ASSET PURCHASE AGREEMENT

Asset Purchase Agreement

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NEWPAGE HOLDING CORP | CHILLICOTHE PAPER INC.

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Title: ASSET PURCHASE AGREEMENT
Governing Law: New York Date: 4/18/2006

Exhibit 10.26

ASSET PURCHASE AGREEMENT

Among

NEWPAGE CORPORATION,

CHILLICOTHE PAPER INC.

and

P. H. GLATFELTER COMPANY

Dated as of February 21, 2006

TABLE OF CONTENTS

	Page
ARTICLE I

DEFINITIONS

SECTION 1.01. Certain Defined Terms	1
SECTION 1.02. Definitions	13
SECTION 1.03. Interpretation and Rules of Construction	15

ARTICLE II

PURCHASE AND SALE

SECTION 2.01. Purchase and Sale of Purchased Assets	16
SECTION 2.02. Assumption and Exclusion of Liabilities	19
SECTION 2.03. Purchase Price; Allocation of Purchase Price	21
SECTION 2.04. Closing	22
SECTION 2.05. Closing Deliveries by the Seller	22
SECTION 2.06. Closing Deliveries by the Purchaser	23
SECTION 2.07. Adjustment of Purchase Price	23

ARTICLE III

REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND PARENT

SECTION 3.01. Organization, Authority and Qualification	26
SECTION 3.02. No Conflict	27
SECTION 3.03. Governmental Consents and Approvals	27
SECTION 3.04. Financial Information; Books and Records	27
SECTION 3.05. Absence of Undisclosed Liabilities	28
SECTION 3.06. Receivables	28
SECTION 3.07. Inventories	28
SECTION 3.08. Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions	29
SECTION 3.09. Litigation	31
SECTION 3.10. Compliance with Laws	31
SECTION 3.11. Environmental Matters	31
SECTION 3.12. Material Contracts	32
SECTION 3.13. Intellectual Property	34
SECTION 3.14. Real Property	35
SECTION 3.15. Tangible Personal Property	36
SECTION 3.16. Assets	37
SECTION 3.17. Customers	37

SECTION 3.18. Suppliers	38
SECTION 3.19. Employee Benefit Matters	38
SECTION 3.20. Labor Matters	40
SECTION 3.21. Key Employees	40
SECTION 3.22. Taxes	41
SECTION 3.23. Insurance	41
SECTION 3.24. Brokers	42
SECTION 3.25. Licenses and Permits	42

ARTICLE IV

REPRESENTATIONS AND WARRANTIES
OF THE PURCHASER

SECTION 4.01. Organization and Authority of the Purchaser	42
SECTION 4.02. No Conflict	42
SECTION 4.03. Governmental Consents and Approvals	43
SECTION 4.04. Financing	43
SECTION 4.05. Litigation	43
SECTION 4.06. Brokers	43
SECTION 4.07. Knowledge of Breach	43
SECTION 4.08. Disclaimer of Warranties	43

ARTICLE V

ADDITIONAL AGREEMENTS

SECTION 5.01. Conduct of Business Prior to the Closing	44
SECTION 5.02. Access to Information	44
SECTION 5.03. Confidentiality	45
SECTION 5.04. Regulatory and Other Authorizations; Notices and Consents	46
SECTION 5.05. Notice of Developments	48
SECTION 5.06. Non-Competition	48
SECTION 5.07. Excluded Liabilities; Assumed Liabilities	49
SECTION 5.08. Tax Cooperation and Exchange of Information; Other Tax Matters	50
SECTION 5.09. Conveyance Taxes	50
SECTION 5.10. Further Action	51
SECTION 5.11. Risk of Loss	51
SECTION 5.12. Proration; Certain Charges and Taxes	51
SECTION 5.13. Compliance with Environmental Transfer Statutes	52
SECTION 5.14. Historical Off-Site Environmental Liabilities Limitations	52
SECTION 5.15. Environmental Reports	53
SECTION 5.16. Provision of Business Records to the Purchaser	53
SECTION 5.17. Use of Intellectual Property	53
SECTION 5.18. Intracompany Arrangements	55
SECTION 5.19. Preparation of Stand-Alone Financial Statements	55
SECTION 5.20. Title Insurance; Objections	55

SECTION 5.21. Coated Converting Agreement		58
SECTION 5.22. Letter of Credit		58

ARTICLE VI

EMPLOYEE MATTERS

SECTION 6.01. Offer of Employment		59
SECTION 6.02. Post Closing Benefits		59
SECTION 6.03. Transition to New Health Plans; Past Service Credit		59
SECTION 6.04. Hourly Pension Plan		60
SECTION 6.05. Certain Other Employee-Related Costs		62
SECTION 6.06. Existing Welfare Benefit Plans; Retiree Medical Benefits		62
SECTION 6.07. Collective Bargaining Agreements		62
SECTION 6.08. Cooperation With Respect to Certain Pre-Closing Retained Liabilities		63

ARTICLE VII

CONDITIONS TO CLOSING

SECTION 7.01. Conditions to Obligations of the Seller and Parent		63
SECTION 7.02. Conditions to Obligations of the Purchaser		64

ARTICLE VIII

INDEMNIFICATION

SECTION 8.01. Survival of Representations and Warranties		65
SECTION 8.02. Indemnification by the Seller and Parent		66
SECTION 8.03. Indemnification by the Purchaser		68
SECTION 8.04. Limits on Indemnification		69
SECTION 8.05. Notice of Loss; Third Party Claims		69
SECTION 8.06. Tax Treatment		70
SECTION 8.07. Limitations and Procedures Applicable to Indemnification for Historical Environmental Liabilities		70
SECTION 8.08. Procedures for Allocation of Responsibility for Straddle Environmental Liabilities		73
SECTION 8.09. Procedures Applicable to Indemnification by the Purchaser for Reserved Pre-Closing Environmental
	Liabilities and Post-Closing Environmental Liabilities	76

ARTICLE IX

TERMINATION

SECTION 9.01. Termination		76
SECTION 9.02. Effect of Termination		76

iii

ARTICLE X

GENERAL PROVISIONS

SECTION 10.01. Expenses	76
SECTION 10.02. Notices	77
SECTION 10.03. Public Announcements	78
SECTION 10.04. Severability	78
SECTION 10.05. Entire Agreement	78
SECTION 10.06. Assignment	78
SECTION 10.07. Amendment	79
SECTION 10.08. Waiver	79
SECTION 10.09. Joint and Several Liability	79
SECTION 10.10. No Third Party Beneficiaries	79
SECTION 10.11. Specific Performance	79
SECTION 10.12. Governing Law	79
SECTION 10.13. Waiver of Jury Trial	80
SECTION 10.14. Counterparts	80

EXHIBITS

1.01(a)(i)	Form of Assignment of Intellectual Property
1.01(a)(ii)	Form of Assignment of Intellectual Property
1.01(b)	Form of Assignment of Lease
1.01(c)	Form of Assumption Agreement
1.01(d)	Form of Bill of Sale and Assignment
1.01(e)	Form of Deed
1.01(f)	Form of Transition Services Agreement
5.17(a)	Form of Temporary Trademark License Agreement
5.17(b)	Form of Technology License Agreement
5.17(c)	Form of Technology License-Back Agreement
5.17(d)	Form of Technology Sub-License Agreement
5.21	Term Sheet for Coated Converting Agreement
5.22	Form of Letter of Credit
6.01	Transferred Employees
7.02(e)	Consents

DISCLOSURE SCHEDULE

The Disclosure Schedule shall include the following Sections:

1.01(a)	Licensed-Back Intellectual Property
1.01(b)	Licensed Business Intellectual Property
1.01(c)	Licensed Carbonless Paper Business Intellectual Property
1.01(d)	Mead Licensed Carbonless Paper Business Intellectual Property
1.01(e)	Owned Business Intellectual Property
1.01(f)	Owned Carbonless Paper Business Intellectual Property
1.01(g)	Working Capital
2.01(a)(xv)	Collective Bargaining Agreements
2.01(b)(ix)	Excluded Intellectual Property
2.01(b)(xii)	Excluded Intercompany Receivables and Payables
3.02	No Conflict
3.03	Governmental Consents and Approvals
3.04(a)(i)	Unaudited Financial Statements
3.05	Absence of Undisclosed Liabilities
3.06	Receivables
3.07(a)	Inventories
3.07(b)	Inventories
3.08(a)	Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions
3.08(b)	Conduct in the Ordinary Course; Absence of Certain Changes, Events and Conditions
3.09	Litigation
3.10(a)	Compliance with Laws
3.10(b)	Governmental Orders
3.11	Environmental Matters
3.12(a)	Material Contracts
3.12(a)(ii)	Material Purchase Orders
3.12(b)	Material Contracts
3.12(f)	Material Contracts
3.12(g)	Material Contracts
3.12(h)	Material Contracts
3.12(i)	Material Contracts
3.13(a)	Intellectual Property
3.13(b)	Intellectual Property
3.13(c)	Intellectual Property
3.13(d)	Intellectual Property
3.14(a)	Owned Real Property
3.14(b)	Leased Real Property
3.14(c)	Real Property
3.14(d)	Real Property
3.14(e)	Transferred Real Property
3.15(b)	Tangible Personal Property
3.16(a)	Assets

3.16(c)	Assets
3.17	Customers
3.18	Suppliers
3.19(a)	Employee Benefit Matters
3.20	Labor Matters
3.21	Key Employees
3.22(l)	Taxes
3.22(m)	Taxes
3.25	Licenses and Permits
5.01(a)	Conduct of Business Prior to the Closing
5.01(b)	Conduct of Business Prior to the Closing
5.04(f)	Guarantees
5.06(c)	Non-Competition with Non-Carbonless Paper Business Customers
5.20(b)(viii)	Title Insurance
6.04(d)	Assumptions and Methodologies for Calculation of Transfer Amount
8.02(g)	Historical On-Site Environmental Liabilities
8.02(i)	Straddle Environmental Liabilities
8.08(g)	Straddle Environmental Liabilities

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

vii

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

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

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

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

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

ARTICLE I

DEFINITIONS

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

“ MeadWestvaco ” means MeadWestvaco Corporation, a Delaware corporation.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Definition		Location

“ Allocation ”		2.03(b)
“ Allocation Accounting Firm ”		2.03(b)
“ Assumed Liabilities ”		2.02(a)
“ Business ”		Recitals
“ Business Records ”		2.01(a)(vi)
“ Carbonless Paper Business ”		Recitals
“ Change ”		8.07(e)
“ Closing ”		2.04

Definition		Location

“ Closing Date Working Capital ”		2.07(c)
“ Closing Date Working Capital Statement ”		2.07(c)
“ Coated Converting Agreement ”		5.21
“ Confidentiality Agreement ”		5.03(b)
“ Continuation Report ”		5.20(c)
“ Controlling Party ”		8.08(c)
“ Employee Amounts ”		6.05
“ Enterprise Zone Agreement ”		3.22
“ ERISA ”		3.19(a)
“ Estimated Closing Date Working Capital ”		2.07(a)
“ Estimated Closing Date Working Capital Statement ”		2.07(a)
“ Excluded Assets ”		2.01(b)
“ Excluded Indebtedness ”		2.02(b)(v)
“ Excluded Intellectual Property ”		2.01(b)(ix)
“ Excluded Liabilities ”		2.02(b)
“ Final Closing Date Working Capital ”		2.07(e)(ii)
“ Final Term ”		5.22(a)
“ Guarantees ”		5.04(f)
“ Independent Accounting Firm ”		2.07(e)(ii)
“ Initial Term ”		5.22(a)
“ Initial Transfer Amount ”		6.04(e)
“ Initial Transfer Date ”		6.04(e)
“ Interest Rate ”		2.07(d)(iii)
“ lease ”		3.12(a)
“ Letter of Credit ”		5.22(a)
“ Licenses and Permits ”		2.01(a)(xiii)
“ LIFO ”		3.07
“ Loss ”		8.02
“ Lowest-Cost Commercially Reasonable Manner ”		8.07(e)
“ Market Risk Period ”		6.04(g)
“ Material Contracts ”		3.12(a)
“ Money Market Vehicle ”		6.04(g)
“ Multiemployer Plan ”		3.19(b)
“ Multiple Employer Plan ”		3.19(b)
“ Non-Carbonless Paper Business ”		Recitals
“ Non-Controlling Party ”		8.08(c)
“ NPDES ”		7.02(j)
“ OHEPA ”		7.02(j)
“ Parent ”		Preamble
“ Permitted Exceptions ”		5.20(b)(ix)
“ Plans ”		3.19(a)
“ Purchase Price ”		2.03(a)
“ Purchased Assets ”		2.01(a)
“ Purchaser ”		Preamble
“ Purchaser Indemnified Party ”		8.02

Definition		Location

“ Purchaser’s Actuary ”		6.04(d)
“ Purchaser’s Hourly Pension Plan ”		6.04(a)
“ Purchaser’s Title Policies ”		5.20(a)
“ Qualification Document ”		6.04(a)
“ Restricted Period ”		5.06(a)
“ Retained Names and Marks ”		5.17(a)
“ Section 414(l) Amount ”		6.04(d)
“ Seller ”		Preamble
“ Seller Indemnified Party ”		8.03
“ Seller’s Actuary ”		6.04(d)
“ Seller’s Hourly Pension Plan ”		6.04(a)
“ Seller’s Title Policies ”		5.20(a)
“ Stand-Alone Financial Statements ”		5.19
“ Straddle Environmental Liability Reserves ”		8.02(i)
“ Technology License Agreement ”		5.17(b)
“ Technology License-Back Agreement ”		5.17(c)
“ Technology Sub-License Agreement ”		5.17(d)
“ Temporary Trademark License Agreement ”		5.17(a)
“ Third Party Claim ”		8.05(b)
“ Title Companies ”		5.20(a)
“ Title Defect ”		5.20(d)
“ Title Endorsements ”		5.20(a)
“ Transfer Amount ”		6.04(d)
“ Transferred Benefit Liabilities ”		6.04(b)
“ Transferred Employee ”		6.01
“ True-Up Amount ”		6.04(e)
“ True-Up Date ”		6.04(e)
“ Voluntary Seller Encumbrances ”		5.20(d)

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

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

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

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

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

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

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

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

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

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

ARTICLE II

PURCHASE AND SALE

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

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

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

(iii) all Tangible Personal Property;

(iv) all Inventories at the Closing Date;

(v) all Receivables at the Closing Date;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(iii) the Purchase Price Bank Account;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(x) all Workers’ Compensation Liabilities.

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

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

(ii) all Excluded Taxes;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(d) a receipt for the Purchase Price;

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ARTICLE III

REPRESENTATIONS AND WARRANTIES
OF THE SELLER AND PARENT

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

(b) Except for the licenses set forth on Section 3.13(b) of the Disclosure Schedule, the Seller is the exclusive owner of the entire right, title and interest in and to the Owned Carbonless Paper Business Intellectual Property and the Owned Business Intellectual Property, free of all Encumbrances, and has a valid license to use the Licensed Carbonless Paper Business Intellectual Property and all the Licensed Business Intellectual Property in the continued operation of the Business without limitation. The Owned Carbonless Paper Business Intellectual Property, the Owned Business Intellectual Property and, to the Knowledge of the Seller, the Licensed Carbonless Paper Business Intellect

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