension Plans under any law
or regulatory provision relating to the Pension Plans. PBGC and the Pension Plans shall not be enjoined or precluded from enforcing such liability as a result of any of the provisions of the Plan of Reorganization or the Plan’s confirmation;
provided, however, that no provision herein or in the Plan shall nullify or void the provisions or the effect of the Bar Date Order, or the provisions of the Plan regarding creditors’ obligations to file timely an Administrative
Expense Claim. 
  

 - 27 - 

 The Pension Plans will not be terminated pursuant to the Plan. In an effort to manage the Debtors’
postpetition minimum funding obligations to the Pension Plans, Hillside will make all Required Contributions to the Pension Plans prior to the Effective Date in accordance with the Amended HSA Agreement (as defined below). On and after the Effective
Date, the Reorganized Debtors shall remain primarily liable for the Required Contributions and will remain the sponsor of the Pension Plans. There will be no change, modification or termination of the PBGC Agreement or the joint and several
liability of the parties thereto. Although Hillside will remain a fiduciary with respect to the investment of all of the assets of the Pension Plans, Hillside is not and shall not be a fiduciary with respect to the Existing Common Stock held by the
Pension Plans. Instead, the United States Trust Company is and will remain a fiduciary with respect to such interests. 
 On or prior to the
Effective Date, the HSA Agreement shall be amended to, among other things, provide greater clarity with respect to the Reorganized Debtors’ obligations to fund the Required Contributions (the “Amended HSA Agreement”),
the terms of which will be no less favorable to the Reorganized Debtors than those that are set forth on Exhibit B to the Plan annexed hereto. In addition, the Amended HSA Agreement shall provide that Hillside shall be deemed to have provided
a Tranche D Loan upon the payment of a postpetition or post-Effective Date Required Contribution made to the Pension Plans in the principal amount of each such Required Contribution, provided, however, that once the outstanding Loans
(as defined herein) under the Credit Agreement total $25 million, Hillside shall receive New Preferred Stock in lieu of a deemed Tranche D Loan in exchange for a postpetition or post-Effective Date Required Contribution made to the Pension
Plans. The terms of the New Preferred Stock are summarized in Section 6.8(c) herein. 
  

	6.7	Overview of the Plan. 

 THE
FOLLOWING IS A SUMMARY OF SOME OF THE SIGNIFICANT ELEMENTS OF THE PLAN. THIS DISCLOSURE STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION SET FORTH IN THE PLAN AND THE EXHIBITS AND SCHEDULES THERETO.

 The Plan classifies Claims and Interests separately in accordance with the Bankruptcy Code and provides different treatment for
different Classes of Claims and Interests. Claims and Interests shall be included in a particular Class only to the extent such Claims or Interests qualify for inclusion within such Class. The Plan separates the various Claims (other than those that
do not need to be classified) into six (6) separate Classes and separates the Interests into two separate Classes. These Classes take into account the differing nature and priority of Claims against, and Interests in, the Debtors. Unless
otherwise indicated, the characteristics and amounts of the Claims or Interests in the following Classes are based on the books and records of the Debtors. 
 This section summarizes the treatment of each of the Classes of Claims and Interests under the Plan, describes the capital structure of the Reorganized Debtors, and describes other provisions of the Plan. Only holders
of Allowed Claims—Claims that are not in dispute, contingent, or unliquidated in amount and are not subject to objection or estimation—are entitled to receive distributions under the Plan. For a more detailed description of the definition
of 

  

 - 28 - 

 
“Allowed,” see Article I of the Plan. Until a Disputed Claim or Interest becomes Allowed, no distribution of Cash, securities and/or other
instruments or property otherwise available to the holder of such Claim or Interest will be made. 
 The Plan is intended to enable the
Debtors to continue present operations without the likelihood of a subsequent liquidation or the need for further financial reorganization. The Debtors believe that they will be able to perform their obligations under the Plan and meet their
expenses after the Effective Date without further financial reorganization. Also, the Debtors believe that the Plan permits fair and equitable recoveries, while expediting the reorganization of the Debtors. 
 The Confirmation Date will be the date that the Confirmation Order is entered by the Clerk of the Bankruptcy Court. The Effective Date will be the first
Business Day on or after the Confirmation Date on which all of the conditions to the Effective Date specified in Section 11.2 of the Plan have been satisfied or waived and the parties have consummated the transactions contemplated by the Plan.

 The Debtors anticipate that the Effective Date will occur prior to the Fall of 2008. Resolution of any challenges to the Plan may take
time and, therefore, the actual Effective Date cannot be predicted with certainty. 
 Other than as specifically provided in the Plan, the
treatment under the Plan of each Claim and Interest will be in full satisfaction, settlement, release and discharge of all Claims or Interests. The Reorganized Debtors will make all payments and other distributions to be made under the Plan unless
otherwise specified. 
 All Claims and Interests, except Administrative Expense Claims, Fee Claims, U.S. Trustee Fees and Priority Tax
Claims, are placed in the Classes set forth in Article IV of the Plan. In accordance with section 1123(a)(1) of the Bankruptcy Code, Administrative Expense Claims, Fee Claims, U.S. Trustee Fees and Priority Tax Claims of the Debtors have not been
classified, and the holders thereof are not entitled to vote on the Plan. A Claim or Interest is placed in a particular Class only to the extent that the Claim or Interest falls within the description of that Class and is classified in other Classes
to the extent that any portion of the Claim or Interest falls within the description of such other Classes. 
  

	 	(a)	Unclassified Claims. 

  

	 	(1)	Administrative Expense Claims. 

 Time for Filing
Administrative Expense Claims: The holder of an Administrative Expense Claim, other than the holder of: 
  

	 	a.	A Fee Claim; 

  

	 	b.	an Administrative Expense Claim that has been Allowed on or before the Effective Date; 

  

	 	c.	an Administrative Expense Claim for an expense or liability incurred and payable in the ordinary course of business by a Debtor on or after the Effective Date;

  

 - 29 - 

	 	d.	an Administrative Expense Claim on account of fees and expenses incurred on or after the Commencement Date by ordinary course professionals retained by the Debtors pursuant to an
order of the Bankruptcy Court; 

  

	 	e.	Claims for indemnification, contribution, or advancement of expenses pursuant to (A) any Debtor’s certificate of incorporation, by-laws, or similar organizational document
or (B) any indemnification or contribution agreement approved by the Bankruptcy Court; 

  

	 	f.	an Administrative Expense Claim arising, in the ordinary course of business, out of the employment by one or more Debtors of an individual from and after the Commencement Date of a
type (or pursuant to an employee benefit plan or program) approved by the Bankruptcy Court; or 

  

	 	g.	statutory fees of the United States Trustee arising under 28 U.S.C. § 1930, and interest thereon arising under 31 U.S.C. §3717, 

 must file with the Bankruptcy Court and serve on the Debtors, the Creditors’ Committee and the Office of the United States Trustee, proof of such
Administrative Expense Claim within thirty (30) days after the Effective Date (the “Administrative Bar Date”). Such proof of Administrative Expense Claim must include at a minimum (i) the name of each
Debtor that is purported to be liable for the Administrative Expense Claim, (ii) the name of the holder of the Administrative Expense Claim, (iii) the amount of the Administrative Expense Claim, (iv) the basis of the Administrative
Expense Claim, and (v) supporting documentation for the Administrative Expense Claim. FAILURE TO FILE AND SERVE SUCH PROOF OF ADMINISTRATIVE EXPENSE CLAIM TIMELY AND PROPERLY SHALL RESULT IN THE ADMINISTRATIVE EXPENSE CLAIM BEING FOREVER
BARRED AND DISCHARGED. 
  

 - 30 - 

 Treatment of Administrative Expense Claims: Except to the extent that a holder of an Allowed
Administrative Expense Claim agrees to a different treatment, on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date an
Administrative Expense Claim becomes an Allowed Claim, the holder of such Allowed Administrative Expense Claim shall receive Cash in an amount equal to such Allowed Claim; provided, however, that Allowed Administrative Expense
Claims representing liabilities incurred in the ordinary course of business by the Debtors, as debtors in possession, shall be paid by the Debtors in the ordinary course of business, with the consent of the Consenting Holders, consistent with past
practice and in accordance with the terms and subject to the conditions of any orders or agreements governing, instruments evidencing, or other documents relating to, such transactions. 
  

	 	(2)	U.S. Trustee Fees. 

 On the Effective Date or as soon as
practicable thereafter, the Debtors shall pay all U.S. Trustee Fees that are due and owing on the Effective Date, including those statutory fees arising under 28 U.S.C. § 1930(a)(6) and accrued interest under 31 U.S.C. § 3717. 

 

	 	(3)	Fee Claims. 

 Time for Filing Fee Claims: All
Professional Persons seeking allowance by the Bankruptcy Court of a Fee Claim shall file their respective final applications for allowance of compensation for services rendered and reimbursement of expenses incurred no later than forty-five
(45) days after the Effective Date. FAILURE TO FILE AND SERVE SUCH FEE APPLICATION TIMELY AND PROPERLY SHALL RESULT IN THE FEE CLAIM BEING FOREVER BARRED AND DISCHARGED. 
 Objections to Fee Claims, if any, must be filed and served pursuant to the procedures set forth in the Confirmation Order no later than sixty-five
(65) days after the Effective Date or such other date as established by the Bankruptcy Court. 
 Treatment of Fee Claims: A Fee
Claim in respect of which a final fee application has been properly filed and served pursuant to Section 3.2(a) of the Plan shall be payable to the extent approved by order of the Bankruptcy Court. On the Effective Date, to the extent known,
the Debtors shall reserve and hold in a segregated account Cash in an amount equal to all accrued but unpaid Fee Claims as of the Effective Date, which Cash shall be disbursed solely to the holders of Allowed Fee Claims with the remainder to be
reserved until all Allowed Fee Claims have been paid in full or all remaining Fee Claims have been disallowed by Final Order. The provisions of Section 3.2 shall not apply to Fee Claims of the Indenture Trustee, which instead are governed by
Section 7.7 of the Plan. 
  

	 	(4)	Priority Tax Claims. 

 Except to the extent that a holder
of an Allowed Priority Tax Claim agrees to less favorable treatment, each holder of an Allowed Priority Tax Claim shall receive, in the Debtors’ discretion and with the consent of the Consenting Holders, either (a) on, or as soon
thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date a Priority Tax Claim becomes an Allowed Claim, 

  

 - 31 - 

 
Cash in an amount equal to such Claim, or (b) deferred Cash payments following the Effective Date, over a period ending not later than five
(5) years after the Commencement Date, in an aggregate amount equal to the Allowed amount of such Priority Tax Claim; provided, however, that all Allowed Priority Tax Claims that are not due and payable on or before the
Effective Date shall be paid in the ordinary course of business as such obligations become due. 
  

	 	(b)	Classification of Claims and Interests. 

  

	 	(1)	Priority Non-Tax Claims (Class 1). 

 Treatment: The
legal, equitable and contractual rights of the holders of Class 1 Claims are unaltered by the Plan. Except to the extent that a holder of an Allowed Priority Non-Tax Claim agrees to less favorable treatment, on, or as soon thereafter as is
reasonably practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date a Priority Non-Tax Claim becomes an Allowed Claim, the holder of such Allowed Priority Non-Tax
Claim shall receive Cash in an amount equal to such Claim. 
 Voting: In accordance with section 1126(f) of the Bankruptcy Code, the
holders of Allowed Priority Non-Tax Claims are conclusively presumed to accept the Plan and the votes of such holders will not be solicited with respect to such Allowed Priority Non-Tax Claims. 
  

	 	(2)	Senior Secured Note Claims (Class 2). 

 Allowance:
On the Effective Date, the Senior Secured Note Claims shall be deemed Allowed Claims in the aggregate amount of $6,906,364.81 for the purposes of the Plan and these Reorganization Cases. 
 Treatment: On the Effective Date, except to the extent that a holder of a Senior Secured Note Claim agrees to a different treatment the holder of
such Senior Secured Note Claim shall be entitled to receive, in full and final satisfaction of such Senior Secured Note Claim, its Pro Rata Share of (a) Cash in an aggregate amount equal to 50% of the Allowed Senior Secured Note Claims
(i.e., $3,453,182.40), plus (b) Amended Senior Secured Notes, issued pursuant to the Amended Senior Secured Note Indenture substantially in the form annexed hereto as Exhibit C, in aggregate principal amount equal to 50% of
the Allowed Senior Secured Note Claims (i.e., $3,453,182.40). 
 Voting: The Senior Secured Note Claims are impaired Claims,
and holders of such Claims are entitled to vote to accept or reject the Plan. The vote of the holders of the Senior Secured Note Claims will be solicited with respect to the Senior Secured Note Claims. 
  

	 	(3)	Other Secured Claims (Class 3). 

 Treatment: The
legal, equitable and contractual rights of the holders of Class 3 Claims are unaltered by the Plan. Except to the extent that a holder of an Allowed Other Secured Claim agrees to a different treatment, on, or as soon thereafter as is reasonably
practicable, the later of the Effective Date and the first Business Day after the date that is thirty (30) calendar days after the date an Other Secured Claim becomes an Allowed Claim, the holder of such 

  

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Allowed Other Secured Claim shall receive, at the election of the Debtors: (a) Cash in an amount equal to such Claim; or (b) such other treatment
such that it will not be impaired pursuant to section 1124 of the Bankruptcy Code; provided, however, that Class 3 Claims incurred by a Debtor in the ordinary course of business may be paid in the ordinary course of business in
accordance with the terms and conditions of any agreements relating thereto in the discretion of the applicable Debtor or Reorganized Debtor, and with the consent of the Consenting Holders, without further notice to or order of the Bankruptcy Court.
Each holder of an Allowed Other Secured Claim shall retain the Liens securing its Allowed Other Secured Claim as of the Effective Date until full and final payment of such Allowed Other Secured Claim is made as provided in the Plan. On the full
payment or other satisfaction of such obligations, the Liens securing such Allowed Other Secured Claim shall be deemed released, terminated and extinguished, in each case without further notice to or order of the Bankruptcy Court, act or action
under applicable law, regulation, order or rule or the vote, consent, authorization or approval of any Person. 
 Voting: In
accordance with section 1126(f) of the Bankruptcy Code, the holders of Allowed Other Secured Claims are conclusively presumed to accept the Plan and the votes of such holders will not be solicited with respect to such Allowed Other Secured Claims.

  

	 	(4)	Hillside Secured Claims (Class 4). 

 Allowance: On
the Effective Date, the Hillside Secured Claim shall be deemed an Allowed Claim in the amount of $11,000,000.00, for the purposes of the Plan and these Reorganization Cases. 
 Treatment: On the Effective Date, in full and final satisfaction of the Hillside Secured Claim, the Reorganized Debtors shall incur the Tranche A
Loan Obligations in the aggregate original principal amount of $10,500,000.00. 
 Voting: The Hillside Secured Claim is an impaired
Claim, and Hillside is entitled to vote to accept or reject the Plan and the vote of Hillside will be solicited with respect to the Hillside Secured Claim. 
  

	 	(5)	General Unsecured Claims (Class 5). 

 Allowance: On
the Effective Date, the Hillside Unsecured Deficiency Claim shall be deemed an Allowed General Unsecured Claim in the amount of $41.7 million, for the purposes of the Plan and these Reorganization Cases. 
 Treatment: 
 (i) Except to the extent
that a holder of an Allowed General Unsecured Claim agrees to different treatment, the holder of such Allowed General Unsecured Claim shall be entitled to receive, in full and final satisfaction of such General Unsecured Claim, its Pro Rata Share of
the Unsecured Claim Distribution. Distributions of New Common Stock shall be made on, or as soon thereafter as is reasonably practicable, the later of the Effective Date and the first Business Day after the date that is 30 calendar days after the
date a General Unsecured Claim becomes an Allowed Claim; provided, however, that distributions of New Common Stock to holders of Allowed General Unsecured Claims who have duly executed and delivered the New Stockholders Agreement on or
prior to the Effective Date, shall be made on the Effective Date. 
  

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 (ii) Alternatively, subject to the occurrence of the Effective Date, each holder of an Allowed General
Unsecured Claim may elect, on such holder’s ballot for voting on the Plan, to receive the lesser of (a) $5,000 and (b) Cash equal the value, as of the Effective Date, of the New Common Stock to which a holder of an Allowed General
Unsecured Claim is entitled under the Plan on account of such Claim (as defined in the Plan, the “Lump Sum Cash Payment”), in lieu of any distribution such holder would otherwise have been entitled to receive pursuant to
Section 5.5(b)(i) of this Plan, in full satisfaction of any and all Plan Distributions to be made on account of such Allowed General Unsecured Claim. 
 Election of the Lump Sum Cash Payment is neither intended to provide, nor necessarily would it provide, holders of Allowed General Unsecured Claims who make such election with the equivalent of the value of the New
Common Stock such holder would otherwise have received. The Debtors believe that the Valuation performed by CM&D, described in Section 7.2 herein, and the Debtors’ estimates of the total amount of outstanding General Unsecured Claims
that will be Allowed on the Effective Date, provide an adequate basis from which to calculate the percentage of recovery to holders of Allowed General Unsecured Claims. Nevertheless, in the event a significant number in amount of Allowed General
Unsecured Claims elect the Lump Sum Cash Payment, which payment may be less than the Cash value, as of the Effective Date, of the New Common Stock that the holder of such Allowed General Unsecured Claim would have been entitled to if it had not
elected to receive a Lump Sum Cash Payment, the total percentage of recovery by holders of Allowed Non-Election General Unsecured Claims may be greater than the amounts projected herein. The Plan includes the Lump Sum Cash Payment election to
provide the holders of Allowed General Unsecured Claims with an alternative for immediately liquidating all or a substantial portion of their entitlement to the New Common Stock into Cash for a fixed price and without related costs of future
liquidation. Further, by making the election to receive a Lump Sum Cash Payment the holder of such Allowed General Unsecured Claim eliminates the risk associated with the ability to divest the New Common Stock in the future. 
 Voting: The General Unsecured Claims are impaired Claims, and the holders of Allowed General Unsecured Claims are entitled to vote to accept or
reject the Plan. The votes of holders of Class 5 Claims will be solicited with respect to such Claims. 
  

	 	(6)	Existing Common Stock Interests (Class 6). 

 Treatment: Shares of Existing Common Stock shall be cancelled and holders of Existing Common Stock Interests shall not be entitled to any distribution under the Plan; provided, however, that, as part of the
settlement and compromise embodied in the Plan, each holder of an Existing Common Stock Interest that does not object to confirmation of the Plan shall, within 10 Business Days of the CPR Administrator’s receipt of the Initial Company Notice
(as defined in the CPR Agreement), receive a CPR Administrator Rights Notice setting forth such holder’s right to receive its Pro Rata Percentage of the CPR Distributions, subject to the terms and conditions of the CPR Agreement. Hillside has
agreed to forego a portion of its recovery on account of the Hillside Secured Claim in order to gift the CPR Distributions to certain holders of Allowed Existing Common Stock Interests. 
  

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 Voting: In accordance with section 1126(g) of the Bankruptcy Code, the holders of Existing Common
Stock Interests are conclusively presumed to reject the Plan. The votes of such holders will not be solicited with respect to such Interests. 
  

	 	(7)	Existing Securities Laws Claims (Class 7). 

 Treatment: Holders of Existing Securities Laws Claims shall not receive or retain any distribution under the Plan on account of such Existing Securities Laws Claims. 
 Voting: In accordance with section 1126(g) of the Bankruptcy Code, the holders of Existing Securities Laws Claims are conclusively presumed to
reject the Plan and the votes of such holders will not be solicited with respect to such Existing Securities Laws Claims. 
  

	 	(8)	Other Existing Interests (Class 8). 

 Treatment: All
Other Existing Interests shall be cancelled, provided, however, that any Debtor that owns Other Existing Interests in another Debtor shall retain such Other Existing Interests. Holders of Other Existing Interests shall not receive or
retain any distribution under the Plan on account of such Other Existing Interests. 
 Voting: In accordance with section 1126(g) of
the Bankruptcy Code, the holders of Other Existing Interests are conclusively presumed to reject the Plan and the votes of such holders will not be solicited with respect to such Other Existing Interests. 
  

	6.8	Summary of Capital Structure of Reorganized Debtors. 

 The following table summarizes the capital structure of the Reorganized Debtors, including the post-Effective Date financing arrangements the Reorganized Debtors expect to enter into to fund their obligations under
the Plan and provide for their post- Effective Date working capital needs. The anticipated principal terms of the following instruments are described in more detail below. The summaries of the Reorganized Debtors’ capital structure are
qualified in their entirety by reference to the Plan and the applicable Plan Documents. 
  

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	 Instrument
	  	 Description

	Amended Senior Secured Notes	  	The principal amount of the Amended Senior Secured Notes will equal 50% of the Allowed Senior Secured Note Claims (which includes (a) all accrued but unpaid interest through the Effective Date,
(b) fees and (c) expenses) secured by a first priority lien on substantially all of the assets of the Reorganized Debtors. The Amended Senior Secured Notes will bear interest at a rate of 12% per annum payable in cash on the due dates set forth in
the Amended Senior Secured Notes and will have a maturity date on the date that is twelve (12) months after the Effective Date. The Amended Senior Secured Notes will amortize ahead of the Loans (as such term is defined below) outstanding under
the Credit Agreement. Until such time as the Amended Senior Notes are indefeasibly repaid in full, the obligations due under the Credit Agreement shall be subordinate to the Amended Senior Secured Notes and subject to certain terms and restrictions
regarding prepayment, payment of interest, and maturity.
		
	Credit Agreement	  	Pursuant to the Credit Agreement, Hillside shall provide Reorganized Ampex certain loans on account of the Hillside Secured Claim and certain exit financing. The Credit Agreement shall provide
for the Tranche A Loan, Tranche B Loan, Tranche C Loans and Tranche D Loans (each as described below, collectively, the “Loans”) in an aggregate principal amount of up to $25 million pursuant to the terms of Section 2.01 of
the Credit Agreement, annexed to the Plan as Exhibit E. The Loans shall bear interest at ten percent (10%) per annum. The Loans shall be guaranteed by the Subsidiary Guarantors (as such term is defined in the Credit Agreement). The obligations of
Reorganized Ampex shall be secured by a second priority and subordinate lien on substantially all of the Debtors’ assets.
		
	 •   Tranche A Loan
	  	The Tranche A Loan shall be in the aggregate principal amount of $10.5 million (the “Tranche A Commitment”) issued in full and final satisfaction of the Hillside Secured
Note Claim. Tranche A Loan Obligations repaid or prepaid may not be reborrowed. The outstanding principal amount of the Tranche A Loan shall be repaid in accordance with the schedule set forth in Section 2.06(a)(i) of the Credit Agreement beginning
in 2010 through 2014 in the amount of $2.1 million per year.

  

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	 Instrument
	  	 Description

	 •   Tranche B Loan
	  	The Tranche B Loan shall be in the aggregate principal amount of $4 million (the “Tranche B Commitment”). The outstanding principal amount of the Tranche B Loan shall be
repaid in accordance with the schedule set forth in Section 2.06(a)(ii) of the Credit Agreement beginning in 2010 through 2014 in the amount of $800,000 per year.
		
	 •   Tranche C Loan
	  	The Tranche C Loans shall be in the aggregate principal amount of initially not more than $1 million (the “Tranche C Commitment”). The Reorganized Debtors may borrow from
time to time during the Tranche C Availability Period (as such term is defined in the Credit Agreement). Each Tranche C Loan shall be in an amount equal to $100,000 or a larger multiple of $100,000 provided, that a Tranche C Loan may be in an
amount that is equal to the entire unused balance of the Trance C Commitment. The Reorganized Debtors shall notify Hillside of any request for a Tranche C Loan no later than seven (7) Business Days before the date of the proposed Tranche C Loan.
Such request shall include the amount of the requested loan, the date of the loan and the location and number of the account to and which funds are to be disbursed. The Tranche C Commitment shall terminate at 5 p.m., New York time, on the Quarterly
Date (as defined in the Credit Agreement), nearest to [    ], 2009.
		
	 •   Tranche D Loan
	  	The HSA Agreement shall be amended to provide that a Tranche D Loan under the Credit Agreement shall be deemed to have been made by Hillside to the Reorganized Debtors upon Hillside’s
payment of a postpetition or post-Effective Date Required Contribution under the Pension Plans, if any, or if the Pension Plans are terminated, the termination liability, but in no event shall such Tranche D Loans exceed in the aggregate such amount
that would cause the aggregate outstanding principal amount of the Credit Agreement to exceed $25 million (the “Tranche D Commitment”). The outstanding principal amount of the Tranche D Loan shall be repaid in five (5) annual
installments equal to twenty percent (20%) of the initial outstanding amount of such Tranche D Loan commencing on the Quarterly Date immediately following the date that is the second anniversary of the date on which such Tranche D Loan is deemed to
have been made and continuing for four (4) corresponding annual Quarterly Dates thereafter.

  

 - 37 - 

			
	 Instrument
	  	 Description

	New Preferred Stock	  	On the Effective Date the Reorganized Debtors will be authorized to issue 5,000 shares of New Preferred Stock, par value $1.00, to be issued to Hillside pursuant to the terms of the Amended HSA
Agreement, in exchange for a postpetition or post-Effective Date payment of the Required Contributions to the Reorganized Debtors’ Pension Plans in the event the aggregate outstanding amount under the Credit Agreement is greater than $25
million. The New Preferred Stock will have a sixteen percent (16%) accruing dividend.
		
	New Common Stock	  	On the Effective Date, Ampex will be authorized to issue 40,000 shares of New Common Stock, par value $0.01, which will be issued to the holders of Allowed Class 5 Non-Election General Unsecured
Claims.

  

	 	(a)	Description of Amended Senior Secured Notes. 

 The Amended
Senior Secured Notes in the aggregate principal amount of approximately $3.45 million will be secured by a first priority lien on substantially all of the assets of the Reorganized Debtors (subject to certain permitted liens). Among other customary
excluded assets, the pledge of any Debtor’s interest in a foreign Subsidiary, will be limited to 65% of such Subsidiary’s voting stock. The Amended Senior Secured Notes will be issued pursuant to the Amended Senior Secured Note Indenture,
with Ampex Corporation as borrower, and its affiliated Reorganized Debtors as guarantors. The terms of the Amended Senior Secured Notes will be no less favorable to the Reorganized Debtors than those that are set forth on Exhibit C to the Plan
annexed hereto. The Amended Senior Secured Notes will bear interest at a rate of 12% per annum payable in cash on the due dates set forth in the Amended Senior Secured Notes and will have a maturity date on the date that is twelve
(12) months after the Effective Date. The Amended Senior Secured Notes shall be senior to all current and/or future indebtedness of the Company (other than certain permitted pari passu indebtedness). All other indebtedness of the Company
(other than certain permitted indebtedness) shall be subordinate and junior to the prior indefeasible payment in full in cash of the Amended Senior Secured Notes. The Amended Senior Secured Notes will amortize ahead of all payments on account of
interest or principal due under the Credit Agreement. The Amended Senior Secured Notes Indenture will provide that all excess cash flow of the Reorganized Debtors shall be used to pay interest and amortize principal of the Amended Senior Secured
Notes prior to any payments of interest and principal on all other debt; provided that a portion of the available cash after paying interest on the Amended Senior Secured Notes may be retained for working capital (including for payment of the
Debtor’s current pension obligations) in accordance with a budget acceptable to the holders of the Amended Senior Secured Notes and to pay interest payments on the Loans subject to the subordination provisions contained in the Intercreditor
Agreement and the restrictions in the Amended Senior Secured Note Indenture of the Loans summarized below. 
  

 - 38 - 

 Notwithstanding anything herein to the contrary, until such time as the Amended Senior Notes are
indefeasibly repaid in full: (i) each of the Loans shall have a maturity date not earlier than eighteen (18) months following the Effective Date, but in no event less than six (6) months following the maturity of the Amended Senior
Secured Notes; (ii) there shall be no prepayment of any of the Loans; (iii) payment of regular scheduled interest payments on account of the Loans that are due on the same date as an interest payment on account of the Amended Senior
Secured Notes shall be permitted, provided, however, that (a) such interest payment due on account of the Amended Senior Secured Notes shall be paid first and in full, (b) there are no existing Events of Default (as such term
is defined in the Amended Senior Secured Notes Indenture), and (c) the Company is not insolvent and will maintain a minimum of $3 million in available liquidity after payment of all interest due and payable on account of the Amended Senior
Secured Notes and each of the Loans, and excluding any cash reserved for working capital purposes after giving effect to such interest payments; and (iv) any payments received in breach of the terms of the subordination agreement shall be held
in trust and immediately turned over to the holders of the Amended Senior Secured Notes. 
 The Amended Senior Secured Note Indenture
includes various affirmative and negative covenants that require the Reorganized Debtors to comply with ongoing obligations and restrict their businesses in various ways, until the obligations thereunder are satisfied. This summary is subject to and
is qualified in its entirety by reference to the provisions of the Amended Senior Secured Note Indenture, in form and substance as may be acceptable to the Reorganized Debtors, Hillside and the Consenting Senior Secured Noteholders. 
  

	 	(b)	Description of the Credit Agreement. 

 The Credit Agreement
shall provide for the Tranche A Loan, Tranche B Loan, Tranche C Loans and Tranche D Loans in an aggregate amount of up to $25 million pursuant to the terms of the Credit Agreement. The Tranche A Loan shall be in the aggregate principal amount of
$10.5 million and shall constitute payment in full and final satisfaction of the Hillside Secured Claim. The Tranche B Loan shall be in the aggregate principal amount of $4 million and the Tranche C Loans shall be in the aggregate initial principal
amount of up to $1 million, and together constitute commitments by Hillside to fund the Debtors’ exit financing needs. The Tranche D Loans shall be incurred in connection with Hillside’s payment of a postpetition or post-Effective Date
Required Contribution to the Pension Plans pursuant to the Amended HSA Agreement and shall not exceed in the aggregate such amount that would cause the aggregate outstanding principal amount of the Loans outstanding under the Credit Agreement to
exceed $25 million. The Loans shall each bear interest at ten percent (10%) per annum. Accrued interest on each Loan shall be payable in arrears on each Quarterly Date and in the case of the Tranche C Loans, also upon termination of the Tranche
C Commitment. All interest shall be computed on the basis of a 360 day year and payable for the actual number of days elapsed (including the first day but excluding the last). Any prepayment of a Tranche A Loan, Tranche B Loan or Tranche D Loan
shall be applied to reduce the subsequent scheduled repayments of such Loan. The Lender may request that the Loans under the Credit Agreement be evidenced by a promissory note. Any prepayment of the Loans shall be applied: 
 first, to the ratable payment of the outstanding principal of the Tranche C Loans; 
  

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 second, to the payment of the outstanding principal of the Tranche B Loan;

 third, to the payment of the outstanding principal of the Tranche A Loan; and 
 fourth, to the ratable payment of the outstanding principal of the Tranche D Loans (provided that, to the extent that at the time
of such prepayment there are Tranche D Loans outstanding with different Final Maturity Dates (as defined in the Credit Agreement), such principal shall be applied first to repay the Tranche D Loans with the earliest Final Maturity Dates).

 The Credit Agreement includes various affirmative and negative covenants that require the Reorganized Debtors to comply with ongoing
obligations and restrict their businesses in various ways. These covenants remain in effect until (i) the Commitments (as defined in the Credit Agreement) have expired or been terminated and the principal of and interest on each Loan and all
fees payable hereunder shall have been paid in full, and (ii) Hillside and certain of its affiliates no longer have any obligations to make Required Contributions and no longer are liable in respect of Termination Liabilities (as defined in the
Credit Agreement) under the HSA Agreement. 
 Reorganized Ampex and each of the Subsidiary Guarantors shall jointly and severally guarantee
to Hillside, each of the holders of a Guaranteed Obligation (as such term is defined in the Credit Agreement) and its successors and assigns prompt payment in full of principal and interest on the Loans and all fees, indemnification payments and
other amounts arising under the Credit Agreement or any other agreement entered into pursuant to the Credit Agreement, whether direct or indirect, absolute or contingent. 
 Subject to the terms of the Credit Agreement, and the exhibits thereto, the obligations of Reorganized Ampex and its Subsidiary Guarantors shall be secured by a second priority and subordinate lien on substantially
all of the Reorganized Debtors’ assets. 
  

	 	(c)	Description of New Preferred Stock. 

 On the Effective Date
the Reorganized Debtors will be authorized to issue 5,000 shares of New Preferred Stock, par value $1.00, to be issued to Hillside pursuant to the terms of the Amended HSA Agreement, in exchange for a postpetition or post-Effective Date payment of
the Required Contributions to the Pension Plans once the aggregate amount of outstanding Loans under the Credit Agreement exceeds $25 million. The New Preferred Stock will have a sixteen percent (16%) accruing dividend. 
  

	 	(d)	Description of New Common Stock. 

 The Reorganized Debtors
will be authorized to issue 40,000 of shares of New Common Stock, with par value of $0.01 per share, to be issued to the holders of Allowed Non-Election General Unsecured Claims, in accordance with Section 7.8 of the Plan. 
  

 - 40 - 

	 	(e)	Description of the CPR Distributions. 

 As a result of the
settlements and compromises embodied in the Plan, Hillside has agreed to forego a portion of its recovery on account of the Hillside Secured Claim in order to gift the CPR Distributions to certain holders of Allowed Existing Common Stock Interests.

 Pursuant and subject to the terms of the CPR Agreement, each holder of an Existing Common Stock Interest that does not object to
confirmation of the Plan shall receive a CPR Administrator Rights Notice setting forth such holder’s Distribution Rights and entitlement to CPR Distributions in an amount equal to its Pro Rata Percentage of the CPR Distributions. If any holders
of Existing Common Stock Interests object to confirmation of the Plan and accordingly are not entitled to receive Distribution Rights, the total of the CPR Distributions that may be paid shall be reduced by a proportionate amount and the portion
that would otherwise have been distributed to holders that object to confirmation will instead be retained by Reorganized Ampex. A holder of Distribution Rights, subject to the terms of the CPR Agreement, may only sell, assign or transfer all or any
portion of such rights to such holder’s Permitted Transferees (as such term is defined in the CPR Agreement). For the avoidance of doubt, a Permitted Transferee (as such term is defined in the CPR Agreement) with respect to a holder of
Distribution Rights that is an individual shall include (i) such holder’s Family Members (as such term is defined in the CPR Agreement), (ii) a revocable trust created for the benefit of the holder of such Distribution Rights, or any
of his or her Family Members; and (iii) the estate, executor, administrator, personal representative, devisee, or legatee of such holder of Distribution Rights. 
 As described in the CPR Agreement, the CPR Distributions are contingent payments that will be subject to Reorganized Ampex achieving certain financial targets. The holders of the Distribution Rights shall receive the
CPR Distributions at such time as the 
  

	 	(i)	the consolidated revenue that Reorganized Ampex and its wholly owned subsidiaries receives from royalty payments on licenses of patents that have been issued based on applications
having an effective filing date prior to the Effective Date that were not revenue bearing as of the Effective Date (the “Existing Patents”), including any interest accrued on such royalty payments (less any expenses arising
out of or associated with such licenses, including applicable taxes assessed on income from such licenses and fees for maintenance of the Existing Patents) after the effective date of each such license; 

  

	 	(ii)	the consolidated revenue that Reorganized Ampex and its wholly owned subsidiaries receives from the sale or transfer of Existing Patents (less any expenses arising out of or
associated with such sale or transfer of Existing Patents, including all applicable taxes); 

  

	 	(iii)	the consolidated revenue that Reorganized Ampex and its wholly owned subsidiaries receives from any securitization of royalties or other payments from licenses of Existing Patents;

  

 - 41 - 

	 	(iv)	the consolidated revenue that Reorganized Ampex and its wholly owned subsidiaries receives from any monetary damages received as a result of infringement litigation asserting an
Existing Patent; and 

  

	 	(v)	in the event that Reorganized Ampex or any of its affiliates (other than Ampex Data Systems Corporation or its successors) uses the Existing Patents, such revenue Reorganized Ampex
would have received had it licensed such Existing Patents to an unaffiliated third party in an arm’s-length transaction 

 (the
“Net New Patent Revenue”); provided, however, that Net New Patent Revenue shall not include revenue from licenses that bear revenue as of the Effective Date, exceeds $83,846,915, which amount includes (w) the dollar
amount of any Loans outstanding under the Credit Agreement as of the Effective Date, (x) the amount which is projected to fund five (5) years of Required Contributions under the Pension Plans commencing on the Effective Date, (y) the
dollar amount equal to the aggregate liquidation preference of New Preferred Stock outstanding as of the Effective Date multiplied by the price per share of such New Preferred Stock as of the Effective Date, and (z) $15 million. On any
Distribution Date (as such term is defined in the CPR Agreement), the CPR Distributions made by Reorganized Ampex shall be fifty percent (50%) of such Net New Patent Revenue in excess of the sum of (w), (x), (y) and (z), less the amount
Reorganized Ampex incurred as expenses under this Agreement or paid to the CPR Administrator as compensation or expense reimbursement pursuant to this Agreement. 
 To receive Distribution Rights, each holder shall surrender to the CPR Administrator (i) certificates representing its shares of Cancelled Common Stock (as such term is defined in the CPR Agreement) (or an
affidavit of loss and indemnity satisfactory to the CPR Administrator with respect to any lost, stolen, mutilated or destroyed certificates) or (ii) to the extent such Cancelled Common Stock is not certificated, other instruments evidencing
such Cancelled Common Stock satisfactory to the CPR Administrator within 60 days of receipt of the CPR Administrator Rights Notice. In the event that any holder of Distribution Rights fails to surrender to the CPR Administrator certificates or other
instruments evidencing Cancelled Common Stock pursuant to Section 3(d) of the CPR Agreement, the Cancelled Common Stock evidenced by such certificates or other instruments held by such Right Holder shall be deemed a Disputed Existing Common
Stock Interest and shall be subject to the terms set forth in Section 5 of the CPR Agreement. 
 Holders of the Distribution Rights
shall be entitled to receive periodic statements from Reorganized Ampex setting forth the value, if any, of the Distribution Rights and the amount of the Net New Patent Revenue. Such statement shall be distributed by the CPR Administrator not later
than fifteen (15) days following each Distribution Date, approved by Reorganized Ampex’s board of directors and certified by its Chief Financial Officer. 
  

 - 42 - 

	 	(f)	Corporate Structure of Reorganized Debtors. 

  

	 	1.	Reorganized Ampex. 

 On the Effective Date,
Ampex’s Amended Certificate of Incorporation and By-Laws, both in the forms as may be acceptable to the Debtors, will be automatically authorized and approved and Reorganized Ampex will file the Amended Certificate of Incorporation with the
Secretary of State of Delaware on the Effective Date. The Amended Certificate of Incorporation and By-Laws are attached to the Plan as Exhibits G and H, respectively. The Amended Certificate of Incorporation will, among other things:
(a) authorize issuance of 40,000 shares of New Common Stock (par value $0.01), which shall be issued to the holders of Allowed Non-Election General Unsecured Claims in Class 5, in accordance with Section 7.8 of the Plan; (b) include,
pursuant to section 1123(a)(6) of the Bankruptcy Code, a provision prohibiting the issuance of non-voting equity securities; (c) to the extent necessary or appropriate, include any restrictions on the transfer of the New Common Stock; and
(d) to the extent necessary or appropriate, include such provisions as may be necessary to effectuate the Plan. 
  

	6.9	Acceptance or Rejection of the Plan; Effect of Rejection by One or More Classes of Claims or Equity Interests. 

  

	 	(a)	Class Acceptance Requirement. 

 A Class of Claims shall have accepted the Plan if it is accepted by at least two-thirds ( 2/3) in amount and more than one-half ( 1/2) in number of the Allowed Claims in such Class that have voted on the
Plan. A Class of Interests shall have accepted the Plan if it is accepted by holders of at least two-thirds ( 2/3) of the
Interests in such Class that actually vote on the Plan. 
  

	 	(b)	Confirmation Pursuant to Section 1129(b) of the Bankruptcy Code or “Cramdown”. 

 Because certain Classes are deemed to have rejected the Plan, the Debtors will request confirmation of the Plan, as it may be modified from time to time,
under section 1129(b) of the Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, revoke or withdraw the Plan or any Plan Document in order to satisfy the requirements of section 1129(b) of the Bankruptcy Code, if necessary.

  

	 	(c)	Elimination of Vacant Classes. 

 Any Class of Claims or
Interests that does not have a holder of an Allowed Claim or Allowed Interest or a Claim or Interest temporarily Allowed by the Bankruptcy Court as of the date of the Confirmation Hearing shall be deemed eliminated from the Plan for purposes of
voting to accept or reject the Plan and for purposes of determining acceptance or rejection of the Plan by such Class pursuant to section 1129(a)(8) of the Bankruptcy Code. 
  

 - 43 - 

	 	(d)	Voting Classes. 

 If a Class contains Claims or Interests
eligible to vote and no holders of Claims or Interests eligible to vote in such Class vote to accept or reject the Plan, the Plan shall be deemed accepted by the holders of such Claims or Interests in such Class. 
  

	 	(e)	Confirmation of All Cases. 

 Except as otherwise specified
in the Plan, the Plan shall not be deemed to have been confirmed unless and until the Plan has been confirmed as to each of the Debtors; provided, however, that the Debtors, in their sole discretion and with the consent of the
Consenting Holders, may at any time waive Section 6.5 of the Plan. 
  

	6.10	Means for Implementation. 

  

	 	(a)	Continued Corporate Existence and Vesting of Assets in Reorganized Debtors. 

 Except as otherwise provided in the Plan, the Debtors shall continue to exist after the Effective Date as Reorganized Debtors, for the purposes of satisfying their obligations under the Plan and the continuation of
their businesses. On or after the Effective Date, each Reorganized Debtor, in its sole and exclusive discretion, may take such action as permitted by applicable law and the Reorganized Debtor’s organizational documents, as such Reorganized
Debtor may determine is reasonable and appropriate, including, but not limited to, causing (a) a Reorganized Debtor to be merged into another Reorganized Debtor, or its Subsidiary and/or affiliate, (b) a Reorganized Debtor to be dissolved,
(c) the legal name of a Reorganized Debtor to be changed, or (d) the closure of a Reorganized Debtor’s case on the Effective Date or any time thereafter. 
 Except as otherwise provided in the Plan, on and after the Effective Date, all property of the Estates of the Debtors, including all claims, rights and causes of action and any property acquired by the Debtors under
or in connection with the Plan, shall vest in each respective Reorganized Debtor free and clear of all Claims, Liens, charges, other encumbrances and Interests. Subject to Section 7.1(a) of the Plan, on and after the Effective Date, the
Reorganized Debtors may operate their businesses and may use, acquire and dispose of property and prosecute, compromise or settle any Claims (including any Administrative Expense Claims) and causes of action without supervision of or approval by the
Bankruptcy Court and free and clear of any restrictions of the Bankruptcy Code or the Bankruptcy Rules other than restrictions expressly imposed by the Plan or the Confirmation Order; provided, further, that the Reorganized Debtors
shall consult with Hillside in their prosecution, compromise, and settlement of any Claims. Without limiting the foregoing, the Reorganized Debtors may pay the charges that they incur on or after the Effective Date for Professional Persons’
fees, disbursements, expenses or related support services without application to the Bankruptcy Court. 
  

	 	(b)	Plan Documents. 

 On the Effective Date, or as soon
thereafter as reasonably practicable, the Reorganized Debtors shall be authorized to enter into, file, execute and/or deliver each of the 

  

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Plan Documents and any other agreement or instrument issued in connection with any Plan Document without the necessity of any further court, corporate, board
or shareholder action or approval. 
  

	 	(c)	Cancellation of Existing Securities and Agreements. 

 Except for the purpose of evidencing a right to distribution under the Plan, and except as otherwise set forth in the Plan, on the Effective Date all agreements, instruments, and other documents evidencing any Claim or Interest, and any
rights of the holder in respect thereof, shall be deemed cancelled, discharged and of no force or effect; provided, however, that Section 7.3(a) of the Plan shall not apply to the HSA Agreement. 
 Notwithstanding Section 7.3(a) of the Plan, the applicable provisions of the Indenture shall continue in effect solely for the purposes of
permitting the Indenture Trustee to: (i) make the distributions to be made to holders of Allowed Senior Secured Note Claims, as contemplated by Article V of the Plan; and (ii) maintain any rights and Charging Liens the Indenture Trustee
may have for any fees, costs, expenses, and indemnification under the Indenture or other agreements until all such fees, costs, and expenses are paid pursuant to Section 7.7 of the Plan; provided, however, that such rights and
Liens are limited to the distributions, if any, to the holders of the Allowed Senior Secured Note Claims. The holders of or parties to such cancelled (or converted, as applicable) instruments, securities and other documentation will have no rights
arising from or relating to such instruments, securities and other documentation or the cancellation (or conversion, as applicable) thereof, except the rights provided pursuant to the Plan. 
  

	 	(d)	Officers and Board of Directors. 

 On the Effective Date,
the boards of directors of the Reorganized Debtors shall consist of those individuals identified on Exhibit I to the Plan. Except as set forth in the Plan, the members of the board of directors of each Debtor prior to the Effective Date, in
their capacities as such, shall have no continuing obligations to the Reorganized Debtors on or after the Effective Date. Following the occurrence of the Effective Date, the board of directors of each Reorganized Debtor may be replaced by such
individuals as are selected in accordance with the organizational documents of such Reorganized Debtor. 
 On the Effective Date, the
officers of the Reorganized Debtors shall consist of those individuals identified on Exhibit I to the Plan. The compensation arrangement for any insider of the Debtors that shall be an officer of a Reorganized Debtor is set forth on Exhibit I
to the Plan. 
  

	 	(e)	Corporate Action. 

 1. On the Effective Date, the
certificate of incorporation and by-laws of each Debtor shall be amended and restated in substantially the forms set forth in the Plan Supplement. 
 2. Any action under the Plan to be taken by or required of the Debtors, including, without limitation, the adoption or amendment of certificates of incorporation and by-laws or the issuance of securities and instruments, shall be authorized
and approved in all respects, without any requirement of further action by any of the Debtors’ board of directors. 
  

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 3. The Debtors shall be authorized to execute, deliver, file, and record such documents, contracts,
instruments, releases and other agreements and take such other action as may be necessary to effectuate and further evidence the terms and conditions of the Plan. On the Effective Date, the New Common Stock will be transferred to the Disbursing
Agent and the Disbursing Agent will hold the New Common Stock until distributions of same are made. 
  

	 	(f)	Authorization of Plan Securities. 

 On the Effective Date,
the Debtors are authorized to issue or cause to be issued the Plan Securities in accordance with the terms of the Plan, without the need for any further corporate or shareholder action. 
  

	 	(g)	Rights of the Indenture Trustee. 

 1. In full satisfaction
of Allowed Fee Claims of the Indenture Trustee for compensation and reimbursement of expenses arising under Section 8.07 of the Indenture (an “Allowed Indenture Trustee Fee Claim”), including to the extent such Allowed
Trustee Fee Claims are secured by any Charging Liens under the Indenture, which for the avoidance of doubt, are preserved under the Plan, on the first Quarterly Distribution Date the Disbursing Agent will distribute to the Indenture Trustee, Cash
equal to the amount of (i) the Allowed Trustee Fee Claims submitted to the Debtors, the Consenting Holders, and the Creditors’ Committee, for fees and expenses arising under Section 8.07 of the Indenture, through the Confirmation
Date, and (ii) any Allowed Indenture Trustee Fee Claims incurred between the Confirmation Date and the Effective Date, provided, however, that no distribution shall be payable hereunder with respect to Claims to which the Debtors, the
Consenting Holders, or the Creditors’ Committee shall have objected within the later of (x) three (3) Business Days prior to the Effective Date, and (y) twenty (20) days of receipt of the request for payment. 
 2. As a condition to receiving payment thereof, each holder of an Indenture Trustee Fee Claim shall deliver to the Debtors, the Consenting Holders, or
the Creditors’ Committee written copies of invoices in respect of such claims, with narrative descriptions of the services rendered (including appropriate redactions to preserve privileged matters) and itemization of expenses incurred in such
detail and with such supporting documentation as is reasonably requested by the Debtors, the Consenting Holders, or the Creditors’ Committee. An Indenture Trustee Fee Claim shall be deemed Allowed except to the extent the Debtors, the
Consenting Holders, or the Creditors’ Committee timely objects. If the Debtors, the Consenting Holders, or the Creditors’ Committee timely objects to the request for payment of any Indenture Trustee Fee Claim, the undisputed amount of any
Indenture Trustee Fee Claims with respect to which such objection(s) are pending shall be Allowed and paid by the Disbursing Agent on the first Quarterly Distribution Date or as soon thereafter as any such Indenture Trustee Fee Claims are Allowed.
The Disbursing Agent shall not be required to make any payments with respect to the disputed portion of an Indenture Trustee Fee Claim as to which the Debtors, the Consenting Holders, or the Creditors’ Committee has objected until resolved by
the objector(s) or determined by the Bankruptcy Court. In the event such objector(s) are unable to resolve a 

  

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dispute as to an Indenture Trustee Fee Claim, the Indenture Trustee may, in its sole discretion, elect to (i) submit any such dispute to the Bankruptcy
Court for resolution by application requesting payment of the disputed portion of the Indenture Trustee Fee Claims in accordance with the reasonableness standard (and not subject to the requirements of sections 503(b)(3) and (4) of the
Bankruptcy Code, which shall not apply) or (ii) assert its Charging Lien (to the extent such Lien exists under the Indenture) to obtain payment of a disputed portion of the Indenture Trustee Fee Claim in lieu of Bankruptcy Court resolution
described in subsection (i). 
 3. Nothing herein shall be deemed to impair, extinguish or negatively impact the Charging Lien. 

 

	 	(h)	Issuance/Delivery of New Common Stock. 

 On the Effective
Date, Reorganized Ampex will be authorized to issue the New Common Stock. On the Effective Date or as soon thereafter as reasonably practicable, Reorganized Ampex will issue or cause to be delivered to the Disbursing Agent for distribution in
accordance with the terms of the Plan, the New Common Stock; provided, however, that Reorganized Ampex will not issue New Common Stock on behalf of Disputed General Unsecured Claims unless and until such Claims are Allowed in
accordance with Section 9.2 of the Plan. Upon issuance, the New Common Stock will be held by the Disbursing Agent, in a segregated trust account or accounts, pending allocation and distribution by the Disbursing Agent to all Persons entitled to
receive such New Common Stock pursuant to and in accordance with the terms of the Plan. 
 Certificates of New Common Stock shall bear a
legend restricting the sale, transfer, assignment or other disposal of such shares, which restrictions are more fully set forth in the New Stockholders Agreement and the Amended Certificate of Incorporation of Reorganized Ampex and are more fully
described in Section 12.2, herein. Certain certificates of New Common Stock issued to Restricted Foreign Holders (as defined in the Amended Certificate of Incorporation of Reorganized Ampex) shall also bear a legend notifying holders of such
shares of New Common Stock that such holder’s voting rights may be nullified in the event of an inquiry or determination by the U.S. Department of Defense regarding foreign ownership of Reorganized Ampex and its possible effects on national
security. 
  

	6.11	Distributions. 

  

	 	(a)	Distributions. 

 The Disbursing Agent shall make all Plan
Distributions and the CPR Administrator shall distribute all Distribution Rights to the appropriate holders of such Claims or Interests or, in the case of the Senior Secured Note Claim Distribution, the Indenture Trustee. The Indenture Trustee shall
deliver such distributions to the holders of the Senior Secured Note Claims in accordance with the provisions of the Plan and the terms of the Indenture or any other governing agreement. Notwithstanding the provisions of Section 7.3 of the Plan
regarding the cancellation of the Indenture, the Indenture shall continue in effect to the extent necessary to allow the Indenture Trustee to receive and make distributions pursuant to the Plan on account of the Senior Secured Note Claims.

  

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 All Plan Distributions and distributions of Distribution Rights shall be made free and clear of all
Liens, Claims and encumbrances, other than, in the case of the Senior Secured Note Claim Distribution, the Charging Liens. 
  

	 	(b)	No Postpetition Interest on Claims. 

 Unless otherwise
specifically provided for in the Plan or the Confirmation Order, or required by applicable bankruptcy law, postpetition interest shall not accrue or be paid on any Claims, and no holder of a Claim shall be entitled to interest accruing on or after
the Commencement Date on any Claim; provided, however, that Section 8.2 of the Plan shall not apply to Senior Secured Note Claims, on which postpetition interest shall accrue. 
  

	 	(c)	Date of Distributions. 

 Unless otherwise provided in the
Plan, any distributions and deliveries to be made hereunder shall be made on the Effective Date or as soon thereafter as is practicable, provided that the Debtors may utilize periodic distribution dates to the extent appropriate, provided
further that any Plan Distributions to (a) holders of Allowed Senior Secured Note Claims, and (b) holders of Allowed Non-Election General Unsecured Claims that have duly executed and delivered the New Stockholders Agreement, shall be
made on the Effective Date. Plan Distributions to holders of Allowed General Unsecured Claims that elect to receive a Lump Sum Cash Payment shall be made on the Effective Date, or as soon as practicable thereafter. In the event that any payment or
act under the Plan is required to be made or performed on a date that is not a Business Day, then the making of such payment or the performance of such act may be completed on or as soon as reasonably practicable after the next succeeding Business
Day, but shall be deemed to have been completed as of the required date. 
  

	 	(d)	Distribution Record Date. 

 As of the close of business on
the applicable Distribution Record Date, the various transfer and claims registers for each of the Classes of Claims or Interests as maintained by the Debtors, their respective agents, or the Indenture Trustee shall be deemed closed, and there shall
be no further changes in the record holders of any of the Claims or Interests. The Debtors shall have no obligation to recognize any transfer of Claims or Interests occurring after the close of business on the applicable Distribution Record Date.
Additionally, with respect to payment of any Cure Amounts or any Cure Disputes in connection with the assumption and/or assignment of the Debtors’ executory contracts and leases, the Debtors shall have no obligation to recognize or deal with
any party other than the non-Debtor party to the underlying executory contract or lease, even if such non-Debtor party has sold, assigned or otherwise transferred its Claim for a Cure Amount. The Debtors and the Indenture Trustee shall be entitled
to recognize and deal for all purposes hereunder only with those record holders stated on the transfer ledgers as of the close of business on the applicable Distribution Record Date, to the extent applicable. 
  

	 	(e)	Disbursing Agent and the CPR Administrator. 

 All
distributions under the Plan initially shall be made by the Debtors or the Disbursing Agent on and/or after the Effective Date as provided in the Plan. The CPR Administrator shall distribute CPR Administrator Rights Notices to eligible holders
setting forth 

  

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such holders’ Distribution Rights. Neither the CPR Administrator nor a Reorganized Debtor acting as Disbursing Agent shall be required to give any bond
or surety or other security for the performance of its duties unless otherwise ordered by the Bankruptcy Court. If the Disbursing Agent is not the CPR Administrator or one of the Reorganized Debtors, such entity shall obtain a bond or surety for the
performance of its duties, and all costs and expenses of procuring any such bond or surety shall be borne by the Debtors or Reorganized Debtors. 
  

	 	(f)	Surrender of Cancelled Instruments or Securities. 

 As a
condition precedent to any holder of a Senior Secured Note Claim receiving any Plan Distribution on account of an Allowed Senior Secured Note Claim, unless waived in writing by the Reorganized Debtors, the Indenture Trustee shall certify in writing
to the Reorganized Debtors that (a) the holder of such Senior Secured Note Claim has properly tendered the Senior Secured Note(s) to be cancelled pursuant to the Plan in accordance with a letter of transmittal to be provided to such holders by
the Disbursing Agent on the Effective Date or as promptly as practicable, which letter of transmittal will include customary provisions with respect to the authority of the holder of such Senior Secured Note(s) to act and the authenticity of any
signatures required thereon, and (b) such Senior Secured Note has been marked as cancelled. Such certification of the Indenture Trustee shall be in form and substance reasonably satisfactory to the Reorganized Debtors and shall be distributed
by the Disbursing Agent promptly after the Effective Date (a “Trustee Certification”). 
 All questions as to the
validity, form, eligibility (including time of receipt), and acceptance of a Trustee Certification will be resolved by the Disbursing Agent, whose determination shall be final and binding, subject only to review by the Bankruptcy Court upon
application with due notice to any affected parties in interest. 
 Any Plan Distributions and any Cash to be distributed pursuant to the
Plan on account of any such Senior Secured Note Claim shall, pending such certification by the Indenture Trustee, be treated as an undeliverable distribution pursuant to Section 8.7 of the Plan. 
  

	 	(g)	Failure to Surrender Cancelled Instruments. 

 Unless a
Trustee Certification certifying that a holder of a Senior Secured Note Claim has surrendered, or is deemed to have surrendered, its Senior Secured Note(s) required to be tendered is received by the Disbursing Agent within one year after the
Effective Date, such holder of a Senior Secured Note Claim shall have its Claim for a distribution pursuant to the Plan on account of such Claim discharged and shall be forever barred from asserting any such Claim against the Debtors or their
property. In such cases, any distribution on account of such Claim or Interest shall be disposed of pursuant to the provisions set forth in Section 8.8 of the Plan. 
  

	 	(h)	Lost, Stolen, Mutilated or Destroyed Debt Securities. 

 In
addition to any requirements under the Indenture, or any related agreement, a Trustee Certification must be submitted to the Disbursing Agent regarding any document evidencing a Senior Secured Note Claim that has been lost, stolen, mutilated or
destroyed, which Trustee Certification shall state that, in lieu of surrendering such certificate or security, the holder of such Senior Secured Note has provided evidence reasonably satisfactory to the 

  

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Indenture Trustee of the loss, theft, mutilation or destruction. In addition, such holder must also provide such security or indemnity as may be required by
the Reorganized Debtors, or the Disbursing Agent to hold such entities harmless from any damages, liabilities or costs incurred in treating such individual as a holder of an Allowed Claim. Upon compliance with Section 8.8 of the Plan by a
holder of a Claim, such holder shall, for all purposes under the Plan, be deemed to have surrendered such security. Any holder for a Senior Secured Note Claim for which a Trustee Certification in compliance with Sections 8.6 and 8.8 of the Plan is
not received by the Reorganized Debtors or the Disbursing Agent, or, if required, fails to execute and deliver security or indemnity reasonably satisfactory to the Reorganized Debtors or the Disbursing Agent before the one year anniversary of the
Effective Date shall be deemed to have forfeited all Claims on account of such Senior Secured Notes and may not participate in any distribution under the Plan in respect of such Claims. Any distribution so forfeited shall become the sole and
exclusive property of the Reorganized Debtors. 
  

	 	(i)	Delivery of Distribution. 

 (A) On or immediately after the
Effective Date, the Reorganized Debtors or the Disbursing Agent will issue, or cause to be issued, and authenticate, as applicable, the applicable Plan Consideration, and, subject to Bankruptcy Rule 9010, unless otherwise provided in the Plan, make
all distributions to any holder of an Allowed Claim at (a) the address of such holder on the books and records of the Debtors or their agents, (b) at the address in any written notice of address change delivered to the Debtors or the
Disbursing Agent, including any addresses included on any filed proofs of Claim or Interest, or (c) in the case of a holder of a Senior Secured Note Claim, at the address in the Indenture Trustee’s official records. In the event that any
distribution to any holder is returned as undeliverable, no distribution to such holder shall be made unless and until the Disbursing Agent has been notified of the then current address of such holder, at which time or as soon as reasonably
practicable thereafter such distribution shall be made to such holder without interest, provided, however, such distributions shall be deemed unclaimed property under section 347(b) of the Bankruptcy Code at the expiration of the later
of one year from (a) the Effective Date and (b) the date such holder’s Claim or Interest is Allowed. 
 (B) The CPR
Administrator shall make all distributions to any eligible holder of an Allowed Existing Common Stock Interest at the address set forth in the Rights Registry (as defined in the CPR Agreement) and as updated in accordance with the terms of the CPR
Agreement. 
  

	 	(j)	Unclaimed Property. 

 One year from the later of
(a) the Effective Date, and (b) the date a Claim or Interest is first Allowed, all unclaimed property or interests in property shall revert to the Reorganized Debtors, and the Claim or Interest of any other holder to such property or
interest in property shall be discharged and forever barred. The Reorganized Debtors and the Disbursing Agent shall have no obligation to attempt to locate any holder of an Allowed Claim other than by reviewing the Debtors’ books and records,
proofs of Claim or Interest filed against the Debtors, properly completed Letters of Transmittal, and in the case of holders of Senior Secured Note Claims, the official records of the Indenture Trustee. The CPR Administrator shall have no 

  

 - 50 - 

 
obligation to attempt to locate any holder of an Allowed Existing Common Stock Interest (or its Permitted Transferee, as defined in the CPR Agreement) other
than by reviewing the Rights Registry (as defined in the CPR Agreement). 
  

	 	(k)	Satisfaction of Claims and Interests. 

 Unless otherwise
provided in the Plan, any distributions and deliveries to be made on account of Allowed Claims and Allowed Interests hereunder shall be in complete settlement, satisfaction and discharge of such Allowed Claims and Allowed Interests. 
  

	 	(l)	Manner of Payment Under Plan. 

 Except as specifically
provided in the Plan, at the option of the Debtors, any Cash payment to be made hereunder may be made by a check or wire transfer or as otherwise required or provided in applicable agreements or customary practices of the Debtors. 
  

	 	(m)	Fractional Shares. 

 No fractional shares of New Common
Stock or Cash shall be distributed. For purposes of distribution, fractional shares of New Common Stock or Cash shall be rounded down to the next whole number or zero, as applicable. Neither the Reorganized Debtors nor the Disbursing Agent shall
have any obligation to make a distribution that is less than one (1) share of New Common Stock or $10.00 in Cash. Fractional shares of New Common Stock shares that are not distributed in accordance with Section 8.13 of the Plan shall be
returned to the Reorganized Debtors and cancelled. 
  

	 	(n)	No Distribution in Excess of Amount of Allowed Claim. 

 Notwithstanding anything to the contrary in the Plan, no holder of an Allowed Claim shall, on account of such Allowed Claim, receive a Plan Distribution (of a value set forth in the Plan) in excess of the Allowed amount of such Claim plus
postpetition interest on such Claim, to the extent provided in Section 8.2 of the Plan. 
  

	 	(o)	Exemption from Securities Laws. 

 The issuance of the Plan
Securities pursuant to the Plan shall be exempt from registration pursuant to section 1145 of the Bankruptcy Code to the maximum extent permitted thereunder, and the Plan Securities may be resold by the holders thereof without restriction, except to
the extent that any such holder is deemed to be an “underwriter” as defined in section 1145(b)(1) of the Bankruptcy Code. Failure of the Plan Securities to be deemed exempt under section 1145 of the Bankruptcy Code or any other applicable
U.S. federal securities laws exemption shall not be a condition to occurrence of the Effective Date of the Plan. For the avoidance of doubt, the CPR Administrator Rights Notices and the Distribution Rights do not constitute securities as defined in
11 U.S.C. §101(49) and are not being issued pursuant to section 1145 of the Bankruptcy Code. 
  

 - 51 - 

	 	(p)	Setoffs and Recoupments. 

 Each Debtor or Reorganized
Debtor, or such entity’s designee as instructed by such Debtor or Reorganized Debtor, may, pursuant to section 553 of the Bankruptcy Code or applicable non-bankruptcy law, setoff and/or recoup against any Allowed Claim (other than an Allowed
Claim held by a Consenting Holder) or Allowed Interest, and the distributions to be made pursuant to the Plan on account of such Allowed Claim (other than an Allowed Claim held by a Consenting Holder) or Allowed Interest, any and all claims, rights
and Causes of Action that the Debtor, the Reorganized Debtor or their successors may hold against the holder of such Allowed Claim or Allowed Interest; provided, however, that neither the failure to effect a setoff or recoupment
nor the allowance of any Claim or Allowed Interest hereunder will constitute a waiver or release by the Debtor, the Reorganized Debtor or their successors of any and all claims, rights and Causes of Action that the Debtor, the Reorganized Debtor or
their successors may possess against such holder. 
  

	 	(q)	Rights and Powers of Disbursing Agent. 

 1. Powers of
the Disbursing Agent. The Disbursing Agent shall be empowered to (a) effect all actions and execute all agreements, instruments, and other documents necessary to perform its duties under the Plan, (b) make all distributions
contemplated hereby, (c) employ professionals to represent it with respect to its responsibilities, and (d) exercise such other powers as may be vested in the Disbursing Agent by order of the Bankruptcy Court (including any order issued
after the Effective Date), pursuant to the Plan, or as deemed by the Disbursing Agent to be necessary and proper to implement the provisions hereof. 
 2. Expenses Incurred On or After the Effective Date. Except as otherwise ordered by the Bankruptcy Court, and subject to the written agreement of the Reorganized Debtors, the amount of any reasonable fees and
expenses incurred by the Disbursing Agent on or after the Effective Date (including, without limitation, taxes) and any reasonable compensation and expense reimbursement Claims (including, without limitation, reasonable attorney and other
professional fees and expenses) made by the Disbursing Agent shall be paid in Cash by the Reorganized Debtors. 
  

	 	(r)	Withholding and Reporting Requirements. 

 In connection
with the Plan and all distributions thereunder, the Debtors shall comply with all withholding and reporting requirements imposed by any federal, state, local or foreign taxing authority, and all Plan Distributions hereunder shall be subject to any
such withholding and reporting requirements. The Debtors shall be authorized to take any and all actions that may be necessary or appropriate to comply with such withholding and reporting requirements, including, without limitation, liquidating a
portion of any Plan Distribution to generate sufficient funds to pay applicable withholding taxes or establishing any other mechanisms the Debtors or the Disbursing Agent believe are reasonable and appropriate, including requiring a holder of a
Claim to submit appropriate tax and withholding certifications. Notwithstanding any other provision of the Plan, (a) each holder of an Allowed Claim or Allowed Interest that is to receive a distribution under the Plan shall have sole and
exclusive responsibility for the satisfaction and payment of any tax obligations imposed by any 

  

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governmental unit, including income, withholding and other tax obligations on account of such distribution, and (b) no Plan Distributions shall be
required to be made to or on behalf of such holder pursuant to the Plan unless and until such holder has made arrangements satisfactory to the Reorganized Debtors for the payment and satisfaction of such tax obligations or has, to the Reorganized
Debtors’ satisfaction, established an exemption therefrom. 
  

	 	(s)	Hart-Scott Rodino Antitrust Improvements Act. 

 Any New
Common Stock to be distributed under the Plan to an entity required to file a Premerger Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, shall not be distributed until the notification and
waiting periods applicable under such Act to such entity shall have expired or been terminated. In the event any applicable notification and waiting periods do not expire without objection, the Debtors or their agent shall, in their sole discretion,
be entitled to sell such entity’s shares of New Common Stock that were to be distributed under the Plan to such entity, and thereafter shall distribute the proceeds of the sale to such entity. 
  

	6.12	Procedures for Resolving Claims. 

  

	 	(a)	Objections to Claims. 

 Other than with respect to Fee
Claims, only the Debtors, Reorganized Debtors, and the Consenting Holders (the “Objecting Parties”) shall be entitled to object to Claims after the Effective Date. Any objections to Claims (other than Fee Claims), which
Claims have been filed on or before the Confirmation Date, shall be served and filed on or before the later of: (i) thirty (30) days after the Effective Date; or (ii) such other date as may be fixed by the Bankruptcy Court, whether
fixed before or after the date specified in clause (i) hereof. Any Claims filed after the Bar Date or Administrative Bar Date, as applicable, shall be deemed disallowed and expunged in their entirety without further order of the Bankruptcy
Court or any action being required on the part of any Objecting Party, unless the Person or entity wishing to file such Claim has received prior Bankruptcy Court authority to file such Claim after the Bar Date or the Administrative Bar Date, as
applicable. Notwithstanding any authority to the contrary, an objection to a Claim shall be deemed properly served on the claimant if an Objecting Party effects service in any of the following manners: (i) in accordance with Federal Rule of
Civil Procedure 4, as modified and made applicable by Bankruptcy Rule 7004; (ii) by first class mail, postage prepaid, on the signatory on the proof of claim as well as all other representatives identified in the proof of claim or any
attachment thereto; or (iii) by first class mail, postage prepaid, on any counsel that has appeared on the claimant’s behalf in the Reorganization Cases (so long as such appearance has not been subsequently withdrawn). From and after the
Effective Date, any Objecting Party may settle or compromise any Disputed Claim without approval of the Bankruptcy Court. 
  

 - 53 - 

	 	(b)	Disputed Claims and Interests. 

  

	 	1.	No Distributions Pending Allowance. 

 Except as
provided in Section 9.2 of the Plan, Disputed Claims and Interests shall not be entitled to any Plan Distributions or Distribution Rights unless and until such Claims or Interests become Allowed Claims or Allowed Interests. 
  

	 	2.	Plan Distributions to Holders of Subsequently Allowed Claims. 

 On each Quarterly Distribution Date (or such earlier date as determined by the Reorganized Debtors or the Disbursing Agent in their sole discretion but subject to Section 9.2 of the Plan), the Disbursing Agent
will make distributions (i) on account of any Disputed Claim that has become an Allowed Claim during the preceding calendar quarter, and (ii) on account of previously Allowed Claims of property that would have been distributed to the
holders of such Claims on the dates distributions previously were made to holders of Allowed Claims in such Class had the Disputed Claims that have become Allowed Claims been Allowed on such dates. The Disbursing Agent shall distribute in respect of
such newly Allowed Claims the Plan Consideration as to which such Claims would have been entitled under the Plan if such newly Allowed Claims were fully or partially Allowed, as the case may be, on the Effective Date, less direct and actual
expenses, fees, or other direct costs of maintaining Plan Consideration on account of such Disputed Claims; provided, however, that no such distributions shall be made on account of any Disputed Claim that has become and Allowed Claim
until such time as the Disbursing Agent shall determine that such distribution is practicable. 
  

	 	3.	Distribution Rights Allocable to Disputed Existing Common Stock Interests. 

  

	 	(a)	With respect to Disputed Existing Common Stock Interests, the CPR Administrator shall hold (A) all Distribution Rights that would otherwise be allocable under the Plan in
respect of Disputed Existing Common Stock Interests if such Interests were Allowed Interests as of the Effective Date, and (B) all CPR Distributions which would otherwise be distributable under the CPR Agreement to the holders of such reserved
Distribution Rights. 

  

	 	(b)	 To the extent a Disputed Existing Common Stock Interest becomes Allowed in full or in part (in accordance with the procedures set forth in the Plan), the CPR
Administrator shall distribute in respect of such newly Allowed Interest, as soon as practicable thereafter, all (A) reserved Distribution Rights to which the holder of such Existing Common Stock Interest would have been entitled if such newly
Allowed Interest were fully or partially Allowed, as the case may be, on the Effective Date, and (B) reserved CPR Distributions which would have been distributed in respect of such reserved Distribution Rights if such Interest were fully or
partially Allowed, as the case may be, on the Effective Date, provided that the CPR Administrator 

  

 - 54 - 

	 	 
may direct the withholding of distributions of the reserved Distribution Rights or CPR Distributions until any cost or expense associated with maintaining
such Distribution Rights accruing after the Effective Date is paid. Notwithstanding any provision herein, no distributions of Distribution Rights or CPR Distributions shall be made to a holder of a Disputed Existing Common Stock Interest that has
become an Allowed Interest until such time as the CPR Administrator shall determine that such distribution is practicable. 

  

	 	4.	Distribution of Reserved Plan Consideration Upon Disallowance. 

 To the extent any Disputed Claim has become Disallowed in full or in part (in accordance with the procedures set forth in the Plan), any Plan Consideration held by the Reorganized Debtors on account of such Disputed
Claim shall become the sole and exclusive property of the Reorganized Debtors. 
 To the extent a Disputed Existing Common Stock Interest
becomes Disallowed in whole or in part, any Distribution Rights or CPR Distributions reserved on account of such Disallowed Interest shall become the sole and exclusive property of the Reorganized Debtors, to the extent of such Disallowance.

  

	 	(c)	Estimation of Claims. 

 Any Debtor or holder of a Claim may
request that the Bankruptcy Court estimate any Claim pursuant to section 502(c) of the Bankruptcy Code for purposes of determining the Allowed amount of such Claim regardless of whether any Objecting Party has previously objected to such Claim or
whether the Bankruptcy Court has ruled on any such objection, and the Bankruptcy Court shall retain jurisdiction to estimate any Claim for purposes of determining the allowed amount of such Claim at any time. In the event that the Bankruptcy Court
estimates any contingent or unliquidated Claim, that estimated amount will constitute either the Allowed amount of such Claim or a maximum limitation on such Claim, as determined by the Bankruptcy Court. If the estimated amount constitutes a maximum
limitation on such Claim, any Objecting Party may elect to pursue any supplemental proceedings to object to any ultimate payment on such Claim. All of the objection, estimation, settlement, and resolution procedures set forth in the Plan are
cumulative and not necessarily exclusive of one another. 
  

	6.13	Executory Contracts and Unexpired Leases. 

  

	 	(a)	General Treatment. 

 As of and subject to the occurrence of
the Effective Date and the payment of the applicable Cure Amount, all executory contracts and unexpired leases to which any Debtor is a party shall be deemed assumed, except for any executory contracts or unexpired leases that: (i) previously
have been assumed or rejected pursuant to a Final Order of the Bankruptcy Court; (ii) are designated specifically or by category as a contract or lease to be rejected on the Schedule of Rejected Contracts and Leases, if any; or (iii) are
the subject of a separate motion to assume or reject under section 365 of the Bankruptcy Code pending on the Effective Date. As of and subject to the occurrence of the Effective Date, all contracts identified on the Schedule of 

  

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Rejected Contracts and Leases shall be deemed rejected, which schedule shall be in form and substance reasonably satisfactory to Hillside. Subject to the
occurrence of the Effective Date, entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of such assumptions and rejections pursuant to sections 365(a) and 1123 of the Bankruptcy Code. Each executory contract and unexpired
lease assumed pursuant to Section 10.1 of the Plan shall revest in and be fully enforceable by the applicable Reorganized Debtor in accordance with its terms, except as modified by the provisions of the Plan, or any order of the Bankruptcy
Court authorizing and providing for its assumption or applicable federal law. 
  

	 	(b)	Completion of Non-Assignable Contract. 

 If the Bankruptcy
Court, or another court of competent jurisdiction, determines that a contract is unable to be assumed and/or assumed and assigned pursuant to section 365 of the Bankruptcy Code (a “Non-assignable Contract”), then the Plan
shall not constitute any Debtor’s agreement to assign such Non-assignable Contract if such attempted assignment would be unlawful. Notwithstanding any provision herein to the contrary, on the Effective Date, the Debtors shall retain all rights
to the Non-assignable Contracts and shall use their reasonable best efforts to obtain any consent, approval or amendment, if any, required to novate, assume and/or assume and assign any Non-assignable Contract. 
  

	 	(c)	Claims Based on Rejection of Executory Contracts or Unexpired Leases. 

 All Allowed Claims arising from the rejection of executory contracts or unexpired leases, if any, will be treated as General Unsecured Claims, subject to any limitation on allowance of such Claims under section 502(b)
of the Bankruptcy Code or otherwise. Except as otherwise ordered by the Bankruptcy Court, in the event that the rejection of an executory contract or unexpired lease by the Debtors pursuant to the Plan results in damages to the other party or
parties to such contract or lease, a Claim for such damages shall be forever barred and shall not be enforceable against the Debtors, or their properties or interests in property as agents, successors, or assigns, unless a proof of such Claim has
been filed with the Bankruptcy Court and served upon counsel for the Debtors on or before the date, and in the form and manner set forth in the order authorizing the rejection which order may be the Confirmation Order. 
  

	 	(d)	Cure of Defaults for Assumed Executory Contracts and Unexpired Leases. 

 1. Except to the extent that different treatment has been agreed to by the non-Debtor party or parties to any executory contract or unexpired lease to be assumed pursuant to Section 10.1 of the Plan, any monetary
amounts by which each executory contract and unexpired lease to be assumed pursuant to the Plan is in default shall be satisfied, pursuant to section 365(b)(1) of the Bankruptcy Code, by payment of the default amount (the “Cure
Amount”) in Cash within thirty (30) days of the Effective Date or on such other less favorable terms to the non-Debtor party as the parties to such executory contracts or unexpired leases may otherwise agree. 
 2. No later than five (5) days prior to the commencement of the Confirmation Hearing, the Debtor shall file a schedule (the “Cure
Schedule”) setting forth the Cure Amount, if any, for each executory contract or unexpired lease to be assumed pursuant to Section 10.1 of 

  

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the Plan. Any party that fails to object to the applicable Cure Amount listed on the Cure Schedule within twenty (20) days of the filing thereof, shall
be forever barred, estopped and enjoined from disputing the Cure Amount set forth on the Cure Schedule (including a Cure Amount of $0.00) and/or from asserting any claim against the Debtor arising under section 365(b)(1) of the Bankruptcy Code
except as set forth on the Cure Schedule. 
 3. In the event of a dispute (each, a “Cure Dispute”) regarding:
(a) the Cure Amount; (b) the ability of the applicable Debtor or Reorganized Debtor to provide “adequate assurance of future performance” (within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to
be assumed; or (c) any other matter pertaining to assumption, the cure payments required by section 365(b)(1) of the Bankruptcy Code shall be made following the entry of a Final Order resolving the Cure Dispute and approving the assumption. To
the extent a Cure Dispute relates solely to the Cure Amount, the Debtor may assume and/or assume and assign the subject contract prior to resolution of the Cure Dispute provided that the Debtor reserves Cash in an amount sufficient to pay the full
amount asserted by the non-Debtor party to the subject contract (or such other amount as may be fixed or estimated by the Bankruptcy Court). 
  

	 	(e)	Indemnification of Directors, Officers and Employees. 

 For
purposes of the Plan, the obligation of a Debtor to indemnify and reimburse any Person or entity serving at any time on or after the Commencement Date as one of its directors, officers or employees by reason of such Person’s or entity’s
service in such capacity, or as a director, officer or employee of any other corporation or legal entity, to the extent provided in such Debtor’s constituent documents, a written agreement with the Debtor, in accordance with any applicable law,
or any combination of the foregoing, shall survive confirmation of the Plan and the Effective Date, remain unaffected thereby, become an obligation of the Reorganized Debtors, and not be discharged in accordance with section 1141 of the Bankruptcy
Code, irrespective of whether indemnification or reimbursement is owed in connection with an event occurring before, on, or after the Commencement Date: 
  

	6.14	Conditions Precedent to Confirmation and Consummation of the Plan. 

  

	 	(a)	Conditions Precedent to Confirmation. 

 Confirmation of the
Plan is subject to: 
 1. the Disclosure Statement having been approved by the Bankruptcy Court as having adequate information in accordance
with section 1125 of the Bankruptcy Code; 
 2. entry of the Confirmation Order in form and substance satisfactory to the Debtors and to the
Consenting Holders; 
 3. a decretal paragraph that provides that all Claims relating to the SERP shall be discharged on the Effective Date;
and 
 4. the Confirmation Order shall contain findings or conclusions, as applicable, that: 
  

	 	a.	the CPR Administrator Rights Notices and Distribution Rights do not constitute securities; 

  

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	 	b.	notice of the commencement of the Reorganization Cases and entry of the Confirmation Order was sufficient to provide notice of such occurrences to the holders of (A) Claims
related to or arising from termination of the SERP, and (B) Environmental Claims; 

  

	 	c.	Hillside shall not be liable for any Environmental Claims solely as a result of the consummation of the Plan; 

  

	 	d.	the SERP does not constitute a retiree plan as used in section 1114 of the Bankruptcy Code. 

  

	 	(b)	Conditions Precedent to the Effective Date. 

 The
occurrence of the Effective Date is subject to: 
 1. the Confirmation Order having been entered by the Bankruptcy Court, being in full force
and effect and not subject to any stay or injunction, and being in form and substance satisfactory to the Debtors and to the Consenting Holders; 
 2. the Plan Documents in form and substance satisfactory to the Consenting Holders being executed and delivered, and any conditions (other than the occurrence of the Effective Date or certification by the Debtors that the Effective Date has
occurred) contained therein having been satisfied or waived in accordance therewith; 
 3. the amount of all Non-Election General Unsecured
Claims (other than the Hillside Unsecured Deficiency Claim) that have not been Disallowed as of the Effective Date shall be equal to or less than an amount equal to 20% of the aggregate amount of all Non-Election General Unsecured Claims that have
not been Disallowed as of the Effective Date; 
 4. the Debtors having performed their obligations under (i) that certain Stipulation
and Interim Order (A) Authorizing Use of Cash Collateral and (B) Finding that Interests of Secured Lenders are Adequately Protected [Docket #39], as approved by the Bankruptcy Court on April 4, 2008, and (ii) any other Order
entered by the Bankruptcy Court regarding the Debtors’ use of cash collateral pursuant to section 363 of the Bankruptcy Code; and 
 5.
the Debtors obtaining all authorizations, consents and regulatory approvals, if any, required to be obtained, and filing all notices and reports, if any, required to be filed, by the Debtors in connection with the Plan’s effectiveness.

  

	 	(c)	Waiver of Conditions Precedent and Bankruptcy Rule 3020(e) Automatic Stay. 

 The Debtors and the Consenting Holders shall have the right to jointly waive one or more of the conditions precedent set forth in Sections 11.1(a)-(b) of the Plan at any time 

  

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without leave of or notice to the Bankruptcy Court and without any formal action other than proceeding with confirmation of the Plan. Hillside shall have the
sole right to waive one or more of the conditions precedent set forth in Section 11.1(c)-(d) of the Plan and time without leave of or notice to the Bankruptcy Court and without formal action other than proceeding with confirmation of the
Plan. 
 The Debtors and the Consenting Holders shall have the right to jointly waive one or more of the conditions precedent set forth in
Sections 11.2(a), (b), (d), and (e) of the Plan at any time without leave of or notice to the Bankruptcy Court and without any formal action other than proceeding with consummation of this Plan. Hillside shall have the sole right to waive the
condition precedent set forth in Section 11.2(c) of the Plan at any time without leave of or notice of the Bankruptcy Court and without any formal action other than proceeding with confirmation of the Plan. Further, the stay of the Confirmation
Order, pursuant to Bankruptcy Rule 3020(e), shall be deemed waived by the Confirmation Order. 
 If any condition precedent to the Effective
Date is waived pursuant to Section 11.3 of the Plan and the Effective Date occurs, the waiver of such condition shall benefit from the “mootness doctrine”, and the act of consummation of the Plan shall foreclose any ability to
challenge the Plan in any court. 
  

	 	(d)	Effect of Failure of Conditions. 

 If all of the conditions
to effectiveness and the occurrence of the Effective Date have not been satisfied or duly waived on or before the first Business Day that is more than 60 days after the Confirmation Date, or by such later date as set forth by the Debtors in a notice
filed with the Bankruptcy Court prior to the expiration of such period, then upon motion by the Debtors made before the time that all of the conditions have been satisfied or duly waived, the Confirmation Order shall be vacated by the Bankruptcy
Court; provided, however, that the Debtors must obtain the consent of the Consenting Holders. It is further provided that notwithstanding the filing of such a motion, the Confirmation Order shall not be vacated if all of
the conditions to consummation set forth in Section 11.2 of the Plan are either satisfied or duly waived before the Bankruptcy Court enters an order granting the relief requested in such motion. If the Confirmation Order is vacated pursuant to
Section 11.4, the Plan shall be null and void in all respects, and nothing contained in the Plan shall: (i) constitute a waiver or release of any Claims against or Interests in the Debtors; (ii) prejudice in any manner the rights of
the holder of any Claim or Interest in the Debtors; or (iii) constitute an admission, acknowledgment, offer or undertaking by the Debtors or any other entity with respect to any matter set forth in the Plan. 
  

	6.15	Effect of Confirmation. 

  

	 	(a)	Binding Effect. 

 The Plan shall be binding and inure to
the benefit of the Debtors, all present and former holders of Claims and Interests, and their respective successors and assigns. 
  

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	 	(b)	Vesting of Assets. 

 On the Effective Date, pursuant to
sections 1141(b) and (c) of the Bankruptcy Code, all property of the Estates shall vest in the Reorganized Debtors, free and clear of all Claims, liens, encumbrances, charges, and other interests, except as provided in the Plan or in the
Confirmation Order. The Reorganized Debtors may operate their businesses and may use, acquire, and dispose of property free of any restrictions of the Bankruptcy Code or the Bankruptcy Rules and in all respects as if there were no pending case under
any chapter or provision of the Bankruptcy Code, except as provided in the Plan. 
  

	 	(c)	Discharge of Claims Against and Interests in the Debtors. 

 Upon the Effective Date and in consideration of the distributions to be made hereunder, except as otherwise provided in the Plan or in the Confirmation Order, each holder (as well as any trustees and agents on behalf of each holder) of a
Claim or Interest and any affiliate of such holder shall be deemed to have forever waived, released, and discharged the Debtors, to the fullest extent permitted by section 1141 of the Bankruptcy Code, of and from any and all Claims, Interests,
rights, and liabilities that arose prior to the Effective Date. Except as otherwise provided in the Plan, upon the Effective Date, all such holders of Claims and Interests and their affiliates shall be forever precluded and enjoined, pursuant to
sections 105, 524, 1141 of the Bankruptcy Code, from prosecuting or asserting any such discharged Claim against or terminated Interest in the Debtors. 
  

	 	(d)	Term of Pre-Confirmation Injunctions or Stays. 

 Unless
otherwise provided in the Plan, all injunctions or stays arising prior to the Confirmation Date in accordance with sections 105 or 362 of the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in full force and
effect until the Effective Date. 
  

	 	(e)	Injunction Against Interference With Plan. 

 Upon the entry
of the Confirmation Order, all holders of Claims and Interests and other parties in interest, along with their respective present or former affiliates, employees, agents, officers, directors, or principals, shall be enjoined from taking any actions
to interfere with the implementation or consummation of the Plan. 
  

	 	(f)	Injunction. 

 1. Except as otherwise provided in the
Plan or the Confirmation Order, as of the Confirmation Date, but subject to the occurrence of the Effective Date, all Persons who have held, hold or may hold Claims against or Interests in the Debtors or the Estates are, with respect to any such
Claims or Interests, permanently enjoined after the Confirmation Date from: (a) commencing, conducting or continuing in any manner, directly or indirectly, any suit, action or other proceeding of any kind (including, without limitation, any
proceeding in a judicial, arbitral, administrative or other forum) against or affecting the Debtors, the Reorganized Debtors, or the Estates or any of their property, the Consenting Holders, or any direct or indirect transferee of any property of,
or direct or indirect successor in interest to, any of the 

  

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foregoing Persons or any property of any such transferee or successor; (b) enforcing, levying, attaching (including, without limitation, any
pre-judgment attachment), collecting or otherwise recovering by any manner or means, whether directly or indirectly, any judgment, award, decree or order against the Debtors, the Reorganized Debtors, or the Estates or any of their property, the
Consenting Holders, or any direct or indirect transferee of any property of, or direct or indirect successor in interest to, any of the foregoing Persons, or any property of any such transferee or successor; (c) creating, perfecting or
otherwise enforcing in any manner, directly or indirectly, any encumbrance of any kind against the Debtors, the Reorganized Debtors, or the Estates or any of their property, the Consenting Holders, or any direct or indirect transferee of any
property of, or successor in interest to, any of the foregoing Persons; (d) acting or proceeding in any manner, in any place whatsoever, that does not conform to or comply with the provisions of the Plan to the full extent permitted by
applicable law; and (e) commencing or continuing, in any manner or in any place, any action that does not comply with or is inconsistent with the provisions of the Plan; provided, however, that nothing contained herein or in the
Plan shall preclude such persons from exercising their rights pursuant to and consistent with the terms of the Plan. 
 2. By
accepting distributions pursuant to the Plan, each holder of an Allowed Claim or Allowed Interest shall be deemed to have specifically consented to the injunctions set forth in the Plan. 
  

	6.16	Releases. 

 1. Releases by
the Debtors. Except as otherwise provided in the Plan or the Confirmation Order, as of the Effective Date, each Debtor, in its individual capacity and as a debtor in possession, shall be deemed to forever release, waive and discharge
all claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action and liabilities (other than the rights of the Debtors to enforce the Plan and the contracts, instruments, releases, indentures and other agreements or
documents delivered thereunder) whether liquidated or unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in
part on any act, omission, transaction, event or other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the parties released pursuant to Section 12.7 of the Plan, the Reorganization Cases, the Plan
or the Disclosure Statement, and that could have been asserted by or on behalf of the Debtors or their Estates, whether directly, indirectly, derivatively or in any representative or any other capacity, against any Released Party; provided,
however, that (x) that the releases set forth in Section 12.7(a) of the Plan shall not release any Debtor’s claims, rights, or causes of action for money borrowed from or owed to a Debtor or its Subsidiary by any of its
directors, officers or former employees as set forth in such Debtors’ or Subsidiary’s books and records, and (y) in no event shall anything in Section 12.7(a) of the Plan be construed as a release of any Person’s fraud,
gross negligence or willful misconduct for matters with respect to the Debtors and their Subsidiaries and/or affiliates; provided, however, solely to the extent that it would contravene DR 6-102 of the New York Code of Professional
Responsibility or any similar ethical rules of another jurisdiction, if binding on an attorney of a Released Party, no attorney of any Released Party shall be released by the Debtors or the Reorganized Debtors. 
  

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 2. Releases by Holders of Claims and Interests. Except as otherwise provided in
the Plan or the Confirmation Order, on the Effective Date, to the fullest extent permissible under applicable law, as such law may be extended or interpreted subsequent to the Effective Date, all holders of Claims and Interests, in consideration for
the obligations of the Debtors under the Plan, the Plan Distributions, the Plan Securities and other contracts, instruments, releases, agreements or documents executed and delivered in connection with the Plan, and each entity (other than a Debtor)
that has held, holds or may hold a Claim or Interest, as applicable, will be deemed to have consented to the Plan for all purposes and the restructuring embodied therein and deemed to forever release, waive and discharge all claims, demands, debts,
rights, causes of action or liabilities (other than the right to enforce the obligations of any party under the Plan and the contracts, instruments, releases, agreements and documents delivered under or in connection with the Plan), including,
without limitation, any claims for any such loss such holder may suffer, have suffered or be alleged to suffer as a result of the Debtors commencing the Reorganization Cases or as a result of the Plan being consummated, whether liquidated or
unliquidated, fixed or contingent, matured or unmatured, known or unknown, foreseen or unforeseen, then existing or thereafter arising, in law, equity or otherwise that are based in whole or in part on any act or omission, transaction, event or
other occurrence taking place on or prior to the Effective Date in any way relating to the Debtors, the Reorganization Cases, the Plan or the Disclosure Statement against any Released Party; provided, however, that in no event shall
anything in Section 12.7(b) of the Plan be construed as a release of any Person’s fraud or willful misconduct for matters with respect to the Debtors and their Subsidiaries and/or affiliates. 
 3. Notwithstanding anything to the contrary contained in the Plan, except to the extent permissible under applicable law, as such law may be extended
or interpreted subsequent to the Effective Date, the releases provided for in Section 12.7 of the Plan shall not release any non-Debtor entity from any liability arising under (a) the Internal Revenue Code or any state, city or municipal
tax code (b) the ERISA, (c) any criminal laws of the United States or any state, city or municipality; and (d) federal securities laws of the United States. 
 The Debtors believe that the releases by each of the Debtors and the holders of Claims and Interests of each of the Released Parties as described in this
Section 6.16, and Sections 12.7(a) and 12.7(b) of the Plan (the “Releases”), are extremely important to the success of the Plan. The Debtors have received substantial contributions to the Plan from each of the Released
Parties. The Released Parties have played a critical role in the formulation of the Debtors’ Plan and have expended an immense amount of time and resources analyzing and negotiating the complex issues presented by the Debtors’ capital
structure. The Plan reflects the settlement and resolution of several of these complex issues. The Releases are an integral part of the consideration to be received in connection with the compromises and resolutions embodied in the Plan and the
Debtors have received substantial consideration in exchange for the Releases. Without the Releases provided in the Plan, the Debtors would not be able to complete a successful reorganization of the Debtors’ Estates. 
 As evidenced by the Plan Support Agreement, many of the Released Parties have expended considerable time, energy and expense in the process of
negotiating the complex issues underlying these cases — a commitment that resulted in the Plan and the Plan Support Agreement. An important component of the settlements embodied in the Plan, is the Consenting 

  

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Holders’ protection from liability in connection with their pre and postpetition involvement in these cases. Without such protection, the Plan Support
Agreement and the Plan would never have garnered such widespread support, making it impossible for the Debtors’ near-term emergence from chapter 11. 
 Many of the Released Parties have made significant non-monetary contributions to the Plan and the Plan process, a fact that supports the Debtors’ decision to grant third-party releases. Absent the tireless
efforts of the various constituencies who came together to work out the terms of a Plan, supported by approximately 80% in amount of the holders of the Debtors’ Senior Secured Notes and the Debtors’ largest secured and unsecured creditor,
aimed at resolving these cases, the Debtors and certain of their largest creditors would likely remain mired in complex and contentious litigation for years to come, threatening to materially delay and reduce distributions to all creditors.
Moreover, pursuant to the Plan, Hillside is contributing value to which it would otherwise be entitled in the form of the Distribution Rights to holders of Allowed Existing Common Stock Interests that do not object to confirmation of the Plan.
Further, Hillside is lending to the Debtors up to $5 million in exit financing and consenting to continue to carry up to another $20 million in additional indebtedness. The Senior Secured Noteholders are consenting to continue to carry additional
indebtedness on account of their deferred payment of 50% of their Secured Claims. The willingness of these creditors to take such risks is a substantial contribution to the Plan and to these cases; absent such willingness, the Plan would not have
been possible, and the Debtors’ may have been unable to reorganize. The substantial and extensive contributions by the Released Parties — both monetary and non-monetary — further justify the non-Debtor releases set forth in the Plan.

 Additionally, an identity of interest exists between the Debtors and certain non-Debtor Released Parties, such that the non-Debtor
releases are appropriate in that they eliminate effectively additional unknown claims against the estates. The Debtors’ directors and officers are parties to and beneficiaries of certain indemnification provisions, whereby the Debtors are
obligated to indemnify them. Under these agreements, any claim asserted against a Released Party who the Debtors are obligated to indemnify would essentially be a claim against the Debtors. Any such claim, even if ultimately unsuccessful, would
further deplete finite estate resources. Other than certain unsubstantiated allegations of breach of fiduciary duties asserted in certain publicly filed Schedule 13D/A filings filed by ValueVest High Concentration Master Fund, Ltd. with the SEC on
December 12, 2007, the Debtors are not aware of any claims against a Released Party. 
  

	 	(b)	Exculpation and Limitation of Liability. 

 None of the Released Parties shall have or incur any liability to any holder of any Claim or Interest for any act or omission in connection with, or arising out of the Debtors’ restructuring, including without limitation the
negotiation and execution of the Plan, the Reorganization Cases, the Disclosure Statement, the solicitation of votes for and the pursuit of the Plan, the consummation of the Plan, or the administration of the Plan or the property to be distributed
under the Plan, including, without limitation, all documents ancillary thereto, all decisions, actions, inactions and alleged negligence or misconduct relating thereto and all prepetition activities leading to the promulgation and confirmation of
the Plan except fraud, gross negligence, or willful misconduct as determined by a Final Order of the Bankruptcy Court. 

  

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The Released Parties shall be entitled to rely upon the advice of counsel with respect to their duties and responsibilities under the Plan;
provided, however, that the foregoing provision shall not affect the liability of the attorneys of the Debtors, the Reorganized Debtors or the Creditors’ Committee solely to the extent that such provision contravenes DR 6-102 of
the New York Code of Professional Responsibility or similar ethical rules of another jurisdiction which are binding on such attorneys. 
  

	 	(c)	Injunction Related to Releases and Exculpation. 

 The Confirmation Order shall permanently enjoin the commencement or prosecution by any person or entity, whether directly, derivatively or otherwise, of any Claims, obligations, suits, judgments, damages, demands, debts, rights, Causes
of Action or liabilities released pursuant to the Plan, including but not limited to the claims, obligations, suits, judgments, damages, demands, debts, rights, causes of action or liabilities, released in Sections 12.7 and 12.8 of the Plan.

  

	 	(d)	Termination of Subordination Rights and Settlement of Related Claims. 

 1. Except as provided in the Plan, the classification and manner of satisfying all Claims and Interests and the respective distributions and treatments under the Plan take into account or conform to the relative
priority and rights of the Claims and Interests in each Class in connection with any contractual, legal and equitable subordination rights relating thereto whether arising under general principles of equitable subordination, section 510(b) of the
Bankruptcy Code or otherwise, and any and all such rights are settled, compromised and released pursuant to the Plan. The Confirmation Order shall permanently enjoin, effective as of the Effective Date, all Persons and Entities from enforcing or
attempting to enforce any such contractual, legal and equitable rights satisfied, compromised and settled pursuant to the Plan. 
 2.
Pursuant to Bankruptcy Rule 9019 and in consideration of the distributions and other benefits provided under the Plan, the provisions of the Plan will constitute a good faith compromise and settlement of all claims or controversies relating to the
subordination rights that a holder of a Claim or Interest may have or any distribution to be made pursuant to the Plan on account of such Claim or Interest. Entry of the Confirmation Order will constitute the Bankruptcy Court’s approval, as of
the Effective Date, of the compromise or settlement of all such claims or controversies and the Bankruptcy Court’s finding that such compromise or settlement is in the best interests of the Debtors and their Estates, and holders of Claims and
Interests, and is fair, equitable and reasonable. 
  

	 	(e)	Retention of Causes of Action/Reservation of Rights. 

 1.
Subject to Section 12.12 of the Plan, nothing contained in the Plan or the Confirmation Order shall be deemed to be a waiver or the relinquishment of any rights, Claims or Causes of Action that the Debtors may have or may choose to assert on
behalf of the Estates or themselves in accordance with any provision of the Bankruptcy Code or any applicable non-bankruptcy law, including, without limitation: (a) any and all Claims against any Person, to the extent such Person asserts a
crossclaim, counterclaim, and/or Claim for setoff which seeks affirmative relief against a Debtor or any of its officers, directors, or representatives; (b) the turnover of any property of the Estates; and/or (c) Claims against other third
parties. 
  

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 2. Nothing contained in the Plan or the Confirmation Order shall be deemed to be a waiver or
relinquishment of any Claim, Cause of Action, right of setoff, or other legal or equitable defense that the Debtors had immediately prior to the Commencement Date, against or with respect to any Claim left unimpaired by the Plan as set forth in
Section 4.2 of the Plan. The Debtors shall have, retain, reserve, and be entitled to assert all such Claims, Causes of Action, rights of setoff, or other legal or equitable defenses which the Debtors had immediately prior to the Commencement
Date as fully as if the Reorganization Cases had not been commenced, and all of the Debtors’ legal and/or equitable rights respecting any Claim left unimpaired by the Plan may be asserted after the Confirmation Date to the same extent as if the
Reorganization Cases had not been commenced. 
  

	 	(f)	Avoidance Actions. 

 Subject to the occurrence of the
Effective Date, neither the Debtors, the Creditors’ Committee, nor any other party in interest shall assert any right, claim or cause of action not asserted by a Debtor prior to the Effective Date and belonging to a Debtor or its Estate against
any Person to avoid a transfer under section 544, 547, 548, or 553(b) of the Bankruptcy Code, of any similar state law, provided, however; that nothing in the Plan shall prohibit the Debtors, the Reorganized Debtors, or the
Creditors’ Committee from challenging the validity, priority, perfection or extent of any lien, mortgage or security agreement or, subject to Section 9.1 of the Plan, objecting to any Claim. All such rights, claims and causes of action
shall be released and waived by the Debtors and their Estates under the Plan on the Effective Date. Notwithstanding anything to the contrary contained therein, nothing contained in the Plan shall prejudice any rights or defenses the Debtors may have
under section 502(d) of the Bankruptcy Code. 
  

	6.17	Retention of Jurisdiction. 

 On and
after the Effective Date, the Bankruptcy Court shall retain jurisdiction, pursuant to 28 U.S.C. §§ 1334 and 157, over all matters arising in, arising under, or related to the Reorganization Cases for, among other things, the following
purposes: 
 a. To hear and determine applications for the assumption or rejection of executory contracts or unexpired leases and the
allowance of Claims resulting therefrom; 
 b. To determine any motion, adversary proceeding, application, contested matter, and other
litigated matter pending on or commenced after the Confirmation Date; 
 c. To ensure that distributions to holders of Allowed Claims or
Allowed Interests are accomplished as provided in the Plan; 
 d. To consider Claims or the allowance, classification, priority, compromise,
estimation, or payment of any Claim, Administrative Expense Claim, or Interest; 
 e. To enter, implement, or enforce such orders as may be
appropriate in the event the Confirmation Order is for any reason stayed, reversed, revoked, modified, or vacated; 
  

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 f. To issue injunctions, enter and implement other orders, and take such other actions as may be
necessary or appropriate to restrain interference by any Person with the consummation, implementation, or enforcement of the Plan, the Confirmation Order, or any other order of the Bankruptcy Court; 
 g. To hear and determine any application to modify the Plan in accordance with section 1127 of the Bankruptcy Code, to remedy any defect or omission or
reconcile any inconsistency in the Plan, the Disclosure Statement, or any order of the Bankruptcy Court, including the Confirmation Order, in such a manner as may be necessary to carry out the purposes and effects thereof; 
 h. To hear and determine all Fee Claims; 
 i. Resolve disputes concerning any reserves with respect to Disputed Claims, Disputed Existing Common Stock Interests, Cure Disputes, or the administration thereof; 
 j. To hear and determine disputes arising in connection with the interpretation, implementation, or enforcement of the Plan, the Confirmation Order, any
transactions or payments contemplated hereby, or any agreement, instrument, or other document governing or relating to any of the foregoing; 
 k. To take any action and issue such orders, including any such action or orders as may be necessary after occurrence of the Effective Date and/or consummation of the Plan, as may be necessary to construe, enforce, implement, execute, and
consummate the Plan, including any release or injunction provisions set forth therein, or to maintain the integrity of the Plan following consummation; 
 l. To determine such other matters and for such other purposes as may be provided in the Confirmation Order; 
 m. To hear and determine matters concerning state, local, and federal taxes in accordance with sections 346, 505, and 1146 of the Bankruptcy Code; 
 n. To hear and determine any other matters related to the Plan and not inconsistent with the Bankruptcy Code and title 28 of the United States Code; 
 o. Resolve any disputes concerning whether a Person or entity had sufficient notice of the Reorganization Cases, the Disclosure Statement Hearing, the
Confirmation Hearing, any applicable Bar Date, or the deadline for responding or objecting to a Cure Amount, for the purpose of determining whether a Claim or Interest is discharged hereunder, or for any other purpose; 
 p. To hear any action relating to an assertion of control group liability or environmental liability against Hillside as a result of the Reorganization
Cases or the Plan; 
 q. To recover all Assets of the Debtors and property of the Estates, wherever located; 
  

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 r. To resolve any disputes concerning or arising out of the CPR Agreement; and 
 s. To enter a final decree closing the Reorganization Cases. 
  

	6.18	Miscellaneous Provisions. 

  

	 	(a)	Exemption from Certain Transfer Taxes. 

 To the fullest
extent permitted by applicable law, any transfer or encumbrance of assets or any portion(s) of assets pursuant to, or in furtherance of, or in connection with the Plan shall constitute a “transfer under a plan” within the purview of
section 1146(c) of the Bankruptcy Code and shall not be subject to transfer, stamp or similar taxes. 
  

	 	(b)	Disallowance of Existing Securities Law Claims. 

 All
Existing Securities Law Claims, if any, shall be deemed disallowed and expunged in their entirety under and pursuant to the Plan without further order of the Bankruptcy Court or any action being required on the part of the Debtors. 
  

	 	(c)	Retiree Benefits and Pension Plans. 

 On and after the
Effective Date, pursuant to section 1129(a)(13) of the Bankruptcy Code, the Debtors shall continue to pay all retiree benefits (within the meaning of section 1114 of the Bankruptcy Code), if any, at the level established in accordance with section
1114 of the Bankruptcy Code, at any time prior to the Confirmation Date, for the duration of the period for which the Debtor had obligated itself to provide such benefits. For the avoidance of doubt, the obligations arising under the SERP do not
constitute retiree benefits within the meaning of section 1114 of the Bankruptcy Code. Nothing herein shall: (i) restrict the Debtors’ right to modify the terms and conditions of the retiree benefits, if any, as otherwise permitted
pursuant to the terms of the applicable plans or non-bankruptcy law; or (ii) be construed as an admission that any such retiree benefits are owed by the Debtors. 
 Reorganized Ampex affirms and agrees that it will assume the Pension Plans and continue to be the contributing sponsor of those plans according to the terms of ERISA, 29 U.S.C. §§ 1301-1461 (2000 &
Supp. V 2005); that the Pension Plans are subject to minimum funding requirements of ERISA and section 412 of the Internal Revenue Code; that no provision of the Confirmation Order, or section 1141 of the Bankruptcy Code, shall, or shall be
construed to, discharge, release, or relieve the Debtor or any other party, in any capacity, from any government policy, or regulatory provision; and that neither the PBGC nor the Pension Plans shall be enjoined from enforcing such liability as a
result of the Plan’s provisions for satisfaction, release and discharge of claims; provided, however, that no provision herein or in the Disclosure Statement shall nullify or void the provisions or the effect of the Bar Date
Order, or the provisions herein regarding creditors’ obligations to file timely an Administrative Expense Claim. There will be no change, modification or termination of the PBGC Agreement. 
  

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	 	(d)	Dissolution of Committee. 

 The Creditors’ Committee
shall be automatically dissolved on the Effective Date and all members, employees or agents thereof shall be released and discharged from all rights and duties arising from, or related to, the Reorganization Cases. 
  

	 	(e)	Termination of Professionals. 

 On the Effective Date, the
engagement of each Professional Person retained by the Debtors and the Creditors’ Committee shall be terminated without further order of the Bankruptcy Court or act of the parties. 
  

	 	(f)	Access. 

 From the Effective Date, the Reorganized Debtors
shall cooperate with any Person that served as a director or officer of a Debtor at any time prior to the Effective Date, and any Consenting Holder (collectively, the “Accessing Parties”), and make available to any Accessing
Party such documents, books, records or information relating to the Debtors’ activities prior to the Effective Date that such Accessing Party may reasonably require in connection with the defense or preparation for the defense of any claim
against such Accessing Party relating to any action taken in connection with such Accessing Party’s role as a director or officer of a Debtor or, in the case of a Consenting Holder, any action taken in connection with the negotiation, execution
and implementation of the Plan, and the Reorganization Cases: 
  

	 	(g)	Amendments. 

 1. Plan Modifications. The Plan
may be amended, modified, or supplemented by the Debtors, with the consent of the Consenting Holders, in the manner provided for by section 1127 of the Bankruptcy Code, or as otherwise permitted by law, without additional disclosure pursuant to
section 1125 of the Bankruptcy Code, except as the Bankruptcy Court may otherwise direct. In addition, after the Confirmation Date, so long as such action does not materially and adversely affect the treatment of holders of Claims or Interests
pursuant to the Plan, the Debtors may institute proceedings in the Bankruptcy Court to remedy any defect or omission or reconcile any inconsistencies in the Plan, the Plan Documents and/or the Confirmation Order, with respect to such matters as may
be necessary to carry out the purposes and effects of the Plan. 
 2. Other Amendments. Prior to the Effective Date the Debtors
may make appropriate technical adjustments and modifications to the Plan without further order or approval of the Bankruptcy Court, provided, however, that, such technical adjustments and modifications do not adversely affect in
a material way the treatment of holders of Claims or Interests. 
  

	 	(h)	Revocation or Withdrawal of the Plan. 

 The Debtors reserve
the right to revoke or withdraw the Plan prior to the Effective Date; provided that the Debtors shall obtain the Consenting Holders’ consent for any revocation or withdrawal of the Plan. If the Debtors take such action, the Plan shall be deemed
null and void. 
  

 - 68 - 

	 	(i)	Confirmation Order. 

 Upon entry by the Bankruptcy Court of
the Confirmation Order, the Confirmation Order shall, and is hereby deemed to, ratify all transactions effected by the Debtors during the period commencing on the Commencement Date and ending on the Confirmation Date except for any acts constituting
willful misconduct or fraud. 
  

	 	(j)	Severability. 

 If, prior to the entry of the Confirmation
Order, any term or provision of the Plan is held by the Bankruptcy Court to be invalid, void, or unenforceable, the Bankruptcy Court, at the request of the Debtors, shall have the power to alter and interpret such term or provision to make it valid
or enforceable to the maximum extent practicable, consistent with the original purpose of the term or provision held to be invalid, void, or unenforceable, and such term or provision shall then be applicable as altered or interpreted.
Notwithstanding any such holding, alteration, or interpretation, the remainder of the terms and provisions of the Plan will remain in full force and effect and will in no way be affected, impaired, or invalidated by such holding, alteration, or
interpretation. The Confirmation Order shall constitute a judicial determination and shall provide that each term and provision of the Plan, as it may have been altered or interpreted in accordance with the foregoing, is valid and enforceable
pursuant to its terms. 
  

	 	(k)	Governing Law. 

 Except to the extent that the Bankruptcy
Code or other federal law is applicable, or to the extent a Plan Document provides otherwise, the rights, duties, and obligations arising under the Plan and the Plan Documents shall be governed by, and construed and enforced in accordance with, the
laws of the State of New York, without giving effect to the principles of conflict of laws thereof. 
  

	 	(l)	Section 1125(e) of the Bankruptcy Code. 

 The Debtors
have, and upon confirmation of the Plan shall be deemed to have, solicited acceptances of the Plan in good faith and in compliance with the applicable provisions of the Bankruptcy Code, and the Debtors (and their affiliates, agents, directors,
officers, employees, advisors, and attorneys) have participated in good faith and in compliance with the applicable provisions of the Bankruptcy Code in the offer, issuance, sale, and purchase of the securities offered and sold under the Plan, and
therefore are not, and on account of such offer, issuance, sale, solicitation, and/or purchase will not be, liable at any time for the violation of any applicable law, rule, or regulation governing the solicitation of acceptances or rejections of
the Plan or offer, issuance, sale, or purchase of the securities offered and sold under the Plan. 
  

	 	(m)	Time. 

 In computing any period of time prescribed or
allowed by the Plan, unless otherwise set forth therein or determined by the Bankruptcy Court, the provisions of Bankruptcy Rule 9006 shall apply. 
  

 - 69 - 

	 	(n)	Notices. 

 In order to be effective, all notices, requests,
and demands to or upon the Debtors or Reorganized Debtors shall be in writing (including by facsimile transmission) and, unless otherwise provided in the Plan, shall be deemed to have been duly given or made only when actually delivered or, in the
case of notice by facsimile transmission, when received and telephonically confirmed, addressed as follows: 
  

			
	 Ampex Corporation
 1228 Douglas Avenue

 Redwood City, California 94063
 Attn: Joel D. Talcott, Esq.,
General Counsel
 Telephone: (650) 367-3330
 Facsimile:
(650) 367-3440

		
	-and-	 	
	
	 Willkie Farr & Gallagher LLP
 787
Seventh Avenue
 New York, New York 10019-6099

	Attn:	 	Matthew A. Feldman, Esq.
		 	Rachel C. Strickland, Esq.
	 Telephone: (212) 728-8000
 Facsimile:
(212) 728-8111

  

	 	(o)	Payment of Statutory Fees. 

 All fees payable pursuant to
section 1930 of title 28 of the United States Code, due and payable through the Effective Date shall be paid by the Debtors on or before the Effective Date and amounts due thereafter shall be paid by the Debtors in the ordinary course until the
entry of a final decree closing the Reorganization Cases. Any deadline for filing Administrative Expense Claims shall not apply to fees payable pursuant to section 1930 of title 28 of the United States Code. 
  

	 	(p)	Reservation of Rights. 

 Except as expressly set forth in
the Plan, the Plan shall have no force or effect unless the Bankruptcy Court shall enter the Confirmation Order. None of the filing of the Plan, any statement or provision contained in the Plan, or the taking of any action by the Debtors with
respect to the Plan shall be or shall be deemed to be an admission or waiver of any rights of the Debtors with respect to the holders of Claims or Interests prior to the Effective Date. 
  

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 ARTICLE VII. 
 CONFIRMATION OF THE PLAN OF REORGANIZATION 
  

	7.1	Confirmation Hearing. 

 Section 1128(a) of the Bankruptcy Code requires the bankruptcy court, after appropriate notice, to hold a hearing on confirmation of a plan of reorganization. The Debtors shall request that the Bankruptcy Court schedule the Disclosure
Statement Hearing to, among other things, establish the date and time of the Confirmation Hearing with respect to the Plan on the first day of the Debtors’ Reorganization Cases. The hearing may be adjourned or continued from time to time by the
Debtors or the Bankruptcy Court without further notice except for an announcement of the adjourned or continued date made at the Confirmation Hearing or any subsequent adjourned or continued Confirmation Hearing. 
 Section 1128(b) of the Bankruptcy Code provides that any party in interest may object to
confirmation of a plan of reorganization. Any objection to confirmation of the Plan must be in writing, must conform to the Bankruptcy Rules, must set forth the name of the objector, the nature and amount of Claims or Interests held or asserted by
the objector against the particular Debtor or Debtors, the basis for the objection and the specific grounds therefor, and must be filed with the Bankruptcy Court, with a copy to chambers, together with proof of service thereof, and served upon:
(a) Willkie Farr & Gallagher LLP, counsel for the Debtors, 787 Seventh Avenue, New York, NY 10019, Attn: Matthew A. Feldman, Esq., and Rachel C. Strickland, Esq.; (b) The Office of the United States Trustee for the Southern
District of New York, 33 Whitehall Street, 21st Floor, New York, NY 10004; (c) Jones Day, Counsel to the Creditors’ Committee, 555 California Street, 26th Floor, San Francisco, CA, 94101, Attn: Tobias S. Keller, Esq.; and Jones Day, North Point, 901 Lakeside Avenue, Cleveland OH, 44114, Attn: Nicholas M. Miller, Esq. (d) Milbank Tweed Hadley McCloy, LLP, counsel
for Hillside, One Chase Manhattan Plaza, New York, NY 10005, Attn: Dennis Dunne, Esq. and Jessica Fink, Esq.; (e) O’Melveny and Meyers LLP, counsel for DDJ Capital Management LLC, Times Square Tower, 7 Times Square, New York, NY 10036,
Attn: Michael Sage, Esq. and Nicole Sabado, Esq.; and (f) Nixon Peabody LLP, counsel for the Indenture Trustee, 100 Summer Street, Boston, MA 02110, Attn: Robert L. Coughlin, Esq and Richard C. Pedone, Esq. 
 ANY HOLDER OF AN ALLOWED EXISTING COMMON STOCK INTEREST WHO OBJECTS TO CONFIRMATION SHALL WAIVE ANY AND ALL RIGHTS AND ENTITLEMENTS TO RECEIVE A CPR
ADMINISTRATOR RIGHTS NOTICE OR DISTRIBUTION RIGHTS ENTITLING SUCH HOLDER TO ITS PRO RATA PERCENTAGE OF THE CPR DISTRIBUTIONS MADE PURSUANT TO THE CPR AGREEMENT AND ANY AND ALL RIGHTS GRANTED THEREBY. 
 Bankruptcy Rule 9014 governs objections to confirmation of the Plan. UNLESS AN OBJECTION TO CONFIRMATION IS TIMELY SERVED AND FILED, IT MAY NOT BE
CONSIDERED BY THE BANKRUPTCY COURT. 
  

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	7.2	Confirmation. 

 At the Confirmation
Hearing, the Bankruptcy Court will determine whether the requirements of section 1129(a) of the Bankruptcy Code have been satisfied with respect to the Plan. Confirmation of a plan under section 1129(a) of the Bankruptcy Code requires, among other
things, that: 
  

	 	•	 	 the plan complies with the applicable provisions of the Bankruptcy Code; 

  

	 	•	 	 the proponent of the plan has complied with the applicable provisions of the Bankruptcy Code; 

  

	 	•	 	 the plan has been proposed in good faith and not by any means forbidden by law; 

  

	 	•	 	 any plan payment made or to be made by the proponent under the plan for services or for costs and expenses in, or in connection with, the chapter 11 case, or in
connection with the plan and incident to the case, has been approved by, or is subject to the approval of, the Bankruptcy Court as reasonable; 

  

	 	•	 	 the proponent has disclosed the identity and affiliations of any individual proposed to serve, after confirmation of the plan, as a director, officer, or voting
trustee of the debtor, an affiliate of the debtor participating in the plan with the debtor, or a successor to the debtor under the plan. The appointment to, or continuance in, such office by such individual must be consistent with the interests of
creditors and equity security holders and with public policy and the proponent must have disclosed the identity of any insider that the reorganized debtor will employ or retain, and the nature of any compensation for such insider;

  

	 	•	 	 with respect to each impaired class of claims or interests, either each holder of a claim or interest of such class has accepted the plan, or will receive or retain
under the plan, on account of such claim or interest, property of a value, as of the effective date of the plan, that is not less than the amount that such holder would receive or retain if the debtor were liquidated on such date under chapter 7 of
the Bankruptcy Code; 

  

	 	•	 	 each class of claims or interests has either accepted the plan or is not impaired under the plan; 

  

	 	•	 	 except to the extent that the holder of a particular claim has agreed to a different treatment of such claim, the plan provides that allowed administrative expenses
and priority claims will be paid in full on the effective date (except that if a class of priority claims has voted to accept the plan, holders of such claims may receive deferred cash payments of a value, as of the effective date of the plan, equal
to the allowed amounts of 

  

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such claims and that holders of priority tax claims may receive on account of such claims deferred cash payments, over a period not exceeding five
(5) years after the date of assessment of such claims, of a value, as of the effective date, equal to the allowed amount of such claims); 

  

	 	•	 	 if a class of claims is impaired, at least one (1) impaired class of claims has accepted the plan, determined without including any acceptance of the plan by
any insider holding a claim in such class; and 

  

	 	•	 	 confirmation of the plan is not likely to be followed by the liquidation, or the need for further financial reorganization, of the debtor or any successor to the
debtor under the plan, unless such liquidation or reorganization is proposed in the plan. 

 Subject to satisfying the
standard for any potential “cramdown” of Classes deemed to reject the Plan, the Debtors believe that: 
  

	 	•	 	 the Plan satisfies all of the statutory requirements of chapter 11 of the Bankruptcy Code; 

  

	 	•	 	 the Debtors have complied or will have complied with all of the requirements of chapter 11 of the Bankruptcy Code; and 

  

	 	•	 	 the Plan has been proposed in good faith. 

 Set forth below is a summary of the relevant statutory confirmation requirements. 
  

	 	(a)	Acceptance 

 Classes 2, 4 and 5 are impaired under the Plan
and are entitled to vote to accept or reject the Plan. Classes 1 and 3 are unimpaired and, therefore, are conclusively presumed to have voted to accept the Plan pursuant to section 1126(f) of the Bankruptcy Code. Classes 6, 7 and 8 are impaired and
deemed to have rejected the Plan. 
 Because certain Classes are deemed to have rejected the Plan, the Debtors will request confirmation of
the Plan, as it may be modified from time to time, under section 1129(b) of the Bankruptcy Code. The Debtors reserve the right to alter, amend, modify, revoke or withdraw the Plan, any exhibit, or schedules thereto or any Plan Document in order to
satisfy the requirements of section 1129(b) of the Bankruptcy Code, if necessary. The Debtors believe that the Plan will satisfy the “cramdown” requirements of section 1129(b) of the Bankruptcy Code with respect to Claims and Interests in
Classes 5, 6, 7 and 8. The Debtors will also seek confirmation of the Plan over the objection of individual holders of Claims who are members of an accepting Class. However, there can be no assurance that the Bankruptcy Court will determine that the
Plan meets the requirements of section 1129(b) of the Bankruptcy Code. 
  

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	 	(b)	Unfair Discrimination and Fair and Equitable Test. 

 To
obtain nonconsensual confirmation of the Plan, it must be demonstrated to the Bankruptcy Court that the Plan “does not discriminate unfairly” and is “fair and equitable” with respect to each impaired, non-accepting Class. The
Bankruptcy Code provides a non-exclusive definition of the phrase “fair and equitable” for, respectively, secured creditors, unsecured creditors and holders of equity interests, which are as follows: 
  

	 	•	 	 Secured Creditors. Either: (i) each impaired secured creditor retains its liens securing its secured claim and receives on account of its secured claim
deferred cash payments having a present value equal to the amount of its allowed secured claim; (ii) each impaired secured creditor realizes the “indubitable equivalent” of its allowed secured claim; or (iii) the property
securing the claim is sold free and clear of liens with such liens to attach to the proceeds of the sale and the treatment of such liens on proceeds to be as provided in clause (i) or (ii) above. 

  

	 	•	 	 General Unsecured Creditors. Either: (i) each impaired unsecured creditor receives or retains under the plan property of a value equal to the amount of
its allowed claim; or (ii) the holders of claims and equity interests that are junior to the claims of the dissenting class will not receive or retain any property under the plan on account of such claims and equity interests.

  

	 	•	 	 Interests. Either (i) each holder of an equity interest will receive or retain under the plan property of a value equal to the greatest of the fixed
liquidation preference to which such holder is entitled, the fixed redemption price to which such holder is entitled or the value of the interest; or (ii) the holder of an interest that is junior to the non-accepting class will not receive or
retain any property under the plan on account of such interest. 

 A plan of reorganization does not “discriminate
unfairly” with respect to a non-accepting class if the value of the cash and/or securities to be distributed to the non-accepting class is equal to, or otherwise fair when compared to, the value of the distributions to other classes whose legal
rights are the same as those of the non-accepting class. 
  

	 	(c)	Feasibility; Financial Projections; Valuation. 

 The
Bankruptcy Code permits a plan to be confirmed only if confirmation is not likely to be followed by liquidation or the need for further financial reorganization. For purposes of determining whether the Plan meets this requirement, the Debtors have
analyzed their ability to meet their obligations under the Plan. As part of this analysis, the Debtors have prepared projections of the financial performance of the Reorganized Debtors for each of the five fiscal years from 2008 through 2012 (the
“Financial Projections”). The Financial Projections, and the assumptions on which they are based, are set forth in the Projected Financial Information contained in Exhibit 6 hereto. Based upon these projections, the
Debtors believe that they will be able to make all payments required pursuant to the Plan while conducting ongoing business operations and, therefore, that confirmation of the Plan is not likely to be followed by liquidation or the need for further
reorganization. 
  

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 The Financial Projections are based on the assumption that the Plan will be confirmed by the Bankruptcy
Court and, for projection purposes, that the Effective Date under the Plan will occur in July 2008. 
 THE PROJECTIONS, INCLUDING THE
UNDERLYING ASSUMPTIONS, SHOULD BE CAREFULLY REVIEWED IN EVALUATING THE PLAN. WHILE MANAGEMENT BELIEVES THE ASSUMPTIONS UNDERLYING THE PROJECTIONS, WHEN CONSIDERED ON AN OVERALL BASIS, ARE REASONABLE IN LIGHT OF CURRENT CIRCUMSTANCES AND
EXPECTATIONS, NO ASSURANCE CAN BE GIVEN THAT THE PROJECTIONS WILL BE REALIZED. THE DEBTORS MAKE NO REPRESENTATION OR WARRANTY AS TO THE ACCURACY OF THE PROJECTIONS. 
 The Debtors have prepared these financial projections based upon certain assumptions that they believe to be reasonable under the circumstances. Those assumptions considered to be significant are described in
Exhibit 6. The financial projections have not been examined or compiled by independent accountants. The Debtors make no representation as to the accuracy of the projections or their ability to achieve the projected results. Many of the
assumptions on which the projections are based are inherently subject to significant economic and competitive uncertainties and contingencies beyond the control of the Debtors and their management. Inevitably, some assumptions will not materialize
and unanticipated events and circumstances may affect the actual financial results. Therefore, the actual results achieved throughout the 5-year period of the Financial Projections may vary from the projected results and the variations may be
material. All holders of Claims that are entitled to vote to accept or reject the Plan are urged to examine carefully all of the assumptions on which the financial projections are based in connection with their evaluation of the Plan. 
  

	 	a.	Valuation of the Reorganized Debtors. 

  

	 	(1)	Introduction. 

 In conjunction with formulating the Plan
and meeting the standards of section 1129 of the Bankruptcy Code, the Debtors have determined that it is appropriate to estimate a post confirmation going concern value for the Reorganized Debtors (the “Estimated Reorganized Debtors’
Enterprise Value”). Accordingly, the Debtors have engaged independent professionals, including CM&D and ThinkFire Services USA, Ltd. (“ThinkFire”), and utilized internal estimates for certain investment
assets to develop the Estimated Reorganized Debtors’ Enterprise Value. 
 ESTIMATED REORGANIZED DEBTORS’ ENTERPRISE VALUE SET FORTH
IN THIS SECTION REPRESENTS A HYPOTHETICAL VALUATION OF THE REORGANIZED DEBTORS, WHICH ASSUMES THAT THE REORGANIZED DEBTORS CONTINUE AS AN OPERATING BUSINESS. ESTIMATED REORGANIZED DEBTORS’ ENTERPRISE VALUE SET FORTH IN THIS SECTION DOES NOT
PURPORT TO CONSTITUTE AN APPRAISAL OR NECESSARILY REFLECT THE ACTUAL MARKET 

  

 - 75 - 

 
VALUE THAT MIGHT BE REALIZED THROUGH A SALE OR LIQUIDATION OF THE REORGANIZED DEBTORS, THEIR SECURITIES OR THEIR ASSETS, WHICH VALUE MAY BE SIGNIFICANTLY
HIGHER OR LOWER THAN THE ESTIMATE SET FORTH IN THIS SECTION. ACCORDINGLY, SUCH ESTIMATED REORGANIZED DEBTORS’ ENTERPRISE VALUE IS NOT NECESSARILY INDICATIVE OF THE PRICES AT WHICH THE NEW COMMON STOCK OR OTHER SECURITIES OF REORGANIZED AMPEX
MAY TRADE AFTER GIVING EFFECT TO THE REORGANIZATION SET FORTH IN THE PLAN, WHICH PRICES MAY BE SIGNIFICANTLY HIGHER OR LOWER THAN INDICATED BY SUCH ESTIMATE. 
  

	 	(2)	Valuation. 

 The Debtors estimate the Estimated Reorganized
Debtors’ enterprise value to be approximately $79.0 million as of June 30, 2008. The enterprise value is based upon an aggregation of individual identifiable assets providing cash flow, or potential cash flow streams. The following table
summarizes the enterprise value of the individual identifiable assets and the Debtors’ basis for each: 
  

						
	 Enterprise Value (amounts in thousands)
	  	Valuation Source	  	June 30, 2008
	Asset	  		  		
	 Ampex Data Systems Corporation
	  	CM&D	  	$	35,405
	 Ampex Corporation - Licensed Cash Flows
	  	CM&D	  	 	23,655
	 TV1 and Cybernet Minority Interest
	  	Company estimate	  	 	1,325
	 Net Operating Loss, carry forwards
	  	CM&D	  	 	7,683
	 Intellectual Property/Patents
	  	ThinkFire	  	 	10,920
		  		  	 	 
	Total Enterprise Value	  		  	$	78,989
		  		  	 	 

 The Estimated Reorganized Debtors’ Enterprise Value is based upon information made
available to, and analyses separately undertaken by, CM&D, ThinkFire and the Debtors on or before March 30, 2008. CM&D has not independently verified or reviewed the work performed by ThinkFire. This reorganization
enterprise value (ascribed as of the date of this Disclosure Statement) reflects, among other factors discussed below, current financial market conditions and the inherent uncertainty today as to the achievement of the Financial Projections, which
are set forth on Exhibit 6 hereto. 
 The foregoing valuation also reflects a number of assumptions, including a successful
reorganization of the Debtors’ businesses and finances in a timely manner, achieving the forecasts reflected in the Financial Projections, the amount of available cash, market conditions, the availability of certain tax attributes and the Plan
becoming effective in accordance with its terms on a basis consistent with the estimates and other assumptions discussed herein. The estimates of value represent hypothetical enterprise values of the Reorganized Debtors as the continuing operator of
its business and assets, and do not purport to reflect or constitute appraisals, liquidation values or estimates of the actual market value that may be realized through the sale of any securities to be issued pursuant to the Plan, which may be
significantly different than the amounts set forth herein. Such estimates were developed solely for purposes of formulation and negotiation of the Plan and analysis of implied relative 

  

 - 76 - 

 
recoveries to creditors thereunder. The value of an operating business such as the Debtors’ businesses is subject to uncertainties and contingencies
that are difficult to predict and will fluctuate with changes in factors affecting the financial condition and prospects of such a business. 
 In preparing the valuation of Ampex Data Systems Corporation, Ampex Corporation’s Licensed Cash Flows and Net Operating Loss (“NOL”) carry forwards, CM&D: (a) reviewed certain historical financial
information of the Debtors for recent years and interim periods; (b) reviewed certain internal financial and operating data of the Debtors, including the Financial Projections developed by management relating to their businesses and prospects;
(c) met with certain members of senior management of the Debtors to discuss the Debtors’ operations and future prospects; (d) reviewed the Financial Projections as prepared by the Debtors; (e) reviewed publicly available
financial data and considered the market values of public companies deemed generally comparable to the operating businesses of the Debtors; (f) considered certain economic and industry information relevant to the Debtors’ operating
businesses; (g) visited certain of the Debtors’ facilities; and (h) reviewed certain analyses prepared by other firms retained by the Debtors and conducted such other analyses as CM&D deemed necessary and appropriate. Although
CM&D conducted a review and analysis of the Debtors’ businesses, operating assets and liabilities, and business plans, CM&D relied on the accuracy and completeness of all: (i) financial and other information furnished to it by the
Debtors; and (ii) publicly available information. No independent evaluations or appraisals of the Debtors’ assets were sought or were obtained in connection therewith, including the work completed by ThinkFire on the intellectual property.

 In performing its analysis of Ampex Data Systems Corporation, Ampex Corporation’s Licensed Cash Flows, and the Debtors’ NOL
carry forwards, CM&D used discounted cash flow and guideline publicly traded company methodologies. These valuation methodologies reflect both the market’s current view of the Debtors’ strategic initiatives and operations, as well as a
longer-term focus on the intrinsic value of the cash flow financial projections associated with Debtors’ current strategic initiatives. The discount rate used by CM&D to arrive at the going concern value of the Debtors’ businesses was
based on a build up of the equity and debt cost of capital of the Debtors weighted according to their capital structure. With regard to the NOL valuation, CM&D has assumed that the emerging entity tax payer will take advantage of section 382
(l) (5) of the Internal Revenue Code. 
 An estimate of total enterprise value is not entirely mathematical, but, rather, it
involves complex considerations and judgments concerning various factors that could affect the value of an operating business. Moreover, the value of an operating business is subject to uncertainties and contingencies that are difficult to predict
and will fluctuate with changes in factors affecting the financial conditions and prospects of such a business. As a result, the estimate of total enterprise value set forth herein is not necessarily indicative of actual outcomes, which may be
significantly more or less favorable than those set forth herein. Because such estimates are inherently subject to uncertainties, neither the Debtors, CM&D, ThinkFire, nor any other person assumes responsibility for their accuracy. Depending on
the results of the Debtors’ operations or changes in the financial markets, the valuation analysis as of the Effective Date may differ from that disclosed herein. 
  

 - 77 - 

 In addition, the valuation of newly issued securities is subject to additional uncertainties and
contingencies, all of which are difficult to predict. Actual market prices of such securities at issuance will depend upon, among other things, prevailing interest rates; conditions in the financial markets; the anticipated initial securities
holdings of prepetition creditors, some of which may prefer to liquidate their investment rather than hold it on a long term basis; and other factors that generally influence the prices of securities. Actual market prices of such securities also may
be affected by the Reorganization Cases or by other factors not possible to predict. Accordingly, Estimated Reorganized Debtors’ Enterprise Value set forth herein does not necessarily reflect, and should not be construed as reflecting, values
that will be attained in the public or private markets. The enterprise value ascribed in the analysis does not purport to be an estimate of the post reorganization market trading value. Such trading value may be materially different from the
reorganization enterprise value ranges associated with the valuation analysis. In addition, there can be no assurance that a trading market will develop for the New Common Stock. New Common Stock will not be registered nor traded in any public
securities market place. 
 In performing its analysis of Ampex Corporation’s Intellectual Property (“IP”)
portfolio, ThinkFire reviewed and placed all 114 U.S. issued patents into one of five portfolios based on the underlying technology implicit to the patent. Each portfolio was reviewed by subject matter experts. The strength of each patent was
assessed for commercial use, novelty, detectability, avoidability and remaining life. Using these valuation considerations, ThinkFire set a valuation range as well as an expected value for each portfolio assuming each was marketed for sale to a
broad range of prospective buyers. Publicly available historical patent sale data was considered as well as a high level review of the portfolio’s potential licensing revenues were considered in estimating value. However, all existing licensing
revenue streams associated with any patent were excluded from the valuation. ThinkFire concluded the value of the overall portfolio to be in the range of $6.6 million to $18.8 million, with an expected value of approximately $10.9 million. It is
important to note that assigning value to patent portfolios is highly speculative. Many factors can ultimately contribute to the price that a particular portfolio will bring, and not all factors could be or were considered. The actual results of the
sale of part or Ampex Corporation’s entire IP portfolio may vary significantly from the estimates provided herein. Greater revenue is potentially available if the patents are successfully licensed or enforced through litigation, although the
risks and uncertainty of such actions can be significant. 
  

	 	(d)	Best Interests Test. 

 With respect to each impaired Class
of Claims and Interests, confirmation of the Plan requires that each holder of a Claim or Interest either (i) accept the Plan or (ii) receive or retain under the Plan property of a value, as of the Effective Date, that is not less than the
value such holder would receive if the Debtors were liquidated under chapter 7 of the Bankruptcy Code. To determine what holders of Claims in each impaired Class would receive if the Debtors were liquidated under chapter 7, the Bankruptcy Court must
determine the dollar amount that would be generated from the liquidation of the Debtors’ assets and properties in the context of a liquidation under chapter 7 of the Bankruptcy Code. The Cash amount that would be available for satisfaction of
Claims and Interests would consist of the proceeds resulting from the disposition of the assets and properties of the Debtors, augmented by the Cash held by the Debtors at the time of the commencement of the liquidation case. Such Cash amount would
be 

  

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(i) first, reduced by the amount of the Allowed Senior Secured Note Claims, the Allowed Hillside Secured Claims, and/or the Allowed Other Secured Claims,
(ii) second, reduced by the costs and expenses of liquidation and such additional administrative claims that might result from the termination of the Debtors’ business and the use of chapter 7 for the purposes of liquidation, and
(iii) third, reduced by the Debtors’ costs of liquidation under chapter 7, including the fees payable to a trustee in bankruptcy, as well as those fees that might be payable to attorneys and other professionals that such a trustee might
engage. In addition, claims would arise by reason of the breach or rejection of obligations incurred and leases and executory contracts (including vendor and customer contracts) assumed or entered into by the Debtors prior to the filing of the
chapter 7 case. 
 To determine if the Plan is in the best interests of each impaired class, the present value of the distributions from the
proceeds of a liquidation of the Debtors’ assets and properties, after subtracting the amounts attributable to the foregoing claims, must be compared with the value of the property offered to such Classes of Claims under the Plan. 

After considering the effects that a chapter 7 liquidation would have on the ultimate proceeds available for distribution to creditors in the
Debtors’ Reorganization Cases, including (i) the increased costs and expenses of a liquidation under chapter 7 arising from fees payable to a trustee in bankruptcy and professional advisors to such trustee, (ii) the erosion in value
of assets in a chapter 7 case in the context of the expeditious liquidation required under chapter 7 and the “forced sale” atmosphere that would prevail, and (iii) the substantial increases in claims that would arise from a
discontinuation of the Debtors’ business, the Debtors have determined that confirmation of the Plan will provide each holder of an Allowed Claim with a recovery that is not less than such holder would receive pursuant to the liquidation of the
Debtors under chapter 7. 
 Moreover, the Debtors believe that the value of any distributions to each Class of Allowed Claims in a chapter 7
case, including the Allowed Senior Secured Note Claims, the Allowed Hillside Secured Claims and the Allowed Other Secured Claims, would be less than the value of distributions under the Plan because in a chapter 7 case the Debtors would not have the
proceeds of the Exit Financing Facility to make such distributions to the holders of Allowed Claims and any distribution in a chapter 7 case would not occur for a substantial period of time. It is likely that distribution of the proceeds of the
liquidation could be delayed for two years after the completion of such liquidation in order to resolve claims and prepare for distributions. In the likely event litigation was necessary to resolve claims asserted in the chapter 7 case, the delay
could be prolonged. 
 CM&D, with the assistance of the Debtors, has prepared a liquidation analysis which is annexed hereto as
Exhibit 5 (the “Liquidation Analysis”). The information set forth in Exhibit 5 provides (a) a summary of the liquidation values of the Debtors’ assets, assuming a chapter 7 liquidation in which a
trustee appointed by the Bankruptcy Court would liquidate the assets of the Debtors’ estates and (b) the expected recoveries of the Debtors’ creditors and equity interest holders under the Plan. The Liquidation Analysis indicates that
holders of the Senior Secured Note Claims, the Hillside Secured Claims, Other Secured Claims, Administrative Expense Claims and Priority Non-Tax Claims, would, after payment of liquidation costs and expenses, receive a 100% recovery on their Claims
in a liquidation scenario. Such holders 

  

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would also receive 100% under the Plan. As reflected in Exhibit 5, the following Classes of Claims and Interests would have a zero percent (0%)
recovery on their Claims in a liquidation scenario: Existing Common Stock Interests, Existing Securities Laws Claims, and Other Existing Interests. Holders of Existing Common Stock Interests will not receive anything on account of their interests
pursuant to the Plan. Notwithstanding the foregoing; however, in light of the compromises and settlements embodied in the Plan, the holders of Allowed Existing Common Stock Interests that do not object to confirmation of the Plan may be entitled to
receive CPR Distributions. As reflected in Exhibit 5, the holders of impaired General Unsecured Claims would have between a 5% and a 7% recovery on their Claims in a liquidation and a 10% recovery on their Claims under the Plan. 

Underlying the Liquidation Analysis are a number of estimates and assumptions that, although developed and considered reasonable by the Debtors’
management, are inherently subject to significant economic and competitive uncertainties and contingencies beyond the control of the Debtors and their management. The Liquidation Analysis also is based on assumptions with regard to liquidation
decisions that are subject to change and significant economic and competitive uncertainties and contingencies beyond the control of the Debtors and their management. Inevitably, some assumptions will not materialize and unanticipated events and
circumstances may affect the results of a liquidation of the Debtors. Accordingly, the values reflected might not be realized if the Debtors were, in fact, to be liquidated. The chapter 7 liquidation period is assumed to average three to six months
following the appointment of a chapter 7 trustee, allowing for, among other things, the discontinuation and wind-down of operations, the sale of the operations, the sale of assets and the collection of receivables. All holders of Claims that are
entitled to vote to accept or reject the Plan are urged to examine carefully all of the assumptions on which the Liquidation Analysis is based in connection with their evaluation of the Plan. 
  

	7.3	Classification of Claims and Interests. 

 The Debtors believe that the Plan meets the classification requirements of the Bankruptcy Code. 
  

	7.4	Consummation. 

 The Plan will
be consummated on the Effective Date. The Effective Date will occur on the first Business Day on which the conditions precedent to the effectiveness of the Plan, as set forth in the Plan, have been satisfied or waived pursuant to the Plan. For a
more detailed discussion of such conditions precedent and the consequences of the failure to meet such conditions, see Article VI of herein. 
 The Plan is to be implemented pursuant to its terms, consistent with the provisions of the Bankruptcy Code. 
  

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 ARTICLE VIII. 
 ALTERNATIVES TO CONFIRMATION AND CONSUMMATION OF THE PLAN 
 If the Plan is not consummated,
the Debtors’ capital structure will remain over leveraged and the Debtors will remain unable to service their debt obligations or to cure the alleged defaults thereunder. Accordingly, if the Plan is not confirmed and consummated, the
alternatives include: 
  

	8.1	Liquidation Under the Bankruptcy Code. 

 The Debtors could be liquidated under chapter 7 or 11 of the Bankruptcy Code. A discussion of the effect a chapter 7 liquidation would have on the recoveries of the holders of Claims is set forth in Article VII of this Disclosure Statement.
The Debtors believe that liquidation would result in lower aggregate distributions being made to creditors than those provided for in the Plan, which is demonstrated by the Liquidation Analysis set forth in Article VII and attached as Exhibit
5 of this Disclosure Statement. 
  

	8.2	Alternative Plan(s) of Reorganization. 

 The Debtors believe that failure to confirm the Plan will lead inevitably to expensive and protracted Reorganization Cases. In formulating and developing the Plan, the Debtors have explored numerous other alternatives and engaged in an
extensive negotiating process involving many different parties with widely disparate interests. 
 The Debtors believe that not only does the
Plan fairly adjust the rights of various Classes of holders of Claims and enable the stakeholders to maximize their returns, but also that rejection of the Plan in favor of some alternative method of reconciling the Claims and Interests will
require, at the very least, an extensive and time consuming process (including the possibility of protracted and costly litigation) and will not result in a better recovery for any Class of Claims or Interests. 
 THE DEBTORS BELIEVE THAT CONFIRMATION OF THE PLAN IS PREFERABLE TO ANY ALTERNATIVE BECAUSE THE PLAN MAXIMIZES THE AMOUNT OF DISTRIBUTIONS TO ALL HOLDERS
OF CLAIMS AND INTERESTS AND ANY ALTERNATIVE TO CONFIRMATION OF THE PLAN WILL RESULT IN SUBSTANTIAL DELAYS IN THE DISTRIBUTION OF ANY RECOVERIES. THEREFORE, THE DEBTORS RECOMMEND THAT ALL HOLDERS OF IMPAIRED CLAIMS ENTITLED TO VOTE ON THE PLAN VOTE
TO ACCEPT THE PLAN. 
  

	8.3	Dismissal of the Debtors’ Reorganization Cases. 

 Dismissal of the Debtors’ Reorganization Cases would have the effect of restoring (or attempting to restore) all parties to the status quo ante. Upon dismissal of the Debtors’ Reorganization Cases,
the Debtors would lose the protection of the Bankruptcy Code, thereby requiring, at the very least, an extensive and time consuming process of negotiation with the creditors of the Debtors, and possibly resulting in costly and protracted litigation
in various jurisdictions. Most significantly, dismissal of the Debtors’ Reorganization Cases may permit 

  

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acceleration of the Senior Secured Notes and Hillside Notes in accordance with their respective indentures. Moreover, holders of the Hillside Notes and the
Senior Secured Notes may be permitted to foreclose upon the assets that are subject to their Liens, which is a substantial portion of the Debtors’ assets and almost all of their Cash. Dismissal will also permit unpaid unsecured creditors to
obtain and enforce judgments against the Debtors. The Debtors believe that these actions would seriously undermine their ability to obtain financing and could lead ultimately to the liquidation of the Debtors under chapter 7 of the Bankruptcy Code.
Therefore, the Debtors believe that dismissal of the Debtors’ Reorganization Cases is not a viable alternative to the Plan. 
 ARTICLE
IX. 
 SUMMARY OF VOTING PROCEDURES 
 This Disclosure Statement, including all Exhibits hereto, together with the related materials included herewith, is being furnished to the holders of Claims in Class 2, Class 4 and Class 5, which Classes are the only
Classes entitled to vote on the Plan. 
 All votes to accept or reject the Plan must be cast by using the ballot (the
“Ballot”) enclosed with this Disclosure Statement. No other votes will be counted. Consistent with the provisions of Bankruptcy Rule 3018, the Debtors have fixed June 12, 2008 at 5:00 p.m. (Prevailing Eastern Time) as
the Voting Record Date. Ballots must be RECEIVED by the Voting Agent no later than 4:00 p.m. (Prevailing Eastern Time) on July 14, 2008, unless the Debtors, at any time, in their sole discretion, extend such date by oral or written notice to
the Voting Agent, in which event the period during which Ballots will be accepted will terminate at 4:00 p.m. (Prevailing Eastern Time) on such extended date. 
 Ballots previously delivered may be withdrawn or revoked at any time prior to the Voting Deadline by the beneficial owner on the Voting Record Date who completed the original Ballot. Only the person or nominee who
submits a Ballot can withdraw or revoke that Ballot. A Ballot may be revoked or withdrawn either by submitting a superseding Ballot or by providing written notice to the Voting Agent. 
 Acceptances or rejections may be withdrawn or revoked prior to the Voting Deadline by complying with the following procedures: (i) a beneficial
owner holding Claims in “street name” who returned his Ballot to a brokerage firm, proxy intermediary, or other nominee should deliver a written notice of withdrawal or revocation to such brokerage firm proxy intermediary or other nominee,
as the case may be; and (ii) all other beneficial owners should deliver a written notice of withdrawal or revocation to the Voting Agent. To be effective, notice of revocation or withdrawal must: (i) be received on or before the Voting
Deadline by the Voting Agent at its address specified on the back cover of this Disclosure Statement; (ii) specify the name of the holder of the Claim whose vote on the Plan is being withdrawn or revoked; (iii) contain the description of
the Claim as to which a vote on the Plan is withdrawn or revoked; and (iv) be signed by the holder of the Claim who executed the Ballot reflecting the vote being withdrawn or revoked, in the same manner as the original signature on the Ballot.
The foregoing procedures should also be followed with respect to a person entitled to vote on the Plan who wishes to change (rather than revoke or withdraw) its vote. 
  

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 ARTICLE X. 
 DESCRIPTION AND HISTORY OF REORGANIZATION CASES 
  

	10.1	General Case Background. 

 On
March 30, 2008, the Debtors filed voluntary petitions for relief under chapter 11 of the Bankruptcy Code. On March 31, 2008, the Bankruptcy Court entered an order (Docket No. 24) authorizing the joint administration of the
Reorganization Cases, for procedural purposes only, under Case No. 08-11094 (AJG). The Honorable Arthur J. Gonzalez is presiding over the Reorganization Cases. The Debtors continue to operate their businesses and manage their properties as
debtors and debtors in possession pursuant to sections 1107 and 1108 of the Bankruptcy Code. As of the date hereof, no request has been made for the appointment of a trustee or examiner in these cases. 
 The following is a brief description of certain significant events that have occurred during the pendency of the Reorganization Cases. 
  

	10.2	Retention of Professionals. 

  

	 	(a)	Willkie Farr & Gallagher LLP. 

 To assist them in
carrying out their duties as debtors in possession, and to otherwise represent their interests in the Reorganization Cases, the Debtors, on March 31, 2008, filed with the Bankruptcy Court an application (Docket No. 19) seeking entry of an
order authorizing the Debtors to retain Willkie Farr & Gallagher LLP as their counsel. On April 22, 2008, the Bankruptcy Court entered an order (Docket No. 89) approving the application. 
  

	 	(b)	Conway MacKenzie & Dunleavy. 

 To assist them in
carrying out their duties as debtors in possession, and to provide certain analyses in connection with confirmation of the Plan, the Debtors, on March 31, 2008, filed with the Bankruptcy Court an application (Docket No. 20) seeking entry
of an order authorizing the Debtors to retain Conway MacKenzie & Dunleavy as their financial advisors. On April 22, 2008, the Bankruptcy Court entered an interim order (Docket No. 90) approving the application on an interim basis.
On May 20, 2008, the Bankruptcy Court entered an order (Docket No. 159) approving the application on a final basis. 
  

	 	(c)	Epiq Bankruptcy Solutions, LLC. 

 On March 31, 2008,
the Debtors filed with the Bankruptcy Court an application (Docket No. 15) seeking entry of an order authorizing the Debtors to retain Epiq Bankruptcy Solutions, LLC as the Debtors’ claims, noticing, and balloting agent. On April 22,
2008, the Bankruptcy Court entered an order (Docket No. 88) approving the application. 
  

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	 	(d)	Ordinary Course Professionals. 

 In addition, the Debtors,
on March 31, 2008, filed with the Bankruptcy Court a motion (Docket No. 21) seeking authority to employ approximately thirty professionals, utilized in the ordinary course to assist the Debtors in their day to day business operations. On
April 22, 2008, the Bankruptcy Court entered an order (Docket No. 92) approving the motion. 
  

	10.3	Appointment of a Creditors’ Committee. 

 Pursuant to section 1102(a)(1) of the Bankruptcy Code, on April 16, 2008, the United States Trustee for the Southern District of New York (the “US Trustee”) appointed an official committee
to represent the interests of the Debtors’ unsecured creditors (the “Creditors’ Committee”). The current members of the Creditors’ Committee are set forth below: 
 David R. Bunker 
 2800 South Court

 Palo Alto, CA 94306 
 David
Chapman 
 P.O. Box 490 
 Pescadero, CA 94060 
 Robert McAdams 
 75644 Via Cortona 
 Indian Wells, CA 92210 
 The PMAGroup, Inc. 
 Attn: John Lynch

 2345 Crystal Drive 
 Suite 300

 Arlington, VA 22202 
 Robert
L. Wilson 
 908 Corriente Point Drive 
 Redwood City, CA 94065 
 Since the formation of the Creditors’ Committee, the Debtors have consulted with the Creditors’
Committee and its proposed counsel, Jones Day, concerning the administration of the Reorganization Cases, and the Plan. The Debtors have met with the proposed counsel to the Creditors’ Committee and are responding to ongoing diligence requests
from the Creditors’ Committee. 
  

	10.4	Section 341 Meeting 

 On
April 30, 2008, the US Trustee convened a meeting of creditors (the “341 Meeting”) pursuant to section 341(a) of the Bankruptcy Code. D. Gordon Strickland, Chief Executive Officer and President of Ampex, attended the 341
Meeting on behalf of the Debtors. 

  

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Subsequent to the 341 Meeting, the Debtors complied with requests from the US Trustee for additional disclosures of information. The 341 Meeting was closed
by the US Trustee as of May 8, 2008. 
  

	10.5	Employment Obligations. 

 The
Debtors believe they have a valuable asset in their workforce, and that the efforts of the Debtors’ employees are critical to a successful reorganization. On March 31, 2008, the Debtors filed with the Bankruptcy Court a motion (Docket
No. 5) for an order authorizing the Debtors to pay certain prepetition employee wage and benefit obligations. On March 31, 2008, the Bankruptcy Court entered an order (Docket No. 26) approving the motion. 
  

	10.6	Continuing Supplier Relations. 

 The Debtors believe
that good relationships with their suppliers are necessary to the uninterrupted functioning of the Debtors’ business operations during the Reorganization Cases. On March 31, 2008, the Debtors filed with the Bankruptcy Court a motion
(Docket No. 7) seeking entry of an order authorizing the Debtors to pay prepetition claims of suppliers of goods entitled to administrative priority pursuant to section 503(b) of the Bankruptcy Code. On April 1, 2008, the Bankruptcy Court
entered an order (Docket No. 34) approving the motion on an interim basis and, on April 22, 2008, entered an order (Docket No. 87) approving the motion on a final basis. 
  

	10.7	Stabilization of Debtors’ Business Operations. 

  

	 	(a)	Cash Management. 

 The Debtors believe it would be
disruptive to their operations if they were forced to change significantly their cash management system upon the commencement of the Reorganization Cases. Accordingly, on March 31, 2008, the Debtors filed with the Bankruptcy Court a motion
(Docket No. 6) seeking entry of an order authorizing the Debtors to maintain their current cash management system. On March 31, 2008, the Bankruptcy Court entered an order (Docket No. 30) approving the motion. 
  

	 	(b)	Customer Programs. 

 The Debtors believe that customer
programs, such as those pertaining to payment discounts, warranties and deferred revenue service agreements, are necessary to maintaining customer loyalty. On March 31, 2008, the Debtors filed with the Bankruptcy Court a motion (Docket
No. 8) seeking entry of an order authorizing the Debtors to honor certain prepetition obligations related to the Debtors’ customer programs. On March 31, 2008, the Bankruptcy Court entered an order (Docket No. 25) approving the
motion. 
  

	 	(c)	Cash Collateral. 

 The Debtors believe that they cannot
meet their ongoing postpetition obligations unless they are authorized to use cash claimed as collateral by Hillside and the holders of the Senior Secured Notes. On March 31, 2008, the Debtors filed with the Bankruptcy Court a 

  

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proposed stipulation (a) authorizing the interim use of cash collateral and (b) finding that the interest of the secured lenders are adequately
protected (Docket No. 14). On April 4, 2008, the Bankruptcy Court entered an interim order (Docket No. 39) authorizing the use of cash collateral on an interim basis, and scheduling a hearing for May 29, 2008, to consider
approval of the use of cash collateral on a final basis. 
  

	10.8	Utilities. 

 On
March 31, 2008, the Debtors filed with the Bankruptcy Court a motion (Docket No. 9) for interim and final orders: (a) prohibiting utilities from altering or discontinuing services; (b) establishing procedures for establishing
reserves for utility payments; (c) deeming utility companies to have adequate assurance of payment; and (d) establishing procedures for resolving requests for additional assurance of payment. On April 18, 2008, the Bankruptcy Court
entered an order (Docket No. 75) approving the motion on an interim basis. On May 14, 2008, the Bankruptcy Court entered an order (Docket No. 148) approving the motion on a final basis. 
  

	10.9	Schedules, Statements and Bar Date. 

  

	 	(a)	Schedules and Statements. 

 On March 31, 2008, each
Debtor filed with the Bankruptcy Court its Schedules of Assets and Liabilities (collectively, the “Schedules”) and Statement of Financial Affairs. On April 11, 2008, Ampex filed an Amended Schedule F to its Schedules of
Assets and Liabilities (Docket No. 55). On April 25, 2008, each Debtor filed an Amended Statement of Financial Affairs. 
  

	 	(b)	Bar Date. 

 Pursuant to Bankruptcy Rule 3003(c)(3), on
March 31, 2008, the Bankruptcy Court entered the Bar Date Order fixing May 12, 2008 (the “General Bar Date”), as the date by which proofs of claim are required to be filed in the Reorganization Cases for all
creditors other than governmental units and September 26, 2008, for the filing of proofs of claim by a governmental unit. The Bar Date Order also established the General Bar Date as the deadline by which all governmental units who intend to
file a claim against one or more of the Debtors must file a non-binding indication of claim (an “Indication of Claim”). The Indications of Claim are to include a governmental unit’s good-faith estimate of the amount of
any claim it may have against the Debtors, a description of such claim and an indication of whether such claim is fixed, contingent or unliquidated. 
 In accordance with the Bar Date Order, on April 7, 2008, a notice regarding the Bar Date was published in USA Today, the San Francisco Chronicle, and Aviation Daily. Also in accordance with
the Bar Date Order, on April 3, 2008, a proof of claim form, a notice regarding the Bar Date, and in the case of governmental units, an Indication of Claim, were mailed to, among others, all creditors listed on the Debtors’ Schedules. A
proof of claim form and a notice regarding the Bar Date were also mailed to the parties added to Ampex’s Amended Schedule F to its Schedules of Assets and Liabilities. 
  

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 ARTICLE XI. 
 GOVERNANCE OF REORGANIZED DEBTORS 
  

	11.1	Board of Directors and Management. 

  

	 	(a)	Reorganized Debtor’s Board. 

 On the Effective Date,
the Board of Reorganized Ampex shall have not less than three members selected by the majority of the holders of the New Common Stock. The members of the Board and initial officers of Reorganized Ampex and the other Reorganized Debtors shall be the
individuals identified on Exhibit I to the Plan. The existing Board of Ampex shall be deemed to have resigned on and as of the Effective Date. 
  

	11.2	Indemnification of Directors and Officers. 

 The Amended Certificate of Incorporation and the certificates or articles of incorporation or organization of the Reorganized Affiliated Debtors will authorize the Reorganized Debtors to indemnify and exculpate their
respective officers, directors or managers and agents to the fullest extent permitted under applicable law. 
  

	11.3	New Stockholders Agreement. 

 Reorganized Ampex shall be authorized and directed to enter into and consummate the transactions contemplated by the New Stockholders Agreement (attached as Exhibit F to the Plan) and such documents, and any agreement or document
entered into in connection therewith, shall become effective and binding in accordance with their respective terms and conditions upon the parties thereto, in each case without further notice to or order of the Bankruptcy Court, act or action under
applicable law, regulation, order, or rule or the vote, consent, authorization or approval of any Person (other than as expressly required by the New Stockholders Agreement). 
  

	11.4	The Credit Agreement. 

 On the
Effective Date, the Reorganized Debtors shall be authorized to enter into the Credit Agreement, the terms of which will be no less favorable to the Reorganized Debtors than those that are set forth on Exhibit E to the Plan, as well as
execute, deliver, file, record and issue any notes, documents, or agreements in connection therewith, in each case without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order, or rule or the
vote, consent, authorization or approval of any Person (other than as expressly required by the Credit Agreement). 
  

	11.5	The Amended Senior Secured Note Indenture. 

 On the Effective Date, the Reorganized Debtors shall be authorized to enter into the Amended Senior Secured Note Indenture, the terms of which will be no less favorable to the Reorganized Debtors than those that are
set forth on Exhibit C to the Plan, as well as execute, deliver, file, record and issue any notes, documents, or agreements in connection therewith, in 

  

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each case without further notice to or order of the Bankruptcy Court, act or action under applicable law, regulation, order, or rule or the vote, consent,
authorization or approval of any Person (other than as expressly required by the Amended Senior Secured Note Indenture). 
 ARTICLE XII.

 CERTAIN RISK FACTORS TO BE CONSIDERED 
  

	12.1	Certain Bankruptcy Considerations. 

  

	 	(a)	Bankruptcy Matters. 

  

	 	1.	General. 

 While the Debtors believe that the
Reorganization Cases commenced in order to implement an agreed upon restructuring will be of short duration and will not be materially disruptive to their businesses, the Debtors cannot be certain that this will be the case. Although the Plan is
designed to minimize the length of the bankruptcy proceeding, it is impossible to predict with certainty the amount of time that the Debtors may spend in bankruptcy or to assure parties-in-interest that the Plan will be confirmed. 
 Even if confirmed on a timely basis, bankruptcy proceedings to confirm the Plan could have an adverse effect on the Debtors’ businesses. Among other
things, it is possible that bankruptcy proceedings could adversely affect the Debtors’ relationships with their key vendors and suppliers, customers and employees. Bankruptcy proceedings also will involve additional expenses and may divert some
of the attention of the Debtors’ management away from the operation of the businesses. 
 The extent to which bankruptcy proceedings
disrupt the Debtors’ businesses will likely be directly related to the length of time it takes to complete the proceedings. If the Debtors are unable to obtain confirmation of the Plan on a timely basis because of a challenge to the Plan or a
failure to satisfy the conditions to the Plan, they may be forced to operate in bankruptcy for an extended period while they try to develop a different reorganization plan that can be confirmed. That would increase both the probability and the
magnitude of the potentially adverse effects described herein. 
  

	 	2.	Failure to Receive Requisite Acceptances. 

 If the
Requisite Acceptances are not received, the Debtors may seek to accomplish an alternative restructuring of their capitalization and obligations to creditors and obtain acceptances to an alternative plan of reorganization for the Debtors, or
otherwise, that may not have the overwhelming support of Hillside and the Senior Secured Noteholder Group and/or may be required to liquidate these estates under chapter 7 or 11 of the Bankruptcy Code. There can be no assurance that the terms of any
such alternative restructuring arrangement or plan would be similar to or as favorable to the Debtors’ creditors as those proposed in the Plan. 
  

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	 	3.	Failure to Confirm the Plan. 

  

	 	(a)	Failure to Receive Bankruptcy Court Approval. 

 Even if the
Requisite Acceptances are received, the Bankruptcy Court, which, as a court of equity may exercise substantial discretion, may decide not to confirm the Plan. Section 1129 of the Bankruptcy Code requires, among other things, a showing that
confirmation of the Plan will not be followed by liquidation or the need for further financial reorganization of the Debtors, and that the value of distributions to dissenting holders of Claims and Interests may not be less than the value such
holders would receive if the Debtors were liquidated under chapter 7 of the Bankruptcy Code. Although the Debtors believe that the Plan meets such test, there can be no assurance that the Bankruptcy Court will reach the same conclusion. 

Additionally, the Solicitation must comply with the requirements of section 1125 of the Bankruptcy Code and the applicable Bankruptcy Rules with
respect to the length of the solicitation period and the adequacy of the information contained in this Disclosure Statement. 
  

	 	(b)	Failure to Satisfy the Conditions Precedent to Confirmation in the Plan and the Terms of the Plan Support Agreement. 

 The Debtors anticipate that the Plan will be consummated prior to the deadline for governmental units (as defined in section 101(27) of the Bankruptcy
Code, the “Governmental Units”) to file proofs of prepetition claim (the “Governmental Unit Bar Date”). The Debtors have filed or will file shortly a motion seeking an order (the “Estimation
Order”) of the Bankruptcy Court allowing, disallowing or estimating (for purposes of allowance) all Claims that are contingent, unliquidated, and/or disputed, including Claims of Governmental Units. In the event the Debtors are unable
to obtain entry of the Estimation Order, and thereby satisfy certain conditions and terms of the Plan and/or the deadlines set forth in the Plan Support Agreement (which deadlines may be amended and/or extended pursuant to the terms of the Plan
Support Agreement), the Debtors may be unable to seek confirmation of the Plan. 
  

	 	4.	Failure to Consummate the Plan. 

 One condition to
consummation of the Plan is the entry of the Confirmation Order which will approve, among other things, the assumption of the majority of the Debtors’ executory contracts and unexpired leases and the execution of the Amended Senior Secured
Notes and the Credit Agreement. As of the date of this Disclosure Statement, there can be no assurance that any or all of the foregoing conditions will be met (or waived) or that the other conditions to consummation, if any, will be satisfied.
Accordingly, even if the Plan is confirmed by the Bankruptcy Court, there can be no assurance that the Plan will be consummated and the restructuring completed. 
  

	 	(b)	Objections to Classification of Claims. 

 Section 1122
of the Bankruptcy Code provides that a plan of reorganization may place a claim or an interest in a particular class only if such claim or interest is substantially similar to the other claims or interests in such class. The Debtors believe that the
classification of Claims and Interests under the Plan complies with the requirements set forth in the Bankruptcy Code. However, there can be no assurance that the Bankruptcy Court will reach the same conclusion. 
  

 - 89 - 

	 	(c)	Size and Amount of Allowed Claims and Interests. 

 While
the Debtors believe that they have accurately estimated the size and amount of the claims that may be asserted against the Debtors, there may be Claims and Interests that the Debtors may not be aware of or that may not be discharged as a result of
these Reorganization Cases. To that end, to the extent the size and amount of the Allowed Claims and Allowed Interests are greater than the Debtors estimated, recoveries on such Claims and Interests, may be different then the estimates proposed
herein. There can be no assurance that the size and amount of Allowed Claims and Interests will not be less than or greater than the size and amounts estimated herein. 
  

	 	(d)	Election for Lump Sum Cash Payment by Holders of Allowed General Unsecured Claims. 

 The ability to elect the Lump Sum Cash Payment is neither intended to provide, nor necessarily would it provide, holders of Allowed General Unsecured Claims who make such election with the equivalent of the value of
the New Common Stock such holder would otherwise have received. The Debtors believe that the Valuation performed by CM&D, described in Section 7.2 herein, and the Debtors’ estimates of the total amount of outstanding General Unsecured
Claims that will be Allowed on the Effective Date, provide an adequate basis from which to calculate the percentage of recovery to holders of Allowed General Unsecured Claims. Nevertheless, in the event a significant number in amount of Allowed
General Unsecured Claims elect the Lump Sum Cash Payment, which payment may be less than the Cash value, as of the Effective Date, of the New Common Stock that the holder of such Allowed General Unsecured Claim would have been entitled to if it had
not elected to receive a Lump Sum Cash Payment, the total percentage of recovery by holders of Allowed Non-Election General Unsecured Claims may be greater than the amounts projected herein. The Plan includes the Lump Sum Cash Payment election to
provide the holders of Allowed General Unsecured Claims with an alternative for immediately liquidating all or a substantial portion of their entitlement to the New Common Stock into Cash for a fixed price and without related costs of future
liquidation. Further, by making the election to receive a Lump Sum Cash Payment the holder of such Allowed General Unsecured Claim eliminates the risk associated with the ability to divest the New Common Stock in the future. 
  

	12.2	Risks Relating to the Amended Senior Secured Notes, the Credit Agreement, the New Preferred Stock and the New Common Stock. 

  

	 	(a)	Variances from Financial Projections. 

 The Financial
Projections included as Exhibit 6 to this Disclosure Statement reflect numerous assumptions concerning the anticipated future performance of the Reorganized Debtors, as well as assumptions with respect to the prevailing market, economic and
competitive conditions, which are beyond the control of the Reorganized Debtors, and which may not materialize. The Debtors believe that the assumptions underlying the Financial Projections are 

  

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reasonable. However, unanticipated events and circumstances occurring subsequent to the preparation of the Financial Projections may affect the actual
financial results of the Debtors and the Reorganized Debtors. Therefore, the actual results achieved throughout the Projection Period necessarily will vary from the projected results, and these variations may be material and adverse. 
  

	 	(b)	Substantial Leverage; Ability to Service Debt. 

 Although
the Reorganized Debtors will have less indebtedness than the Debtors, the Reorganized Debtors will still have substantial indebtedness. On the Effective Date, after giving effect to the transactions contemplated by the Plan, the Reorganized Debtors
will, on a consolidated basis, have (i) approximately $10.5 million in secured indebtedness under the Tranche A Loan, (ii) a secured loan outstanding or available under the Tranche B Loan in the aggregate amount of $4 million, (iii) a
secured loan outstanding or available under the Tranche C Loan in an initial aggregate principal amount of up to $1 million, (iv) a Tranche D Loan in the amount of such postpetition Required Contribution made to the Pension Plans and any
termination liability, (v) approximately $3.45 million in secured indebtedness under the Amended Senior Secured Notes, and (vi) approximately $46.9 million in projected future funding obligations under the Pension Plans. 
 The degree to which the Reorganized Debtors will be leveraged could have important consequences because: 
  

	 	•	 	 it could affect the Reorganized Debtors’ ability to satisfy their obligations under the Amended Senior Secured Notes, the Credit Agreement, and the Reorganized
Debtors’ other obligations, including Required Contributions to the Pension Plans; 

  

	 	•	 	 a substantial portion of the Reorganized Debtors’ cash flow from operations will be dedicated to debt service and unavailable to support operations, working
capital, capital expenditures, expansion, acquisitions or general corporate or other purposes; 

  

	 	•	 	 the Reorganized Debtors’ ability to obtain additional financing in the future may be limited; 

  

	 	•	 	 the Reorganized Debtors may be more highly leveraged than some of their competitors, which may place the Reorganized Debtors at a competitive disadvantage;

  

	 	•	 	 the Reorganized Debtors’ flexibility in planning for, or reacting to, changes in their business may be limited; and 

  

	 	•	 	 it may make the Reorganized Debtors more vulnerable in the event of a downturn in their business or the economy in general. 

 The Reorganized Debtors’ ability to make payments on and to refinance their debt, including the obligations under the Amended Senior Secured Notes,
the Credit Agreement, and the Reorganized Debtors’ other obligations, including Required Contributions to the Pension Plans, will depend on their ability to generate cash in the future. This, to a certain extent, is subject to general economic,
business, financial, competitive, legislative, regulatory and other factors that are beyond the control of the Reorganized Debtors. 
  

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 There can be no assurance that the Reorganized Debtors will be able to generate sufficient cash flow from
operations or that sufficient future borrowings will be available to pay off the Reorganized Debtors’ debt obligations, including, among other obligations, the Amended Senior Secured Notes, the Credit Agreement, and the Reorganized
Debtors’ Required Contributions to the Pension Plans. The Reorganized Debtors may need to refinance all or a portion of their debt on or before maturity; however, there can be no assurance that the Reorganized Debtors will be able to refinance
any of their debt on commercially reasonable terms or at all. 
  

	 	(c)	Significant Holder. 

 Under the Plan, Hillside is
contemplated to receive at least eighty percent (80%) of the New Common Stock. Hillside may be in a position to control the outcome of actions requiring stockholder approval, including the election of directors, and its interests might conflict
with interests of other stockholders of the Reorganized Debtors. 
  

	 	(d)	Obligations Under the Amended Senior Secured Notes and the Credit Agreement 

 The Reorganized Debtors’ obligations under the Amended Senior Secured Notes and the Credit Agreement will be secured by substantially all of the assets of the Reorganized Debtors. If the Reorganized Debtors
become insolvent or are liquidated, or if there is a default under the Amended Senior Secured Notes or the Credit Agreement, and payment on any obligation thereunder is accelerated, the lenders under the Amended Senior Secured Notes or the Credit
Agreement would be entitled to exercise the remedies available to a secured lender under applicable law, and they would have a claim on the assets securing the obligations that would be superior to any claim of the holders of unsecured debt.

  

	 	(e)	Restrictive Covenants. 

 The Amended Senior Secured Notes
and the Credit Agreement will contain various covenants which may limit the discretion of the Reorganized Debtors’ management by restricting the Reorganized Debtors’ ability to, among other things, incur additional indebtedness, incur
liens, pay dividends or make certain restricted payments, consummate certain asset sales, enter into certain transactions with affiliates, merge, consolidate and/or sell or dispose of all or substantially all of their assets. In addition, it is
expected that the Amended Senior Secured Notes and the Credit Agreement will require the Reorganized Debtors to meet certain financial covenants set forth in the Plan. 
 Any failure to comply with the restrictions of the Amended Senior Secured Notes and the Credit Agreement or any other subsequent financing agreements may result in an event of default. An event of default may allow
the creditors to accelerate the related debt as well as any other debt to which a cross-acceleration or cross-default provision applies. If the Reorganized Debtors are unable to repay amounts outstanding under the Amended Senior Secured Notes or the
Credit Agreement when due, the lenders thereunder could, subject to the 

  

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terms of the relevant agreements, seek to foreclose on the collateral which is pledged to secure the indebtedness outstanding under such facility and notes.
Substantially all of the assets of the Reorganized Debtors will be pledged as security under the Amended Senior Secured Notes and the Credit Agreement. 
  

	 	(f)	Lack of Trading Market. 

 It is anticipated that there will
be no active trading market for the New Common Stock. Reorganized Ampex has no present intention to register any of the securities under the Securities Act, nor to apply to list any of the foregoing on any national securities exchange. Accordingly,
there can be no assurance that any market will develop or as to the liquidity of any market that may develop for any such securities. In addition, Reorganized Ampex will not be required to file reports with the SEC or otherwise provide financial or
other information to the public which may further impair liquidity and prevent brokers or dealers from publishing quotations. 
  

	 	(g)	Restrictions on Transfer. 

 Holders of Plan Securities who
are deemed to be “underwriters” as defined in section 1145(b) of the Bankruptcy Code will be restricted in their ability to transfer or sell their securities. These Persons will be permitted to transfer or sell such securities only
pursuant to (a) “ordinary trading transactions” by a holder that is not an “issuer” within the meaning of section 1145(b), or (b) the provisions of Rule 144 under the Securities Act, if available, or another available
exemption from the registration requirements of the Securities Act. Reorganized Ampex has no current plans to register at a later date, post-emergence, any of its securities under the Securities Act or under equivalent state securities laws such
that the recipients of the New Common Stock would be able to resell their securities pursuant to an effective registration statement. Moreover, Reorganized Ampex does not currently intend to make publicly available the information required by Rule
144, thereby limiting the ability of holders of securities to avail themselves of Rule 144. 
 The New Stockholders Agreement and Amended
Certificate of Incorporation contain restrictions on stockholders’ ability to transfer the New Common Stock. The summary of these documents contained herein is qualified in its entirety by the Plan and the applicable Plan Documents. The New
Stockholders Agreement and the Amended Certificate of Incorporation restrict transfers of New Common Stock to any Third Party (as defined in the New Stockholders Agreement), without the prior consent of a majority of the board of directors of
Reorganized Ampex. The Restrictions on Transfers of New Common Stock shall not apply to (i) any transfer by a Hillside Investor of Common Stock (as defined in the New Stockholders Agreement) or (ii) any transfer by a Non-Hillside Holder
(as defined in the New Stockholders Agreement) to a permitted transferee, which includes (A) any Person (as defined in the New Stockholders Agreement) directly or indirectly owning, controlling or holding with power to vote a majority of the
outstanding voting securities of and equity or beneficial interests in such other Person, (B) any Person a majority of whose outstanding voting securities and equity or beneficial interests are directly or indirectly owned, controlled or held
with power to vote by such other Person, (C) any Person a majority of whose outstanding voting securities and equity or other beneficial interests are directly or indirectly owned, controlled or held with power to 

  

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vote by a Person directly or indirectly owning, controlling or holding with power to vote a majority of the outstanding voting securities and equity or other
beneficial interests of such other Person with whom affiliate status is being tested and (D) a trust, limited partnership or limited liability company benefiting solely such Person and/or any spouse, parent, sibling or descendant of such Person
(or a spouse, parent, sibling or descendant of any director or officer of such Person (each (A)-(D), a “Permitted Transferee”). Furthermore, these documents restrict transfers that would result in the New Common Stock of
Reorganized Ampex being held of record by more than 300 persons, unless such transfer is otherwise approved by the board of directors. 
 Certain transfers, including pursuant to a merger, that meet certain requirements are not subject to such a condition on transfer. In addition to the foregoing transfer restrictions, the stockholder that proposes to effect a transfer must
submit a written request that includes, among other things, if applicable, reasonably sufficient information to establish that the transfer does not violate or result in registration being required under applicable securities laws or laws relating
to investment companies or advisors. 
 All certificates for shares of the New Common Stock shall conspicuously bear the following legend:

 THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES
LAWS AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF 1933, AS AMENDED, OR AN EXEMPTION THEREFROM AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES
LAWS. 
 In addition to the legend required by Section 3.1(f)(i) of the New Stockholders Agreement, all certificates for shares of
Common Stock shall conspicuously bear the following legend: 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VARIOUS CONDITIONS
INCLUDING, CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER AS SET FORTH IN THE CORPORATION’S CERTIFICATE OF INCORPORATION, AS AMENDED (THE “CERTIFICATE OF INCORPORATION”), AND THE STOCKHOLDERS’ AGREEMENT DATED AS OF
[                    ], 2008 AMONG THE CORPORATION AND THE STOCKHOLDERS NAMED THEREIN, AS IT MAY BE AMENDED FROM TIME TO TIME (THE
STOCKHOLDERS’ AGREEMENT). NO REGISTRATION OR TRANSFER OF THESE SHARES WILL BE MADE ON THE BOOKS OF THE 

  

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CORPORATION UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF RECORD OF THE
SHARES REPRESENTED BY THIS CERTIFICATE A COPY OF THE CERTIFICATE OF INCORPORATION AND STOCKHOLDERS’ AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF STOCK, UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF
BUSINESS. 
 In addition to transfer restrictions under the applicable Securities Laws, the indenture governing the Amended Senior Secured
Notes also contains restrictions on the holders’ ability to transfer those securities. The certificates, if any, evidencing the Amended Senior Secured Notes will contain the following legend on the face thereof in substantially the following
form: 
 UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT
AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN. 
 TRANSFERS OF THIS
GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS
MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTION 2.07 OF THE INDENTURE. 
  

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 See Article XIII “Securities Law Matters” for additional information regarding
restrictions on resales of the Plan Securities. 
  

	 	(h)	Restrictions Related to Foreign Ownership of New Common Stock. 

 As set forth more fully in the Amended Certificate of Incorporation of Reorganized Ampex, Class A Shares of New Common Stock owned of record or beneficially by any Restricted Foreign Holder (defined below) shall not be entitled to vote
on any matter submitted to a vote of stockholders and shall not be considered in determining whether any voting level set forth in the Amended Certificate of Incorporation of Reorganized Ampex has been met. A “Restricted Foreign
Holder” is any person identified by name or status by the United States Department of Defense (the “DoD”) in any notice to Reorganized Ampex, whether written or oral, advising Reorganized Ampex that such
person’s ownership of New Common Stock is the subject of an investigation, inquiry or other action with respect to foreign ownership, control or influence of or on Reorganized Ampex which could adversely affect the Reorganized Debtors’
facility security clearances granted to it by the United States government to enable Reorganized Ampex to perform classified government contracts. Upon receipt by the Reorganized Ampex of notice of any final determination by the DoD that such
person’s ownership of New Common Stock will not adversely affect the Reorganized Debtors’ security clearance, such person shall no longer be a Restricted Foreign Holder. If the DoD’s final determination is that such person’s
ownership of New Common Stock adversely affects the Reorganized Debtors’ U.S. government facility security clearances, then such person shall continue to be a Restricted Foreign Holder for so long as such final determination remains in effect.
Within 10 days of receipt of any such notice of investigation, inquiry, other action or final determination, Reorganized Ampex shall send notice thereof, and of the consequences hereunder thereof, to any affected Restricted Foreign Holder.

 All certificates for the Corporation’s Class A Shares shall conspicuously bear the following legend: 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE RESTRICTED PURSUANT TO THE CERTIFICATE OF INCORPORATION OF THE CORPORATION TO THE EFFECT THAT THE VOTING
RIGHTS OF CERTAIN HOLDERS OF THE CORPORATION’S SECURITIES MAY BE NULLIFIED IN THE EVENT OF AN INQUIRY OR DETERMINATION BY THE U.S. DEPARTMENT OF DEFENSE REGARDING FOREIGN OWNERSHIP OF THE CORPORATION AND ITS POSSIBLE EFFECTS ON NATIONAL
SECURITY. 
  

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	 	(i)	The Valuation of New Common Stock is Not Intended to Represent the Trading Value of the New Common Stock. 

 The Valuation of the Reorganized Debtors, set forth in Section 7.2(a) herein prepared by CM&D with the assistance of the Debtors and based on the
Financial Projections developed by the Debtors’ management, is based on the assumption that the holders of Allowed General Unsecured Claims will receive all of the issued New Common Stock in Reorganized Ampex in full and final satisfaction of
their Claims and is not intended to represent the trading values of New Common Stock in public or private markets. 
  

	 	(j)	Dividend Policies. 

 All of the Reorganized Debtors’
cash flow will be required to be used in the foreseeable future (a) to make payments under the Amended Senior Secured Notes or the Credit Agreement and the Required Contributions to the Pension Plans, (b) to fund the Reorganized
Debtors’ other obligations under the Plan, and (c) for working capital and capital expenditure purposes. Accordingly, Reorganized Ampex does not anticipate paying cash dividends on the New Common Stock in the foreseeable future.

  

	12.3	Risks Relating to Tax and Accounting Consequences of the Plan. 

  

	 	(a)	Certain Tax Consequences of the Plan Raise Unsettled and Complex Legal Issues and Involve Factual Determinations. 

 The federal income tax consequences of the Plan are complex and are subject to significant uncertainties. The Debtors currently do not intend to seek any
ruling from the IRS on the tax consequences of the Plan. Even if the Debtors decide to request a ruling, there would be no assurance that the IRS would rule favorably or that any ruling would be issued before the Effective Date. In addition, in such
case, there would still be issues with significant uncertainties, which would not be the subject of any ruling request. Thus, there can be no assurance that the IRS will not challenge the various positions the Debtors have taken, or intend to
take, with respect to the tax treatment in the Plan, or that a court would not sustain such a challenge. 
  

	 	(b)	Use of Historical Financial Information. 

 As a result of
the consummation of the Plan and the transactions contemplated thereby, the Reorganized Debtors believe they will be subject to the fresh-start accounting rules. Fresh-start accounting allows for the assessment of every balance sheet account for
possible fair value adjustment, resulting in the emergence of a new company recapitalized and revalued. This process is guided by purchase price allocation standards under GAAP. 
  

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	12.4	Risks Associated with the Business. 

  

	 	(a)	The Debtors’ Reorganization Cases May Negatively Impact the Company’s Future Operations. 

 While the Debtors believe they will be able to emerge from chapter 11 relatively expeditiously, there can be no assurance as to timing for approval of
the Plan or the Debtors’ emergence from chapter 11. Additionally, notwithstanding the support of their largest creditors, the Reorganization Cases may adversely affect the Company’s ability to retain existing customers, attract new
customers and maintain contracts that are critical to its operations. 
  

	 	(b)	Operating Results and Income May Fluctuate. 

 The
Debtors’ businesses have generally been subject to certain fluctuations in operating results and incomes. These fluctuations result from, among other things, receipt of lump sum, prepaid and ongoing licensing royalties; the expiration of
various patents; products sales by licensees; new licenses with licensees; litigation expenses; debt prepayments and interest expense; the amount and timing of pension contributions and related funding obligations; customer orders and government
spending patterns; availability and market acceptance of new products and services; timing of significant orders and new product announcements; and order cancellations. 
 For example, historically, the Company’s licensing revenue has fluctuated widely due to a number of factors that cannot be predicted, such as the timing and negotiated terms of patent settlement agreements in any
particular period, the extent to which third parties acknowledge use of patented technology, the extent to which the Company must pursue litigation in order to enforce its patents to protect its business, and the ultimate success of the
Company’s licensing and litigation activities. Licensing revenue also depends in part on fluctuating sales volumes and prices of licensees’ products that incorporate its technology. 
 Similarly, the Recorders Segment is subject to fluctuation in revenues. The Recorders Segment is dependent on the funding of government defense programs,
which may come under increased pressure in the future, leading to a decline in sales. In addition, a substantial portion of the Company’s Recorders Segment backlog at a given time is normally shipped within one or two quarters thereafter, and
revenues in any quarter are heavily dependent on orders received in that quarter and the immediately preceding quarter. 
  

	 	(c)	Provision for Income Taxes. 

 The provision for income
taxes in the years ended December 31, 2007, 2006 and 2005 included foreign and state income taxes and withholding taxes on royalty revenue. In 2005, the Company was able to lower its tax provision by utilizing NOL carryforwards. At
December 31, 2007, the Company had federal NOLs for income tax purposes of approximately $200 million, expiring in the years 2009 through 2027. In addition, the Company had federal capital loss carryforwards totaling $8.8 million at
December 31, 2007, which may be utilized to offset capital gains, if any, generated in future periods. 
  

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 Cancellation of indebtedness arising from the Reorganization Cases is anticipated to reduce the amount of
NOL carryforwards by approximately $50 million. A corporation’s use of its net operating loss carryforwards is generally limited under section 382 of the Internal Revenue Code of 1986 (the “IRC”) if a corporation
undergoes an “ownership change.” When an “ownership change” occurs pursuant to a case commenced under chapter 11 of the Bankruptcy Code, the general limitation under section 382 of the IRC may not apply if certain requirements
are satisfied under either section 382(l)(5) or section 382(l)(6) of the IRC. The Company will experience an “ownership change” in connection with these Reorganization Cases, but the Company has not yet determined whether it will be
eligible for or rely on the special rule under section 382(l)(5) or the special rule under section 382(l)(6) of the IRC. If the Company relies on section 382(l)(5) of the IRC, a second “ownership change” within two years from the Effective
Date could eliminate completely the Company’s ability to utilize its net operating loss carryovers. Regardless of whether the Company relies on section 382(l)(5) of the IRC, an “ownership change” after the Effective Date could
significantly limit the Company’s ability to utilize its net operating loss carryforwards for taxable years including or following such “ownership change.” 
 The remaining provision for income taxes in 2007, 2006 and 2005 consisted primarily of foreign withholding taxes on royalty revenue generated in certain locations in Asia. 
  

	 	(d)	Licensing Revenue Has Been Materially and Adversely Affected Due to the Expiration of Certain Patents. 

 While the Company continues to believe that certain patents are being used in digital still cameras and camera-equipped cellular phones which do not
expire until after 2012, the manufacturers of these products discontinued royalty payments to the Debtors after the expiration of the 121 Patent. To date the Company has been unable to prove infringement of any of its other digital imaging patents,
which the Company believes may be used in a variety of digital imaging consumer products. Even if the Company is able to prove infringement, it would have to obtain resources from law firms willing to enter into contingency fee arrangements to
support its licensing initiatives and to potentially defend against litigation that prospective licensees might initiate in exchange for a percentage of future royalties. There can be no assurance that these arrangements could be obtained.

 The success of the Company’s Licensing and Recorders Segments depends, in part, upon its ability to establish and maintain the
proprietary nature of its technology through the patent process. There can be no assurance that one or more of the Company’s patents will not be successfully challenged, invalidated or circumvented or that the Company will otherwise be able to
rely on such patents for any reason. In addition, competitors, many of whom have substantial resources and have made substantial investments in competing technologies, may seek to apply for and obtain patents that restrict the Company’s ability
to make, use and sell its products either in the U.S. or in foreign markets. Monitoring unauthorized use of the Company’s technology is difficult, and it cannot be certain that the steps taken will prevent unauthorized use, particularly in
foreign countries where the laws may not protect proprietary rights as fully as the laws of the U.S. If any of the Company’s patents are successfully challenged, invalidated or circumvented or its right or ability to manufacture its products
becomes restricted, its ability to continue to manufacture and market its products could be adversely affected, which would likely have a material adverse effect upon the Company’s business, financial condition and results of operations.

  

 - 99 - 

 Unless the Company is able to develop or acquire new patents in the digital imaging field or other
fields, or to demonstrate infringement of its later expiring patents, its licensing revenues will cease after 2014. Moreover, if other companies develop patented proprietary technology similar to the Company’s or competing technologies, the
Company’s competitive position could be materially weakened and its licensing revenues may be reduced. 
  

	 	(e)	The Company’s Business Depends Materially on U.S. Government Spending. 

 The Recorders Segment depends materially on continued expenditures by the U.S. Government on intelligence and defense programs. Significant portions of data acquisition and instrumentation recorder sales reflect
purchases by prime contractors to the federal government, which are subject to significant fluctuations. The current U.S. budget deficit is expected to result in the cancellation of various defense programs. The Company does not know whether
programs in which it participates, and from which it gains revenue, will be affected by such cuts, program delays or deferred funding. The loss or significant decline in spending on various imaging and intelligence gathering programs, in which the
Company is a subcontractor to prime government contractors, or lack of acceptance of the Company’s new products could have a material adverse effect on revenues and earnings. 
 In addition, other factors relating to the markets for the Company’s instrumentation products and to competition in these markets may affect future
sales of these products. The Company’s DDRs disk-based data acquisition recorder and its DSRs solid state memory-based data acquisition recorder have been designed to replace a large installed base of DCRsi tape-based data acquisition recorders
over several years. However, there can be no assurance that these products will achieve the same level of market acceptance. Also, as the Company’s DST and DCRsi tape-based products are replaced, it is expected that revenues from the sale of
spare parts, service and tape associated with these products will decline. 
  

	 	(f)	Substantial Unfunded Pension Liabilities May Adversely Affect the Company’s Liquidity and its Ability to Maintain or Grow Operations. 

 The Pension Plans remain substantially underfunded. At December 31, 2007, unfunded accumulated plan benefit obligations under the Ampex Pension Plan
and the Media Pension Plan totaled $44.2 million and $13.5 million, respectively, and have been recognized as liabilities on the Company’s consolidated balance sheet. 
 Future pension contributions payable under these pension plans will be based on actual investment performance, life expectancy of the participants and
other factors, which factors may differ from the assumptions used to project future pension contributions. 
 Under the PBGC Agreement,
Hillside is required to advance Required Contributions for the Pensions Plans if the Company cannot make such contributions. As part of the Plan, Hillside will remain jointly and severally obligated to fund Required Contributions if the Reorganized
Debtors are unable to do so. The Company believes that Hillside has sufficient 

  

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assets to fund future Required Contributions under the PBGC Agreement, but the Company does not own or control Hillside and, except for the provisions of the
PBGC Agreement and the related HSA Agreement, the Company’s ability to borrow from Hillside amounts necessary to satisfy the Required Contributions is beyond its control. 
  

	 	(g)	Rapid Technological Change or the Company’s Ability to Respond and to Develop New Products May Affect its Business. 

 All the industries and markets from which the Company derives or expects to derive revenues, directly or through its licensing program, are characterized
by continual technological change and the need to introduce new products, product upgrades and patentable technology. This has required, and will continue to require, substantial amounts of capital to be spent on the research, development and
engineering of new products and advances to existing products, as well as for assessing infringement of the Company’s patents by manufacturers of consumer digital video products. There are no assurances that the Company’s existing
products, technologies and services will not become obsolete or that any new products, technologies or services will win commercial acceptance. Obsolescence of existing product lines, or inability to develop and introduce new products and services,
could have a material adverse effect on the Company’s revenues and results of operations in the future. The development and introduction of new technologies, products and services are subject to inherent technical and market risks, and there
can be no assurance that the Company will be successful in this regard. In addition, reductions in research and development programs could adversely affect the Company’s ability to remain competitive. 
 Because the Recorders Segment is primarily focused on data acquisition and instrumentation products, the Company has devoted the majority of its research
and development to producing new solid state- and disk-based instrumentation recorders. The Company does not currently intend to invest additional development resources to extend the life of its 19-millimeter mass storage products beyond the quad
density format other than as required to support the needs of its customers. If the Recorders Segment were to experience further declines in product revenues, the Company may be required to reduce future research, development and engineering costs,
which may have a material adverse affect on results of operations. 
  

	 	(h)	Competitors in the Recorders Segment May Have Greater Financial Resources. 

 The Recorders Segment encounters significant competition in all of the markets for its products and services. Many of the Company’s competitors in this industry have greater resources and access to capital. In
the instrumentation market, which currently is the Recorders Segment’s major area of focus, the Company competes primarily with companies that depend on government contracts for a major portion of their revenues, including L-3 Communications
Corporation, Calculex and Sypris Solutions, Inc. While the number of competitors in this industry has decreased in recent years as government spending in many areas has declined, many of these competitors have greater financial resources than does
the Company. 
  

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	 	(i)	The Company Relies on a Limited Number of Key Suppliers and Vendors to Operate its Business. 

 The Recorders Segment purchases certain components such as customized integrated circuits, memory chips and magnetic media products from a single or a
small number of domestic or foreign manufacturers. Significant delays in deliveries or defects in such components may, from time to time, adversely affect manufacturing operations, pending qualification of an alternative supplier. In addition, the
Company produces highly engineered products in relatively small quantities. As a result, its ability to cause suppliers to continue production of certain products on which it depends, or to deliver those products to it on a timely basis, may be
limited. These suppliers may require the Company to purchase lifetime quantities of their products or components, which may cause inventories to increase beyond levels required to support current revenues. The Company does not generally enter into
long-term raw materials or components supply contracts. Accordingly, if the Company experiences problems with these manufacturers, the Company could fail to obtain sufficient resources to operate its business successfully. 
  

	 	(j)	International Operations Subject the Company to Social, Political and Economic Risks of Doing Business in Foreign Countries. 

 Although the Company has significantly curtailed its Recorders Segment’s international operations in prior years, sales to foreign customers
(including U.S. export sales) continue to be significant to operations. However, international operations are subject to a number of special risks, including limitations on repatriation of earnings, restrictive actions by local governments, and
nationalization. Additionally, export sales are subject to export regulation and restrictions imposed by U.S. government agencies. Although fluctuations in the value of foreign currencies can affect the results of operations, the Company does not
normally seek to mitigate exposure to exchange rate fluctuations by hedging its foreign currency positions. Accordingly, revenues from international operations are subject to numerous risks, any of which may have an adverse impact on the results of
operations. 
  

	 	(k)	The Loss of One or More of the Company’s Key Personnel Could Disrupt Operations and Adversely Affect Financial Results. 

 The Company is highly dependent upon the availability and performance of its executive officers and directors, including senior executives in its
corporate licensing division and Data Systems. The Company has not entered into employment agreements with any of its key employees other than D. Gordon Strickland, Chief Executive Officer and President of Ampex whose employment agreement would not
necessarily protect the Company from the loss of his services. Additionally, the Company does not maintain key man life insurance on any of these individuals. Accordingly, the loss of services of any of the Company’s executive officers could
materially adversely affect the Company’s business, financial condition and operating results. 
  

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	 	(l)	The Company is Subject to Environmental Regulation and Could Incur Substantial Costs as a Result of Violations of or Liabilities Under Environmental Laws. 

The Company’s facilities are subject to numerous federal, state and local laws and regulations designed to protect the environment from waste
emissions and hazardous substances. Owners and occupiers of sites containing hazardous substances, as well as generators and transporters of hazardous substances, are subject to broad liability under various federal and state environmental laws and
regulations, including liability for investigative and cleanup costs and damages arising out of past disposal activities. The Company is currently engaged in various environmental investigations, remediation and/or monitoring activities at several
sites located off our facilities. There can be no assurance that, among other things, the amount of actual environmental liabilities will not be greater than the estimates used for purposes of the disclosures contained herein or in the Plan, or that
the Company will not incur further liability. Further, there can be no assurance that the Company will be able to obtain a discharge of any potential obligations with respect to environmental matters upon the Effective Date or that additional
liabilities with respect to environmental matters will not be asserted in the future. In addition, changes in environmental regulations could impose the need for additional capital equipment or other requirements. Such liabilities or regulations
could have a material adverse effect on the Company in the future. 
  

	 	(m)	Legal Matters. 

 The Company is party to routine litigation
incidental to its business, including litigation relating to certain cases brought for recovery of worker’s compensation. It is not anticipated that any current or pending lawsuit, either individually or in the aggregate, is likely to have a
material adverse effect on the Company’s financial condition. However, no assurances can be provided that the Company will be able to successfully defend or settle all pending or future purported claims, and the Company’s failure to do so
may have a material adverse effect on the Reorganized Debtors. A brief summary of the Debtors’ largest litigation matters include: 
  

	 	1.	William Cawfield v. A.W. Chesterton, Inc., et al. 

 On February 15, 2008, William Cawfield filed suit against Ampex Corporation, among others, alleging negligence and wanton misconduct with respect to the plaintiff’s fathers’ exposure to asbestos and asbestos-contaminated
products. Mr. Cawfield additionally alleges that Ampex was involved in negligent and willful spoliation of evidence, is subject to strict liability, and breached its duties to provide a safe workplace. Each count seeks $50,000 in damages.

  

	 	2.	Ampex Corporation v. Eastman Kodak, et al. 

 On
October 21, 2004, Ampex instituted litigation in the United States District Court for the District of Delaware (the “District Court”) against Eastman Kodak Company, Altek Corporation, and Chinon Industries, Inc.
(“Kodak”), alleging infringement of its U.S. patent 4,821,121. The Company sought an injunction and damages for infringement. The Company filed an appeal to the Court of Appeals for the Federal Circuit (the
“Federal Circuit”). The Federal Circuit affirmed the District Court’s decision. Kodak is currently pursuing an action for costs and attorney fees in the District Court. It is not yet possible to determine the outcome of
this action. 
  

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	 	3.	Reuters Newsmedia, Inc. v. Ampex Corporation and Quantegy, Inc. f/k/a Ampex Media Corporation, Inc. 

 In October 1995, Reuters and Ampex Corporation entered into a settlement agreement authorizing Reuters to return equipment in exchange for a credit to be
used during the following two years. Reuters attempted once during the two-year period and once thereafter to tender for the tape purchases made from Quantegy, Inc. Ampex refused to issue credits because Quantegy, Inc. was not a related entity at
the time of the Reuters tape purchases. On June 9, 1999, Reuters filed a complaint alleging (i) breach of contract, (ii) unjust enrichment, and (iii) money had and received. It is not yet possible to determine the outcome of this
action. 
  

	 	4.	Robert Ross v. Asbestos Defendants 

 Ampex has been
joined with multiple other defendants by Robert Ross, based on alleged exposure to asbestos while working as a contractor at Ampex during the 1960’s. Counsel has been engaged, an answer to the complaint has been filed, and the case has been
tendered to the Company’s insurance carriers who are reviewing coverage. It is not yet possible to determine the outcome of this action. 
 ARTICLE XIII. 
 SECURITIES LAW MATTERS 
  

	13.1	Plan Securities. 

 The Plan
provides for Reorganized Debtors to issue to holders of the Senior Secured Notes, the Amended Senior Secured Notes. The Plan further provides for the Reorganized Debtors to incur on account of the Hillside Secured Claims, the Tranche A Loan. The
Plan also provides for the Reorganized Debtors to incur certain obligations under the Tranche B Loan, Tranche C Loans and Tranche D Loans, if any. The Plan provides for the Reorganized Debtors to issue to the holders of the Allowed Non-Election
General Unsecured Claims in Class 5, New Common Stock. For the avoidance of doubt, the CPR Administrator Rights Notices and the Distribution Rights are not securities and, as such, are not subject to registration or exempt from registration under
section 1145 of the Bankruptcy Code. 
 The Debtors believe that all of the Plan Securities constitute “securities,” as defined in
Section 2(a)(1) of the Securities Act, section 101 of the Bankruptcy Code, and applicable state securities laws. The Debtors further believe that the offer and sale of the Plan Securities pursuant to the Plan are, and subsequent transfers of
the Plan Securities by the holders thereof that are not “underwriters,” as defined in Section 2(a)(11) of the Securities Act and in the Bankruptcy Code will be, exempt from federal and state securities registration requirements under
various provisions of the Securities Act, the Bankruptcy Code and state securities laws. 
 The New Stockholders Agreement and Amended
Certificate of Incorporation contain restrictions on stockholders’ ability to transfer the New Common Stock. Subject to 

  

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certain limited exceptions, the New Stockholders Agreement and the Amended Certificate of Incorporation restrict transfers of New Common Stock to any Third
Party (as defined in the New Stockholders Agreement), without the prior consent of a majority of the board of directors of Reorganized Ampex. 
 All certificates for shares of the New Common Stock shall conspicuously bear the following Legend: 
 THE SHARES REPRESENTED BY THIS
CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR ANY STATE SECURITIES LAWS AND MAY NOT BE SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT IN ACCORDANCE WITH THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OF
1933, AS AMENDED, OR AN EXEMPTION THEREFROM AND, IN EACH CASE, IN COMPLIANCE WITH APPLICABLE STATE SECURITIES LAWS. 
 In addition to the
legend required by Section 3.1(f)(i) of the New Stockholders Agreement, all certificates for shares of Common Stock shall conspicuously bear the following legend: 
 THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO VARIOUS CONDITIONS INCLUDING, CERTAIN RESTRICTIONS ON SALE, DISPOSITION OR TRANSFER AS SET FORTH IN THE CORPORATION’S CERTIFICATE OF INCORPORATION, AS
AMENDED (THE “CERTIFICATE OF INCORPORATION”), AND THE STOCKHOLDERS’ AGREEMENT DATED AS OF [            ], 2008 AMONG THE CORPORATION AND THE STOCKHOLDERS NAMED
THEREIN, AS IT MAY BE AMENDED FROM TIME TO TIME (THE STOCKHOLDERS’ AGREEMENT). NO REGISTRATION OR TRANSFER OF THESE SHARES WILL BE MADE ON THE BOOKS OF THE CORPORATION UNLESS AND UNTIL SUCH RESTRICTIONS SHALL HAVE BEEN COMPLIED WITH. THE
CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH HOLDER OF RECORD OF THE SHARES REPRESENTED BY THIS CERTIFICATE A COPY OF THE CERTIFICATE OF INCORPORATION AND STOCKHOLDERS’ AGREEMENT, CONTAINING THE ABOVE-REFERENCED RESTRICTIONS ON TRANSFERS OF
STOCK, UPON WRITTEN REQUEST TO THE CORPORATION AT ITS PRINCIPAL PLACE OF BUSINESS. 
  

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	13.2	Issuance and Resale of Plan Securities Under the Plan. 

  

	 	(a)	Exemption from Registration. 

 Section 3(a)(9) of the
Securities Act provides that Section 5 of the Securities Act and, by virtue of Section 18 of the Securities Act, any state law requirements for the offer and sale of a security do not apply to any security exchanged by an issuer with its
existing security holders exclusively where no commission or other remuneration is paid or given directly or indirectly for soliciting such exchange. Section 1145 of the Bankruptcy Code provides that Section 5 of the Securities Act and any
state law requirements for the offer and sale of a security do not apply to the offer or sale of stock, options, warrants or other securities by a debtor if (a) the offer or sale occurs under a plan of reorganization, (b) the recipients of
the securities hold a claim against, an interest in, or claim for administrative expense against, the debtor, and (c) the securities are issued in exchange for a claim against or interest in a debtor or are issued principally in such exchange
and partly for cash and property. In reliance upon these exemptions and Section 4(2) of the Securities Act and Regulation D promulgated thereunder, the Plan Securities will not be registered under the Securities Act or any state securities
laws. To the extent that the Plan Securities are issued under the Plan and are covered by section 1145 of the Bankruptcy Code, the Plan Securities may be resold without registration under the Securities Act or other federal securities laws, unless
the holder is an “underwriter” (as discussed below) with respect to such securities, as that term is defined in Section 2(a)(11) of the Securities Act and in the Bankruptcy Code. In addition, the Plan Securities generally may be able
to be resold without registration under state securities laws pursuant to various exemptions provided by the respective laws of those states; however, the availability of such exemptions cannot be known unless individual state securities laws are
examined. Therefore, recipients of the Plan Securities are advised to consult with their own legal advisors as to the availability of any such exemption from registration under state law in any given instance and as to any applicable requirements or
conditions to such availability. 
  

	 	(b)	Resales of Plan Securities; Definition of Underwriter. 

 Section 1145(b)(1) of the Bankruptcy Code defines an “underwriter” as one who, except with respect to “ordinary trading transactions” of an entity that is not an “issuer,” (a) purchases a claim
against, interest in, or claim for an administrative expense in the case concerning, the debtor, if such purchase is with a view to distribution of any security received or to be received in exchange for such claim or interest, or (b) offers to
sell securities offered or sold under a plan for the holders of such securities, or (c) offers to buy securities offered or sold under a plan from the holders of such securities, if such offer to buy is (i) with a view to distribution of
such securities and (ii) under an agreement made in connection with the plan, with the consummation of the plan, or with the offer or sale of securities under the plan, or (d) is an issuer of the securities within the meaning of
Section 2(a)(11) of the Securities Act. In addition, a Person who receives a fee in exchange for purchasing an issuer’s securities could also be considered an underwriter within the meaning of Section 2(a)(11) of the Securities Act.

 The definition of an “issuer” for purposes of whether a Person is an underwriter under section 1145(b)(1)(D) of the Bankruptcy
Code, by reference to Section 2(a)(11) of the Securities Act, includes as “statutory underwriters” all persons who, directly or indirectly, 

  

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through one or more intermediaries, control, are controlled by, or are under common control with, an issuer of securities. The reference to
“issuer,” as used in the definition of “underwriter” contained in Section 2(a)(11), is intended to cover “controlling persons” of the issuer of the securities. “Control,” as defined in Rule 405 of the
Securities Act, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract, or otherwise. Accordingly, an
officer or director of a reorganized debtor or its successor under a plan of reorganization may be deemed to be a “controlling person” of such debtor or successor, particularly if the management position or directorship is coupled with
ownership of a significant percentage of the reorganized debtor’s or its successor’s voting securities. Moreover, the legislative history of section 1145 of the Bankruptcy Code suggests that a creditor who owns ten percent (10%) or
more of a class of securities of a reorganized debtor may be presumed to be a “controlling person” and, therefore, an underwriter. 
 Resales of the Plan Securities by Persons deemed to be “underwriters” (which definition includes “controlling person”) are not exempted by section 1145 of the Bankruptcy Code from registration under the Securities Act or
other applicable law. Under certain circumstances, holders of Plan Securities who are deemed to be “underwriters” may be entitled to resell their Plan Securities pursuant to the limited safe harbor resale provisions of Rule 144. Generally,
Rule 144 would permit the public sale of securities received by such person if current information regarding the issuer is publicly available and if volume limitations, manner of sale requirements and certain other conditions are met. However, the
Reorganized Debtors do not presently intend to make publicly available the requisite current information regarding the Reorganized Debtors and, as a result, Rule 144 will not be available for resales of Plan Securities by persons deemed to be
underwriters. 
 Whether any particular Person would be deemed to be an “underwriter” (including whether such Person is a
“controlling person”) with respect to the Plan Securities would depend upon various facts and circumstances applicable to that Person. Accordingly, the Debtors express no view as to whether any Person would be deemed an
“underwriter” with respect to the Plan Securities. In view of the complex nature of the question of whether a particular Person may be an underwriter, the Debtors make no representations concerning the right of any Person to freely resell
Plan Securities. Accordingly, the Debtors recommend that potential recipients of Plan Securities consult their own counsel concerning whether they may freely trade such securities without compliance with the federal and state securities laws.

 ARTICLE XIV. 
 CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE PLAN 
  

	14.1	Introduction. 

 The following
discussion summarizes certain federal income tax consequences expected to result from the consummation of the Plan. This discussion is only for general information purposes and only describes the expected tax consequences to holders entitled to vote
on the Plan. It is not a complete analysis of all potential federal income tax consequences 

  

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and does not address any tax consequences arising under any state, local or foreign tax laws or federal estate or gift tax laws. This discussion is based on
the Internal Revenue Code of 1986, as amended (the “IRC”), Treasury Regulations promulgated thereunder, judicial decisions, and published rulings and administrative pronouncements of the Internal Revenue Service (the
“IRS”), all as in effect on the date of this Disclosure Statement. These authorities may change, possibly retroactively, resulting in federal income tax consequences different from those discussed below. No ruling has been or
will be sought from the IRS, and no legal opinion of counsel will be rendered, with respect to the matters discussed below. There can be no assurance that the IRS will not take a contrary position regarding the federal income tax consequences
resulting from the consummation of the Plan or that any contrary position would not be sustained by a court. 
 For purposes of this
discussion, the terms “Old Senior Notes” and “Old Hillside Notes” are used to refer to the Senior Secured Notes and the Hillside Notes, respectively, the Old Senior Notes and Old Hillside Notes
together referred to as the “Old Notes” and the term “New Notes” is used to refer to both the Amended Senior Secured Notes (the “New Senior Notes”) and the Tranche A Loan Obligations
(referred to in this Article XIV, the “New Hillside Loan”). This discussion assumes that holders of the Old Senior Notes have held such property as “capital assets” within the meaning of IRC Section 1221
(generally, property held for investment) and holders will hold the New Notes and New Common Stock as capital assets. In addition, this discussion assumes that the Debtors’ obligations under the Old Notes and New Notes will be treated as debt
for federal income tax purposes. 
 This discussion does not address all federal income tax considerations that may be relevant to a
particular holder in light of that holder’s particular circumstances or to holders subject to special rules under the federal income tax laws, such as financial institutions, insurance companies, brokers, dealers or traders in securities,
commodities or currencies, tax-exempt organizations, tax-qualified retirement plans, partnerships and other pass-through entities, foreign corporations, foreign trusts, foreign estates, holders who are not citizens or residents of the U.S., holders
subject to the alternative minimum tax, holders holding the Old Notes, New Notes or New Common Stock as part of a hedge, straddle or other risk reduction strategy or as part of a conversion transaction or other integrated investment, holders who
have a functional currency other than the U.S. dollar and holders that acquired the Old Notes in connection with the performance of services. 
 HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE U.S. FEDERAL INCOME TAX CONSEQUENCES TO THEM OF THE CONSUMMATION OF THE PLAN AND THE OWNERSHIP AND DISPOSITION OF THE NEW NOTES AND NEW COMMON STOCK RECEIVED PURSUANT TO THE PLAN, AS
WELL AS ANY TAX CONSEQUENCES ARISING UNDER ANY STATE, LOCAL OR FOREIGN TAX LAWS, OR ANY OTHER FEDERAL TAX LAWS. 
 TO COMPLY WITH INTERNAL
REVENUE SERVICE CIRCULAR 230, TAXPAYERS ARE HEREBY NOTIFIED THAT (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS DISCLOSURE STATEMENT IS NOT INTENDED OR WRITTEN TO BE USED, AND CANNOT BE USED BY ANY TAXPAYER, FOR THE PURPOSE OF AVOIDING
PENALTIES THAT MAY BE IMPOSED ON A 

  

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TAXPAYER UNDER THE INTERNAL REVENUE CODE, (B) ANY SUCH DISCUSSION IS WRITTEN IN CONNECTION WITH THE PROMOTION OR MARKETING OF THE TRANSACTIONS OR
MATTERS ADDRESSED HEREIN, AND (C) TAXPAYERS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR. 
  

	14.2	Federal Income Tax Consequences to the Debtors. 

  

	 	(a)	Cancellation of Indebtedness and Reduction of Tax Attributes. 

 The Debtors generally should realize cancellation of indebtedness (“COD”) income to the extent the sum of (i) cash and the fair market value of any property (including New Common Stock) and (ii) the issue
prices of the New Notes received by holders is less than the sum of (x) the adjusted issue prices of the Old Notes, (y) the adjusted issue price of any other debt exchanged for property pursuant to the Plan and (z) the amount of any
unpaid accrued interest on the Old Notes and such other debt to the extent previously deducted by the Debtors. 
 The Debtors currently
estimate that the amount of COD income realized upon consummation of the Plan could range from approximately $20 million to approximately $40 million; however, the ultimate amount of COD income realized by the Debtors is uncertain because, among
other things, it will depend on the fair market value of the New Common Stock and the issue price of the New Notes on the Effective Date. COD income realized by a debtor will be excluded from income if the discharge of debt occurs in a case brought
under the Bankruptcy Code, the debtor is under the court’s jurisdiction in such case and the discharge is granted by the court or is pursuant to a plan approved by the court (the “Bankruptcy Exception”). Because the
Bankruptcy Exception will apply to the transactions consummated pursuant to the Plan, the Debtors will not be required to recognize any COD income realized as a result of the implementation of the Plan. 
 A debtor that does not recognize COD income under the Bankruptcy Exception generally must reduce certain tax attributes by the amount of the excluded COD
income. Attributes subject to reduction include NOLs, NOL carryforwards and certain other losses, credits and carryforwards, and the debtor’s tax basis in its assets (including stock of subsidiaries). A debtor’s tax basis in its assets
generally may not be reduced below the amount of liabilities remaining immediately after the discharge of indebtedness. If the debtor is a member of a consolidated group and reduces its basis in the stock of another group member, a
“look-through rule” requires a corresponding reduction in the tax attributes of the lower-tier member. NOLs for the taxable year of the discharge and NOL carryovers to such year generally are the first attributes subject to reduction.
However, a debtor may elect under IRC Section 108(b)(5) (the “Section 108(b)(5) Election”) to reduce its basis in its depreciable property first. If the debtor is a member of a consolidated group, the debtor may treat
stock in another group member as depreciable property for purposes of the Section 108(b)(5) Election, provided the lower-tier member consents to a corresponding reduction in its basis in its depreciable property. If a debtor makes a
Section 108(b)(5) Election, the limitation on reducing the debtor’s basis in its assets below the amount of its remaining liabilities does not apply. The Debtors have not yet determined whether they will make the Section 108(b)(5)
Election. 
  

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 At December 31, 2006, the Debtors had NOLs for federal income tax purposes of approximately $189
million expiring in the years 2009 through 2027. Approximately $70 million of these NOLs are subject to pre-existing usage limitations under IRC Section 382. The Debtors believe that, for federal income tax purposes, the Debtors’
consolidated group generated approximately $15 million of consolidated NOLs in the 2007 tax year, and likely will generate additional NOLs during the 2008 tax year. However, the amount of the Debtors’ 2007 and 2008 NOLs will not be determined
until the Debtors prepare their consolidated federal income tax returns for such periods. Moreover, the Debtors’ NOLs are subject to audit and possible challenge by the IRS. Accordingly, the amount of the Debtors’ NOLs ultimately may vary
from the amounts set forth above. 
 The Debtors currently anticipate that the application of IRC Section 108(b) (assuming no
Section 108(b)(5) Election is made) is likely to be limited largely to a reduction of the Debtors’ consolidated NOLs. However, the ultimate effect of the attribute reduction rules is uncertain because, among other things, it will depend on
the amount of COD income realized by the Debtors and the extent to which the Debtors are required to reduce other tax attributes. 
  

	 	(b)	Section 382 Limitation on NOLs. 

 Under IRC
Section 382, if a corporation or a consolidated group with NOLs (a “Loss Corporation”) undergoes an “ownership change,” the Loss Corporation’s use of its pre-change NOLs (and certain other tax attributes)
generally will be subject to an annual limitation in the post-change period. In general, an “ownership change” occurs if the percentage of the value of the Loss Corporation’s stock owned by one or more direct or indirect “five
percent shareholders” increases by more than fifty percentage points over the lowest percentage of value owned by the five percent shareholders at any time during the applicable testing period (an “Ownership Change”).
The testing period generally is the shorter of (i) the three-year period preceding the testing date or (ii) the period of time since the most recent Ownership Change of the corporation. 
 Subject to the special bankruptcy rules discussed below, the amount of the annual limitation on a Loss Corporation’s use of its pre-change NOLs (and
certain other tax attributes) is generally equal to the product of the applicable long-term tax-exempt rate (as published by the IRS for the month in which the Ownership Change occurs) and the value of the Loss Corporation’s outstanding stock
immediately before the Ownership Change (excluding certain capital contributions). If a Loss Corporation has a net unrealized built-in gain (“NUBIG”) immediately prior to the Ownership Change, the annual limitation may be
increased during the subsequent five-year period (the “Recognition Period”). If a Loss Corporation has a net unrealized built-in loss (“NUBIL”) immediately prior to the Ownership Change, certain losses
recognized during the Recognition Period also would be subject to the annual limitation and thus would reduce the amount of pre-change NOLs that could be used by the Loss Corporation during the five-year period. 
 The Debtors believe they experienced an Ownership Change on April 1, 1994 and, as a result, the Debtors’ use of their consolidated NOLs
attributable to the period prior to such date are subject to an annual limitation. Another Ownership Change prior to the Effective Date similarly would result in an annual limitation on the Debtor’s use of their consolidated 

  

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NOLs attributable to the period prior to such date, including the NOLs attributable to period prior to the 1994 Ownership Change. When NOLs are subject to
more than one IRC Section 382 annual limitation, the lowest annual limitation applies. Based on the current trading prices of Company stock, it is likely that any Ownership Change prior to the Effective Date will result in the Debtors’
ability to use their existing NOLs being severely limited in periods after such Ownership Change. The Company has requested that the Bankruptcy Court issue an order requiring existing shareholders to notify the Debtors prior to the consummation of
certain equity transfers that could lead toward an Ownership Change so as to provide the Debtors with time to object to any such transfers in an effort to preserve the value of the Debtors’ NOLs. 
 The Debtors expect the consummation of the Plan will result in an Ownership Change of the Debtors’ consolidated group. The remainder of this
discussion assumes that the expected Ownership Change will occur on the Effective Date, though it is possible the IRS could take the position that the Ownership Change occurred on the date the Plan is confirmed by the Bankruptcy Court. If the IRS
took the position that the ownership change occurred on the Confirmation Date, the consequences of such change could be other than as described below. Because the Ownership Change that occurs on the Effective Date will occur in a case brought under
the Bankruptcy Code, one of the following two special rules will apply in determining the Debtors’ ability to utilize NOLs attributable to tax periods preceding the Effective Date in post-Effective Date tax periods. 
 Under IRC Section 382(l)(5), an Ownership Change in bankruptcy will not result in any annual limitation on the debtor’s pre-change NOLs if the
stockholders or “qualified creditors” of the debtor receive at least fifty percent (50%) of the stock (by vote and value) of the reorganized debtor in the bankruptcy reorganization as a result of being shareholders or creditors of the
debtor. Instead, the debtor’s pre-change NOLs are reduced by the amount of any interest deductions with respect to debt converted into stock in the bankruptcy reorganization that were allowed in the three taxable years preceding the taxable
year in which the Ownership Change occurs and in the part of the taxable year prior to and including the effective date of the bankruptcy reorganization. However, if any pre-change NOLs of the debtor already are subject to an annual usage limitation
under IRC Section 382 at the time of an Ownership Change subject to IRC Section 382(l)(5), those NOLs will continue to be subject to such limitation. 
 A qualified creditor is any creditor who has held the debt of the debtor continuously during the period beginning at least eighteen months prior to the petition date or who has held “ordinary course
indebtedness” at all times since it has been outstanding. A creditor who does not become a direct or indirect five percent shareholder of the reorganized debtor generally may be treated by the debtor as having always held any debt exchanged for
stock for purposes of determining whether such creditor is a qualified creditor unless the creditor’s participation in formulating the plan of reorganization makes evident to the debtor that the creditor has not owned the debt for the requisite
period. The Debtors believe that the Ownership Change expected to result from the consummation of the Plan may satisfy the requirements of IRC Section 382(l)(5), though no assurance can be given in this regard. 
 If IRC Section 382(l)(5) applies to an Ownership Change, any subsequent Ownership Change of the debtor within a two-year period will result in the
debtor being unable to use any pre-change losses following such subsequent Ownership Change. A debtor may elect 

  

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not to apply IRC Section 382(l)(5) to an Ownership Change that otherwise satisfies its requirements. This election must be made on the debtor’s
federal income tax return for the taxable year in which the Ownership Change occurs. The Debtors have not yet determined whether to elect out of the application of IRC Section 382(l)(5) if it is determined they otherwise qualify. If the
Effective Date occurs in 2008, assuming the Ownership Change resulting from implementation of the Plan satisfies the requirements of IRC Section 382(l)(5), the Debtors would have until as late as September 15, 2009, to determine whether to
elect not to apply IRC Section 382(l)(5). 
 If an Ownership Change pursuant to a bankruptcy plan does not satisfy the requirements of
IRC Section 382(l)(5), or if a debtor elects not to apply IRC Section 382(l)(5), the debtor’s use of its pre-change NOLs will be subject to an annual limitation as determined under IRC Section 382(l)(6). In such case, the amount
of the annual limitation generally will be equal to the product of the applicable long-term tax-exempt rate (4.25% for March 2008) and the value of the debtor’s outstanding stock immediately after the bankruptcy reorganization, provided such
value may not exceed the value of the debtor’s gross assets immediately before the Ownership Change, subject to certain adjustments. Depending on whether the debtor has a NUBIG or NUBIL immediately prior to the Ownership Change, the annual
limitation may be increased or decreased during the Recognition Period. However, if any pre-change NOLs of the debtor already are subject to an annual limitation at the time of an Ownership Change subject to IRC Section 382(l)(6), those NOLs
will be subject to the lower of the two annual limitations. 
 NOLs not utilized in a given year due to the annual limitation may be carried
forward for use in future years until their expiration dates. To the extent the Reorganized Debtors’ annual limitation exceeds the consolidated group’s taxable income in a given year, the excess will increase the annual limitation in
future taxable years. 
  

	 	(c)	Alternative Minimum Tax. 

 In general, an alternative
minimum tax (“AMT”) is imposed on a corporation’s alternative minimum taxable income (“AMTI”) at a 20% rate to the extent such tax exceeds the corporation’s regular federal income tax for the
taxable year. For purposes of computing AMTI, certain tax deductions and other beneficial allowances are modified or eliminated, with further adjustments required if AMTI, determined without regard to adjusted current earnings
(“ACE”), differs from ACE. In addition, even though a corporation otherwise might be able to offset all of its taxable income for regular tax purposes by available NOL carryforwards, under current law only 90% of its AMTI
generally may be offset by available NOL carryforwards. Accordingly, for tax periods after the Effective Date, the Reorganized Debtors may have to pay AMT regardless of whether they generate non-AMT NOLs or have sufficient non-AMT NOL carryforwards
to offset regular taxable income for such periods. In addition, if a corporation undergoes an Ownership Change and is in a NUBIL position on the date of the Ownership Change, the corporation’s aggregate tax basis in its assets would be reduced
for certain AMT purposes to reflect the fair market value of such assets as of the change date. A corporation that pays AMT generally is later allowed a nonrefundable credit (equal to a portion of its prior year AMT liability) against its regular
federal income tax liability in future taxable years when it is no longer subject to the AMT. 
  

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	14.3	Federal Income Tax Consequences to Holders of Certain Claims. 

  

	 	(a)	Prior Waivers of Defaults and Forbearance of Rights. 

 Under applicable Treasury Regulations, the significant modification of a debt instrument will result in a deemed exchange of the “old” debt instrument for a “new” debt instrument and will be a taxable event upon which
gain or loss may be recognized in certain circumstances. A modification of a debt instrument is significant if the modified instrument differs materially either in kind or extent from the original debt instrument. Under these regulations, absent a
written or oral agreement to alter other terms of the debt instrument, an agreement by the holder to temporarily waive an acceleration clause or similar default right is not considered a “modification” of the instrument unless and until
the forbearance period exceeds two years following the issuer’s initial failure to perform and any additional period during which the parties conduct good faith negotiations or during which the issuer is in a case under the Bankruptcy Code.

 From September 2007 through January 2008, the Debtors obtained a forbearance of certain defaults alleged under the Old Hillside Notes. The
Debtors took the position that the forbearances did not constitute a “modification” of the Old Hillside Notes. The remaining discussion assumes that the forbearance did not result in a deemed exchange of the Old Hillside Notes. 

 

	 	(b)	Holders of Senior Secured Notes (Class 2). 

  

	 	1.	Exchange of Old Senior Notes for New Senior Notes. 

 Recognition of Gain or Loss. As described above, the significant modification of a debt instrument will result in a deemed exchange of the instrument and a taxable event to the holder. Pursuant to the Plan, the terms of the Old
Senior Notes will be amended or otherwise modified as set forth in the New Senior Notes Indenture. Although the matter is not free from doubt, the adoption of the amendments to the New Senior Notes Indenture should not result in a significant
modification of the Old Senior Notes and the Debtors intend to take such position for federal income tax purposes. If the adoption of the proposed amendments does not result in a significant modification, holders of the Old Senior Notes will have
the same adjusted tax basis in, and holding period for, the New Senior Notes received in exchange for the Old Senior Notes as the holder had immediately prior to the adoption of the proposed amendments and will recognize gain or loss equal to the
difference between the cash received on the portion of their Old Senior Notes that are retired and their tax basis in such Old Senior Notes. Any such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if
the holder has held the Old Senior Notes for more than one year as of the date of disposition. Holders should consult their tax advisors regarding the applicable tax rates and netting rules for capital gains and losses. There are limitations on the
deduction of capital losses by both corporate and noncorporate taxpayers. 
 If the New Senior Notes constitute a significant modification of
the Old Senior Notes, the federal income tax consequences of the exchange of Old Senior Notes for New Senior Notes depend, in part, on whether the Old Senior Notes and New Senior Notes constitute 

  

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“securities” for purposes of the “reorganization” provisions of the IRC. If both the Old Senior Notes and the New Senior Notes are
treated as securities, the exchange of such notes pursuant to the Plan would generally constitute a tax-deferred recapitalization within the meaning of IRC Section 368(a)(1)(E). The test of whether a debt obligation is a security involves an
overall evaluation of the nature of the obligation, with the term of the obligation usually regarded as one of the most significant factors. Debt obligations with a term of five years or less generally have not qualified as securities, whereas debt
obligations with a term of ten years or more generally have qualified as securities. Where a debt instrument is exchanged for another debt instrument of the issuer with substantially similar terms, there is authority that supports the position that
the term of the newly issued instrument for purposes of determining whether it is a security is measured from the original issuance date of the instrument exchanged therefor, rather than from the exchange date. Another important factor in
determining whether a debt obligation is a security is the extent to which the obligation is subordinated to other liabilities of the issuer. Generally, the more senior the debt obligation, the less likely it is to be a security. Although the matter
is not free from doubt, in the event that the New Senior Notes constitute a significant modification of the Old Senior Notes, the Debtors intend to take the position that the Old Senior Notes and New Senior Notes are securities and, therefore, the
exchange of the Old Senior Notes for New Senior Notes constitutes a recapitalization for federal income tax purposes. 
 Subject to the
preceding discussion and the “Other Considerations—Accrued Interest” discussion below, if the New Senior Notes constitute a significant modification of the Old Senior Notes and the deemed exchange of Old Senior Notes for New
Senior Notes constitutes a recapitalization for federal income tax purposes, holders of Old Senior Notes would recognize gain equal to the lesser of (i) the excess of the issue price of the New Senior Notes, which for this purpose would
generally be the face amount of the New Senior Notes, and any cash received in consideration for Old Senior Notes over the holder’s adjusted tax basis in the Old Senior Notes and (ii) the amount of the cash received in the exchange. Any
gain recognized upon the exchange generally would be capital gain and will be long-term capital gain if the holder’s holding period exceeds one year. No loss would be recognized in respect of the exchange if it qualifies as a recapitalization.
A holder’s initial tax basis in the New Senior Notes would be equal to its adjusted tax basis in the Old Senior Notes, increased by the amount of any gain recognized by the holder and decreased by the amount of cash received by the holder, and
the holder’s holding period in the New Senior Notes would include the holder’s holding period in the Old Senior Notes. 
 If the
Old Senior Notes or the New Senior Notes do not constitute securities for U.S. federal income tax purposes and the amendments do constitute a significant modification, a holder of Old Senior Notes would recognize gain or loss on the exchange of Old
Senior Notes for cash and New Senior Notes. Subject to the “Other Considerations—Accrued Interest” discussion below, the amount of gain or loss recognized by a holder would be equal to the difference between (i) the issue
price of the New Senior Notes, which for this purpose would generally be the face amount of the New Senior Notes, and cash received in the exchange and (ii) the holder’s adjusted tax basis in the Old Senior Notes exchanged therefor.
Subject to the “Other Considerations—Market Discount” discussion below, any such gain or loss generally would be capital gain or loss, and would be long-term capital gain or loss if the holder has held the Old Senior Notes for
more than one year as of the Effective Date. A holder’s initial tax basis in the New Senior Notes would be equal to the debt’s issue price, and its holding period would begin on the day after the Effective Date. 
  

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 Holders should consult their tax advisors regarding the tax treatment of the exchange of Old Senior Notes
for New Senior Notes, the character of any gain or loss as long-term or short-term capital gain or loss, or as ordinary income or loss, as its character will be determined by a number of factors, including (but not limited to) the tax status of the
holder, whether the Old Senior Notes constitute a capital asset in the holder’s hands, whether the Old Senior Notes have been held for more than one year, whether the Old Senior Notes have bond premium or market discount, and whether and to
what extent the holder previously claimed a bad debt deduction with respect to the Old Senior Notes. Holders also should consult their tax advisors regarding the applicable tax rates and netting rules for capital gains and losses, and as to whether
any resulting gain recognition may be deferred under the installment method until principal is repaid on the New Senior Notes. There are limitations on the deduction of capital losses by both corporate and noncorporate taxpayers. 
  

	 	2.	New Senior Notes. 

 If the New Senior Notes
constitute a significant modification of the Old Senior Notes, the tax consequences of owning the New Senior Notes are as follows. A note that matures one year or less from its date of issuance, such as the New Senior Notes, will be treated as being
issued at a discount and none of the interest paid on the note will be treated as qualified stated interest. In general, a cash method holder of a New Senior Note would not be required to accrue this discount, if any, for federal income tax purposes
unless it elects to do so. Holders who so elect and certain other holders, including those who report income on the accrual method of accounting for federal income tax purposes, are required to include the discount in income as it accrues on a
straight-line basis, unless another election is made to accrue the discount according to a constant yield method based on daily compounding. In the case of a holder who is not required and who does not elect to include the discount in income
currently, any gain realized on the sale, exchange or retirement of the New Senior Note will be ordinary income to the extent of the discount accrued on a straight-line basis (or, if elected, according to a constant yield method based on daily
compounding) through the date of sale, exchange or retirement. In addition, those holders will be required to defer deductions for any interest paid on indebtedness incurred to purchase or carry short-term notes in an amount not exceeding the
accrued discount until the accrued discount is included in income. 
 A holder of New Senior Notes will recognize gain or loss upon the sale,
redemption, retirement or other taxable disposition of the New Senior Notes equal to the difference between the amount realized upon the disposition (less a portion allocable to any accrued interest as described above) and the holder’s adjusted
tax basis in the New Senior Notes. Any such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the holder has held the New Senior Notes for more than one year as of the date of disposition. Holders
should consult their tax advisors regarding the applicable tax rates and netting rules for capital gains and losses. There are limitations on the deduction of capital losses by both corporate and noncorporate taxpayers. 
  

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	 	(c)	Holders of Hillside Note Claims. 

  

	 	1.	Exchange of Old Hillside Notes for the Indebtedness under the New Hillside Loan and New Common Stock. 

 Recognition of Gain or Loss. The federal income tax consequences of the consummation of the Plan to holders of Old Hillside Notes depend, in part,
on whether the Old Hillside Notes and the New Hillside Loan constitute “securities” for purposes of the “reorganization” provisions of the IRC, as described above under “Holders of Senior Secured Notes — Recognition
of Gain or Loss.” It is unclear whether the Old Hillside Notes qualify as securities for federal income tax purposes. 
 If the Old
Hillside Notes do not qualify as securities, the exchange of the Old Hillside Notes for the New Hillside Loan and New Common Stock would be a fully taxable exchange. If the exchange is fully taxable, subject to the “Other
Considerations—Accrued Interest” discussion below, a holder of Old Hillside Notes would recognize gain or loss on the exchange of Old Hillside Notes for the New Hillside Loan and Common Stock. The amount of gain or loss recognized by a
holder would be equal to the difference between (i) the sum of the issue price of the New Hillside Loan (see “New Hillside Loan” discussion below) and the fair market value of the New Common Stock received in the exchange and
(ii) the holder’s adjusted tax basis in the Old Hillside Notes exchanged therefor. In that case, a holder’s holding period in the New Common Stock and in the New Hillside Loan would begin on the day after the Effective Date.

 If the Old Hillside Notes and the New Hillside Loan constitute securities for federal income tax purposes, subject to the “Other
Considerations—Accrued Interest” discussion below, the exchange would qualify as a tax deferred recapitalization under IRC Section 368(a)(1)(E) and the holders of Old Hillside Notes would not recognize gain or loss upon the
exchange of the Old Hillside Notes for the New Hillside Loan and New Common Stock. A holder’s adjusted tax basis in the Old Hillside Notes will be allocated between the New Hillside Loan and New Common Stock in accordance with their respective
fair market values on the Effective Date, and the holder’s holding period in the New Hillside Loan and New Common Stock will include the holder’s holding period in the Old Hillside Notes. 
 Holders should consult their tax advisors regarding the tax treatment of the exchange of Old Hillside Notes for the New Hillside Loan and New Common
Stock, the character of any gain or loss as long-term or short-term capital gain or loss, or as ordinary income or loss, as its character will be determined by a number of factors, including (but not limited to) the tax status of the holder, whether
the Old Hillside Notes constitute a capital asset in the holder’s hands, whether the Old Hillside Notes have been held for more than one year, whether the Old Hillside Notes have bond premium or market discount, and whether and to what extent
the holder previously claimed a bad debt deduction with respect to the Old Hillside Notes. Holders also should consult their tax advisors regarding the applicable tax rates and netting rules for capital gains and losses, and as to whether any
resulting gain recognition may be deferred under the installment method until principal is repaid on the New Subordinated Notes. There are limitations on the deduction of capital losses by both corporate and noncorporate taxpayers. 
  

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	 	2.	New Hillside Loan. 

 Interest and Original Issue
Discount. Payments of stated interest under the New Hillside Loan will constitute payments of “qualified stated interest” and generally will be taxable to holders as ordinary income at the time the payments are received or accrued, in
accordance with the holder’s method of tax accounting. 
 The preceding discussion assumes the amount of the New Hillside Loan will not
be issued with original issue discount (“OID”). The New Hillside Loan generally would be treated as issued with OID if the principal amount of the New Hillside Loan plus all scheduled interest payments thereon, other than
payments of qualified stated interest, exceeds the issue price of the notes by more than a de minimis amount. The issue price of a debt instrument issued in exchange for another debt instrument depends on whether either debt instrument is
considered publicly traded for purposes of the OID rules at any time during the sixty-day period ending thirty days after the issue date. If neither debt instrument is publicly traded, the issue price of the new debt instrument will be its stated
principal amount if the new debt instrument provides for adequate stated interest (i.e., interest at least at the applicable federal rate as of the issue date), or will be its imputed principal amount if the instrument does not provide for
adequate stated interest. If the new debt instrument is publicly traded, its issue price generally will be its trading price immediately following issuance. If the old debt instrument is publicly traded, but the new debt instrument is not, the issue
price of the new debt instrument generally will be the fair market value of the old debt instrument at the time of the exchange less the fair market value of the portion of the old debt instrument allocable to any other property received in the
exchange. 
 A debt instrument will be considered to be publicly traded if certain pricing information related to the instrument is generally
available on a quotation medium. Because the relevant trading period is generally in the future, it is impossible to predict whether the Old Hillside Notes or the New Hillside Loan will be publicly traded during the relevant period. However, the
Debtors anticipate that the Old Hillside Notes and New Hillside Loan will not be treated as publicly traded and, therefore, that the issue price of the New Hillside Loan will be its stated principal amount. 
 Sale, Retirement or Other Taxable Disposition. A holder of the New Hillside Loan will recognize gain or loss upon the sale, redemption, retirement
or other taxable disposition of the obligations due under the New Hillside Loan equal to the difference between the amount realized upon the disposition (less a portion allocable to any unpaid accrued interest which generally will be taxable as
ordinary income) and the holder’s adjusted tax basis in the New Hillside Loan. Any such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the holder has held the New Hillside Loan for more than
one year as of the date of disposition. Holders should consult their tax advisors regarding the applicable tax rates and netting rules for capital gains and losses. There are limitations on the deduction of capital losses by both corporate and
noncorporate taxpayers. 
  

	 	3.	New Common Stock. 

 Distributions. A holder
of New Common Stock generally will be required to include in gross income as ordinary dividend income the amount of any distributions paid on the 

  

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New Common Stock to the extent such distributions are paid out of the Reorganized Debtors’ current or accumulated earnings and profits as determined for
federal income tax purposes. Distributions not treated as dividends for federal income tax purposes will constitute a return of capital and will first be applied against and reduce a holder’s adjusted tax basis in the New Common Stock, but not
below zero. Any excess amount will be treated as gain from a sale or exchange of the New Common Stock. Holders that are treated as corporations for federal income tax purposes may be entitled to a dividends received deduction with respect to
distributions out of earnings and profits. 
 Sale or Other Taxable Disposition. A holder of New Common Stock will recognize gain or
loss upon the sale or other taxable disposition of New Common Stock equal to the difference between the amount realized upon the disposition and the holder’s adjusted tax basis in the New Common Stock. Subject to the rules discussed below in
“Other Considerations—Market Discount” and the recapture rules under IRC Section 108(e)(7), any such gain or loss generally will be capital gain or loss, and will be long-term capital gain or loss if the holder has held
the New Common Stock for more than one year as of the date of disposition. Under the IRC Section 108(e)(7) recapture rules, a holder may be required to treat gain recognized on the taxable disposition of the New Common Stock as ordinary income
if the holder took a bad debt deduction with respect to the Old Hillside Notes or recognized an ordinary loss on the exchange of the Old Hillside Notes for New Common Stock. Holders should consult their tax advisors regarding the applicable tax
rates and netting rules for capital gains and losses. There are limitations on the deduction of capital losses by both corporate and noncorporate taxpayers. 
  

	 	(d)	Holders of General Unsecured Claims 

 Recognition of
Gain or Loss. The federal income tax consequences of the consummation of the Plan to holders of General Unsecured Claims depend, in part, on whether the General Unsecured Claims constitute “securities” for purposes of the
“reorganization” provisions of the IRC, as described above under “Holders of Senior Secured Notes — Recognition of Gain or Loss.” Holders of General Unsecured Claims should consult their tax advisors as to whether
their claims constitute securities. 
 If the General Unsecured Claims do not qualify as securities or if the holder elects to receive the
Lump Sum Cash Payment instead of New Common Stock, the exchange of the General Unsecured Claims for New Common Stock would be a fully taxable exchange. If the exchange is fully taxable, subject to the “Other Considerations—Accrued
Interest” discussion below, a holder would recognize gain or loss on the exchange of General Unsecured Claims for Common Stock. The amount of gain or loss recognized by a holder would be equal to the difference between (i) the fair
market value of the Cash or New Common Stock received in the exchange and (ii) the holder’s adjusted tax basis in the General Unsecured Claims exchanged therefor. In that case a holder’s holding period in any New Common Stock would
begin on the day after the Effective Date. 
 If the General Unsecured Claims constitute securities for federal income tax purposes and the
holder does not elect the Lump Sum Cash Payment, subject to the “Other Considerations—Accrued Interest” discussion below, the exchange would qualify as a tax 

  

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deferred recapitalization under IRC Section 368(a)(1)(E) and the holders of General Unsecured Claims would not recognize gain or loss upon the exchange
of the General Unsecured Claims for New Common Stock. A holder’s adjusted tax basis in the New Common Stock will be equal to the holder’s basis in its General Unsecured Claims, and the holder’s holding period in the New Common Stock
will include the holder’s holding period in the General Unsecured Claims. 
 Holders of General Unsecured Claims should consult
“Holders of Hillside Note Claims — New Common Stock” above for the tax consequences of owning New Common Stock. Holders should consult their tax advisors regarding the tax treatment of the exchange of General Unsecured Claims
for New Common Stock, the character of any gain or loss as long-term or short-term capital gain or loss, or as ordinary income or loss, as its character will be determined by a number of factors, including (but not limited to) the tax status of the
holder, whether the General Unsecured Claims constitute a capital asset in the holder’s hands, whether the General Unsecured Claims have been held for more than one year, and whether and to what extent the holder previously claimed a bad debt
deduction with respect to the General Unsecured Claims. Holders also should consult their tax advisors regarding the applicable tax rates and netting rules for capital gains and losses. There are limitations on the deduction of capital losses by
both corporate and noncorporate taxpayers. 
  

	 	(e)	Other Considerations. 

 Accrued Interest. There is
general uncertainty regarding the extent to which the receipt of cash or other property should be treated as attributable to unpaid accrued interest. The Reorganized Debtors intend to take the position that cash or property distributed pursuant to
the Plan will first be allocable to the principal amount of a holder’s Claim and then, to the extent necessary, to any unpaid accrued interest thereon. The IRS, however, could take a contrary position. 
 To the extent any property received pursuant to the Plan is considered attributable to unpaid accrued interest, a holder will recognize ordinary income
to the extent the value of the property exceeds the amount of unpaid accrued interest previously included in gross income by the holder. A holder’s tax basis in such property should be equal to the amount of interest income treated as satisfied
by the receipt of the property, and its holding period in the property should begin on the day after the Effective Date. A holder generally will be entitled to recognize a loss to the extent any accrued interest previously included in its gross
income is not paid in full. HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE EXTENT TO WHICH CONSIDERATION RECEIVED UNDER THE PLAN SHOULD BE TREATED AS ATTRIBUTABLE TO UNPAID ACCRUED INTEREST. 
 Market Discount. A holder will be considered to have acquired an Old Note at a market discount if its tax basis in the note immediately after
acquisition is less than the sum of all amounts payable thereon (other than payments of qualified stated interest) after the acquisition date, subject to a statutorily defined de minimis exception. Market discount generally accrues on a
straight line basis from the acquisition date over the remaining term of the obligation or, at the holder’s election, under a constant yield method. A holder that acquired an Old Note at a market discount previously may have elected to include
the market discount in income as it accrued over the term of the note. 
  

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 A holder that acquires a debt instrument at a market discount generally is required to treat any gain
realized on the disposition of the instrument as ordinary income to the extent of accrued market discount not previously included in gross income by the holder. However, special rules apply to the disposition of a market discount obligation in
certain types of non-recognition transactions, such as a recapitalization. Under these rules, a holder that acquired an Old Note at a market discount generally should not be required to recognize any accrued market discount as income at the time of
the exchange of Old Notes for New Notes and, if applicable, New Common Stock to the extent it receives stock or securities in exchange for the Old Note. Rather, on a subsequent taxable disposition of the stock or securities received in the exchange,
any gain realized by the holder on a disposition of the stock will be ordinary income to extent of the market discount accrued on the Old Note prior to the exchange that is allocable to the stock, and any gain realized by the holder on a disposition
of the securities will be ordinary income to the extent of the allocable amount of market discount accrued on the Old Note prior to the exchange and the amount of market discount accrued on the securities after the exchange. The method of allocating
accrued market discount to stock and securities when both are received in exchange for a market discount obligation in a recapitalization is uncertain. Accordingly, holders that acquired the Old Notes with market discount should consult their tax
advisors regarding this issue. 
  

	 	(f)	Information Reporting and Backup Withholding. 

 The
Reorganized Debtors (or their paying agent) may be obligated to furnish information to the IRS regarding the consideration received by holders (other than corporations and other exempt holders) pursuant to the Plan. In addition, the Reorganized
Debtors will be required to report annually to the IRS with respect to each holder (other than corporations and other exempt holders) the amount of interest paid and OID, if any, accrued on the New Notes, the amount of dividends paid on the New
Common Stock, and the amount of any tax withheld from payment thereof. 
 Holders may be subject to backup withholding (currently, at a rate
of 28%) on the consideration received pursuant to the Plan. Backup withholding may also apply to interest, OID and principal payments on the New Notes, dividends paid on the New Common Stock and proceeds received upon sale or other disposition of
the New Notes or New Common Stock. Certain holders (including corporations) generally are not subject to backup withholding. A holder that is not otherwise exempt generally may avoid backup withholding by furnishing to the Reorganized Debtors (or
their paying agent) its taxpayer identification number and certifying, under penalties of perjury, that the taxpayer identification number provided is correct and that the holder has not been notified by the IRS that it is subject to backup
withholding. 
 Backup withholding is not an additional tax. Taxpayers may use amounts withheld as a credit against their federal income tax
liability or may claim a refund of any excess amounts withheld by timely filing an appropriate claim for refund with the IRS. 
 THE
FOREGOING DISCUSSION OF FEDERAL INCOME TAX CONSIDERATIONS IS FOR GENERAL INFORMATION PURPOSES ONLY AND IS NOT TAX ADVICE. EACH HOLDER SHOULD CONSULT ITS OWN TAX ADVISOR REGARDING THE FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES 

  

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OF THE PLAN DESCRIBED HEREIN. NEITHER THE PROPONENTS NOR THEIR PROFESSIONALS WILL HAVE ANY LIABILITY TO ANY PERSON OR HOLDER ARISING FROM OR RELATED TO THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE PLAN OR THE FOREGOING DISCUSSION. 
  

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 ARTICLE XV. 
 CONCLUSION 
 The Debtors believe that confirmation and implementation of the Plan is
preferable to any of the alternatives described herein because it will provide the greatest recovery to holders of Claims. Other alternatives would involve significant delay, uncertainty and substantial administrative costs and are likely to reduce
if not eliminate any return to unsecured creditors who hold Claims. Moreover, under such alternatives, holders of Interests are highly unlikely to receive any recovery on account of their Interests or otherwise. The Debtors urge the holders of
impaired Claims in Class 2, Class 4, and Class 5 who are entitled to vote on the Plan to vote to accept the Plan and to evidence such acceptance by returning their Ballots to the Voting Agent so that they will be received not later than 4:00 p.m.,
prevailing Eastern Time, on July 14, 2008. 
  

			
	Dated:	 	June 11, 2008
		 	New York, New York

  

			
	Respectfully submitted,
	
	AMPEX CORPORATION
		
	By:	 	 /s/ Joel D. Talcott

		 	Joel D. Talcott
		 	Authorized Signatory
	
	AMPEX DATA SYSTEMS CORPORATION
		
	By:	 	 /s/ Joel D. Talcott

		 	Joel D. Talcott
		 	Vice President and Secretary
	
	AMPEX DATA INTERNATIONAL CORPORATION
		
	By:	 	 /s/ Joel D. Talcott

		 	Joel D. Talcott
		 	Vice President and Secretary

  

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	AMPEX FINANCE CORPORATION
		
	By:	 	 /s/ Joel D. Talcott

		 	Joel D. Talcott
		 	Authorized Signatory
	
	AFC HOLDINGS CORPORATION
		
	By:	 	 /s/ Joel D. Talcott

		 	Joel D. Talcott
		 	Vice President and Secretary
	
	AMPEX HOLDINGS CORPORATION
		
	By:	 	 /s/ Joel D. Talcott

		 	Joel D. Talcott
		 	Authorized Signatory
	
	AMPEX INTERNATIONAL SALES CORPORATION
		
	By:	 	 /s/ Joel D. Talcott

		 	Joel D. Talcott
		 	Vice President and Secretary

 Counsel: 
 WILLKIE FARR & GALLAGHER LLP 
 787 Seventh Avenue 
 New York, NY 10019 
 (212) 728-8000 
 Attorneys for
the Debtors and Debtors in Possession 
  

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 Exhibits 
  

	 	•	 	 Exhibit 1—Plan 

  

	 	•	 	 Exhibit 2—Plan Support Agreement 

  

	 	•	 	 Exhibit 3—Prepetition Corporate Organizational Chart 

  

	 	•	 	 Exhibit 4—Consolidated Audited Financial Statements for the Debtors for the fiscal year ended December 31, 2007 

  

	 	•	 	 Exhibit 5— Liquidation Analysis 

  

	 	•	 	 Exhibit 6— Reorganized Debtors’ Projected Financial Information 

  

	 	•	 	 Exhibit 7— Disclosure Statement Order 

 EXHIBIT 1 
 PLAN 

 EXHIBIT 2 
 PLAN SUPPORT AGREEMENT 

 EXHIBIT 3 
 PREPETITION CORPORATE ORGANIZATIONAL CHART 

 EXHIBIT 4 
 CONSOLIDATED UNAUDITED FINANCIAL STATEMENTS 
 FOR THE DEBTORS FOR THE FISCAL YEAR ENDED DECEMBER 31, 2007

 [TO FOLLOW] 

 EXHIBIT 5 
 LIQUIDATION ANALYSIS 
 [TO FOLLOW] 

 EXHIBIT 6 
 FINANCIAL PROJECTIONS 
 [TO FOLLOW] 

 EXHIBIT 7 
 DISCLOSURE STATEMENT ORDER 
 [TO FOLLOW]Seventh Amendment to Credit Agreement

 Exhibit 10.1 
 SEVENTH AMENDMENT 
 This Seventh Amendment (the “Agreement”) to the Credit Agreement
referred to below is dated as of June 6, 2008, by and among BOWATER CANADIAN FOREST PRODUCTS INC., a company organized under the laws of Canada, in its capacity as Borrower under the Credit Agreement referred to below (the
“Borrower”), BOWATER INCORPORATED, a corporation organized under the laws of Delaware, in its capacity as a Guarantor under the Credit Agreement referred to below (the “Original U.S. Borrower”), certain Subsidiaries
and Affiliates of the Original U.S. Borrower party hereto (the “Grantors”), ABITIBIBOWATER INC., a corporation organized under the laws of Delaware (the “Parent”), the Lenders party hereto (collectively, the
“Lenders”) pursuant to an authorization (in the form attached hereto as Exhibit A, each a “Lender Authorization”) and THE BANK OF NOVA SCOTIA, as administrative agent (the “Administrative
Agent”) for the Lenders party to the Credit Agreement referred to below. 
 STATEMENT OF PURPOSE: 
 The Borrower, the Original U.S. Borrower, the existing Lenders, certain other financial institutions and the Administrative Agent are parties to the
Credit Agreement dated as of May 31, 2006 (as amended by that certain First Amendment dated as of July 20, 2007, that certain Second Amendment dated as of October 31, 2007, that certain Third Amendment and Waiver dated as of
February 25, 2008, that certain Fourth Amendment dated as of March 31, 2008, that certain Fifth Amendment Agreement dated as of April 30, 2008, that certain Sixth Amendment dated as of May 28, 2008, as amended hereby and as
further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”). 
 The Borrower
has requested that (i) the Commitments be increased by $31,250,000 (the “Increase”) and that, as such, Goldman Sachs Credit Partners L.P. (“GSCP”) and Canadian Imperial Bank of Commerce
(“CIBC”) become Lenders under the Credit Agreement (ii) the Administrative Agent and the Lenders extend the Maturity Date of the Credit Facility to June 5, 2009 (the “Extension”) and (iii) the Credit
Agreement be amended as more specifically set forth herein. Subject to the terms and conditions set forth herein, the Administrative Agent and each of the Lenders have agreed to grant such requests of the Borrower. 
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows: 
 1. Capitalized Terms. Except as otherwise provided herein, all capitalized undefined terms used in this Agreement
(including, without limitation, in the introductory paragraph and the statement of purpose hereto) shall have the meanings assigned thereto in the Credit Agreement (as amended by this Agreement). 
 2. Increase of the Credit Facility. 
 (a) The Borrower, the Original U.S. Borrower, the Grantors, the existing Lenders and GSCP and CIBC as new Lenders hereby wish to amend the Credit Agreement and increase the Commitments under the Credit Facility by $31,250,000, with GSCP
having a new Commitment of $25,000,000 and CIBC having a new Commitment of $20,000,000 and the Commitments of the existing Lenders being adjusted. Accordingly, the Commitments of all Lenders from the Seventh Amendment Effective Date shall be
$143,750,000 and the Commitment of each Lender shall be as specified in Exhibit B. 
 (b) Upon this Agreement being effective on the
Seventh Amendment Effective Date, the Administrative Agent shall notify the Borrower and the Lenders of the adjustments which are required to be made among the Lenders to ensure that all outstanding Loans and L/C Participations under Credit Facility
are owed to the Lenders in the proportion of their respective Commitments and shall pay any all costs required pursuant to Section 4.9 of the Credit Agreement in connection with such adjustments as if such adjustments were repayments.

  

 1 

 (c) Upon receipt of such notification, the Lenders (including, for greater certainty, GSCP and CIBC)
shall promptly pay to the Administrative Agent the amounts payable by such Lenders, respectively under such adjustments, and the Administrative Agent shall promptly distribute to the other Lenders the amounts so received to give effect to such
adjustments. The Borrower acknowledges that upon such payment and distribution being made, the Loans and L/C Participations so adjusted shall be owing to the Lenders as provided in such adjustments. 
 (d) The Administrative Agent may determine the adjustments to be made pursuant to this Article 2 without regard to outstanding Swingline Loans with the
Swingline Lender pursuant to Section 2.2 of the Credit Agreement. 
 3. Credit Agreement Amendments. The Credit Agreement is
hereby amended as set forth on Exhibit C. 
 4. Conditions to Effectiveness. Upon the satisfaction of each of the following
conditions, this Agreement shall be deemed to be effective as of June 6, 2008 (the “Seventh Amendment Effective Date”): 
 (a) the Administrative Agent shall have received counterparts of this Agreement executed by the Administrative Agent (on behalf of itself and each of the Lenders by virtue of each Lender’s execution of a Lender Authorization) the
Borrower, the Original U.S. Borrower, the Parent and the Grantors; 
 (b) the Administrative Agent shall have received a resolution duly
adopted by the board of directors (or equivalent governing body) of the Borrower and each U.S. Borrower authorizing the Increase; 
 (c) the
Administrative Agent shall have received a favorable opinion from counsel to the Borrower addressed to the Administrative Agent and the Lenders with respect to this Agreement and the Credit Agreement; 
 (d) the Administrative Agent shall have been reimbursed for all fees and out-of-pocket charges and other expenses incurred in connection with this
Agreement, including, without limitation, the reasonable fees and disbursements of counsel for the Administrative Agent and the U.S. Administrative Agent; 
 (e) the Borrower shall have paid to the Administrative Agent, for the account of each Lender (including the Administrative Agent) that has agreed to the Increase and the Extension and that executes and delivers this
Agreement or a Lender Authorization to the Administrative Agent (or its counsel), an amendment and extension fee in an amount equal to 50 basis points times the principal amount of such Lender’s Commitment; and 
 (f) the Administrative Agent shall have received such other instruments, documents and certificates as the Administrative Agent shall reasonably request
in connection with the execution of this Agreement. 
 5. Effect of the Agreement. Except as expressly provided herein, the Credit
Agreement and the other Loan Documents shall remain unmodified and in full force and effect. Except as expressly set forth herein, this Agreement shall not be deemed (a) to be a waiver of, or consent to, a modification or amendment of, any
other term or condition of the Credit Agreement or any other Loan Document, (b) to prejudice any other right or rights which the Administrative Agent or the Lenders may now have or may have in the future 

  

 2 

 
under or in connection with the Credit Agreement or the other Loan Documents or any of the instruments or agreements referred to therein, as the same may be
amended, restated, supplemented or otherwise modified from time to time, (c) to be a commitment or any other undertaking or expression of any willingness to engage in any further discussion with the Borrower, the U.S. Borrower or any other
Person with respect to any waiver, amendment, modification or any other change to the Credit Agreement or the Loan Documents or any rights or remedies arising in favor of the Lenders or the Administrative Agent, or any of them, under or with respect
to any such documents or (d) to be a waiver of, or consent to or a modification or amendment of, any other term or condition of any other agreement by and among the Borrower and the U.S. Borrower, on the one hand, and the Administrative Agent
or any other Lender, on the other hand. References in the Credit Agreement to “this Agreement” (and indirect references such as “hereunder”, “hereby”, “herein”, and “hereof”) and in any Loan Document
to the Credit Agreement shall be deemed to be references to the Credit Agreement as modified hereby. 
 6. Representations and
Warranties/No Default. By their execution hereof, 
 (a) the Borrower, the Original U.S. Borrower and each Grantor hereby certifies,
represents and warrants to the Administrative Agent and the Lenders that after giving effect to the amendments set forth in Sections 2 and 3 above, each of the representations and warranties set forth in the Credit Agreement and the other
Loan Documents is true and correct in all material respects as of the date hereof (except to the extent that (i) any such representation or warranty that is qualified by materiality or by reference to Material Adverse Effect, in which case such
representation or warranty is true and correct in all respects as of the date hereof or (ii) any such representation or warranty relates only to an earlier date, in which case such representation or warranty shall remain true and correct as of
such earlier date) and that no Default or Event of Default has occurred or is continuing; 
 (b) the Borrower, the Original U.S. Borrower,
the Parent and each of the Grantors hereby certifies, represents and warrants to the Administrative Agent and the Lenders that: 
 (i) it has the right, power and authority and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other documents executed in connection herewith to which
it is a party in accordance with their respective terms and the transactions contemplated hereby; and 
 (ii) this Agreement
and each other document executed in connection herewith has been duly executed and delivered by the duly authorized officers of the Borrower, the Original U.S. Borrower, the Parent and each of the Grantors, and each such document constitutes the
legal, valid and binding obligation of the Borrower, the Original U.S. Borrower, the Parent and each of the Grantors, enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency, reorganization, moratorium or similar
state or federal debtor relief laws from time to time in effect which affect the enforcement of creditors’ rights in general and the availability of equitable remedies. 
 7. Reaffirmations. Each Credit Party (a) agrees that the transactions contemplated by this Agreement shall not limit or diminish the
obligations of such Person under, or release such Person from any obligations under the Credit Agreement, the applicable Guaranty Agreement, the Collateral Agreement and each other Security Document to which it is a party, (b) confirms and
reaffirms its obligations under the Credit Agreement, the applicable Guaranty Agreement, the Collateral Agreement and each other Security Document to which it is a party and (c) agrees that the Credit Agreement, the applicable Guaranty
Agreement, the Collateral Agreement and each other Security Document to which it is a party remain in full force and effect and are hereby ratified and confirmed. 
  

 3 

 8. Acknowledgement by Parent. The Parent hereby acknowledges receipt of a copy of the Credit
Agreement and agrees, for the benefit of the Administrative Agent and the Secured Parties, to be bound thereby and to comply with the terms thereof insofar as such terms are applicable to it (including, without limitation, Sections 7.1(f),
10.6(i) and 12.1(o)). 
 9. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO THE CONFLICTS OF LAW PRINCIPLES THEREOF INSOFAR AS SUCH PRINCIPLES WOULD DEFER TO THE SUBSTANTIVE LAWS OF SOME OTHER JURISDICTION. 
 10. Counterparts. This Agreement may be executed by one or more of the parties hereto in any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same instrument. 
 11. Electronic Transmission. A facsimile,
telecopy, pdf or other reproduction of this Agreement may be executed by one or more parties hereto, and an executed copy of this Agreement may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic transmission
device pursuant to which the signature of or on behalf of such party can be seen, and such execution and delivery shall be considered valid, binding and effective for all purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Agreement as well as any facsimile, telecopy, pdf or other reproduction hereof. 
 [Signature Pages Follow]

  

 4 

 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date and
year first above written. 
  

					
	BORROWER:
	
	BOWATER CANADIAN FOREST PRODUCTS INC.
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	Vice President and Treasurer

  

					
	PARENT:
	
	ABITIBIBOWATER INC.
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	Senior Vice President and Chief Financial Officer

  

					
	PARENT GRANTORS:
	
	BOWATER INCORPORATED
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	Vice President and Treasurer

  

					
	BOWATER CANADIAN HOLDINGS INCORPORATED
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	Vice President

  

					
	BOWATER NEWSPRINT SOUTH LLC
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	Manager

  

					
	BOWATER NEWSPRINT SOUTH OPERATIONS, LLC
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	Manager

 Seventh Amendment =- Bowater Canada 

					
	BOWATER ALABAMA LLC
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	Manager

  

					
	SUBSIDIARY GRANTORS:
	
	 BOWATER CANADA FINANCE LIMITED
 PARTNERSHIP

		
	By:	 	 BOWATER CANADA TREASURY CORPORATION, its general partner

		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	President

  

					
	BOWATER SHELBURNE CORPORATION
		
	By:	 	/s/ William G. Harvey
		 	Name:	 	William G. Harvey
		 	Title:	 	President

  

					
	BOWATER LAHAVE CORPORATION
		
	By:	 	/s/ Duane A. Owens
		 	Name:	 	Duane A. Owens
		 	Title:	 	Vice President and Treasurer

 [Signature Pages Continue] 
 Seventh Amendment =- Bowater Canada 

			
	THE BANK OF NOVA SCOTIA, as Administrative Agent (on behalf of itself and the Lenders (including the new Lenders) who have executed a Lender Authorization) and as Issuing Lender and
Lender
		
	By:	 	/s/ Robert Boomhour
	Name:	 	Robert Boomhour
	Title:	 	Director

 Seventh Amendment =- Bowater Canada 

 Exhibit A 
 Form of Lender Authorization 

 LENDER AUTHORIZATION 
 Bowater Canadian Forest Products Inc. 
 Seventh Amendment 
 June 6, 2008 
 The Bank of Nova Scotia 
 40 King Street West 
 Scotia Plaza, 62nd Floor 
 Toronto, Ontario M5W
2X6 
 Attention: Corporate Banking Loan Syndication 
  

	 	Re:	Seventh Amendment dated as of June 6, 2008 (the “Amendment”) to that certain Credit Agreement dated as of May 31, 2006 (as amended, the
“Agreement”) among Bowater Canadian Forest Products Inc. (the “Borrower”), Bowater Incorporated, the lenders party thereto (the “Lenders”), and The Bank of Nova Scotia, as administrative agent (the
“Administrative Agent”) for the Lenders. 

 This Lender Authorization acknowledges our receipt and review of
the execution copy of the Agreement, in the form posted on SyndTrak Online or otherwise distributed to us by the Administrative Agent. By executing this Lender Authorization, we hereby approve the Agreement and authorize the Administrative Agent to
execute and deliver the Agreement on our behalf. 
 Each financial institution purporting to be a Lender (including a new Lender) and
executing this Lender Authorization agrees or reaffirms that it shall be a party to the Agreements and the other Loan Documents (as defined in the Credit Agreement) to which Lenders are parties and shall have the rights and obligations of a
“Lender” (as defined in the Credit Agreement), and agrees to be bound by the terms and provisions applicable to a “Lender” under each such agreement. In furtherance of the foregoing, each financial institution executing this
Lender Authorization agrees to execute any additional documents reasonably requested by the U.S. Administrative Agent or the Administrative Agent, as applicable, to evidence such financial institution’s rights and obligations under the Credit
Agreement. 
 A facsimile, telecopy, pdf or other reproduction of this Lender Authorization may be executed by one or more parties hereto,
and an executed copy of this Lender Authorization may be delivered by one or more parties hereto by facsimile or similar instantaneous electronic transmission device pursuant to which the signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and effective for all purposes. 
  

			
	 
	[Insert name of applicable financial institution]
		
	By:	 	 
	Name:	 	 
	Title:	 	 

 Exhibit B 
  

				
	 Lender
	  	Commitment
	 The Bank of Nova Scotia
	  	$	41,250,000
	 Bank of Montreal
	  	$	37,500,000
	 Goldman Sachs Credit Partners L.P.
	  	$	25,000,000
	 Export Development Canada
	  	$	20,000,000
	 Canadian Imperial Bank of Commerce
	  	$	20,000,000
		  	 	 
	 Total:
	  	$	143,750,000

 Exhibit C 
 Published CUSIP Number: 
 Revolving Credit CUSIP Number: 
 CREDIT AGREEMENT 
 dated as of
May 31, 2006 
 (as amended by that certain First Amendment dated as of July 20, 2007, 
 that certain Second Amendment dated as of October 31, 2007, 
 that certain Third Amendment and Waiver dated as of February 25, 2008, 
 that certain Fourth Amendment
dated as of March 31, 2008, that certain Fifth Amendment dated 
 as of April 30, 2008, that certain Sixth Amendment dated as of
May 28, 2008 and that certain Seventh Amendment dated as of June 6, 2008) 
 by and among 
 BOWATER CANADIAN FOREST PRODUCTS INC., 
 as Borrower, 
 BOWATER INCORPORATED, 
 as Guarantor, 
 the Lenders referred to herein, 
 THE BANK OF NOVA SCOTIA, 
 as Administrative Agent 
 and Issuing Lender, 
 BANK OF MONTREAL, 

 as Syndication Agent and Swingline Lender, 
 and 
 WACHOVIA BANK, NATIONAL ASSOCIATION, 
 as Documentation Agent 
 WACHOVIA CAPITAL MARKETS, LLC, 
 as Sole Book Manager 
 WACHOVIA CAPITAL
MARKETS, LLC, 
 as Lead Arranger 

 TABLE OF CONTENTS 
  

					
	 	  	Page
	 ARTICLE I DEFINITIONS
	  	1
	 SECTION 1.1
	  	Definitions	  	1
	 SECTION 1.2
	  	Other Definitions and Provisions	  	44
	 SECTION 1.3
	  	Accounting Terms	  	44
	 SECTION 1.4
	  	PPSA and CCQ Terms	  	44
	 SECTION 1.5
	  	Rounding	  	44
	 SECTION 1.6
	  	References to Agreement and Laws	  	45
	 SECTION 1.7
	  	Times of Day	  	45
	 SECTION 1.8
	  	Letter of Credit Amounts	  	45
	 SECTION 1.9
	  	Amount of Obligations	  	45
		
	 ARTICLE II REVOLVING CREDIT FACILITY
	  	45
	 SECTION 2.1
	  	Revolving Credit Loans	  	45
	 SECTION 2.2
	  	Swingline Loans	  	46
	 SECTION 2.3
	  	Procedure for Advances of Revolving Credit Loans and Swingline Loans	  	47
	 SECTION 2.4
	  	Repayment and Prepayment of Revolving Credit Loans and Swingline Loans	  	48
	 SECTION 2.5
	  	Permanent Reduction of the Commitment	  	51
	 SECTION 2.6
	  	Termination of Credit Facility	  	51
	 SECTION 2.7
	  	Terms Applicable to BA Loans	  	53
		
	 ARTICLE III LETTER OF CREDIT FACILITY
	  	58
	 SECTION 3.1
	  	L/C Commitment	  	58
	 SECTION 3.2
	  	Procedure for Issuance of Letters of Credit	  	58
	 SECTION 3.3
	  	Commissions and Other Charges	  	59
	 SECTION 3.4
	  	L/C Participations	  	59
	 SECTION 3.5
	  	Reimbursement Obligation of the Borrower	  	60
	 SECTION 3.6
	  	Obligations Absolute	  	61
	 SECTION 3.7
	  	Effect of Letter of Credit Application	  	61
		
	 ARTICLE IV GENERAL LOAN PROVISIONS
	  	62
	 SECTION 4.1
	  	Interest	  	62
	 SECTION 4.2
	  	Notice and Manner of Conversion or Continuation of Loans	  	65
	 SECTION 4.3
	  	Fees	  	66
	 SECTION 4.4
	  	Manner of Payment	  	66
	 SECTION 4.5
	  	Evidence of Indebtedness	  	67
	 SECTION 4.6
	  	Adjustments	  	68
	 SECTION 4.7
	  	Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by the Administrative Agent	  	68
	 SECTION 4.8
	  	Changed Circumstances	  	69
	 SECTION 4.9
	  	Indemnity	  	70
	 SECTION 4.10
	  	Increased Costs	  	71
	 SECTION 4.11
	  	Taxes	  	72
	 SECTION 4.12
	  	Mitigation Obligations; Replacement of Lenders	  	75

  

 -ii- 

					
	 SECTION 4.13
	  	Security	  	75
	 SECTION 4.14
	  	Additional Subsidiary Borrowers	  	76
		
	 ARTICLE V CLOSING; CONDITIONS OF CLOSING AND BORROWING
	  	77
	 SECTION 5.1
	  	Closing	  	77
	 SECTION 5.2
	  	Conditions to Closing and Initial Extensions of Credit	  	77
	 SECTION 5.3
	  	Conditions to All Extensions of Credit	  	81
	 SECTION 5.4
	  	Post-Closing Conditions	  	81
		
	 ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER
	  	82
	 SECTION 6.1
	  	Representations and Warranties	  	82
	 SECTION 6.2
	  	Survival of Representations and Warranties, Etc.	  	90
		
	 ARTICLE VII FINANCIAL INFORMATION AND NOTICES
	  	90
	 SECTION 7.1
	  	Financial Statements and Projections	  	90
	 SECTION 7.2
	  	Officer’s Compliance Certificate	  	94
	 SECTION 7.3
	  	Accountants’ Certificate	  	94
	 SECTION 7.4
	  	Other Reports	  	94
	 SECTION 7.5
	  	Notice of Litigation and Other Matters	  	95
	 SECTION 7.6
	  	Accuracy of Information	  	96
		
	 ARTICLE VIII AFFIRMATIVE COVENANTS
	  	96
	 SECTION 8.1
	  	Preservation of Corporate Existence and Related Matters	  	96
	 SECTION 8.2
	  	Maintenance of Property; Reinvestment	  	96
	 SECTION 8.3
	  	Insurance	  	98
	 SECTION 8.4
	  	Accounting Methods and Financial Records	  	98
	 SECTION 8.5
	  	Payment of Taxes	  	98
	 SECTION 8.6
	  	Compliance With Laws and Approvals	  	98
	 SECTION 8.7
	  	Environmental Laws	  	98
	 SECTION 8.8
	  	Compliance with ERISA	  	99
	 SECTION 8.9
	  	Visits and Inspections	  	99
	 SECTION 8.10
	  	Additional Guarantors	  	100
	 SECTION 8.11
	  	Use of Proceeds	  	105
	 SECTION 8.12
	  	Further Assurances	  	105
		
	 ARTICLE IX FINANCIAL COVENANTS
	  	106
	 SECTION 9.1
	  	Consolidated Senior Secured Leverage Ratio	  	106
	 SECTION 9.2
	  	Interest Coverage Ratio	  	106
		
	 ARTICLE X NEGATIVE COVENANTS
	  	107
	 SECTION 10.1
	  	Limitations on Indebtedness	  	107
	 SECTION 10.2
	  	Limitations on Liens	  	110
	 SECTION 10.3
	  	Limitations on Loans, Advances, Investments and Acquisitions	  	112
	 SECTION 10.4
	  	Limitations on Mergers and Liquidation	  	113
	 SECTION 10.5
	  	Limitations on Asset Dispositions	  	114
	 SECTION 10.6
	  	Limitations on Dividends and Distributions	  	115
	 SECTION 10.7
	  	Limitations on Exchange and Issuance of Capital Stock	  	116

  

 -iii- 

					
	 SECTION 10.8
	  	Transactions with Affiliates	  	116
	 SECTION 10.9
	  	Certain Accounting Changes; Organizational Documents	  	117
	 SECTION 10.10
	  	Amendments; Payments and Prepayments of Indebtedness	  	117
	 SECTION 10.11
	  	Restrictive Agreements	  	119
	 SECTION 10.12
	  	Nature of Business	  	119
	 SECTION 10.13
	  	Impairment of Security Interests	  	119
		
	 ARTICLE XI UNCONDITIONAL U.S. BORROWER GUARANTY
	  	119
	 SECTION 11.1
	  	Guaranty of Obligations	  	119
	 SECTION 11.2
	  	Nature of Guaranty	  	120
	 SECTION 11.3
	  	Waivers	  	121
	 SECTION 11.4
	  	Modification of Loan Documents, Etc.	  	122
	 SECTION 11.5
	  	Demand by the Administrative Agent	  	123
	 SECTION 11.6
	  	Termination; Reinstatement	  	123
	 SECTION 11.7
	  	No Subrogation	  	124
	 SECTION 11.8
	  	Payments	  	124
	 SECTION 11.9
	  	Nature of Obligations; Bankruptcy Limitations; Agreement for Contribution	  	124
		
	 ARTICLE XII DEFAULT AND REMEDIES
	  	126
	 SECTION 12.1
	  	Events of Default	  	126
	 SECTION 12.2
	  	Remedies	  	132
	 SECTION 12.3
	  	Rights and Remedies Cumulative; Non-Waiver; etc.	  	132
	 SECTION 12.4
	  	Crediting of Payments and Proceeds	  	133
	 SECTION 12.5
	  	Administrative Agent May File Proofs of Claim	  	134
	 SECTION 12.6
	  	Judgment Currency	  	134
		
	 ARTICLE XIII THE ADMINISTRATIVE AGENT
	  	135
	 SECTION 13.1
	  	Appointment and Authority	  	135
	 SECTION 13.2
	  	Rights as a Lender	  	136
	 SECTION 13.3
	  	Exculpatory Provisions	  	136
	 SECTION 13.4
	  	Reliance by the Administrative Agent	  	137
	 SECTION 13.5
	  	Delegation of Duties	  	137
	 SECTION 13.6
	  	Resignation of Administrative Agent	  	137
	 SECTION 13.7
	  	Non-Reliance on Administrative Agent and Other Lenders	  	138
	 SECTION 13.8
	  	No Other Duties, etc; Documentation Agent	  	139
	 SECTION 13.9
	  	Collateral and Guaranty Matters	  	139
	 SECTION 13.10
	  	Swingline Lender	  	140
		
	 ARTICLE XIV MISCELLANEOUS
	  	141
	 SECTION 14.1
	  	Notices	  	141
	 SECTION 14.2
	  	Amendments, Waivers and Consents	  	142
	 SECTION 14.3
	  	Expenses; Indemnity	  	144
	 SECTION 14.4
	  	Right of Setoff	  	146
	 SECTION 14.5
	  	Governing Law	  	147
	 SECTION 14.6
	  	Waiver of Jury Trial	  	147
	 SECTION 14.7
	  	Reversal of Payments	  	148

  

 -iv- 

					
	 SECTION 14.8
	  	Injunctive Relief; Punitive Damages	  	148
	 SECTION 14.9
	  	Accounting Matters	  	148
	 SECTION 14.10
	  	Successors and Assigns; Participations	  	148
	 SECTION 14.11
	  	Confidentiality	  	151
	 SECTION 14.12
	  	Performance of Duties	  	152
	 SECTION 14.13
	  	All Powers Coupled with Interest	  	152
	 SECTION 14.14
	  	Survival of Indemnities	  	152
	 SECTION 14.15
	  	Titles and Captions	  	152
	 SECTION 14.16
	  	Severability of Provisions	  	152
	 SECTION 14.17
	  	Counterparts	  	152
	 SECTION 14.18
	  	Integration	  	153
	 SECTION 14.19
	  	Term of Agreement	  	153
	 SECTION 14.20
	  	No Fiduciary Duty	  	153
	 SECTION 14.21
	  	Advice of Counsel, No Strict Construction	  	153
	 SECTION 14.22
	  	USA Patriot Act	  	154
	 SECTION 14.23
	  	Inconsistencies with Other Documents; Independent Effect of Covenants	  	154
	 SECTION 14.24
	  	No Novation	  	154

  

 -v- 

 EXHIBITS 
  

					
	 Exhibit A-1
	  	-	  	Form of Revolving Credit Note
	 Exhibit A-2
	  	-	  	Form of Swingline Note
	 Exhibit B
	  	-	  	Form of Notice of Borrowing
	 Exhibit C
	  	-	  	Form of Notice of Account Designation
	 Exhibit D
	  	-	  	Form of Notice of Prepayment
	 Exhibit E
	  	-	  	Form of Notice of Conversion/Continuation
	 Exhibit F
	  	-	  	Form of Officer’s Compliance Certificate
	 Exhibit G
	  	-	  	Form of Assignment and Assumption
	 Exhibit H
	  	-	  	Form of Subsidiary Guaranty Agreement
	 Exhibit I
	  	-	  	Form of Collateral Agreement
	 Exhibit J
	  	-	  	Form of Intercompany Subordination Agreement
	 Exhibit K
	  		  	Form of Borrowing Base Certificate

 SCHEDULES 
  

					
	Schedule 1.1(a)	  	-  	  	Existing Letters of Credit
	Schedule 1.1(b)	  	-  	  	Specified Existing Notes
	Schedule 1.1(c)	  	-  	  	Description of New U.S. Borrower Real Property
	Schedule 6.1(b)	  	-  	  	Subsidiaries and Capitalization
	Schedule 6.1(i-1)	  	-  	  	ERISA Plans
	Schedule 6.1(i-2)	  	-  	  	Canadian Plans
	Schedule 6.1(l)	  	-  	  	Significant Indebtedness
	Schedule 6.1(n)	  	-  	  	Burdensome Provisions
	Schedule 6.1(t)	  	-  	  	Litigation
	Schedule 10.1	  	-  	  	Permitted Indebtedness
	Schedule 10.2	  	-  	  	Existing Liens
	Schedule 10.3	  	-  	  	Existing Loans, Advances and Investments
	Schedule 10.8	  	-  	  	Transactions with Affiliates

  

 - vi - 

 CREDIT AGREEMENT, dated as of May 31, 2006, by and among BOWATER CANADIAN FOREST PRODUCTS INC., a
Canadian corporation (the “Borrower”), together with each additional borrower that becomes a party hereto pursuant to the terms hereof, as Borrower, BOWATER INCORPORATED, a Delaware corporation (the “Original U.S.
Borrower”), together with each additional guarantor that becomes a party hereto pursuant to the terms hereof, as Guarantors, the lenders who are party to this Agreement or who may become a party to this Agreement pursuant to
Section 14.10 hereof, as Lenders, and THE BANK OF NOVA SCOTIA, as Administrative Agent for the Lenders. 
 STATEMENT OF PURPOSE

 The Borrower has requested, and the Lenders have agreed, to extend certain credit facilities to the Borrower on the terms and
conditions of this Agreement. 
 NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, such parties hereby agree as follows: 
 ARTICLE I 
 DEFINITIONS 
 SECTION 1.1 Definitions. The following terms when used in
this Agreement shall have the meanings assigned to them below: 
 “Abitibi” means Abitibi-Consolidated Inc. 
 “Abitibi Entities” means, collectively, Abitibi and its Subsidiaries. 
 “Accounts” has the meaning specified in Section 1.1 of the Collateral Agreement. 
 “Administrative Agent” means The Bank of Nova Scotia, in its capacity as Administrative Agent hereunder, and any successor thereto
appointed pursuant to Section 13.6. 
 “Administrative Agent’s Office” means the office of the
Administrative Agent specified in or determined in accordance with the provisions of Section 14.1(c). 
 “Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent. 
 “Affiliate”
means, with respect to any Person, any other Person which directly or indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, such first Person or any of its Subsidiaries. As used in this
definition, the term “control” means (a) the power to vote ten percent (10%) or more of the securities or other equity interests of a Person having ordinary voting power (excluding, however, a Person or group whose ownership in
another Person is permitted to be reported on Schedule 13G pursuant to Rule 13d-1(b) under the Securities Exchange Act of 1934, as amended) or (b) the possession, directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting securities, by contract or otherwise. 

 
Notwithstanding the foregoing, (i) no individual shall be an Affiliate of the U.S. Borrower or any of its Subsidiaries solely and exclusively by reason
of his or her being a director, officer or employee of the U.S. Borrower or any of its Subsidiaries, (ii) none of the Subsidiaries of the U.S. Borrower shall be Affiliates of the U.S. Borrower or any of its Subsidiaries and (iii) no U.S.

 Borrower shall be an Affiliate of any other U.S. Borrower; provided that the Abitibi Entities shall be Affiliates of the U.S.
Borrower and its Subsidiaries for the purposes of this Agreement and the other Loan Documents and the U.S. Credit Agreement and the “Loan Documents” (as defined in the U.S. Credit Agreement). 
 “Aggregate Credit Exposure” means the sum of (a) the aggregate amount of outstanding Loans and (b) the aggregate amount of
outstanding U.S. Loans. 
 “Agreement” means this Credit Agreement, as amended by (a) the First Amendment dated as of
July 20, 2007 by and among the Borrower, the Guarantors and the Administrative Agent (on behalf of itself and the Lenders party thereto), (b) the Second Amendment dated as of October 31, 2007 by and among the Borrower, the Guarantors
and the Administrative Agent (on behalf of itself and the Lenders party thereto), (c) the Third Amendment, (d) the Fourth Amendment, (e) the Fifth Amendment, (f) the Sixth Amendment and (g) the Seventh Amendment and as
further amended, restated, supplemented or otherwise modified from time to time. 
 “Applicable Insolvency Laws” means all
Applicable Laws governing bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances or other similar laws (including, without limitation, 11 U.S.C. Sections 544,
547, 548 and 550 and other “avoidance” provisions of Title 11 of the United States Code, as amended or supplemented, the Bankruptcy and Insolvency Act (Canada), as amended or supplemented, the Companies’ Creditors Arrangement Act
(Canada), as amended or supplemented, and the CCQ). 
 “Applicable Law” means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses, approvals, legally binding policies, interpretations and orders of courts or Governmental Authorities and all orders and decrees of all courts and arbitrators. 

“Applicable Margin” means the corresponding percentages per annum as set forth below based on the Average Utilization: 
 (a) as of any date of determination prior to the Conversion Date: 
  

									
	 Pricing
Level
	  	 Average Utilization Percentage
	  	LIBOR +	 	 	Canadian Prime Rate
or Base Rate +	 
	I	  	Greater than 75%	  	3.00	%	 	1.75	%
	II	  	Greater than 35%, but less than or equal to 75%	  	2.75	%	 	1.50	%
	III	  	Less than or equal to 35%	  	2.50	%	 	1.25	%

  

 - 2 - 

 (b) as of any date of determination on or after the Conversion Date: 
  

									
	 Pricing
Level
	  	 Average Utilization Percentage
	  	LIBOR +	 	 	Base Rate +	 
	I	  	Greater than 75%	  	3.50	%	 	2.25	%
	II	  	Greater than 35%, but less than or equal to 75%	  	3.25	%	 	2.00	%
	III	  	Less than or equal to 35%	  	3.00	%	 	1.75	%

 The Applicable Margin shall be determined by the Administrative Agent and adjusted quarterly on each Calculation
Date; provided that the Applicable Margin shall be based on Pricing Level II until the first Calculation Date occurring after the Seventh Amendment Effective Date and, thereafter the Pricing Level shall be determined by reference to the
Average Utilization Percentage as of the last day of the most recently ended fiscal quarter of the U.S. Borrower preceding the applicable Calculation Date. The Applicable Margin shall be effective from one Calculation Date until the next Calculation
Date. Any adjustment in the Applicable Margin shall be applicable to all Extensions of Credit then existing or subsequently made or issued. 
 “Approved Fund” means any Person (other than a natural Person), including, without limitation, any special purpose entity, that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business; provided, that such Approved Fund must be administered, managed or underwritten by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender. 
 “April 2008 Convertible Indebtedness” means that certain
Indebtedness incurred by the Parent in accordance with the terms of Section 12.1(o)(viii) on or prior to April 15, 2008, which is convertible into Capital Stock of the Parent. 
 “Asset Coverage Amount” means, as of any date of determination, an amount equal to sixty percent (60%) of the net book value of the
Coverage Assets as set forth on the Consolidated balance sheet of the Borrower and its Consolidated Subsidiaries most recently delivered pursuant to Section 5.2 or Section 7.1 hereof. 
 “Asset Disposition” means the disposition of any or all of the assets (including, without limitation, any Capital Stock owned thereby)
of the U.S. Borrower or any of its Subsidiaries whether by sale, lease, transfer or otherwise. The term “Asset Disposition” shall not include any Insurance and Condemnation Event. 
 “Assignment and Assumption” means an assignment and assumption entered into by a Lender and an Eligible Assignee (with the consent of
any party whose consent is required by Section 14.10), and accepted by the Administrative Agent, in substantially the form of Exhibit G or any other form approved by the Administrative Agent. 
  

 - 3 - 

 “Attributable Indebtedness” means, on any date, (a) in respect of any Capital Lease
of any Person, the capitalized amount thereof that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP, and (b) in respect of any Synthetic Lease, the capitalized amount or principal amount of the
remaining lease payments under the relevant lease that would appear on a balance sheet of such Person prepared as of such date in accordance with GAAP if such lease were accounted for as a Capital Lease. 
 “Average Utilization” means, for any calendar quarter, the average daily principal balance of all Extensions of Credit outstanding
during such calendar quarter. 
 “BA Discount Rate” means, with respect to an issue of Bankers’ Acceptances with the
same maturity date, (a) for a Lender which is a Schedule I Lender, the CDOR Rate for the appropriate term, and (b) for a Lender which is a Lender (other than a Schedule I Lender), the arithmetic average (rounded upwards to the nearest
1/100 of 1%) of the actual discount rates for Bankers’ Acceptances for such term accepted by the Schedule II or III Reference Banks established in accordance with their normal practices at or about 10:00 a.m. (Toronto time) on the date of
issuance. 
 “BA Equivalent Loan” means a Revolving Credit Loan made to the Borrower by a Non-BA Lender in lieu of accepting
such Non-BA Lender’s share of Bankers’ Acceptances which may be evidenced by a Discount Note. 
 “BA Loan” means a
borrowing by the Borrower by way of the issuance of Bankers’ Acceptances and includes a BA Equivalent Loan. 
 “BA
Proceeds” means, for any Bankers’ Acceptance issued and to be purchased by the Lenders hereunder, an amount calculated on the applicable date that such Bankers’ Acceptance is accepted by dividing: 
 (a) the face amount of such Bankers’ Acceptance 
       by 
 (b) the sum of one plus the product of: 
 (i) the BA Discount Rate applicable thereto 
      and 
 (ii) a fraction, the numerator of which is the number of
days in the applicable Interest Period and the denominator of which is the number of days in the applicable year, being 365 or 366, as the case may be, 
 with the product being rounded up or down to the (A) second decimal place (with .005 being rounded up) and (B) nearest whole cent with one-half of one cent being rounded up. 
 “Bankers’ Acceptance” means each bill of exchange, including a depository bill issued in accordance with the Depository Bills
and Notes Act (Canada), denominated in Canadian Dollars, drawn by the Borrower and accepted by a Lender (including, without limitation, each Discount Note). 
  

 - 4 - 

 “Base Rate” means, at any time, the higher of (a) the Prime Rate and (b) the
Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take effect simultaneously with the corresponding change or changes in the Prime Rate or the Federal Funds Rate. 
 “Base Rate Loan” means any Loan made to the Borrower in Dollars which bears interest at a rate based upon the Base Rate as provided in
Section 4.1(a). 
 “BCFC Notes” means the 7.95% Notes due 2011 issued pursuant to the Indenture dated as of
October 31, 2001 among Bowater Canada Finance Corporation, as Issuer, the Original U.S. Borrower, as Guarantor, and The Bank of New York, as Trustee. 
 “Borrower” has the meaning assigned thereto in the introductory paragraph hereto. 
 “Borrowing Base” means, at any time, the amount equal to: 
 (a) the sum of: 
 (i) up to eighty-five percent (85%) of Eligible Domestic Accounts; plus  
 (ii) up to the Credit Insurance Policy limit with respect to Eligible Foreign Accounts, reduced dollar for dollar by the aggregate amount
of unpaid premium payments with respect to such Credit Insurance Policy; provided that such amount shall in no event whatsoever exceed one hundred percent (100%) of the Eligible Foreign Accounts; 
 plus 
 (b) the sum of:

 (i) with respect to Eligible Inventory consisting of raw materials and work in process, the lesser of: (A) up to
eighty-five percent (85%) of the Net Recovery Percentage of such Eligible Inventory; and (B) up to sixty percent (60%) of the Value of such Eligible Inventory; plus  
 (ii) with respect to Eligible Inventory consisting of finished goods, the lesser of: (A) up to eighty-five percent (85%) of the
Net Recovery Percentage of such Eligible Inventory and (B) up to seventy-five percent (75%) of the Value of such Eligible Inventory; 
 minus 
 (c) any Reserves. 
 “Borrowing Base Certificate” means a certificate substantially in the form of Exhibit K. 
 “Borrowing Limit” means, at any time, the least of: 
  

 - 5 - 

 (a) the aggregate principal amount of the Commitments at such time less, except with respect to
Section 2.4(b) and Section 5.2(e)(iii), 
 (i) in the case of any request for Revolving Credit Loans
(other than BA Loans), the sum of all outstanding Swingline Loans, BA Loans and L/C Obligations; 
 (ii) in the case of any
request for Swingline Loans, the sum of all outstanding Revolving Credit Loans (including BA Loans) and L/C Obligations; or 
 (iii) in the case of any request for BA Loans, the sum of all outstanding Revolving Credit Loans (other than BA Loans), Swingline Loans and L/C Obligations; or 
 (iv) in the case of any request for issuance of a Letter of Credit, the sum of all outstanding Loans (including BA Loans); and 

(b) the amount which, when aggregated with the aggregate amount of all other Extensions of Credit, does not exceed the Asset Coverage Amount; and

 (c) at any time on or after the Conversion Date, the Borrowing Base at such time less, except with respect to
Section 2.4(b), 
 (i) in the case of any request for Revolving Credit Loans (other than BA Loans), the sum of all
outstanding Swingline Loans, BA Loans and L/C Obligations; 
 (ii) in the case of any request for Swingline Loans, the sum of
all outstanding Revolving Credit Loans (including BA Loans) and L/C Obligations; 
 (iii) in the case of any request for BA
Loans, the sum of all outstanding Revolving Credit Loans (other than BA Loans), Swingline Loans and L/C Obligations; or 
 (iv) in the case of any request for issuance of a Letter of Credit, the sum of all outstanding Loans (including BA Loans). 
 “Bowater-Calhoun Arrangement” means that certain intercompany loan arrangement pursuant to which: 
 (a) the
Original U.S. Borrower loaned $33,294,000 of proceeds of the McMinn County pollution control bonds to Calhoun Newsprint Company as evidenced by an intercompany note payable to the Original U.S. Borrower; and 
 (b) Calhoun Newsprint Company loaned such proceeds back to the Original U.S. Borrower as evidenced by an intercompany note payable to Calhoun Newsprint
Company and secured by the Original U.S. Borrower’s intercompany note receivable referred to in clause (a). 
 “Bowater
Guaranteed Obligations” has the meaning assigned thereto in Section 11.1. 
  

 - 6 - 

 “Business Day” means: 
 (a) for all purposes other than as set forth in clause (b) below, any day other than a Saturday, Sunday or legal holiday on which banks in New York,
New York, Toronto, Ontario and Montreal, Québec are open for the conduct of their commercial banking business; and 
 (b) with respect
to all notices and determinations in connection with, and payments of principal and interest on, any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and that is also a day for trading by and between banks in deposits for
the applicable Permitted Currency in the London interbank market or any other applicable offshore interbank market for such Permitted Currency. 
 “Calculation Date” means (a) each date that is ten (10) Business Days after the end of each fiscal quarter of the Original U.S. Borrower and (b) the Conversion Date. 
 “Canadian Dollar” or “C$” means, at any time of determination, the lawful currency of Canada. 
 “Canadian Employee Benefit Plan” means (a) any employee benefit plan that is maintained for the benefit of employees or former
employees of the Borrower or any of its Domestic Subsidiaries registered in accordance with the ITA or other Applicable Law which the U.S. Borrower or any of its Subsidiaries sponsors, maintains, or to which it makes, is making, or is obligated to
make, contributions or (b) any Canadian Pension Plan or Canadian Multiemployer Plan that has at any time within the preceding six (6) years been maintained for the employees of the U.S. Borrower or any of its Subsidiaries, and shall not
include any Employee Benefit Plan. 
 “Canadian Fee Letter” means the separate fee letter agreement executed by the Borrower
and The Bank of Nova Scotia and/or certain of its affiliates dated May 31, 2006. 
 “Canadian GAAP” means generally
accepted accounting principles in Canada, that are applicable to the circumstances as of the date of determination, consistently applied. 
 “Canadian Multiemployer Plan” means a “multi-employer pension plan” as defined by Applicable Laws and registered in accordance with the ITA or other Applicable Laws and as to which the U.S. Borrower or any of its
Subsidiaries is making, or is accruing an obligation to make, or has accrued an obligation to make, contributions within the preceding six (6) years, and shall not include any Multiemployer Plan. 
 “Canadian Pension Plan” means any Canadian Employee Benefit Plan, other than a Canadian Multiemployer Plan, which is registered in
accordance with the ITA or other Applicable Law and which (a) is maintained for the employees of the U.S. Borrower or any of its Subsidiaries or (b) has at any time within the preceding six (6) years been maintained for the employees
of the U.S. Borrower or any of its Subsidiaries which the U.S. Borrower or any of its Subsidiaries sponsors, maintains, or to which it makes, is making or is obligated to make, contributions, and shall not include any Pension Plan. 
  

 -7 - 

 “Canadian Prime Rate” means, 
 (a) with respect to Revolving Credit Loans denominated in Canadian Dollars, at any time, the greater of (i) the rate of interest per annum announced
by the Administrative Agent from time to time (and in effect on such day) as its prime rate for Canadian Dollar commercial loans made in Canada, as adjusted automatically from time to time and without notice to the Borrower upon change by the
Administrative Agent and (ii) one percent (1%) plus the one (1) month CDOR Rate from time to time (and in effect on such day) as advised by the Administrative Agent to the Borrower from time to time pursuant hereto; and

 (b) with respect to Swingline Loans denominated in Canadian Dollars, at any time, the greater of (i) the rate of interest per annum
announced by the Swingline Lender from time to time (and in effect on such day) as its prime rate for Canadian Dollar commercial loans made in Canada, as adjusted automatically from time to time and without notice to the Borrower upon change by the
Swingline Lender and (ii) one percent (1%) plus the one (1) month CDOR Rate from time to time (and in effect on such day) as advised by the Swingline Lender to the Borrower from time to time pursuant hereto. 
 The parties hereto acknowledge that the rate announced publicly by the Administrative Agent or the Swingline Lender, as applicable, as its prime rate is
an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks. 
 “Canadian
Prime Rate Loan” means any Loan made to the Borrower in Canadian Dollars which bears interest based upon the Canadian Prime Rate as provided in Section 4.1(a). 
 “Capital Asset” means, with respect to the U.S. Borrower and its Subsidiaries, any asset that should, in accordance with GAAP, be
classified and accounted for as a capital asset on a Consolidated balance sheet of the U.S. Borrower and its Subsidiaries. 
 “Capital Expenditures” means, with respect to the U.S. Borrower and its Subsidiaries for any period, the aggregate cost of all Capital Assets acquired by the U.S. Borrower and its Subsidiaries during such period, as
determined in accordance with GAAP. 
 “Capital Lease” means any lease of any property by the U.S. Borrower or any of its
Subsidiaries, as lessee, that should, in accordance with GAAP, be classified and accounted for as a capital lease on a Consolidated balance sheet of the U.S. Borrower and its Subsidiaries. 
 “Capital Stock” means (a) in the case of a corporation, capital stock, (b) in the case of an association or business entity,
any and all shares, interests, participations, rights or other equivalents (however designated) of capital stock, (c) in the case of a partnership, partnership interests (whether general or limited), (d) in the case of a limited liability
company, membership interests and (e) any other interest or participation that confers on a Person the right to receive a share of the profits and losses of, or distributions of assets of, the issuing Person. 
 “Cash Equivalents” means, collectively: 
 (a) marketable obligations issued or unconditionally guaranteed by the United States, Canada or any agency thereof maturing within two hundred seventy (270) days from the date of acquisition thereof; 

 

 - 8 - 

 (b) commercial paper maturing no more than two hundred seventy (270) days from the date of creation
thereof and currently having the highest rating obtainable from either S&P, Moody’s or DBRS; 
 (c) certificates of deposit, time
deposits and bankers’ acceptances maturing no more than two hundred seventy (270) days from the date of creation thereof issued by commercial banks incorporated under the laws of the United States or Canada, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating of “A” or better by a nationally recognized rating agency; provided that the aggregate amount invested in such certificates of deposit shall not at any
time exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for any one such bank; 
 (d) repurchase obligations for
underlying securities of the types described in, and satisfying the requirements specified in, clauses (a) and (c) above entered into with any bank satisfying the requirements specified in clause (c) above; 
 (e) demand deposit accounts maintained in the ordinary course of business; and 
 (f) (i) money market mutual or similar funds which (A) invest solely in assets of the types described in clauses (a) through (e) above,
without regard to the limitations as to the maturity of such obligations, bankers’ acceptances, time deposits, certificates of deposit, repurchase agreements or commercial paper set forth above, (B) are rated at least “AAm” or
“AAmg” or their equivalent by both S&P and Moody’s, provided that there is no “r-highlighter” affixed to such rating and (C) comply with Rule 2a-7 of the Investment Company Act of 1940, as amended; and

 (ii) the money market fund called Columbia Cash Reserves, so long as Columbia Cash Reserves continues to buy only
“first tier” securities as defined by Rule 2a-7 of the Investment Company Act of 1940, as amended. 
 “CCQ” means
the Civil Code of Québec as in effect in the Province of Québec, as amended or modified from time to time. 
 “CDOR Rate” means, on any day, with respect to a particular term as specified herein, the annual rate of discount or interest which is the arithmetic average of the discount rates (rounded upwards to the nearest multiple of
0.01%) for bankers’ acceptances denominated in Canadian Dollars for such term and face amount identified as such on the Reuters Screen CDOR Page at approximately 10:00 a.m. (Toronto time) on such day, or if such day is not a Business Day, then
on the immediately preceding Business Day (as adjusted by the Administrative Agent after 10:00 a.m. (Toronto time) to reflect any error in any posted rate or in the posted average annual rate). If the rate does not appear on the Reuters Screen CDOR
Page as contemplated above, then the CDOR Rate on any day shall be calculated by the Administrative Agent as the arithmetic average of the discount rates (rounded upwards to the nearest multiple of 0.01%) for bankers’ acceptances denominated in
Canadian Dollars for such term and face amount of, and as quoted by, the Schedule I Reference Banks, as of 10:00 a.m. (Toronto time) on that day, or if that day is not a Business Day, then on the immediately preceding Business Day. Each calculation
by the Administrative Agent of the CDOR Rate shall be binding and conclusive for all purposes, absent manifest error. 
  

 - 9 - 

 “Change in Control” means an event or series of events by which (a) except in the
case of the conversion to Capital Stock of the April 2008 Convertible Indebtedness (as to which this clause (a) shall not apply), any person or group of persons (within the meaning of Section 13(d) of the Securities Exchange Act of 1934,
as amended) shall obtain ownership or control in one or more series of transactions of more than thirty-five percent (35%) of the Capital Stock or thirty-five percent (35%) of the voting power of the Parent entitled to vote in the election
of members of the board of directors of the Parent, (b) after giving effect to the conversion to Capital Stock of the April 2008 Convertible Indebtedness and solely in connection therewith, any person or group of persons (within the meaning of
Section 13(d) of the Securities Exchange Act of 1934, as amended) shall obtain ownership or control in one or more series of transactions of fifty percent (50%) or more of the Capital Stock or fifty percent (50%) or more of the voting
power of the Parent entitled to vote in the election of members of the board of directors of the Parent, (c) during any period of twenty-five (25) consecutive calendar months, a majority of the members of the board of directors of the
Parent cease to be composed of Continuing Directors, (d) there shall have occurred under any indenture or other instrument evidencing any Indebtedness of the U.S. Borrower or any of its Subsidiaries in excess of $25,000,000 any “change in
control” or similar provision (as set forth in the indenture, agreement or other evidence of such Indebtedness) obligating the U.S. Borrower or any of its Subsidiaries to repurchase, redeem or repay all or any part of such Indebtedness or
Capital Stock provided for therein (provided that if such obligation is contingent on any other event or circumstance, then such “change in control” shall not constitute a Change in Control hereunder unless such other event or
circumstance also has occurred or exists), (e) the Parent shall cease to own one hundred percent (100%) of the Capital Stock of the Original U.S. Borrower, (f) the Original U.S. Borrower shall cease to own, directly or indirectly, one
hundred percent (100%) of the Capital Stock of the Borrower or (g) the Parent shall cease to own one hundred percent (100%) of the Capital Stock of any New U.S. Borrower. 
 For the purposes hereof, “Continuing Directors” means, during any period of twenty-five (25) consecutive calendar months, individuals
(i) who were members of the board of directors on the first day of such period, (ii) whose election or nomination to the board of directors was approved by individuals who comprised a majority of the board of directors on the first day of
such period or (iii) whose election or nomination to the board of directors was approved by (A) individuals who were members of the board of directors on the first day of such period or (B) individuals whose election or nomination to
the board of directors was approved by a majority of the board of directors on the first day of such period; provided that in each case such individuals referenced in clause (A) and clause (B) constituted a majority of the board of
directors at the time of such election or nomination. 
 “Change in Law” means the occurrence, after the date of this
Agreement, of any of the following: (a) the adoption or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any
Governmental Authority or (c) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Governmental Authority. 
  

 - 10 - 

 “Closing Date” means the date of this Agreement or such later Business Day upon which
each condition described in Section 5.2 shall be satisfied or waived in all respects in a manner acceptable to the Administrative Agent, in its sole discretion. 
 “Code” means the Internal Revenue Code of 1986, and the rules and regulations thereunder, each as amended or modified from time to time.

 “Collateral” means the collateral security for the Obligations and/or the U.S. Obligations (as the case may be) pledged
or granted pursuant to the Security Documents. 
 “Collateral Agreement” means the collateral agreement of even date
executed by the Credit Parties in favor of the Administrative Agent, for the benefit of the Secured Parties, substantially in the form of Exhibit I, as amended, restated, supplemented or otherwise modified from time to time. 
 “Combination” means the combination of the Original U.S. Borrower with Abitibi-Consolidated Inc., with the Parent as a common holding
company, pursuant to the terms of the Combination Agreement. 
 “Combination Agreement” means that certain Combination
Agreement and Agreement and Plan of Merger dated as of January 29, 2007 among the Parent, Abitibi-Consolidated Inc., the Original U.S. Borrower, Alpha-Bravo Merger Sub Inc., a Delaware corporation, and Bowater Canada, Inc., as the same may be
amended, modified or supplemented from time to time. 
 “Commitment” means (a) as to any Lender, the obligation
of such Lender to make Extensions of Credit to the Borrower hereunder in an aggregate principal amount at any time outstanding not to exceed the amount set forth opposite such Lender’s name on the Register, as such amount may be modified at any
time or from time to time pursuant to the terms hereof and (b) as to all Lenders, the aggregate commitment of all Lenders to make Extensions of Credit, as such amount may, subject to Section 14.2(b)(ii), be modified at any time or
from time to time pursuant to the terms hereof. The Commitment of all the Lenders on the Closing Date shall be $165,000,000, the Commitments of all the Lenders on the Sixth Amendment Effective Date shall be $112,500,000 and the Commitments of all
Lenders on the Seventh Amendment Effective Date shall be $143,750,000. 
 “Commitment Percentage” means, as to any
Lender at any time, the ratio of (a) the amount of the Commitment of such Lender to (b) the Commitments of all the Lenders. 
 “Consolidated” means, when used with reference to financial statements or financial statement items of any Person, such statements or items on a consolidated basis in accordance with applicable principles of consolidation
under GAAP; provided, however, that, when used with respect to the U.S. Borrower, “Consolidated” shall include the Original U.S. Borrower and its Subsidiaries (other than the Abitibi Entities) combined with each New U.S. Borrower
and its Subsidiaries (if any). 
  

 - 11 - 

 “Consolidated Adjusted EBITDA” means, for any period, the sum for the U.S. Borrower and
its Consolidated Subsidiaries (determined on a Consolidated basis, without duplication, in accordance with GAAP) of the following: (a) Consolidated EBITDA for such period plus (b) any net gain on any Asset Disposition during such
period minus (c) any net loss on any Asset Disposition during such period; provided that, for purposes of this Agreement, Consolidated Adjusted EBITDA shall be adjusted on a pro forma basis, in a manner consistent with
Regulation S-X of the SEC or otherwise reasonably acceptable to the Administrative Agent, to include or exclude, as applicable, as of the first day of any applicable period, (A) any Permitted Acquisition closed during such period or
(B) any permitted Asset Disposition closed during such period (other than Asset Dispositions permitted pursuant to Section 10.5(a)-(h)) of assets having an aggregate fair market value (at the time of the closing of such Asset
Disposition) in excess of $50,000,000. 
 “Consolidated EBITDA” means, for any period, the sum for the U.S. Borrower and its
Consolidated Subsidiaries (determined on a Consolidated basis, without duplication, in accordance with GAAP) of the following: 
 (a)
Consolidated Net Income for such period, 
 plus 
 (b) the sum of the following to the extent deducted in determining Consolidated Net Income for such period: 
 (i) income taxes for such period (or minus, to the extent added in determining Consolidated Net Income for such period, income tax
benefit for such period); 
 (ii) amortization, depreciation, depletion and other non-cash charges for such period;

 (iii) Consolidated Interest Expense for such period; 
 (iv) any extraordinary charges for such period; 
 (v) any unusual or non-recurring charges for such period up to an amount not to exceed five percent (5%) of the Consolidated EBITDA
of the U.S. Borrower and its Subsidiaries (as calculated without giving effect to this clause (v) or clause (vi) below); 
 (vi) any cost savings and synergies associated with a Permitted Acquisition not to exceed five percent (5%) of the Consolidated EBITDA of the U.S. Borrower and its Subsidiaries (as calculated without giving effect to this clause
(vi) or clause (v) above); and 
 (vii) any net loss on any Asset Disposition during such period, 
 less 
 (c) the sum of
the following to the extent included in determining Consolidated Net Income for such period: 
 (i) the aggregate amount of
interest income for such period; 
  

 - 12 - 

 (ii) any extraordinary gains during such period; 
 (iii) any unusual or non-recurring gains during such period; and 
 (iv) any net gain on any Asset Disposition during such period; 
 provided that, for purposes of this Agreement, Consolidated EBITDA shall be adjusted on a pro forma basis, in a manner consistent with Regulation S-X of the SEC or otherwise reasonably acceptable
to the Administrative Agent and the U.S. Administrative Agent, to include or exclude, as applicable, as of the first day of any applicable period, (A) any Permitted Acquisition closed during such period or (B) any permitted Asset
Disposition closed during such period (other than Asset Dispositions permitted pursuant to Section 10.5(a)-(h)) of assets having an aggregate fair market value (at the time of the closing of such Asset Disposition) in excess of
$50,000,000. 
 “Consolidated Interest Expense” means, with respect to the U.S. Borrower and its Consolidated Subsidiaries
for any period, (a) the gross interest expense (including, without limitation, interest expense attributable to Capital Leases and plus the net amount payable (or minus the net amount receivable) under any Interest Rate Contracts
of the U.S. Borrower and its Consolidated Subsidiaries), plus (b) the aggregate amount of all cash distributions or dividends paid by the U.S. Borrower and its Consolidated Subsidiaries to the Parent pursuant to, and in accordance with,
Section 10.6(j) , all determined for such period on a Consolidated basis without duplication, in accordance with GAAP. 
 “Consolidated Net Income” means, with respect to the U.S. Borrower and its Consolidated Subsidiaries, for any period of determination, the net income (or loss) of the U.S. Borrower and its Consolidated Subsidiaries for such
period, determined on a Consolidated basis in accordance with GAAP. 
 “Consolidated Senior Secured Leverage Ratio”
means, as of any date of determination, the ratio of (a) Consolidated Total Senior Secured Indebtedness on such date to (b) the sum, without duplication, of (i) Consolidated EBITDA for the period of four (4) consecutive fiscal
quarters ending on or immediately prior to such date plus (ii) the amount of Specified Non-Recurring Charges taken during the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date.

 “Consolidated Subsidiary” means, for any Person, each Subsidiary of such Person (whether now existing or hereafter
created or acquired) the financial statements of which shall be (or should have been) consolidated with the financial statements of such Person in accordance with GAAP. 
 “Consolidated Total Indebtedness” means, as of any date of determination, without duplication, all Indebtedness (excluding clause (h) of the definition thereof) of the U.S. Borrower and its
Consolidated Subsidiaries. 
 “Consolidated Total Leverage Ratio” means, as of any date of determination, the ratio of
(a) Consolidated Total Indebtedness on such date to (b) Consolidated EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date. 
  

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 “Consolidated Total Senior Secured Indebtedness” means, 
 (a) for purposes of determining the Consolidated Senior Secured Leverage Ratio, as of any date of determination with respect to the U.S. Borrower and its
Consolidated Subsidiaries on a Consolidated basis, without duplication, the sum of (i) all outstanding U.S. Extensions of Credit (including, without limitation, each outstanding letter of credit and each outstanding swingline loan) under the
U.S. Credit Facility plus (ii) all outstanding Extensions of Credit (including, without limitation, each outstanding Letter of Credit and each outstanding Swingline Loan) under the Credit Facility plus (iii) all other
outstanding Indebtedness of the U.S. Borrower and its Consolidated Subsidiaries which is secured by any assets of the U.S. Borrower and its Consolidated Subsidiaries other than any Hedging Agreement; and 
 (b) for all other purposes, as of any date of determination with respect to the U.S. Borrower and its Consolidated Subsidiaries on a Consolidated basis,
without duplication, the sum of (i) all outstanding U.S. Extensions of Credit (including, without limitation, each outstanding letter of credit and each outstanding swingline loan) under the U.S. Credit Facility plus (ii) all other
outstanding Indebtedness (other than any Hedging Agreement) of the U.S. Borrower and its Consolidated Subsidiaries which is secured by a Lien on the U.S. Coverage Assets. 
 “Conversion Date” means November 15, 2008. 
 “Coosa Pines IDB” has
the meaning set forth in the definition of Supplemental New U.S. Borrower Mortgage. 
 “Coverage Assets” means all accounts
receivable (excluding any intercompany accounts receivable) and all inventory of the Borrower and its Domestic Subsidiaries; provided that for purposes of calculating the Asset Coverage Amount, the net book value of inventory constituting
Coverage Assets shall not, at any time, exceed $170,000,000. 
 “Credit Facility” means, collectively, the Revolving Credit
Facility, the Swingline Facility and the L/C Facility. 
 “Credit Insurance Policy” means a foreign accounts receivable
credit insurance policy payable to the Administrative Agent, for the benefit of the Secured Parties, and issued by an insurer reasonably acceptable to the Administrative Agent and containing terms and provisions (including, without limitation,
coverage amounts, limits, deductibles and exclusions from coverage) acceptable to the Administrative Agent in its sole discretion. 
 “Credit Parties” means, collectively, the Borrower and the Guarantors. 
 “DBRS” means DBRS
Limited and any successor thereto. 
 “Default” means any of the events specified in Section 12.1 which with the
passage of time, the giving of notice or any other condition, would constitute an Event of Default. 
  

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 “Defaulting Lender” means any Lender that (a) has failed to fund any portion of the
Revolving Credit Loans or participations in L/C Obligations or participations in Swingline Loans required to be funded by it hereunder within one (1) Business Day of the date required to be funded by it hereunder, (b) has otherwise failed
to pay over to the Administrative Agent or any other Lender any other amount required to be paid by it hereunder within one (1) Business Day of the date when due, unless such amount is the subject of a good faith dispute, or (c) has been
deemed insolvent or become the subject of a bankruptcy, receivership or insolvency proceeding. 
 “Determination Time” means
(i) with respect to Extensions of Credit expressed in Canadian Dollars, each of (A) approximately 11:00 a.m. (Toronto time) two (2) Business Days before such Extension of Credit is made or issued (or to be made or issued), as
applicable, and (B) approximately 11:00 a.m. (Toronto time) two (2) Business Days before each date on which such Extension of Credit is continued pursuant to Section 4.2 or extended (or to be continued or extended), as
applicable, or (ii) at such times as may be reasonably determined by the Administrative Agent (not more frequently than quarterly). 
 “Discount Note” means a non-interest bearing promissory note denominated in Canadian Dollars issued by the Borrower to a Non-BA Lender to evidence a BA Equivalent Loan. 
 “Disputes” means any dispute, claim or controversy arising out of, connected with or relating to this Agreement or any other Loan
Document, between or among parties hereto and to the other Loan Documents. 
 “Document” has the meaning specified in
Section 1.1 of the Collateral Agreement. 
 “Documentation Agent” means Wachovia Bank, National Association, in
its capacity as Documentation Agent hereunder. 
 “Dollar Amount” means, as of any date of determination, (a) with
respect to each Extension of Credit or other sum expressed in Dollars, the amount thereof and (b) with respect to each Extension of Credit or other sum expressed in Canadian Dollars, the amount of Dollars which is equivalent to the principal
amount of such Extension of Credit or other sum, at the most favorable spot exchange rate reasonably determined by the Administrative Agent as of the most recent Determination Time. 
 “Dollars” or “$” means, unless otherwise qualified, dollars in lawful currency of the United States. 
 “Domestic Subsidiary” means any Subsidiary of the Borrower organized under the laws of Canada or any province or political subdivision
thereof. 
 “Eligible Accounts” means, at any time, Accounts of the Borrower and its Consolidated Subsidiaries which the
Administrative Agent determines, in the exercise of its reasonable business and credit judgment as a secured asset based lender, are eligible as the basis for the extension of Revolving Credit Loans and Swingline Loans and the issuance of Letters of
Credit hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible Accounts shall not include any Account: 
 (a) that does not arise out of actual and bona fide sales of goods or rendering of services in the ordinary course of the Borrower’s or the relevant Subsidiary’s business, which transactions are completed in
accordance with the terms and provisions of any documents related thereto; 
  

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 (b) that would otherwise be an Eligible Domestic Account, but is payable other than in
Dollars or Canadian Dollars, or that is otherwise on terms other than those normal or customary in the Borrower’s or the relevant Subsidiary’s business; 
 (c) that would otherwise be an Eligible Foreign Account, but is payable other than in Dollars, Canadian Dollars, Euros or Pounds Sterling
or that is otherwise on terms other than those normal or customary in the Borrower’s or the relevant Subsidiary’s business; 
 (d) that is owing from an account debtor where the account debtor or any officer or employee of the account debtor with respect to such Account is an officer, employee, agent or other Affiliate of the Borrower or any
Subsidiary; 
 (e) that is unpaid more than ninety (90) days past original invoice date or more than sixty (60) days
past the original due date; 
 (f) of any account debtor where fifty percent (50%) or more of the Accounts owing from
such account debtor are not deemed Eligible Accounts; 
 (g) that is owing by an account debtor to the extent the aggregate
amount of Accounts owing from such account debtor and its Affiliates to the Borrower or any of its Subsidiaries exceeds ten percent (10%) of the aggregate Eligible Accounts, but only the amount in excess thereof shall be ineligible; 

(h) that is owing from any Person that (i) has disputed liability for any Account owing from such Person or (ii) has
otherwise asserted any claim, demand or liability against the Borrower or any of its Subsidiaries, whether by action, suit, counterclaim or otherwise; 
 (i) that is owing from any Person that shall take or be the subject of any action or proceeding of a type described in Section 12.1(i) or Section 12.1(j); 
 (j) that is owing from any account debtor not deemed creditworthy at any time by the Administrative Agent in good faith; 
 (k) with respect to which any cheque or other instrument of payment has been returned uncollected for any reason; 
 (l) which is evidenced by a promissory note, chattel paper or instrument; 
 (m) which is owed by an account debtor located in any jurisdiction which requires filing of a “Notice of Business Activities
Report” or other similar report in order to permit the Borrower or its applicable Subsidiary to seek judicial enforcement in such jurisdiction of payment of such Account, unless the Borrower or its applicable Subsidiary has filed such report or
qualified to do business in such jurisdiction; 
  

 - 16 - 

 (n) (i) owing from any Person that is also a supplier to or creditor of the Borrower or
any of its Subsidiaries or (ii) representing any manufacturer’s or supplier’s credits, discounts, incentive plans or similar arrangements entitling the Borrower or any of its Subsidiaries to discounts on future purchase therefrom;

 (o) that is owing by an account debtor whose chief executive office with respect to such Account is located outside Canada
or the United States, other than Eligible Foreign Accounts; 
 (p) which (i) is not evidenced by an invoice or other
documentation satisfactory to the Administrative Agent which has been sent to the account debtor, (ii) is contingent upon the Borrower’s or its Subsidiary’s completion of any further performance, (iii) represents a progress
billing, or (iv) arises out of sales on a bill-and-hold, guaranteed sale, sale-or-return, sale on approval, consignment, cash on delivery basis or subject to any right of return, repurchase, setoff or charge back; 
 (q) owing from an account debtor that is a Governmental Authority of the United States or Canada or any state or province thereof unless
the Borrower or its relevant Subsidiary shall have satisfied the requirements of the Assignment of Claims Act of 1940 in the case of Accounts owing from a Governmental Authority of the United States, the Financial Administration Act (Canada) in the
case of Accounts owing from a Governmental Authority of Canada and any similar state or provincial legislation and the Administrative Agent is satisfied as to the absence of setoffs, counterclaims and other defenses on the part of such account
debtor; 
 (r) with respect to which any representation and warranty set forth in any Loan Document applicable to Accounts is
not true and correct; 
 (s) in respect of which the Collateral Agreement, after giving effect to the related filings of
financing statements that have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Administrative Agent, on behalf of the Secured Parties, securing the Obligations
or which is subject to any Lien except those permitted under this Agreement which does not have priority over the Liens of the Administrative Agent hereunder; 
 (t) which is owing to a non-Wholly Owned Subsidiary; 
 (u) that is, in accordance with GAAP, classified as a contra-account which offset other assets on the balance sheet of the Borrower or its
Subsidiaries; or 
 (v) which the Administrative Agent otherwise determines, in the exercise of its reasonable business and
credit judgment as a secured asset based lender, is unacceptable for any reason whatsoever. 
 “Eligible Assignee” means (a)
a Lender, (b) an Affiliate of a Lender, (c) an Approved Fund, and (d) any other Person (other than a natural person) approved by (i) the Administrative Agent, (ii) the Swingline Lender, (iii) each Issuing Lender and (iv) unless a Default or Event of

  

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Default has occurred and is continuing, the Borrower (each such approval not to be unreasonably withheld or delayed). Notwithstanding the foregoing,
“Eligible Assignee” shall not include the U.S. Borrower or any of the U.S. Borrower’s Affiliates or Subsidiaries. 
 “Eligible Domestic Accounts” means Eligible Accounts owing by an account debtor whose chief executive office with respect to such Accounts is located in Canada or the United States. 
 “Eligible Foreign Accounts” means Eligible Accounts owing by an account debtor whose chief executive office with respect to such
Accounts is located outside Canada or the United States and (a) the account debtor has delivered to the Borrower an irrevocable letter of credit issued or confirmed by a bank reasonably satisfactory to the Administrative Agent and payable only
in Canada and in Dollars or Canadian Dollars, sufficient to cover such Account, in form and substance satisfactory to the Administrative Agent and if required by the Administrative Agent, the original of such letter of credit has been delivered to
the Administrative Agent and the issuer thereof, and the Borrower has assigned the proceeds of such letter of credit to the Administrative Agent or named the Administrative Agent as transferee beneficiary thereunder or (b) such Account is
subject to a Credit Insurance Policy. 
 “Eligible Inventory” means, at any time, Inventory of the Borrower and its
Consolidated Subsidiaries which the Administrative Agent determines, in the exercise of its reasonable business and credit judgment as a secured asset based lender, are eligible as the basis for the extension of Revolving Credit Loans and Swingline
Loans and the issuance of Letters of Credit hereunder. Without limiting the Administrative Agent’s discretion provided herein, Eligible Inventory shall not include any Inventory: 
 (a) that is located on leaseholds as to which the lessor has not entered into a collateral access agreement providing the Administrative
Agent with the right to receive notices of default, the right to repossess such Inventory at any time and such other rights as may be requested by the Administrative Agent, unless the Administrative Agent has established acceptable Reserves against
such Inventory in lieu of obtaining a collateral access agreement; 
 (b) that is slow moving, obsolete, unusable,
unmerchantable, damaged, defective, unfit for sale, perishable or otherwise unavailable for sale; 
 (c) consisting of
promotional, marketing, packaging or shipping materials and supplies, prototypes, displays or display items, bill-and-hold goods, goods held on consignment or goods not of a types held for sale in the ordinary course of business; 
 (d) that fails to meet all standards imposed by any Governmental Authority having regulatory authority over such Inventory or its use or
sale; 
 (e) that is subject to any licensing, patent, royalty, trademark, trade name or copyright agreement with any third
party unless the Administrative Agent is satisfied that it may sell or otherwise dispose of such Inventory without (i) infringing the rights of such party, (ii) violating any contract with such party, or (iii) incurring any liability
with respect to payment of royalties other than royalties incurred pursuant to the sale of such Inventory under the current licensing agreements; 
  

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 (f) that is subject to a Lien of any other Person (unless such Person has entered into an
intercreditor agreement, in form and substance satisfactory to the Administrative Agent which subordinates such Lien to the Liens of the Administrative Agent); 
 (g) that is located outside Canada; 
 (h) that is not in the possession of or under the sole control of the Borrower or any of its Subsidiaries (including any Inventory that is owned in part by another Person); 
 (i) with respect to which any representation and warranty set forth in any Loan Document applicable to Inventory is not true and correct;

 (j) in respect of which the Collateral Agreement, after giving effect to the related filings of financing statements that
have then been made, if any, does not or has ceased to create a valid and perfected first priority lien or security interest in favor of the Administrative Agent, on behalf of the Secured Parties, securing the Obligations; 
 (k) that is located in any third party warehouse or is in the possession of a bailee (other than a third party processor) and is not
evidenced by a Document, unless such warehouseman or bailee has delivered to the Administrative Agent a collateral access agreement in form and substance acceptable to the Administrative Agent and such other documentation as the Administrative Agent
may require or the Administrative Agent has established acceptable Reserves against such Inventory in lieu of obtaining a collateral access agreement; 
 (l) which is being processed offsite at a third party location or outside processor, or is in transit to or from said third party location or outside processor; 
 (m) which is not reflected in a current perpetual inventory report of the Borrower delivered to the Administrative Agent pursuant to
Section 7.1(g); 
 (n) for which reclamation rights have been asserted by the seller; 
 (o) which is owned by any non-Wholly-Owned Subsidiary; 
 (p) that is subject to repossession under the “30-day goods” rule in the Bankruptcy and Insolvency Act (Canada) except to the
extent that the applicable vendor has entered into an agreement with the Administrative Agent in form and substance acceptable to the Administrative Agent waiving its right to repossession; or 
 (q) which the Administrative Agent otherwise determines, in the exercise of its reasonable business and credit judgment as a secured asset
based lender, is unacceptable for any reason whatsoever. 
  

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 “Employee Benefit Plan” means (a) any employee benefit plan within the meaning of
Section 3(3) of ERISA that is maintained for employees of the U.S. Borrower or any of its Subsidiaries which the U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates sponsors, maintains, or to which it makes, is making, or
is obligated to make, contributions or (b) any Pension Plan or Multiemployer Plan that has at any time within the preceding six (6) years been maintained for the employees of the U.S. Borrower or any of its Subsidiaries or any of their
current or former ERISA Affiliates. 
 “EMU Legislation” means legislative measures of the Council of European Union for the
introduction of, change over to or operation of the euro. 
 “Environmental Claims” means any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens, accusations, allegations, notices of noncompliance or violation, investigations (other than internal reports prepared by any Person in the ordinary course of business and
not in response to any third party action or request of any kind) or proceedings relating in any way to any actual or alleged violation of or liability under any Environmental Law or relating to any permit issued, or any approval given, under any
such Environmental Law, including, without limitation, any and all claims by Governmental Authorities for enforcement, cleanup, removal, response, remedial or other actions or damages, contribution, indemnification cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged injury or threat of injury to human health or the environment. 
 “Environmental Laws” means any and all federal, foreign, state, provincial and local laws, statutes, ordinances, codes, rules, legally binding policies, standards and regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to the protection of human health or the environment, including, but not limited to, requirements pertaining to the manufacture, processing, distribution, use, treatment,
storage, disposal, transportation, handling, reporting, licensing, permitting, investigation or remediation of Hazardous Materials. 
 “ERISA” means the Employee Retirement Income Security Act of 1974, and the rules and regulations thereunder, each as amended or modified from time to time. 
 “ERISA Affiliate” means any Person who together with the U.S. Borrower or any of its Subsidiaries is treated as a single employer within
the meaning of Section 414(b), (c), (m) or (o) of the Code or Section 4001(b) of ERISA. 
 “Euro” means
the single currency to which the Participating Member States of the European Union have converted. 
 “Event of Default”
means any of the events specified in Section 12.1; provided that any requirement for passage of time, giving of notice, or any other condition, has been satisfied. 
 “Exchangeable Shares” means those shares of Capital Stock issued by Bowater Canada, Inc. and listed on the Toronto Stock Exchange (under
stock symbol BWX) which are exchangeable at any time at the option of the holder of such shares into common stock of the Parent and which entitle the holders thereof to similar voting rights and dividend payments (on a per share basis) as those
granted to holders of the common stock of the Parent. 
  

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 “Excluded Taxes” means, with respect to the Administrative Agent, any Lender, any
Issuing Lender or any other recipient of any payment to be made by or on account of any obligation of the Borrower hereunder, (a) taxes imposed on or measured by its overall net income (however denominated), and franchise taxes imposed on it
(in lieu of net income taxes), by the jurisdiction (or any political subdivision thereof) under the laws of which such recipient is organized or in which its principal office is located or, in the case of any Lender, in which its applicable Lending
Office is located, (b) any branch profits taxes imposed by Canada or any similar tax imposed by any other jurisdiction in which the Borrower is located. and (c) in the case of a Foreign Lender (other than an assignee pursuant to a request
by the Borrower under Section 4.12(b)), any withholding tax that is imposed on amounts payable to such Foreign Lender at the time such Foreign Lender becomes a party hereto (or designates a new Lending Office) or is attributable to such
Foreign Lender’s failure or inability (other than as a result of a Change in Law) to comply with Section 4.11(e), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a
new Lending Office (or assignment), to receive additional amounts from the Borrower with respect to such withholding tax pursuant to Section 4.11(a). 
 “Existing Facilities” means the collective reference to (a) the credit facility established pursuant to that certain Credit Agreement dated as of April 22, 2004 (as amended, restated,
supplemented or modified) by and among the Original U.S. Borrower and the Borrower, as borrowers, JPMorgan Chase Bank, as U.S. administrative agent, The Bank of Nova Scotia, as Canadian administrative agent and the lenders party thereto and
(b) the conduit facility established pursuant that certain Loan Agreement dated as of December 19, 2002 (as amended, restated, supplemented or modified) by and among Bowater Funding Inc., as borrower, the U.S. Borrower, as initial
servicer, the lenders party thereto, SunTrust Capital Markets, Inc. and Wachovia Bank, National Association, as co-agents, and SunTrust Capital Markets, Inc., as administrative agent. 
 “Existing Letters of Credit” means those letters of credit existing on the Closing Date and identified on Schedule 1.1(a).

 “Existing Notes” means the collective reference to each of the senior unsecured notes and debentures set forth on
Schedule 10.1. 
 “Extensions of Credit” means, as to any Lender at any time, (a) an amount equal to the sum of
(i) the aggregate principal amount of all Revolving Credit Loans made by such Lender then outstanding, (ii) such Lender’s Commitment Percentage of the L/C Obligations then outstanding and (iii) such Lender’s Commitment
Percentage of the Swingline Loans then outstanding or (b) the making of any Loan or participation in any Swingline Loan or any Letter of Credit by such Lender, as the context requires. 
 “Federal Funds Rate” means, for any day, the rate per annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by federal funds brokers on such day (or, if such day is not a Business 

  

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Day, for the immediately preceding Business Day), as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day,
provided that if such rate is not so published for any day which is a Business Day, the average of the quotation for such day on such transactions received by the Administrative Agent from three Federal Funds brokers of recognized standing
selected by the Administrative Agent. 
 “Fiscal Year” means the fiscal year of the U.S. Borrower and its Subsidiaries
ending on December 31. 
 “Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other
than that in which the Borrower is resident for tax purposes. For purposes of this definition, Canada and each province thereof shall be deemed to constitute a single jurisdiction. 
 “Fourth Amendment” means that certain Fourth Amendment dated as of Fourth Amendment Effective Date by and among the Borrower, the
Guarantors and the Administrative Agent (on behalf of itself and the Lenders party thereto). 
 “Fourth Amendment Effective
Date” means March 31, 2008. 
 “Fifth Amendment” means that certain Fifth Amendment dated as April 30,
2008 by and among the Borrower, the Guarantors and the Administrative Agent (on behalf of itself and the Lenders party thereto). 
 “GAAP” means generally accepted accounting principles in the United States set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards Board or such other principles as may be approved by a significant segment of the accounting profession in the United States, that are applicable to the circumstances as of the date
of determination, consistently applied. 
 “Governmental Approvals” means all authorizations, consents, approvals, permits,
licenses and exemptions of, registrations and filings with, and reports to, all Governmental Authorities. 
 “Governmental
Authority” means the government of the United States, Canada or any other nation, or of any political subdivision thereof, whether state, provincial or local, and any agency, authority, instrumentality, regulatory body, court, central bank
or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supra-national bodies such as the European Union or the European Central Bank).

 “Guarantors” means each Parent Guarantor and each Subsidiary Guarantor, and each New U.S. Borrower. 
 “Guaranty Agreements” means, collectively, the Parent Guaranty Agreements and the Subsidiary Guaranty Agreements. 
  

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 “Guaranty Obligation” means, with respect to the U.S. Borrower and its Subsidiaries,
without duplication, any obligation, contingent or otherwise, of any such Person pursuant to which such Person has directly or indirectly guaranteed any Indebtedness of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of any such Person (a) to purchase or pay (or advance or supply funds for the purchase or payment of) such Indebtedness (whether arising by virtue of partnership arrangements, by
agreement to keep well, to purchase assets, goods, securities or services, to take-or-pay, or to maintain financial statement condition or otherwise) or (b) entered into for the purpose of assuring in any other manner the obligee of such
Indebtedness of the payment thereof or to protect such obligee against loss in respect thereof (in whole or in part); provided, that the term Guaranty Obligation shall not include endorsements for collection or deposit in the ordinary course
of business. 
 “Hazardous Materials” means any substances or materials (a) which are or become defined as hazardous
wastes, hazardous substances, pollutants, contaminants, chemical substances or mixtures or toxic substances under any Environmental Law, (b) which are toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic or
otherwise harmful to human health or the environment and are or become regulated by any Governmental Authority, (c) the presence of which require investigation or remediation under any Environmental Law or common law, (d) the discharge or
emission or release of which requires a permit or license under any Environmental Law or other Governmental Approval, (e) which are deemed to constitute a nuisance or a trespass which pose a health or safety hazard to Persons or neighboring
properties, (f) which consist of underground or aboveground storage tanks, whether empty, filled or partially filled with any substance, or (g) which contain, without limitation, asbestos, polychlorinated biphenyls, urea formaldehyde foam
insulation, petroleum hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas. 
 “Hedging Agreement” means any agreement with respect to any Interest Rate Contract, forward rate agreement, commodity swap, forward foreign exchange agreement, currency swap agreement, cross-currency rate swap agreement,
currency option agreement or other agreement or arrangement designed to alter the risks of any Person arising from fluctuations in interest rates, currency values or commodity prices, all as amended, restated, supplemented or otherwise modified from
time to time. 
 “Hedging Obligations” means all existing or future payment and other obligations owing by any Credit Party
under any Hedging Agreement (which such Hedging Agreement is permitted hereunder) with any Person that is a Lender or an Affiliate of a Lender at the time such Hedging Agreement is executed. 
 “Immaterial Subsidiary” means: 
 (a) any Domestic Subsidiary that is not a Wholly-Owned Subsidiary to the extent that (i) there is a provision in the organizational documents of such Domestic Subsidiary or (ii) the Borrower or any of its
Subsidiaries is party to a legally enforceable agreement, in either case that would prohibit such Domestic Subsidiary from being a Subsidiary Guarantor without the consent of (or the approval of directors appointed by) a third party owner of such
Domestic Subsidiary; and 
  

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 (b) any individual Domestic Subsidiary having total assets with a book value that is less
than one percent (1%) of the aggregate book value of the total Consolidated assets of the U.S. Borrower and its Subsidiaries (as of the most recent date for which financial statements have been delivered). 
 “Indebtedness” means, with respect to any Person at any date and without duplication, the sum of the following: 
 (a) all liabilities, obligations and indebtedness for borrowed money of such Person, including, but not limited to, obligations evidenced
by bonds, debentures, notes or other similar instruments of such Person; 
 (b) all obligations of such Person to pay the
deferred purchase price of property or services (including, without limitation, all obligations under non-competition, earn-out or similar agreements in connection with an acquisition), except trade payables and accrued obligations arising in the
ordinary course of business, so long as such trade accounts payable are payable within ninety (90) days of the date the respective goods are delivered or the respective services are rendered; 
 (c) the Attributable Indebtedness of such Person with respect to such Person’s obligations in respect of Capital Leases and Synthetic
Leases (regardless of whether accounted for as indebtedness under GAAP); 
 (d) all Indebtedness of any other Person secured
by a Lien on any asset owned by such Person (including indebtedness arising under conditional sales or other title retention agreements), whether or not such indebtedness shall have been assumed by such Person or is limited in recourse; 

(e) all Guaranty Obligations of such Person; 
 (f) all obligations, contingent or otherwise, of such Person in connection with letters of credit, whether or not drawn, including,
without limitation, any reimbursement obligation, and bankers’ acceptances issued for the account of such Person; 
 (g)
all cash obligations of any such Person to redeem, repurchase, exchange, defease or otherwise make payments in respect of Capital Stock of such Person, unless such redemption, repurchase, exchange, defeasance or other payment is contingent (unless
such contingency has been satisfied) or is not required prior to the date that is ninety-one (91) days after the Maturity Date; 
 (h) all Net Hedging Obligations of such Person; and 
 (i) the outstanding attributed principal amount under any
asset securitization program of such Person. 
  

 - 24 - 

 For all purposes hereof, the Indebtedness of any Person shall include the Indebtedness of any partnership
or joint venture (other than a joint venture that is itself a corporation or limited liability company) in which such Person is a general partner or a joint venturer, unless such Person is not legally liable therefor under Applicable Law or as a
result of any legally enforceable contractual limitation with respect to such Indebtedness. 
 “Indemnified Taxes” means
Taxes and Other Taxes other than Excluded Taxes. 
 “Insurance and Condemnation Event” means the receipt by the U.S.
Borrower or any of its Subsidiaries of any cash insurance proceeds or condemnation award payable by reason of theft, loss, physical destruction or damage, taking or similar event with respect to any of their respective property or assets.

 “Intercompany Subordination Agreement” means an Intercompany Subordination Agreement substantially in the form of
Exhibit J by and among the Administrative Agent and the applicable Credit Parties or Subsidiaries thereof party thereto. 
 “Interest Period” has the meaning assigned thereto in Section 4.1(b). 
 “Interest Rate
Contract” means any interest rate swap agreement, interest rate cap agreement, interest rate floor agreement, interest rate collar agreement, interest rate option or any other agreement regarding the hedging of interest rate risk exposure
executed in connection with hedging the interest rate exposure of any Person and any confirming letter executed pursuant to such agreement, all as amended, restated, supplemented or otherwise modified from time to time. 
 “Inventory” has the meaning specified in Section 1.1 of the Collateral Agreement. 
 “ISP98” means the International Standby Practices (1998 Revision, effective January 1, 1999), International Chamber of Commerce
Publication No. 590. 
 “Issuing Lender” means (a) with respect to Letters of Credit issued hereunder on or after
the Closing Date, The Bank of Nova Scotia, in its capacity as issuer thereof, or any successor thereto or any other Lender designated as an Issuing Lender by the Borrower (with reasonable prior notice of such designation by the Borrower to the
Administrative Agent) and (b) with respect to the Existing Letters of Credit, the issuers thereof as identified on Schedule 1.1(a). 
 “ITA” means the Income Tax Act (Canada), as amended or modified from time to time. 
 “L/C
Commitment” means the lesser of (a) Fifty Million Dollars ($50,000,000) and (b) the aggregate Commitments of the Lenders. 
 “L/C Facility” means the letter of credit facility established pursuant to Article III. 
 “L/C
Obligations” means at any time, an amount equal to the sum of (a) the aggregate undrawn and unexpired amount of the then outstanding Letters of Credit and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5. 
  

 - 25 - 

 “L/C Participants” means the collective reference to all of the Lenders other than the
applicable Issuing Lender. 
 “L/C Supporting Documentation” has the meaning assigned thereto in Section 3.2.

 “Lender” means each Person that is bound by the terms of this Agreement as a Lender (including, without limitation, each
Issuing Lender and the Swingline Lender unless the context otherwise requires) and each Person that hereafter becomes a party to this Agreement as a Lender pursuant to Section 14.10. 
 “Lending Office” means, with respect to any Lender, the office or branch of such Lender maintaining such Lender’s Extensions of
Credit. 
 “Letter of Credit Application” means an application, in the form specified by the applicable Issuing Lender from
time to time, requesting the applicable Issuing Lender to issue a Letter of Credit. 
 “Letters of Credit” means the
collective reference to letters of credit issued pursuant to Section 3.1 and the Existing Letters of Credit. 
 “LIBOR” means the rate of interest per annum determined on the basis of the rate
for deposits in the applicable Permitted Currency in minimum amounts of at least $5,000,000 (with respect to Revolving Credit Loans denominated in Dollars) or C$5,000,000 (with respect to Revolving Credit Loans denominated in Canadian Dollars) for a
period equal to the applicable Interest Period which appears on the Reuters Page LIBOR01 (or any successor page) at approximately 11:00 a.m. (London time) two (2) Business Days prior to the first day of the applicable Interest Period (rounded
upward, if necessary, to the nearest 1/100th of 1%). If, for any reason, such rate does not appear on Reuters Page LIBOR01 (or any successor page),
then “LIBOR” shall be determined by the Administrative Agent to be the arithmetic average of the rate per annum at which deposits in the applicable Permitted Currency in minimum amounts of at least $5,000,000 (with respect to Revolving
Credit Loans denominated in Dollars) or C$5,000,000 (with respect to Revolving Credit Loans denominated in Canadian Dollars) would be offered by first class banks in the London interbank market to the Administrative Agent at approximately 11:00 a.m.
(London time) two (2) Business Days prior to the first day of the applicable Interest Period for a period equal to such Interest Period. Each calculation by the Administrative Agent of LIBOR shall be conclusive and binding for all purposes,
absent manifest error. 
 “LIBOR Rate” means the rate per annum (rounded upwards, if necessary, to the next higher 1/100th
of 1%) equal to LIBOR. Each calculation by the Administrative Agent of the LIBOR Rate shall be conclusive and binding for all purposes, absent manifest error. 
 “LIBOR Rate Loan” means any Loan bearing interest at a rate based upon the LIBOR Rate as provided in Section 4.1(a). 
 “Lien” means, with respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge, security interest, hypothec,
hypothecation, assignment by way of security or 

  

 - 26 - 

 
encumbrance of any kind in respect of such asset. For the purposes of this Agreement, a Person shall be deemed to own subject to a Lien any asset which it
has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, Capital Lease or other title retention agreement relating to such asset. 
 “Loan Documents” means, collectively, this Agreement, each Note, the Letter of Credit Applications, the Security Documents, the
Intercompany Subordination Agreement, and each other document, instrument, certificate and agreement executed and delivered by the Parent, the U.S. Borrower or any of their respective Subsidiaries in connection with this Agreement or otherwise
referred to herein or contemplated hereby (excluding any Hedging Agreement), all as may be amended, restated, supplemented or otherwise modified from time to time. 
 “Loans” means the collective reference to the Revolving Credit Loans and the Swingline Loans, and “Loan” means any of such Loans. 
 “Material Adverse Effect” means, with respect to the U.S. Borrower or any of its Subsidiaries, a material adverse effect on (a) the
business, assets, liabilities (actual or contingent), operations or condition (financial or otherwise) of the U.S. Borrower and its Subsidiaries, taken as a whole, or (b) the ability of any such Person to perform its obligations under the Loan
Documents to which it is a party. 
 “Material Subsidiary” means: 
 (a) each Domestic Subsidiary of the Borrower, other than the Immaterial Subsidiaries; and 
 (b) each Domestic Subsidiary that, notwithstanding the definition of Immaterial Subsidiary, is designated as a Material Subsidiary pursuant to
Section 8.10(a)(ii). 
 Notwithstanding anything to the contrary contained in this Agreement or any other Loan Document, any
Domestic Subsidiary that (i) owns a Material Subsidiary or (ii) provides a guaranty of (A) the Existing Notes, (B) any Indebtedness incurred to refinance, refund, renew or extend the Existing Notes as permitted pursuant to
Section 10.1(d) or (C) any Indebtedness permitted pursuant to Section 12.1(o)(viii), in each case, shall be a Material Subsidiary. 
 “Maturity Date” means the earliest of the dates referred to in Section 2.6 (subject to the extension provisions thereof). 
 “Moody’s” means Moody’s Investors Service, Inc. and any successor thereto. 
 “Multiemployer Plan” means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which the U.S. Borrower or
any of its Subsidiaries or any of their ERISA Affiliates is making, or is accruing an obligation to make, or has accrued an obligation to make contributions within the preceding six (6) years. 
  

 - 27 - 

 “Net Cash Proceeds” means, as applicable; 
 (a) with respect to any Asset Disposition, the gross cash proceeds received by the U.S. Borrower or any of its Subsidiaries therefrom less the sum
of the following, without duplication, (i) selling expenses incurred in connection with such Asset Disposition (including reasonable brokers’ fees and commissions, legal, accounting and other professional and transactional fees, transfer
and similar taxes and the Original U.S. Borrower’s reasonable good faith estimate of income taxes paid or payable in connection with such sale), (ii) reasonable reserves with respect to post-closing adjustments, indemnities and other
contingent liabilities established in connection with such Asset Disposition (provided that, to the extent and at the time any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds), (iii) the
principal amount, premium or penalty, if any, interest and other amounts on any Indebtedness secured by a Lien on the assets (or a portion thereof) sold in such Asset Disposition, which Indebtedness is repaid with such proceeds and (iv) the
Original U.S. Borrower’s reasonable good faith estimate of cash payments required to be made within ninety (90) days of such Asset Disposition with respect to retained liabilities directly related to the assets (or a portion thereof) sold
in such Asset Disposition (provided that, to the extent that cash proceeds are not used to make payments in respect of such retained liabilities within ninety (90) days of such Asset Disposition, such cash proceeds shall constitute Net
Cash Proceeds); and 
 (b) with respect to any Insurance and Condemnation Event, the gross cash proceeds received by the U.S. Borrower or any
of its Subsidiaries therefrom less the sum of the following, without duplication, (i) all fees and expenses in connection therewith and (ii) the principal amount, premium or penalty, if any, interest and other amounts on any
Indebtedness secured by a Lien on the assets (or a portion thereof) subject to such Insurance and Condemnation Event, which Indebtedness is repaid in connection therewith. 
 “Net Hedging Obligations” means, with respect to any Hedging Agreement as of any date, the Termination Value of such Hedging Agreement
on such date. 
 “Net Recovery Percentage” means, at any time, the fraction, expressed as a percentage, (a) the
numerator of which is the amount equal to the recovery in respect of Eligible Inventory at such time on a net orderly liquidation value basis as set forth in the most recent acceptable appraisal of Eligible Inventory received by the Administrative
Agent, net of operating expenses, liquidation expenses and commissions, and (b) the denominator of which is the applicable original Value of the aggregate amount of the Inventory subject to such appraisal. 
 “New U.S. Borrowers” means (a) Bowater Alabama LLC (formerly known as Bowater Alabama, Inc.), an Alabama limited liability company
(the “Coosa Pines U.S. Borrower”), (b) Bowater Newsprint South LLC, a Delaware limited liability company (“BNS Holdings”) and (c) Bowater Newsprint South Operations LLC (formerly known as Bowater Newsprint
South, Inc.), a Delaware corporation and as successor by merger to Bowater Mississippi, LLC (the “Grenada U.S. Borrower”). 
 “New U.S. Borrower Fixed Assets” means, collectively, the Coosa Pines Mill, the Coosa Pines Mill Real Property, the Coosa Pines Mill Equipment, the Grenada Mill, the Grenada Mill Real Property, the Grenada Mill Equipment
and any and all other real property and equipment 

  

 - 28 - 

 
owned or thereafter acquired by any New U.S. Borrower or in which any New U.S. Borrower has or at any time in the future may acquire any right, title or
interest, and wherever located or deemed located to the extent related to or forming a part of the Coosa Pines Mill, the Coosa Pines Mill Real Property, the Coosa Pines Mill Equipment, the Grenada Mill, the Grenada Mill Real Property or the Grenada
Mill Equipment; provided, that in no event shall the New U.S. Borrower Fixed Assets include any U.S. Coverage Assets. 
 “New
U.S. Borrower Mill Assets” means, collectively: 
 (a) (i) that certain mill owned as of the Fourth Amendment Effective Date by
Bowater Alabama, Inc., a Subsidiary of the Original U.S. Borrower, and located in Coosa Pines, Alabama (the “Coosa Pines Mill”), along with the real property upon which the Coosa Pines Mill is situated (as more particularly
described on Schedule 1.1(c) hereto, the “Coosa Pines Mill Real Property”); 
 (ii) all equipment used
in connection with the Coosa Pines Mill and located at the Coosa Pines Mill Real Property (the “Coosa Pines Mill Equipment”); and 
 (iii) all other rights and assets used for the operation, administration and maintenance of the Coosa Pines Mill Real Property; 
 (b) (i) that certain mill owned (directly or beneficially) as of the Fourth Amendment Effective Date by a Subsidiary of the Original U.S. Borrower, and located in Grenada, Mississippi (the “Grenada
Mill”), along with the real property upon which the Grenada Mill is situated (as more particularly described on Schedule 1.1(c) hereto, the “Grenada Mill Real Property”); 
 (ii) all equipment used in connection with the Grenada Mill and located at the Grenada Mill Real Property (the “Grenada Mill
Equipment”); and 
 (iii) all other rights and assets used for the operation, administration and maintenance of the
Grenada Mill Real Property; and 
 (c) all operations of the foregoing. 
 “New U.S. Borrower Mortgages” means those certain mortgages, deeds of trust, security agreements, subordination agreements or
other real property security documents encumbering the New U.S. Borrower Fixed Assets executed by the applicable New U.S. Borrower in favor of the U.S. Administrative Agent, for the ratable benefit of the Secured Parties and the U.S. Secured
Parties, as amended, restated, supplemented or otherwise modified from time to time in form and substance reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent. 
 “New U.S. Borrower Notes” has the meaning assigned thereto in Section 10.5(h). 
 “New U.S. Borrower Transactions” means the transfer of the Capital Stock of each New U.S. Borrower from the Original U.S. Borrower to
the Parent in exchange for the New U.S. Borrower Notes, in each case, to the extent permitted pursuant to, and in accordance with the terms of, this Agreement and the U.S. Credit Agreement. 
  

 - 29 - 

 “New Material Subsidiary” has the meaning assigned thereto in Section 8.10.

 “Non-BA Lender” means a Lender that cannot or does not as a matter of policy accept or purchase Bankers’
Acceptances. 
 “Non-Consenting Lender” has the meaning assigned thereto in Section 2.6. 
 “Notes” means the collective reference to the Revolving Credit Notes, the Swingline Note and the Discount Notes. 
 “Notice of Account Designation” has the meaning assigned thereto in Section 2.3(b). 
 “Notice of Borrowing” has the meaning assigned thereto in Section 2.3(a). 
 “Notice of Conversion/Continuation” has the meaning assigned thereto in Section 4.2. 
 “Notice of Prepayment” has the meaning assigned thereto in Section 2.4(c). 
 “Obligations” means, in each case, whether now in existence or hereafter arising: (a) the principal of and interest on (including
interest accruing after the filing of any bankruptcy or similar petition) the Loans, (b) the L/C Obligations, (c) all Hedging Obligations and (d) all other fees and commissions (including reasonable attorneys’ fees), charges,
indebtedness, loans, liabilities, financial accommodations, obligations, covenants and duties owing by the U.S. Borrower, the Borrower or any of their respective Subsidiaries to the Lenders or the Administrative Agent, in each case under any Loan
Document, with respect to any Loan or Letter of Credit, of every kind, nature and description, direct or indirect, absolute or contingent, due or to become due, contractual or tortious, liquidated or unliquidated, and whether or not evidenced by any
note. 
 “OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control. 
 “Officer’s Compliance Certificate” means a certificate of the chief financial officer, the treasurer or the assistant treasurer of
each of the Borrower and the Original U.S. Borrower substantially in the form of Exhibit F. 
 “Operating Lease”
means, as to any Person as determined in accordance with GAAP, any lease of property (whether real, personal or mixed) by such Person as lessee which is not a Capital Lease. 
 “Original U.S. Borrower” has the meaning assigned thereto in the introductory paragraph hereto. 
 “Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges or similar levies
arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document. 
  

 - 30 - 

 “Parent” means AbitibiBowater Inc., a Delaware corporation f/k/a Alpha-Bravo Holdings,
Inc. 
 “Parent Guarantor” means (a) the U.S. Borrower, as guarantor pursuant to Article XI hereof, and
(b) each other direct or indirect parent company of the Borrower that (i) has previously provided a guaranty of the Obligations or (ii) hereafter becomes a guarantor pursuant to Section 8.10(c). 
 “Parent Guaranty Agreements” means each unconditional guaranty agreement executed by the Parent Guarantors in favor of the
Administrative Agent for the ratable benefit of the Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. 
 “Parent Overhead Expenses” means (a) accounting and auditing costs and expenses incurred by the Parent in the ordinary course of its business in connection with preparing financial reports and tax filings;
(b) customary fees and expenses payable to the SEC and other reasonable and customary costs and expenses payable in connection with the Parent being a publicly traded company (including, without limitation, reasonable and customary fees and
expenses required to be paid for professional and regulatory compliance); (c) reasonable and customary legal fees and expenses required for the corporate maintenance of the Parent and the U.S. Borrower and its Subsidiaries; (d) reasonable
and customary director fees; (e) reasonable and customary costs and expenses payable for director and officer insurance; (f) transfer agent fees payable in connection with Capital Stock of the Parent; and (g) franchise taxes and other
fees payable to the jurisdiction of incorporation or qualification of the Parent incurred in the ordinary course of conducting its business; provided that in no event shall Parent Overhead Expenses include management fees, salaries, bonuses,
debt service and dividends and other distributions in respect of the Capital Stock of the Parent. 
 “Participant” has the
meaning assigned thereto in Section 14.10(d). 
 “Participating Member State” means each state so described in
any EMU Legislation. 
 “PBGC” means the Pension Benefit Guaranty Corporation or any successor agency. 
 “Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to the provisions of Title IV of ERISA
or Section 412 of the Code and which (a) is maintained for the employees of the U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates or (b) has at any time within the preceding six (6) years been maintained
for the employees of the U.S. Borrower or any of its Subsidiaries or any of their current or former ERISA Affiliates which the U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates sponsors, maintains, or to which it makes, is
making or is obligated to make, contributions. 
  

 - 31 - 

 “Permitted Acquisition” means any investment by the U.S. Borrower or any of its
Subsidiaries in the form of the acquisition of all or substantially all of the business or assets, or any portion of the business or assets that constitutes a line of business, a business unit or a division (whether by the acquisition of Capital
Stock, assets or any combination thereof), of any other Person if each such acquisition or investment meets all of the following requirements: 
 (a) with respect to any acquisition: 
 (i) such acquisition is not a hostile acquisition (with evidence thereof to
be provided to the Administrative Agent or the U.S. Administrative Agent upon its reasonable request); 
 (ii) the Person or
business to be acquired shall be in a substantially similar line of business as the U.S. Borrower and its Subsidiaries pursuant to Section 10.12; 
 (iii) if such transaction is a merger or consolidation involving a Credit Party or a U.S. Credit Party, the surviving Person shall be a
Credit Party or U.S. Credit Party and no Change of Control shall have been effected thereby; 
 (iv) if the acquisition will
result in the acquisition of, or creation of, any New Material Subsidiary, the Borrower shall comply with Section 8.10 hereof; 
 (v) no Default or Event of Default shall have occurred and be continuing both before and after giving effect to such acquisition; and 
 (vi) after giving effect to the acquisition, at least (A) $50,000,000 in availability shall exist under the U.S. Credit Facility and
(B) $25,000,000 in availability shall exist under this Credit Facility; and 
 (b) with respect to any acquisition for which the
Permitted Acquisition Consideration is greater than $50,000,000 or any acquisition funded (in whole or in part) by Extensions of Credit or U.S. Extensions of Credit (in addition to the requirements set forth in clause (a) above): 
 (i) no less than fifteen (15) Business Days prior to the proposed closing date of such acquisition, the Original U.S. Borrower shall
have delivered written notice of such acquisition to the Administrative Agent and the U.S. Administrative Agent, which notice shall include the proposed closing date of such acquisition; 
 (ii) no later than five (5) Business Days prior to the proposed closing date of such acquisition, the Original U.S. Borrower shall
have delivered to the Administrative Agent and the U.S. Administrative Agent an Officer’s Compliance Certificate demonstrating, in form and substance reasonably satisfactory thereto, (A) pro forma compliance (as of the most recent
fiscal quarter ended for which financial statements have been delivered pursuant hereto, adjusted to give effect the acquisition and any Extensions of Credit or U.S. Extensions of Credit made or to be made in connection therewith) with each covenant
contained in Article IX and (B) a pro forma Consolidated Senior Secured Leverage Ratio (as of the most recent fiscal quarter ended for which financial statements have been delivered pursuant hereto, adjusted to give effect the
acquisition and any Extensions of Credit or U.S. Extensions of Credit made or to be made in connection therewith) not to exceed 1.00 to 1.00; 
  

 - 32 - 

 (iii) no later than five (5) Business Days prior to the proposed closing date of
such acquisition, the Original U.S. Borrower, to the extent requested by the Administrative Agent or the U.S. Administrative Agent, (A) shall have delivered to the Administrative Agent or the U.S. Administrative Agent, as applicable, promptly
upon the finalization thereof, copies of substantially final Permitted Acquisition Documents, which shall be in form and substance reasonably satisfactory to the Administrative Agent or the U.S. Administrative Agent, as applicable, and
(B) shall have delivered to, or made available for inspection by, the Administrative Agent or the U.S. Administrative Agent, as applicable, substantially complete Permitted Acquisition Diligence Information, which shall be in form and substance
reasonably satisfactory to the Administrative Agent or the U.S. Administrative Agent, as applicable; 
 (iv) the Original U.S.
Borrower shall provide such other documents and other information as may be reasonably requested by the Administrative Agent or the U.S. Administrative Agent in connection with the acquisition; and 
 (v) the Original U.S. Borrower shall demonstrate, in form and substance reasonably satisfactory to the Administrative Agent and the U.S.
Administrative Agent, that the entity to be acquired had positive Consolidated EBITDA for the four (4) fiscal quarter period ended prior to the proposed closing date of such acquisition (it being agreed and acknowledged that clause (b)(vi) of
the definition of “Consolidated EBITDA” shall be calculated solely with respect to the Person or business to be acquired); and 
 (c) with respect to any acquisition for which the Permitted Acquisition Consideration is less than $50,000,000 and such acquisition is not funded (in whole or in part) by Extensions of Credit or U.S. Extensions of Credit (in addition to the
requirements set forth in clause (a) above): 
 (i) no more than ten (10) days following the closing date of such
acquisition, the Original U.S. Borrower shall have delivered written notice of such acquisition to the Administrative Agent and the U.S. Administrative Agent, which notice shall include the closing date of such acquisition; and 
 (ii) to the extent requested by the Administrative Agent or the U.S. Administrative Agent, the Original U.S. Borrower shall have delivered
to the Administrative Agent or the U.S. Administrative Agent, as applicable, promptly upon the finalization thereof (but no later than fifteen (15) days after the closing date of such acquisition) copies of substantially final Permitted
Acquisition Documents. 
 Notwithstanding anything to the contrary contained in this Agreement or the other Loan Documents, the Original U.S.
Borrower shall have obtained the prior written consent of the Required Lenders prior to the consummation of such acquisition if (1) the Permitted Acquisition Consideration for any such acquisition (or series of related acquisitions), together
with all other acquisitions consummated during the previous twelve (12) month period exceeds $100,000,000 in the aggregate (excluding any portion of the acquisitions paid with the proceeds from any equity issuance by the U.S. Borrower) and
(2) the Permitted Acquisition Consideration for such acquisition (or series of related acquisitions), together with all other acquisitions consummated during the term of this Agreement, exceeds $300,000,000 in the aggregate (excluding any
portion of the acquisitions paid with the proceeds from any equity issuance by the U.S. Borrower). 
  

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 “Permitted Acquisition Consideration” means the aggregate amount of the purchase price
(including, but not limited to, any assumed debt, earn-outs (valued at the maximum amount payable thereunder), deferred payments, or Capital Stock of the U.S. Borrower, net of the applicable acquired company’s cash and Cash Equivalent balance
as shown on its most recent financial statements delivered in connection with the applicable Permitted Acquisition) to be paid on a singular basis in connection with any applicable Permitted Acquisition as set forth in the applicable Permitted
Acquisition Documents executed by the U.S. Borrower or any of its Subsidiaries in order to consummate the applicable Permitted Acquisition. 
 “Permitted Acquisition Diligence Information” means with respect to any acquisition proposed by the U.S. Borrower or any of its Subsidiaries, to the extent applicable and in the possession of the U.S. Borrower or any of its
Subsidiaries, all material financial information, all material contracts, all material customer lists, all material supply agreements, and all other material information, in each case, reasonably requested to be delivered to the Administrative Agent
or the U.S. Administrative Agent in connection with such acquisition (except to the extent that any such information is (a) subject to any confidentiality agreement, unless mutually agreeable arrangements can be made to preserve such
information as confidential, (b) classified or (c) subject to any attorney-client privilege). 
 “Permitted Acquisition
Documents” means with respect to any acquisition proposed by the U.S. Borrower or any of its Subsidiaries, the purchase agreement, sale agreement, merger agreement or other similar agreement evidencing such acquisition (whichever is
applicable), including, without limitation, all schedules and exhibits thereto and each other material document executed, delivered, contemplated by or prepared in connection therewith and any amendment, modification or supplement to any of the
foregoing. 
 “Permitted Currency” means Dollars and Canadian Dollars or each such currency, as the context requires.

 “Permitted Liens” means the Liens permitted pursuant to Section 10.2. 
 “Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership,
governmental authority or other entity. 
 “Pounds Sterling” means, at any time of determination, the then official currency
of the United Kingdom. 
 “PPSA” means the Personal Property Security Act as in effect in the provinces of Ontario, Nova
Scotia and New Brunswick, as amended or modified from time to time. 
 “Prime Rate” means, 
 (a) with respect to all Revolving Credit Loans denominated in Dollars, at any time, the rate of interest per annum publicly announced from time to time
by the Administrative Agent as its prime rate for Dollar commercial loans made in Canada; and 
  

 - 34 - 

 (b) with respect to all Swingline Loans denominated in Dollars, at any time, the rate of interest per
annum publicly announced from time to time by the Swingline Lender as its prime rate for Dollar commercial loans made in Canada. 
 Each
change in the Prime Rate shall be effective as of the opening of business on the day such change in such prime rate occurs. The parties hereto acknowledge that the rate announced publicly by the Administrative Agent or the Swingline Lender, as
applicable, as its prime rate is an index or base rate and shall not necessarily be its lowest or best rate charged to its customers or other banks. 
 “Priority Payables” means, with respect to any Person, any amount payable by such Person which is secured by a Lien in favour of a Governmental Authority which, in the reasonable good faith credit
discretion of the Administrative Agent, ranks or is capable of ranking prior to or pari passu with the Liens created by the Security Documents in respect of any Eligible Accounts or Eligible Inventory, including amounts owing for wages, vacation
pay, severance pay, employee deductions, sales tax, excise tax, Taxes payable pursuant to the Excise Tax Act (net of GST input credits), income tax, workers compensation, government royalties, pension fund obligations including Canadian
Pension Plans, real property tax and other statutory or other claims that have or may have priority over, or rank pari passu with, such Liens created by the Security Documents. 
 “QSPE” means each of the following: (a) Calhoun Note Holdings AT LLC, (b) Calhoun Note Holdings TI LLC, (c) Bowater
Catawba Note Holdings I LLC, (d) Bowater Catawba Note Holdings II LLC, (e) Bowater Saluda Note Holdings LLC, (f) Timber Note Holding LLC and (g) any other qualified special purpose entity created to facilitate the sale and/or the
monetization of receivables from the sale of timberlands pursuant to Section 10.5(g); provided that: 
 (i)
no portion of the Indebtedness or any other obligations (contingent or otherwise) of any such Person (1) may be guaranteed by the U.S. Borrower or any of its Subsidiaries, (2) may be recourse to or obligate the U.S. Borrower or any of its
Subsidiaries in any way or (3) may subject any property or asset of the U.S. Borrower or any of its Subsidiaries, directly or indirectly, contingently or otherwise, to the satisfaction thereof (other than, in the case of clauses
(1) (solely with respect to guaranties of make whole premiums), (2) and (3), pursuant to Standard Securitization Undertakings); 
 (ii) the U.S. Borrower and its Subsidiaries may not have any material contract, agreement, arrangement or understanding with any such Person other than on terms no less favorable to the U.S. Borrower or any of its
Subsidiaries than those that might be obtained at the time from Persons that are not Affiliates of the U.S. Borrower or any of its Subsidiaries; and 
 (iii) the U.S. Borrower and its Subsidiaries may not (A) have any obligation to maintain or preserve the financial condition of any such Person or (B) cause any such Person to achieve certain levels of
operating results. 
 “Québec Collateral Documents” means collectively the Deed of Hypothec, the Debenture and the
Pledge referred to in Section 13.1(b). 
  

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 “Register” has the meaning assigned thereto in Section 14.10(c). 

“Reimbursement Obligation” means the obligation of the Borrower to reimburse the applicable Issuing Lender pursuant to
Section 3.5 for amounts drawn under Letters of Credit. 
 “Related Parties” means, with respect to any Person,
such Person’s Affiliates and the directors, officers, employees, agents and advisors of such Person and of such Person’s Affiliates. 
 “Required Agreement Lenders” means, at any date, any combination of Lenders having more than fifty percent (50%) of the sum of the aggregate amount of the Commitment under this Credit Facility or, if the Commitment
under this Credit Facility has been terminated, any combination of Lenders holding more than fifty percent (50%) of the aggregate Extensions of Credit. 
 “Required Lenders” means, at any date, any combination of Lenders and U.S. Lenders having more than fifty percent (50%) of the sum of (a) the aggregate amount of the Commitment under this
Credit Facility (or if the Commitment has been terminated, the aggregate amount of Extensions of Credit under this Credit Facility) plus (b) the aggregate amount of the commitments under the U.S. Credit Facility (or, if the commitments
under the U.S. Credit Facility have been terminated, the aggregate amount of the U.S. Extensions of Credit). 
 “Reserves”
means, as of any date of determination, such amounts as the Administrative Agent may from time to time establish and revise in good faith reducing the amount of the Extensions of Credit which would otherwise be available to the Borrower under the
lending formulas provided herein: (a) to reflect events, conditions, contingencies or risks which, as determined by the Administrative Agent in good faith, adversely affect, or would have a reasonable likelihood of adversely affecting, either
(i) the Collateral or any other property which is security for the Obligations, its value or the amount that might be received by the Administrative Agent from the sale or other disposition or realization upon the Collateral, or (ii) the
assets, business or prospects of the Borrower or any of its Consolidated Subsidiaries or (iii) the security interests and other rights of the Administrative Agent or any Lender in the Collateral (including the enforceability, perfection and
priority thereof) or (b) to reflect the Administrative Agent’s good faith belief that any collateral report or financial information furnished by or on behalf of the Borrower or any of its Consolidated Subsidiaries to the Administrative
Agent is or may have been incomplete, inaccurate or misleading in any material respect or (c) in respect of any state of facts which the Administrative Agent determines in good faith constitutes a Default or an Event of Default. Without
limiting the generality of the foregoing, Reserves may, at the Administrative Agent’s option, be established to reflect environmental liabilities or Priority Payables. To the extent that the Administrative Agent may revise the lending formulas
used to determine the Borrowing Base or establish new criteria or revise existing criteria so as to address any circumstances, condition, event or contingency in any manner satisfactory to the Administrative Agent, the Administrative Agent shall not
establish a Reserve for the same purpose. The amount of any Reserve established by the Administrative Agent shall have a reasonable relationship to the event, condition, or other matter which is the basis for the Reserve as determined by the
Administrative Agent in good faith. 
  

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 “Responsible Officer” means, as to any Person, the chief executive officer, president,
chief financial officer, controller, treasurer or assistant treasurer of such Person or any other officer of such Person reasonably acceptable to the Administrative Agent and the U.S. Administrative Agent. Any document delivered hereunder that is
signed by a Responsible Officer of a Person shall be conclusively presumed to have been authorized by all necessary corporate, partnership and/or other action on the part of such Person and such Responsible Officer shall be conclusively presumed to
have acted on behalf of such Person. 
 “Restricted Subsidiary” means any Person that is a “Restricted Subsidiary”
pursuant to the definition thereof as contained in the Existing Notes as in effect as of the Closing Date, for so long as such Existing Notes or any Indebtedness incurred to refinance such Existing Notes is outstanding and includes provisions
restricting the granting of a lien on the capital stock or indebtedness of such Restricted Subsidiaries. 
 “Revolving Credit
Facility” means the revolving credit facility established pursuant to Article II. 
 “Revolving Credit Loan”
means (i) any revolving loan made to the Borrower pursuant to Section 2.1, (b) any BA Loan made to the Borrower pursuant to Section 2.7 and (c) all such revolving loans collectively as the context requires.

 “Revolving Credit Note” means a promissory note made by the Borrower in favor of a Lender evidencing the Revolving Credit
Loans (other than BA Loans) made by such Lender, substantially in the form of Exhibit A-1, and any amendments, supplements and modifications thereto, any substitutes therefor, and any replacements, restatements, renewals or extension thereof,
in whole or in part. 
 “S&P” means Standard & Poor’s Ratings Services, a division of The McGraw-Hill
Companies, Inc. and any successor thereto. 
 “SEC” means the Securities and Exchange Commission, or any Governmental
Authority succeeding to any of its principal functions. 
 “Sanctioned Entity” shall mean (a) an agency of the
government of, (b) an organization directly or indirectly controlled by, or (c) a person resident in a country that is subject to a sanctions program identified on the list maintained by OFAC and available at
http://www.treas.gov/offices/enforcement/ofac/sanctions/index.html, or as otherwise published from time to time as such program may be applicable to such agency, organization or person. 
 “Sanctioned Person” shall mean a person named on the list of Specially Designated Nationals or Blocked Persons maintained by OFAC
available at http://www.treas.gov/offices/ enforcement/ofac/sdn/index.html, or as otherwise published from time to time. 
 “Schedule I Lender” means any Lender named on Schedule I to the Bank Act (Canada). 
 “Schedule I
Reference Banks” means any bank or banks named on Schedule I to the Bank Act (Canada) as may be agreed from time to time by the Administrative Agent and the Borrower. 
  

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 “Schedule II or III Lender” means any Lender named on Schedule II or Schedule III to the
Bank Act (Canada). 
 “Schedule II or III Reference Banks” means any bank named on Schedule II or Schedule III to the
Bank Act (Canada) as may be agreed from time to time by the Administrative Agent and the Borrower. 
 “Secured
Parties” means the Administrative Agent, the Lenders and/or any party to a Hedging Agreement that was a Lender or an Affiliate of a Lender at the time such Hedging Agreement was executed. 
 “Security Documents” means the collective reference to the Collateral Agreement, the Québec Security Documents, the Guaranty
Agreements, the New U.S. Borrower Mortgages and each other agreement or writing pursuant to which any Credit Party purports to pledge or grant a security interest in any property or assets securing the Obligations or any such Person purports to
guaranty the payment and/or performance of the Obligations, in each case, as amended, restated, supplemented or otherwise modified from time to time. 
 “Seventh Amendment” means that certain Seventh Amendment dated as of June 6, 2008 by and among the Borrower, the Guarantors and the Administrative Agent (on behalf of itself and the Lenders party
thereto). 
 “Seventh Amendment Effective Date” means June 6, 2008. 
 “Significant Indebtedness” means Indebtedness (other than the Obligations and the U.S. Obligations) of the U.S. Borrower and its
Subsidiaries the outstanding principal amount of which is in excess of $25,000,000. 
 “Sixth Amendment” means that certain
Sixth Amendment dated as of May 28, 2008 by and among the Borrower, the Guarantors and the Administrative Agent (on behalf of itself and the Lenders party thereto). 
 “Sixth Amendment Effective Date” means May 28, 2008. 
 “Solvent”
means, as to the U.S. Borrower and its Subsidiaries on a particular date, that any such Person (a) has capital sufficient to carry on its business and transactions and all business and transactions in which it is about to engage and is able to
pay its debts as they mature, (b) has assets having a value, both at fair valuation and at present fair saleable value, greater than the amount required to pay its probable liabilities (including contingencies), and (c) does not believe
that it will incur debts or liabilities beyond its ability to pay such debts or liabilities as they mature. 
 “Specified Existing
Notes” means each of the Existing Notes which (a) as of the Closing Date, matures or is subject to mandatory redemption prior to May 25, 2011 and (b) has an outstanding principal amount, as of the Closing Date, in excess of
$75,000,000. The Specified Existing Notes shall be set forth on Schedule 1.1(b). 
  

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 “Specified Non-Recurring Charges” means the non-recurring charges against income taken
by the Original U.S. Borrower during the following periods in the following amounts: 
 (a) with respect to the fiscal quarter ended
March 31, 2007, non-recurring charges in the amount of $9,500,000; 
 (b) with respect to the fiscal quarter ended June 30, 2007,
non-recurring charges in the amount of $20,000,000; 
 (c) with respect to the fiscal quarter ended September 30, 2007, non-recurring
charges in the amount of $46,000,000; 
 (d) with respect to the fiscal quarter ending December 31, 2007, non-recurring charges
consisting of the following, without duplication, (i) severance expenses of the Original U.S. Borrower, (ii) merger costs incurred with respect to the Combination and (iii) other mill closure costs, in each case, taken during such
quarter, in an aggregate amount to be determined in accordance with GAAP, but not to exceed $100,000,000; and 
 (e) with respect to the
fiscal quarter ending March 31, 2008, non-recurring charges consisting of the following, without duplication, (i) severance expenses of the Original U.S. Borrower, (ii) merger costs incurred with respect to the Combination and
(iii) other mill closure costs, in each case, taken during such quarter, in an aggregate amount to be determined in accordance with GAAP, but not to exceed $100,000,000 less the amount of Specified Non-Recurring Charges taken pursuant to
clause (d) above with respect to the fiscal quarter ended December 31, 2007; 
 provided that, notwithstanding anything to
the contrary contained in this Agreement or any other Loan Document, for purposes of calculating the Consolidated Senior Secured Leverage Ratio and the interest coverage ratio as set forth in Section 9.2, such non-recurring charges shall
be excluded from the non-recurring charges included in clause (b)(v) of the definition of Consolidated EBITDA. 
 “Stamping
Fee” has the meaning assigned thereto in Section 2.7(k). 
 “Standard Securitization Undertakings”
means, collectively, (i) customary arms-length servicing obligations (together with any related performance guaranties), (ii) obligations (together with any related performance guaranties) to refund the purchase price or grant purchase
price credits for dilutive events or misrepresentation (in each case unrelated to the collectibility of receivables or creditworthiness of the associated account debtors), (iii) representations, warranties, covenants and indemnities (together
with any related performance guaranties) of a type that are reasonably customary in accounts receivable securitizations and (iv) in the case of a QSPE, a guarantee by the U.S. Borrower or its Subsidiaries of any make whole premium (but not any
principal or interest) on Indebtedness of such QSPE. 
 “Subordinated Indebtedness” means the collective reference to any
Indebtedness of the U.S. Borrower or any of its Subsidiaries subordinated in right and time of payment to the Obligations and containing such other terms and conditions, in each case as are satisfactory to the Administrative Agent and the U.S.
Administrative Agent. 
  

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 “Subsidiary” means as to any Person, any corporation, partnership, limited liability
company or other entity of which more than fifty percent (50%) of the outstanding Capital Stock having ordinary voting power to elect a majority of the board of directors or other persons or governing body performing similar functions of such
corporation, partnership, limited liability company or other entity is at the time directly or indirectly owned or controlled by such Person and/or one or more Subsidiaries of such Person (irrespective of whether, at the time, Capital Stock of any
other class or classes of such corporation, partnership, limited liability company or other entity shall have or might have voting power by reason of the happening of any contingency); provided, however, notwithstanding the foregoing, the
terms “Subsidiary” or “Subsidiaries”: 
 (a) shall include (i) all Subsidiaries of the Original U.S. Borrower (other
than those noted in clause (b) below) and (ii) all Subsidiaries of each New U.S. Borrower; and 
 (b) shall exclude (i) all
QSPEs and (ii) all of the Abitibi Entities. 
 Unless otherwise qualified, references to “Subsidiary” or “Subsidiaries” herein shall
refer to those of the U.S. Borrower. 
 “Subsidiary Borrower” means any Domestic Subsidiary of the Borrower that is
designated as a borrower under this agreement in accordance with the terms of Section 4.14. 
 “Subsidiary
Guarantors” means each direct or indirect Material Subsidiary of the Borrower which becomes a party to the Subsidiary Guaranty Agreement in accordance with Section 8.10(a). 
 “Subsidiary Guaranty Agreement” means each unconditional guaranty agreement executed by the Subsidiary Guarantors in favor of the
Administrative Agent for the ratable benefit of the Secured Parties, substantially in the form of Exhibit H, as amended, restated, supplemented or otherwise modified from time to time. 
 “Supplemental New U.S. Borrower Mortgage” means that certain Agreement of Subordination and Attornment, dated as of May 15, 2008,
executed by The Industrial Development Board of the City of Childersburg, a public corporation duly organized and existing under the laws of the State of Alabama (such Person, the “Coosa Pines IDB”), in the Coosa Pines Mill or Coosa
Pines Real Property to the interests of the Administrative Agent and the U.S. Administrative Agent therein, executed by the Coosa Pines IDB in favor of the U.S. Administrative Agent, for the ratable benefit of the Secured Parties and the U.S.
Secured Parties, as amended, restated, supplemented or otherwise modified from time to time. 
 “Swingline Commitment” means
the lesser of (a) Ten Million Dollars ($10,000,000) and (b) the Commitment. 
 “Swingline Facility” means the
swingline facility established pursuant to Section 2.2. 
  

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 “Swingline Lender” means Bank of Montreal in its capacity as swingline lender hereunder.

 “Swingline Loan” means any swingline loan made by the Swingline Lender to the Borrower pursuant to
Section 2.2, and all such swingline loans collectively as the context requires. 
 “Swingline Note” means a
promissory note made by the Borrower in favor of the Swingline Lender evidencing the Swingline Loans made by the Swingline Lender, substantially in the form of Exhibit A-2, and any amendments, supplements and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals or extension thereof, in whole or in part. 
 “Swingline
Termination Date” means the first to occur of (a) the resignation or removal of the Swingline Lender in accordance with Section 13.10 (except to the extent the Swingline Lender is replaced with a successor Swingline Lender,
reasonably acceptable to the Borrower and the Administrative Agent (such approvals not to be unreasonably withheld or delayed), prior to the effectiveness of such resignation) and (b) the Maturity Date. 
 “Synthetic Lease” means any synthetic lease, tax retention operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money indebtedness for tax purposes but is classified as an Operating Lease in accordance with GAAP. 
 “Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings, assessments, fees or other charges imposed by any Governmental Authority, including any interest,
additions to tax or penalties applicable thereto. 
 “Termination Event” means except for any such event or condition that
could not reasonably be expected to have a Material Adverse Effect: (a) a “Reportable Event” described in Section 4043 of ERISA for which the notice requirement has not been waived by the PBGC, or (b) the withdrawal of the
U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates from a Pension Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or the treatment of a Pension Plan amendment as a termination, under Section 4041 of ERISA or similar provision of other Applicable Law, if the plan assets are not
sufficient to pay all plan liabilities, or (d) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Pension Plan by the PBGC or any other applicable Governmental Authority under other Applicable Law,
or (e) any other event or condition which would constitute grounds under Section 4042(a) of ERISA or other Applicable Law for the termination of, or the appointment of a trustee to administer, any Pension Plan, or (f) the imposition
of a Lien pursuant to Section 412 of the Code or Section 302 of ERISA or the provisions of any other Applicable Law, or (g) the partial or complete withdrawal of the U.S. Borrower or any of its Subsidiaries or of any of their ERISA
Affiliates from a Multiemployer Plan if withdrawal liability is asserted by such plan, or (h) any event or condition which results in the reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i) any
event or condition which results in the termination of a Multiemployer Plan 

  

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under Section 4041A of ERISA or the institution by PBGC of proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA, or
(j) the termination of a Canadian Pension Plan, the filing of a notice of intent to terminate a Canadian Pension Plan or the treatment of a Canadian Pension Plan amendment as a termination, under Applicable Law, if the plan assets are not
sufficient to pay all plan liabilities, or (k) the institution of proceedings to terminate, or the appointment of a trustee with respect to, any Canadian Pension Plan by any applicable Governmental Authority under Applicable Law, or
(l) any other event or condition which would constitute grounds under Applicable Law for the termination of, or the appointment of a trustee to administer, any Canadian Pension Plan, or (m) the partial or complete withdrawal of the U.S.
Borrower or any of its Subsidiaries from a Canadian Multiemployer Plan if withdrawal liability is asserted by such plan, or (n) any event or condition which results in the reorganization or insolvency of a Canadian Multiemployer Plan, or
(o) any event or condition which results in the termination of a Canadian Multiemployer Plan or the institution by any Governmental Authority of proceedings to terminate a Canadian Multiemployer Plan. 
 “Termination Value” means, in respect of any one or more Hedging Agreements, after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging Agreements, (a) for any date on or after the date such Hedging Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s), and
(b) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Hedging Agreements, as determined based upon one or more mid-market or other readily available quotations provided by
any recognized dealer in such Hedging Agreements (which may include a Lender or any Affiliate of a Lender). 
 “Third
Amendment” means that certain Third Amendment and Waiver dated as of Third Amendment Effective Date by and among the Borrower, the Guarantors and the Administrative Agent (on behalf of itself and the Lenders party thereto). 
 “Third Amendment Effective Date” means February 25, 2008. 
 “United Kingdom” means the United Kingdom of Great Britain and Northern Ireland. 
 “U.S. Administrative Agent” means Wachovia Bank, National Association in its capacity as the administrative agent under the U.S. Credit
Agreement. 
 “U.S. Borrower” means, collectively, the New U.S. Borrowers and the Original U.S. Borrower. 
 “U.S. Borrower Guaranty” means the unconditional guaranty of the payment of the Obligations of the Borrower under Article XI of
this Agreement. 
 “U.S. Borrowing Limit” means the “Borrowing Limit” as defined in the U.S. Credit Agreement.

 “U.S. Collateral” means the “Collateral” as defined in the U.S. Credit Agreement. 
 “U.S. Collateral Agreement” means the “Collateral Agreement” as defined in the U.S. Credit Agreement. 
  

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 “U.S. Coverage Assets” means the “Coverage Assets” as defined in the U.S.
Credit Agreement. 
 “U.S. Credit Agreement” means that certain credit agreement dated as of even date herewith by and among
the U.S. Borrower, as borrower, the lenders party thereto, as lenders, and the U.S. Administrative Agent, as administrative agent. 
 “U.S. Credit Facility” means that certain revolving credit facility established pursuant to the U.S. Credit Agreement. 
 “U.S. Credit Party” means the U.S. Borrower and each U.S. Subsidiary Guarantor. 
 “U.S. Extensions of
Credit” means the “Extensions of Credit” as defined in the U.S. Credit Agreement. 
 “U.S. Fee Letter”
means the separate fee letter agreement executed by the Original U.S. Borrower and Wachovia and/or certain of its affiliates dated April 3, 2006. 
 “U.S. Lender” means any “Lender” as defined in the U.S. Credit Agreement. 
 “U.S. Loans” means “Loans” as defined in the U.S. Credit Agreement. 
 “U.S. Maturity
Date” means the “Maturity Date” as defined in the U.S. Credit Agreement. 
 “U.S. Obligations” means the
“Obligations” as defined in the U.S. Credit Agreement. 
 “U.S. Parent Guaranty Agreement” means the “Parent
Guaranty Agreement” as defined in the U.S. Credit Agreement. 
 “U.S. Required Agreement Lenders” means the
“Required Agreement Lenders” as defined in the U.S. Credit Agreement. 
 “U.S. Secured Parties” means the
“Secured Parties” as defined in the U.S. Credit Agreement. 
 “U.S. Subsidiary Guarantors” means the
“Subsidiary Guarantors” as defined in the U.S. Credit Agreement. 
 “United States” means the United States of
America. 
 “Value” means, with respect to Inventory, the lower of (a) cost computed on a first-in first-out basis in
accordance with GAAP or (b) market value; provided that, for purposes of the calculation of the Borrowing Base, (i) the value of the Inventory shall not include: (A) intercompany profit or (B) write-ups or write-downs in
value with respect to currency exchange rates and (ii) notwithstanding anything to the contrary contained in this Agreement, the cost of the Inventory shall be computed in the same manner and consistent with the most recent appraisal of the
Inventory received and accepted by the Administrative Agent. 
  

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 “Wholly-Owned” means, with respect to a Subsidiary, that all of the shares of Capital
Stock of such Subsidiary are, directly or indirectly, owned or controlled by the U.S. Borrower and/or one or more of its Wholly-Owned Subsidiaries (except for (a) directors’ qualifying shares or other shares required by Applicable Law to
be owned by a Person other than the U.S. Borrower and (b) the Exchangeable Shares). 
 SECTION 1.2 Other Definitions and
Provisions. With reference to this Agreement and each other Loan Document, unless otherwise specified herein or in such other Loan Document: (a) the definitions of terms herein shall apply equally to the singular and plural forms of the
terms defined, (b) whenever the context may require, any pronoun shall include the corresponding masculine, feminine and neuter forms, (c) the words “include”, “includes” and “including” shall be deemed to be
followed by the phrase “without limitation”, (d) the word “will” shall be construed to have the same meaning and effect as the word “shall”, (e) any definition of or reference to any agreement, instrument or
other document herein shall be construed as referring to such agreement, instrument or other document as from time to time amended, supplemented or otherwise modified (subject to any restrictions on such amendments, supplements or modifications set
forth herein), (f) any reference herein to any Person shall be construed to include such Person’s successors and assigns, (g) the words “herein”, “hereof” and “hereunder”, and words of similar import,
shall be construed to refer to this Agreement in its entirety and not to any particular provision hereof, (h) all references herein to Articles, Sections, Exhibits and Schedules shall be construed to refer to Articles and Sections of, and
Exhibits and Schedules to, this Agreement, (i) the words “asset” and “property” shall be construed to have the same meaning and effect and to refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights, (j) the term “documents” includes any and all instruments, documents, agreements, certificates, notices, reports, financial statements and other writings, however evidenced,
whether in physical or electronic form, (k) in the computation of periods of time from a specified date to a later specified date, the word “from” means “from and including;” the words “to” and “until”
each mean “to but excluding;” and the word “through” means “to and including”, and (l) Section headings herein and in the other Loan Documents are included for convenience of reference only and shall not affect the
interpretation of this Agreement or any other Loan Document. 
 SECTION 1.3 Accounting Terms. All accounting terms not specifically or
completely defined herein shall be construed in conformity with, and all financial data (including financial ratios and other financial calculations) required to be submitted pursuant to this Agreement shall be prepared in conformity with GAAP as in
effect from time to time, applied on a consistent basis and in a manner consistent with that used in preparing the audited financial statements required by Section 7.1(b) and (d), except as otherwise specifically prescribed
herein. 
 SECTION 1.4 PPSA and CCQ Terms. Terms defined in the PPSA or the CCQ in effect on the Closing Date and not otherwise
defined herein shall, unless the context otherwise indicates, have the meanings provided by those definitions. Subject to the foregoing, the terms “PPSA” and “CCQ” refer, as of any date of determination, to the PPSA
or the CCQ, as applicable, then in effect. 
 SECTION 1.5 Rounding. Any financial ratios required to be maintained pursuant to this
Agreement shall be calculated by dividing the appropriate component by the other 

  

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component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the
nearest number (with a rounding-up if there is no nearest number). 
 SECTION 1.6 References to Agreement and Laws. Unless otherwise
expressly provided herein, (a) references to formation documents, governing documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions,
supplements and other modifications thereto, but only to the extent that such amendments, restatements, extensions, supplements and other modifications are not prohibited by any Loan Document; and (b) references to any Applicable Law shall
include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such Applicable Law. 
 SECTION 1.7 Times of Day. Unless otherwise specified, all references herein to times of day shall be references to Eastern time (daylight or standard, as applicable). 
 SECTION 1.8 Letter of Credit Amounts. Unless otherwise specified, all references herein to the amount of a Letter of Credit at any time shall be
deemed to mean the maximum face amount of such Letter of Credit after giving effect to all increases thereof contemplated by such Letter of Credit or the Letter of Credit Application therefor, whether or not such maximum face amount is in effect at
such time. 
 SECTION 1.9 Amount of Obligations. Unless otherwise specified, for purposes of this Agreement, any determination of the
amount of any outstanding Loans, L/C Obligations or other Obligations or the amount of the Borrowing Base or any component thereof shall be based upon the Dollar Amount of such outstanding Loans, L/C Obligations or other Obligations or Borrowing
Base or component thereof. 
 ARTICLE II 
 REVOLVING CREDIT FACILITY 
 SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions of this Agreement
(including, without limitation, with respect to any BA Loan, Section 2.7), and in reliance upon the representations and warranties set forth herein, each Lender severally agrees to make Revolving Credit Loans in any Permitted Currency to
the Borrower from time to time from the Closing Date through, but not including, the Maturity Date as requested by the Borrower in accordance with the terms of Section 2.3; provided, that (a) the aggregate principal amount of
all outstanding Revolving Credit Loans, after giving effect to any amount requested, shall not exceed the Borrowing Limit and (b) the principal amount of outstanding Revolving Credit Loans from any Lender shall not at any time exceed such
Lender’s Commitment less such Lender’s Commitment Percentage of outstanding L/C Obligations and outstanding Swingline Loans. Each Revolving Credit Loan by a Lender shall be in a principal amount equal to such Lender’s
Commitment Percentage of the aggregate principal amount of Revolving Credit Loans requested on such occasion in the Permitted Currency requested by the Borrower. Subject to the terms and conditions hereof, the Borrower may borrow, repay and reborrow
Revolving Credit Loans hereunder until the Maturity Date. 
  

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 SECTION 2.2 Swingline Loans. 
 (a) Availability. Subject to the terms and conditions of this Agreement, the Swingline Lender agrees to make Swingline Loans in any Permitted
Currency to the Borrower from time to time from the Closing Date through, but not including, the Swingline Termination Date; provided, that the aggregate principal amount of all outstanding Swingline Loans (after giving effect to any amount
requested), shall not exceed the lesser of (i) the Borrowing Limit and (ii) the Swingline Commitment. 
 (b) Refunding.

 (i) Swingline Loans shall be refunded by the Lenders in the applicable Permitted Currency on demand by the Swingline Lender
with notice to the Administrative Agent. Such refundings shall be made by the Lenders in accordance with their respective Commitment Percentages and shall thereafter be reflected as Revolving Credit Loans of the Lenders on the books and records of
the Administrative Agent (which Revolving Credit Loans shall bear interest based upon (A) the Canadian Prime Rate with respect to any Swingline Loan denominated in Canadian Dollars and (B) the Base Rate with respect to any Swingline Loan
denominated in Dollars). Each Lender shall fund its respective Commitment Percentage of Revolving Credit Loans as required to repay Swingline Loans outstanding to the Swingline Lender upon demand by the Swingline Lender but in no event later than
1:00 p.m. on the next succeeding Business Day after such demand is made. No Lender’s obligation to fund its respective Commitment Percentage of a Swingline Loan shall be affected by any other Lender’s failure to fund its Commitment
Percentage of a Swingline Loan, nor shall any Lender’s Commitment Percentage be increased as a result of any such failure of any other Lender to fund its Commitment Percentage of a Swingline Loan. 
 (ii) The Borrower shall pay to the Swingline Lender on demand, in the applicable Permitted Currency, with notice to the Administrative
Agent, the amount of such Swingline Loans to the extent amounts received from the Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. In addition, the Borrower hereby authorizes the
Administrative Agent to charge any account maintained by the Borrower with the Swingline Lender (up to the amount available therein) in order to immediately pay the Swingline Lender the amount of such Swingline Loans to the extent amounts received
from the Lenders are not sufficient to repay in full the outstanding Swingline Loans requested or required to be refunded. If any portion of any such amount paid to the Swingline Lender shall be recovered by or on behalf of the Borrower from the
Swingline Lender in bankruptcy or otherwise, the loss of the amount so recovered shall be ratably shared among all the Lenders in accordance with their respective Commitment Percentages (unless the amounts so recovered by or on behalf of the
Borrower pertain to a Swingline Loan extended after the occurrence and during the continuance of an Event of Default of which the Swingline Lender has received notice in the manner consistent with the notice requirements of
Section 13.10(b) and which such Event of Default has not been waived by the Required Lenders, the Required Agreement Lenders or the Lenders, as applicable). 
  

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 (iii) Each Lender acknowledges and agrees that its obligation to refund Swingline Loans
in accordance with the terms of this Section is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the conditions set forth in Article V. Further, each
Lender agrees and acknowledges that if prior to the refunding of any outstanding Swingline Loans pursuant to this Section, one of the events described in Section 12.1(i) or (j) shall have occurred, each Lender will, on the
date the applicable Revolving Credit Loan would have been made, purchase an undivided participating interest in the Swingline Loan to be refunded in an amount equal to its Commitment Percentage of the aggregate amount of such Swingline Loan. Each
Lender will immediately transfer to the Swingline Lender, in immediately available funds in the applicable Permitted Currency, the amount of its participation and upon receipt thereof the Swingline Lender will deliver to such Lender a certificate
evidencing such participation dated the date of receipt of such funds and for such amount. Whenever, at any time after the Swingline Lender has received from any Lender such Lender’s participating interest in a Swingline Loan, the Swingline
Lender receives any payment on account thereof, the Swingline Lender will distribute to such Lender its participating interest in such amount (appropriately adjusted, in the case of interest payments, to reflect the period of time during which such
Lender’s participating interest was outstanding and funded). 
 SECTION 2.3 Procedure for Advances of Revolving Credit Loans and
Swingline Loans. 
 (a) Requests for Borrowing. The Borrower shall give the Administrative Agent and, with respect to each
Swingline Loan, the Swingline Lender irrevocable prior written notice substantially in the form of Exhibit B (a “Notice of Borrowing”) not later than 12:00 p.m. (i) on the same Business Day as each Canadian Prime Rate
Loan, each Base Rate Loan and each Swingline Loan, (ii) at least one (1) Business Day before each BA Loan and (iii) at least three (3) Business Days before each LIBOR Rate Loan, of its intention to borrow, specifying (A) the
date of such borrowing, which shall be a Business Day; (B) the applicable Permitted Currency with respect to such borrowing; (C) the amount of such borrowing, which shall be, (1) with respect to Canadian Prime Rate Loans (other than
Swingline Loans) in an aggregate principal amount of C$1,000,000 or a whole multiple of C$500,000 in excess thereof, (2) with respect to Base Rate Loans (other than Swingline Loans) in an aggregate principal amount of $1,000,000 or a whole
multiple of $500,000 in excess thereof, (3) with respect to BA Loans in an aggregate principal amount of C$1,000,000 or a whole multiple of C$500,000 in excess thereof, (4) with respect to LIBOR Rate Loans denominated in Canadian Dollars
in an aggregate principal amount of C$3,000,000 or a whole multiple of C$1,000,000 in excess thereof, (5) with respect to LIBOR Rate Loans denominated in Dollars in an aggregate principal amount of $3,000,000 or a whole multiple of $1,000,000
in excess thereof and (6) with respect to Swingline Loans in any amount of Canadian Dollars or Dollars (as applicable); (D) whether such Loan is to be a Revolving Credit Loan or Swingline Loan; (E) in the case of a Revolving Credit
Loan whether the Loans are to be LIBOR Rate Loans, Canadian Prime Rate Loans, Base Rate Loans or BA Loans; and (E) in the case of a LIBOR Rate Loan or any BA Loan, the duration of the Interest Period applicable thereto. A Notice of Borrowing
received after 12:00 p.m. shall be deemed received on the next Business Day. The Administrative Agent shall promptly notify the Lenders of each Notice of Borrowing. 
  

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 (b) Disbursement of Revolving Credit and Swingline Loans. Not later than 2:00 p.m. on the proposed
borrowing date for any Loan (including any BA Loan), (i) each Lender will make available to the Administrative Agent, for the account of the Borrower, at the Administrative Agent’s Office in funds immediately available to the
Administrative Agent, such Lender’s Commitment Percentage of the Revolving Credit Loans (including any BA Loan) to be made on such borrowing date (provided that, without limiting the anything to the contrary contained herein, BA Loans
shall be subject to all disbursement provisions of Section 2.7) and (ii) the Swingline Lender will make available to the Administrative Agent, for the account of the Borrower, at the Administrative Agent’s Office in funds
immediately available to the Administrative Agent, the Swingline Loans to be made on such borrowing date. The Borrower hereby irrevocably authorizes the Administrative Agent to disburse the proceeds of each borrowing requested pursuant to this
Section in immediately available funds by crediting or wiring such proceeds to the deposit account of the Borrower identified in the most recent notice substantially in the form of Exhibit C (a “Notice of Account
Designation”) delivered by the Borrower to the Administrative Agent or as may be otherwise agreed upon by the Borrower and the Administrative Agent from time to time. Subject to Section 4.7 hereof, the Administrative Agent shall
not be obligated to disburse the portion of the proceeds of any Loan (including any BA Loan) requested pursuant to this Section to the extent that (i) with respect to any Revolving Credit Loan (including any BA Loan), any Lender has not made
available to the Administrative Agent its Commitment Percentage of such Revolving Credit Loan (including any BA Loan) or (ii) with respect to any Swingline Loan, the Swingline Lender has not made available to the Administrative Agent such
Swingline Loan. Revolving Credit Loans to be made for the purpose of refunding Swingline Loans shall be made by the Lenders as provided in Section 2.2(b). 
 SECTION 2.4 Repayment and Prepayment of Revolving Credit Loans and Swingline Loans. 
 (a)
Repayment on Maturity Date. The Borrower hereby agrees to repay the outstanding principal amount of (i) all Revolving Credit Loans in full on the Maturity Date, and (ii) all Swingline Loans in accordance with
Section 2.2(b), together, in each case, with all accrued but unpaid interest thereon. 
 (b) Mandatory Prepayments.

 (i) Borrowing Limit. If at any time (as determined by the Administrative Agent under Section 2.4(b)(iv),
which determination shall be conclusive absent manifest error): 
 (A) solely because of currency fluctuation, the outstanding
principal amount of all Revolving Credit Loans plus the sum of all outstanding Swingline Loans and L/C Obligations exceeds one hundred and five percent (105%) of the Borrowing Limit; or 
 (B) for any other reason, the outstanding principal amount of all Revolving Credit Loans plus the sum of all outstanding Swingline
Loans and L/C Obligations exceeds the Borrowing Limit; 

  

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then, in each such case, the Borrower agrees to prepay (x) if such excess results from a change to the Asset Coverage Amount, within three
(3) Business Days following the delivery of the applicable financial statements resulting in such change or (y) in any other circumstance, immediately upon notice from the Administrative Agent, by payment to the Administrative Agent for
the account of the Lenders, Extensions of Credit in an amount equal to such excess with each such repayment applied first to the principal amount of outstanding Swingline Loans, second to the principal amount of outstanding Revolving
Credit Loans (other than Bankers’ Acceptances and BA Loans) and third, with respect to any Letters of Credit, Bankers’ Acceptances or BA Loans then outstanding, a payment of cash collateral into a cash collateral account opened by
the Administrative Agent, for the benefit of the Lenders in an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit, Bankers’ Acceptances or BA Loans (such cash collateral to be applied in accordance with
Section 2.5(b) or Section 12.2(b)). 
 (ii) Excess Swingline Loans. If at any time (as
determined by the Administrative Agent or the Swingline Lender under Section 2.4(b)(iv), which determination shall be conclusive absent manifest error) the outstanding amount of all Swingline Loans exceeds the Swingline Commitment, then,
in each such case, the Borrower agrees to repay, immediately upon notice from the Administrative Agent, by payment to the Administrative Agent for the account of the Swingline Lender, Swingline Loans in an amount equal to such excess;
provided that if such excess is solely as a result of currency fluctuations the Borrower shall only be required to make such payment to the extent that the outstanding amount of all Swingline Loans exceeds one hundred and five percent
(105%) of the Swingline Commitment. 
 (iii) Excess L/C Obligations. If at any time (as determined by the
Administrative Agent under Section 2.4(b)(iv), which determination shall be conclusive absent manifest error) the outstanding amount of all L/C Obligations exceeds the L/C Commitment, then, in each such case, the Borrower shall make a
payment of cash collateral into an account opened by the Administrative Agent, for the benefit of itself and the Lenders, in an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit (such cash collateral to be
applied in accordance with Section 12.2(b)); provided that if such excess is solely as a result of currency fluctuations the Borrower shall only be required to make such payment of cash collateral to the extent that the
outstanding amount of all L/C Obligations exceeds one hundred and five percent (105%) of the L/C Commitment. 
 (iv)
Testing. The Borrower’s compliance with this Section 2.4(b) shall be tested only at each Determination Time. 
 (c)
Optional Prepayments. The Borrower may at any time and from time to time prepay Revolving Credit Loans and Swingline Loans, in whole or in part, with irrevocable prior written notice to the Administrative Agent substantially in the form of
Exhibit D (a “Notice of Prepayment”) given not later than 12:00 p.m. (i) on the same Business Day as the prepayment of each Canadian Prime Rate Loan and each Base Rate Loan (including, in each case, each Swingline
Loan), (ii) at least one (1) Business Day before the prepayment of each BA Loan and (iii) at least three (3) Business Days before the prepayment of each LIBOR Rate Loan, 

  

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specifying the date and amount of prepayment, the applicable Permitted Currency in which such prepayment is denominated and whether the prepayment is of
Canadian Prime Rate Loans, Base Rate Loans, BA Loans, LIBOR Rate Loans, Swingline Loans or a combination thereof, and, if of a combination thereof, the amount allocable to each. Upon receipt of such notice, the Administrative Agent shall promptly
notify each Lender. If any such notice is given, the amount specified in such notice shall be due and payable on the date set forth in such notice. Partial prepayments shall be in an aggregate amount of C$1,000,000 or a whole multiple of C$500,000
in excess thereof with respect to Canadian Prime Rate Loans (other than Swingline Loans), $1,000,000 or a whole multiple of $500,000 in excess thereof with respect to Base Rate Loans (other than Swingline Loans), C$1,000,000 or a whole multiple of
C$500,000 in excess thereof with respect to BA Loans, C$3,000,000 or a whole multiple of C$1,000,000 in excess thereof with respect to LIBOR Rate Loans denominated in Canadian Dollars, $3,000,000 or a whole multiple of $1,000,000 in excess thereof
with respect to LIBOR Rate Loans denominated in Dollars, C$100,000 or a whole multiple of C$100,000 in excess thereof with respect to Swingline Loans denominated in Canadian Dollars and $100,000 or a whole multiple of $100,000 in excess thereof with
respect to Swingline Loans denominated in Dollars. A Notice of Prepayment received after 12:00 p.m. shall be deemed received on the next Business Day. 
 (d) Limitation on Prepayment of LIBOR Rate Loans and BA Loans. 
 (i) The Borrower may
not prepay any LIBOR Rate Loan on any day other than on the last day of the Interest Period applicable thereto unless such prepayment is accompanied by any amount required to be paid pursuant to Section 4.9 hereof. 
 (ii) Notwithstanding Section 2.4(c) above, the Borrower may not prepay any BA Loan on any day other than on the last day of
the Interest Period applicable thereto; provided that, notwithstanding anything to the contrary contained in this Agreement, if at any time any Bankers’ Acceptances are required to be prepaid prior to their maturity, the Borrower shall
be required to deposit the amount of such prepayment in a cash collateral account with the Administrative Agent until the date of maturity of such Bankers’ Acceptances. Such cash collateral account shall be under the sole control of the
Administrative Agent. Except as contemplated hereby, neither the Borrower nor any Person claiming on behalf of the Borrower shall have any right to any of the cash in such cash collateral account. The Administrative Agent shall apply the cash held
in such cash collateral account to the face amount of such Bankers’ Acceptances at maturity whereupon any cash remaining in such cash collateral account shall be released by the Administrative Agent to the Borrower. Upon deposit of such cash
collateral as provided herein, such Bankers’ Acceptances shall not be considered to be outstanding for any purpose hereunder, including, without limitation, calculation of Average Utilization and availability under the Borrowing Limit.

 (e) Hedging Agreements. No repayment or prepayment pursuant to this Section shall affect any of the Borrower’s obligations
under any Hedging Agreement. 
  

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 SECTION 2.5 Permanent Reduction of the Commitment. 
 (a) Voluntary Reduction. The Borrower shall have the right at any time and from time to time, upon at least five (5) Business Days prior
written notice to the Administrative Agent, to permanently reduce, without premium or penalty, (i) the entire Commitment at any time or (ii) portions of the Commitment, from time to time, in an aggregate principal amount not less than
$5,000,000 or any whole multiple of $5,000,000 in excess thereof. Any reduction of the Commitment shall be applied to the Commitment of each Lender according to its Commitment Percentage. All commitment fees accrued until the effective date of any
termination of the Commitment shall be paid on the effective date of such termination. 
 (b) Corresponding Payment. Each permanent
reduction permitted or required pursuant to this Section or Section 8.2(b) shall be accompanied by a payment of principal sufficient to reduce the aggregate outstanding Revolving Credit Loans, Swingline Loans and L/C Obligations, as
applicable, after such reduction to the Commitment as so reduced and if the Commitment as so reduced is less than the aggregate amount of all outstanding Letters of Credit, the Borrower shall be required to deposit cash collateral in a cash
collateral account opened by the Administrative Agent in an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Such cash collateral shall be applied in accordance with Section 12.2(a). Any
reduction of the Commitment to zero shall be accompanied by payment of all outstanding Revolving Credit Loans and Swingline Loans (and furnishing of cash collateral for all L/C Obligations) and shall result in the termination of the Commitment and
the Credit Facility. Such cash collateral shall be applied in accordance with Section 12.2(b). If the reduction of the Commitment requires the repayment of any LIBOR Rate Loan or any BA Loan, such repayment shall be accompanied by any
amount required to be paid pursuant to Section 4.9 hereof; provided that, notwithstanding anything to the contrary contained in this Agreement, if at any time any Bankers’ Acceptances are prepaid prior to their maturity, the
Borrower shall be required to deposit the amount of such prepayment in a cash collateral account with the Administrative Agent until the date of maturity of such Bankers’ Acceptances. Such cash collateral account shall be under the sole control
of the Administrative Agent. Except as contemplated hereby, neither the Borrower nor any Person claiming on behalf of the Borrower shall have any right to any of the cash in such cash collateral account. The Administrative Agent shall apply the cash
held in such cash collateral account to the face amount of such Bankers’ Acceptances at maturity whereupon any cash remaining in such cash collateral account shall be released by the Administrative Agent to the Borrower. Upon deposit of such
cash collateral as provided herein, such Bankers’ Acceptances shall not be considered to be outstanding for any purpose hereunder, including, without limitation, calculation of Average Utilization and availability under the Borrowing Limit.

 SECTION 2.6 Termination of Credit Facility. 
 (a) The Credit Facility shall terminate on the earliest of: (i) May 30, 2007 (it being agreed by all parties hereto that, as of the Seventh Amendment Effective Date, such date has been extended to
June 5, 2009), (ii) the date of termination by the Borrower pursuant to Section 2.5, (iii) the date of termination by the Administrative Agent on behalf of the Lenders pursuant to Section 12.2(a), (iv) the date
which is ninety-one (91) days prior to the then current maturity date of any Specified Existing Note if on the date which is one hundred twenty (120) days prior to the 

  

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then current maturity date of such Specified Existing Note either (A) the remaining outstanding principal balance thereof (excluding any such balance as
to which sums have been set aside for the payment thereof pursuant to any defeasance or sinking fund or escrow arrangement or similar provisions) is in excess of $75,000,000 or (B) the Aggregate Credit Exposure is in excess of $100,000,000 and
the outstanding principal balance of such Specified Existing Note (excluding any such balance as to which sums have been set aside for the payment thereof pursuant to any defeasance or sinking fund or escrow arrangement or similar provisions) has
not been paid in full; or (v) the date which is ninety-one (91) days prior to the then current maturity date of any Indebtedness permitted pursuant to Section 12.1(o)(iii) if, on the date which is one hundred twenty
(120) days prior to the then current maturity date of such Indebtedness, such Indebtedness has not been paid in full in accordance with the terms of this Agreement or extended or refinanced such that the maturity of such Indebtedness is more
than ninety-one (91) days after May 27, 2009 (as such date may be extended pursuant to Section 2.6(b)); provided, that, on an annual basis the Borrower shall be entitled to request an extension of the Credit Facility
upon the same terms and conditions as contained herein for an additional 364-day period and thereafter be entitled to request subsequent extensions for 364-day periods, which request shall be granted in the Lenders’ discretion and subject to
the provisions of Sections 2.6(b) and (c); provided that the following conditions are satisfied (A) no Default or Event of Default has occurred and is continuing, (B) the Credit Facility has not been terminated
pursuant to clause (ii), (iii), (iv) or (v) above, (C) the Borrower provides written notice to the Administrative Agent (the “Extension Notice”) at least ninety (90) days prior to the then existing Maturity Date
(the date on which such Extension Notice is delivered, the “Extension Notice Date”) of its request to extend the Credit Facility and (D) each of the conditions set forth in Section 5.3 on the then existing Maturity
Date are satisfied by the Borrower. 
 (b) The Administrative Agent shall promptly deliver a copy of the Extension Notice to each Lender upon
receipt of same from the Borrower. Each of the Lenders shall within thirty (30) days from the Extension Notice Date (the “Consent Date”) provide written notice to the Administrative Agent of each such Lender’s agreement to
extend (any such Lender, a “Consenting Lender”) or not to so extend (any such Lender, a “Non-Consenting Lender”) the then existing Maturity Date. No Lender shall be under any obligation or commitment to extend the
then existing Maturity Date and no such obligation or commitment on the part of any Lender shall be inferred from the provisions of this Section 2.6. Failure on the part of any Lender to respond to the Extension Notice by the Consent
Date shall be deemed to be a refusal of such Lender to consent to the Extension Notice and such Lender shall be deemed to be a Non-Consenting Lender for purposes of this Section 2.6. The Administrative Agent shall provide a written list
of the Consenting Lenders and Non-Consenting Lenders to the Borrower and the Lenders promptly following the Consent Date. 
 (c) All Loans of
any Non-Consenting Lender shall be subject to the then existing Maturity Date. If Lenders holding Commitment Percentages aggregating less than one hundred percent (100%) of the aggregate Commitments consent to such extension, the Borrower may
elect by written notice to the Administrative Agent to (i) continue the Credit Facility for such additional period with an aggregate Commitment equal to the then effective aggregate Commitment less the total Commitments of the Non-Consenting
Lenders (provided that such continuation shall be permitted only if the total amount of such Commitments to be continued are equal to or greater than fifty percent (50%) of the total amount of the original Commitments 

  

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(after giving effect to any assignments pursuant to clause (iii) below)) or (ii) not continue the Credit Facility for such additional period and,
in such event, the Extension Notice shall be of no further effect or (iii) require any such Non-Consenting Lender to transfer and assign without recourse (in accordance with the provisions of Section 14.10) its Commitment and other
interests, rights and obligations under this Agreement to an Eligible Assignee which consents thereto, which shall assume such obligations upon its consent to assume such obligations; provided that (A) no such assignment shall conflict
with any Applicable Law, (B) such assignment shall be at the cost and expense of the Borrower and (C) the purchase price to be paid to such Non-Consenting Lender shall be an amount equal to the outstanding principal amount of the Loans of
such Non-Consenting Lender plus all interest accrued and unpaid thereon and all other amounts owing to such Non-Consenting Lender thereon. If the extension is granted and the conditions set forth in clause (a) of this Section 2.6
are satisfied, upon the then existing Maturity Date, the scheduled Maturity Date shall be extended to the date which is 364 days from such then existing Maturity Date. 
 SECTION 2.7 Terms Applicable to BA Loans. 
 (a) Commitment for BA Loans. 
 (i) Subject to the terms and conditions of this Agreement, the Borrower shall be entitled to receive the BA Proceeds of Bankers’
Acceptances denominated in Canadian Dollars in accordance with the provisions of Article II (including, without limitation, this Section 2.7); provided that: 
 (A) the aggregate principal amount of all outstanding BA Loans (after giving effect to any amount requested) shall not exceed the
Borrowing Limit; and 
 (B) the aggregate principal amount of all outstanding BA Loans from any Lender shall not at any time
exceed such Lender’s Commitment less the such Lender’s Commitment Percentage of outstanding Revolving Credit Loans (other than BA Loans), outstanding Swingline Loans and outstanding L/C Obligations. 
 Each BA Loan shall be funded in Canadian Dollars by each Lender in a principal amount equal to such Lender’s Commitment Percentage of the aggregate principal amount
of BA Loans requested on such occasion. Subject to the terms and conditions hereof, the Borrower may borrow, repay and reborrow BA Loans hereunder until the Maturity Date. 
 (ii) For the purposes of this Agreement, the full face amount of Bankers’ Acceptances, without discount, shall be used when
calculations are made to determine the amount of Loans outstanding. Each determination by the Administrative Agent of the Stamping Fee, the BA Discount Rate and the BA Proceeds shall, in the absence of manifest error, be presumed correct.

 (b) Term. Each Bankers’ Acceptance shall have an Interest Period as determined pursuant to Section 4.1(b) (subject
to availability). 
  

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 (c) Discount Rate. On each borrowing date on which Bankers’ Acceptances are to be accepted,
the Administrative Agent shall advise the Borrower as to its determination of the applicable BA Discount Rate for the Bankers’ Acceptances which the Lenders have agreed to purchase. 
 (d) Purchase of Bankers’ Acceptances. Each Lender agrees to purchase a Bankers’ Acceptance accepted by it. The Borrower shall sell, and
such Lender shall purchase, the Bankers’ Acceptance at the applicable BA Discount Rate. Each Lender shall provide, to the account of the Administrative Agent, the BA Proceeds less the Stamping Fee payable by the Borrower with respect to
the Bankers’ Acceptance. The Administrative Agent shall make available to the Borrower, in accordance with the provisions of Section 2.3, the BA Proceeds less the applicable Stamping Fee with respect to each Bankers’
Acceptance purchased and each BA Equivalent Loan advanced by a Lender on the date of such acceptance. Each Lender may from time to time hold, sell, rediscount, trade or otherwise dispose of any or all Bankers’ Acceptances accepted and purchased
by it. 
 (e) Execution of Bankers’ Acceptances. Drafts drawn by the Borrower to be accepted as Bankers’ Acceptances shall
be signed by a duly authorized officer or officers of the Borrower or by its attorneys, including attorneys appointed pursuant to Section 2.7(f). Notwithstanding that any Person whose signature appears on any Bankers’ Acceptance may
no longer be an authorized signatory for the Borrower at the time of issuance of a Bankers’ Acceptance, that signature shall nevertheless be valid and sufficient for all purposes as if the authority had remained in force at the time of issuance
and any Bankers’ Acceptance so signed shall be binding on the Borrower. 
 (f) Power of Attorney for the Execution of Bankers’
Acceptances. To facilitate availment of the BA Loans, the Borrower hereby appoints each Lender as its attorney to sign and endorse on its behalf, in handwriting or by facsimile or mechanical signature as and when deemed necessary by such Lender,
blank forms of Bankers’ Acceptances. In this respect, it is each Lender’s responsibility to maintain an adequate supply of blank forms of Bankers’ Acceptances for acceptance under this Agreement. Each Lender shall exercise the same
degree of care in the custody and safekeeping of signed blank forms of Bankers’ Acceptance as it exercises in respect of its own bearer securities. The Borrower recognizes and agrees that all Bankers’ Acceptances signed and/or endorsed on
its behalf by a Lender shall bind the Borrower as fully and effectually as if signed in the handwriting of and duly issued by the proper signing officers of the Borrower. Each Lender is hereby authorized to issue such Bankers’ Acceptances
endorsed in blank in such face amounts as may be determined by such Lender; provided that the aggregate amount thereof is equal to the aggregate amount of Bankers’ Acceptances required to be accepted and purchased by such Lender. No
Lender shall be liable for any damage, loss or other claim arising by reason of any loss or improper use of any such instrument except to the extent that such damage, loss or other claim is determined by a court of competent jurisdiction by final
nonappealable judgment to have resulted from the gross negligence or willful misconduct of such Lender or its officers, employees, agents or representatives. On the repayment in full of all Obligations or on request by the Borrower, each Lender
shall cancel all forms of Bankers’ Acceptances which have been pre-signed or pre-endorsed by or on behalf of the Borrower and which are held by such Lender and have not yet been issued in accordance herewith. Each Lender shall maintain a record
with respect to Bankers’ Acceptances held by it 

  

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in blank hereunder, voided by it for any reason, accepted and purchased by it hereunder, and cancelled at their respective maturities. Each Lender agrees to
provide such records to the Borrower at the Borrower’s expense upon request. 
 To facilitate the acceptance of Bankers’
Acceptances hereunder, the Borrower hereby authorizes the Lenders and irrevocably appoints each of the Lenders as its attorney, respectively: 
 (i) to complete and sign on the Borrower’s behalf, either manually or by facsimile or mechanical signature, the drafts to create the Bankers’ Acceptances (with, in each Lender’s discretion, the
inscription “This is a depository bill subject to the Depository Bills and Notes Act (Canada)”); 
 (ii)
after the acceptance thereof by any Lender, to endorse on the Borrower’s behalf, either manually or by facsimile or mechanical signature, such Bankers’ Acceptances in favor of the applicable purchaser or endorsee thereof including, in such
Lender’s discretion, such Lender or a clearing house (as defined by the Depository Bills and Notes Act (Canada)); 
 (iii) to deliver such Bankers’ Acceptances to such purchaser or to deposit such Bankers’ Acceptances with such clearing house; and 
 (iv) to comply with the procedures and requirements established from time to time by such Lender or such clearing house in respect of the delivery, transfer and collection of bankers’ acceptances and depository
bills. 
 All Bankers’ Acceptances so completed, signed, endorsed, delivered or deposited by a Lender on behalf of the Borrower shall be binding upon
the Borrower as if completed, signed, endorsed, delivered or deposited by it. The records of the Lenders and such clearing houses shall, in the absence of manifest error, be conclusively binding on the Borrower. None of the Lenders shall be liable
for any claim arising by reason of any loss or improper use of such drafts or Bankers’ Acceptances except for damages suffered by the Borrower caused by the willful misconduct or gross negligence of such Lender, as determined by a court of
competent jurisdiction by final nonappealable judgment. 
 (g) Disbursement of BA Loans. Promptly following the receipt by the
Administrative Agent of a Notice of Borrowing or Notice of Conversion/Continuation in respect of Bankers’ Acceptances, the Administrative Agent shall advise the Lenders of the notice and shall advise each Lender of the face amount of
Bankers’ Acceptances to be accepted by it on the applicable borrowing date and the applicable Interest Period (which shall be identical for all Lenders). The aggregate face amount of Bankers’ Acceptances to be accepted by a Lender shall be
determined by the Administrative Agent by reference to such Lender’s Commitment Percentage of the Bankers’ Acceptances to be made on the applicable borrowing date, except that, if the face amount of a Bankers’ Acceptance which would
otherwise be accepted by a Lender would not be C$100,000, or a whole multiple thereof, the face amount shall be increased or reduced by the Administrative Agent in its sole discretion to C$100,000, or the nearest whole multiple of that amount, as
appropriate; provided that after such issuance, the aggregate principal amount of all outstanding BA Loans from any Lender shall not at any time exceed such Lender’s Commitment less such Lender’s Commitment Percentage of
outstanding Revolving Credit Loans (other than BA Loans), outstanding Swingline Loans and outstanding L/C Obligations. 
  

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 (h) Waiver of Presentment and Other Conditions. The Borrower waives presentment for payment
and any other defense to payment of any amounts due to any Lender in respect of a Bankers’ Acceptance accepted and purchased by it pursuant to this Agreement which might exist solely by reason of the Bankers’ Acceptance being held, at the
maturity thereof, by such Lender in its own right and the Borrower agrees not to claim any days of grace if such Lender as holder sues the Borrower on the Bankers’ Acceptance for payment of the amount payable by the Borrower thereunder. On the
specified maturity date of a Bankers’ Acceptance or the date of any prepayment thereof in accordance with this Agreement, if earlier, the Borrower shall pay to the Lender that has accepted such Bankers’ Acceptance the full face amount of
such Bankers’ Acceptance and after such payment, the Borrower shall have no further liability in respect of such Bankers’ Acceptance (except to the extent that any such payment is rescinded or reclaimed by operation of law or otherwise)
and such Lender shall be entitled to all benefits of, and be responsible for all payments due to third parties under, such Bankers’ Acceptance. 
 (i) BA Equivalent Loans by Non-BA Lenders. Whenever the Borrower requests a BA Loan or conversion to a BA Loan or continuation of a BA Loan under this Agreement, each Non-BA Lender shall, in lieu of accepting
and purchasing a Bankers’ Acceptance, make a BA Equivalent Loan in an amount equal to the Non-BA Lender’s Commitment Percentage of the BA Loan to be made on the applicable borrowing date. 
 (j) Terms Applicable to Discount Notes. As set out in the definition of “Bankers’ Acceptances”, that term includes Discount Notes
and all terms of this Agreement applicable to Bankers’ Acceptances shall apply equally to Discount Notes evidencing BA Equivalent Loans with such changes as may in the context be necessary. For purposes of this Agreement: 
 (i) the term of a Discount Note shall be the same as the Interest Period for Bankers’ Acceptances accepted and purchased on the same
date in respect of the same BA Loan; 
 (ii) a stamping fee will be payable in respect of a Discount Note and shall be
calculated at the same rate and in the same manner as the Stamping Fee in respect of a Bankers’ Acceptance; and 
 (iii)
the BA Discount Rate applicable to a Discount Note shall be the BA Discount Rate applicable to Bankers’ Acceptances accepted by the Administrative Agent (or its designee), as Lender, on the same date, in respect of the same BA Loan. 

(k) Stamping Fees on Bankers’ Acceptance. The Borrower shall pay, in respect of each draft accepted by each Lender as a Bankers’
Acceptance, a per annum stamping fee (the “Stamping Fee”) equal to (i) the Applicable Margin for LIBOR Rate Loans, changing when and as such Applicable Margin for LIBOR Rate Loans shall change, multiplied by
(ii) the face amount of such Bankers’ Acceptance, and calculated based on the number of days to maturity of such Bankers’ Acceptance divided by the number of days in the applicable year, being 365 or 366, as the case may be.
Such Stamping Fee shall be payable in advance on the date of issuance 

  

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of the Bankers’ Acceptance. The Borrower authorizes and directs each Lender to deduct from the BA Proceeds of Bankers’ Acceptances purchased by
such Lender for its own account, the amount of each such Stamping Fee upon the issue of each Bankers’ Acceptance. 
 (l) Depository
Bills and Notes Act. At the option of the Borrower and any Lender, Bankers’ Acceptances under this Agreement to be accepted by such Lender may be issued in the form of depository bills for deposit with The Canadian Depository for Securities
Limited pursuant to the Depository Bills and Notes Act (Canada). All depository bills so issued shall be governed by the provisions of this Agreement. 
 (m) Circumstances Making Bankers’ Acceptances Unavailable. If the Administrative Agent determines in good faith, which determination shall constitute prima facie evidence thereof, and notifies the
Borrower that, by reason of circumstances affecting the money market, there is no market for Bankers’ Acceptances, then: 
 (i) the right of the Borrower to request a BA Loan (or continuation or conversion thereof) shall be suspended until the Administrative Agent determines that the circumstances causing such suspension no longer exist and the Administrative
Agent so notifies the Borrower; and 
 (ii) any notice relating to a BA Loan (or continuation or conversion thereof) which is
outstanding at such time shall be deemed to be a notice requesting Canadian Prime Rate Loans (or continuation or conversion thereof). 
 The Administrative
Agent shall promptly notify the Borrower and the Lenders of the suspension in accordance with this Section 2.7(m) of the Borrower’s right to request a BA Loan (or continuation or conversion thereof) and of the termination of any
such suspension. 
 (n) Prepayment. As provided in Section 2.4, the Borrower may pay the full face amount of a
Bankers’ Acceptances to the Administrative Agent to be held by the Administrative Agent in a non-interest bearing (unless otherwise agreed to by the Administrative Agent) account as collateral security for the Borrower’s obligations with
respect to those Bankers’ Acceptances and after such payment, the Borrower shall have no further liability in respect of such Bankers’ Acceptance (except to the extent that any such payment is rescinded or reclaimed by operation of law or
otherwise) and any Lender that accepted such Bankers’ Acceptance shall be entitled to all benefits of, and be responsible for all payments due to third parties under, such Bankers’ Acceptance. 
 (o) Default. Immediately upon termination of the Commitments under Section 12.2, the Borrower shall pay to the Administrative Agent on
behalf of the Lenders the full face amount of all Bankers’ Acceptances which have not matured. Such amounts shall be held by the Administrative Agent in a non-interest bearing (unless otherwise agreed to by the Administrative Agent) account as
collateral security for the Borrower’s obligations with respect to those Bankers’ Acceptances. 
  

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 ARTICLE III 
 LETTER OF CREDIT FACILITY 
 SECTION 3.1 L/C
Commitment. Subject to the terms and conditions hereof, each Issuing Lender, in reliance on the agreements of the other Lenders set forth in Section 3.4(a), agrees to issue standby letters of credit (“Letters of
Credit”) for the account of the Borrower on any Business Day from the Closing Date to, but not including, the fifth (5th) Business Day
prior to the Maturity Date in such form as may be approved from time to time by the applicable Issuing Lender; provided, that no Issuing Lender shall have any obligation to issue any Letter of Credit if, after giving effect to such issuance,
(a) the aggregate amount of L/C Obligations would exceed the L/C Commitment or (b) the aggregate amount of L/C Obligations would exceed the Borrowing Limit. Each Letter of Credit shall (i) be denominated in a Permitted Currency and
(ii) be a standby letter of credit issued to support obligations of the Borrower or any of its Subsidiaries, contingent or otherwise, (iii) expire on a date that is no later than the fifth (5th) Business Day prior to the Maturity Date (provided that any such Letter of Credit may, (A) by its terms and otherwise consistent with this Agreement, provide for
automatic annual renewals and (B) expire on a date that is after the Maturity Date with the prior written consent of each of the Administrative Agent and the applicable Issuing Lender, in each such Person’s sole discretion; provided
that all L/C Obligations associated with any such Letter of Credit are cash collateralized in a manner satisfactory to the Administrative Agent and the applicable Issuing Lender on or prior to the fifth (5th) Business Day prior to the Maturity Date and that, on the Maturity Date, all the L/C Participants are released from their L/C Obligations pertaining to such Letters of Credit)
and (iv) be subject to ISP98 and, to the extent not inconsistent therewith, the laws of the State of New York. No Issuing Lender shall at any time be obligated to issue any Letter of Credit hereunder if such issuance would conflict with, or
cause such Issuing Lender or any L/C Participant to exceed any limits imposed by, any Applicable Law. References herein to “issue” and derivations thereof with respect to Letters of Credit shall also include extensions or modifications of
any outstanding Letters of Credit, unless the context otherwise requires. As of the Closing Date, each of the Existing Letters of Credit shall constitute, for all purposes of this Agreement and the other Loan Documents, a Letter of Credit issued and
outstanding hereunder. 
 SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower may from time to time request that an
Issuing Lender issue a Letter of Credit by delivering to such Issuing Lender at such Issuing Lender’s Lending Office and to the Administrative Agent at the Administrative Agent’s Office a Letter of Credit Application therefor, completed to
the reasonable satisfaction of the applicable Issuing Lender and the Administrative Agent, and such other certificates, documents and other papers and information as such Issuing Lender and the Administrative Agent may reasonably request (the
“L/C Supporting Documentation”) (which information shall include the Permitted Currency in which the Letter of Credit shall be denominated). Upon receipt of any Letter of Credit Application and the L/C Supporting Documentation, the
applicable Issuing Lender shall process such Letter of Credit Application and the L/C Supporting Documentation delivered to it in connection therewith in accordance with its customary procedures and shall, after approving the same and receiving
confirmation from the Administrative Agent that sufficient availability exists under the Credit Facility for the issuance of such Letter of Credit, subject to Section 3.1 and Article V, promptly issue the Letter of Credit
requested thereby (but in no event shall the applicable Issuing Lender be required to 

  

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issue any Letter of Credit earlier than three (3) Business Days after its receipt of the Letter of Credit Application therefor and the L/C Supporting
Documentation relating thereto) by issuing the original of such Letter of Credit to the beneficiary thereof or as otherwise may be agreed by the applicable Issuing Lender and the Borrower. The applicable Issuing Lender shall promptly furnish to the
Borrower and the Administrative Agent a copy of such Letter of Credit and the Administrative Agent shall promptly notify each Lender of the issuance of such Letter of Credit and, upon request by any Lender, furnish to such Lender a copy of such
Letter of Credit and the amount of such Lender’s participation therein. 
 SECTION 3.3 Commissions and Other Charges. 

(a) Letter of Credit Commissions. The Borrower shall pay to the Administrative Agent, for the account of the each applicable Issuing Lender and
the L/C Participants, a letter of credit commission with respect to each Letter of Credit in an amount equal to the face amount of such Letter of Credit (as such amount may be reduced by (i) any permanent reduction of such Letter of Credit or
(ii) any amount which is drawn, reimbursed and no longer available under such Letter of Credit) multiplied by the Applicable Margin with respect to LIBOR Rate Loans (determined on a per annum basis). Such commission shall be payable
quarterly in arrears on the last Business Day of each calendar quarter, on the Maturity Date and thereafter on demand of the Administrative Agent. The Administrative Agent shall, promptly following its receipt thereof, distribute to each applicable
Issuing Lender and the L/C Participants all commissions received pursuant to this Section in accordance with their respective Commitment Percentages. 
 (b) Issuance Fee. In addition to the foregoing commission, the Borrower shall pay to the Administrative Agent, for the account of each applicable Issuing Lender, an issuance fee with respect to each Letter of
Credit issued by such Issuing Lender in an amount equal to the face amount of such Letter of Credit multiplied by one-eighth of one percent (0.125%) per annum. Such issuance fee shall be payable quarterly in arrears on the last Business Day
of each calendar quarter commencing with the first such date to occur after the issuance of such Letter of Credit, on the Maturity Date and thereafter on demand of the applicable Issuing Lender. 
 (c) Other Costs. In addition to the foregoing fees and commissions, the Borrower shall pay or reimburse each Issuing Lender for such normal and
customary costs and expenses as are incurred or charged by such Issuing Lender in issuing, effecting payment under, amending or otherwise administering any Letter of Credit. 
 (d) Payments. The commissions, fees, charges, costs and expenses payable pursuant to this Section 3.3 shall be payable in the
Permitted Currency in which the applicable Letter of Credit is denominated. 
 SECTION 3.4 L/C Participations. 
 (a) Each Issuing Lender irrevocably agrees to grant and hereby grants to each L/C Participant, and, to induce such Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase and hereby accepts and purchases from such Issuing Lender, on the terms and conditions hereinafter stated, for such L/C Participant’s own account and risk an
undivided interest equal to such L/C Participant’s Commitment 

  

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Percentage in such Issuing Lender’s obligations and rights under and in respect of each Letter of Credit issued by such Issuing Lender hereunder and the
amount of each draft paid by such Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably agrees with each Issuing Lender that, if a draft is paid under any Letter of Credit issued by such Issuing Lender for which such
Issuing Lender is not reimbursed in full by the Borrower through a Revolving Credit Loan or otherwise in accordance with the terms of this Agreement, such L/C Participant shall pay to such Issuing Lender in the applicable Permitted Currency upon
demand at such Issuing Lender’s Lending Office an amount equal to such L/C Participant’s Commitment Percentage of the amount of such draft, or any part thereof, which is not so reimbursed. 
 (b) Upon becoming aware of any amount required to be paid by any L/C Participant to the applicable Issuing Lender pursuant to Section 3.4(a)
in respect of any unreimbursed portion of any payment made by such Issuing Lender under any Letter of Credit issued by it, such Issuing Lender shall notify the Administrative Agent and each L/C Participant of the amount and due date of such required
payment and such L/C Participant shall pay to such Issuing Lender in the applicable Permitted Currency the amount specified on the applicable due date. If any such amount is paid to such Issuing Lender after the date such payment is due, such L/C
Participant shall pay to such Issuing Lender in the applicable Permitted Currency on demand, in addition to such amount, the product of (i) such amount, multiplied by (ii) the Base Rate (with respect to payments required to be made
in Dollars) or the Canadian Prime Rate (with respect to payments required to be made in Canadian Dollars), in each case as determined by the Administrative Agent, during the period from and including the date such payment is due to the date on which
such payment is immediately available to such Issuing Lender, multiplied by (iii) a fraction, the numerator of which is the number of days that elapse during such period and the denominator of which is 360. A certificate of the
applicable Issuing Lender with respect to any amounts owing under this Section shall be conclusive in the absence of manifest error. With respect to payment to an Issuing Lender of the unreimbursed amounts described in this Section, if the L/C
Participants receive notice that any such payment is due (A) prior to 2:00 p.m. on any Business Day, such payment shall be due that Business Day, and (B) after 2:00 p.m. on any Business Day, such payment shall be due on the following
Business Day. 
 (c) Whenever, at any time after the applicable Issuing Lender has made payment under any Letter of Credit and has received
from any L/C Participant its Commitment Percentage of such payment in accordance with this Section, such Issuing Lender receives any payment related to such Letter of Credit (whether directly from the Borrower or otherwise), or any payment of
interest on account thereof, such Issuing Lender will distribute to such L/C Participant its pro rata share thereof; provided, that in the event that any such payment received by such Issuing Lender shall be required to be returned by
such Issuing Lender, such L/C Participant shall return to such Issuing Lender the portion thereof previously distributed by such Issuing Lender to it. 
 SECTION 3.5 Reimbursement Obligation of the Borrower. In the event of any drawing under any Letter of Credit, the Borrower agrees to reimburse (either with the proceeds of a Revolving Credit Loan as provided
for in this Section or with funds from other sources), in same day funds in the applicable Permitted Currency in which such Letter of Credit was denominated, the applicable Issuing Lender on each date on which such Issuing Lender notifies the
Borrower of the date and amount of a draft paid under any Letter of Credit for the amount of 

  

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(a) such draft so paid and (b) any amounts referred to in Section 3.3(c) incurred by such Issuing Lender in connection with such payment.
The applicable Issuing Lender shall promptly deliver written notice of any drawing under any Letter of Credit issued by such Issuing Lender to the Administrative Agent and the Borrower. Unless the Borrower shall immediately notify the applicable
Issuing Lender that the Borrower intends to reimburse such Issuing Lender for such drawing from other sources or funds, the Borrower shall be deemed to have timely given a Notice of Borrowing to the Administrative Agent requesting that the Lenders
make a Revolving Credit Loan bearing interest at the Base Rate (to the extent that the applicable Letter of Credit was denominated in Dollars) or the Canadian Prime Rate (to the extent that the applicable Letter of Credit was denominated in Canadian
Dollars) on such date in the amount of (a) such draft so paid and (b) any amounts referred to in Section 3.3(c) incurred by such Issuing Lender in connection with such payment, and the Lenders shall make such Revolving Credit
Loan, the proceeds of which shall be applied to reimburse such Issuing Lender for the amount of the related drawing and costs and expenses. Each Lender acknowledges and agrees that its obligation to fund a Revolving Credit Loan in accordance with
this Section to reimburse the applicable Issuing Lender for any draft paid under a Letter of Credit is absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, non-satisfaction of the
conditions set forth in Section 2.3(a) or Article V. If the Borrower has elected to pay the amount of such drawing with funds from other sources and shall fail to reimburse the applicable Issuing Lender as provided above, the
unreimbursed amount of such drawing shall bear interest at the rate which would be payable on any outstanding Base Rate Loans (with respect to any amount payable in Dollars) or any outstanding Canadian Prime Rate Loans (with respect to any amount
payable in Canadian Dollars), in each case which were then overdue, from the date such amounts become payable (whether at stated maturity, by acceleration or otherwise) until payment in full. 
 SECTION 3.6 Obligations Absolute. The Borrower’s obligations under this Article III (including, without limitation, the Reimbursement
Obligation) shall be absolute and unconditional under any and all circumstances and irrespective of any setoff, counterclaim or defense to payment which the Borrower may have or have had against any Issuing Lender or any beneficiary of a Letter of
Credit or any other Person. The Borrower also agrees that no Issuing Lender nor any L/C Participant shall be responsible for, and the Borrower’s Reimbursement Obligation under Section 3.5 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon, even though such documents shall in fact prove to be invalid, fraudulent or forged, or any dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or any claims whatsoever of the Borrower against any beneficiary of such Letter of Credit or any such transferee. No Issuing Lender shall be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or advice, however transmitted, in connection with any Letter of Credit, except for errors or omissions caused by the applicable Issuing Lender’s gross negligence or
willful misconduct, as determined by a court of competent jurisdiction by final nonappealable judgment. The Borrower agrees that any action taken or omitted by the applicable Issuing Lender under or in connection with any Letter of Credit or the
related drafts or documents, if done in the absence of gross negligence or willful misconduct shall be binding on the Borrower and shall not result in any liability of such Issuing Lender or any L/C Participant to the Borrower. The responsibility of
the applicable Issuing 

  

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Lender to the Borrower in connection with any draft presented for payment under any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the documents (including each draft) delivered under such Letter of Credit in connection with such presentment are in conformity with such Letter of Credit. 
 SECTION 3.7 Effect of Letter of Credit Application. To the extent that any provision of any Letter of Credit Application or L/C Supporting
Documentation related to any Letter of Credit is inconsistent with the provisions of this Article III, the provisions of this Article III shall apply. 
 ARTICLE IV 
 GENERAL LOAN PROVISIONS 
 SECTION 4.1 Interest. 
 (a)
Interest Rate Options. Subject to the provisions of this Section, at the election of the Borrower: 
 (i) Revolving
Credit Loans denominated in Canadian Dollars (other than BA Loans) shall bear interest at (A) the Canadian Prime Rate plus the Applicable Margin or (B) the LIBOR Rate plus the Applicable Margin; 
 (ii) Revolving Credit Loan denominated in Canadian Dollars in the form of a BA Loan (and the Banker’s Acceptance applicable thereto)
shall be discounted, and shall otherwise be subject to such other terms and conditions, set forth in Section 2.7; 
 (iii) Revolving Credit Loans denominated in Dollars shall bear interest at (A) the Base Rate plus the Applicable Margin or (B) the LIBOR Rate plus the Applicable Margin; 
 (iv) Swingline Loans denominated in Canadian Dollars shall bear interest at the Canadian Prime Rate plus the Applicable Margin; and

 (v) Swingline Loans denominated in Dollars shall bear interest at the Base Rate plus the Applicable Margin.

 The Borrower shall select the type of Loan, the applicable Permitted Currency, the rate of interest and the Interest Period, if any, applicable to any
Loan at the time a Notice of Borrowing is given pursuant to Section 2.3 or at the time a Notice of Conversion/Continuation is given pursuant to Section 4.2. Any Loan or any portion thereof as to which the Borrower has not
duly specified (i) a type of Loan shall be deemed to be a Revolving Credit Loan, (ii) a currency as provided herein shall be deemed to be a Revolving Credit Loan denominated in Canadian Dollars or (iii) an interest rate as provided
herein shall be deemed to be a Base Rate Loan (if such Loan is to be denominated in Dollars) or a Canadian Prime Rate Loan (if such Loan is to be denominated in Canadian Dollars). 
  

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 (b) Interest Periods. In connection with each LIBOR Rate Loan and each BA Loan, the Borrower, by
giving notice at the times described in Section 2.3 or 4.2, as applicable, shall elect an interest period (each, an “Interest Period”) to be applicable to such Revolving Credit Loan, which Interest Period shall be
a period of one (1), two (2), three (3), or six (6) months; provided that: 
 (i) the Interest Period shall
commence on the date of advance of or conversion to any LIBOR Rate Loan or any BA Loan and, in the case of immediately successive Interest Periods, each successive Interest Period shall commence on the date on which the immediately preceding
Interest Period expires; 
 (ii) if any Interest Period would otherwise expire on a day that is not a Business Day, such
Interest Period shall expire on the next succeeding Business Day; provided, that if any Interest Period with respect to a LIBOR Rate Loan or a BA Loan would otherwise expire on a day that is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Interest Period shall expire on the immediately preceding Business Day; 
 (iii) any Interest Period with respect to a LIBOR Rate Loan or a BA Loan that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such
Interest Period) shall end on the last Business Day of the relevant calendar month at the end of such Interest Period; 
 (iv)
no Interest Period shall extend beyond the Maturity Date; and 
 (v) there shall be no more than (A) four
(4) Interest Periods in effect at any time with respect to LIBOR Rate Loans and (B) ten (10) Interest Periods in effect at any time with respect to BA Loans. 
 (c) Default Rate. Subject to Section 12.3, (i) immediately upon the occurrence and during the continuance of an Event of Default
under Section 12.1(a), (b), (i) or (j), or (ii) at the election of the Required Agreement Lenders, upon the occurrence and during the continuance of any other Event of Default, (A) the Borrower shall
no longer have the option to request LIBOR Rate Loans, Swingline Loans, BA Loans or Letters of Credit, (B) all outstanding LIBOR Rate Loans shall bear interest at a rate per annum of two percent (2%) in excess of the rate then applicable
thereto until the end of the applicable Interest Period and thereafter at a rate equal to two percent (2%) in excess of the rate then applicable to (1) Canadian Prime Rate Loans (with respect to Revolving Credit Loans denominated in
Canadian Dollars) or (2) Base Rate Loans (with respect to Revolving Credit Loans denominated in Dollars), (C) all outstanding Canadian Prime Rate Loans and other Obligations denominated in Canadian Dollars arising hereunder or under any
other Loan Document shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate then applicable to Canadian Prime Rate Loans and (D) all outstanding Base Rate Loans and other Obligations denominated in Dollars
arising hereunder or under any other Loan Document shall bear interest at a rate per annum equal to two percent (2%) in excess of the rate then applicable to Base Rate Loans. Interest shall continue to accrue on the Obligations after the filing
by or against the Borrower of any petition seeking any relief in bankruptcy or under any act or law pertaining to insolvency or debtor relief, whether state, federal or foreign. 
  

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 (d) Interest Payment and Computation. 
 (i) Interest on each Canadian Prime Rate Loan and each Base Rate Loan shall be due and payable in arrears on the last Business Day of each
calendar quarter commencing September 30, 2006; and interest on each LIBOR Rate Loan shall be due and payable on the last day of each Interest Period applicable thereto, and if such Interest Period extends over three (3) months, at the end
of each three (3) month interval during such Interest Period. Interest on LIBOR Rate Loans and all fees (except for Stamping Fees) shall be computed on the basis of a 360-day year and assessed for the actual number of days elapsed and interest
on Canadian Prime Rate Loans, Base Rate Loans and Stamping Fees shall be computed on the basis of a 365/366-day year and assessed for the actual number of days elapsed. 
 (ii) For purposes of the Interest Act (Canada) and disclosure thereunder, whenever any interest or fee to be paid hereunder or in
connection herewith is to be calculated on the basis of any period of time that is less than a calendar year, the yearly rate of interest to which the rate used in such calculation is equivalent is the rate so used multiplied by the actual number of
days in the calendar year in which the same is to be ascertained and divided by 365 or 366, as applicable. The rates of interest under this Agreement are nominal rates, and not effective rates or yields. The principle of deemed reinvestment of
interest does not apply to any interest calculation under this Agreement. 
 (e) Maximum Rate. 
 (i) In no contingency or event whatsoever shall the aggregate of all amounts deemed interest under this Agreement charged or collected
pursuant to the terms of this Agreement exceed the highest rate permissible under any Applicable Law which a court of competent jurisdiction shall, in a final determination, deem applicable hereto. 
 (ii) Notwithstanding the provisions of this Section 4.1 or any other provision of this Agreement or any other Loan Document,
in no event shall the aggregate “interest” (as such term is defined in Section 347 of the Criminal Code (Canada)) exceed the effective annual rate of interest on the “credit advanced” (as such term is defined in
Section 347 of the Criminal Code (Canada)) lawfully permitted under Section 347 of the Criminal Code (Canada). The effective annual rate of interest shall be determined in accordance with generally accepted actuarial
practices and principles over the term of the applicable Loan, and in the event of a dispute, a certificate of a Fellow of the Canadian Institute of Actuaries qualified for a period of ten (10) years and appointed by the Administrative Agent
will be conclusive for the purposes of such determination. 
 (iii) In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable rate, the rate in effect hereunder shall automatically be reduced to the maximum rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent’s option (A) promptly refund to 

  

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the Borrower any interest received by the Lenders in excess of the maximum lawful rate or (B) apply such excess to the principal balance of the
Obligations on a pro rata basis. It is the intent hereof that the Borrower not pay or contract to pay, and that neither the Administrative Agent nor any Lender receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by the Borrower under Applicable Law. 
 SECTION 4.2 Notice and Manner of
Conversion or Continuation of Loans. 
 (a) Provided that no Default or Event of Default has occurred and is then continuing, the
Borrower shall have the option to: 
 (i) convert at any time all or any portion of any outstanding Canadian Prime Rate Loans
(other than Swingline Loans) in a principal amount equal to C$3,000,000 or any whole multiple of C$1,000,000 in excess thereof into one or more LIBOR Rate Loans denominated in Canadian Dollars; 
 (ii) convert at any time all or any portion of any outstanding Canadian Prime Rate Loans (other than Swingline Loans) in a principal
amount equal to C$1,000,000 or a whole multiple of C$500,000 in excess thereof into BA Loans; 
 (iii) upon the expiration of
any Interest Period, (A) convert all or any part of its outstanding LIBOR Rate Loans denominated in Canadian Dollars in a principal amount equal to C$1,000,000 or a whole multiple of C$500,000 in excess thereof into Canadian Prime Rate Loans
(other than Swingline Loans) or BA Loans, (B) continue such LIBOR Rate Loans as LIBOR Rate Loans, (C) convert all or any part of its outstanding BA Loans in a principal amount equal to C$1,000,000 or a whole multiple of C$500,000 in excess
thereof into Canadian Prime Rate Loans (other than Swingline Loans), (D) convert all or any part of its outstanding BA Loans in a principal amount equal to C$3,000,000 or any whole multiple of C$1,000,000 in excess thereof into one or more
LIBOR Rate Loans denominated in Canadian Dollars or (E) continue such BA Loans as BA Loans; 
 (iv) convert at any time
all or any portion of any outstanding Base Rate Loans (other than Swingline Loans) in a principal amount equal to $3,000,000 or any whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans denominated in Dollars; and

 (v) upon the expiration of any Interest Period, (A) convert all or any part of its outstanding LIBOR Rate Loans
denominated in Dollars in a principal amount equal to $1,000,000 or a whole multiple of $500,000 in excess thereof into Base Rate Loans (other than Swingline Loans) or (B) continue such LIBOR Rate Loans as LIBOR Rate Loans; 
 provided that (1) with respect to any BA Loan, any conversion of a BA Loan shall be made on, and only on, the last day of the Interest Period applicable
thereto; (2) with respect to any BA Loan, in the event that a BA Loan is to be continued as a BA Loan, the BA Proceeds arising 

  

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from the continued BA Loan shall be retained by the relevant Lender to be applied by it to the face amount of the Bankers’ Acceptance maturing on the
date of such advance, and the Borrower shall pay to each Lender, on such date, an amount equal to the difference between the face amount at maturity of the maturing Bankers’ Acceptance and the BA Proceeds of the Bankers’ Acceptance to be
issued; and (3) with respect to any LIBOR Rate Loan or any BA Loan, if the Borrower fails to provide a Notice of Conversion/Continuation with respect to such Loan or any portion thereof prior to the time period required below, such Loan shall
be converted into a Base Rate Loan (if such Loan was denominated in Dollars) or a Canadian Prime Rate Loan (if such Loan was denominated in Canadian Dollars). 
 (b) Whenever the Borrower desires to convert or continue Revolving Credit Loans as provided above, the Borrower shall give the Administrative Agent irrevocable prior written notice in the form attached as Exhibit
E (a “Notice of Conversion/Continuation”) not later than 12:00 p.m. three (3) Business Days before the day on which a proposed conversion or continuation of such Loan is to be effective specifying (A) the Permitted
Currency in which such Loan is denominated, (B) the Loans to be converted or continued, and, in the case of any LIBOR Rate Loan or BA Loan to be converted or continued, the last day of the Interest Period therefor, (C) the effective date
of such conversion or continuation (which shall be a Business Day), (D) the principal amount of such Loans to be converted or continued, and (E) the Interest Period to be applicable to such converted or continued LIBOR Rate Loan or BA
Loan. The Administrative Agent shall promptly notify the Lenders of such Notice of Conversion/Continuation. 
 SECTION 4.3 Fees.

 (a) Commitment Fee. The Borrower shall pay to the Administrative Agent, for the account of the Lenders, a non-refundable commitment
fee at a rate per annum equal to 0.25% on the average daily unused portion of the Commitment as in effect from time to time during the period commencing on the Closing Date and ending on the Maturity Date; provided, that the amount of
outstanding Swingline Loans shall not be considered usage of the Commitment for the purpose of calculating such commitment fee. The commitment fee shall be payable for each calendar quarter in arrears on the last Business Day of such calendar
quarter during the term of this Agreement commencing with the calendar quarter ending September 30, 2006 and ending on the Maturity Date. Such commitment fee shall be distributed by the Administrative Agent to the Lenders pro rata in
accordance with the Lenders’ respective Commitment Percentages. 
 (b) Agency Fee. The Borrower shall pay to the Administrative
Agent, for its own account, an annual administrative agency fee in an amount agreed to by the Borrower and the Administrative Agent in the Canadian Fee Letter. 
 (c) Other Fees. The Borrower agrees to pay any fees (and other expenses) as set forth in the U.S. Fee Letter. 
 SECTION 4.4 Manner of Payment. Each payment by the Borrower on account of the principal of or interest on the Loans or of any fee, commission or other amounts (including the Reimbursement Obligation) payable to
the Lenders under this Agreement shall be made not later than 2:00 p.m. on the date specified for payment under this Agreement to the Administrative 

  

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Agent at the Administrative Agent’s Office for the account of the Lenders (other than as set forth below) pro rata in accordance with
their respective Commitment Percentages, (except as specified below), in the applicable Permitted Currency, in immediately available funds and shall be made without any setoff, counterclaim or deduction whatsoever. Any payment received after such
time but before 3:00 p.m. on such day shall be deemed a payment on such date for the purposes of Section 12.1, but for all other purposes shall be deemed to have been made on the next succeeding Business Day. Any payment received after
3:00 p.m. shall be deemed to have been made on the next succeeding Business Day for all purposes. Upon receipt by the Administrative Agent of each such payment, the Administrative Agent shall distribute to each Lender at its Lending Office its
pro rata share of such payment in accordance with such Lender’s Commitment Percentage, (except as specified below) and shall wire advice of the amount of such credit to each Lender. Each payment to the Administrative Agent of the
applicable Issuing Lender’s fees or L/C Participants’ commissions shall be made in like manner, but for the account of the applicable Issuing Lender or the L/C Participants, as the case may be. Each payment to the Administrative Agent of
Administrative Agent’s fees or expenses shall be made for the account of the Administrative Agent and any amount payable to any Lender under Section 4.9, 4.10, 4.11 or 14.3 shall be paid to the Administrative
Agent for the account of the applicable Lender. Subject to Section 4.1(b)(ii), if any payment under this Agreement shall be specified to be made upon a day which is not a Business Day, it shall be made on the next succeeding day which is
a Business Day and such extension of time shall in such case be included in computing any interest if payable along with such payment. 
 SECTION 4.5 Evidence of Indebtedness. 
 (a) Extensions of Credit. The Extensions of Credit made by each Lender shall
be evidenced by one or more accounts or records maintained by such Lender and by the Administrative Agent in the ordinary course of business. The accounts or records maintained by the Administrative Agent and each Lender shall be conclusive absent
manifest error of the amount of the Extensions of Credit made by the Lenders to the Borrower and the interest and payments thereon. Any failure to so record or any error in doing so shall not, however, limit or otherwise affect the obligation of the
Borrower hereunder to pay any amount owing with respect to the Obligations. In the event of any conflict between the accounts and records maintained by any Lender and the accounts and records of the Administrative Agent in respect of such matters,
the accounts and records of the Administrative Agent shall control in the absence of manifest error. Upon the request of any Lender made through the Administrative Agent, the Borrower shall execute and deliver to such Lender (through the
Administrative Agent) a Revolving Credit Note and/or Swingline Note and/or Discount Note, as applicable, which shall evidence such Lender’s Revolving Credit Loans and/or Swingline Loans and/or BA Equivalent Loans, as applicable, in addition to
such accounts or records. Each Lender may attach schedules to its Notes and endorse thereon the date, amount and maturity of its Loans and payments with respect thereto. 
 (b) Participations. In addition to the accounts and records referred to in subsection (a), each Lender and the Administrative Agent shall maintain in accordance with its usual practice accounts or
records evidencing the purchases and sales by such Lender of participations in Letters of Credit and Swingline Loans. In the event of any conflict between the accounts and records maintained by the Administrative Agent and the accounts and records
of any Lender in respect of such matters, the accounts and records of the Administrative Agent shall control in the absence of manifest error. 
  

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 SECTION 4.6 Adjustments. If any Lender shall, by exercising any right of setoff or counterclaim or
otherwise, obtain payment in respect of any principal of or interest on any of its Loans or other obligations hereunder resulting in such Lender’s receiving payment of a proportion of the aggregate amount of its Loans and accrued interest
thereon or other such obligations (other than pursuant to Section 4.9, 4.10, 4.11 or 14.3 hereof) greater than its pro rata share thereof as provided herein, then the Lender receiving such greater proportion shall (a) notify
the Administrative Agent of such fact, and (b) purchase (for cash at face value) participations in the Loans and such other obligations of the other Lenders, or make such other adjustments as shall be equitable, so that the benefit of all such
payments shall be shared by the Lenders ratably in accordance with the aggregate amount of principal of and accrued interest on their respective Loans and other amounts owing them; provided that: 
 (i) if any such participations are purchased and all or any portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such recovery, without interest, and 
 (ii) the
provisions of this paragraph shall not be construed to apply to (A) any payment made by the Borrower pursuant to and in accordance with the express terms of this Agreement or (B) any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans or participations in Swingline Loans and Letters of Credit to any assignee or participant, other than to the Borrower or any of its Subsidiaries (as to which the provisions of this
paragraph shall apply). 
 Each Credit Party consents to the foregoing and agrees, to the extent it may effectively do so under Applicable Law, that any
Lender acquiring a participation pursuant to the foregoing arrangements may exercise against each Credit Party rights of setoff and counterclaim with respect to such participation as fully as if such Lender were a direct creditor of each Credit
Party in the amount of such participation. 
 SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by
the Administrative Agent. The obligations of the Lenders under this Agreement to make the Loans and issue or participate in Letters of Credit are several and are not joint or joint and several. Unless the Administrative Agent shall have received
notice from a Lender prior to a proposed borrowing date with respect to a LIBOR Rate Loan or a BA Loan or prior to 12:00 noon on a proposed borrowing date with respect to a Canadian Prime Rate Loan or a Base Rate Loan that such Lender will not make
available to the Administrative Agent such Lender’s ratable portion of the amount to be borrowed on such date (which notice shall not release such Lender of its obligations hereunder), the Administrative Agent may assume that such Lender has
made such portion available to the Administrative Agent on the proposed borrowing date in accordance with Section 2.3(b), and the Administrative Agent may, in reliance upon such assumption, make available to the Borrower on such date a
corresponding amount. If such amount is made available to the Administrative Agent on a date after such borrowing date, such Lender shall pay to the Administrative Agent on demand an amount, until paid, equal to (a) with respect to any amount
to be borrowed denominated in Dollars, the product of (i) the amount not 
  

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 made available by such Lender in accordance with the terms hereof, multiplied by (ii) the daily average
Federal Funds Rate during such period as determined by the Administrative Agent, multiplied by (iii) a fraction, the numerator of which is the number of days that elapse from and including such borrowing date to the date on which such
amount not made available by such Lender in accordance with the terms hereof shall have become immediately available to the Administrative Agent, and the denominator of which is 360 and (b) with respect to any amount to be borrowed denominated
in Canadian Dollars, the amount not made available by such Lender in accordance with the terms hereof and interest thereon at a rate per annum equal to the Administrative Agent’s aggregate marginal cost (including the cost of maintaining any
required reserves or deposit insurance and of any fees, penalties, overdraft charges or other costs or expenses incurred by the Administrative Agent as a result of the failure to deliver funds hereunder) of carrying such amount. A certificate of the
Administrative Agent with respect to any amounts owing under this Section shall be conclusive, absent manifest error. If such Lender’s Commitment Percentage of such borrowing is not made available to the Administrative Agent by such Lender
within three (3) Business Days after such borrowing date, the Administrative Agent shall be entitled to recover such amount made available by the Administrative Agent with interest thereon at the rate per annum applicable to Base Rate Loans
hereunder (with respect to any amount denominated in Dollars) or Canadian Prime Rate Loans hereunder (with respect to any amount denominated in Canadian Dollars), in each case, on demand, from the Borrower. The failure of any Lender to make
available its Commitment Percentage of any Loan requested by the Borrower shall not relieve it or any other Lender of its obligation, if any, hereunder to make its Commitment Percentage of such Loan available on the borrowing date, but no Lender
shall be responsible for the failure of any other Lender to make its Commitment Percentage of such Loan available on the borrowing date. 
 SECTION 4.8 Changed Circumstances. 
 (a) Circumstances Affecting LIBOR Rate and BA Loan Availability. If with respect
to any Interest Period the Administrative Agent or any Lender (after consultation with the Administrative Agent) shall determine that, by reason of circumstances affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, Dollars or Canadian Dollars in the applicable amounts are not being quoted via Reuters Page LIBOR01 (or any successor page) or offered to the Administrative Agent or such Lender for such Interest Period then the Administrative Agent
shall forthwith give notice thereof to the Borrower. Thereafter, until the Administrative Agent notifies the Borrower that such circumstances no longer exist, the obligation of the Lenders to make such LIBOR Rate Loans or BA Loans, as applicable,
and the right of the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan or a BA Loan, as applicable, shall be suspended, and the Borrower shall repay in full (or cause to be repaid in full) the then outstanding principal
amount of each such LIBOR Rate Loan or each such BA Loan, as applicable, together with accrued interest thereon, on the last day of the then current Interest Period applicable to such LIBOR Rate Loan or such BA Loan, as applicable, or convert the
then outstanding principal amount of each such LIBOR Rate Loan or BA Loan, as applicable, to a Base Rate Loan (with respect to any such Loan denominated in Dollars) or a Canadian Prime Rate Loan (with respect to any such Loan denominated in Canadian
Dollars) as of the last day of such Interest Period. 
  

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 (b) Laws Affecting LIBOR Rate and BA Loan Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the interpretation or administration thereof by any Governmental Authority, central bank or comparable agency charged with the interpretation or administration thereof, or
compliance by any of the Lenders (or any of their respective Lending Offices) with any request or directive (whether or not having the force of law) of any such Governmental Authority, central bank or comparable agency, shall make it unlawful or
impossible for any of the Lenders (or any of their respective Lending Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate Loan or any BA Loan, such Lender shall promptly give notice thereof to the Administrative Agent and
the Administrative Agent shall promptly give notice to the Borrower and the other Lenders. Thereafter, until the Administrative Agent notifies the Borrower that such circumstances no longer exist, (i) the obligations of the Lenders to make
LIBOR Rate Loans or BA Loans and the right of the Borrower to convert any Loan or continue any Loan as a LIBOR Rate Loan or a BA Loan shall be suspended and thereafter the Borrower may select only Base Rate Loans (with respect to any Loan
denominated in Dollars) or Canadian Prime Rate Loans (with respect to any Loan denominated in Canadian Dollars) hereunder, and (ii) if any of the Lenders may not lawfully continue to maintain a LIBOR Rate Loan or a BA Loan, as applicable, to
the end of the then current Interest Period applicable thereto as a LIBOR Rate Loan or a BA Loan, as applicable, the applicable LIBOR Rate Loan shall immediately be converted to a Base Rate Loan (with respect to any such Loan denominated in Dollars)
or a Canadian Prime Rate Loan (with respect to any such Loan denominated in Canadian Dollars) for the remainder of such Interest Period. 
 (c) Regulatory Limitations. In the event, as a result of increases in the value of any Permitted Currency against the Dollar or for any other reason, the obligation of any of the Lenders to make Loans (taking into account the Dollar
Amount of the Obligations and all other indebtedness required to be aggregated under any Applicable Law) is determined by such Lender to exceed its then applicable legal lending limit under such Applicable Law, the amount of additional Extensions of
Credit such Lender shall be obligated to make or issue or participate in hereunder shall immediately be reduced to the maximum amount which such Lender may legally advance (as determined by such Lender), the obligation of each of the remaining
Lenders hereunder shall be proportionately reduced, based on their applicable Commitment Percentages and, to the extent necessary under such laws and regulations (as determined by each of the Lenders, with respect to the applicability of such laws
and regulations to itself), and the Borrower shall reduce, or cause to be reduced, complying to the extent practicable with the remaining provisions hereof, the Obligations outstanding hereunder by an amount sufficient to comply with such maximum
amounts. 
 SECTION 4.9 Indemnity. The Borrower hereby indemnifies each of the Lenders against any loss or expense which may arise or
be attributable to each Lender’s obtaining, liquidating or employing deposits or other funds acquired to effect, fund or maintain any Loan (a) as a consequence of any failure by the Borrower to make any payment when due of any amount due
hereunder in connection with a LIBOR Rate Loan or a BA Loan, (b) due to any failure of the Borrower to borrow, continue or convert on a date specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation or (c) due to any
payment, prepayment or conversion of any LIBOR Rate Loan or any BA Loan on a date other than the last day of the Interest Period therefor. The amount of such loss or expense shall be determined, in the 

  

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applicable Lender’s sole discretion, based upon the assumption that such Lender funded its Commitment Percentage of the LIBOR Rate Loans or BA Loans in
the London interbank market or other applicable market and using any reasonable attribution or averaging methods which such Lender deems appropriate and practical. A certificate of such Lender setting forth the basis for determining such amount or
amounts necessary to compensate such Lender shall be forwarded to the Borrower through the Administrative Agent and shall be conclusively presumed to be correct save for manifest error. 
 SECTION 4.10 Increased Costs. 
 (a)
Increased Costs Generally. If any Change in Law shall: 
 (i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets of, deposits with or for the account of, or advances, loans or other credit extended or participated in by, any Lender (except any reserve requirement reflected in the
LIBOR Rate) or an Issuing Lender; 
 (ii) subject any Lender or any Issuing Lender to any tax of any kind whatsoever with
respect to this Agreement, any Letter of Credit, any participation in a Letter of Credit or any LIBOR Rate Loan or BA Loan made by it, or change the basis of taxation of payments to such Lender or such Issuing Lender in respect thereof (except for
Indemnified Taxes or Other Taxes covered by Section 4.11 and the imposition of, or any change in the rate of any Excluded Taxes payable by such Lender or such Issuing Lender); or 
 (iii) impose on any Lender or any Issuing Lender (or their respective Lending Offices) or the London interbank or other applicable market
any other condition, cost or expense affecting this Agreement or LIBOR Rate Loans or BA Loans made by such Lender or any Letter of Credit or participation therein; 
 and the result of any of the foregoing shall be to increase the cost to such Lender of making, converting into or maintaining any LIBOR Rate Loan or BA Loan (or of maintaining its obligation to make any such Loan), or to increase the cost
to such Lender or such Issuing Lender of participating in, issuing or maintaining any Letter of Credit (or of maintaining its obligation to participate in or to issue any Letter of Credit), or to reduce the amount of any sum received or receivable
by such Lender or such Issuing Lender hereunder (whether of principal, interest or any other amount) then, upon written request of such Lender or such Issuing Lender, the Borrower shall promptly pay to any such Lender or such Issuing Lender, as the
case may be, such additional amount or amounts as will compensate such Lender or such Issuing Lender, as the case may be, for such additional costs incurred or reduction suffered. 
 (b) Capital Requirements. If any Lender or any Issuing Lender determines that any Change in Law affecting such Lender or such Issuing Lender or
any lending office of such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company, if any, regarding capital requirements has or would have the effect of reducing the rate of return on such Lender’s or
such Issuing Lender’s capital or on the capital of such Lender’s or such Issuing 

  

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Lender’s holding company, if any, as a consequence of this Agreement, the Commitment of such Lender or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by such Issuing Lender, to a level below that which such Lender or such Issuing Lender or such Lender’s or such Issuing Lender’s holding company could have achieved but for
such Change in Law (taking into consideration such Lender’s or such Issuing Lender’s policies and the policies of such Lender’s or such Issuing Lender’s holding company with respect to capital adequacy), then from time to time
upon written request of such Lender or such Issuing Lender the Borrower shall promptly pay to such Lender or such Issuing Lender, as the case may be, such additional amount or amounts as will compensate such Lender or such Issuing Lender or such
Lender’s or such Issuing Lender’s holding company for any such reduction suffered. 
 (c) Certificates for Reimbursement. A
certificate of a Lender or an Issuing Lender setting forth the amount or amounts necessary to compensate such Lender or such Issuing Lender or its holding company, as the case may be, as specified in paragraph (a) or (b) of this Section
and delivered to the Borrower shall be conclusive absent manifest error. The Borrower shall pay such Lender or such Issuing Lender, as the case may be, the amount shown as due on any such certificate within ten (10) days after receipt thereof.

 (d) Exchange Indemnification and Increased Costs. The Borrower shall, upon demand from the Administrative Agent, pay to the
Administrative Agent or any applicable Lender, the amount of (i) any loss or cost or increased cost incurred by the Administrative Agent or any applicable Lender, (ii) any reduction in any amount payable to or in the effective return on
the capital to the Administrative Agent or any applicable Lender or (iii) any currency exchange loss, that Administrative Agent or any Lender sustains as a result of any payment being made by the Borrower in a currency other than that
originally extended to the Borrower. A certificate of the Administrative Agent or the applicable Lender, as the case may be, setting forth in reasonable detail the basis for determining such additional amount or amounts necessary to compensate the
Administrative Agent or the applicable Lender shall be conclusively presumed to be correct save for manifest error 
 (e) Delay in
Requests. Failure or delay on the part of any Lender or any Issuing Lender to demand compensation pursuant to this Section shall not constitute a waiver of such Lender’s or such Issuing Lender’s right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or an Issuing Lender pursuant to this Section for any increased costs incurred or reductions suffered more than nine (9) months prior to the date that such Lender or
such Issuing Lender, as the case may be, notifies the Borrower of the Change in Law giving rise to such increased costs or reductions and of such Lender’s or such Issuing Lender’s intention to claim compensation therefor (except that if
the Change in Law giving rise to such increased costs or reductions is retroactive, then the nine-month period referred to above shall be extended to include the period of retroactive effect thereof). 
 SECTION 4.11 Taxes. 
 (a) Payments
Free of Taxes. Any and all payments by or on account of any obligation of the Borrower hereunder or under any other Loan Document shall be made free and clear of and without reduction or withholding for any Indemnified Taxes or Other Taxes;

  

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provided that if the Borrower shall be required by Applicable Law to deduct any Indemnified Taxes (including any Other Taxes) from such payments, then
(i) the sum payable shall be increased as necessary so that after making all required deductions (including deductions applicable to additional sums payable under this Section) the Administrative Agent, Lender or Issuing Lender, as the case may
be, receives an amount equal to the sum it would have received had no such deductions been made, (ii) the Borrower shall make such deductions and (iii) the Borrower shall timely pay the full amount deducted to the relevant Governmental
Authority in accordance with Applicable Law. 
 (b) Payment of Other Taxes by the Borrower. Without limiting the provisions of
paragraph (a) above, the Borrower shall timely pay any Other Taxes to the relevant Governmental Authority in accordance with Applicable Law. 
 (c) Indemnification by the Borrower. The Borrower shall indemnify the Administrative Agent, each Lender and each Issuing Lender, within ten (10) days after demand therefor, for the full amount of any Indemnified Taxes or Other
Taxes (including Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this Section) paid by the Administrative Agent, such Lender or such Issuing Lender, as the case may be, and any penalties, interest and
reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority. A certificate as to the amount of such payment
or liability delivered to the Borrower by a Lender or an Issuing Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender or an Issuing Lender, shall be conclusive absent manifest
error. 
 (d) Evidence of Payments. As soon as practicable after any payment of Indemnified Taxes or Other Taxes by the Borrower to a
Governmental Authority, the Borrower shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence
of such payment reasonably satisfactory to the Administrative Agent. 
 (e) Status of Lenders. Any Foreign Lender that is entitled to
an exemption from or reduction of withholding tax under the law of the jurisdiction in which the Borrower is resident for tax purposes, or any treaty to which such jurisdiction is a party, with respect to payments hereunder or under any other Loan
Document shall deliver to the Borrower (with a copy to the Administrative Agent), at the time or times prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed
documentation prescribed by Applicable Law as will permit such payments to be made without withholding or at a reduced rate of withholding. In addition, any Lender, if requested by the Borrower or the Administrative Agent, shall deliver such other
documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or
information reporting requirements. 
 Without limiting the obligations of the Lenders set forth above regarding delivery of certain forms
and documents to establish each Lender’s status for Canadian withholding tax purposes, each Lender agrees promptly to deliver to the Administrative Agent or the Borrower as 

  

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the Administrative Agent or the Borrower shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such other documents
and forms required by any relevant taxing authorities under the Applicable Laws of any other jurisdiction, duly executed and completed by such Lender, as are required under such Applicable Laws to confirm such Lender’s entitlement to any
available exemption from, or reduction of, applicable withholding taxes in respect of all payments to be made to such Lender outside of Canada by the Borrower pursuant to this Agreement, the other Loan Documents or otherwise to establish such
Lender’s status for withholding tax purposes in such other jurisdiction. Each Lender shall promptly (i) notify the Administrative Agent of any change in circumstances which would modify or render invalid any such claimed exemption or
reduction, and (ii) take such steps as shall not be materially disadvantageous to it, in the reasonable judgment of such Lender, and as may be reasonably necessary (including the re-designation of its Lending Office) to avoid any requirement of
Applicable Laws of any such jurisdiction that the Borrower make any deduction or withholding for taxes from amounts payable to such Lender. Additionally, the Borrower shall promptly deliver to the Administrative Agent or any Lender, as the
Administrative Agent or such Lender shall reasonably request, on or prior to the Closing Date, and in a timely fashion thereafter, such documents and forms required by any relevant taxing authorities under the Applicable Laws of any jurisdiction,
duly executed and completed by the Borrower, as are required to be furnished by such Lender or the Administrative Agent under such Applicable Laws in connection with any payment by the Administrative Agent or any Lender of Taxes or Other Taxes, or
otherwise in connection with the Loan Documents, with respect to such jurisdiction. 
 (f) Treatment of Certain Refunds. If the
Administrative Agent, a Lender or an Issuing Lender determines, in its sole discretion, that it has received a refund of any Taxes or Other Taxes as to which it has been indemnified by the Borrower or with respect to which the Borrower has paid
additional amounts pursuant to this Section, it shall pay to the Borrower an amount equal to such refund (but only to the extent of indemnity payments made, or additional amounts paid, by the Borrower under this Section with respect to the Taxes or
Other Taxes giving rise to such refund), net of all out-of-pocket expenses of the Administrative Agent, such Lender or such Issuing Lender, as the case may be, and without interest (other than any interest paid by the relevant Governmental Authority
with respect to such refund); provided that the Borrower, upon the request of the Administrative Agent, such Lender or such Issuing Lender, agrees to repay the amount paid over to the Borrower (plus any penalties, interest or other
charges imposed by the relevant Governmental Authority) to the Administrative Agent, such Lender or such Issuing Lender in the event the Administrative Agent, such Lender or such Issuing Lender is required to repay such refund to such Governmental
Authority. This paragraph shall not be construed to require the Administrative Agent, any Lender or any Issuing Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to the Borrower or
any other Person. 
 (g) Survival. Without prejudice to the survival of any other agreement of the Borrower hereunder, the agreements
and obligations of the Borrower contained in this Section shall survive the payment in full of the Obligations and the termination of the Commitment. 
  

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 SECTION 4.12 Mitigation Obligations; Replacement of Lenders. 
 (a) Designation of a Different Lending Office. If any Lender requests compensation under Section 4.10, or requires the Borrower to pay
any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to Section 4.11, then such Lender shall use reasonable efforts to designate a different lending office for funding or booking its
Loans hereunder or to assign its rights and obligations hereunder to another of its offices, branches or affiliates, if, in the judgment of such Lender, such designation or assignment (i) would eliminate or reduce amounts payable pursuant to
Section 4.10 or Section 4.11, as the case may be, in the future and (ii) would not subject such Lender to any unreimbursed cost or expense and would not otherwise be disadvantageous to such Lender. The Borrower hereby
agrees to pay all reasonable costs and expenses incurred by any Lender in connection with any such designation or assignment. 
 (b)
Replacement of Lenders. If any Lender requests compensation under Section 4.10, or if the Borrower is required to pay any additional amount to any Lender or any Governmental Authority for the account of any Lender pursuant to
Section 4.11, or if any Lender defaults in its obligation to fund Loans hereunder, then the Borrower may, at its sole expense and effort, upon notice to such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions contained in, and consents required by, Section 14.10), all of its interests, rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another Lender, if a Lender accepts such assignment); provided that: 
 (i) the Borrower shall have paid to the Administrative Agent the assignment fee specified in Section 14.10; 
 (ii) such Lender shall have received payment of an amount equal to the outstanding principal of its Loans and participations in Letters of Credit, accrued interest thereon, accrued fees and all other amounts payable
to it hereunder and under the other Loan Documents (including any amounts under Section 4.9) from the assignee (to the extent of such outstanding principal and accrued interest and fees) or the Borrower (in the case of all other
amounts); 
 (iii) in the case of any such assignment resulting from a claim for compensation under Section 4.10
or payments required to be made pursuant to Section 4.11, such assignment will result in a reduction in such compensation or payments thereafter; and 
 (iv) such assignment does not conflict with Applicable Law. 
 A Lender shall not be required to make any such assignment or delegation if, prior thereto, as a result of a waiver by such Lender or otherwise, the circumstances entitling the Borrower to require such assignment and
delegation cease to apply. 
 SECTION 4.13 Security. The Obligations of the Borrower shall be secured as provided in the Security
Documents. 
  

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 SECTION 4.14 Additional Subsidiary Borrowers. The Borrower may designate any Domestic Subsidiary
as a Subsidiary Borrower under this Agreement and the other Loan Documents upon satisfaction of each of the following conditions. 
 (a) The
Borrower shall have delivered to the Administrative Agent a written notice requesting that such Domestic Subsidiary be designated as a new Subsidiary Borrower. The Administrative Agent agrees that promptly upon receipt of such notice it will forward
such notice to the Lenders requesting their approval of such Domestic Subsidiary as a Subsidiary Borrower. If the Required Agreement Lenders approve such designation (which approval shall occur no earlier than five (5) Business Days after the
Lenders receive written notice of the request that such Domestic Subsidiary be designated as a new Subsidiary Borrower), the applicable Domestic Subsidiary shall be deemed a “Borrower” under this Agreement and the other Loan Documents and
all references herein (other than the references in Article V, Article VI, Article VII, Article VIII, Article IX and Article X of this Agreement) to “Borrower” shall be deemed to include the
Subsidiary Borrower. 
 (b) The Administrative Agent shall have received a duly executed supplement to this Agreement and any other
applicable Loan Documents joining such Domestic Subsidiary as a Subsidiary Borrower hereunder (such supplement to be in form and substance reasonably satisfactory to the Administrative Agent). 
 (c) Such Domestic Subsidiary shall deliver to the Administrative Agent such documents and certificates referred to in Section 5.2 as may be
reasonably requested by the Administrative Agent (it being agreed by the Borrower that, if the designation of such Domestic Subsidiary as a Subsidiary Borrower obligates the Administrative Agent or any Lender to comply with “know your
customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Borrower shall, promptly upon the request of the Administrative Agent or any Lender, supply such documentation
and other evidence as is reasonably requested by the Administrative Agent or any Lender in order for the Administrative Agent or such Lender to carry out, and be satisfied it has complied with the results of, all necessary “know your
customer” or other similar checks under all Applicable Laws). 
 (d) (i) If not previously granted to the Administrative Agent under the
Security Documents, such Domestic Subsidiary shall pledge a security interest in all Collateral owned by such Domestic Subsidiary by delivering to the Administrative Agent a duly executed supplement to each applicable Security Document or such
other documents as the Administrative Agent shall reasonably deem appropriate for such purpose. 
 (ii) To the extent not
previously delivered to the Administrative Agent under the Security Documents, the Borrower shall deliver to the Administrative Agent such original Capital Stock or other certificates and stock or other transfer powers evidencing the Capital Stock
of such Domestic Subsidiary and, to the extent required by the Security Documents, all Capital Stock or other certificates and stock or other transfer powers evidencing the Capital Stock owned by such Domestic Subsidiary. 
  

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 (e) The Borrower shall deliver to the Administrative Agent such updated Schedules to the Loan Documents
as requested by the Administrative Agent with respect to such Domestic Subsidiary. 
 (f) The Borrower shall deliver to the Administrative
Agent such other documents (including, without limitation, legal opinions) as may be reasonably requested by the Administrative Agent, all in form, content and scope reasonably satisfactory to the Administrative Agent. 
 (g) The obligations of each Subsidiary Borrower hereunder and under the other Loan Documents shall be joint and several with the Obligations of the
Borrower and each other Subsidiary Borrower. 
 ARTICLE V 
 CLOSING; CONDITIONS OF CLOSING AND BORROWING 
 SECTION 5.1 Closing. The closing shall take
place at the offices of Kennedy Covington Lobdell & Hickman, L.L.P. at 10:00 a.m. on May 31, 2006 or at such other place, date and time as the parties hereto shall mutually agree. 
 SECTION 5.2 Conditions to Closing and Initial Extensions of Credit. The obligation of the Lenders to close this Agreement and to make the initial
Loan or issue or participate in the initial Letter of Credit, if any, is subject to the satisfaction of each of the following conditions: 
 (a) Executed Loan Documents. This Agreement, a Revolving Credit Note in favor of each Lender (if requested thereby), a Swingline Note in favor of the Swingline Lender (if requested thereby), a Discount Note in favor of each Non-BA
Lender (if requested thereby) and the Security Documents, together with any other applicable Loan Documents, shall have been duly authorized, executed and delivered to the Administrative Agent by the parties thereto, shall be in full force and
effect and no Default or Event of Default shall exist hereunder or thereunder. 
 (b) Closing Certificates; Etc. The Administrative
Agent shall have received each of the following in form and substance reasonably satisfactory to the Administrative Agent: 
 (i) Officer’s Certificate of the Original U.S. Borrower. A certificate from a Responsible Officer of the Original U.S. Borrower to the effect that all representations and warranties of the Original U.S. Borrower and its
Subsidiaries contained in this Agreement and the other Loan Documents are true, correct and complete in all material respects (provided that any representation or warranty that is qualified by materiality or by reference to Material Adverse
Effect shall be true, correct and complete in all respects); that neither the Original U.S. Borrower nor any of its Subsidiaries is in violation of any of the covenants contained in this Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no Default or Event of Default has occurred and is continuing; and that each of the Credit Parties, as applicable, has satisfied each of the conditions set forth in Section 5.2
and Section 5.3. 
  

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 (ii) Certificate of Secretary of each Credit Party. A certificate of a Responsible
Officer of each Credit Party certifying as to the incumbency and genuineness of the signature of each officer of such Credit Party executing Loan Documents to which it is a party and certifying that attached thereto is a true, correct and complete
copy of (A) the articles or certificate of incorporation or formation (or equivalent documentation) of such Credit Party and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of
incorporation or formation, (B) the bylaws or other governing document (or equivalent documentation) of such Credit Party as in effect on the Closing Date, (C) resolutions duly adopted by the board of directors or other governing body of
such Credit Party authorizing the transactions contemplated hereunder and the execution, delivery and performance of this Agreement and the other Loan Documents to which it is a party, and (D) each certificate required to be delivered pursuant
to Section 5.2(b)(iii). 
 (iii) Certificates of Good Standing. Certificates as of a recent date of the
good standing (or equivalent documentation) of each Credit Party under the laws of its jurisdiction of organization and, to the extent requested by the Administrative Agent, each other jurisdiction where such Credit Party is qualified to do business
and, to the extent available, a certificate of the relevant taxing authorities of such jurisdictions certifying that such Credit Party has filed required tax returns and owes no delinquent taxes. 
 (iv) Opinions of Counsel. Favorable opinions of counsel to the Credit Parties (including, without limitation, applicable local
counsel in the State of New York, the provinces of Québec, Ontario, Nova Scotia and New Brunswick, and any other applicable jurisdiction) addressed to the Administrative Agent and the Lenders with respect to the Credit Parties, the Loan
Documents and such other matters as the Lenders shall request. 
 (c) Personal Property Collateral. 
 (i) Filings and Recordings. The Administrative Agent shall have received all filings and recordations that are necessary to perfect
the security interests of the Administrative Agent, on behalf of itself and the Lenders, in the Collateral shall have been received by the Administrative Agent and the Administrative Agent shall have received evidence reasonably satisfactory to the
Administrative Agent that upon such filings and recordations such security interests constitute valid and perfected first priority Liens thereon. 
 (ii) Lien Search. The Administrative Agent shall have received the results of a Lien search (including a search as to judgments, pending litigation and tax matters), in form and substance reasonably
satisfactory thereto, made against each of the Credit Parties (other than the U.S. Borrower) under the PPSA and the CCQ (or applicable judicial docket) as in effect in any province in which any of the assets of such Credit Party are located,
indicating among other things that its assets are free and clear of any Lien except for Permitted Liens. 
 (iii) Hazard
and Liability Insurance. The Administrative Agent shall have received certificates of property hazard, business interruption and liability insurance, evidence of payment of all insurance premiums for the current policy year of each insurance
policy (naming the Administrative Agent as additional insured on all certificates for liability insurance and loss payee with respect to the Collateral on all certificates for property insurance), and, if requested 

  

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by the Administrative Agent, copies (certified by a Responsible Officer) of insurance policies in the form required under the Security Documents and
otherwise in form and substance reasonably satisfactory to the Administrative Agent. 
 (d) Consents; Defaults. 
 (i) Governmental and Third Party Approvals. The Credit Parties shall have received all material governmental, shareholder and third
party consents and approvals necessary (or any other material consents as determined in the reasonable discretion of the Administrative Agent) in connection with the transactions contemplated by this Agreement and the other Loan Documents and the
other transactions contemplated hereby and all applicable waiting periods shall have expired without any action being taken by any Person that could reasonably be expected to restrain, prevent or impose any material adverse conditions on any of the
Credit Parties or such other transactions or that could seek or threaten any of the foregoing, and no law or regulation shall be applicable which in the reasonable judgment of the Administrative Agent could reasonably be expected to have such
effect. 
 (ii) No Injunction, Etc. No action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain substantial damages in respect of, or which is related to or arises out of this Agreement or the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby, or which, in the Administrative Agent’s sole discretion, would make it inadvisable to consummate the transactions contemplated by this Agreement or the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby. 
 (e) Financial Matters. 
 (i) Financial Statements. The Administrative Agent shall have received (A) the audited Consolidated balance sheet of the
Original U.S. Borrower and its Subsidiaries as of December 31, 2005 and the related audited statements of income and retained earnings and cash flows for the Fiscal Year then ended, (B) any interim unaudited Consolidated balance sheet of
the Original U.S. Borrower and its Subsidiaries and related unaudited interim statements of income, cash flows and retained earnings for each interim quarterly period (if any) ended at least forty-five (45) days prior to the Closing Date,
(C) the audited Consolidated balance sheet of the Borrower and its Subsidiaries as of December 31, 2005 and the related audited statements of income and retained earnings and cash flows for the Fiscal Year then ended and (D) any
interim unaudited Consolidated balance sheet of the Borrower and its Subsidiaries and related unaudited interim statements of income, cash flows and retained earnings for each interim quarterly period (if any) ended at least forty-five
(45) days prior to the Closing Date. 
 (ii) Financial Projections. The Administrative Agent shall have received
projections prepared by management of the Original U.S. Borrower, of balance sheets, income statements and cash flow statements on a quarterly basis for 2006 and on an annual basis for each year thereafter during the term of the U.S. Credit
Facility. 
  

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 (iii) Financial Condition Certificate. The Original U.S. Borrower shall have
delivered to the Administrative Agent a certificate, in form and substance satisfactory to the Administrative Agent, and certified as accurate by a Responsible Officer of the Original U.S. Borrower, that (A) the Original U.S. Borrower and each
of its Subsidiaries are each Solvent, (B) the material payables of the Original U.S. Borrower and each of its Subsidiaries are current and not past due, (C) attached thereto are calculations, as determined on a pro forma basis as of
March 31, 2006 and after giving effect to the transactions contemplated hereby and any Extensions of Credit or U.S. Extensions of Credit to be made on the Closing Date, with the covenants contained in Article IX; (D) the financial
projections previously delivered to the Administrative Agent represent the good faith estimates (utilizing assumptions believed to be reasonable) of the financial condition and operations of the Original U.S. Borrower and its Subsidiaries;
(E) attached thereto is a calculation of the ratio of (1) Consolidated Total Indebtedness as of the Closing Date (after giving effect to any Extensions of Credit or U.S. Extensions of Credit on the Closing Date) to (2) Consolidated
EBITDA for the most recently ended four (4) consecutive fiscal quarters for which financial statements have been delivered, demonstrating that such ratio is less than 5.80 to 1.00; (F) attached thereto is a calculation of Consolidated
Adjusted EBITDA for the most recently ended four (4) consecutive fiscal quarters for which financial statements have been delivered, demonstrating to the reasonable satisfaction of the Administrative Agent that Consolidated Adjusted EBITDA (as
determined in such manner) is not less than $500,000,000; and (G) attached thereto is a calculation of the Borrowing Limit as of the Closing Date. 
 (iv) Payment at Closing; Fee Letters. The Borrower shall have paid to the Administrative Agent and the Lenders the fees set forth or referenced in Section 4.3 and any other accrued and unpaid fees
or commissions due hereunder (including, without limitation, legal (including, without limitation, local counsel) fees and expenses) and to any other Person such amount as may be due thereto in connection with the transactions contemplated hereby,
including all taxes, fees and other charges in connection with the execution, delivery, recording, filing and registration of any of the Loan Documents. 
 (f) Miscellaneous. 
 (i) Notice of Borrowing. The Administrative Agent shall
have received a Notice of Borrowing from the Borrower in accordance with Section 2.3(a) with respect to any Loans (if any) to be made on the Closing Date, and a Notice of Account Designation specifying the account or accounts to which
the proceeds of any Loans made on or after the Closing Date are to be disbursed. 
 (ii) Existing Facilities. Each of
the Existing Facilities shall be repaid in full and terminated and all collateral security therefor shall be released, and the Administrative Agent shall have received pay-off letters in form and substance satisfactory to it evidencing such
repayment, termination and release. 
 (iii) Closing of the U.S. Credit Facility. The U.S. Credit Facility shall
simultaneously close on the Closing Date. 
  

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 (iv) Other Documents. All opinions, certificates and other instruments and all
proceedings in connection with the transactions contemplated by this Agreement shall be satisfactory in form and substance to the Administrative Agent. The Administrative Agent shall have received copies of all other documents, certificates and
instruments reasonably requested thereby, with respect to the transactions contemplated by this Agreement. 
 SECTION 5.3 Conditions to
All Extensions of Credit. The obligations of the Lenders to make any Extensions of Credit (including any initial Extensions of Credit), convert or continue any Loan and/or any Issuing Lender to issue or extend any Letter of Credit are subject to
the satisfaction of the following conditions precedent on the relevant borrowing, continuation, conversion, issuance or extension date: 
 (a) Continuation of Representations and Warranties. The representations and warranties contained in Article VI shall be true and correct in all material respects on and as of such borrowing, continuation, conversion, issuance
or extension date with the same effect as if made on and as of such date, except for any representation and warranty made as of an earlier date, which representation and warranty shall remain true and correct as of such earlier date; provided
that any representation or warranty that is qualified by materiality or by reference to Material Adverse Effect shall be true and correct in all respects on and as of such borrowing, continuation, conversion, issuance or extension date. 

(b) No Existing Default. No Default or Event of Default shall have occurred and be continuing (i) on the borrowing, continuation or
conversion date with respect to such Loan or after giving effect to the Loans to be made, continued or converted on such date or (ii) on the issuance or extension date with respect to such Letter of Credit or after giving effect to the issuance
or extension of such Letter of Credit on such date. 
 (c) Notices. The Administrative Agent shall have received a Notice of Borrowing
or Notice of Conversion/Continuation, as applicable, from the Borrower in accordance with Section 2.3(a) or Section 4.2, as applicable. 
 SECTION 5.4 Post-Closing Conditions. 
 (a) Prior to June 30, 2006, as such date may be extended
by the Administrative Agent in its sole discretion, the Administrative Agent shall have received the following control agreements, in each case in form and substance satisfactory to the Administrative Agent: 
 (i) A deposit account control agreement executed by the Borrower, the Administrative Agent and National Bank of Canada with respect to all
Deposit Accounts, other than Excluded Deposit Accounts (in each case as defined in the Collateral Agreement), of the Borrower at National Bank of Canada; 
 (ii) A deposit account control agreement executed by the Borrower, the Administrative Agent and The Toronto-Dominion Bank with respect to all Deposit Accounts, other than Excluded Deposit Accounts (in each case as
defined in the Collateral Agreement), of the Borrower at The Toronto-Dominion Bank; 
 (iii) A deposit account control
agreement executed by the Borrower, the Administrative Agent and Bank of America, N.A. with respect to all Deposit Accounts, other than Excluded Deposit Accounts (in each case as defined in the Collateral Agreement), of the Borrower at Bank of
America, N.A.; 
  

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 (iv) A deposit account control agreement executed by the Borrower, the Administrative
Agent and Bank of Montreal with respect to all Deposit Accounts, other than Excluded Deposit Accounts (in each case as defined in the Collateral Agreement), of the Borrower at Bank of Montreal; 
 (v) All other control agreements which the Administrative Agent requires to be delivered pursuant to the Collateral Agreement, in each
case in form and substance satisfactory to the Administrative Agent. 
 (b) Prior to June 30, 2006, as such date may be extended by the
Administrative Agent in its sole discretion, the Administrative Agent shall have received any warehouse or similar agreement, and any other ancillary documentation, required to be delivered thereto pursuant to Section 4.6(b) of the
Collateral Agreement (or, if any such warehouse or similar agreement, and any other ancillary documentation, has not been delivered by such date, the Borrower shall take all actions required by the Administrative Agent pursuant to
Section 4.6(b) in connection therewith). 
 ARTICLE VI 
 REPRESENTATIONS AND WARRANTIES OF THE BORROWER 
 SECTION 6.1 Representations
and Warranties. To induce the Administrative Agent and Lenders to enter into this Agreement and to induce the Lenders to make Extensions of Credit, each of the Borrower and the U.S. Borrower hereby represents and warrants to the Administrative
Agent and Lenders both before and after giving effect to the transactions contemplated hereunder that: 
 (a) Organization; Power;
Qualification. Each of the U.S. Borrower and its Subsidiaries is duly organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or formation, has the power and authority to own its properties and to
carry on its business as now being and hereafter proposed to be conducted and is duly qualified and authorized to do business in each jurisdiction in which the character of its properties or the nature of its business requires such qualification and
authorization except in jurisdictions where the failure to be so qualified or in good standing could not reasonably be expected to result in a Material Adverse Effect. 
 (b) Ownership. Each Subsidiary of the U.S. Borrower as of the Closing Date is listed on Schedule 6.1(b) (which schedule shall be updated pursuant to, and in connection with, the consummation of the
transactions contemplated by Section 8.10(e)(i)) together with (i) its jurisdiction of formation and each jurisdiction in which it is qualified to do business as of the Closing Date, (ii) each Person holding ownership interests
in such Subsidiary, (iii) the nature of the ownership interest held by each such Person and the percentage of ownership of such Subsidiary represented by such ownership interests and (iv) a designation of each Subsidiary that is inactive.
All outstanding shares have been duly authorized and validly issued and are fully 

  

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paid and nonassessable, with no personal liability attaching to the ownership thereof, and not subject to any preemptive or similar rights, except as
described in Schedule 6.1(b) (which schedule shall be updated pursuant to, and in connection with, the consummation of the transactions contemplated by Section 8.10(e)(i)). As of the Closing Date, there are no outstanding stock
purchase warrants, subscriptions, options, securities, instruments or other rights of any type or nature whatsoever, which are convertible into, exchangeable for or otherwise provide for or permit the issuance of Capital Stock of the U.S. Borrower
or its Subsidiaries, except as described on Schedule 6.1(b) (which schedule shall be updated pursuant to, and in connection with, the consummation of the transactions contemplated by Section 8.10(e)(i)). 
 (c) Authorization of Agreement, Loan Documents and Borrowing. Each of the U.S. Borrower and its Subsidiaries has the right, power and authority
and has taken all necessary corporate and other action to authorize the execution, delivery and performance of this Agreement and each of the other Loan Documents to which it is a party in accordance with their respective terms. This Agreement and
each of the other Loan Documents have been duly executed and delivered by the duly authorized officers of the U.S. Borrower and each of its Subsidiaries party thereto, and each such document constitutes the legal, valid and binding obligation of the
U.S. Borrower or its Subsidiary party thereto, enforceable in accordance with its terms, except as such enforceability may be limited by (i) bankruptcy, insolvency, reorganization, moratorium or similar state or federal laws from time to time
in effect which affect the enforcement of creditors’ rights in general and (ii) the application of general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). 
 (d) Compliance of Agreement, Loan Documents and Borrowing with Laws, Etc. The execution, delivery and performance by the U.S. Borrower and its
Subsidiaries of the Loan Documents to which each such Person is a party, in accordance with their respective terms, the Extensions of Credit hereunder and the transactions contemplated hereby do not and will not, by the passage of time, the giving
of notice or otherwise, (i) require any Governmental Approval or violate any Applicable Law relating to the U.S. Borrower or any of its Subsidiaries, (ii) conflict with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of the U.S. Borrower or any of its Subsidiaries, (iii) conflict with, result in a breach of or constitute a default under any indenture, agreement or other instrument to which such Person
is a party or by which any of its properties may be bound or any Governmental Approval relating to such Person, which could reasonably be expected to have a Material Adverse Effect, (iv) result in or require the creation or imposition of any
Lien upon or with respect to any property now owned or hereafter acquired by such Person other than Liens arising under the Loan Documents or (v) require any consent or authorization of, filing with, or other act in respect of, an arbitrator or
Governmental Authority and no consent of any other Person is required in connection with the execution, delivery, performance, validity or enforceability of this Agreement other than consents, authorizations, filings or other acts or consents for
which the failure to obtain or make could not reasonably be expected to have a Material Adverse Effect and other than consents or filings under the PPSA and the CCQ. 
  

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 (e) Compliance with Law; Governmental Approvals. Each of the U.S. Borrower and its Subsidiaries
(i) has all Governmental Approvals required by any Applicable Law for it to conduct its business, each of which is in full force and effect, is final and not subject to review on appeal and is not the subject of any pending or, to the best of
its knowledge, threatened attack by direct or collateral proceeding, except where the failure to do so could not reasonably be expected to have a Material Adverse Effect, (ii) is in compliance with its articles of incorporation, bylaws or other
organizational documents of the U.S. Borrower or any of its Subsidiaries, except where the failure to comply could not reasonably be expected to have a Material Adverse Effect, (iii) is in compliance with each Governmental Approval applicable
to it and in compliance with all other Applicable Laws relating to it or any of its respective properties, except where the failure to comply could not reasonably be expected to have a Material Adverse Effect, and (iv) has timely filed all
reports, documents and other materials required to be filed by it under all Applicable Laws with any Governmental Authority and has retained all records and documents required to be retained by it under Applicable Law, except where the failure to do
so, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect. 
 (f) Tax Returns and
Payments. Each of the U.S. Borrower and its Subsidiaries has duly filed or caused to be filed all federal and other material tax returns required by Applicable Law to be filed, and has paid, or made adequate provision for the payment of, all
federal and other material taxes, assessments and governmental charges or levies upon it and its property, income, profits and assets which are due and payable. Such returns accurately reflect in all material respects all liability for taxes of the
U.S. Borrower and its Subsidiaries for the periods covered thereby. There is no ongoing audit or examination or, to the knowledge of the Borrower or the U.S. Borrower, other investigation by any Governmental Authority of the tax liability of the
U.S. Borrower and its Subsidiaries, except, in each case, as could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect. No Governmental Authority has asserted any Lien or other claim against the U.S.
Borrower or any of its Subsidiaries with respect to unpaid taxes which has not been discharged or resolved other than Permitted Liens. The charges, accruals and reserves on the books of the U.S. Borrower and any of its Subsidiaries in respect of
federal and other material taxes for all Fiscal Years and portions thereof since the organization of the U.S. Borrower and any of its Subsidiaries are in the judgment of the U.S. Borrower adequate, and the U.S. Borrower does not anticipate any
material amount of additional taxes or assessments for any of such years. 
 (g) Intellectual Property Matters. Each of the U.S.
Borrower and its Subsidiaries owns or possesses rights to use all franchises, licenses, copyrights, copyright applications, patents, patent rights or licenses, patent applications, trademarks, trademark rights, service mark, service mark rights,
trade names, trade name rights, copyrights and other rights with respect to the foregoing which are reasonably necessary to conduct its business, except where the failure to own or possess such rights, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. No event has occurred which permits, or after notice or lapse of time or both would permit, the revocation or termination of any such rights, and neither the U.S. Borrower nor any of its
Subsidiaries is liable to any Person for infringement under Applicable Law with respect to any such rights as a result of its business operations except as could not reasonably be expected to have a Material Adverse Effect. 
  

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 (h) Environmental Matters. 
 (i) The properties owned, leased or operated by the U.S. Borrower and its Subsidiaries now or in the past do not contain, and to their
knowledge have not previously contained, any Hazardous Materials in amounts or concentrations which (A) constitute or constituted a violation of applicable Environmental Laws or (B) could give rise to liability under applicable
Environmental Laws except where such violation or liability could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; 
 (ii) Except to the extent such matters could not reasonably be expected, individually or in the aggregate, to have a Material Adverse
Effect, the U.S. Borrower, each of its Subsidiaries and such properties and all operations conducted in connection therewith are in compliance, and have been in compliance, with all applicable Environmental Laws, and there is no contamination at,
under or about such properties or such operations which could interfere with the continued operation of such properties; 
 (iii) Neither the U.S. Borrower nor any of its Subsidiaries has received any written notice of violation, alleged violation, non-compliance, liability or potential liability regarding environmental matters, Hazardous Materials, or
compliance with Environmental Laws, nor does the U.S. Borrower or any of its Subsidiaries have knowledge or reason to believe that any such notice will be received or is being threatened, except where such violation, alleged violation,
non-compliance, liability or potential liability which is the subject of such notice could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect; 
 (iv) Hazardous Materials have not been transported or disposed of to or from the properties owned, leased or operated by the U.S. Borrower
and its Subsidiaries in violation of, or in a manner or to a location which could give rise to liability under, Environmental Laws, nor have any Hazardous Materials been generated, treated, stored or disposed of at, on or under any of such
properties in violation of, or in a manner that could give rise to liability under, any applicable Environmental Laws, except where such violation or liability could not reasonably be expected, individually or in the aggregate, to have a Material
Adverse Effect; 
 (v) No judicial proceedings or governmental or administrative action is pending, or, to the knowledge of
the Borrower or the U.S. Borrower, threatened, under any Environmental Law to which the U.S. Borrower or any of its Subsidiaries is or will be named as a potentially responsible party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees, consent orders, administrative orders or other orders, or other administrative or judicial requirements outstanding under any Environmental Law with respect to the U.S.
Borrower, any of its Subsidiaries or such properties or such operations that could reasonably be expected to have a Material Adverse Effect; and 
 (vi) There has been no release, or to the best of the Borrower’s and the U.S. Borrower’s knowledge, threat of release, of Hazardous Materials at or from properties owned, leased or operated by the U.S.
Borrower or any Subsidiary, now or in the past, in violation of or in amounts or in a manner that could give rise to liability under Environmental Laws that could reasonably be expected to have a Material Adverse Effect. 
  

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 (i) ERISA. 
 (i) As of the Closing Date, neither the U.S. Borrower nor any of its Subsidiaries nor any ERISA Affiliate maintains or contributes to, or
has any obligation under, any Employee Benefit Plans other than those identified on Schedule 6.1(i-1) and neither the U.S. Borrower nor any of its Subsidiaries maintains or contributes to, or has any obligation under, any Canadian Employee
Benefit Plans other than those identified on Schedule 6.1(i-2). 
 (ii) The U.S. Borrower, each of its Subsidiaries and
each of their ERISA Affiliates is in material compliance with all applicable provisions of ERISA and the regulations and published interpretations thereunder with respect to all Employee Benefit Plans except for any required amendments for which the
remedial amendment period as defined in Section 401(b) of the Code has not yet expired and except where a failure to so comply could not reasonably be expected to have a Material Adverse Effect. The U.S. Borrower and each of its Subsidiaries is
in material compliance with all applicable provisions of the ITA and other Applicable Law and the regulations and published interpretations thereunder with respect to all Canadian Employee Benefit Plans except where a failure to so comply could not
reasonably be expected to have a Material Adverse Effect. Each Employee Benefit Plan that is intended to be qualified under Section 401(a) of the Code has been determined by the Internal Revenue Service to be so qualified, and each trust
related to such plan has been determined to be exempt under Section 501(a) of the Code except for such plans that have not yet received determination letters but for which the remedial amendment period for submitting a determination letter has
not yet expired. No liability has been incurred by the U.S. Borrower, any of its Subsidiaries or any of their ERISA Affiliates which remains unsatisfied for any taxes or penalties with respect to any Employee Benefit Plan or any Multiemployer Plan
except for a liability that could not reasonably be expected to have a Material Adverse Effect. No liability has been incurred by the U.S. Borrower or any of its Subsidiaries which remains unsatisfied for any taxes or penalties with respect to any
Canadian Employee Benefit Plan or any Canadian Multiemployer Plan, except for a liability that could not reasonably be expected to have a Material Adverse Effect. 
 (iii) Except as set forth on Schedule 6.1(i-1) or Schedule 6.1(i-2), as of the Closing Date, no Pension Plan or Canadian
Pension Plan has been terminated, nor has any accumulated funding deficiency (as defined in Section 412 of the Code or any other Applicable Law) been incurred (without regard to any waiver granted under Section 412 of the Code or any other
Applicable Law), nor has any funding waiver from the Internal Revenue Service been received or requested with respect to any Pension Plan, nor has the U.S. Borrower, any of Subsidiaries or any of their ERISA Affiliates failed to make any
contributions or to pay any amounts due and owing as required by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension Plan prior to the due dates of such contributions under Section 412 of the Code or
Section 302 of ERISA, nor has there been any event requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension Plan. 
 (iv) Except where the failure of any of the following representations to be correct in all material respects could not reasonably be
expected to have a Material Adverse Effect, neither the U.S. Borrower nor any of its Subsidiaries nor any of their ERISA Affiliates has: (A) engaged in a nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code, (B) incurred any liability to the PBGC which remains outstanding 

  

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other than the payment of premiums and there are no premium payments which are due and unpaid, (C) failed to make a required contribution or payment to
a Multiemployer Plan or a Canadian Multiemployer Plan, (D) failed to make a required installment or other required payment under Section 412 of the Code, other Applicable Laws or its Employee Benefit Plans or (E) failed to make a
required installment or other required payment under Applicable Laws or its Canadian Employee Benefit Plans. 
 (v) No
Termination Event has occurred or is reasonably expected to occur. 
 (vi) Except where the failure of any of the following
representations to be correct in all material respects could not reasonably be expected to have a Material Adverse Effect, no proceeding, claim (other than a benefits claim in the ordinary course of business), lawsuit and/or investigation is
existing or, to the best knowledge of the Borrower and the U.S. Borrower after due inquiry, threatened concerning or involving any (A) employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently maintained or contributed
to by the U.S. Borrower, any of its Subsidiaries or any of their ERISA Affiliates, (B) Pension Plan or Canadian Pension Plan or (C) Multiemployer Plan or Canadian Multiemployer Plan. 
 (j) Margin Stock. Neither the U.S. Borrower nor any of its Subsidiaries is engaged principally or as one of its activities in the business of
extending credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each such term is defined or used, directly or indirectly, in Regulation U of the Board of Governors of the Federal Reserve System).
No part of the proceeds of any of the Loans or Letters of Credit will be used for purchasing or carrying margin stock or for any purpose which violates, or which would be inconsistent with, the provisions of Regulation T, U or X of such Board of
Governors. Not more than 25% of the value of the assets (either of the Borrower only or of the US Borrower and its Subsidiaries on consolidated basis) are margin stock. 
 (k) Government Regulation. Neither the U.S. Borrower nor any of its Subsidiaries is an “investment company” or a company “controlled” by an “investment company” (as each such term
is defined or used in the Investment Company Act of 1940, as amended) and neither the U.S. Borrower nor any of its Subsidiaries is, or after giving effect to any Extension of Credit or U.S. Extension of Credit will be, subject to regulation under
the Interstate Commerce Act, as amended, or any other Applicable Law which limits its ability to incur or consummate the transactions contemplated hereby. 
 (l) Significant Indebtedness. Schedule 6.1(l) sets forth a complete and accurate list of all Significant Indebtedness of the U.S. Borrower and its Subsidiaries in effect as of the Closing Date. As of the
Closing Date, other than as set forth in Schedule 6.1(l), each indenture, agreement or other instrument governing such Significant Indebtedness is, and after giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms thereof. To the extent requested by the Administrative Agent, the U.S. Borrower and its Subsidiaries have delivered to the Administrative Agent a true and complete copy of each
indenture, agreement or other instrument governing the Significant Indebtedness required to be listed on Schedule 6.1(l). As of the Closing Date, neither the U.S. Borrower nor any Subsidiary (nor, to the knowledge of the Borrower or the U.S.
Borrower, any other party thereto) is in breach of or in default under any Significant Indebtedness in any material respect. 
  

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 (m) Employee Relations. Each of the U.S. Borrower and its Subsidiaries has a stable work force in
place, except as could not reasonably be expected to have a Material Adverse Effect. The U.S. Borrower knows of no pending, threatened or contemplated strikes, work stoppage or other collective labor disputes involving its employees or those of its
Subsidiaries that could reasonably be expected to have a Material Adverse Effect. 
 (n) Burdensome Provisions. Except as described on
Schedule 6.1(n), no Subsidiary is party to any agreement or instrument or otherwise subject to any restriction or encumbrance that restricts or limits its ability to make dividend payments or other distributions in respect of its Capital
Stock to the U.S. Borrower or any Subsidiary or to transfer any of its assets or properties to the U.S. Borrower or any other Subsidiary in each case other than restrictions or encumbrances existing under or by reason of (i) the Loan Documents,
(ii) Applicable Law and (iii) legally enforceable provisions which are contained in either (A) the organizational documents of any Subsidiary that a not Wholly-Owned Subsidiary or (B) any other agreements with the other owner(s)
of such Subsidiary (which, in the case of such provisions existing on the Closing Date, are described on Schedule 6.1(n)). 
 (o)
Financial Statements. The audited and unaudited financial statements delivered pursuant to Section 5.2(e)(i) are complete and correct and fairly present in all material respects on a Consolidated basis the assets, liabilities and
financial position of the U.S. Borrower and its Subsidiaries and the Borrower and its Subsidiaries, respectively, as at the respective dates of such statements, and the results of the operations and changes of financial position for the periods then
ended (other than customary year-end adjustments for interim financial statements). All such financial statements, including the related schedules and notes thereto, have been prepared in accordance with GAAP (or, with respect to financial
statements of the Borrower and its Subsidiaries, Canadian GAAP). Such financial statements show all material indebtedness and other material liabilities, direct or contingent, of the U.S. Borrower and its Subsidiaries and the Borrower and its
Subsidiaries, respectively, as of the date thereof, including material liabilities for taxes, material commitments, and Indebtedness, in each case, to the extent required to be disclosed under GAAP (or, with respect to financial statements of the
Borrower and its Subsidiaries, Canadian GAAP). The projected financial statements delivered pursuant to Section 5.2(e)(ii) were prepared in good faith on the basis of the assumptions stated therein, which assumptions are believed to be
reasonable in light of then existing conditions. 
 (p) No Material Adverse Change. Since December 31, 2005, there has been no
material adverse change in the business, assets, liabilities (actual or contingent), operations, or condition (financial or otherwise) of the U.S. Borrower and its Subsidiaries taken as a whole and no event has occurred or condition arisen that
could reasonably be expected to have a Material Adverse Effect. 
 (q) Solvency. As of the Closing Date and after giving effect to
each Extension of Credit made hereunder and each U.S. Extension of Credit, each of the Credit Parties will be Solvent. 
  

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 (r) Titles to Properties. Each of the U.S. Borrower and its Subsidiaries has such title to the
real property owned or leased by it as is reasonably necessary to the conduct of its business and valid and legal title to all of its personal property and assets, including, but not limited to, those reflected on the balance sheets of the U.S.
Borrower, the Borrower and their respective Subsidiaries delivered pursuant to Section 5.2(e)(i), Section 7.1(a), (b) and (d) except those which have been disposed of by the U.S. Borrower or its
Subsidiaries subsequent to such date which dispositions have been in the ordinary course of business or as otherwise expressly permitted hereunder. 
 (s) Liens. None of the properties and assets of the U.S. Borrower or any of its Subsidiaries is subject to any Lien, except Permitted Liens. Neither the U.S. Borrower nor any of its Subsidiaries has signed any financing statement or
any security agreement authorizing any secured party thereunder to file any financing statement, except to perfect those Permitted Liens. 
 (t) Litigation. Except for matters existing on the Closing Date and set forth on Schedule 6.1(t), there are no actions, suits or proceedings pending nor, to the knowledge of the Borrower and the U.S. Borrower, threatened
against or in any other way relating adversely to or affecting the U.S. Borrower or any of its Subsidiaries or any of their respective properties in any court or before any arbitrator of any kind or before or by any Governmental Authority that has
or could reasonably be expected to have a Material Adverse Effect. 
 (u) Senior Indebtedness Status. The Obligations of each Credit
Party under this Agreement and each of the other Loan Documents ranks and shall continue to rank at least senior in priority of payment to all Subordinated Indebtedness of each such Person and is designated as “Senior Indebtedness” under
all instruments and documents, now or in the future, relating to all Subordinated Indebtedness of such Person. 
 (v) OFAC. None of
the U.S. Borrower, any Subsidiary of the U.S. Borrower or any Affiliate of the U.S. Borrower or any U.S. Subsidiary Guarantor: (i) is a Sanctioned Person, (ii) has more than ten percent (10%) of its assets in Sanctioned Entities, or
(iii) derives more than ten percent (10%) of its operating income from investments in, or transactions with Sanctioned Persons or Sanctioned Entities. The proceeds of any Loan will not be used and have not been used to fund any operations
in, finance any investments or activities in, or make any payments to, a Sanctioned Person or a Sanctioned Entity. Solely, for purposes of this subsection (v), “Subsidiary” shall include (A) each Abitibi Entity and
(B) each QSPE. 
 (w) Disclosure. The U.S. Borrower and/or its Subsidiaries have disclosed to the Administrative Agent and the
Lenders all agreements, instruments and corporate or other restrictions to which the U.S. Borrower or any of its Subsidiaries are subject, and all other matters known to it, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect. The financial statements, material reports, material certificates or other material information furnished (whether in writing or orally), taken together as a whole, by or on behalf of any of the U.S. Borrower or
any of its Subsidiaries to the Administrative Agent or any Lender in connection with the transactions contemplated hereby and the negotiation of this Agreement or delivered hereunder (as modified or supplemented by other information so furnished) do
not contain any material misstatement of fact or omit to state any material fact necessary to make the statements therein, in the light of the circumstances under which they were 

  

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made, not misleading; provided that, with respect to projected financial information, pro forma financial information, estimated
financial information and other projected or estimated information, such information was prepared in good faith based upon assumptions believed to be reasonable at the time. 
 SECTION 6.2 Survival of Representations and Warranties, Etc. All representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan Documents (including, but not limited to, any such representation or warranty made in or in connection with any amendment thereto) shall constitute representations and
warranties made under this Agreement. All representations and warranties made under this Agreement shall be made or deemed to be made at and as of the Closing Date (except those that are expressly made as of a specific date), shall survive the
Closing Date and shall not be waived by the execution and delivery of this Agreement, any investigation made by or on behalf of the Lenders or any borrowing hereunder. 
 ARTICLE VII 
 FINANCIAL INFORMATION AND NOTICES 
 Until all the Obligations have been paid and satisfied in full and the Commitment terminated, unless consent has been obtained in the manner set forth in
Section 14.2, the U.S. Borrower and the Borrower will furnish or cause to be furnished to the Administrative Agent (for distribution to the Lenders) at the Administrative Agent’s Office at the address set forth in
Section 14.1 or such other office as may be designated by the Administrative Agent from time to time: 
 SECTION 7.1 Financial
Statements and Projections. 
 (a) Quarterly Financial Statements of the U.S. Borrower. As soon as practicable and in any event
within forty-five (45) days (or, if earlier, on the date of any required public filing thereof) after the end of each of the first three (3) fiscal quarters of each Fiscal Year, an unaudited Consolidated balance sheet of the U.S. Borrower
and its Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated statements of income, retained earnings and cash flows and a report containing management’s discussion and analysis of such financial statements for the
fiscal quarter then ended and that portion of the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in the
preceding Fiscal Year and prepared by the U.S. Borrower in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting principles and
practices during the period, and certified by the chief financial officer of the U.S. Borrower to present fairly in all material respects the financial condition of the U.S. Borrower and its Subsidiaries on a Consolidated basis as of their
respective dates and the results of operations of the U.S. Borrower and its Subsidiaries for the respective periods then ended, subject to normal year end adjustments. 
  

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 (b) Annual Financial Statements of the U.S. Borrower. As soon as practicable and in any event
within ninety (90) days (or, if earlier, on the date of any required public filing thereof) after the end of each Fiscal Year, an audited Consolidated balance sheet of the U.S. Borrower and its Subsidiaries as of the close of such Fiscal Year
and audited Consolidated statements of income, retained earnings and cash flows and a report containing management’s discussion and analysis of such financial statements for the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with GAAP and, if applicable, containing disclosure of the effect on the financial position
or results of operations of any change in the application of accounting principles and practices during the year. Such annual financial statements shall be audited by an independent certified public accounting firm acceptable to the Administrative
Agent and the U.S. Administrative Agent, and accompanied by a report thereon by such certified public accountants that is not qualified with respect to scope limitations imposed by the U.S. Borrower or any of its Subsidiaries or with respect to
accounting principles followed by the U.S. Borrower or any of its Subsidiaries not in accordance with GAAP. 
 (c) Annual Business Plan
and Financial Projections of the U.S. Borrower. As soon as practicable and in any event within ninety (90) days after the beginning of each Fiscal Year, a business plan of the U.S. Borrower and its Subsidiaries for such Fiscal Year, such
plan to be prepared in accordance with GAAP and to include, on a quarterly basis, the following: a projected income statement, statement of cash flows and balance sheet and a statement containing the volume and price assumptions by product line used
in preparing the business plan, accompanied by a certificate from a Responsible Officer of the U.S. Borrower to the effect that, to the best of such officer’s knowledge, such projections are good faith estimates (utilizing assumptions believed
to be reasonable) of the financial condition and operations of the U.S. Borrower and its Subsidiaries for such Fiscal Year. 
 (d)
Financial Statements of the Borrower and its Subsidiaries. 
 (i) Quarterly Financial Statements of the
Borrower. As soon as practicable and in any event within the time prescribed by applicable Canadian securities laws, regulations and policies, with respect to each fiscal quarter of each Fiscal Year, an unaudited Consolidated balance sheet of
the Borrower and its Subsidiaries as of the close of such fiscal quarter and unaudited Consolidated statements of income, retained earnings and cash flows and a report containing management’s discussion and analysis of such financial statements
for the fiscal quarter then ended and that portion of the Fiscal Year then ended, including the notes thereto, all in reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the corresponding period in
the preceding Fiscal Year and prepared by the Borrower in accordance with Canadian GAAP and, if applicable, containing disclosure of the effect on the financial position or results of operations of any change in the application of accounting
principles and practices during the period, and certified by the chief financial officer of the Borrower to present fairly in all material respects the financial condition of the Borrower and its Subsidiaries on a Consolidated basis as of their
respective dates and the results of operations of the Borrower and its Subsidiaries for the respective periods then ended, subject to normal year end adjustments. 
  

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 (ii) Annual Financial Statements of the Borrower. As soon as practicable and in
any event within the time prescribed by applicable Canadian securities laws, regulations and policies, with respect to each Fiscal Year, an audited Consolidated balance sheet of the Borrower and its Subsidiaries as of the close of such Fiscal Year
and audited Consolidated statements of income, retained earnings and cash flows and a report containing management’s discussion and analysis of such financial statements for the Fiscal Year then ended, including the notes thereto, all in
reasonable detail setting forth in comparative form the corresponding figures as of the end of and for the preceding Fiscal Year and prepared in accordance with Canadian GAAP and, if applicable, containing disclosure of the effect on the financial
position or results of operations of any change in the application of accounting principles and practices during the year. Such annual financial statements shall be audited by an independent certified public accounting firm acceptable to the
Administrative Agent and the U.S. Administrative Agent, and accompanied by a report thereon by such certified public accountants that is not qualified with respect to scope limitations imposed by the Borrower or any of its Subsidiaries or with
respect to accounting principles followed by the Borrower or any of its Subsidiaries not in accordance with Canadian GAAP. 
 (e) Monthly
Borrowing Limit Calculation. Within fifteen (15) Business Days after the last day of each calendar month beginning after the Third Amendment Effective Date, a report in form and substance reasonably satisfactory to the Administrative Agent
showing a calculation of the Asset Coverage Amount and clauses (a) and (b) of the Borrowing Limit as of the last day of the preceding calendar month. 
 (f) Parent Cash Balance Reporting. On Monday of each week after the first week that the Parent establishes its initial deposit, securities or investment account, the Parent will deliver a written daily cash
balance summary to the Administrative Agent and the U.S. Administrative Agent showing the aggregate available cash balance in the deposit, securities and other investment accounts of the Parent as of the end of business on each Business Day of the
preceding week. 
 (g) Monthly Borrowing Base Certificate. As soon as available, but in any event within ten (10) days after the
end of each calendar month, commencing with the calendar month ending June 30, 2008, a Borrowing Base Certificate, in form and substance satisfactory to the Administrative Agent as at the end of such calendar month, duly certified by a
Responsible Officer of the Borrower. 
 (h) Borrowing Limit in the event of Asset Disposition. In the event of an Asset Disposition of
Eligible Inventory or Eligible Accounts by the Borrower or any of its Subsidiaries that: (1) is permitted pursuant to Section 10.5(c), Section 10.5(d) or Section 10.5(k) and (2) the aggregate value of such Eligible Inventory
and Eligible Accounts transferred in one or a series of related transactions is in excess of $10,000,000, (i) until October 31, 2008, a pro forma calculation of the Asset Coverage Amount giving effect to such Asset Disposition and,
(ii) on or after November 1, 2008, a pro forma Borrowing Base Certificate giving effect to such Asset Disposition, in all cases to be delivered at least five (5) Business Days prior such Asset Disposition. 
  

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 (i) Other Reporting. 
 (i) As soon as available but in any event within twenty (20) days after the end of each calendar month, commencing with the calendar
month ending September 30, 2008, and at such other times as may be requested by the Administrative Agent, as of the monthly period then ended, all delivered electronically in a text formatted file acceptable to the Administrative Agent:

 (A) a detailed schedule and aging of the Accounts (1) including all invoices aged by invoice date and due date (with
an explanation of the terms offered) and (2) reconciled to the Borrowing Base Certificate delivered as of such date prepared in a manner reasonably acceptable to the Administrative Agent, together with a summary specifying the name, address,
and balance due for each account debtor; 
 (B) a schedule detailing the Borrower’s and its Subsidiaries’ Inventory,
in form and substance satisfactory to the Administrative Agent, (1) by location (showing Inventory in transit, any Inventory located with a third party under any consignment, bailee arrangement, or warehouse agreement), by class (raw material,
mill store inventory, work-in-process and finished goods), and by volume on hand, which Inventory shall be valued at the lower of cost (determined on a first-in, first-out basis) or market and adjusted for Reserves as the Administrative Agent has
previously indicated to the Borrower are deemed by the Administrative Agent to be appropriate, (2) including a report of any variances or other results of Inventory counts performed by the Borrower or any of its Subsidiaries since the last
Inventory schedule (including information regarding sales or other reductions, additions, returns, credits issued by the Borrower or any of its Subsidiaries and complaints and claims made against the Borrower or any of its Subsidiaries), and
(3) reconciled to the Borrowing Base Certificate delivered as of such date; 
 (C) a worksheet of calculations prepared
by the Borrower to determine Eligible Accounts and Eligible Inventory, such worksheets detailing the Accounts and Inventory excluded from Eligible Accounts and Eligible Inventory and the reason for such exclusion; 
 (D) a reconciliation of the Accounts and Inventory between the amounts shown in the Borrower’s general ledgers and financial
statements and the reports delivered pursuant to clauses (A) and (B) above; 
 (E) a reconciliation of the loan
balance per the Borrower’s general ledgers to the loan balance under this Agreement; and 
 (F) a schedule and aging of
Borrower’s and its Subsidiaries’ accounts payable; 
 (ii) At such times as may be requested by the Administrative
Agent, as of the quarter most recently ended, a list of all customer addresses, delivered electronically in a text formatted file acceptable to the Administrative Agent; 
  

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 (iii) On or after September 30, 2008, promptly upon the Administrative Agent’s
request: 
 (A) an appraisal of all of the Inventory of the Borrower and its Subsidiaries, which appraisal shall be in form
and substance satisfactory to the Administrative Agent, prepared by an independent third party appraiser acceptable to the Administrative Agent, and upon which the Administrative Agent and the Lenders (and the successors and assigns of the
Administrative Agent and each Lender) is expressly permitted to rely; and 
 (B) a schedule, which schedule shall be in form
and substance satisfactory to the Administrative Agent, detailing the balance of all intercompany accounts of the Borrower and its Subsidiaries; 
 (iv) As soon as available but in any event within thirty (30) days after the end of each calendar month, commencing with the calendar month ending September 30, 2008, and at such other times as may be
requested by the Administrative Agent, as of the period then ended, the Borrower’s and its Subsidiaries’ sales journals, cash receipts journals (identifying trade and non-trade cash receipts) and debit memo/credit memo journals; and

 (v) After September 30, 2008, as soon as possible and in any event within thirty (30) days after filing thereof,
copies of all tax returns filed by the Borrower or any of its Subsidiaries with the Canada Customs and Revenue Agency, and any other applicable Governmental Authority in any jurisdiction. 
 SECTION 7.2 Officer’s Compliance Certificate. At each time financial statements are delivered pursuant to Section 7.1(a) or
(b) and at such other times as the Administrative Agent shall reasonably request, an Officer’s Compliance Certificate. 
 SECTION 7.3 Accountants’ Certificate. At each time financial statements are delivered pursuant to Section 7.1(b), a certificate of the independent public accountants certifying such financial statements that in
connection with their audit, nothing came to their attention that caused them to believe that the U.S. Borrower or the Borrower failed to comply with the terms, covenants, provisions or conditions of Article IX or, if such is not the case,
specifying such non-compliance and its nature and period of existence. 
 SECTION 7.4 Other Reports. 
 (a) Promptly upon their becoming available, copies of all registration statements (other than on Form S-8) and regular periodic reports on Forms 10-K,
10-Q and 8-K that the Parent, the U.S. Borrower or any of its Subsidiaries shall have filed with the SEC, or any similar periodic reports filed with any comparable agency in Canada (it being agreed that each such report or statement shall be deemed
delivered on the date that (i) such report or statement is posted on the website of the SEC at www.sec.gov, on SEDAR at www.sedar.com or on the website of the Original U.S. Borrower at www.abitibibowater.com and
(ii) the Original U.S. Borrower has provided the Administrative Agent with written notice of such posting). 
  

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 (b) Promptly upon the mailing thereof to the shareholders of the Parent or the U.S. Borrower generally,
copies of all financial statements, reports and proxy statements so mailed (it being agreed that such mailing shall be deemed delivered on the date that (i) such information is posted on the website of the SEC at www.sec.gov, on SEDAR at
www.sedar.com or on the website of the Original U.S. Borrower at www.abitibibowater.com and (ii) the Original U.S. Borrower has provided the Administrative Agent with written notice of such posting). 
 (c) Such other information regarding the Collateral or the operations, business affairs and financial condition of the U.S. Borrower or any of its
Subsidiaries as the Administrative Agent (for itself or on behalf of any Lender) may reasonably request. 
 SECTION 7.5 Notice of
Litigation and Other Matters. Prompt (but in no event later than ten (10) days after any Credit Party obtains knowledge thereof) telephonic and written notice of: 
 (a) the commencement of all proceedings and investigations by or before any Governmental Authority and all actions and proceedings in any court or before
any arbitrator against or involving the U.S. Borrower or any of its Subsidiaries or any of their respective properties, assets or businesses that if adversely determined could reasonably be expected to have a Material Adverse Effect; 
 (b) any notice of any violation received by the U.S. Borrower or any of its Subsidiaries from any Governmental Authority including, without limitation,
any notice of violation of Environmental Laws which in any such case could reasonably be expected to have a Material Adverse Effect; 
 (c)
any labor controversy that has resulted in, or threatens to result in, a strike or other work action against the U.S. Borrower or any of its Subsidiaries which in any such case could reasonably be expected to have a Material Adverse Effect;

 (d) any attachment, judgment, lien, levy or order exceeding $10,000,000 that is assessed against the U.S. Borrower or any of its
Subsidiaries; 
 (e) (i) any Default or Event of Default or (ii) any event which constitutes or which with the passage of time or giving
of notice or both would constitute a default or event of default under any Significant Indebtedness to which the U.S. Borrower or any of its Subsidiaries is a party or by which the U.S. Borrower or any of its Subsidiaries or any of their respective
properties may be bound which could reasonably be expected to have a Material Adverse Effect; 
 (f) (i) any unfavorable determination letter
from the Internal Revenue Service regarding the qualification of an Employee Benefit Plan under Section 401(a) of the Code (along with a copy thereof), (ii) all notices received by the U.S. Borrower or any of its Subsidiaries or any of
their ERISA Affiliates of the PBGC’s or any other Governmental Authority’s intent to terminate any Pension Plan or Canadian Pension Plan or to have a trustee appointed to administer any Pension Plan or Canadian Pension Plan, (iii) all
notices received by the U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates from a Multiemployer Plan or Canadian Multiemployer Plan sponsor concerning the imposition or amount of withdrawal 

  

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liability pursuant to Section 4202 of ERISA or any other Applicable Law and (iv) the U.S. Borrower obtaining knowledge or reason to know that the
U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates has filed or intends to file a notice of intent to terminate any Pension Plan or Canadian Pension Plan under a distress termination within the meaning of Section 4041(c)
of ERISA or otherwise; 
 (g) any event which makes any of the representations set forth in Section 6.1 that is subject to
materiality or Material Adverse Effect qualifications inaccurate in any respect or any event which makes any of the representations set forth in Section 6.1 that is not subject to materiality or Material Adverse Effect qualifications
inaccurate in any material respect; and 
 (h) any notice delivered to the U.S. Borrower, or sent by or on behalf of the U.S. Borrower, with
respect to the U.S. Credit Agreement or any of the loan documents executed in connection therewith (including a copy of any such notice). 
 SECTION 7.6 Accuracy of Information. All written information, reports, statements and other papers and data furnished by or on behalf of the Parent, the Borrower or the U.S. Borrower to the Administrative Agent or any Lender whether
pursuant to this Article VII or any other provision of this Agreement, or any of the Security Documents, shall, at the time the same is so furnished, comply with the representations and warranties set forth in Section 6.1(w).

 ARTICLE VIII 
 AFFIRMATIVE
COVENANTS 
 Until all of the Obligations have been paid and satisfied in full and the Commitment terminated, unless consent has been
obtained in the manner provided for in Section 14.2, the U.S. Borrower and the Borrower will, and will cause each of their respective Subsidiaries to: 
 SECTION 8.1 Preservation of Corporate Existence and Related Matters. Except as permitted by Section 10.4, preserve and maintain its legal existence and all material rights, franchises, licenses and
privileges and qualify and remain qualified as a foreign corporation and authorized to do business in each jurisdiction in which the failure to so qualify could reasonably be expected to have a Material Adverse Effect. 
 SECTION 8.2 Maintenance of Property; Reinvestment. 
 (a) Protect and preserve all properties used or useful in its business, including copyrights, patents, trade names, service marks and trademarks; maintain in good working order and condition, ordinary wear and tear
excepted, all buildings, equipment and other tangible real and personal property; and from time to time make or cause to be made all repairs, renewals and replacements thereof and additions to such property necessary for the conduct of its business;
in each case to the extent necessary so that the business carried on in connection therewith may be conducted in a commercially reasonable manner, it being understood and agreed that nothing in this paragraph shall prohibit the idling or abandonment
of any property in the reasonable business judgment of the U.S. Borrower and its Subsidiaries. 
  

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 (b) (i) If the U.S. Borrower or any of its Subsidiaries receives Net Cash Proceeds in excess of
$10,000,000 from any Asset Disposition permitted under this Agreement (other than (A) any Asset Disposition permitted pursuant to clauses (a), (b), (c), (d), (e), (f) or (h) of Section 10.5 or (B) any Asset
Disposition described in clause (ii) or clause (iii) below) or consented to by the requisite Lenders pursuant to Section 14.2, or from any Insurance and Condemnation Event, and the Aggregate Credit Exposure is in excess of
$100,000,000 at the end of the fiscal quarter following the time such proceeds are received, the U.S. Borrower shall no later than twelve (12) months following such quarter end, apply such portion of such Net Cash Proceeds to repayment of the
outstanding amounts under this Credit Facility or the U.S. Credit Facility as shall reduce the Aggregate Credit Exposure to an amount less than $100,000,000; provided that no such repayment shall be required to the extent that such portion of
the Net Cash Proceeds is within such twelve (12) month period either (A) reinvested in the business (including Capital Expenditures, Permitted Acquisitions, purchases of assets in the ordinary course of business and other business
expenditures permitted hereunder) or (B) subject to compliance with Section 10.10, applied to repayment of the Existing Notes. 
 (ii) No later than five (5) Business Days following the date of receipt by the U.S. Borrower or any of its Subsidiaries of any Net Cash Proceeds from any Asset Disposition permitted pursuant to
Section 10.5(j) or from any Insurance and Condemnation Event with respect to the New U.S. Borrower Fixed Assets, the U.S. Borrower shall, subject to the terms of, and in the allocations and manner specified in, the applicable New U.S.
Borrower Mortgage, apply such Net Cash Proceeds (A) to permanently reduce the Commitment under this Agreement and the “Commitment” (under and as defined in the U.S. Credit Agreement) and (B) to permanently repay Extensions of
Credit under this Agreement and U.S. Extensions of Credit under the U.S. Credit Agreement; provided that no such reduction or repayment shall be required from the Net Cash Proceeds received by the U.S. Borrower or any of its Subsidiaries with
respect to any Asset Disposition of any Coosa Pines Mill Equipment or any Grenada Mill Equipment, or any Insurance and Condemnation Event with respect to any Coosa Pines Mill Equipment or any Grenada Mill Equipment, so long as such Net Cash Proceeds
are committed to be reinvested in replacement Coosa Pines Mill Equipment (in the case of an Asset Disposition or Insurance or Condemnation Event with respect to Coosa Pines Mill Equipment) or Grenada Mill Equipment (in the case of an Asset
Disposition or Insurance or Condemnation Event with respect to Grenada Mill Equipment) within three (3) months after receipt of such Net Cash Proceeds and are thereafter actually reinvested in such assets within twelve (12) months after
receipt of such Net Cash Proceeds; provided, that any portion of the Net Cash Proceeds not committed to be reinvested within such three (3) month period or actually reinvested within such twelve (12) month period shall be applied in
accordance with clauses (A) and (B) of this clause (ii); provided further, that the aggregate amount of the Net Cash Proceeds to be reinvested shall be either (x) deposited in a Deposit Account (as such term is defined in the
U.S. Collateral Agreement) subject to control (as such term is defined in the U.S. Collateral Agreement) of the U.S. Administrative Agent, for the benefit of the Secured Parties and the U.S. Secured Parties, until so reinvested or (y) with
respect to any amounts to be reinvested that are not deposited in a Deposit Account per clause (x) above, be used to repay 

  

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Extensions of Credit and U.S. Extensions of Credit to be allocated in the manner specified in the applicable New U.S. Borrower Mortgage (provided that
each of the Borrowing Limit and the U.S. Borrowing Limit shall be temporarily reduced by an amount equal to the principal amount of all such repayments, as applicable, made pursuant to this clause (y), until such time as such reinvestment actually
occurs and the U.S. Borrower delivers written notice thereof to the Administrative Agent and the U.S. Administrative Agent). 
 (iii) No later than five (5) Business Days following the date of receipt by the U.S. Borrower or any of its Subsidiaries of any Net Cash Proceeds from any Asset Disposition of timberlands permitted pursuant to
Section 10.5(g) or consented to by the requisite Lenders pursuant to Section 14.2, the U.S. Borrower shall apply such Net Cash Proceeds to repayment of the outstanding amounts under this Credit Facility or the U.S. Credit
Facility in an aggregate amount equal to the lesser of (A) fifty percent (50%) of the aggregate amount of such Net Cash Proceeds or (B) the amount which when used to repay the outstanding amounts under this Credit Facility or the U.S.
Credit Facility will reduce the Aggregate Credit Exposure to an amount less than $100,000,000. 
 SECTION 8.3 Insurance. Maintain
insurance with financially sound and reputable insurance companies against such risks and in such amounts as are customarily maintained by similar businesses and as may be required by Applicable Law and as are required by any Security Documents
(including, without limitation, hazard and business interruption insurance), and on the Closing Date and from time to time thereafter deliver to the Administrative Agent upon its reasonable request information in reasonable detail as to the
insurance then in effect, stating the names of the insurance companies, the amounts of the insurance, the dates of the expiration thereof and the properties and risks covered thereby. 
 SECTION 8.4 Accounting Methods and Financial Records. Maintain a system of accounting, and keep proper books, records and accounts (which shall be
true and complete in all material respects) as may be required or as may be necessary to permit the preparation of financial statements in accordance with GAAP and in compliance with the regulations of any Governmental Authority having jurisdiction
over it or any of its properties. 
 SECTION 8.5 Payment of Taxes. Pay and discharge all taxes, assessments and other governmental
charges that may be levied or assessed upon it or on its income or profits or any of its property; except for any such tax, assessment or other governmental charge the payment of which is being contested in good faith so long as adequate reserves
are maintained with respect thereto in accordance with GAAP. 
 SECTION 8.6 Compliance With Laws and Approvals. Observe and remain in
compliance with all Applicable Laws and maintain in full force and effect all Governmental Approvals, in each case applicable to the conduct of its business, except where the failure to do so could not reasonably be expected to have a Material
Adverse Effect. 
 SECTION 8.7 Environmental Laws. In addition to and without limiting the generality of Section 8.6,
(a) comply with, and ensure such compliance by all tenants and subtenants with all applicable Environmental Laws and obtain and comply with and maintain, 

  

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and ensure that all tenants and subtenants, if any, obtain and comply with and maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except where the failure to do so could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect, (b) conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under Environmental Laws, and promptly comply with all lawful orders and directives of any Governmental Authority regarding Environmental Laws, except where the failure to
conduct or complete such actions, or comply with such orders or directions, could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect and (c) defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective parents, Subsidiaries, Affiliates, employees, agents, officers and directors, from and against any claims, demands, penalties, fines, liabilities, settlements, damages, costs and expenses of whatever kind
or nature known or unknown, contingent or otherwise, arising out of, or in any way relating to the presence of Hazardous Materials, or the violation of, noncompliance with or liability under any Environmental Laws applicable to the operations of the
U.S. Borrower or any of its Subsidiaries, or any orders, requirements or demands of Governmental Authorities related thereto, including, without limitation, reasonable attorney’s and consultant’s fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that any of the foregoing directly result from the gross negligence or willful misconduct of the party seeking indemnification therefor, as determined by a court of competent
jurisdiction by final nonappealable judgment. 
 SECTION 8.8 Compliance with ERISA. In addition to and without limiting the generality
of Section 8.6, (a) except where the failure to so comply could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect, (i) comply with all material applicable provisions of ERISA with
respect to Employee Benefit Plans and the ITA and other Applicable Law with respect to all Canadian Employee Benefit Plans, (ii) not take any action or fail to take action the result of which could be a liability to the PBGC or any other
Governmental Authority or to a Multiemployer Plan or a Canadian Multiemployer Plan, (iii) not participate in any prohibited transaction that could result in any civil penalty under ERISA or tax under the Code and (iv) operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under Section 4980B of the Code or any liability to any qualified beneficiary as defined in Section 4980B of the Code and (b) furnish to the Administrative Agent upon
the Administrative Agent’s request such additional information about any Employee Benefit Plan or Canadian Employee Benefit Plan as may be reasonably requested by the Administrative Agent. 
 SECTION 8.9 Visits and Inspections. Permit representatives of the Administrative Agent or any Lender, from time to time upon prior reasonable
notice and during normal business hours, at the Borrower’s expense, to visit and inspect its properties; inspect, audit and make extracts from its books, records and files, including, but not limited to, management letters prepared by
independent accountants; discuss with its principal officers, and its independent accountants, its business, assets, liabilities, financial condition, results of operations and business prospects; and conduct field audits, examinations and
appraisals with respect to the Collateral (including, but not limited to, the Accounts, the Inventory and the New U.S. Borrower Fixed Assets). Upon the occurrence and during the continuance of an Event of Default, the Administrative Agent may do any
of the foregoing at any time without advance notice. Notwithstanding the foregoing, field audits, examinations and appraisals with respect to the Collateral shall be conducted only by the Administrative Agent, in its sole discretion or at the
request of any Lender. 
  

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 SECTION 8.10 Additional Guarantors. 
 (a) Within thirty (30) days after (i) the redesignation of an Immaterial Subsidiary as a Material Subsidiary in accordance with
Section 8.10(b) below or (ii) the creation or acquisition of any Material Subsidiary, including in connection with any Permitted Acquisition (any such Subsidiary, a “New Material Subsidiary”), cause to be executed
and delivered to the Administrative Agent (unless otherwise agreed to by the Administrative Agent): (A) a duly executed Subsidiary Guaranty Agreement (or, if applicable, a joinder agreement in form and substance reasonably satisfactory to the
Administrative Agent joining such New Material Subsidiary to the Subsidiary Guaranty Agreement), the Collateral Agreement and any other applicable Security Documents, (B) such updated Schedules to the Loan Documents as requested by the
Administrative Agent with regard to such Person (including, without limitation, updated Schedule 6.1(b) reflecting the creation or acquisition of such New Material Subsidiary), (C) such documents and certificates referred to in
Section 5.2 as may be reasonably requested by the Administrative Agent (including, without limitation, favorable legal opinions of counsel addressed to the Administrative Agent and the Lenders with respect to the New Material Subsidiary,
the Loan Documents and such other matters as the Lenders shall request), and (D) such other documents and certificates as may be reasonably requested by the Administrative Agent, all in form, content and scope reasonably satisfactory to the
Administrative Agent. 
 (b) The Borrower may, at any time and upon written notice to the Administrative Agent, redesignate any Immaterial
Subsidiary as a Material Subsidiary. Further, promptly after the date on which the Borrower or the Administrative Agent determines that any Subsidiary no longer qualifies as an Immaterial Subsidiary such Subsidiary shall be redesignated as a
Material Subsidiary and shall comply with clause (a) of this Section. 
 (c) The Borrower may, at any time and upon written notice to
the Administrative Agent, designate any direct or indirect parent company of the Borrower that is organized under the laws of Canada or any province thereof as a Parent Guarantor by causing such direct or indirect parent company of the Borrower to
execute and deliver all documents and certificates required to be delivered pursuant to clause (a) of this Section (provided that such direct or indirect parent company of the Borrower shall, rather than execute a Subsidiary Guaranty
Agreement or a joinder thereto, either (i) execute a parent guaranty agreement in form and substance satisfactory to the Administrative Agent or (ii) join as a guarantor under Article XI). 
 (d) Within thirty (30) days after the creation or acquisition of any new Subsidiary, including in connection with any Permitted Acquisition, cause
to be executed and delivered to the Administrative Agent (unless otherwise agreed to by the Administrative Agent) a duly executed joinder agreement in the form attached to the Intercompany Subordination Agreement joining such new Subsidiary thereto.

  

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 (e) (i) (A) Concurrently with the delivery of the documentation required to be delivered pursuant to
Section 8.10(e)(ii)(A) of the U.S. Credit Agreement but in no event later than April 15, 2008, the U.S. Administrative Agent shall have received: 
 (1) evidence satisfactory to the U.S. Administrative Agent that the U.S. Borrower shall be diligently pursuing in good faith the
rendering of the solvency opinions referred to in Section 8.10(e)(i)(B) and Section 8.10(e)(i)(C) by a third party consultant reasonably acceptable to the U.S. Administrative Agent (including having delivered to such third
party consultant all financial and other information necessary to provide the basis for the delivery of such solvency opinion); and 
 (2) information, in form and substance reasonably satisfactory to the U.S. Administrative Agent, confirming (x) that the New U.S. Borrowers own, free and clear of any Liens, the New U.S. Borrower Fixed Assets and (y) the ability
of the New U.S. Borrowers to grant to the U.S. Administrative Agent, on behalf of the Secured Parties and the U.S. Secured Parties, a perfected first priority security interest in the New U.S. Borrower Fixed Assets without the consent or approval of
any third Person; and 
 (B) Concurrently with the delivery of the documentation required to be delivered pursuant to
Section 8.10(e)(ii)(B) of the U.S. Credit Agreement but in no event later than May 15, 2008, the Administrative Agent shall have received: 
 (1) a copy of a solvency opinion from an opinion provider reasonably acceptable to the Administrative Agent as to the solvency of the
Original U.S. Borrower after giving effect to the New U.S. Borrower Transactions and the transactions contemplated by the Fourth Amendment, this Agreement and the joinder agreement referred to in clause (2) below and such other matters as the
Lenders shall request (which such opinion shall expressly permit reliance (or be accompanied by a letter, in form and substance satisfactory to the Administrative Agent, executed by the opinion provider that expressly permits reliance) by the
Administrative Agent, the Lenders and any successors and assigns of the Administrative Agent or any Lender); 
 (2) a duly
executed joinder agreement, in form and substance reasonably satisfactory to the Administrative Agent, joining each New U.S. Borrower to Article XI of this Agreement (as a U.S. Borrower), the Intercompany Subordination Agreement and any other
applicable Loan Documents; 
 (3) such updated Schedules to the Loan Documents as requested by the Administrative Agent or
the U.S. Administrative Agent with regard to the New U.S. Borrowers (including, without limitation, an updated Schedule 6.1(b)); 
 (4) a certificate of a Responsible Officer of each New U.S. Borrower certifying as to the incumbency and genuineness of the signature of each officer of each New U.S. Borrower executing the Loan Documents 

  

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to which it is a party and certifying that attached thereto is a true, correct and complete copy of (w) the articles or certificate of incorporation or
formation of each New U.S. Borrower and all amendments thereto, certified as of a recent date by the appropriate Governmental Authority in its jurisdiction of incorporation or formation, (x) the bylaws or other governing document of each New
U.S. Borrower as in effect on the date hereof, (y) resolutions duly adopted by the board of directors or other governing body of each New U.S. Borrower authorizing the transactions contemplated hereunder and the execution, delivery and
performance of this Agreement and the other Loan Documents to which it is a party, and (z) certificates as of a recent date of the good standing of each New U.S. Borrower under the laws of its jurisdiction of incorporation or formation;

 (5) the results of a Lien search (including a search as to judgments, pending litigation and tax matters) made against
each New U.S. Borrower under the Uniform Commercial Code (or applicable judicial docket) as in effect in each jurisdiction in which filings or recordations under the Uniform Commercial Code should be made to evidence or perfect security interests in
all assets of each New U.S. Borrower, indicating among other things that the assets of each New U.S. Borrower are free and clear of any Liens (except Permitted Liens); 
 (6) evidence in form and substance reasonably satisfactory to the Administrative Agent confirming the interest of the U.S. Administrative
Agent (as loss payee and additional insured and, with respect to the real property subject to the New U.S. Borrower Mortgages (other than the Supplemental New U.S. Borrower Mortgage), as mortgagee) with respect to such insurance coverage;

 (7) a duly executed counterpart of each New U.S. Borrower Mortgage (other than the Supplemental New U.S. Borrower
Mortgage); 
 (8) all filings and recordations that are necessary to perfect the security interests of the U.S.
Administrative Agent, on behalf of itself, the Secured Parties and the U.S. Secured Parties, in the Collateral granted by each New U.S. Borrower under each New U.S. Borrower Mortgage (other than the Supplemental New U.S. Borrower Mortgage) and
evidence satisfactory to the Administrative Agent that upon such filings and recordations such security interests constitute valid and perfected first priority Liens therein; 
 (9) favorable opinions of counsel of each New U.S. Borrower addressed to the Administrative Agent and the Lenders with respect to each
New U.S. Borrower, this Agreement, each of the New U.S. Borrower Mortgages (other than the Supplemental New U.S. Borrower Mortgage) and the other Loan Documents to which the New U.S. Borrowers are a party and such other matters as the Lenders shall
reasonably request (which such opinions shall expressly permit reliance by successors and assigns of the Administrative Agent or any Lender); and 
  

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 (10) such other instruments, documents and certificates as the Administrative Agent
shall reasonably request. 
 (C) Concurrently with the delivery of the documentation required to be delivered pursuant to
Section 8.10(e)(ii)(C) of the U.S. Credit Agreement but in no event later than May 22, 2008, the Administrative Agent shall have received a copy of a solvency opinion from an opinion provider reasonably acceptable to the
Administrative Agent as to the solvency of each of the New U.S. Borrowers (other than BNS Holdings if BNS Holdings is a holding company that holds only the Capital Stock of the Coosa Pines U.S. Borrower and the Grenada U.S. Borrower and has no
creditors other than the U.S. Lenders), in each case after giving effect to the New U.S. Borrower Transactions and the transactions contemplated by the Fourth Amendment, this Agreement and the joinder agreement referred to in
Section 8.10(e)(i)(B)(2) above and such other matters as the Lenders shall request (which such opinion shall expressly permit reliance (or be accompanied by a letter, in form and substance satisfactory to the Administrative Agent,
executed by the opinion provider that expressly permits reliance) by the Administrative Agent, the Lenders and any successors and assigns of the Administrative Agent or any Lender). 
 (D) Concurrently with the delivery of the documentation required to be delivered pursuant to Section 8.10(e)(ii)(D) of the
U.S. Credit Agreement but in no event later than May 30, 2008, the Administrative Agent shall have received: 
 (1) to
the extent reasonably requested by the Administrative Agent, evidence in form and substance reasonably satisfactory to the Administrative Agent confirming the interest of the U.S. Administrative Agent as loss payee, additional insured and mortgagee
with respect to the Coosa Pines Mill and Coosa Pines Real Property subject to the Supplemental New U.S. Borrower Mortgage; 
 (2) a duly executed counterpart of the Supplemental New U.S. Borrower Mortgage; 
 (3) all filings and recordations
that are necessary to perfect the security interests of the U.S. Administrative Agent, on behalf of itself, the other Secured Parties and the U.S. Secured Parties, in the Collateral granted by the Supplemental New U.S. Borrower Mortgagor, and
evidence satisfactory to the Administrative Agent that upon such filings and recordations such security interests constitute valid and perfected first priority Liens therein (or, to the extent acceptable to the Administrative Agent, evidence
satisfactory to the Administrative Agent that upon delivery of the Supplemental New U.S. Borrower Mortgage, all right, title and interest of the Supplemental New U.S. Borrower Mortgagor shall be subordinated in all respects to the security interests
of the U.S. 

  

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Administrative Agent, on behalf of itself, the other Secured Parties and the U.S. Secured Parties, with respect to the interests subject to the Supplemental
New U.S. Borrower Mortgage); 
 (4) favorable opinions of counsel of the Supplemental New U.S. Borrower Mortgagor addressed
to the Administrative Agent and the Lenders with respect to the Supplemental New U.S. Borrower Mortgage and such other matters as the Lenders shall reasonably request (which such opinions shall expressly permit reliance by successors and assigns of
the Administrative Agent or any Lender); and 
 (5) such other instruments, documents and certificates as the Administrative
Agent shall reasonably request; 
 (E) As of the Seventh Amendment Effective Date, the Borrower has delivered the
documentation required pursuant to Section 8.10(e)(i) of this Agreement. 
 (ii) On or before June 30, 2008:

 (A) a final title policy, insuring the first priority Liens of the Secured Parties and the U.S. Secured Parties and showing
no Liens prior to the Liens of the Secured Parties and the U.S. Secured Parties (other than for ad valorem taxes not yet due and payable) and containing only such other customary title exceptions as are reasonably acceptable to the U.S.
Administrative Agent, with title insurance companies acceptable to the U.S. Administrative Agent, on each of the Coosa Pines Mill Real Property and Grenada Mill Real Property (it being agreed that the U.S. Borrower and its Subsidiaries shall provide
or obtain any customary affidavits and indemnities as may be required or necessary to obtain title insurance satisfactory to the U.S. Administrative Agent); 
 (B) copies of all recorded documents creating exceptions to the title policies referred to in Section 8.10(e)(ii)(A); 

 (C) a certification form of a certification from the National Research Center, or any successor agency thereto, regarding
each of the Coosa Pines Mill Real Property and the Grenada Mill Real Property; 
 (D) copies of as-built surveys of a recent
date of each of the Coosa Pines Mill Real Property and the Grenada Mill Real Property, in each case, certified as of a recent date by a registered engineer or land surveyor. Each such survey shall be accompanied by an affidavit (a “Survey
Affidavit”) of an authorized signatory of the owner of such property stating that there have been no improvements or encroachments to the property since the date of the respective survey such that the existing survey is no longer accurate.
Each such survey shall show the area of such property, all boundaries of the land with courses and distances indicated, including chord bearings and arc and chord distances for all curves, and shall show dimensions and locations of all easements,
private drives, 

  

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roadways, and other facts materially affecting such property, and shall show such other details as the U.S. Administrative Agent may reasonably request,
including, without limitation, any encroachment (and the extent thereof in feet and inches) onto the property or by any of the improvements on the property upon adjoining land or upon any easement burdening the property; any improvements, to the
extent constructed, and the relation of the improvements by distances to the boundaries of the property, to any easements burdening the property, and to the established building lines and the street lines; and if improvements are existing,
(x) a statement of the number of each type of parking space required by Applicable Laws, ordinances, orders, rules, regulations, restrictive covenants and easements affecting the improvement, and the number of each such type of parking space
provided, and (y) the locations of all utilities serving the improvement; 
 (E) a Phase I environmental assessment and
such other environmental report reasonably requested by the U.S. Administrative Agent regarding each of the Coosa Pines Mill Real Property and the Grenada Mill Real Property, in each case prepared by an environmental engineering firm acceptable to
the U.S. Administrative Agent showing no environmental conditions in violation of Environmental Laws or liabilities under Environmental Laws, either of which could reasonably be expected to have a Material Adverse Effect; and 
 (F) such other certificates, documents and information (including, without limitation, engineering and structural reports, permanent
certificates of occupancy and evidence of zoning compliance, in each case, with respect to each of the Coosa Pines Mill Real Property and the Grenada Mill Real Property) as may be reasonably requested by the U.S. Administrative Agent, all in form,
consent and scope reasonably satisfactory to the U.S. Administrative Agent. 
 (iii) In each case noted above, the U.S.
Administrative Agent shall have received, on behalf of itself, the Lenders and any other applicable Person, all accrued and unpaid fees, expenses or commissions payable to the Administrative Agent and the Lenders under this Agreement (including,
without limitation, legal (including, without limitation, local counsel) fees and expenses) and such amounts as may be due to any other Person in connection with the transactions contemplated hereby, including all taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of any of the Loan Documents. 
 SECTION 8.11 Use of
Proceeds. The Borrower shall use the proceeds of the Extensions of Credit (a) to finance the acquisition of Capital Assets, (b) to refinance the Existing Facilities and (c) for working capital and general corporate purposes of the
U.S. Borrower and its Subsidiaries, including the payment of certain fees and expenses incurred in connection with this Agreement. 
 SECTION
8.12 Further Assurances. Make, execute and deliver all such additional and further acts, things, deeds and instruments as the Administrative Agent or the Required Agreement Lenders (through the Administrative Agent) may reasonably require to
document and consummate the transactions contemplated hereby and to vest completely in and insure the Administrative Agent and the Lenders their respective rights under this Agreement, the Letters of Credit and the other Loan Documents. 

 

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 ARTICLE IX 
 FINANCIAL COVENANTS 
 Until all of the Obligations have been paid and satisfied in full and the
Commitment terminated, unless consent has been obtained in the manner set forth in Section 14.2, the U.S. Borrower and its Subsidiaries on a Consolidated basis will not: 
 SECTION 9.1 Consolidated Senior Secured Leverage Ratio. As of any fiscal quarter end, permit the Consolidated Senior Secured Leverage Ratio to be
greater than the corresponding ratio set forth below: 
  

			
	 Applicable Period
	  	 Maximum Ratio

	 Third Amendment Effective Date to March 31, 2008
	  	4.50 to 1.00
		
	 April 1, 2008 through and including June 30, 2008
	  	2.75 to 1.00
		
	 July 1, 2008 through and including September 30, 2008
	  	1.50 to 1.00
		
	 October 1, 2008 and thereafter
	  	1.25 to 1.00

 SECTION 9.2 Interest Coverage Ratio. As of any fiscal quarter ending during the
periods specified below, permit the ratio of (a) the sum, without duplication, of (i) Consolidated Adjusted EBITDA for the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date, plus (ii) the
amount of Specified Non-Recurring Charges taken during the period of four (4) consecutive fiscal quarters ending on or immediately prior to such date, to (b) Consolidated Interest Expense paid or payable in cash for the period of four
(4) consecutive fiscal quarters ending on or immediately prior to such date, to be less than the corresponding ratio set forth below: 
  

			
	 Applicable Period
	  	 Minimum Ratio

	 Third Amendment Effective Date to March 31, 2008
	  	0.75 to 1.00
		
	 April 1, 2008 through and including June 30, 2008
	  	1.10 to 1.00
		
	 July 1, 2008 through and including September 30, 2008
	  	1.40 to 1.00
		
	 October 1, 2008 through and including December 31, 2008
	  	1.75 to 1.00
		
	 January 1, 2009 and thereafter
	  	2.00 to 1.00

  

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 ARTICLE X 
 NEGATIVE COVENANTS 
 Until all of the Obligations have been paid and satisfied in full and the
Commitment terminated, unless consent has been obtained in the manner set forth in Section 14.2, the U.S. Borrower and the Borrower will not and will not permit any of their respective Subsidiaries to: 
 SECTION 10.1 Limitations on Indebtedness. Create, incur, assume or suffer to exist any Indebtedness except: 
 (a) (i) the Obligations (excluding Hedging Obligations permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in favor
of the Administrative Agent for the benefit of the Secured Parties; 
 (b) (i) the U.S. Obligations (excluding any U.S. Obligations pursuant
to Hedging Agreements permitted pursuant to Section 10.1(c)) and (ii) the Guaranty Obligations in respect of the U.S. Obligations in favor of the U.S. Administrative Agent for the benefit of the U.S. Secured Parties; 
 (c) Indebtedness incurred in connection with a Hedging Agreement (i) which is entered into for interest rate, foreign currency or other business
purposes and not for speculative purposes and (ii) with a counterparty reasonably satisfactory to the Administrative Agent and the U.S. Administrative Agent; provided that any counterparty that is a Lender, a U.S. Lender or any Affiliate
thereof shall be deemed satisfactory to the Administrative Agent and the U.S. Administrative Agent; 
 (d) Indebtedness existing on the
Closing Date and not otherwise permitted under this Section and, to the extent that the outstanding principal amount of such Indebtedness is in excess of $25,000,000, listed on Schedule 10.1 (including any Indebtedness (including, without
limitation, any Guaranty Obligation of Indebtedness of another Person but excluding the April 2008 Convertible Indebtedness) issued to refinance or to refund such Indebtedness or any Indebtedness which constitutes a renewal or extension of such
Indebtedness); provided that (i) the principal amount of such Indebtedness may not be increased at the time of such refinancing, refunding, renewal or extension except (A) by an amount equal to a reasonable premium or other
reasonable amount paid, and fees and expenses reasonably incurred, in connection with such refinancing, refunding, renewal or extension and by an amount equal to any existing commitments unutilized thereunder and (B) by additional amounts, to
the extent that the Consolidated Total Leverage Ratio, on a pro forma basis after giving effect to such increase, would be no greater than 5.50 to 1.00, (ii) no Default or Event of Default exists and is continuing or would be caused by
the refinancing, refunding, renewal or extension thereof, (iii) the 

  

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Administrative Agent and the U.S. Administrative Agent shall have received satisfactory written evidence that the U.S. Borrower and its Subsidiaries would be
in compliance with all covenants in this Agreement and the U.S. Credit Agreement on a pro forma basis after giving effect to the refinancing, refunding, renewal or extension thereof, (iv) the weighted average life of such Indebtedness
shall not be shorter than the weighted average life of the Indebtedness being refinanced, refunded, renewed or extended, (v) any terms of subordination set forth in the Indebtedness being refinanced, refunded, renewed or extended are not
adversely affected in any material respect and (vi) none of the Existing Notes nor any Indebtedness incurred in accordance with this paragraph to refinance, refund, renew or extend the Existing Notes shall be guaranteed by the U.S. Borrower or
any of its Subsidiaries (other than (A) those Existing Notes which are guaranteed by the U.S. Borrower as of the Closing Date and identified on Schedule 10.1 as being so guaranteed and (B) any Indebtedness issued to refinance any
Existing Notes which, as of the Closing Date, (1) have an outstanding principal balance in excess of $50,000,000 and (2) mature or are subject to mandatory redemption prior to the U.S. Maturity Date); 
 (e) Indebtedness incurred in connection with Capital Leases, including those Capital Leases existing on the Closing Date, and purchase money
Indebtedness, including all purchase money Indebtedness existing on the Closing Date, in an aggregate amount not to exceed $50,000,000 on any date of determination; 
 (f) (i) Guaranty Obligations with respect to Indebtedness permitted pursuant to subsections (c), (e), (h), (l) and (n) of this Section (provided that any Guaranty
Obligations of Indebtedness incurred pursuant to subsection (h) or, to the extent applicable, subsection (n) of this Section shall be subordinated to the Obligations and the U.S. Obligations to the same extent as the
Indebtedness that is being guaranteed); or 
 (ii) Guaranty Obligations of the Original U.S. Borrower with respect to the
April 2008 Convertible Indebtedness; provided that (A) the Original U.S. Borrower shall not be permitted to create, incur, assume or suffer to exist such Guaranty Obligations unless (1) it shall have delivered to the U.S.
Administrative Agent evidence, in form and substance reasonably satisfactory to the U.S. Administrative Agent, that the Abitibi Entities shall have consummated (or will concurrently consummate) their previously announced financing plan which will
consist of the following: (x) $250,000,000 to $325,000,000 of new senior unsecured exchange notes of Abitibi, (y) $350,000,000 to $450,000,000 of new 364-day term loans of Abitibi and (z) approximately $400,000,000 of new senior
secured notes or a term loan of Abitibi not to exceed a five year term (provided that Abitibi may replace or amend the financings described in this clause (A)(1) above so long as such replacement or amendment consists of non-convertible debt
financings of Abitibi that are not guaranteed by, or secured by the assets of, the U.S. Borrower or any of its Subsidiaries and would not reduce the aggregate amount of proceeds reflected above in this clause (A) in excess of $50,000,000) or
(2) the proceeds of such Indebtedness are used to permanently reduce, on a pro rata basis, the Commitment under this Agreement and the “Commitment” under and as defined in the U.S. Credit Agreement and to permanently repay, on a pro
rata basis, Extensions of Credit under this Agreement and U.S. Extensions of Credit under the U.S. Credit Agreement or for such other use approved in writing by the Required Lenders (it being understood that any use that involves the reduction of
the commitments or repayment of 

  

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the extensions of credit under this Credit Facility or the U.S. Credit Facility shall continue to be applied to this Credit Facility and the U.S. Credit
Facility on a pro rata basis unless otherwise agreed to by the Required Agreement Lenders and the U.S. Required Agreement Lenders); and (B) such Guaranty Obligations shall be unsecured and shall not exceed $350,000,000 in an aggregate principal
amount (plus any paid-in-kind interest thereon) on any date of determination; 
 (g) (i) (A) Indebtedness owed by any U.S. Credit Party to
any other U.S. Credit Party, including, without limitation, Indebtedness evidenced by the New U.S. Borrower Notes (provided that, if requested by the U.S. Administrative Agent, such Indebtedness shall be subordinated to the U.S. Obligations
on terms and conditions reasonably satisfactory to the U.S. Administrative Agent) and (B) Indebtedness owed by any Credit Party (other than the U.S. Borrower) to any other Credit Party (other than the U.S. Borrower) (provided that, if
requested by the Administrative Agent, such Indebtedness shall be subordinated to the Obligations on terms and conditions reasonably satisfactory to the Administrative Agent); 
 (ii) (A) Indebtedness owed by any Credit Party (other than the U.S. Borrower) to any U.S. Credit Party (provided that such
Indebtedness shall be payable by such Credit Party on demand by the applicable U.S. Credit Party) and (B) Indebtedness owed by any U.S. Credit Party to any Credit Party (provided that such Indebtedness shall be payable by such U.S.
Credit Party (other than the U.S. Borrower) on demand by the applicable Credit Party); 
 (iii) Indebtedness owed by any
Subsidiary which is not a U.S. Credit Party or a Credit Party to any other Subsidiary which is not a U.S. Credit Party or a Credit Party; 
 (iv) Indebtedness owed by any U.S. Credit Party or any Credit Party to a Subsidiary that is not a U.S. Credit Party or a Credit Party (provided that such Indebtedness (other than Indebtedness existing as of the
Closing Date pursuant to the Bowater-Calhoun Arrangement) shall be subordinated to the U.S. Obligations and the Obligations, as applicable, pursuant to an Intercompany Subordination Agreement); and 
 (v) Indebtedness owed by any Subsidiary that is not a U.S. Credit Party or a Credit Party to a U.S. Credit Party or a Credit Party
(provided that such Indebtedness shall be payable by such Subsidiary on demand by the U.S. Credit Party or the Credit Party, as applicable, to the extent required pursuant to the Intercompany Subordination Agreement); provided that the
aggregate amount of such Indebtedness incurred after the Closing Date, together with any equity or capital investments made after the Closing Date permitted pursuant to Section 10.3(g) (without duplication), shall not exceed $50,000,000
outstanding on any date of determination (which amount shall be calculated as the net balance of such loans, advances and investments as reduced by any repayments or distributions made with respect thereto); provided further that the
limitation set forth in the preceding proviso shall not be applicable to any loans and advances made by the U.S. Borrower to Bowater Canada Finance Corporation to pay interest on the BCFC Notes; 
  

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 (h) Subordinated Indebtedness; provided that in the case of each issuance of Subordinated
Indebtedness, (i) no Default or Event of Default shall have occurred and be continuing or would be caused by the issuance of such Subordinated Indebtedness, (ii) the Consolidated Total Leverage Ratio on pro forma basis after giving
effect to issuance of such Subordinated Indebtedness is no greater than 5.50 to 1.00 and (iii) the U.S. Administrative Agent and the Administrative Agent shall have received satisfactory written evidence that the U.S. Borrower and its
Subsidiaries would be in compliance with all covenants contained in this Agreement and the U.S. Credit Agreement on a pro forma basis after giving effect to the issuance of any such Subordinated Indebtedness; 
 (i) Indebtedness of the U.S. Borrower or any of its Subsidiaries as an account party in respect of trade letters of credit in an aggregate amount not to
exceed $25,000,000 on any date of determination; provided that no such trade letter of credit shall be secured by any assets of the U.S. Borrower or any of its Subsidiaries other than the assets being acquired or shipped pursuant to such
letter of credit; 
 (j) Indebtedness (i) of any Person that becomes a Subsidiary after the Closing Date in connection with any
Permitted Acquisition or (ii) assumed in connection with any assets acquired in connection with any Permitted Acquisition, and the refinancing, refunding, renewal and extension (but not the increase in the aggregate principal amount) thereof;
provided that (A) such Indebtedness exists at the time such Person becomes a Subsidiary or such assets are acquired and is not created in contemplation of, or in connection with, such Person becoming a Subsidiary or such assets being
acquired and (B) notwithstanding anything to the contrary contained in this Agreement, neither the U.S. Borrower nor any other Subsidiary (other than such Person) shall have any liability or other obligation with respect to such Indebtedness
(other than any liability or other obligation of the U.S. Borrower or any of its Subsidiaries permitted hereunder which existed prior to the time that such Person became a Subsidiary or such asset was acquired); 
 (k) [Intentionally Omitted]; 
 (l) Indebtedness in an aggregate principal amount not to exceed $125,000,000 in the form of Canadian cash management facilities; 
 (m) [Intentionally Omitted]; and 
 (n) Additional Indebtedness not otherwise permitted pursuant to this Section in an
aggregate amount outstanding not to exceed $25,000,000. 
 SECTION 10.2 Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including, without limitation, shares of Capital Stock), real or personal, whether now owned or hereafter acquired, except: 
 (a) (i) Liens of the Administrative Agent for the benefit of the Secured Parties, (ii) Liens of the U.S. Administrative Agent for the benefit of the
U.S. Secured Parties and (iii) Liens on the New U.S. Borrower Fixed Assets of the U.S. Administrative Agent for the benefit of the Secured Parties and the U.S. Secured Parties pursuant to the New U.S. Borrower Mortgages; 
  

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 (b) Liens not otherwise permitted by this Section and in existence on the Closing Date and, with respect
to each Credit Party and each U.S. Credit Party, described on Schedule 10.2 (including Liens incurred in connection with any refinancing, refunding, renewal or extension of Indebtedness pursuant to Section 10.1(d) solely to the
extent that the such Liens were in existence on the Closing Date and described on Schedule 10.2); provided that the scope of any such Lien shall not be increased, or otherwise expanded, to cover any additional property or type of
asset, as applicable, beyond that in existence on the Closing Date; 
 (c) Liens for taxes, assessments and other governmental charges or
levies not yet due or as to which the period of grace (not to exceed thirty (30) days), if any, related thereto has not expired or which are being contested in good faith and by appropriate proceedings if adequate reserves are maintained to the
extent required by GAAP; 
 (d) the claims of materialmen, mechanics, carriers, warehousemen, processors or landlords for labor, materials,
supplies or rentals incurred in the ordinary course of business, (i) which are not overdue for a period of more than thirty (30) days or (ii) which are being contested in good faith and by appropriate proceedings if adequate reserves
are maintained to the extent required by GAAP; 
 (e) Liens consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers’ compensation, unemployment insurance or similar legislation; 
 (f)
Liens constituting encumbrances in the nature of zoning restrictions, easements and rights or restrictions of record on the use of real property or other similar restrictions, which do not, in any case, impair the use thereof in the ordinary conduct
of business; 
 (g) Liens securing Indebtedness permitted under Section 10.1(e); provided that (i) such Liens shall
be created substantially simultaneously with the acquisition or lease of the related asset, (ii) such Liens do not at any time encumber any property other than the property financed by such Indebtedness, (iii) the amount of Indebtedness
secured thereby is not increased and (iv) the principal amount of Indebtedness secured by any such Lien shall at no time exceed one hundred percent (100%) of the original purchase price or lease payment amount of such property at the time
it was acquired; 
 (h) Liens securing judgments for the payment of money not constituting an Event of Default under
Section 12.1(m) or securing appeal or other surety bonds relating to such judgments; 
 (i) Liens on tangible property or
tangible assets of the U.S. Borrower or any of its Subsidiaries acquired pursuant to a Permitted Acquisition, or on tangible property or tangible assets of any Subsidiary of the U.S. Borrower which are in existence at the time that such Subsidiary
of the U.S. Borrower is acquired pursuant to a Permitted Acquisition (provided that such Liens (i) are not incurred in connection with, or in anticipation of, such Permitted Acquisition, (ii) are applicable only to specific tangible
property or tangible assets, (iii) are not “blanket” or all asset Liens and (iv) do not attach to any other property or assets of the U.S. Borrower or any of its Subsidiaries); 
  

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 (j) Liens in existence as of the Closing Date in connection with the Bowater-Calhoun Arrangement as
described in clause (b) of the definition thereof; 
 (k) [Intentionally Omitted]; and 
 (l) Liens not otherwise permitted hereunder securing obligations not at any time exceeding in the aggregate $25,000,000. 
 SECTION 10.3 Limitations on Loans, Advances, Investments and Acquisitions. Purchase, own, invest in or otherwise acquire, directly or indirectly,
any Capital Stock, interests in any partnership or joint venture (including, without limitation, the creation or capitalization of any Subsidiary), evidence of Indebtedness or other obligation or security, all or substantially all of the business or
assets of any other Person (or any portion of the business or assets of any other Person that constitutes a line of business, a business unit or a division) or any other investment or interest whatsoever in any other Person, or make or permit to
exist, directly or indirectly, any loans, advances or extensions of credit to, or any investment in cash or by delivery of property in, any Person (collectively, “Investments”) except: 
 (a) Investments: 
 (i)
existing on the Closing Date in Subsidiaries existing on the Closing Date; 
 (ii) after the Closing Date in Subsidiaries
formed after the Closing Date so long as the U.S. Borrower, the Borrower and their respective Subsidiaries comply with the applicable provisions of Section 8.10 of this Agreement and Section 8.10 of the U.S. Credit Agreement;

 (iii) existing on the Closing Date (other than Investments in Subsidiaries on the Closing Date) and described on
Schedule 10.3; 
 (b) Investments in cash and Cash Equivalents; 
 (c) Investments by the U.S. Borrower or any of its Subsidiaries in the form of Permitted Acquisitions; 
 (d) Hedging Agreements permitted pursuant to Section 10.1; 
 (e) Investments in the form of loans and advances to employees in the ordinary course of business, which, in the aggregate, do not exceed at any time $2,000,000; 
 (f) (i) Investments in the form of intercompany Indebtedness permitted pursuant to Section 10.1(g) (other than clause (v) of
Section 10.1(g)), but including, without limitation, Investments by the Original U.S. Borrower in the Parent evidenced by the New U.S. Borrower Notes so long as each of the New U.S. Borrower Notes is pledged as security for the U.S.
Obligations and delivered to the U.S. Administrative Agent, for the ratable benefit of the U.S. Secured Parties, in each case, pursuant to the terms of the U.S. Collateral Agreement), (ii) equity or capital investments made by the U.S. Borrower
or any of its Subsidiaries in any U.S. Credit Party or any Credit Party (or made in a Wholly-Owned Subsidiary that is not a U.S. Credit Party 

  

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or a Credit Party and immediately contributed (directly or indirectly through one or more intermediate Wholly-Owned Subsidiaries) into a U.S. Credit Party or
a Credit Party) and (iii) equity or capital investments made by any Subsidiary that is not a U.S. Credit Party or a Credit Party in any other Subsidiary that is not a U.S. Credit Party or a Credit Party; 
 (g) Investments in the form of intercompany Indebtedness permitted by clause (v) of Section 10.1(g), together with equity or capital
investments made by any U.S. Credit Party or any Credit Party to any Subsidiary which is not a U.S. Credit Party or a Credit Party; provided that the aggregate amount of such intercompany Indebtedness and equity or capital investments, in
each case incurred or made after the Closing Date, shall not exceed $50,000,000 outstanding on any date of determination (which amount shall be calculated as the net balance of such loans, advances and equity or capital investments as reduced by any
repayments or distributions made with respect thereto); provided further that the limitation set forth in the preceding proviso shall not be applicable to any loans and advances made by the U.S. Borrower to Bowater Canada Finance
Corporation to pay interest on the BCFC Notes; 
 (h) [Intentionally Omitted]; and 
 (i) Investments made after the Closing Date and not otherwise permitted hereunder (including minority investments in joint ventures) in an aggregate
amount not to exceed $20,000,000 on any date of determination (which amount shall be calculated as the net balance of such Investments as reduced by any repayments or distributions made with respect thereto). 
 SECTION 10.4 Limitations on Mergers and Liquidation. Merge, amalgamate, consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution) except: 
 (a) any Wholly-Owned Subsidiary of the U.S.
Borrower may be merged, amalgamated or consolidated with or into: 
 (i) the U.S. Borrower (provided that the
continuing or surviving Person shall be the U.S. Borrower); or 
 (ii) any other Wholly-Owned Subsidiary of the U.S. Borrower
(provided that the continuing or surviving Person shall (A) be a U.S. Subsidiary Guarantor in the case of a merger, amalgamation or consolidation involving a U.S. Subsidiary Guarantor, (B) include the Borrower in the case of a
merger, amalgamation or consolidation involving the Borrower or (C) subject to clauses (i) and (ii)(B) above, be a Guarantor in the case of a merger, amalgamation or consolidation involving a Guarantor); 
 provided further that no U.S. Credit Party may be merged, amalgamated or consolidated with or into a Credit Party (other than the U.S. Borrower) and no
Credit Party (other than the U.S. Borrower) may be merged, amalgamated or consolidated with or into a U.S. Credit Party; 
 (b) any
Wholly-Owned Subsidiary of the U.S. Borrower may merge or amalgamate into the Person such Wholly-Owned Subsidiary was formed to acquire in connection with a Permitted Acquisition; 
  

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 (c) any Wholly-Owned Subsidiary of the U.S. Borrower may merge or amalgamate into any Person pursuant to
an Asset Disposition of all of the assets of such Wholly-Owned Subsidiary permitted pursuant to Section 10.5; and 
 (d) any
Subsidiary of the U.S. Borrower (other than the Borrower) may wind-up, liquidate or dissolve; provided that (i) its assets are transferred to the U.S. Borrower or any Wholly-Owned Subsidiary of the U.S. Borrower and (ii) if such
Subsidiary is (A) a U.S. Subsidiary Guarantor then the transferee shall be a U.S. Credit Party and (B) a Guarantor (other than the U.S. Borrower) then the transferee shall be a Credit Party. 
 SECTION 10.5 Limitations on Asset Dispositions. Make any Asset Disposition (including, without limitation, the sale of any receivables and
leasehold interests and any sale-leaseback or similar transaction) except: 
 (a) the sale of inventory in the ordinary course of business;

 (b) the sale of obsolete, worn-out or surplus assets no longer used or usable in the business of the U.S. Borrower or any of its
Subsidiaries; 
 (c) the transfer of assets to the U.S. Borrower, the Borrower or any Wholly-Owned Subsidiary (provided that, in the
case of any such transfer of assets, (i) if the transferee of such assets is a U.S. Credit Party or a Credit Party, such U.S. Credit Party or Credit Party shall not pay more than the fair market value of such assets (determined as of the date
of the applicable transfer) and (ii) if the transferor of such assets is a U.S. Credit Party or a Credit Party, the transferee shall not pay less than the fair market value of such assets (determined as of the date of the applicable transfer);

 (d) the sale or discount without recourse of accounts receivable arising in the ordinary course of business in connection with the
compromise or collection thereof; 
 (e) the disposition of any Hedging Agreement; 
 (f) the disposition of cash or Cash Equivalents; 
 (g) subject to the requirements of Section 8.2(b), the sale of timberlands by the U.S. Borrower or its Subsidiaries; 
 (h) the transfer by the Original U.S. Borrower of the Capital Stock of the New U.S. Borrowers to the Parent in connection with the New U.S. Borrower Transactions in exchange for a promissory note or promissory notes, in form and substance
satisfactory to the U.S. Administrative Agent, payable by the Parent to the Original U.S. Borrower (such notes, as amended, restated, supplemented or otherwise modified, the “New U.S. Borrower Notes”); 
 (i) [Intentionally Omitted]; and 
 (j) Asset
Dispositions of all or any portion of the New U.S. Borrower Fixed Assets; provided that: 
  

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 (i) such Asset Disposition shall be for no less than fair market value; 
 (ii) both before and after giving to such Asset Disposition, no Default or Event of Default shall have occurred and be continuing;

 (iii) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article
IX; 
 (iv) the terms of such Asset Disposition shall be reasonably satisfactory to the Administrative Agent and the U.S.
Administrative Agent, each in its sole discretion; 
 (v) the Net Cash Proceeds of such Asset Disposition shall be applied in
accordance with Section 8.2(b)(ii); and 
 (k) additional Asset Dispositions not otherwise permitted pursuant to this Section in
an aggregate amount not to exceed $250,000,000 in the aggregate during the term of this Agreement (it being understood and agreed that this clause (k) shall not permit the sale of any New U.S. Borrower Fixed Assets). 
 SECTION 10.6 Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its
capital structure could reasonably be expected to have a Material Adverse Effect; provided that: 
 (a) the U.S. Borrower or any
Subsidiary may pay dividends in shares of its own Capital Stock; 
 (b) the U.S. Borrower or any Subsidiary may make cash distributions or
equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; 

(c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares);
provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their
respective ownership percentages in such Subsidiary; 
 (d) [Intentionally Omitted]; 
 (e) [Intentionally Omitted]; 
 (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the Parent for the Exchangeable Shares being repurchased;

  

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 (g) the U.S. Borrower may make dividends and distributions to the Parent to pay: 
 (i) taxes attributable to the consolidated operations of the U.S. Borrower and its Subsidiaries; 
 (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of
Parent Overhead Expenses during such Fiscal Year; and 
 (iii) so long as no Default or Event of Default has occurred and is
continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; 
 (h) [Intentionally Omitted]; 
 (i) subject
to Section 12.1(o)(ix); so long as (i) no Default or Event of Default shall have occurred and be continuing or would be caused thereby and (ii) the U.S. Borrower shall have complied with the requirements set forth in
Section 8.10(e)(i) of this Agreement and Section 8.10(e)(i), (ii)(A) and (ii)(B) of the U.S. Credit Agreement, the U.S. Borrower may make cash distributions or dividends to the Parent which shall be invested in
a U.S. Credit Party; and 
 (j) subject to Section 10.10 and Section 12.1(o)(viii)(E), the U.S. Borrower and its
Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 12.1(o)(viii); provided that on each date
any distribution or dividend is paid and after giving effect thereto: 
 (i) no Default or Event of Default shall have
occurred and be continuing; and 
 (ii) the U.S. Borrower shall be in pro forma compliance with each of the covenants set
forth in Article IX and Section 12.1(o)(ix). 
 SECTION 10.7 Limitations on Exchange and Issuance of Capital Stock.
Except to the extent included as Indebtedness and incurred in accordance with Section 10.1 hereof, issue, sell or otherwise dispose of any class or series of Capital Stock that, by its terms or by the terms of any security into which it
is convertible or exchangeable, is, or upon the happening of an event or passage of time would be, (a) convertible or exchangeable into Indebtedness unless such Indebtedness is permitted at the time pursuant to Section 10.1or
(b) required to be redeemed or repurchased, including at the option of the holder, in whole or in part, or has, or upon the happening of an event or passage of time would have, a redemption or similar payment due. 
 SECTION 10.8 Transactions with Affiliates. Directly or indirectly (a) make any loan or advance to, or purchase or assume any note or other
obligation to or from, any of its officers, directors, shareholders or other Affiliates, or to or from any member of the immediate family of any of its officers, directors, shareholders or other Affiliates, or subcontract any operations to any of
its Affiliates or (b) enter into, or be a party to, any other transaction not described in clause (a) above with any of its Affiliates other than: 
  

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 (i) transactions permitted by Section 10.3, Section 10.4,
Section 10.6 or Section 10.7 ; 
 (ii) transactions existing on the Closing Date and described on
Schedule 10.8; 
 (iii) normal compensation and reimbursement of reasonable expenses of officers and directors;
and 
 (iv) other transactions in the ordinary course of business on terms as favorable as would be obtained by it on a
comparable arms-length transaction with an independent, unrelated third party. 
 SECTION 10.9 Certain Accounting Changes; Organizational
Documents. 
 (a) Change its Fiscal Year end, or make any change in its accounting treatment and reporting practices except as required
by GAAP. 
 (b) Amend, modify or change its articles of incorporation (or corporate charter or other similar organizational documents) or
amend, modify or change its bylaws (or other similar documents) in any manner which materially adversely affects the rights or interests of the Lenders or the U.S. Lenders. 
 SECTION 10.10 Amendments; Payments and Prepayments of Indebtedness. 
 (a) Amend, modify or change any indenture or other agreement governing the Existing Notes in any respect which would materially adversely affect the rights or interests of the U.S. Administrative Agent, the
Administrative Agent, the U.S. Lenders and the Lenders. 
 (b) Amend, modify or change (i) any provision of this Agreement which, under
Section 14.2, is subject to the approval of the Required Lenders without amending, modifying or changing the corresponding provision in the U.S. Credit Agreement or (ii) any provision of the U.S. Credit Agreement which, under
Section 13.2 of the U.S. Credit Agreement, is subject to the approval of the Required Lenders without amending, modifying or changing the corresponding provision in this Agreement. 
 (c) Amend or modify (or permit the modification or amendment of) any of the terms or provisions of any Subordinated Indebtedness in any respect which
would materially adversely affect the rights or interests of the U.S. Administrative Agent, the Administrative Agent, the U.S. Lenders and the Lenders. 
 (d) Cancel, forgive, make any payment (other than regularly scheduled interest payments) or prepayment on, or redeem or acquire for value (including, without limitation, by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of paying when due, but excluding payments at the scheduled maturity thereof) all or any portion of any Subordinated Indebtedness (other than Indebtedness incurred pursuant to
Section 10.1(g)(i)), the Existing Notes or any Indebtedness incurred to refinance the Existing Notes as permitted pursuant to Section 10.1(d), except for: 
  

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 (i) refinancings, refundings, renewals, extensions or exchange of any Subordinated
Indebtedness permitted by Section 10.1(h) subject to the satisfaction of each of the conditions to a refinance, refunding, renewal or extension set forth in Section 10.1(d); 
 (ii) [Intentionally Omitted]; 
 (iii) refinancings, refundings, renewals, extensions or exchange of any Existing Notes permitted by Section 10.1(d); and 
 (iv) cash redemptions or repayments of the Existing Notes or any Indebtedness incurred to refinance the Existing Notes as permitted
pursuant to Section 10.1(d); provided that (A) no Default or Event of Default shall have occurred and be continuing at the time of such redemption or repayment or would result from such redemption or repayment and (B) if
at the time of such redemption or repayment (or immediately after giving effect thereto), the sum of (x) the principal amount of the outstanding Loans under this Credit Facility plus (y) the principal amount of the outstanding U.S.
Loans is in excess $100,000,000, the Administrative Agent shall have received satisfactory written evidence that: 
 (1) the
U.S. Borrower and its Subsidiaries would be in compliance with all covenants in this Agreement on a pro forma basis after giving effect to such redemption; 
 (2) the principal amount of availability under this Credit Facility and the U.S. Credit Facility both before and after giving effect to
such redemption is equal to or greater than $50,000,000; 
 (3) the Consolidated Total Senior Secured Indebtedness, both
before and immediately after giving effect thereto, is less than or equal to eighty percent (80%) of the net book value of the U.S. Coverage Assets as set forth on the Consolidated balance sheet of the U.S. Borrower and its Consolidated
Subsidiaries most recently delivered pursuant to Section 5.2 or Section 7.1 hereof; and 
 (4) the
principal amount of outstanding Extensions of Credit, both before and immediately after giving effect thereto, is less than or equal to fifty percent (50%) of the net book value of the Coverage Assets as set forth on the Consolidated balance
sheet of the Borrower and its Consolidated Subsidiaries most recently delivered pursuant to Section 5.2 or Section 7.1 hereof. 
 (e) Amend, modify, waive or supplement (or permit the modification, amendment, waiver or supplement of) any of the terms or provisions of the April 2008 Convertible Indebtedness (including the Purchase Agreement dated
March 24, 2008 by and between the Parent and Fairfax Financial Holdings Limited (including the exhibits and schedules thereto) and each other material document, instrument, certificate and agreement executed or delivered in connection
therewith), other than the waiver of any of the closing conditions set forth in Section 6 of the Purchase Agreement, in any respect which would adversely affect the rights or interests of the Administrative Agent, the U.S. Administrative Agent,
the Lenders and the U.S. Lenders. 
  

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 SECTION 10.11 Restrictive Agreements. 
 (a) Enter into any Indebtedness which: 
 (i) contains any covenants more restrictive than the provisions of Article VIII, Article IX, Article X, or 
 (ii) contains any negative pledge on assets or restricts, limits or otherwise encumbers its ability to incur Liens on or with respect to
any of its assets or properties other than the assets or properties securing such Indebtedness (other than (A) the Existing Notes (provided that such provisions may not be amended or modified to be more restrictive), (B) any
Indebtedness incurred in accordance with Section 10.1(d) to refinance the Existing Notes (provided that such provisions may not be more restrictive than those contained in the Existing Notes) and (C) the U.S. Credit Facility
(provided that such provisions shall not be amended or modified except as permitted hereunder and thereunder). 
 (b) Enter into or
permit to exist any agreement which impairs or limits the ability of any Subsidiary to pay dividends to the U.S. Borrower or to make or repay loans or advances to the U.S. Borrower other than (i) restrictions and conditions imposed by
Applicable Law or the Loan Documents, (ii) legally enforceable restrictions and conditions which are permitted by clause (iii) of Section 6.1(n) and (iii) customary restrictions and conditions contained in agreements
relating to the sale of a Subsidiary or its assets pending such sale; provided that such restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is permitted under this Agreement. 
 SECTION 10.12 Nature of Business. Alter in any material respect the character or conduct of the business conducted by the U.S. Borrower and its
Subsidiaries as of the Closing Date. 
 SECTION 10.13 Impairment of Security Interests. Take or omit to take any action, which might
or would have the result of materially impairing the security interests in favor of the Administrative Agent with respect to the Collateral or grant to any Person (other than the Administrative Agent or the U.S. Administrative Agent, in each case,
for the benefit of the Secured Parties, pursuant to the Security Documents) any interest whatsoever in the Collateral, except for Permitted Liens and Asset Dispositions permitted under Section 10.5. 
 ARTICLE XI 
 UNCONDITIONAL U.S. BORROWER
GUARANTY 
 SECTION 11.1 Guaranty of Obligations. The U.S. Borrower hereby unconditionally guarantees to the Administrative Agent
for the ratable benefit of the Administrative Agent and the Secured Parties, and their respective successors, endorsees, transferees and assigns, the 

  

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prompt payment of all Obligations of the Borrower, whether primary or secondary (whether by way of endorsement or otherwise), whether now existing or
hereafter arising, whether or not from time to time reduced or extinguished (except by payment thereof) or hereafter increased or incurred, whether or not recovery may be or hereafter become barred by the statute of limitations, whether enforceable
or unenforceable as against the Borrower, whether or not discharged, stayed or otherwise affected by any Applicable Insolvency Law or proceeding thereunder, whether created directly with the Administrative Agent or any other Secured Party or
acquired by the Administrative Agent or any other Secured Party through assignment, endorsement or otherwise, whether matured or unmatured, whether joint or several, as and when the same become due and payable (whether at maturity or earlier, by
reason of acceleration, mandatory repayment or otherwise), in accordance with the terms of any such instruments evidencing any such obligations, including all renewals, extensions or modifications thereof (all Obligations of the Borrower, including
all of the foregoing, being hereinafter collectively referred to as the “Bowater Guaranteed Obligations”). 
 SECTION 11.2
Nature of Guaranty. 
 (a) The U.S. Borrower agrees that this U.S. Borrower Guaranty is a continuing, unconditional guaranty of
payment and performance and not of collection, and that its obligations under this U.S. Borrower Guaranty shall be primary, absolute and unconditional, irrespective of, and unaffected by: 
 (i) the genuineness, validity, regularity, enforceability or any future amendment of, or change in, this Agreement or any other Loan
Document or any other agreement, document or instrument to which the U.S. Borrower, the Borrower or any of their respective Subsidiaries or Affiliates is or may become a party; 
 (ii) the absence of any action to enforce this U.S. Borrower Guaranty, this Agreement, any other Loan Document or any Hedging Agreement,
or the waiver or consent by the Administrative Agent or any other Secured Party with respect to any of the provisions of this U.S. Borrower Guaranty, this Agreement, any other Loan Document or any Hedging Agreement; 
 (iii) the existence, value or condition of, or failure to perfect its Lien against, any security for or other guaranty of the Bowater
Guaranteed Obligations or any action, or the absence of any action, by the Administrative Agent or any other Secured Party in respect of such security or guaranty (including, without limitation, the release of any such security or guaranty);

 (iv) any structural change in, restructuring of or other similar change of the U.S. Borrower, the Borrower or any of their
respective Subsidiaries; or 
 (v) any other action or circumstances which might otherwise constitute a legal or equitable
discharge or defense of a surety or guarantor; 
 it being agreed by the U.S. Borrower that its obligations under this U.S. Borrower Guaranty shall not be
discharged except as under the terms of Section 11.6 below. 
  

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 (b) The U.S. Borrower represents, warrants and agrees that the Bowater Guaranteed Obligations and its
obligations under this U.S. Borrower Guaranty are not and shall not be subject to any counterclaims, offsets or defenses of any kind (other than the defense of payment) against the Administrative Agent, the Secured Parties or the Borrower whether
now existing or which may arise in the future. 
 (c) The U.S. Borrower hereby agrees and acknowledges that the Bowater Guaranteed
Obligations, and any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended or waived, in reliance upon this U.S. Borrower Guaranty, and all dealings between the Borrower and the U.S.
Borrower, on the one hand, and the Administrative Agent and any other Secured Party, on the other hand, likewise shall be conclusively presumed to have been had or consummated in reliance upon this U.S. Borrower Guaranty. 
 SECTION 11.3 Waivers. To the extent permitted by Applicable Law, the U.S. Borrower expressly waives the benefit of all provisions of Applicable
Law which are or might be in conflict with this U.S. Borrower Guaranty and all of the following rights and defenses (and agrees not to take advantage of or assert any such right or defense): 
 (a) any rights it may now or in the future have under any statute, or at law or in equity, or otherwise, to compel the Administrative Agent or any other
Secured Party to proceed in respect of the Bowater Guaranteed Obligations against the Borrower or any other Person or against any security for or other guaranty of the payment and performance of the Bowater Guaranteed Obligations before proceeding
against, or as a condition to proceeding against, the U.S. Borrower; 
 (b) any defense based upon the failure of the Administrative Agent or
any other Secured Party to commence an action in respect of the Bowater Guaranteed Obligations against the Borrower, the U.S. Borrower, any other guarantor or any other Person or any security for the payment and performance of the Bowater Guaranteed
Obligations; 
 (c) any right to insist upon, plead or in any manner whatever claim or take the benefit or advantage of, any appraisal,
valuation, stay, extension, marshalling of assets or redemption laws, or exemption, whether now or at any time hereafter in force, which may delay, prevent or otherwise affect the performance by the U.S. Borrower of its obligations under, or the
enforcement by the Administrative Agent or the other Secured Parties of, this U.S. Borrower Guaranty; 
 (d) any right of diligence,
presentment, demand, protest and notice (except as specifically required herein) of whatever kind or nature with respect to any of the Bowater Guaranteed Obligations and waives, to the fullest extent permitted by Applicable Laws, the benefit of all
provisions of Applicable Law which are or might be in conflict with the terms of this U.S. Borrower Guaranty; and 
 (e) any and all right to
notice of the creation, renewal, extension or accrual of any of the Bowater Guaranteed Obligations and notice of or proof of reliance by the Administrative Agent or any other Secured Party upon, or acceptance of, this U.S. Borrower Guaranty.

  

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 The U.S. Borrower agrees that any notice or directive given at any time to the Administrative Agent or
any other Secured Party which is inconsistent with any of the foregoing waivers shall be null and void and may be ignored by the Administrative Agent or such other Secured Party, and, in addition, may not be pleaded or introduced as evidence in any
litigation relating to this U.S. Borrower Guaranty for the reason that such pleading or introduction would be at variance with the written terms of this U.S. Borrower Guaranty, unless the Administrative Agent and the Required Agreement Lenders have
specifically agreed otherwise in writing. The foregoing waivers are of the essence of the transaction contemplated by this Agreement and the other Loan Documents and, but for this U.S. Borrower Guaranty and such waivers, the Administrative Agent and
other Secured Parties would decline to enter into this Agreement and the other Loan Documents. 
 SECTION 11.4 Modification of Loan
Documents, Etc. Neither the Administrative Agent nor any other Secured Party shall incur any liability to the U.S. Borrower as a result of any of the following, and none of the following shall impair or release this U.S. Borrower Guaranty or any
of the obligations of the U.S. Borrower under this U.S. Borrower Guaranty: 
 (a) any change or extension of the manner, place or terms of
payment of, or renewal or alteration of all or any portion of, the Bowater Guaranteed Obligations; 
 (b) any action under or in respect of
this Agreement or the other Loan Documents in the exercise of any remedy, power or privilege contained therein or available to any of them at law, in equity or otherwise, or waiver or refraining from exercising any such remedies, powers or
privileges; 
 (c) any amendment to, or modification of, in any manner whatsoever, the Loan Documents; 
 (d) any extension or waiver of the time for performance by the U.S. Borrower, any other guarantor, the Borrower or any other Person of, or compliance
with, any term, covenant or agreement on its part to be performed or observed under a Loan Document, or waiver of such performance or compliance or consent to a failure of, or departure from, such performance or compliance; 
 (e) the taking and holding of security or collateral for the payment of the Bowater Guaranteed Obligations or the sale, exchange, release, disposal of,
or other dealing with, any property pledged, mortgaged or conveyed, or in which the Administrative Agent or the other Secured Parties have been granted a Lien, to secure any Indebtedness of the U.S. Borrower, any other guarantor or the Borrower to
the Administrative Agent or the other Secured Parties; 
 (f) the release of anyone who may be liable in any manner for the payment of any
amounts owed by the U.S. Borrower, any other guarantor or the Borrower to the Administrative Agent or any other Secured Party; 
 (g) any
modification or termination of the terms of any intercreditor or subordination agreement pursuant to which claims of other creditors of the U.S. Borrower, any other guarantor or the Borrower are subordinated to the claims of the Administrative Agent
or any other Secured Party; or 
  

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 (h) any application of any sums by whomever paid or however realized to any Bowater Guaranteed
Obligations owing by the U.S. Borrower, any other guarantor or the Borrower to the Administrative Agent or any other Secured Party in such manner as the Administrative Agent or any other Secured Party shall determine in its reasonable discretion.

 SECTION 11.5 Demand by the Administrative Agent. In addition to the terms set forth in this Article XI and in no manner
imposing any limitation on such terms, if all or any portion of the then outstanding Bowater Guaranteed Obligations are declared to be immediately due and payable, then the U.S. Borrower shall, upon demand in writing therefor by the Administrative
Agent to the U.S. Borrower, pay all or such portion of the outstanding Bowater Guaranteed Obligations due hereunder then declared due and payable. 
 SECTION 11.6 Termination; Reinstatement. 
 (a) Subject to clause (c) below, this U.S. Borrower Guaranty shall remain in
full force and effect until all the Bowater Guaranteed Obligations and all the obligations of the U.S. Borrower under this U.S. Borrower Guaranty shall have been paid in full and the Commitments terminated. 
 (b) No payment made by the Borrower, the U.S. Borrower or any other Person received or collected by the Administrative Agent or any other Secured Party
from the Borrower, the U.S. Borrower or any other Person by virtue of any action or proceeding or any setoff or appropriation or application at any time or from time to time in reduction of or in payment of the Bowater Guaranteed Obligations shall
be deemed to modify, reduce, release or otherwise affect the liability of the U.S. Borrower hereunder which shall, notwithstanding any such payment (other than any payment made by the U.S. Borrower in respect of the obligations of the U.S. Borrower
or any payment received or collected from the U.S. Borrower in respect of the obligations of the U.S. Borrower), remain liable for the obligations of the U.S. Borrower up to the maximum liability of the U.S. Borrower hereunder until the Bowater
Guaranteed Obligations and all the obligations of the U.S. Borrower shall have been paid in full and the Commitments terminated. 
 (c) The
U.S. Borrower agrees that, if any payment made by the Borrower or any other Person applied to the Bowater Guaranteed Obligations is at any time annulled, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid, or is repaid in whole or in part pursuant to a good faith settlement of a pending or threatened claim, or the proceeds of any Collateral are required to be refunded by the Administrative Agent or any other Secured
Party to the Borrower, its estate, trustee, receiver or any other Person, including, without limitation, the U.S. Borrower, under any Applicable Law or equitable cause, then, to the extent of such payment or repayment, the U.S. Borrower’s
liability hereunder shall be and remain in full force and effect, as fully as if such payment had never been made, and, if prior thereto, this U.S. Borrower Guaranty shall have been canceled or surrendered, this U.S. Borrower Guaranty shall be
reinstated in full force and effect, and such prior cancellation or surrender shall not diminish, release, discharge, impair or otherwise affect the obligations of the U.S. Borrower in respect of the amount of such payment. 
  

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 SECTION 11.7 No Subrogation. Notwithstanding any payment or payments by the U.S. Borrower
hereunder, or any setoff or application of funds of the U.S. Borrower by the Administrative Agent or any other Secured Party, or the receipt of any amounts by the Administrative Agent or any other Secured Party with respect to any of the Bowater
Guaranteed Obligations, the U.S. Borrower shall not be entitled to be subrogated to any of the rights of the Administrative Agent or any other Secured Party against the Borrower, the other Subsidiary Guarantors or any other guarantor or against any
collateral security held by the Administrative Agent or any other Secured Party for the payment of the Bowater Guaranteed Obligations nor shall the U.S. Borrower seek any reimbursement from the Borrower, any of the other Subsidiary Guarantors or any
of the other guarantors in respect of payments made by the U.S. Borrower in connection with the Bowater Guaranteed Obligations, until all amounts owing to the Administrative Agent and the other Secured Parties on account of the Bowater Guaranteed
Obligations are paid in full and the Commitments are terminated. If any amount shall be paid to the U.S. Borrower on account of such subrogation rights at any time when all of the Bowater Guaranteed Obligations shall not have been paid in full or
the Commitments have not been terminated, such amount shall be held by the U.S. Borrower in trust for the Administrative Agent, segregated from other funds of the U.S. Borrower, and shall, forthwith upon receipt by the U.S. Borrower, be turned over
to the Administrative Agent in the exact form received by the U.S. Borrower (duly endorsed by the U.S. Borrower to the Administrative Agent, if required) to be applied against the Bowater Guaranteed Obligations, whether matured or unmatured, in such
order as set forth in this Agreement. 
 SECTION 11.8 Payments. Payments by the U.S. Borrower shall be made to the Administrative
Agent, to be credited and applied to the Bowater Guaranteed Obligations in accordance with Section 12.4 of this Agreement, in immediately available Dollars or Canadian Dollars, as designated by the Administrative Agent, to an account
designated by the Administrative Agent or at the Administrative Agent’s Office or at any other address that may be specified in writing from time to time by the Administrative Agent. Any and all payments by or on account of any obligation of
the U.S. Borrower under this U.S. Borrower Guaranty shall be made free and clear of and without reduction or withholding for any taxes. 
 SECTION 11.9 Nature of Obligations; Bankruptcy Limitations; Agreement for Contribution 
 (a) Nature of Obligations.
All of the U.S. Borrowers shall be jointly and severally liable for the Bowater Guaranteed Obligations, however incurred. 
 (b)
Bankruptcy Limitations. Notwithstanding anything to the contrary contained in this Agreement, it is the intention of each U.S. Borrower, the Administrative Agent and the Lenders that, in any proceeding involving the bankruptcy,
reorganization, arrangement, adjustment of debts, relief of debtors, dissolution or insolvency or any similar proceeding with respect to any U.S. Borrower or its assets, the amount of such U.S. Borrower’s obligations with respect to the Bowater
Guaranteed Obligations shall be equal to, but not in excess of, the maximum amount thereof not subject to avoidance or recovery by operation of Applicable 

  

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Insolvency Laws after giving effect to Section 11.9(c). To that end, but only in the event and to the extent that after giving effect to
Section 11.9(c), such U.S. Borrower’s obligations with respect to the Bowater Guaranteed Obligations or any payment made pursuant to such Bowater Guaranteed Obligations would, but for the operation of the first sentence of this
Section 11.9(b), be subject to avoidance or recovery in any such proceeding under Applicable Insolvency Laws after giving effect to Section 11.9(c), the amount of such U.S. Borrower’s obligations with respect to the
Bowater Guaranteed Obligations shall be limited to the largest amount which, after giving effect thereto, would not, under Applicable Insolvency Laws, render such U.S. Borrower’s obligations with respect to the Bowater Guaranteed Obligations
unenforceable or avoidable or otherwise subject to recovery under Applicable Insolvency Laws. To the extent any payment actually made pursuant to the Bowater Guaranteed Obligations exceeds the limitation of the first sentence of this
Section 11.9(b) and is otherwise subject to avoidance and recovery in any such proceeding under Applicable Insolvency Laws, the amount subject to avoidance shall in all events be limited to the amount by which such actual payment exceeds
such limitation and the Bowater Guaranteed Obligations as limited by the first sentence of this Section 11.9(b) shall in all events remain in full force and effect and be fully enforceable against such U.S. Borrower. The first sentence
of this Section 11.9(b) is intended solely to preserve the rights of the Administrative Agent and the Lenders hereunder against such U.S. Borrower in such proceeding to the maximum extent permitted by Applicable Insolvency Laws and
neither such U.S. Borrower, any other U.S. Borrower, any Guarantor nor any other Person shall have any right or claim under such sentence that would not otherwise be available under Applicable Insolvency Laws in such proceeding. 
 (c) Agreement for Contribution. The U.S. Borrowers hereby agree among themselves that, if any U.S. Borrower shall make an Excess Payment (as
defined below), such U.S. Borrower shall have a right of contribution from each other U.S. Borrower in an amount equal to such other U.S. Borrower’s Contribution Share (as defined below) of such Excess Payment. The payment obligations of any
U.S. Borrower under this Section 11.9(c) shall be subordinate and subject in right of payment to the Bowater Guaranteed Obligations until such time as the Bowater Guaranteed Obligations have been paid in full, and none of the U.S.
Borrowers shall exercise any right or remedy under this Section 11.9(c) against any other U.S. Borrower until such Bowater Guaranteed Obligations have been paid in full. For purposes of this Section 11.9(c): 
 (1) “Excess Payment” shall mean the amount paid by any U.S. Borrower in excess of its Ratable Share of any Bowater
Guaranteed Obligations; 
 (2) “Ratable Share” shall mean, for any U.S. Borrower in respect of any payment of
Bowater Guaranteed Obligations, the ratio (expressed as a percentage) as of the date of such payment of Bowater Guaranteed Obligations of (A) the amount by which the aggregate present fair salable value of all of the assets and properties of
such U.S. Borrower exceeds the amount of all debts and liabilities of such U.S. Borrower (including probable contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such U.S. Borrower hereunder) to
(B) the amount by which the aggregate present fair salable value of all assets and other properties of all of the U.S. Borrowers exceeds the amount of all of the debts and liabilities (including probable contingent, subordinated, unmatured, and
unliquidated liabilities, but excluding the 

  

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obligations of the U.S. Borrowers hereunder) of the U.S. Borrowers; provided, however, that, for purposes of calculating the Ratable Shares of
the U.S. Borrowers in respect of any payment of the Bowater Guaranteed Obligations, any U.S. Borrower that became a U.S. Borrower subsequent to the date of any such payment shall be deemed to have been a U.S. Borrower on the date of such payment and
the financial information for such U.S. Borrower as of the date such U.S. Borrower became a U.S. Borrower shall be utilized for such U.S. Borrower in connection with such payment; and 
 (3) “Contribution Share” shall mean, for any U.S. Borrower in respect of any Excess Payment made by any other U.S.
Borrower, the ratio (expressed as a percentage) as of the date of such Excess Payment of (A) the amount by which the aggregate present fair salable value of all of the assets and properties of such U.S. Borrower exceeds the amount of all debts
and liabilities of such U.S. Borrower (including probable contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such U.S. Borrower hereunder) to (B) the amount by which the aggregate present fair
salable value of all assets and other properties of the U.S. Borrowers other than the maker of such Excess Payment exceeds the amount of all of the debts and liabilities (including probable contingent, subordinated, unmatured, and unliquidated
liabilities, but excluding the obligations of the U.S. Borrowers) of the U.S. Borrowers other than the maker of such Excess Payment; provided, however, that, for purposes of calculating the Contribution Shares of the U.S. Borrowers in
respect of any Excess Payment, any U.S. Borrower that became a U.S. Borrower subsequent to the date of any such Excess Payment shall be deemed to have been a U.S. Borrower on the date of such Excess Payment and the financial information for such
U.S. Borrower as of the date such U.S. Borrower became a U.S. Borrower shall be utilized for such U.S. Borrower in connection with such Excess Payment. 
 Each of the U.S. Borrowers recognizes and acknowledges that the rights to contribution arising hereunder shall constitute an asset in favor of the party entitled to such contribution. No U.S. Borrower shall have any right of subrogation,
indemnity or reimbursement under Applicable Law in respect of any payment of Bowater Guaranteed Obligations (other than the contribution rights set forth in this Section 11.9(c)) against any other U.S. Borrower. 
 For purposes of this Section, the term “U.S. Borrowers” means the collective reference to the Original U.S. Borrower and the New U.S. Borrowers
and “U.S. Borrower” means the Original U.S. Borrower or one of the New U.S. Borrowers, as applicable. 
 ARTICLE XII 
 DEFAULT AND REMEDIES 
 SECTION 12.1
Events of Default. Each of the following shall constitute an Event of Default, whatever the reason for such event and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment or order of any
court or any order, rule or regulation of any Governmental Authority or otherwise: 
  

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 (a) Default in Payment of Principal of Loans and Reimbursement Obligations. The Borrower or any
other Credit Party shall default in any payment of principal of any Loan or Reimbursement Obligation when and as due (whether at maturity, by reason of acceleration or otherwise). 
 (b) Other Payment Default. The Borrower or any other Credit Party shall default in the payment when and as due (whether at maturity, by reason of
acceleration or otherwise) of interest on any Loan or Reimbursement Obligation or the payment of any other Obligation, and such default shall continue for a period of three (3) or more Business Days. 
 (c) Misrepresentation. Any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the U.S. Borrower,
the Borrower or any other Credit Party herein, in any other Loan Document, or in any document delivered in connection herewith or therewith that is subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in
any respect when made or deemed made or any representation, warranty, certification or statement of fact made or deemed made by or on behalf of the U.S. Borrower, the Borrower or any other Credit Party herein, any other Loan Document, or in any
document delivered in connection herewith or therewith that is not subject to materiality or Material Adverse Effect qualifications, shall be incorrect or misleading in any material respect when made or deemed made. 
 (d) Default in Performance of Certain Covenants. The U.S. Borrower, the Borrower or any other Credit Party shall default in the performance or
observance of any covenant or agreement contained in Section 5.4, Section 7.1, Section 7.2, Section 7.5(e)(i), Section 8.2(b)(ii), Section 8.10(e)(i),
Section 8.10(e)(ii) or Article IX or Article X. 
 (e) Default in Performance of Other Covenants and
Conditions. The U.S. Borrower, the Borrower or any other Credit Party shall default in the performance or observance of any term, covenant, condition or agreement contained in this Agreement (other than as specifically provided for otherwise in
this Section) or any other Loan Document and such default shall continue for a period of thirty (30) days after written notice thereof has been given to the Borrower by the Administrative Agent. 
 (f) Hedging Agreement. The U.S. Borrower, the Borrower or any other Credit Party shall default in the performance or observance of any terms,
covenant, condition or agreement (after giving effect to any applicable grace or cure period) under any Hedging Agreement and such default causes the termination of such Hedging Agreement and the Termination Value owed by the U.S. Borrower, the
Borrower or such other Credit Party as a result thereof exceeds $25,000,000. 
 (g) Indebtedness Cross-Default. 
 (i) Any “Event of Default” (as defined in the U.S. Credit Agreement) shall occur under the U.S. Credit Agreement. 
  

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 (ii) Any default shall occur in the payment of any Indebtedness of the U.S. Borrower or
any of its Subsidiaries (other than the Loans, any Reimbursement Obligation or the U.S. Credit Facility) the aggregate outstanding amount of which Indebtedness is in excess of $25,000,000 beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created. 
 (iii) Any default in the observance or performance of
any other agreement or condition relating to any Indebtedness of the U.S. Borrower or any of its Subsidiaries (other than the Loans, any Reimbursement Obligation or the U.S. Credit Facility) the aggregate outstanding amount of which Indebtedness is
in excess of $25,000,000 or contained in any instrument or agreement evidencing, securing or relating thereto or any other event shall occur or condition exist, the effect of which default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, with the giving of notice if required, any such Indebtedness to become due prior to its stated maturity (any applicable grace period having
expired). 
 (iv) Any payment default or any other event of default or any other similar event, including any change in
control, shall occur under any agreement executed in connection with the April 2008 Convertible Indebtedness. 
 (h) Change in
Control. Any Change in Control shall occur. 
 (i) Voluntary Bankruptcy Proceeding. The U.S. Borrower or any of its Subsidiaries
shall (i) commence a voluntary case under the federal bankruptcy laws (as now or hereafter in effect), (ii) file a petition seeking to take advantage of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent to or fail to contest in a timely and appropriate manner any petition filed against it in an involuntary case under such bankruptcy laws or other laws,
(iv) apply for or consent to, or fail to contest in a timely and appropriate manner, the appointment of, or the taking of possession by, a receiver, custodian, trustee, or liquidator of itself or of a substantial part of its property, domestic
or foreign, (v) admit in writing its inability to pay its debts as they become due, (vi) make a general assignment for the benefit of creditors, or (vii) take any corporate action for the purpose of authorizing any of the foregoing.

 (j) Involuntary Bankruptcy Proceeding. A case or other proceeding shall be commenced against the U.S. Borrower or any of its
Subsidiaries in any court of competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or hereafter in effect) or under any other laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or adjustment of debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or the like for the U.S. Borrower or any of its Subsidiaries or for all or any substantial part of their respective assets, domestic or foreign,
and such case or proceeding shall continue without dismissal or stay for a period of sixty (60) consecutive days, or an order granting the relief requested in such case or proceeding (including, but not limited to, an order for relief under
such federal bankruptcy laws) shall be entered. 
 (k) Failure of Agreements. (i) Any provision of this Agreement or any
provision of any other Loan Document shall for any reason cease to be valid and binding on the Borrower or any other Credit Party party thereto or any such Person shall so state in writing, (ii) any Loan Document shall for any reason cease to
create a valid and perfected first priority Lien on, or 

  

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security interest in, any of the Collateral securing the Obligations purported to be covered thereby or (iii) any subordination provision in any
document or instrument governing any Subordinated Indebtedness, any subordination provision in any subordination agreement that relates to any Subordinated Indebtedness or any subordination provision in any guaranty by any U.S. Credit Party of any
Subordinated Indebtedness shall, in any case, cease to be in full force and effect, or any Person shall contest in any manner the validity, binding nature or enforceability of any such provision, in each of the foregoing clauses (i), (ii) and
(iii), other than in accordance with the express terms hereof or thereof. 
 (l) Termination Event. The occurrence of any of the
following events: (i) the U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates fails to make full payment when due of all amounts which, under the provisions of any Pension Plan or Section 412 of the Code, the U.S.
Borrower or any of its Subsidiaries or any of their ERISA Affiliates is required to pay as contributions thereto, (ii) the U.S. Borrower or any of its Subsidiaries fails to make full payment when due of all amounts which, under the provisions
of any Canadian Pension Plan or other Applicable Law, the U.S. Borrower or any of its Subsidiaries is required to pay as contributions thereto, (iii) an accumulated funding deficiency in excess of $25,000,000 occurs or exists, whether or not
waived, with respect to any Pension Plan or Canadian Pension Plan, (iv) a Termination Event, (v) the U.S. Borrower or any of its Subsidiaries or any of their ERISA Affiliates as employers under one or more Multiemployer Plans makes a
complete or partial withdrawal from any such Multiemployer Plan and the plan sponsor of such Multiemployer Plan notifies such withdrawing employer that such employer has incurred a withdrawal liability requiring payments in an amount exceeding
$25,000,000 or (vi) the U.S. Borrower or any of its Subsidiaries as employers under one or more Canadian Multiemployer Plans makes a complete or partial withdrawal from any such Canadian Multiemployer Plan and the plan sponsor of such Canadian
Multiemployer Plans notifies such withdrawing employer that such employer has incurred a withdrawal liability requiring payments in an amount exceeding $25,000,000. 
 (m) Judgment. A judgment or order for the payment of money which causes the aggregate amount of all such judgments or orders to exceed (i) $10,000,000 in the aggregate (to the extent not covered by
independent third-party insurance as to which the insurer does not dispute coverage) or (ii) $50,000,000 in the aggregate (regardless of insurance) shall be entered against the U.S. Borrower or any of its Subsidiaries by any court and such
judgment or order shall continue without having been paid and satisfied, discharged, vacated or stayed for a period of thirty (30) days after the entry thereof. 
 (n) Environmental. Any one or more Environmental Claims shall have been asserted against the U.S. Borrower or any of its Subsidiaries; the U.S. Borrower or any of its Subsidiaries would be reasonable likely to
incur liability as a result thereof; and such liability would be reasonably likely, individually or in the aggregate, to have a Material Adverse Effect. 
 (o) Activities of Parent. The Parent shall engage in any business, operations or activities other than: 
 (i) (A) holding all of the Capital Stock of the Original U.S. Borrower, each New U.S. Borrower, the Donohue Corp., a Delaware corporation (or an intermediate holding company that owns the Capital Stock of the Donahue
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Consolidated Inc. or any of its subsidiaries, (B) holding certain preferred Capital Stock of Bowater Canadian Holdings Incorporated, a company organized
under the laws of Nova Scotia, so long as promptly upon receipt thereof, the Parent either (1) distributes such Capital Stock to the Original U.S. Borrower, (2) distributes such Capital Stock to another U.S. Credit Party or
(3) pledges such Capital Stock as collateral support for the U.S. Obligations in accordance with the U.S. Collateral Agreement, (C) the employment of management and (D) activities reasonably complimentary and related to the foregoing
(including, without limitation, investments in the U.S. Borrower); 
 (ii) guaranteeing the U.S. Obligations in favor of the
U.S. Administrative Agent, for the ratable benefit of the U.S. Secured Parties, pursuant to the U.S. Parent Guaranty Agreement; 
 (iii) [Intentionally Omitted]; 
 (iv) granting a security interest in its assets and properties (other
than (A) the Capital Stock of the U.S. Borrower or (B) in connection with the Indebtedness permitted pursuant to the following clause (viii)); provided that (x) the U.S. Administrative Agent is given a Lien on such assets and
properties that is prior to such other Lien or (y) to the extent that a Lien is granted in the stock of Abitibi-Consolidated Inc., then the U.S. Administrative Agent shall be granted a Lien in the stock of the Original U.S. Borrower;

 (v) granting a security interest in the Capital Stock of the U.S. Borrower in favor of the U.S. Administrative Agent, for
the ratable benefit of the U.S. Secured Parties, to secure the U.S. Obligations; 
 (vi) engaging in non-revenue generating
activities reasonably related to restructuring of the Subsidiaries of the Parent; provided, that in the case of any restructuring involving the Credit Parties or the U.S. Credit Parties, the Administrative Agent and the U.S. Administrative
Agent shall have received (A) an organizational chart of the Parent and its Subsidiaries after giving effect thereto and (B) a final summary of the steps involved in any such restructuring; 
 (vii) guaranteeing obligations of Subsidiaries of the Parent or of the Abitibi Entities to the extent that such obligations are unsecured,
relate to indemnification obligations with respect to asset sales or trade obligations incurred in the ordinary course of business and do not constitute Indebtedness of such Subsidiary or of such Abitibi Entity; and 
 (viii) to the extent not otherwise permitted hereunder and so long as the U.S. Borrower shall have complied with the requirements set
forth in Section 8.10(e)(i) of the U.S. Credit Agreement, incurring unsecured Indebtedness; provided, that: 
 (A) the Administrative Agent and the U.S. Administrative Agent shall have received reasonably satisfactory written evidence that the U.S. Borrower and its Subsidiaries would be in compliance with the covenants set forth in Article IX
and Section 12.1(o)(ix) on a pro forma basis after giving effect to such Indebtedness; 
  

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 (B) no Default or Event of Default shall have occurred and be continuing or would be
caused by the issuance of such Indebtedness; 
 (C) no portion of such Indebtedness of the Parent may be recourse to any
Credit Party or any U.S. Credit Party (except to the extent permitted pursuant to Section 10.1(d) or (f)(ii)) (it being understood and agreed that no Credit Party or U.S. Credit Party (except to the extent permitted pursuant to
Section 10.1(d) or (f)(ii) shall have any obligation whatsoever to repay such Indebtedness or any other obligation related thereto); 
 (D) no such Indebtedness shall have a maturity date that is earlier than the
ninety-first (91st) day after the Maturity Date; 
 (E) the Parent may not cancel, forgive or make any payment (other than regularly scheduled interest payments) or prepayments on, or redeem or acquire for value (including, without limitation, by way of depositing with
any trustee with respect thereto money or securities before due for the purpose of paying when due, but excluding payments at the scheduled maturity thereof) any such Indebtedness; provided, that the Parent may pay a cash settlement of any
convertible Indebtedness so long as on the date of any such payment and after giving effect thereto: 
 (1) no Default or
Event of Default shall have occurred and be continuing; 
 (2) the U.S. Borrower shall be in pro forma compliance with each
of the covenants set forth in Article IX; 
 (3) the Aggregate Credit Exposure shall not exceed $100,000,000;

 (4) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and 
 (F) except to the extent such Indebtedness is guaranteed by a U.S. Credit Party pursuant to Section 10.1(d), the proceeds of
such Indebtedness are used solely for working capital and general corporate purposes of, or to repay outstanding Indebtedness of, the Parent and its Subsidiaries or any Abitibi Entity; 
 (ix) holding a cash balance in the deposit, securities and other investment accounts of the Parent as of the end of any Business Day in
excess of $25,000,000, unless the amount of such balance that is in excess of $25,000,000 is as promptly as possible, but in no event later than one (1) Business Day, invested in the U.S. Borrower; provided, that notwithstanding this
Section 12.1(o)(ix)), the Parent may retain the proceeds of the April 2008 Convertible Indebtedness until no later than April 15, 2008; and 
  

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 (x) to the extent not otherwise permitted hereunder, incurring Indebtedness payable to
the Original U.S. Borrower pursuant to the New U.S. Borrower Notes. 
 SECTION 12.2 Remedies. Upon the occurrence of an Event of
Default, with the consent of the Required Agreement Lenders, the Administrative Agent may, or upon the request of the Required Agreement Lenders, the Administrative Agent shall, by notice to the Borrower: 
 (a) Acceleration; Termination of Facilities. Terminate the Commitment and declare the principal of and interest on the Loans and the Reimbursement
Obligations at the time outstanding, and all other amounts owed to the Lenders and to the Administrative Agent under this Agreement or any of the other Loan Documents (including, without limitation, all L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented or shall be entitled to present the documents required thereunder) and all other Obligations (other than Hedging Obligations), to be forthwith due and payable, whereupon
the same shall immediately become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived by each Credit Party, anything in this Agreement or the other Loan Documents to the contrary
notwithstanding, and terminate the Credit Facility and any right of the Borrower to request borrowings or Letters of Credit thereunder; provided, that upon the occurrence of an Event of Default specified in Section 12.1(i) or (j),
the Credit Facility shall be automatically terminated and all Obligations (other than Hedging Obligations) shall automatically become due and payable without presentment, demand, protest or other notice of any kind, all of which are expressly waived
by each Credit Party, anything in this Agreement or in any other Loan Document to the contrary notwithstanding. 
 (b) Letters of
Credit. With respect to all Letters of Credit with respect to which presentment for honor shall not have occurred at the time of an acceleration pursuant to the preceding paragraph, the Borrower shall at such time deposit in a cash collateral
account opened by the Administrative Agent an amount equal to the aggregate then undrawn and unexpired amount of such Letters of Credit. Amounts held in such cash collateral account shall be applied by the Administrative Agent to the payment of
drafts drawn under such Letters of Credit, and the unused portion thereof after all such Letters of Credit shall have expired or been fully drawn upon, if any, shall be applied to repay the other Obligations on a pro rata basis. After all
such Letters of Credit shall have expired or been fully drawn upon, the Reimbursement Obligation shall have been satisfied and all other Obligations shall have been paid in full, the balance, if any, in such cash collateral account shall be returned
to the Borrower. 
 (c) Rights of Collection. Exercise on behalf of the Lenders all of its other rights and remedies under this
Agreement, the other Loan Documents and Applicable Law, in order to satisfy all of the Borrower’s Obligations. 
 SECTION 12.3 Rights
and Remedies Cumulative; Non-Waiver; etc. The enumeration of the rights and remedies of the Administrative Agent and the Lenders set forth in this Agreement is not intended to be exhaustive and the exercise by the Administrative Agent and the
Lenders of any right or remedy shall not preclude the exercise of any other rights or remedies, all of which shall be cumulative, and shall be in addition to any other right or remedy given hereunder or under the other Loan Documents or that may now
or hereafter exist at law or in 

  

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equity or by suit or otherwise. No delay or failure to take action on the part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial exercise of any such right, power or privilege preclude any other or further exercise thereof or the exercise of any other right, power or privilege or shall be construed
to be a waiver of any Event of Default. No course of dealing between the Borrower, the U.S. Borrower, the Administrative Agent and the Lenders or their respective agents or employees shall be effective to change, modify or discharge any provision of
this Agreement or any of the other Loan Documents or to constitute a waiver of any Event of Default. 
 SECTION 12.4 Crediting of Payments
and Proceeds. In the event that the Borrower shall fail to pay any of the Obligations when due or the Obligations have been accelerated pursuant to Section 12.2, all payments received by the Lenders upon the Obligations and all net
proceeds from the enforcement of the Obligations shall be applied: 
 First, to payment of that portion of the Obligations
constituting fees, indemnities, expenses and other amounts, including attorney fees, payable to the Administrative Agent in its capacity as such and each Issuing Lender in its capacity as such (ratably among the Administrative Agent and each Issuing
Lender in proportion to the respective amounts described in this clause First payable to them); 
 Second, to payment of that
portion of the Obligations constituting fees, indemnities, expenses and other amounts (other than principal and interest) payable to the Lenders, including attorney fees (ratably among the Lenders in proportion to the respective amounts described in
this clause Second payable to them); 
 Third, to payment of that portion of the Obligations constituting accrued and unpaid
interest on the Loans and Reimbursement Obligations (including any accrued and unpaid interest thereon) (ratably among the Lenders in proportion to the respective amounts described in this clause Third payable to them); 
 Fourth, to payment of that portion of the Obligations constituting unpaid principal of the Loans and Reimbursement Obligations (ratably among the
Lenders in proportion to the respective amounts described in this clause Fourth held by them); 
 Fifth, to the Administrative
Agent for the account of each Issuing Lender, to cash collateralize any L/C Obligations then outstanding (ratably among the Issuing Lenders in proportion to the respective amounts described in this clause Fifth payable to them); 

Sixth, to the payment of that portion of the Obligations constituting Hedging Obligations (including any termination payments and any accrued
and unpaid interest thereon) (ratably among the Secured Parties providing the Hedging Agreements giving rise to such Hedging Obligations in proportion to the respective amounts described in this clause Sixth payable to them); and 

Last, the balance, if any, after all of the Obligations have been indefeasibly paid in full, to the Borrower or as otherwise required by
Applicable Law. 
  

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 SECTION 12.5 Administrative Agent May File Proofs of Claim. In case of the pendency of any
receivership, insolvency, liquidation, bankruptcy, reorganization, arrangement, adjustment, composition or other judicial proceeding relative to any Credit Party, the Administrative Agent (irrespective of whether the principal of any Loan or L/C
Obligation shall then be due and payable as herein expressed or by declaration or otherwise and irrespective of whether the Administrative Agent shall have made any demand on the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise: 
 (a) to file and prove a claim for the whole amount of the principal and interest owing and unpaid in respect of
the Loans, L/C Obligations and all other Obligations that are owing and unpaid and to file such other documents as may be necessary or advisable in order to have the claims of the Lenders and the Administrative Agent (including any claim for the
reasonable compensation, expenses, disbursements and advances of the Lenders and the Administrative Agent and their respective agents and counsel and all other amounts due the Lenders and the Administrative Agent under Section 3.3,
Section 4.3 and Section 14.3) allowed in such judicial proceeding; and 
 (b) to collect and receive any monies or
other property payable or deliverable on any such claims and to distribute the same; 
 and any custodian, receiver, assignee, trustee, liquidator,
sequestrator or other similar official in any such judicial proceeding is hereby authorized by each Lender to make such payments to the Administrative Agent and, in the event that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for the reasonable compensation, expenses, disbursements and advances of the Administrative Agent and its agents and counsel, and any other amounts due the Administrative
Agent under Section 3.3, Section 4.3 and Section 14.3. 
 Nothing contained herein shall be deemed to authorize the
Administrative Agent to authorize or consent to or accept or adopt on behalf of any Lender any plan of reorganization, arrangement, adjustment or composition affecting the Obligations or the rights of any Lender or to authorize the Administrative
Agent to vote in respect of the claim of any Lender in any such proceeding. 
 SECTION 12.6 Judgment Currency. The obligation of the
Borrower to make payments of the principal of and interest on the Notes and the obligation of any such Person to make payments of any other amounts payable hereunder or pursuant to any other Loan Document in the currency specified for such payment
shall not be discharged or satisfied by any tender, or any recovery pursuant to any judgment, which is expressed in or converted into any other currency, except to the extent that such tender or recovery shall result in the actual receipt by each of
the Administrative Agent and Lenders of the full amount of the particular Permitted Currency expressed to be payable pursuant to the applicable Loan Document. The Administrative Agent shall, using all amounts obtained or received from the Borrower
pursuant to any such tender or recovery in payment of principal of and interest on the Obligations, promptly purchase the applicable currency at the most favorable spot exchange rate determined by the Administrative Agent to be available to it. The
obligation of the Borrower to make payments in the applicable currency shall be enforceable as an alternative or additional cause of action solely for the purpose of recovering in the applicable currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the currency expressed to be payable pursuant to the applicable Loan Document. 
  

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 ARTICLE XIII 
 THE ADMINISTRATIVE AGENT 
 SECTION 13.1 Appointment and Authority. 
 (a) Each of the Lenders and each of the Issuing Lenders hereby irrevocably appoints The Bank of Nova Scotia to act on its behalf as the Administrative
Agent hereunder and under the other Loan Documents and authorizes the Administrative Agent to take such actions on its behalf and to exercise such powers as are delegated to the Administrative Agent by the terms hereof or thereof, together with such
actions and powers as are reasonably incidental thereto. The provisions of this Article are solely for the benefit of the Administrative Agent, the Lenders and the Issuing Lenders (and, as applicable, the Documentation Agent), and neither the U.S.
Borrower, the Borrower nor any of their respective Subsidiaries shall have rights as a third party beneficiary of any of such provisions. 
 (b) Without prejudice to the foregoing, each of the Lenders hereby irrevocably designates and appoints the Administrative Agent as the person holding the power of attorney (fondé de pouvoir) of the Lenders as contemplated
under Article 2692 of the CCQ, to enter into, to take and to hold on their behalf, and for their benefit, any deed of hypothec (“Deed of Hypothec”) to be executed by any of the Credit Parties granting a Lien pursuant to the
Applicable Law of the Province of Québec and to exercise such powers and duties which are conferred thereupon under such deed. Each of the Lenders hereby additionally irrevocably designates and appoints the Administrative Agent as agent,
custodian and depository for and on behalf of the Lenders (i) to hold and to be the sole registered holder of any debenture (“Debenture”) issued under the Deed of Hypothec, the whole notwithstanding Section 32 of the
Act respecting the Special Powers of Legal Persons (Québec) or any other Applicable Law, and (ii) to enter into, to take and to hold on their behalf, and for their benefit, a debenture pledge agreement (“Pledge”)
to be executed by such Credit Party pursuant to the Applicable Law of the Province of Québec and creating a Lien on the Debenture as security for the payment and performance of, inter alia, the Obligations. In this respect,
(A) the Administrative Agent as agent, custodian and depository for and on behalf of the Lenders, shall keep a record indicating the names and addresses of, and the pro rata portion of the obligations and indebtedness secured by
the Pledge owing to each of the Lenders for and on behalf of whom the Debenture is so held from time to time, and (B) each of the Lenders will be entitled to the benefits of any property or assets charged under the Deed of Hypothec and the
Pledge and will participate in the proceeds of realization of any such property or assets. The Administrative Agent, in such aforesaid capacities shall (x) 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 Administrative Agent with respect to the property or assets charged under the Deed of Hypothec and Pledge, any other Applicable Law or otherwise, and (y) benefit
from and be subject to all provisions hereof with respect to the Administrative Agent mutatis mutandis, including, without limitation, all such provisions with respect to the liability or responsibility to and indemnification by the Lenders
and/or the Credit Parties. 
  

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 SECTION 13.2 Rights as a Lender. The Person serving as the Administrative Agent hereunder shall
have the same rights and powers in its capacity as a Lender as any other Lender and may exercise the same as though it were not the Administrative Agent and the term “Lender” or “Lenders” shall, unless otherwise expressly
indicated or unless the context otherwise requires, include the Person serving as the Administrative Agent hereunder in its individual capacity. Such Person and its Affiliates may accept deposits from, lend money to, act as the financial advisor or
in any other advisory capacity for and generally engage in any kind of business with the U.S. Borrower, the Borrower or any Subsidiary or other Affiliate thereof as if such Person were not the Administrative Agent hereunder and without any duty to
account therefor to the Lenders. 
 SECTION 13.3 Exculpatory Provisions. The Administrative Agent shall not have any duties or
obligations except those expressly set forth herein and in the other Loan Documents. Without limiting the generality of the foregoing, the Administrative Agent: 
 (a) shall not be subject to any fiduciary or other implied duties, regardless of whether a Default has occurred and is continuing; 
 (b) shall not have any duty to take any discretionary action or exercise any discretionary powers, except discretionary rights and powers expressly contemplated hereby or by the other Loan Documents that the
Administrative Agent is required to exercise as directed in writing by the Required Lenders or Required Agreement Lenders, as applicable (or such other number or percentage of the Lenders as shall be expressly provided for herein or in the other
Loan Documents), provided that the Administrative Agent shall not be required to take any action that, in its opinion or the opinion of its counsel, may expose the Administrative Agent to liability or that is contrary to any Loan Document or
Applicable Law; and 
 (c) shall not, except as expressly set forth herein and in the other Loan Documents, have any duty to disclose, and
shall not be liable for the failure to disclose, any information relating to the U.S. Borrower, the Borrower or any of its Affiliates that is communicated to or obtained by the Person serving as the Administrative Agent or any of its Affiliates in
any capacity. 
 The Administrative Agent shall not be liable for any action taken or not taken by it (i) with the consent or at the request of the
Required Lenders or Required Agreement Lenders, as applicable (or such other number or percentage of the Lenders as shall be necessary, or as the Administrative Agent shall believe in good faith shall be necessary, under the circumstances as
provided in Section 12.2 and Section 14.2) or (ii) in the absence of its own gross negligence or willful misconduct as determined by a court of competent jurisdiction by final nonappealable judgment. The Administrative
Agent shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Administrative Agent by the U.S. Borrower, the Borrower, a Lender or an Issuing Lender in accordance with
Section 14.1. In the event that the Administrative Agent receives such a notice, it shall promptly give notice thereof to the Lenders and the Issuing Lenders. 
  

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 The Administrative Agent shall not be responsible for or have any duty to ascertain or inquire into (i) any
statement, warranty or representation made in or in connection with this Agreement or any other Loan Document, (ii) the contents of any certificate, report or other document delivered hereunder or thereunder or in connection herewith or
therewith, (iii) the performance or observance of any of the covenants, agreements or other terms or conditions set forth herein or therein or the occurrence of any Default, (iv) the validity, enforceability, effectiveness or genuineness
of this Agreement, any other Loan Document or any other agreement, instrument or document or (v) the satisfaction of any condition set forth in Article V or elsewhere herein, other than to confirm receipt of items expressly required to
be delivered to the Administrative Agent. 
 SECTION 13.4 Reliance by the Administrative Agent. The Administrative Agent shall be
entitled to rely upon, and shall not incur any liability for relying upon, any notice, request, certificate, consent, statement, instrument, document or other writing (including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or otherwise authenticated by the proper Person. The Administrative Agent also may rely upon any statement made to it orally or by telephone and believed by it to have been
made by the proper Person, and shall not incur any liability for relying thereon. In determining compliance with any condition hereunder to the making of a Loan, or the issuance of a Letter of Credit, that by its terms must be fulfilled to the
satisfaction of a Lender or the applicable Issuing Lender, the Administrative Agent may presume that such condition is satisfactory to such Lender or such Issuing Lender unless the Administrative Agent shall have received notice to the contrary from
such Lender or such Issuing Lender prior to the making of such Loan or the issuance of such Letter of Credit. The Administrative Agent may consult with legal counsel (who may be counsel for the U.S. Borrower or the Borrower), independent accountants
and other experts selected by it, and shall not be liable for any action taken or not taken by it in accordance with the advice of any such counsel, accountants or experts. 
 SECTION 13.5 Delegation of Duties. The Administrative Agent may perform any and all of its duties and exercise its rights and powers hereunder or
under any other Loan Document by or through any one or more sub-agents appointed by the Administrative Agent. The Administrative Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through
their respective Related Parties. The exculpatory provisions of this Article shall apply to any such sub-agent and to the Related Parties of the Administrative Agent and any such sub-agent, and shall apply to their respective activities in
connection with the syndication of the credit facilities provided for herein as well as activities as Administrative Agent. 
 SECTION 13.6
Resignation of Administrative Agent. 
 (a) The Administrative Agent may at any time give notice of its resignation to the Lenders,
each Issuing Lender and the Borrower. Upon receipt of any such notice of resignation, the Required Agreement Lenders shall have the right, in consultation with the Borrower, to appoint a successor, which shall be a bank with an office in Canada, or
an Affiliate of any such bank with an office in Canada. If no such successor shall have been so appointed by the Required Agreement Lenders and shall have accepted such appointment within 30 days after the retiring Administrative Agent gives
notice of its resignation, then the retiring Administrative Agent may on behalf of the Lenders and the Issuing Lenders, appoint a successor Administrative Agent meeting the qualifications set forth above; provided that if the Administrative
Agent shall 

  

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notify the Borrower and the Lenders that no qualifying Person has accepted such appointment, then such resignation shall nonetheless become effective in
accordance with such notice and (i) the retiring Administrative Agent shall be discharged from its duties and obligations hereunder and under the other Loan Documents (except that in the case of any collateral security held by the
Administrative Agent on behalf of any Lender or any Issuing Lender under any of the Loan Documents, the retiring Administrative Agent shall continue to hold such collateral security until such time as a successor Administrative Agent is appointed)
and (ii) all payments, communications and determinations provided to be made by, to or through the Administrative Agent shall instead be made by or to each Lender and each Issuing Lender directly, until such time as the Required Agreement
Lenders appoint a successor Administrative Agent as provided for above in this paragraph. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, such successor shall succeed to and become vested with all of the
rights, powers, privileges and duties of the retiring (or retired) Administrative Agent, and the retiring Administrative Agent shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this paragraph). The fees payable by the Borrower to a successor Administrative Agent shall be the same as those payable to its predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Administrative Agent’s resignation hereunder and under the other Loan Documents, the provisions of this Article and Section 14.3 shall continue in effect for the benefit of such retiring Administrative Agent, its
sub-agents and their respective Related Parties in respect of any actions taken or omitted to be taken by any of them while the retiring Administrative Agent was acting as Administrative Agent. 
 (b) Any resignation by The Bank of Nova Scotia as Administrative Agent pursuant to this Section shall also constitute its resignation as an Issuing
Lender. Upon the acceptance of a successor’s appointment as Administrative Agent hereunder, (i) such successor shall succeed to and become vested with all of the rights, powers, privileges and duties of the retiring Issuing Lender,
(ii) the retiring Issuing Lender shall be discharged from all of its duties and obligations hereunder or under the other Loan Documents, and (iii) the successor Issuing Lender shall issue letters of credit in substitution for the Letters
of Credit, if any, outstanding at the time of such succession or make other arrangement satisfactory to the retiring Issuing Lender to effectively assume the obligations of the retiring Issuing Lender with respect to such Letters of Credit.

 SECTION 13.7 Non-Reliance on Administrative Agent and Other Lenders. Each Lender and each Issuing Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as it has deemed appropriate, made its own credit analysis and decision to enter into
this Agreement. Each Lender and each Issuing Lender also acknowledges that it will, independently and without reliance upon the Administrative Agent or any other Lender or any of their Related Parties and based on such documents and information as
it shall from time to time deem appropriate, continue to make its own decisions in taking or not taking action under or based upon this Agreement, any other Loan Document or any related agreement or any document furnished hereunder or thereunder.

  

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 SECTION 13.8 No Other Duties, etc; Documentation Agent. 
 (a) Anything herein to the contrary notwithstanding, none of the syndication agents, documentation agents (other than as noted in subsection
(b) below), co-agents, book manager, lead manager, arranger, lead arranger or co-arranger listed on the cover page or signature pages hereof shall have any powers, duties or responsibilities under this Agreement or any of the other Loan
Documents, except in its capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder. 
 (b) (i) Each of
the Lenders and each of the Issuing Lenders hereby irrevocably appoints Wachovia Bank, National Association as the Documentation Agent hereunder and under the other Loan Documents and authorizes the Documentation Agent to take actions with respect
to the documentation of the Credit Facility, including the preparation and execution of any definitive documentation in connection with the Credit Agreement and the other Loan Documents, together with such actions and powers as are reasonably
incidental thereto; provided that, anything herein to the contrary notwithstanding, the Documentation Agent shall have no other powers, duties or responsibilities under this Agreement or any of the other Loan Documents, except in its
capacity, as applicable, as the Administrative Agent, a Lender or an Issuing Lender hereunder. 
 (ii) The Documentation Agent
and it Affiliates may accept deposits from, lend money to, act as the financial advisor or in any other advisory capacity for and generally engage in any kind of business with the U.S. Borrower, the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Documentation Agent hereunder and without any duty to account therefor to the Lenders. 
 (iii) The Documentation Agent may perform any and all of its duties and exercise its rights and powers hereunder or under any other Loan Document by or through any one or more sub-agents appointed by the Documentation Agent. The
Documentation Agent and any such sub-agent may perform any and all of its duties and exercise its rights and powers by or through their respective Related Parties. 
 SECTION 13.9 Collateral and Guaranty Matters. The Lenders irrevocably authorize the Administrative Agent, at its option and in its discretion, 
 (b) to release any Lien on any Collateral granted to or held by the Administrative Agent, for the ratable benefit of the Secured Parties, under any Loan
Document (i) upon repayment of the outstanding principal of and all accrued interest on the Loans and Reimbursement Obligations, payment of all outstanding fees and expenses hereunder, the termination of the Commitment and the expiration or
termination of all Letters of Credit, (ii) that is sold or to be sold or otherwise transferred as part of or in connection with any sale or transfer permitted hereunder or under any other Loan Document, or (iii) subject to
Section 14.2, if approved, authorized or ratified in writing by the Required Agreement Lenders; 
 (c) to subordinate or release
any Lien on any Collateral granted to or held by the Administrative Agent under any Loan Document to the holder of any Permitted Lien; and 
  

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 (d) to release any Subsidiary Guarantor from its obligations under the Subsidiary Guaranty Agreement, the
Collateral Agreement and any other Loan Documents if such Person ceases to be a Subsidiary as a result of a transaction(s) permitted hereunder. 
 Upon
request by the Administrative Agent at any time, the Required Agreement Lenders will confirm in writing the Administrative Agent’s authority to release or subordinate its interest in particular types or items of property, or to release any
Subsidiary Guarantor from its obligations under the Subsidiary Guaranty Agreement pursuant to this Section. 
 SECTION 13.10 Swingline
Lender. 
 (a) Resignation of Swingline Lender. 
 (i) Notwithstanding anything to the contrary contained herein, the Swingline Lender may, upon thirty (30) days’ notice to the
Borrower, resign as the Swingline Lender. In the event of any such resignation, the Borrower shall be entitled to appoint from among the Lenders a successor Swingline Lender hereunder; provided that no failure by the Borrower to appoint any
such successor shall affect the resignation of the Swingline Lender; provided further that (i) no Lender shall be required to accept such appointment as successor Swingline Lender; (ii) any successor Swingline Lender shall be
approved by the Administrative Agent (such approval not to be unreasonably withheld or delayed); and (iii) until a Lender shall have notified the Administrative Agent and the current Swingline Lender in writing that it has agreed to act as a
successor Swingline Lender, the current Swingline Lender shall continue as Swingline Lender hereunder. Upon the acceptance of any appointment as Swingline Lender hereunder by a successor, such successor Swingline Lender shall thereupon succeed to
and become vested with all rights, powers, privileges and duties of the replaced Swingline Lender, and the replaced Swingline Lender shall be discharged from its duties and obligations in its capacity as Swingline Lender without any other or further
act or deed on the part of such replaced Swingline Lender or any other Lender. 
 (ii) Any resigning Swingline Lender shall
retain all the rights of the Swingline Lender provided for hereunder with respect to Swingline Loans made by it and outstanding as of the effective date of such resignation, including the right to require the Revolving Credit Lenders to make
Revolving Credit Loans or fund risk participations in outstanding Swingline Loans pursuant to Section 2.2(b). 
 (b) Knowledge
of Defaults. For purposes of Section 2.2(b), the Swingline Lender shall be deemed not to have knowledge of any Default unless and until notice describing such Default is given to the Swingline Lender by the U.S. Borrower, the
Borrower, the Administrative Agent, a Lender or an Issuing Lender in accordance with Section 14.1. In the event that the Swingline Lender receives such a notice, it shall promptly give notice thereof to the Administrative Agent, the
Lenders and the Issuing Lenders. 
  

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 ARTICLE XIV 
 MISCELLANEOUS 
 SECTION 14.1 Notices. 
 (a) Method of Communication. Except as otherwise provided in this Agreement, all notices
and communications hereunder shall be in writing (for purposes hereof, the term “writing” shall include information in electronic format such as electronic mail and internet web pages), or by telephone subsequently confirmed in writing.
Any notice shall be effective if delivered by hand delivery or sent via electronic mail, posting on an internet web page, telecopy, recognized overnight courier service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or sent by electronic mail, posting on an internet web page, telecopy, (ii) on the next Business Day if sent by recognized overnight courier service and
(iii) on the third (3rd) Business Day following the date sent by certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to be the controlling and proper notice in the event of a discrepancy with or failure to receive a confirming written notice. 
 (b) Addresses for Notices. Notices to any party shall be sent to it at the following addresses, or any other address as to which all the other
parties are notified in writing. 
  

			
	If to the U.S. Borrower
	or the Borrower:	  	Bowater Incorporated
		  	55 East Camperdown Way
		  	Greenville, SC 29602-1028
		  	Attention: Treasurer
		  	Telephone No.: (864) 282-9413
		  	Telecopy No.: (864) 282-9219
		
	With copies to:	  	Hazen H. Dempster
		  	Troutman Sanders LLP
		  	Suite 5200
		  	600 Peachtree Street, N.E.
		  	Atlanta, Georgia 30308-2216
		  	Telephone No.: (404) 885-3126
		  	Telecopy No.: (404) 962-6544
		
	If to The Bank of	  	
	Nova Scotia as	  	
	Administrative Agent:	  	The Bank of Nova Scotia
		  	40 King Street West
		  	Scotia Plaza, 62nd Floor
		  	Toronto, Ontario M5W 2X6
		  	Attention: Corporate Banking Loan Syndication
		  	Telephone No.:
		  	Telecopy No.: (416) 866-3329

  

			
	If to any Lender:	  	To the address set forth on the Register

  

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 (c) Administrative Agent’s Office. The Administrative Agent hereby designates its office
located at the address set forth above, or any subsequent office which shall have been specified for such purpose by written notice to the Borrower and Lenders, as the Administrative Agent’s Office referred to herein, to which payments due are
to be made and at which Loans will be disbursed and Letters of Credit requested. 
 SECTION 14.2 Amendments, Waivers and Consents.
Except as set forth below or as specifically provided in any Loan Document, any term, covenant, agreement or condition of this Agreement or any of the other Loan Documents may be amended or waived by the Lenders, and any consent given by the
Lenders, if, but only if, in the case of an amendment, waiver or consent for which a substantially similar corresponding amendment, waiver or consent with regard to the U.S. Credit Agreement will be made effective thereunder contemporaneously, such
amendment, waiver or consent is in writing signed by the Required Lenders (or by the Administrative Agent with the consent of the Required Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by the Borrower;
and in the case of any other amendment, waiver or consent specifically impacting only this Agreement and the other Loan Documents, such amendment, waiver or consent is in writing signed by the Required Agreement Lenders (or by the Administrative
Agent with the consent of the Required Agreement Lenders) and delivered to the Administrative Agent and, in the case of an amendment, signed by the Borrower; provided, that no amendment, waiver or consent shall: 
 (a) waive any condition set forth in Section 5.2 without the written consent of each Lender directly affected thereby; 
 (b) (i) extend or increase the Commitment of any Lender (or reinstate any Commitment terminated pursuant to Section 12.2) or the amount
of Loans of any Lender without the written consent of such Lender or (ii) increase the aggregate Commitments of all Lenders to an aggregate principal amount in excess of $165,000,000 without the consent of the U.S. Required Agreement Lenders;

 (c) postpone any date fixed by this Agreement or any other Loan Document for any payment of principal, interest, fees or other amounts due
to the Lenders (or any of them) hereunder or under any other Loan Document without the written consent of each Lender directly affected thereby; provided, that only the consent of the Required Lenders shall be necessary in order to waive (in
whole or in part) any prepayment required pursuant to Section 8.2(b). 
 (d) reduce the principal of, or the rate of interest
specified herein on, any Loan or Reimbursement Obligation, or (subject to clause (iv) of the second proviso to this Section) any fees or other amounts payable hereunder or under any other Loan Document without the written 

  

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consent of each Lender directly affected thereby; provided that only the consent of the Required Agreement Lenders shall be necessary to waive any
obligation of the Borrower to pay interest at the rate set forth in Section 4.1(c) during the continuance of an Event of Default; 
 (e) change Section 4.4 or Section 12.4 in a manner that would alter the pro rata sharing of payments required thereby without the written consent of each Lender directly affected thereby; 
 (f) change any provision of this Section or the definitions of “Required Lenders” or “Required Agreement Lenders” or any other
provision hereof specifying the number or percentage of Lenders required to amend, waive or otherwise modify any rights hereunder or make any determination or grant any consent hereunder, without the written consent of each Lender and each U.S.
Lender directly affected thereby; 
 (g) increase the percentage specified in the definition of “Asset Coverage Amount”; reduce or
eliminate any of the Indebtedness specified in part (b) of the definition of “Extensions of Credit” in determining the Borrowing Limit; or add additional categories or types of assets to the definition of “Coverage Assets”,
in each case without the written consent of each Lender directly affected thereby; 
 (h) increase any of the percentages specified in the
definition of “Borrowing Base”; amend the definitions of “Eligible Accounts” or “Eligible Inventory” in a manner which would result in more availability under the Borrowing Base; or add additional categories or
types of assets to the definition of “Borrowing Base”, in each case without the written consent of each Lender directly affected thereby; 
 (i) (i) release the U.S. Borrower from the U.S. Borrower Guaranty, or (ii) release all of the Subsidiary Guarantors or release Subsidiary Guarantors comprising substantially all of the credit support for the Obligations, in either
case, from the Subsidiary Guaranty Agreement (other than as authorized in Section 13.9), in each case without the written consent of each Lender; 
 (j) release all or substantially all of the Collateral or release any Security Document (other than as authorized in Section 13.9 or as otherwise specifically permitted or contemplated in this Agreement or
the applicable Security Document) without the written consent of each Lender; or 
 (k) change Article XI of this Agreement without
the written consent of each U.S. Lender; 
 (l) add as Collateral any assets of any Person that is not organized under the laws of Canada or
any province thereof without the written consent of the U.S. Administrative Agent and the U.S. Required Agreement Lenders (it being understood that under the terms of the U.S. Credit Agreement a vote of the Administrative Agent and the Required
Agreement Lenders shall be required to add as Collateral for the U.S. Credit Facility any assets of any Person that is not organized under the laws of the United States or any state thereof); or 
  

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 (m) join as a Credit Party any Person that is not organized under the laws of Canada or any province
thereof without the written consent of the U.S. Administrative Agent and the U.S. Required Agreement Lenders (it being understood that under the terms of the U.S. Credit Agreement a vote of the Administrative Agent and the Required Agreement Lenders
shall be required to join as a U.S. Credit Party any Person that is not organized under the laws of the United States or any state thereof); 
 provided further, that (i) no amendment, waiver or consent shall, unless in writing and signed by the applicable Issuing Lender in addition to the Lenders required above, affect the rights or duties of such Issuing Lender
under this Agreement or any Letter of Credit Application relating to any Letter of Credit issued or to be issued by it; (ii) no amendment, waiver or consent shall, unless in writing and signed by the Swingline Lender in addition to the Lenders
required above, affect the rights or duties of the Swingline Lender under this Agreement; (iii) no amendment, waiver or consent shall, unless in writing and signed by the Administrative Agent in addition to the Lenders required above, affect
the rights or duties of the Administrative Agent under this Agreement or any other Loan Document; and (iv) the Fee Letter may be amended, or rights or privileges thereunder waived, in a writing executed only by the parties thereto.
Notwithstanding anything to the contrary herein, no Defaulting Lender shall have any right to approve or disapprove any amendment, waiver or consent hereunder, except that the Commitment of such Lender may not be increased or extended without the
consent of such Lender. 
 SECTION 14.3 Expenses; Indemnity. 
 (a) Costs and Expenses. The Borrower and the other Credit Parties, jointly and severally, shall pay (i) all reasonable out-of-pocket expenses
incurred by the Administrative Agent, the Documentation Agent and their respective Affiliates (including the reasonable fees, charges and disbursements of counsel for each of the Administrative Agent and the Documentation Agent), in connection with
the syndication of the credit facilities provided for herein, the preparation, negotiation, execution, delivery and administration of this Agreement and the other Loan Documents or any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions contemplated hereby or thereby shall be consummated), (ii) all reasonable out-of-pocket expenses incurred by each Issuing Lender in connection with the issuance, amendment, renewal or extension of any
Letter of Credit or any demand for payment thereunder and (iii) all out-of-pocket expenses incurred by the Administrative Agent, the Documentation Agent, any Lender or any Issuing Lender (including the fees, charges and disbursements of any
counsel for the Administrative Agent, the Documentation Agent, any Lender or any Issuing Lender), in connection with the enforcement or protection of its rights (A) in connection with this Agreement and the other Loan Documents, including its
rights under this Section, or (B) in connection with the Loans made or Letters of Credit issued hereunder, including all such out-of-pocket expenses incurred during any workout, restructuring or negotiations in respect of such Loans or Letters
of Credit or (C) with respect to the preservation and protection of the Collateral and (iv) all out-of-pocket expenses and costs heretofore and from time to time hereafter incurred by the Administrative Agent during the course of periodic
field audits, examinations and appraisals with respect to the Collateral and the operations of the Credit Parties and their Subsidiaries, plus a per diem charge at the Administrative Agent’s then standard rate for the Administrative
Agent’s examiners in the field and office. 
  

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 (b) Indemnification. The Borrower and the other Credit Parties shall indemnify the Administrative
Agent (and any sub-agent thereof), the Documentation Agent (and any sub-agent thereof), each Lender and each Issuing Lender, and each Related Party of any of the foregoing Persons (each such Person being called an “Indemnitee”)
against, and hold each Indemnitee harmless from, any and all losses, claims (including, without limitation, any Environmental Claims or civil penalties or fines assessed by OFAC), damages, liabilities and related expenses (including the fees,
charges and disbursements of any counsel for any Indemnitee), incurred by any Indemnitee or asserted against any Indemnitee by any third party or by the Borrower or any other Credit Party arising out of, in connection with, or as a result of
(i) the execution or delivery of this Agreement, any other Loan Document or any agreement or instrument contemplated hereby or thereby, the performance by the parties hereto of their respective obligations hereunder or thereunder or the
consummation of the transactions contemplated hereby or thereby, (ii) any Loan or Letter of Credit or the use or proposed use of the proceeds therefrom (including any refusal by any Issuing Lender to honor a demand for payment under a Letter of
Credit if the documents presented in connection with such demand do not strictly comply with the terms of such Letter of Credit), (iii) any actual or alleged presence or Release of Hazardous Materials on or from any property owned or operated
by the U.S. Borrower or any of its Subsidiaries, or any Environmental Claim related in any way to the U.S. Borrower or any of its Subsidiaries, (iv) any actual or prospective claim, litigation, investigation or proceeding relating to any of the
foregoing, whether based on contract, tort or any other theory, whether brought by a third party or by the Borrower or any other Credit Party, and regardless of whether any Indemnitee is a party thereto, or (v) any claim (including, without
limitation, any Environmental Claims or civil penalties or fines assessed by OFAC), investigation, litigation or other proceeding (whether or not the Administrative Agent, the Documentation Agent or any Lender is a party thereto) and the prosecution
and defense thereof, arising out of or in any way connected with the Loans, this Agreement, any other Loan Document, or any documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby, including
without limitation, reasonable attorneys and consultant’s fees, in all cases, whether or not caused by or arising, in whole or in part, out of the comparative, contributory, or sole negligence of the Indemnitee, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such losses, claims, damages, liabilities or related expenses (x) are determined by a court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of such Indemnitee or (y) result from a claim brought by the Borrower or any other Credit Party against an Indemnitee for breach in bad faith of such Indemnitee’s obligations
hereunder or under any other Loan Document, if the Borrower or such Credit Party has obtained a final and nonappealable judgment in its favor on such claim as determined by a court of competent jurisdiction. 
 (c) Reimbursement by Lenders. To the extent that the Borrower for any reason fails to indefeasibly pay any amount required under clause
(a) or (b) of this Section to be paid by it to the Administrative Agent (or any sub-agent thereof), the Documentation Agent (or any sub-agent thereof), any Issuing Lender or any Related Party of any of the foregoing, each Lender severally
agrees to pay to the Administrative Agent (or any such sub-agent), the Documentation Agent (or any sub-agent thereof), such Issuing Lender or such Related Party, as the case may be, such Lender’s Commitment Percentage (determined as of the time
that the applicable unreimbursed expense or indemnity payment is sought) of such unpaid amount, provided that the unreimbursed 

  

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expense or indemnified loss, claim, damage, liability or related expense, as the case may be, was incurred by or asserted against the Administrative Agent
(or any such sub-agent), the Documentation Agent (or any sub-agent thereof) or such Issuing Lender in its capacity as such, or against any Related Party of any of the foregoing acting for the Administrative Agent (or any such sub-agent), the
Documentation Agent (or any sub-agent thereof) or such Issuing Lender in connection with such capacity. The obligations of the Lenders under this clause (c) are subject to the provisions of Section 4.7. 
 (d) Waiver of Consequential Damages, Etc. To the fullest extent permitted by Applicable Law, the Borrower and each other Credit Party shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect, consequential or punitive damages (as opposed to direct or actual damages) arising out of, in connection with, or as a result of, this
Agreement, any other Loan Document or any agreement or instrument contemplated hereby, the transactions contemplated hereby or thereby, any Loan or Letter of Credit or the use of the proceeds thereof. No Indemnitee referred to in clause
(b) above shall be liable for any damages arising from the use by unintended recipients of any information or other materials distributed by it through telecommunications, electronic or other information transmission systems in connection with
this Agreement or the other Loan Documents or the transactions contemplated hereby or thereby. 
 (e) Payments. All amounts due under
this Section shall be payable promptly after demand therefor. 
 SECTION 14.4 Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender, each Issuing Lender, the Swingline Lender and each of their respective Affiliates is hereby authorized at any time and from time to time, to the fullest extent permitted by Applicable Law, to set off and
apply any and all deposits (general or special, time or demand, provisional or final, in whatever currency) at any time held and other obligations (in whatever currency) at any time owing by such Lender, such Issuing Lender, the Swingline Lender or
any such Affiliate to or for the credit or the account of the Borrower or any other Credit Party against any and all of the obligations of the Borrower or such Credit Party now or hereafter existing under this Agreement or any other Loan Document to
such Lender, such Issuing Lender or the Swingline Lender, irrespective of whether or not such Lender, such Issuing Lender or the Swingline Lender shall have made any demand under this Agreement or any other Loan Document and although such
obligations of the Borrower or such Credit Party may be contingent or unmatured or are owed to a branch or office of such Lender, such Issuing Lender or the Swingline Lender different from the branch or office holding such deposit or obligated on
such indebtedness. The rights of each Lender, each Issuing Lender, the Swingline Lender and their respective Affiliates under this Section are in addition to other rights and remedies (including other rights of setoff) that such Lender, such Issuing
Lender, the Swingline Lender or their respective Affiliates may have. Each Lender, each Issuing Lender and the Swingline Lender agrees to notify the Borrower and the Administrative Agent promptly after any such setoff and application;
provided that the failure to give such notice shall not affect the validity of such setoff and application. 
  

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 SECTION 14.5 Governing Law. 
 (a) Governing Law. This Agreement and the other Loan Documents, unless expressly set forth therein, shall be governed by, and construed in
accordance with, the law of the State of New York, without reference to the conflicts of law principles thereof insofar as such principles would defer to the substantive laws of some other jurisdiction. 
 (b) Submission to Jurisdiction. The Borrower and each other Credit Party irrevocably and unconditionally submits, for itself and its property, to
the nonexclusive jurisdiction of the courts of (i) the State of New York sitting in New York County and of the United States District Court for the Southern District of New York and (iii) the Province of Ontario, and in each case any
appellate court from any thereof, in any action or proceeding arising out of or relating to this Agreement or any other Loan Document, or for recognition or enforcement of any judgment, and each of the parties hereto irrevocably and unconditionally
agrees that all claims in respect of any such action or proceeding may be heard and determined in such New York State or Ontario court or, to the fullest extent permitted by Applicable Law, in such federal court. Each of the parties hereto agrees
that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Nothing in this Agreement or in any other Loan Document shall
affect any right that the Administrative Agent, any Lender or any Issuing Lender may otherwise have to bring any action or proceeding relating to this Agreement or any other Loan Document against the Borrower or any other Credit Party or its
properties in the courts of any jurisdiction. 
 (c) Waiver of Venue. The Borrower and each other Credit Party irrevocably and
unconditionally waives, to the fullest extent permitted by Applicable Law, any objection that it may now or hereafter have to the laying of venue of any action or proceeding arising out of or relating to this Agreement or any other Loan Document in
any court referred to in paragraph (b) of this Section. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by Applicable Law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court. 
 (d) Service of Process. Each party hereto irrevocably consents to service of process in the manner
provided for notices in Section 14.1. Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by Applicable Law. 
 SECTION 14.6 Waiver of Jury Trial. EACH PARTY HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT
MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 
  

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 SECTION 14.7 Reversal of Payments. To the extent the U.S. Borrower or the Borrower makes a payment
or payments to the Administrative Agent for the ratable benefit of the Lenders or the Administrative Agent receives any payment or proceeds of the Collateral which payments or proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds repaid, the
Obligations or part thereof intended to be satisfied shall be revived and continued in full force and effect as if such payment or proceeds had not been received by the Administrative Agent. 
 SECTION 14.8 Injunctive Relief; Punitive Damages. 
 (a) The U.S. Borrower and the Borrower recognize that, in the event the U.S. Borrower or the Borrower fails to perform, observe or discharge any of its obligations or liabilities under this Agreement, any remedy of
law may prove to be inadequate relief to the Lenders. Therefore, the U.S. Borrower and the Borrower agree that the Lenders, at the Lenders’ option, shall be entitled to temporary and permanent injunctive relief in any such case without the
necessity of proving actual damages. 
 (b) The Administrative Agent, the Lenders and the U.S. Borrower and the Borrower (on behalf of
themselves and the other Credit Parties) hereby agree that no such Person shall have a remedy of punitive or exemplary damages against any other party to a Loan Document and each such Person hereby waives any right or claim to punitive or exemplary
damages that they may now have or may arise in the future in connection with any Dispute, whether such Dispute is resolved through arbitration or judicially. 
 SECTION 14.9 Accounting Matters. If at any time any change in GAAP would affect the computation of any financial ratio or requirement set forth in any Loan Document, and either the U.S. Borrower or the Required
Lenders shall so request, the Administrative Agent, the Lenders and the U.S. Borrower shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP (subject to the approval
of the Required Lenders); provided that, until so amended, (a) such ratio or requirement shall continue to be computed in accordance with GAAP prior to such change therein and (b) the U.S. Borrower shall provide to the
Administrative Agent and the Lenders financial statements and other documents required under this Agreement or as reasonably requested hereunder setting forth a reconciliation between calculations of such ratio or requirement made before and after
giving effect to such change in GAAP. 
 SECTION 14.10 Successors and Assigns; Participations. 
 (a) Successors and Assigns Generally. The provisions of this Agreement shall be binding upon and inure to the benefit of the parties hereto and
their respective successors and assigns permitted hereby, except that neither the Borrower nor any other Credit Party may assign or otherwise transfer any of its rights or obligations hereunder without the prior written consent 

  

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of the Administrative Agent and each Lender and no Lender may assign or otherwise transfer any of its rights or obligations hereunder except (i) to an
Eligible Assignee in accordance with the provisions of paragraph (b) of this Section, (ii) by way of participation in accordance with the provisions of paragraph (d) of this Section or (iii) by way of pledge or assignment of a
security interest subject to the restrictions of paragraph (f) of this Section (and any other attempted assignment or transfer by any party hereto shall be null and void). Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective successors and assigns permitted hereby, Participants to the extent provided in paragraph (d) of this Section and, to the extent expressly contemplated hereby, the Related
Parties of each of the Administrative Agent and the Lenders) any legal or equitable right, remedy or claim under or by reason of this Agreement. 
 (b) Assignments by Lenders. Any Lender may at any time assign to one or more Eligible Assignees all or a portion of its rights and obligations under this Agreement (including all or a portion of its Commitment and the Loans at the
time owing to it); provided that 
 (i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Commitment and the Loans at the time owing to it or in the case of an assignment to a Lender or an Affiliate of a Lender or an Approved Fund with respect to a Lender, the aggregate amount of the Commitment (which for this
purpose includes Loans outstanding thereunder) or, if the applicable Commitment is not then in effect, the principal outstanding balance of the Loans of the assigning Lender subject to each such assignment (determined as of the date the Assignment
and Assumption with respect to such assignment is delivered to the Administrative Agent or, if “Trade Date” is specified in the Assignment and Assumption, as of the Trade Date) shall not be less than $5,000,000, unless (A) such
assignment is made to an existing Lender, to an Affiliate thereof, or to an Approved Fund, in which case no minimum amount shall apply, or (B) each of the Administrative Agent and, so long as no Default or Event of Default has occurred and is
continuing, the Borrower otherwise consent (each such consent not to be unreasonably withheld or delayed); 
 (ii) each
partial assignment shall be made as an assignment of a proportionate part of all the assigning Lender’s rights and obligations under this Agreement with respect to the Loans or the Commitment assigned; 
 (iii) (A) the consent of the Administrative Agent (such consent not to be unreasonably withheld or delayed) shall be required for any
assignment in respect of the Credit Facility if such assignment is to a Person that is not a Lender, an Affiliate of such Lender or an Approved Fund with respect to such Lender, (B) the consent of each Issuing Lender (such consent not to be
unreasonably withheld or delayed) shall be required for any assignment that increases the obligation of the assignee to participate in exposure under one or more Letters of Credit (whether or not then outstanding) and (C) the consent of the
Swingline Lender (such consent not to be unreasonably withheld or delayed) shall be required for any assignment in respect of the Credit Facility; and 
 (iv) the parties to each assignment shall execute and deliver to the Administrative Agent an Assignment and Assumption, together with a processing and recordation fee of $3,500 for each assignment, and the
Eligible Assignee, if it shall not be a Lender, shall deliver to the Administrative Agent an Administrative Questionnaire. 
  

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 Subject to acceptance and recording thereof by the Administrative Agent pursuant to paragraph (c) of this Section,
from and after the effective date specified in each Assignment and Assumption, the Eligible Assignee thereunder shall be a party to this Agreement and, to the extent of the interest assigned by such Assignment and Assumption, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender thereunder shall, to the extent of the interest assigned by such Assignment and Assumption, be released from its obligations under this Agreement (and, in the case of an
Assignment and Assumption covering all of the assigning Lender’s rights and obligations under this Agreement, such Lender shall cease to be a party hereto) but shall continue to be entitled to the benefits of Section 4.8,
Section 4.9, Section 4.10, Section 4.11 and Section 14.3 with respect to facts and circumstances occurring prior to the effective date of such assignment. Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this paragraph shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with paragraph (d) of this
Section. 
 (c) Register. The Administrative Agent, acting solely for this purpose as an agent of the Borrower, shall maintain at one
of its offices in Montreal, Québec or Toronto, Ontario, a copy of each Assignment and Assumption delivered to it and a register for the recordation of the names and addresses of the Lenders, and the Commitment of, and principal amounts of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the “Register”). The entries in the Register shall be conclusive, and the Borrower, the Administrative Agent and the Lenders may treat each Person whose
name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement, notwithstanding notice to the contrary. The Register shall be available for inspection by the Borrower and any Lender, at any
reasonable time and from time to time upon reasonable prior notice. 
 (d) Participations. Any Lender may at any time, without the
consent of, or notice to, the Borrower and the Administrative Agent, sell participations to any Person (other than a natural person or the U.S. Borrower, the Borrower or any of the their respective Affiliates or Subsidiaries) (each, a
“Participant”) in all or a portion of such Lender’s rights and/or obligations under this Agreement (including all or a portion of its Commitment and/or the Loans owing to it); provided that (i) such Lender’s
obligations under this Agreement shall remain unchanged, (ii) such Lender shall remain solely responsible to the other parties hereto for the performance of such obligations and (iii) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in connection with such Lender’s rights and obligations under this Agreement. 
 Any agreement or instrument pursuant to which a Lender sells such a participation shall provide that such Lender shall retain the sole right to enforce this Agreement and to approve any amendment, modification or
waiver of any provision of this Agreement; provided that such agreement or instrument may provide that such Lender will not, without the consent of the Participant, agree to any amendment, modification or waiver or modification described in
Section 14.2 that directly affects such Participant. Subject to paragraph (e) of this Section, the Borrower agrees that each Participant shall be entitled to the benefits of Section 4.8, Section 4.9, 

  

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Section 4.10 and Section 4.11 to the same extent as if it were a Lender and had acquired its interest by assignment pursuant to
paragraph (b) of this Section. To the extent permitted by law, each Participant also shall be entitled to the benefits of Section 14.4as though it were a Lender, provided such Participant agrees to be subject to
Section 4.6 as though it were a Lender. 
 (e) Limitations upon Participant Rights. A Participant shall not be entitled to
receive any greater payment under Section 4.10 and Section 4.11 than the applicable Lender would have been entitled to receive with respect to the participation sold to such Participant, unless the sale of the participation
to such Participant is made with the Borrower’s prior written consent. A Participant that would be a Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.11 unless (i) the Borrower is notified
of the participation sold to such Participant and such Participant agrees, for the benefit of the Borrower, to comply with Section 4.11(e) as though it were a Lender and (ii) the applicable Lender shall provide the Borrower with
satisfactory evidence that the participation is in registered form and shall permit the Borrower to review such register as reasonably needed for the Borrower to comply with its obligations under Applicable Laws. 
 (f) Certain Pledges. Any Lender may at any time pledge or assign a security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including without limitation any pledge or assignment to secure obligations to a Federal Reserve Bank; provided that no such pledge or assignment shall release such Lender from any of its obligations
hereunder or substitute any such pledgee or assignee for such Lender as a party hereto. 
 SECTION 14.11 Confidentiality. Each of the
Administrative Agent and the Lenders agrees to maintain the confidentiality of the Information (as defined below), except that Information may be disclosed (a) to its and its Affiliates’ directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the Persons to whom such disclosure is made will be informed of the confidential nature of such Information and instructed to keep such Information confidential), (b) to
the extent requested by, or required to be disclosed to, any rating agency, or regulatory or similar authority (including any self-regulatory authority, such as the National Association of Insurance Commissioners), (c) to the extent required by
Applicable Laws or regulations or by any subpoena or similar legal process, (d) to any other party hereto, (e) in connection with the exercise of any remedies under this Agreement or under any other Loan Document (or any Hedging Agreement
with a Lender or the Administrative Agent) or any action or proceeding relating to this Agreement or any other Loan Document (or any Hedging Agreement with a Lender or the Administrative Agent) or the enforcement of rights hereunder or thereunder,
(f) subject to an agreement containing provisions substantially the same as those of this Section, to (i) any purchasing Lender, proposed purchasing Lender, Participant or proposed Participant, or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to the U.S. Borrower, the Borrower and their respective obligations, (g) with the consent of the U.S. Borrower or the Borrower, (h) to Gold Sheets and
other similar bank trade publications, such information to consist of deal terms and other information customarily found in such publications, or (i) to the extent such Information (x) becomes publicly available other than as a result of a
breach by such Person of this Section or (y) becomes available to the Administrative Agent or any Lender on a nonconfidential basis from a source other than the U.S. Borrower or the Borrower or (j) to 

  

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governmental regulatory authorities in connection with any regulatory examination of the Administrative Agent or any Lender or in accordance with the
Administrative Agent’s or any Lender’s regulatory compliance policy if the Administrative Agent or such Lender deems necessary for the mitigation of claims by those authorities against the Administrative Agent or such Lender or any of its
subsidiaries or affiliates. For purposes of this Section, “Information” means all information received from any Credit Party relating to any Credit Party or any of their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis prior to disclosure by any Credit Party; provided that, in the case of information received from a Credit Party after the date hereof, such information is clearly
identified at the time of delivery as confidential. Any Person required to maintain the confidentiality of Information as provided in this Section shall be considered to have complied with its obligation to do so if such Person has exercised the
same degree of care to maintain the confidentiality of such Information as such Person would accord to its own confidential information. 
 SECTION 14.12 Performance of Duties. Each of the Credit Party’s obligations under this Agreement and each of the other Loan Documents shall be performed by such Credit Party at its sole cost and expense. 
 SECTION 14.13 All Powers Coupled with Interest. All powers of attorney and other authorizations granted to the Lenders, the Administrative Agent
and any Persons designated by the Administrative Agent or any Lender pursuant to any provisions of this Agreement or any of the other Loan Documents shall be deemed coupled with an interest and shall be irrevocable so long as any of the Obligations
remain unpaid or unsatisfied, any of the Commitment remains in effect or the Credit Facility has not been terminated. 
 SECTION 14.14
Survival of Indemnities. Notwithstanding any termination of this Agreement, the indemnities to which the Administrative Agent and the Lenders are entitled under the provisions of this Article XIV and any other provision of this
Agreement and the other Loan Documents shall continue in full force and effect and shall protect the Administrative Agent and the Lenders against events arising after such termination as well as before. 
 SECTION 14.15 Titles and Captions. Titles and captions of Articles, Sections and subsections in, and the table of contents of, this Agreement are
for convenience only, and neither limit nor amplify the provisions of this Agreement. 
 SECTION 14.16 Severability of Provisions. Any
provision of this Agreement or any other Loan Document which is prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective only to the extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions hereof or thereof or affecting the validity or enforceability of such provision in any other jurisdiction. 
 SECTION 14.17 Counterparts. This Agreement may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an
original and shall be binding upon all parties, their successors and assigns, and all of which taken together shall constitute one and the same agreement. 
  

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 SECTION 14.18 Integration. This Agreement, together with the other Loan Documents, comprises the
complete and integrated agreement of the parties on the subject matter hereof and thereof and supersedes all prior agreements, written or oral, on such subject matter. In the event of any conflict between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control; provided that the inclusion of supplemental rights or remedies in favor of the Administrative Agent or the Lenders in any other Loan Document shall not be deemed a
conflict with this Agreement. Each Loan Document was drafted with the joint participation of the respective parties thereto and shall be construed neither against nor in favor of any party, but rather in accordance with the fair meaning thereof.

 SECTION 14.19 Term of Agreement. This Agreement shall remain in effect from the Closing Date through and including the date upon
which all Obligations arising hereunder or under any other Loan Document shall have been indefeasibly and irrevocably paid and satisfied in full and the Commitment has been terminated. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination or in respect of any provision of this Agreement which survives such termination. 
 SECTION 14.20 No Fiduciary Duty. The Administrative Agent, the Documentation Agent, each Lender and their Affiliates (collectively, solely for purposes of this paragraph, the “Lenders”), may have
economic interests that conflict with those of U.S. Borrower or the Borrower. The U.S. Borrower and the Borrower agree that nothing in the Loan Documents or otherwise will be deemed to create an advisory, fiduciary or agency relationship or
fiduciary or other implied duty between the Lenders, the U.S. Borrower, the Borrower, their stockholders or Affiliates. The U.S. Borrower and the Borrower acknowledge and agree that (i) the transactions contemplated by the Loan Documents are
arm’s-length commercial transactions between the Lenders, on the one hand, and the U.S. Borrower or the Borrower, on the other, (ii) in connection with this Agreement and the Loan Documents, each of the Lenders is acting solely as a
principal and not the agent or fiduciary of the U.S Borrower, the Borrower, their management, stockholders, creditors or any other Person, (iii) no Lender has assumed an advisory or fiduciary responsibility under this Agreement or the Loan
Documents in favor of the U.S Borrower or the Borrower (irrespective of whether any Lender or any of its Affiliates has advised or is currently advising the U.S Borrower or the Borrower on other matters) and (iv) U.S. Borrower and Borrower have
consulted their own legal and financial advisors to the extent it deemed appropriate. U.S. Borrower and Borrower further acknowledge and agree that they are responsible for making their own independent judgment with respect to this Agreement and the
Loan Documents. Borrower and U.S. Borrower agree that they will not claim that any Lender has rendered advisory services of any nature or respect, or owes a fiduciary or similar duty to U.S. Borrower or Borrower, in connection with this Agreement
and the Loan Documents. 
 SECTION 14.21 Advice of Counsel, No Strict Construction. Each of the parties represents to each other party
hereto that it has discussed this Agreement with its counsel. The parties hereto have participated jointly in the negotiation and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement
shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Agreement. 
  

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 SECTION 14.22 USA Patriot Act. The Administrative Agent and each Lender hereby notifies the
Borrower that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the “Act”), it is required to obtain, verify and record information that identifies the
Borrower and each Guarantor, which information includes the name and address of each Borrower and each Guarantor and other information that will allow such Lender to identify such Borrower or Guarantor in accordance with the Act. 
 SECTION 14.23 Inconsistencies with Other Documents; Independent Effect of Covenants. 
 (a) In the event there is a conflict or inconsistency between this Agreement and any other Loan Document, the terms of this Agreement shall control;
provided that any provision of the Security Documents which imposes additional burdens on the U.S. Borrower or its Subsidiaries or further restricts the rights of the U.S. Borrower or its Subsidiaries or gives the Administrative Agent or
Lenders additional rights shall not be deemed to be in conflict or inconsistent with this Agreement and shall be given full force and effect. 
 (b) The U.S. Borrower and the Borrower expressly acknowledge and agree that each covenant contained in Article VIII, Article IX or Article X, hereof shall be given independent effect. Accordingly, the U.S. Borrower and
the Borrower shall not engage in any transaction or other act otherwise permitted under any covenant contained in Article VIII, Article IX or Article X if, before or after giving effect to such transaction or act, the U.S.
Borrower or the Borrower shall or would be in breach of any other covenant contained in Article VIII, Article IX or Article X. 
 SECTION 14.24 No Novation. The execution and delivery of this Agreement shall not constitute a novation of any indebtedness or other obligations owing to the Lenders or the Administrative Agent based on facts or events occurring or
existing prior to the execution and delivery of this Agreement. 
 [Signature pages to follow] 
  

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