EQUITY AND ASSET PURCHASE AGREEMENT

Exhibit 99.1

EQUITY AND ASSET PURCHASE AGREEMENT

BY AND BETWEEN

MEADWESTVACO CORPORATION

AND

MAPLE ACQUISITION LLC

Dated as of January 14, 2005

TABLE OF CONTENTS

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EQUITY AND ASSET PURCHASE AGREEMENT

EQUITY AND ASSET PURCHASE AGREEMENT, dated as of January 14, 2005 (this “ Agreement ”), by and between Maple Acquisition LLC, a Delaware limited liability company (“ Purchaser ”), and MeadWestvaco Corporation, a Delaware corporation (“ Seller ”).

Unless otherwise indicated, terms used herein have the respective meanings set forth in Section 15.1.

RECITALS

WHEREAS, Seller and its Subsidiaries are, among other things, engaged in the manufacture and distribution of coated papers and carbonless papers from the Operations Sites and through the ownership, operation, maintenance and harvesting of the Timberlands and the use or sale of products derived therefrom, as more fully described in Exhibit A (the “ Business ”); and

WHEREAS, upon the terms and subject to the conditions hereinafter set forth, the parties desire that Seller and its Subsidiaries sell, assign and transfer to Purchaser and/or one or more of its Designated Affiliates, and that Purchaser and/or one or more of its Designated Affiliates purchase and acquire from Seller and its Subsidiaries, all of the right, title and interest of Seller and its Subsidiaries in and to the Purchased Equity Interests and the Purchased Assets, and that Purchaser and/or one or more of its Designated Affiliates assume the Assumed Liabilities.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements hereinafter set forth, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:

ARTICLE I

THE PURCHASE AND SALE

Section 1.1. Purchase and Sale of Shares . On the terms and subject to the conditions set forth herein, at the Closing, Seller shall sell and deliver, or cause one or more of its Subsidiaries to sell and deliver, to Purchaser and/or one or more of its Designated Affiliates, and Purchaser and/or one or more of its Designated Affiliates shall purchase, acquire and accept from Seller, or the applicable Subsidiary or Subsidiaries of Seller, legal and beneficial ownership of all of the issued and outstanding capital stock or other equity interests (the “ Purchased Equity Interests ”) of each of the entities on Schedule 1.1 (each, a “ Purchased Company ” and, collectively, the “ Purchased Companies ”; the Purchased Companies, collectively with their Subsidiaries, being referred to as the “ Acquired Companies ”).

Section 1.2. Purchase and Sale of the Purchased Assets . On the terms and subject to the conditions hereof, and subject to the exclusions set forth in Section 1.3, at the Closing, Seller shall, and shall cause its Subsidiaries (other than any Acquired Companies), to sell, assign, transfer, convey and deliver to Purchaser and/or one or more of its Designated

Affiliates, and Purchaser and/or one or more of its Designated Affiliates shall purchase, acquire and accept from Seller and/or its Subsidiaries (other than any Acquired Companies), all of the right, title and interest of Seller and/or its Subsidiaries (other than any Acquired Companies) in, to and under all of the following assets, properties, rights, Contracts and claims of Seller and/or its Subsidiaries (other than any Acquired Companies), wherever located, whether tangible or intangible, real, personal or mixed (collectively, and excluding the Excluded Assets, the “ Purchased Assets ”):

(a) (i) the real property listed on Schedule 1.2(a)(i) together with any and all buildings, structures, improvements and fixtures located thereon (the “ CP Owned Real Property ”, which term shall include all interests and rights of CP appurtenant to such real property and related to the operation of the Business thereon) and (ii) the real property leases listed on Schedule 1.2(a)(ii) and all such real property leases (pursuant to which MW Custom Papers LLC (“ CP ”) is the lessee) Related to the Business entered into by CP (as lessee) between the date of this Agreement and the Closing Date in accordance with Section 6.2 hereof (the “ CP Real Property Leases ”); provided that CP Owned Real Property and CP Real Property Leases shall include all real property (other than Timberlands) owned or leased by CP or any Subsidiary of CP that is Related to the Business conducted by or through CP, and not expressly excluded from this transaction pursuant to any other provision of this Agreement, whether or not such owned or leased real property is listed on Schedule 1.2(a)(i) or Schedule 1.2(a)(ii) ;

(b) (i) the real property listed on Schedule 1.2(b)(i) together with any and all buildings, structures, improvements and fixtures located thereon (the “ Seller Owned Real Property ”, which term shall include all interests and rights of Seller appurtenant to such real property and related to the operation of the Business thereon) and (ii) the real property leases (pursuant to which Seller or a Subsidiary of Seller is the lessee) listed on Schedule 1.2(b)(ii) and all real property leases Related to the Business entered into by Seller (as lessee) or a Subsidiary of Seller (other than CP or an Acquired Company) between the date of this Agreement and the Closing Date in accordance with Section 6.2 hereof (the “ Seller Real Property Leases ”); provided that Seller Owned Real Property and Seller Real Property Leases shall include all real property (other than Timberlands) owned or leased by Seller or a Subsidiary of Seller (other than CP or an Acquired Company) that is Related to the Business, and not expressly excluded from this transaction pursuant to any other provision of this Agreement, whether or not such owned or leased real property is listed on Schedule 1.2(b)(i) or Schedule 1.2(b)(ii) ;

(c) the Timberlands;

(d) all machinery, equipment, Computer Hardware (as configured for use in the Business but excluding any Computer Hardware located at Seller’s data center or South Carolina regional IT center), furniture, automobiles, trucks, tractors, trailers, tools and other tangible personal property Related to the Business owned by Seller or any of its Subsidiaries (other than any Acquired Companies), whether located on site at the Owned Real Properties or Leased Real Properties or stored or used off site in the Ordinary Course of the operation of the Business (collectively, the “ Purchased Equipment ”);

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(e) all inventories and supplies of raw materials, works-in-process, finished goods, supplies, packaging materials, storeroom contents and other inventoried items, whether located on site at the Owned Real Properties or Leased Real Properties or stored or used off site in the Ordinary Course, in each case Related to the Business;

(f) the manufacturing know-how employed by Seller or any of its Subsidiaries exclusively in the Business;

(g) all Intellectual Property owned by Seller or any of its Subsidiaries (other than the Acquired Companies) and Related to the Business (the “ Purchased Intellectual Property ”), including without limitation the Intellectual Property identified on Schedule 1.2(g) and all such Intellectual Property acquired or developed by Seller or any of its Subsidiaries (other than the Acquired Companies) between the date of this Agreement and the Closing Date in accordance with Section 6.2 hereof;

(h) all trade accounts and notes receivable and other receivables as of the Closing Date arising out of the sale or other disposition of goods or services of the Business, to the extent reflected in the Estimated Closing Date Working Capital Statement, as the same may be adjusted in the Closing Date Working Capital Statement;

(i) all rights and incidents as of the Closing Date in, to and under all Business Contracts, including but not limited to (i) contracts for the purchase, or the sale, supply or provision, of merchandise, steam, materials, energy supplies or services, including operating, land management and resource management and repair and timber and logging hauling or cutting; (ii) contracts for the purchase or lease of equipment or Computer Hardware (excluding contracts relating to Computer Hardware located at Seller’s data center or South Carolina regional IT center); (iii) contracts relating to franchise, distributorship or sale agency arrangements; (iv) personal property leases; (v) Computer Software licenses; (vi) IP Licenses; (vii) all open purchase and sales orders, but excluding Contracts with employees of the Business who are not Transferred Employees; and (viii) the benefits under Hedging Agreements to the extent Related to the Business or otherwise allocable to the Business;

(j) to the extent permitted by applicable Law, all books and records (other than Tax Returns), files (including personnel and workers’ compensation claim files and other employee books and records, or copies thereof, pertaining to Transferred Employees), papers, tapes, disks, manuals, keys, reports, plans, catalogs, sales and promotional materials, supplier and customer lists, price lists, historical research, environmental and engineering data and all other printed and written materials Related to the Business;

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(k) except to the extent the transfer of the following information is prohibited by applicable Law, all Data that is Related to the Business (collectively, “ Business Data ”);

(l) the Permits Related to the Business issued by any Governmental Bodies (to the extent permitted by applicable Law to be transferred);

(m) all deferred and prepaid charges and other current assets of the Business, other than those that relate to any Excluded Asset, to the extent reflected in the Estimated Closing Date Working Capital Statement, as the same may be adjusted in the Closing Date Working Capital Statement;

(n) all Computer Software owned by Seller or any of its Subsidiaries (other than the Acquired Companies) and Related to the Business (the “ Purchased Seller Software ”), including without limitation the Computer Software listed on Schedule 1.2(n) , and all such Computer Software acquired or developed by Seller or any Subsidiary of Seller (other than an Acquired Company) between the date of this Agreement and the Closing Date in accordance with Section 6.2 hereof;

(o) all rights, claims, causes of action, recoveries and rights of reimbursement to the extent arising out of, relating to or otherwise in any way in respect of, the Purchased Assets or any Assumed Liability including all rights, guaranties, manufacturer and supplier warranties, indemnities and similar rights in favor of Seller or any of its Subsidiaries (other than any Acquired Companies) in respect of any Purchased Asset or any Assumed Liability (but with respect to any Tax refund claim, Tax payment or Tax reduction or credit related thereto, the provisions of Articles XIV shall apply);

(p) all rights of Seller or any of its Subsidiaries (other than any Acquired Companies) under the Collective Bargaining Agreements, and all Collective Bargaining Agreements entered into after the date hereof and prior to the Closing Date in accordance with Section 6.2;

(q) all cash or cash equivalents (“ Workers’ Compensation Cash Security ”) securing all surety bonds, letters of credit or other forms of security used to secure workers’ compensation obligations of the Business; and

(r) all other assets, properties, rights, Contracts and claims of Seller and any of its Subsidiaries (other than any Acquired Companies) of any kind and nature Related to the Business not otherwise described above.

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Section 1.3. Excluded Assets . Notwithstanding anything to the contrary contained in Section 1.2, the parties expressly understand and agree that the Purchased Assets shall not include, and neither Seller nor any of its Subsidiaries is hereunder selling, assigning, transferring or conveying to Purchaser any right to or interest in, any of the following assets, properties, rights, contracts and claims, whether tangible or intangible, real, personal or mixed (collectively, the “ Excluded Assets ”):

(a) all cash, cash equivalents, bank deposits, investment accounts, lockboxes, certificates of deposit, marketable securities or similar cash items, of Seller or any Subsidiary (other than any Workers’ Compensation Cash Security), provided that (i) cash and cash equivalents, deposits and restricted cash accounts owned or held by any of the Acquired Companies on the Closing Date shall not be Excluded Assets to the extent that they are taken into account when calculating the Estimated Closing Date Cash and the Closing Date Cash and (ii) any Workers’ Compensation Cash Security shall not be taken into account when calculating Estimated Closing Date Cash and the Closing Date Cash;

(b) any data and records (or copies thereof) required to administer the benefits of Acquired Company Employees and Business Employees under any Seller Employee Benefit Plan;

(c) except as provided in Section 1.7, any and all insurance policies, binders and claims of Seller and any of its Subsidiaries (other than any Acquired Companies) and rights thereunder, including with respect to any insurance settlement agreements, and the proceeds thereof and all prepaid insurance premiums;

(d) subject to Section 7.7, all of Seller’s right, title and interest in the “Mead,” “Westvaco” and “MeadWestvaco” marks 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 Schedule 1.3(d) , together with all patents and invention records listed on Schedule 1.3(d) (collectively, the “ Excluded IP Assets ”);

(e) the assets and contracts (other than real property, which is addressed in Section 1.3(i) below) listed on Schedule 1.3(e) ;

(f) any books, records and other materials that Seller or any of its Subsidiaries is required by Law to retain, all Tax Returns (including income tax returns) and all “MeadWestvaco” marked sales and promotional materials and brochures;

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

(h) all assets, business lines, properties, rights, contracts and claims of Seller or any Subsidiary (including any Acquired Company) not Related to the Business, including those listed on Schedule 1.3(h) ;

(i) all real property, including mill facilities, waste disposal facilities, treatment operations and landfills, whether owned or leased, that are listed on Schedule 1.3(i) or that are not currently used or currently intended for future use in the Business, other than (subject to provisions of Section 6.12 with respect to the Timberlands and the provisions of Section 7.11 with respect to the Owned Real Property) any property listed on Schedule 1.2(a)(i), Schedule 1.2(a)(ii), Schedule 1.2(b)(i), Schedule 1.2(b)(ii), Schedule 4.9(a)(i), Schedule 4.9(c) and the Timberlands, whether or not currently used (the “ Excluded Real Property ”);

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(j) the Specialty Chemicals and Specialty Papers business as conducted by the Seller and its Subsidiaries (as described in Seller’s most recent Form 10-K filed with the U.S. Securities and Exchange Commission), including all assets relating primarily thereto;

(k) all refunds or credits of or against any Excluded Taxes; and

(l) except as set forth on Schedule 1.3(l) , all intercompany receivables, payables, loans and investments (i) between Seller or any of its Subsidiaries (other than an Acquired Company), on the one hand, and Seller or any of its Subsidiaries (other than an Acquired Company), on the other hand, or (ii) required to be settled in accordance with Section 6.5.

Section 1.4. Assumed Liabilities . Simultaneously with the Closing, Purchaser and/or one or more of its Designated Affiliates shall assume and be liable for, and shall pay, perform and discharge, all of the following obligations and Liabilities of Seller and its Subsidiaries (other than the Acquired Companies), whether known or unknown, fixed or contingent, asserted or unasserted, to the extent not satisfied or extinguished as of the Closing Date, in each case as and to the extent Related to the Business (collectively, and excluding the Excluded Liabilities, the “ Assumed Liabilities ”):

(a) all Liabilities to the extent related to the Business or any Purchased Asset to the extent such Liabilities (i) arise out of events or conditions occurring on or after the Closing Date or arise out of the operation of the Business on or after the Closing Date or (ii) are reflected, or are expressly reserved therefor, in the Estimated Closing Date Working Capital Statement, as the same may be adjusted in the Closing Date Working Capital Statement;

(b) all Liabilities under Business Contracts, including any disputes with counterparties thereunder, whether relating to events or conditions occurring before, on or after the Closing Date; provided that no Liability shall be assumed arising under or with respect to any Business Contracts to the extent related to any Excluded Real Property or other Excluded Asset;

(c) all Liabilities assigned to Purchaser or its Designated Affiliates under Section 10.1;

(d) all accounts and trade payables, in each case to the extent such Liabilities are reflected, or are expressly reserved for, in the Estimated Closing Date Working Capital Statement, as the same may be adjusted in the Closing Date Working Capital Statement;

(e) all Liabilities that Purchaser or any of its Designated Affiliates has assumed or agreed to pay for or be responsible for pursuant to the terms hereof or of the Transition Agreements;

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(f) all Liabilities arising from commitments (in the form of accepted purchase orders, or otherwise) to sell products, or outstanding quotations, proposals or bids (provided, that, with respect to such commitments, quotations, proposals or bids arising between the date hereof and the Closing Date, such commitments, quotations, proposals or bids have been made in accordance with Section 6.2 hereof);

(g) all Liabilities arising from commitments (in the form of issued purchase orders or otherwise), or outstanding quotations, proposals or bids, to purchase or acquire raw materials, components, supplies or services (provided, that, with respect to such commitments, quotations, proposals or bids arising between the date hereof and the Closing Date, such commitments, quotations, proposals or bids have been made in accordance with Section 6.2 hereof);

(h) all Liabilities with respect to any return, rebate, recall, warranty or similar liabilities relating to products;

(i) all Liabilities (other than Liabilities arising out of the use or alleged use of asbestos or asbestos-containing materials in products of the Business) for death, personal injury, advertising injury, other injury to persons or property damage relating to, resulting from, caused by or arising out of, directly or indirectly, use of or exposure to any of the products (or any part or component) designed, manufactured, serviced or sold, or services performed, by the Business, including any such Liabilities for negligence, strict liability, design or manufacturing defect, conspiracy, failure to warn, or breach of express or implied warranties or merchantability or fitness for any purpose or use;

(j) all Liabilities (other than Liabilities arising out of the use or alleged use of asbestos or asbestos-containing materials in products of the Business) relating to, resulting from, caused by or arising out of, directly or indirectly, the Business or any Assets, to the extent that the same constitute, may constitute or are alleged to constitute a tort, breach of contract or violation of, or non-compliance with, any Law or Permit (excluding Environmental Laws and Environmental Permits or related torts), which, in any case, (i) relate to claims for death, personal injury, advertising injury, torts, other injury to persons or property damage and (ii) arise in the Ordinary Course and are of the type which customarily occur in the Business being conveyed to Purchaser or on the Owned Real Properties, the Leased Real Properties, the Operation Sites and the Timberlands;

(k) all Liabilities relating to, resulting from, caused by or arising out of, directly or indirectly, the Business or any Assets, including those that constitute, may constitute or are alleged to constitute a tort, breach of contract or violation of, or non-compliance with, any Law or Permit (excluding Environmental Laws and Environmental Permits) relating to occupational health and safety, occupational disease or occupational injury, other than those relating to occupational health and safety, occupational disease or occupational injury relating to facilities not included in the Assets;

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(l) all Liabilities relating to workers’ compensation and relating to, resulting from, caused by or arising out of, directly or indirectly, the Business or any Purchased Assets, including those that constitute, may constitute or are alleged to constitute a tort, breach of contract or violation of, or non-compliance with, any Law or Permit (excluding Environmental Laws and Environmental Permits), other than those relating to workers’ compensation for injury or illness incurred at facilities not included in the Assets;

(m) solely to the extent provided in Article XI, Environmental Liabilities first occurring after the Closing Date, Historical On-Site Environmental Liabilities, and Straddle Environmental Liabilities, with respect to the Business and the Assets conveyed hereunder;

(n) all Liabilities to the extent arising out of Legal Proceedings not constituting or primarily relating to Excluded Liabilities or Excluded Assets;

(o) all obligations for written contractual commitments by the Business to make the charitable contributions listed on Schedule 1.4(o) hereto (provided, however, that the parties agree that such commitments may be fulfilled directly by Purchaser or one or more of its Designated Affiliates and in the name of Purchaser or one or more of its Designated Affiliates);

(p) (i) the non-current Indebtedness of the Business to the extent listed on Schedule 1.4(p) (the “ Assumed Indebtedness ”) and (ii) the other Indebtedness of the Business reflected, or expressly reserved therefor, in the Estimated Closing Date Working Capital Statement, as the same may be adjusted in the Closing Date Working Capital Statement;

(q) all Liabilities (i) for the repair, reforestation, conservation, erosion maintenance and/or prevention, and/or restoration of all Timberlands other than Timberlands excluded pursuant to Section 6.12, or (ii) relating to, resulting from, caused by or arising out of, directly or indirectly, any boundary disputes of the type that would ordinarily relate to or occur on the Timberlands (provided that nothing in this clause (ii) shall be deemed to modify the definition of Timberlands Permitted Exceptions with respect to boundary disputes);

(r) all Taxes imposed on or payable with respect to the Acquired Companies or the Business for which Purchaser is responsible pursuant to Section 14.1(b); and

(s) all Liabilities, in respect of lawsuits, actions and proceedings arising in the Ordinary Course in respect of the Transferred Employees, whether or not attributable to circumstances occurring before, on or after the Closing Date, including Ordinary Course grievances under Collective Bargaining Agreements, but excluding Liabilities relating to Transferred Employees for which Seller has retained responsibility under the terms of this Agreement, but only to the extent of such agreed retention.

Nothing in this Section 1.4 is intended or shall be construed to limit or restrict the right of Purchaser or any of its Designated Affiliates (except to the extent expressly provided in

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Article XI) to recover against Seller for any breach of representation, warranty or covenant in this Agreement in the manner and to the extent provided with respect to such breach pursuant to Article XI of the Agreement.

Section 1.5. Excluded Liabilities . Notwithstanding the provisions of Section 1.4, it is expressly understood and agreed that there shall be excluded from the Liabilities and obligations being assumed by Purchaser and/or its Designated Affiliates hereunder (and to the extent that the following Liabilities and obligations have been incurred by any Acquired Company, Seller and its Subsidiaries (other than its Acquired Companies) shall assume and be solely responsible for) the following Liabilities and obligations of Seller or any of its Subsidiaries (collectively, the “ Excluded Liabilities ”):

(a) All Liabilities of Seller or any of its Subsidiaries (including any Acquired Company) not Related to the Business, including all Liabilities primarily relating to assets, business lines, rights, contracts and claims specified in Sections 1.3(h) and 1.3(i);

(b) all Liabilities for which Seller or any of its Subsidiaries (other than the Acquired Companies) is expressly made responsible pursuant hereto or the Transition Agreements;

(c) all Liabilities to the extent related to any Excluded Asset;

(d) all Excluded Taxes;

(e) except as set forth on Schedule 1.5(e) , all intercompany receivables, payables, loans and investments (i) between Seller or any of its Subsidiaries (other than an Acquired Company), on the one hand, and Seller or any of its Subsidiaries (other than an Acquired Company), on the other hand, or (ii) required to be settled in accordance with Section 6.5;

(f) all Liabilities assigned to or retained by Seller under Section 10.1;

(g) all Liabilities arising under or with respect to any Business Contracts to the extent related to any Excluded Real Property;

(h) except to the extent provided in Section 1.4(m) (Assumed Liabilities) and subject to the provisions set forth in Article XI, all Environmental Liabilities whether or not Related to the Business, provided, however, with respect to Historical Off-Site Environmental Liabilities, such Liabilities shall be subject to the procedures set forth in Section 11.4;

(i) all Liabilities to the extent arising out of Legal Proceedings relating to the matters constituting Excluded Liabilities specified in the foregoing clauses (a) – (h) of this Section 1.5;

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(j) all Liabilities to the extent relating to the Deleted Parcels and other real property not conveyed (including through the Acquired Companies) to Purchaser (or its designee) hereunder; and

(k) the Indebtedness of the Business other than (i) the Assumed Indebtedness; and (ii) the Indebtedness of the Business reflected, or expressly reserved for, in the Estimated Closing Date Working Capital Statement, as the same may be adjusted in the Closing Date Working Capital Statement.

Section 1.6. Timber Assets . On the terms and subject to the conditions hereof, and subject to the exclusions set forth in Section 1.3, at or immediately prior to the Closing, Seller shall, and shall cause CP and the Acquired Companies to, sell, assign, transfer, convey and deliver to the Purchaser (or one or more of its Designated Affiliates), and Purchaser (or one or more of its Designated Affiliates) shall purchase, acquire, accept and assume from Seller, CP and such Acquired Companies, all of the right, title and interest of Seller, CP and such Acquired Companies in and to all of the Assets and Liabilities that are being conveyed hereunder that are Related to the Timber Business. Notwithstanding anything to the contrary contained herein, Purchaser shall be responsible for the excess of (i) the Transfer Taxes incurred in connection with the transfers by the Acquired Companies contemplated by this Section 1.6, over (ii) the Transfer Taxes with respect to Timberlands that would otherwise have been incurred (and as a result of the transfers by the Acquired Companies contemplated by this Section 1.6 will not be incurred) at Closing on account of the stock of the Acquired Companies being transferred to Purchaser (and the amount of any and all other Transfer Taxes shall be paid by Seller and Purchaser as provided in Section 14.10).

Section 1.7. Insurance Proceeds . If between the date hereof and the Closing, (i) any loss or damage to any Purchased Asset or any asset owned by any Acquired Company shall occur from fire, casualty or any other occurrence, (ii) Seller or the applicable Acquired Company does not, prior to the Closing Date, rebuild or restore such Purchased Asset or such other asset owned by an Acquired Company to a state at least substantially the same as the state of such asset immediately prior to the date of such loss or damage, and (iii) the Closing occurs, then the Purchase Price shall be reduced by an amount reasonably agreed to by Seller and Purchaser to equal the reasonable additional cost to rebuild or restore (or, if applicable, finish rebuilding or restoring) such Purchased Asset or such other asset owned by an Acquired Company to a state at least substantially the same as the state of such asset immediately prior to the date of such loss or damage, and, subject to the provision below, Seller shall be entitled to receive and/or retain all insurance proceeds resulting from such loss or damage. For the avoidance of doubt, (a) Seller and its Subsidiaries shall not have any obligation to rebuild or restore any such property, and (b) Purchaser’s sole right shall be to receive the agreed upon reduction of the Purchase Price; provided , that no reduction of the Purchase Price as contemplated by this Section 1.7 shall be made or required if the Purchase Price reduction relates to loss of or damage to any assets included in the calculation of Working Capital in the Estimated Closing Date Working Capital Statement, as the same may be adjusted in the Closing Date Working Capital Statement. Seller shall have the sole right and authority to provide notices and claims to the applicable insurance carrier and otherwise to communicate and negotiate with such carrier. Notwithstanding anything in this Section 1.7 to the contrary, the benefit of any insurance proceeds in relation to “business interruption” damages based upon lost profits or business opportunities in respect of the period

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prior to the Closing Date, and insurance proceeds in relation to such loss or damage to the extent attributable to any such property rebuilt or restored before the Closing Date or otherwise used for such purpose will inure to the benefit of and be payable to Seller, and Purchaser will not be entitled to receive or retain such proceeds. Notwithstanding anything in this Section 1.7 to the contrary, the benefit of any insurance proceeds in relation to “business interruption” damages based upon lost profits or business opportunities in respect of the period following the Closing Date will inure to the benefit of and be payable to Purchaser, and Seller will not be entitled to receive or retain such proceeds. It is understood and agreed that for purposes of determining whether any change, event, effect or circumstance constitutes a “Material Adverse Effect” as defined herein, any credit received by Purchaser on account of this Section 1.7 shall be taken into account.

Section 1.8. Separate Businesses . Purchaser and Seller acknowledge, understand and agree that, unless Purchaser otherwise notifies Seller in writing, it is Purchaser’s intention to operate the Paper Business and Timber Business as separate businesses from and following the Closing Date. In furtherance of and notwithstanding anything in this Agreement inconsistent or contrary to the foregoing, to the extent any right, asset or benefit inures to Purchaser or any obligation or liability is imposed upon or is to be assumed by Purchaser under this Agreement (including indemnification obligations under Article XI hereof), the Exhibits and the other agreements or instruments referenced herein or therein that: (a) if Related to the Timber Business, such right, asset, benefit, obligation or liability shall be solely for the benefit of and the responsibility of the Purchaser and only those of its Affiliates, if any, designated by Purchaser at Closing to acquire the Assets and assume the Liabilities Related to the Timber Business and their respective successors and assigns (“ Purchaser’s Timber Entities ”) and (b) if Related to the Paper Business, such right, asset, benefit, obligation or liability shall be solely for the benefit and the responsibility of the Designated Affiliates of Purchaser designated by Purchaser at Closing to acquire the Assets and assume the Liabilities Related to the Paper Business and their respective successors and assigns (“ Purchaser’s Paper Entities ”). For the avoidance of doubt, in no event shall Seller or any of its Affiliates be entitled under this Agreement, the Exhibits or any other agreement or instrument referenced herein or therein to make any claim against, or seek recovery from, by or through (i) any of Purchaser’s Timber Entities for matters Related to the Paper Business or (ii) any of Purchaser’s Paper Entities for matters Related to the Timber Business.

ARTICLE II

CONSIDERATION

Section 2.1. Amount and Form of Consideration . The consideration to be paid by Purchaser to Seller in full consideration of the Purchased Equity Interests and the Purchased Assets shall consist of:

(a) U.S.$ 2,300,000,000.00 (the “ Initial Cash Consideration ”) in cash, subject to adjustment as set forth in Section 2.3 and 6.12 (the Initial Cash Consideration, as so adjusted, the “ Final Cash Consideration ”), to be paid in the manner and at the time set forth in Sections 2.2 and 2.3; and

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(b) the assumption by Purchaser and/or one or more of its Designated Affiliates on and as of the Closing Date of the Assumed Liabilities.

Section 2.2. Payment of Cash Consideration . At the Closing, the Closing Date Cash Consideration (as defined below) shall be paid by wire transfer of immediately available funds in U.S. Dollars to an account or accounts designated by Seller, such designation to be made in writing at least three Business Days prior to the Closing Date.

Section 2.3. Purchase Price Adjustment . (a) At least five Business Days prior to the Closing Date, Seller shall prepare, or cause to be prepared, and deliver to 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 ”), and a certificate setting forth a good faith estimate of Working Capital as of close of business on the Closing Date (“ Estimated Closing Date Working Capital ”), an estimate of Closing Date Cash (“ Estimated Closing Date Cash ”) and an estimate of Assumed Indebtedness (“ Estimated Assumed Indebtedness ”). The Estimated Closing Date Working Capital Statement shall be prepared in accordance with GAAP, as modified by the accounting policies specified on Schedule 2.3(a) (“ Specified Accounting Policies ”), and to the extent consistent with GAAP, in accordance with the accounting principles, procedures, policies, methods that were employed in preparing the Benchmark Balance Sheet, consistently applied. The Initial Cash Consideration shall be (i)(A) increased dollar for dollar to the extent the Estimated Closing Date Working Capital exceeds the Target Working Capital, or (B) decreased dollar for dollar to the extent the Estimated Closing Date Working Capital is less than the Target Working Capital, (ii) increased dollar for dollar to the extent that Estimated Closing Date Cash is greater than U.S.$0 and (iii) decreased dollar for dollar by the Estimated Assumed Indebtedness (the Initial Cash Consideration, as adjusted pursuant to this sentence and Section 6.12, the “ Closing Date Cash Consideration ”).

(b) Within 90 calendar days following the Closing Date, Purchaser shall prepare, or cause to be prepared, and deliver to Seller 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 2.3(d), the “ Closing Date Working Capital Statement ”), and a certificate setting forth a calculation of Working Capital as of the close of business on the Closing Date (“ Closing Date Working Capital ”), a calculation of Closing Date Cash and a calculation of Assumed Indebtedness. The Closing Date Working Capital Statement shall be prepared in accordance with GAAP, as modified by the Specified Accounting Policies, using (to the extent consistent with GAAP) the same accounting principles, procedures, policies, methods that were employed in preparing the Benchmark Balance Sheet, consistently applied.

(c) During the preparation of the Estimated Closing Date Working Capital Statement and the calculation of Estimated Closing Date Working Capital, Estimated Closing Date Cash and Estimated Assumed Indebtedness (the “ Estimated Closing Date Financial Data ”), Seller shall, and shall cause its Subsidiaries to afford Purchaser reasonable opportunity to review such preparation, including supporting detail. Purchaser shall provide to Seller the same reasonable opportunity to review, during such preparation, Seller’s preparations of the Closing Date Working Capital Statement and the accompanying certificate.

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(d) After receipt of the Closing Date Working Capital Statement, Seller shall have 30 calendar days to review the Closing Date Working Capital Statement and the accompanying certificate (collectively, the “Closing Date Financial Data” ), together with the work-papers used in the preparation thereof. Seller and its authorized representatives shall have full access to all relevant books and records and employees of Purchaser and the Acquired Companies to the extent reasonably required to complete their review of the Closing Date Financial Data. Seller may dispute items reflected in the calculation of Closing Date Working Capital and Closing Date Cash and Assumed Indebtedness only on the basis that such amounts (i) were not determined in conformity with GAAP, as modified by the Specified Accounting Policies, applied by Purchaser on a consistent basis (to the extent consistent with GAAP) with the accounting principles, procedures, policies, methods that were employed in preparing the Benchmark Balance Sheet, consistently applied) or (ii) contain arithmetic error. Unless Seller delivers written notice to Purchaser on or prior to the 20th calendar day after Seller’s receipt of the Closing Date Working Capital Statement, which notice shall set forth a specific description of the basis of Seller’s objection or objections and the adjustments to the amount of Closing Date Working Capital and/or Closing Date Cash and/or Assumed Indebtedness which Seller believes should be made, Seller shall be deemed to have accepted and agreed to the calculation of Closing Date Working Capital and Closing Date Cash and/or Assumed Indebtedness. If Seller so notifies Purchaser of its objection to the calculation of Closing Date Working Capital, Closing Date Cash and/or Assumed Indebtedness, Purchaser and Seller shall, within 30 calendar days following such notice (the “ Resolution Period ”), attempt to resolve their differences and any resolution by them as to any disputed amounts shall be final, binding and conclusive. If following resolution of any disputed amounts there do not remain in dispute amounts the aggregate net effect of which exceeds U.S.$1 million with respect to the Closing Date Working Capital, the Closing Date Cash or Assumed Indebtedness, then all amounts remaining in dispute shall be deemed to have been resolved in favor of the calculation of Closing Date Working Capital, Closing Date Cash or Assumed Indebtedness, as the case may be, delivered by Seller to Purchaser.

(e) If, at the conclusion of the Resolution Period, the aggregate net effect of all amounts remaining in dispute exceeds U.S.$1 million with respect to Closing Date Working Capital, Closing Date Cash or Assumed Indebtedness, then all amounts remaining in dispute shall be submitted to Deloitte & Touche LLP (the “ Neutral Auditors ”). Each party agrees to execute, if requested by the Neutral Auditors, a reasonable engagement letter, including customary indemnities in favor of the Neutral Auditors. All fees and expenses relating to the work, if any, to be performed by the Neutral Auditors shall be borne pro rata as between Seller on the one hand and Purchaser on the other, in proportion to the allocation of the dollar value of the amounts remaining in dispute between Seller and Purchaser made by the Neutral Auditors such that the prevailing party pays the lesser proportion of the fees and expenses. The Neutral Auditors shall act as an expert to determine, based solely on the provisions of this Section 2.3 and the presentations by Seller and Purchaser, and not by independent review, only those issues still in dispute and only as to whether such amounts were arrived at in conformity with Specified Accounting Policies and Section 2.3(a) hereof. The Neutral Auditors’ determination shall be made within 30 calendar days of their selection, shall be set forth in a written statement delivered to Seller and Purchaser and shall be final, binding and conclusive. The term “ Final Closing Date Working Capital ” shall mean the definitive Closing Date Working Capital, the term “ Final Closing Date Cash ” shall mean the definitive Closing Date Cash and the term “ Final Assumed Indebtedness ” shall mean the definitive Assumed Indebtedness, respectively, agreed to (or

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deemed to be agreed to) by Purchaser and Seller in accordance with the terms of Section 2.3(d) or the definitive Closing Date Financial Data resulting from the determinations made by the Neutral Auditors in accordance with this Section 2.3(e) (in addition to those items theretofore agreed to by Seller and Purchaser).

(f) The Closing Date Cash Consideration shall be (i)(A) increased dollar for dollar to the extent the Final Closing Date Working Capital exceeds Estimated Closing Date Working Capital, or (B) decreased dollar for dollar to the extent the Final Closing Date Working Capital is less than Estimated Closing Date Working Capital and (ii)(A) increased dollar for dollar to the extent that Final Closing Date Cash is greater than Estimated Closing Date Cash or (B) decreased dollar for dollar to the extent that Final Closing Date Cash is less than Estimated Closing Date Cash and (iii)(A) increased dollar for dollar by the amount Estimated Assumed Indebtedness exceeds Final Assumed Indebtedness and (B) decreased dollar for dollar by the amount Final Assumed Indebtedness exceeds Estimated Assumed Indebtedness. Any adjustments to the Closing Date Cash Consideration made pursuant to this Section 2.3(f), together with interest on such amount from the Closing Date to the date of payment at a per annum rate equal to the JP Morgan Chase prime rate (determined as of the Closing Date), shall be paid by wire transfer of immediately available funds to the account or accounts specified by Seller, if Seller is owed payment, or to the account or accounts specified by Purchaser, if Purchaser is owed payment, within five Business Days after the Final Closing Date Working Capital, Final Closing Date Cash and Final Assumed Indebtedness are agreed to by Purchaser and Seller or any remaining disputed items are ultimately determined by the Neutral Auditors.

(g) Notwithstanding anything herein to the contrary, if at any time prior to the Closing, Seller or Purchaser determines that, in the course of the preparation or review of the balance sheet included in the Historical Audited Financial Statements or Stub Period Consolidated Financial Statements or otherwise, any asset or liability recorded on the Benchmark Balance Sheet was improperly classified as a “current” or “non-current” asset or liability, Seller or Purchaser shall notify the other party and, unless the other party delivers a notice of objection to such determination within 10 days of such notice, the Benchmark Balance Sheet and the Target Working Capital shall be adjusted to reflect the reclassification of any such assets or liabilities. Irrespective of whether any such adjustment is made on or prior to the Closing Date, Purchaser shall not be bound by any determination by Seller with respect to the classification of any assets or liabilities included in the Benchmark Balance Sheet, the Estimated Closing Date Working Capital or the Estimated Closing Date Working Capital Statement in its determination of Closing Date Working Capital or the Closing Date Working Capital Statement (except with respect to determinations by Seller that are consistent with GAAP to use one classification rather than another, which determinations shall be final and binding upon the parties). To the extent there is any dispute concerning the classification of assets or liabilities in the calculation of the Benchmark Balance Sheet, the Target Working Capital and the Closing Date Working Capital, such dispute, whether arising before or (within the time periods in which Seller may deliver a notice of objection generally with respect to the Closing Date Working Capital Statement) after the Closing Date, shall be subject to resolution by the Neutral Auditors in accordance with the terms of this Section 2.3.

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ARTICLE III

THE CLOSING

Section 3.1. Closing Date . Except as hereinafter provided, the closing of the transactions contemplated hereunder (the “ Closing ”) shall take place at the offices of Schulte Roth & Zabel LLP, 919 Third Avenue, New York, New York 10022, at 10:00 a.m. (local time) on (i) the earlier to occur of (1) the last Business Day of the calendar month in which the last of the conditions set forth in Articles VIII and IX have been satisfied (other than those conditions that by their terms cannot be satisfied until the Closing Date) or, in the case of Article VIII, waived by Purchaser, or, in the case of Article IX, waived by Seller, or (ii) at such other place and at such other time and date as may be mutually agreed upon by Purchaser and Seller (such date and time being referred to herein as the “ Closing Date ”).

Section 3.2. Deliveries by Seller to Purchaser . At the Closing, Seller shall deliver, or shall cause to be delivered, to Purchaser and/or one or more of its Designated Affiliates the following:

(a) stock certificates or appropriate certificates of ownership, as applicable, representing all of the Purchased Equity Interests (other than those that are in book-entry form), in each case accompanied by stock powers duly executed in blank or other duly executed instruments of transfer;

(b) one or more bills of sale, substantially in the form of Exhibit B , or local transfer agreements as may be necessary or desirable under applicable Law, or comparable instruments of transfer transferring to Purchaser and/or one or more of its Designated Affiliates all of the Purchased Assets, duly executed by Seller;

(c) limited warranty deeds, substantially in the form of Exhibit C (with such modifications as may be required in the applicable local jurisdiction), with respect to the Owned Real Properties (other than Acquired Company Owned Real Property) and the Timberlands transferred pursuant to Section 1.6 (collectively, the “ Deeds ”);

(d) duly executed instruments of assignment and assumption of the Real Property Leases to which Seller or any of its Subsidiaries (other than Acquired Companies) is a party, substantially in the form of Exhibit D , subject to Sections 6.3(b) and 10.4(b) (and all other applicable terms of this Agreement);

(e) a receipt duly executed by Seller acknowledging payment of the Closing Date Cash Consideration;

(f) duly executed instruments of assignment or transfer and assumption of the Purchased Intellectual Property other than Computer Software, which is covered by other Sections of this Agreement, substantially in the form of Exhibit E or local assignment agreements as may be necessary or desirable under applicable Law;

(g) the certificates referred to in Section 8.9 signed by a duly authorized officer of Seller;

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(h) the resignations of the officers, as corporate officers, and directors of the Acquired Companies set forth on Schedule 3.2(h) ;

(i) the Transition Agreements, duly executed by Seller;

(j) a certificate of non-foreign status pursuant to Treasury Regulations Section 1.1445-2(b)(2) from Seller and each domestic Subsidiary of Seller that transfers Purchased Equity Interests or Purchased Assets pursuant to this Agreement;

(k) a duly executed assignment and assumption agreement or other comparable instrument of assignment and assumption, substantially in the form of Exhibit F , evidencing assumption of the Assumed Liabilities by Purchaser or one or more of its Designated Affiliates and retention of the Excluded Liabilities by Seller or its Subsidiaries (other than any Acquired Companies), and all other instruments or documents as shall be necessary in the reasonable judgment of Purchaser to evidence the assignment by Seller of the Purchased Assets and the assumption by Purchaser or one or more of its Designated Affiliates of the Assumed Liabilities and acquisition, assumption or retention of the Excluded Assets and Excluded Liabilities by Seller or its Subsidiaries (other than the Acquired Companies), subject to Sections 6.3(b) and 10.4(b);

(l) any real property Transfer Tax returns (as described in Section 14.10 hereof) required to be executed by Seller or any of its Subsidiaries; and

(m) the Laser License Agreement (the “ Laser License Agreement ”) , substantially in the form of Exhibit G , duly executed by Seller.

Section 3.3. Deliveries by Purchaser to Seller . At the Closing, Purchaser and/or one or more of its Designated Affiliates shall deliver to Seller the following:

(a) the Closing Date Cash Consideration by wire transfer of immediately available funds in the amount and manner provided in Section 2.2;

(b) a duly executed assignment and assumption agreement or other comparable instrument of assignment and assumption, substantially in the form of Exhibit F , evidencing assumption of the Assumed Liabilities and all other instruments or documents as shall be necessary in the reasonable judgment of Seller to evidence the assignment by Seller of the Purchased Assets and the assumption by Purchaser or its Designated Affiliates of the Assumed Liabilities, subject to Sections 6.3(b) and 10.4(b);

(c) completed and duly executed copies of Internal Revenue Service Form 8023, required schedules thereto, and any similar state, local or foreign forms;

(d) any applicable resale certificates and other exemption certificates reasonably requested by the Seller pursuant to Section 14.10;

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(e) the certificate referred to in Section 9.5 signed by a duly authorized officer of Purchaser;

(f) the Transition Agreements, duly executed by Purchaser and/or one or more of its Designated Affiliates;

(g) duly executed instruments of assignment and assumption of the Real Property Leases to which Seller or any of its Subsidiaries (other than Acquired Companies) is a party, substantially in the form of Exhibit D , subject to Sections 6.3(b) and 10.4(b) (and all other applicable terms of this Agreement);

(h) any real property Transfer Tax returns (as described in Section 14.10 hereof) required to be executed by Purchaser;

(i) the Laser License Agreement, duly executed by Purchaser and/or one or more of its Designated Affiliates; and

(j) duly executed instruments of assignment or transfer and assumption of the Purchased Intellectual Property other than Computer Software, which is covered by other Sections of this Agreement, substantially in the form of Exhibit E or local assignment agreements as may be necessary or desirable under applicable Law.

Section 3.4. Proceedings at Closing . All acts and proceedings to be taken and all documents to be executed and delivered by the parties at the Closing shall be deemed to have been taken and executed simultaneously, and, except as permitted hereunder, no acts or proceedings shall be deemed taken nor any documents executed or delivered until all have been taken, executed and delivered.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF SELLER

As an inducement to Purchaser to enter into this Agreement and to consummate the transactions contemplated hereby, Seller hereby represents and warrants to Purchaser that, except as set forth in the applicable Schedules to this Agreement delivered by Seller to Purchaser and dated as of the date hereof:

Section 4.1. Organization and Good Standing . Each of Seller, CP and the Acquired Companies is an entity duly organized, validly existing and, if applicable, in good standing under the laws of the jurisdiction of its organization or formation, as set forth on Schedule 4.1 , and has the requisite power and authority to own or lease and operate its properties and to carry on, in all material respects, its business as now being conducted. Each of Seller, CP and the Acquired Companies is duly qualified, authorized or licensed to conduct its business as a foreign corporation and, if applicable, is in good standing under the laws of each jurisdiction in which the conduct of its business or the ownership of its properties or assets requires such qualification, authorization or license, except where the failure to be so qualified, authorized or licensed or to be in good standing would not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect. CP is a direct, wholly-owned Subsidiary of Seller.

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Section 4.2. Capital Structure of Acquired Companies . As of the date hereof, the authorized capital stock or other equity interests of each of the Acquired Companies and the number of shares of such capital stock or other equity interests that are issued and outstanding and the ownership thereof, are as set forth on Schedule 4.2 . The Acquired Company Equity Interests are duly authorized, validly issued, fully paid and nonassessable (except as disclosed on Schedule 4.2 ) and are not subject to any pre-emptive or subscription rights (and were not issued in violation of any preemptive or subscription rights). As set forth on Schedule 4.2 , Seller, directly or indirectly through one or more wholly owned Subsidiaries of Seller, beneficially owns and has good and valid title to all the Acquired Company Equity Interests, free and clear of all Liens other than Liens disclosed on Schedule 4.2 and Liens imposed by this Agreement and under state and federal securities Laws. Except as set forth in Schedule 4.2 , (i) there are no options, warrants, or similar rights to purchase any of the shares or other equity interests of any of the Acquired Companies, and no obligations binding upon any Acquired Company to issue, sell, redeem, purchase or exchange any of its capital stock or any other equity interest or any right relating thereto, and (ii) there are no shareholders’ agreements, voting agreements, voting trusts or other agreements or rights of third parties with respect to or affecting any of the Acquired Companies or any of their shares of capital stock or other equity interests. Seller has delivered to Purchaser prior to the date hereof true and complete copies of the certificate of incorporation, bylaws, operating agreement and each other organizational document of each of the Acquired Companies, each as in effect as of the date hereof.

Section 4.3. Subsidiaries . Schedule 4.3 contains a true and complete list of all Subsidiaries of the Purchased Companies and the ownership thereof. All of the outstanding shares of capital stock or other equity interests of each Subsidiary of the Purchased Companies (collectively, the “ Purchased Company Subsidiaries ”) are owned directly or indirectly by the Purchased Companies, as set forth on Schedule 4.3 , free and clear of all Liens other than Liens disclosed on Schedule 4.3 and Liens imposed by this Agreement and under state and federal securities Laws, and are duly authorized, validly issued, fully paid and nonassessable and are not subject to any preemptive or subscription rights. The applicable Purchased Companies and/or Subsidiaries thereof, as set forth on Schedule 4.3 , have good and valid title to all such shares.

Section 4.4. Authorization of Agreement . Seller has all requisite corporate power and authority to execute and deliver (or cause to be executed and delivered) this Agreement and each other agreement, document, instrument or certificate contemplated hereby to be executed by Seller or its Subsidiaries in connection with the consummation of the transactions contemplated hereby (all such other agreements, documents, instruments and certificates required to be executed by Seller or any of its Subsidiaries being hereinafter referred to, collectively, as the “ Seller Documents ”), and to perform (or cause to be performed) fully Seller’s obligations hereunder and thereunder. The execution, delivery and performance by Seller of this Agreement and by Seller or its Subsidiaries of each of the Seller Documents has been duly and validly authorized by all necessary action on the part of Seller or such Subsidiaries, as applicable, and no additional authorization, consent or approval by Seller, its Subsidiaries or the shareholders of Seller is required in connection with the execution, delivery and performance by them of the Seller Documents. This Agreement has been, and each of the Seller Documents will be, on or prior to the Closing Date, duly executed and delivered by Seller and its Subsidiaries, as applicable, and (assuming the due authorization, execution and delivery by the other parties hereto and thereto) this Agreement constitutes, and each of the Seller

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Documents when so executed and delivered will constitute valid and legally binding obligations of Seller and its Subsidiaries, as applicable, enforceable against each in accordance with its terms, except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar Laws affecting the enforcement of creditors’ rights generally, and general principles of equity (regardless of whether such enforceability is considered in a proceeding in Law or equity).

Section 4.5. No Conflicts; Consents of Third Parties . (a) None of the execution and delivery by Seller or any of its Subsidiaries of this Agreement and the Seller Documents, the consummation of the transactions contemplated hereby or thereby or compliance by Seller and its Subsidiaries with any of the provisions hereof or thereof will (i) result in the breach of any provision of the certificate or articles of incorporation, by-laws or similar organizational documents of Seller, CP or any Acquired Company; (ii) except as set forth on Schedule 4.5 , violate, result in the breach or termination of, or constitute (with or without notice or lapse of time or both) a default or give rise to any right of consent, cancellation, termination or acceleration or right to increase the obligations or otherwise modify the terms under any Business Contract; or (iii) constitute a violation of any Law applicable to Seller or any Acquired Company, except as would not, in the case of clause (ii) only, reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

(b) No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of Seller, CP or any Acquired Company in connection with the execution and delivery of this Agreement or the Seller Documents, the consummation of the transactions contemplated hereby and thereby or the compliance by Seller, CP and Seller’s other Subsidiaries with any of the provisions hereof or thereof, except for (i) compliance with the applicable requirements of any competition or antitrust laws, including (x) the Hart-Scott-Rodino Antitrust Improvements Act of 1976 and the rules and regulations promulgated thereunder (the “ HSR Act ”), (y) comparable requirement in foreign jurisdictions, and (z) Permits required under Environmental Laws, and (ii) other than those referred to in clause (i), such consents, waivers, approvals, Orders, Permits or authorizations of, or declarations or filings with, or notifications to, any Person or Governmental Body the failure of which to be received or made would not reasonably be expected to have, individually or in the aggregate, a material adverse effect on the Purchaser’s ability to operate the Business after Closing substantially as conducted as of the date hereof or a material adverse effect on the Purchaser’s or Seller’s ability to consummate the transactions contemplated by this Agreement.

Section 4.6. Financial Statements . (a) Schedule 4.6(a) contains true and complete copies of the unaudited balance sheets of the Business, as of September 30, 2004, December 31, 2003 and December 31, 2002, and the unaudited statements of operations of the Business for the nine months ended September 30, 2004 and the fiscal years ended December 31, 2003 and December 31, 2002 (collectively, the “ Unaudited Historical Financial Statements ”). Each of the Unaudited Historical Financial Statements has been prepared in accordance with GAAP as applied to carve-out financial statements (except for normal and recurring year end adjustments, which are not expected in the aggregate to be material in amount, and the omission of footnotes, the omission of cash flow statements and the selection of periods presented), consistently with Regulation S-X. The Unaudited Historical Financial Statements were prepared

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on the basis of the books and records of the Business (in each case, as of the date of such Unaudited Historical Financial Statements) and present fairly, in all material respects, the financial position of the Business as of the dates thereof and the results of its operations for each of the periods then ended in conformity with GAAP as applied to carve-out financial statements (except for normal and recurring year end adjustments, which are not expected in the aggregate to be material in amount, and the omission of footnotes, the omission of cash flow statements and the selection of periods presented), consistently with Regulation S-X. Such books and records are a portion of the books and records from which Seller’s audited financial statements are prepared. The procedures and application of GAAP used in the preparation of the Unaudited Historical Financial Statements were consistent with the procedures and application of GAAP used by Seller in preparation of Seller’s audited financial statements as filed with the Securities and Exchange Commission, except as set forth in Schedule 4.6(a)(ii) .

(b) Seller has made available to Purchaser a true and correct copy of the unaudited balance sheet of the Business, as of September 30, 2004 (the “ Balance Sheet Date ”), which reflects adjustments to the balance sheet of the Business as of such date as if the balance sheet were prepared in accordance with GAAP as modified by the Specified Accounting Principles (such balance sheet being the “ Benchmark Balance Sheet ”). The Benchmark Balance Sheet was prepared on the basis of the books and records of the Business as of the date thereof and presents fairly, in all material respects, the financial position of the Business as of the date thereof in conformity with GAAP, as modified by the Specified Accounting Principles, as applied to carve-out financial statements (except for normal and recurring year end adjustments, which are not expected in the aggregate to be material in amount, and the omission of footnotes, the omission of cash flow statements and the selection of periods presented), consistently with Regulation S-X.

(c) The Historical Audited Financial Statements, the 2004 Audited Financial Statements, the Stub Period Financial Statements and the Additional Financial Data will, upon their delivery to Purchaser in accordance with Section 6.9 hereof, fairly present in all material respects, the results of operations, the financial condition and cash flows of the Business, the Timber Business or the Paper Business, as applicable, stated and presented in compliance with Regulation S-X and GAAP, consistently applied with the preparation of the Unaudited Historical Financial Statements, except as set forth in Schedule 4.6(c) .

(d) Except as set forth in Schedule 4.6(d) , when delivered pursuant to Section 6.9, the Historical Combined Audited Financial Statements will not, excluding the effect of all extraordinary gains or losses (as determined in accordance with GAAP), differ in any material respect from the corresponding Unaudited Historical Financial Statements for the corresponding period. Except as set forth in Schedule 4.6(d) , when delivered pursuant to Section 6.9, the Stub Period Combined Financial Statements will not, excluding the effect of all extraordinary gains or losses (as determined in accordance with GAAP), differ in any material respect from the corresponding Unaudited Financial Statements.

(e) None of the Seller, CP nor any of the Acquired Companies has or is subject to any Liabilities which would be required to be recorded by GAAP other than: (i) Liabilities recorded or disclosed on the September 30, 2004 balance sheet included in the Unaudited Historical Financial Statements, (ii) Liabilities which have arisen after September 30,

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2004 in the Ordinary Course that are not material to the Balance Sheet of the Business, (iii) Liabilities reflected in the Closing Date Working Capital, (iv) Excluded Liabilities and (v) Liabilities arising from matters disclosed by Seller in the Schedules to this Agreement as of the date hereof.

(f) All accounts and notes receivable reflected on the Unaudited Historical Financial Statements were, and all accounts and notes receivable to be shown in the computation of Closing Date Net Working Capital will be, bona fide receivables, accounted for in accordance with GAAP, consistently applied, and subject to no offsets or counterclaims (other than any offsets or counterclaims for which adequate reserves have been, or will be, recorded to the extent required by GAAP), representing amounts due with respect to actual transactions in the operation of the Business.

(g) [Reserved].

(h) Except as set forth in Schedule 4.6(h) , the Seller and its Subsidiaries maintain, as it relates to the Business, in all material respects internal controls over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements of Seller and its Subsidiaries on a consolidated, enterprise-wide basis, for external purposes in accordance with GAAP, including policies and procedures that (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the Seller and its Subsidiaries, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements of Seller on a consolidated basis in accordance with GAAP, and that receipts and expenditures of the Seller and its Subsidiaries are being made only in accordance with authorizations of management and directors of the Seller and its Subsidiaries and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the assets of the Seller and its Subsidiaries.

Section 4.7. Material Adverse Changes . Since the Balance Sheet Date, except as expressly contemplated by the transactions contemplated hereby or as set forth on Schedule 4.7 , (a) the Business has been conducted in all material respects in the Ordinary Course and (b) there has been no Material Adverse Effect nor has there been any event or circumstance (or series of events or circumstances) that, individually or in the aggregate, would reasonably be expected to result in a Material Adverse Effect. From the Balance Sheet Date until the date hereof, except as set forth on Schedule 4.7, none of the Seller nor any of its Subsidiaries has, with respect to the Business:

(a) sold, assigned, pledged, hypothecated or otherwise transferred any portion of the Assets, including the Timberlands and the timber located thereon, in any case except for (i) sales of inventory and standing timber in the Ordinary Course and not inconsistent with the Harvesting Plan, (ii) sales of other assets or properties not in excess of $5 million in the aggregate, and (iii) the Timberland sales reflected in Schedule 4.7(a) ;

(b) other than in the Ordinary Course, entered into, terminated or materially amended any Business Contracts or Leases that are individually or in the aggregate material to the Business;

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(c) suffered any extraordinary damage, destruction or other casualty loss to any assets that are, individually or in the aggregate, material to the Business;

(d) except as required by applicable Law or the terms of any Employee Benefit Plan or Individual Agreement, and except for (i) normal salary administration and ordinary course promotions for Business Employees or Acquired Company Employees, (ii) increases required by Collective Bargaining Agreements, Employee Benefit Plans or Individual Agreements, (iii) increases applicable to Corporate Business Employees that do not exceed $150,000 in the aggregate and (iv) or other compensation increases in the Ordinary Course, increased the compensation payable or to become payable to any of the Business Employees or Acquired Company Employees or increased any bonus, insurance, pension or other employee benefit plan, payment or arrangement made by Seller, CP or any of the Acquired Companies, for or with any of the Business Employees or Acquired Company Employees;

(e) experienced any material shortage, cessation or interruption of raw materials, supplies or other services required to conduct the Business;

(f) except as set forth on Schedule 4.7(f), experienced any material grievance or labor dispute, claim or litigation by or involving the Business Employees or Acquired Company Employees which could reasonably be expected to result in liability to the Business in excess of $200,000 individually or $500,000 in the aggregate;

(g) experienced any material adverse dispute of any kind pending or, to the Seller’s Knowledge, threatened with any material lessor, lessee, contract vendor or vendee, customer, supplier, distributor or joint venturer;

(h) except for renewals of existing contracts or the entering into of similar renewed or replacement contracts with different vendors on substantially the same terms (disregarding reasonable cost or similar increases), entered into any Business Contract which is for a term of one year or more and involves the annual payment of more than (i) $5,000,000, in the case of Business Contracts with customers and merchant distributors of the Business, (ii) $2,500,000, in the case of Business Contracts with suppliers to the Business, including pulp and timber Contracts, Contracts regarding the purchase or sale of energy, steam, and power and (iii) $1,000,000 in the case of all other Business Contracts;

(i) entered into any Business Contract pursuant to which it agrees to (i) indemnify any Person in any material respect (other than in the Ordinary Course), or (ii) refrain from competing with any Person or from engaging in any business or carrying on any business in any geographic area or during any period of time (excluding, in the case of this clause (ii), any such Business Contracts which do not impose material business restraints on the Business and which would not by their terms apply to the shareholder(s) of Purchaser or any other entities or businesses owned by such shareholder(s));

(j) except as required by Law or otherwise in the Ordinary Course: (i) entered into or made any amendment to any Contract with any labor or trade union or association representing any Business Employee or Acquired Company Employee or (ii) adopted, entered into or made any amendment to any Employee Benefit Plan, in either case that would materially

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increase the cost to the Business of such Contract or Employee Benefit Plan; or made any material change in the actuarial methods or assumptions used in funding any defined benefit pension plan, or made any material change in the assumptions or factors used in determining benefit equivalencies thereunder;

(k) created or assumed any Lien of any kind on any property or assets, other than Permitted Exceptions;

(l) except as listed on Schedule 4.7(l) granted any material severance or termination pay to any of the employees, directors, officers or consultants of the Business or materially increased any benefits payable under any existing severance or termination pay policies or agreements with any of employees, officers, directors or consultants, including any of the foregoing that would be triggered by the consummation of the transactions contemplated by this Agreement, except (as to any of the foregoing) pursuant to any Employee Benefit Plan or Individual Agreement that is set forth on Schedule 4.15(a)(i) ;

(m) accelerated the collection of accounts or notes receivable of the Business or deferred the payment of any trade payables of the Business, other than in the Ordinary Course; or

(n) entered into an agreement to do any of the foregoing.

Section 4.8. Taxes . Except as set forth on Schedule 4.8 :

(a) all Tax Returns required to be filed by or with respect to the Acquired Companies or the Business have been timely filed (taking into account extensions) and all such Tax Returns are complete and accurate in all material respects;

(b) all Taxes for which Seller is obligated to indemnify Purchaser pursuant to the terms of this Agreement arising in a Pre-Closing Tax Period and attributable to the Acquired Companies or the Business, whether or not shown to be due on such Tax Returns (or payable pursuant to any assessments with respect to such Tax Returns) have been or will be timely paid to the appropriate taxing authority or to the Purchaser pursuant to the terms of this Agreement;

(c) there is no action, suit, audit, claim or assessment pending, with respect to a material amount of Taxes of the Acquired Companies or the Business;

(d) all material amounts required to be withheld or collected for payment by the Acquired Companies, including from employee salaries, wages and other compensation, have been collected or withheld and paid to the appropriate taxing authorities;

(e) (i) no property of the Acquired Companies and none of the Purchased Assets is “tax exempt use property” within the meaning of Section 168(h) of the Code and (ii) none of the Acquired Companies is a party to and none of the Purchased Assets is subject to any lease made pursuant to Section 168(f)(8) of the Internal Revenue Code of 1954;

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(f) each of the 338(h)(10) Election Entities is a member of the affiliated group that files a consolidated federal income Tax Return with Seller as the common parent, and Seller is eligible to join with Purchaser in making a 338(h)(10) Election with respect to the acquisition by the Purchaser of each such 338(h)(10) Election Entity;

(g) none of the Acquired Companies is obligated to make any payments (or is a party to any agreement that could obligate it to make any future payments), and none of the Assumed Liabilities is an obligation to make any payments, that will not be deductible under Sections 162(m) or 280G of the Code;

(h) none of the Acquired Companies has distributed stock of another Person, or has had its stock distributed by another Person, in a transaction that was purported or intended to be governed in whole or in part by Section 355 or Section 361 of the Code; and

(i) since their formations, each Acquired Company that is a limited liability company has been taxed as a disregarded entity for income Tax purposes and no elections have been or will be made to treat any such Acquired Company as a corporation for any income Tax purposes.

Section 4.9. Real Property .

(a) CP, Seller, a Subsidiary of Seller or an Acquired Company, in each case as designated on Schedule 1.2(a)(i) , Schedule 1.2(b)(i) or Schedule 4.9(a)(i) , owns valid fee simple title in and to (as to CP) all CP Owned Real Property, (as to Seller or a Subsidiary of Seller) all Seller Owned Real Property, and (as to an Acquired Company) all of the real property owned by an Acquired Company as listed on Schedule 4.9(a)(i) (the real property listed on Schedule 4.9(a)(i) owned by an Acquired Company, the “ Acquired Company Owned Real Property ”, which term shall include all interests and rights of such Acquired Company that are appurtenant to such real property and related to the operation of the Business thereon) (the CP Owned Real Property, the Seller Owned Real Property, and the Acquired Company Owned Real Property, together, the “ Owned Real Properties ” which term, as defined and used herein, shall not include the Timberlands, but shall include all interests and rights of Seller, CP or such Acquired Company that are appurtenant to such real property and related to the operation of the Business thereon), free and clear of all Liens other than Permitted Exceptions.

(b) Except as disclosed on Schedule 4.9(b) , none of the Owned Real Properties is subject to any material lease, sublease, license or other agreement that grants to any other Person any rights to acquire, lease, use or occupy such Owned Real Property or any part thereof.

(c) Except as set forth on Schedule 4.9(c) , (i) each material CP Real Property Lease constitutes a valid leasehold estate in the real estate subject to each such lease, each material Seller Real Property Lease constitutes a valid leasehold estate in the real estate subject to each such lease, and each of the material real property leases listed on Schedule 4.9(c) , pursuant to which an Acquired Company is the lessee (the “ Acquired Company Real Property

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Leases ”; and each property subject to an Acquired Company Real Property Lease, an “ Acquired Company Leased Real Property ”) constitutes a valid leasehold estate in the real estate subject to each such lease (the CP Real Property Leases, the Seller Real Property Leases, and the Acquired Company Real Property Leases, together, the “ Real Property Leases ”; and each property subject to a Real Property Lease, a “ Leased Real Property ” all of which terms, as defined and used herein, shall not include the Timberlands), subject in each case only to Permitted Exceptions, (ii) each material Real Property Lease is in full force and effect and is valid and enforceable in accordance with its terms, except as may be limited by applicable bankruptcy, insolvency, moratorium or other laws affecting the enforcement of creditor’s rights generally or by general principles of equity, (iii) other than as expressly provided on Schedule 4.9(c)(iii), neither Seller nor any of its Subsidiaries acts as a landlord with respect to any Real Property Lease, and (iv) to the Knowledge of Seller, there is no outstanding material default by Seller, a Subsidiary of Seller, CP or an Acquired Company (as the case may be) under any material Real Property Lease.

(d) Except as set forth on Schedule 4.9(d) , none of the real estate demised to Seller, a Subsidiary of Seller, CP or an Acquired Company pursuant to a material Real Property Lease is subject to any other lease, sublease, license or other agreement granting to any other Person any rights to lease, use or occupy such real property or any part thereof.

(e) Except as set forth in Schedule 4.9(e) , there does not exist any actual or, to the Knowledge of Seller, threatened, condemnation or eminent domain proceedings that affect any Owned Real Property or material Leased Real Property, and none of Seller or any of its Subsidiaries have received any written notice of the intention of any Governmental Body or other Person to take or use any Owned Real Property or material Leased Real Property.

(f) No Acquired Company owns or leases any material real property that is Related to the Business, except (i) as included in the Acquired Company Owned Real Property or as leased under the Acquired Company Real Property Leases, (ii) as shall be conveyed by Seller or a Subsidiary of Seller to an Acquired Company (or to Purchaser or its designee, at Purchaser’s request) at or prior to the Closing, and (iii) the Timberlands.

Section 4.10. Operations Sites .

(a) Mills . (i) Except as set forth in clause (ii) of this Section 4.10(a) and subject to clause (iv) of this Section 4.10(a): MeadWestvaco Kentucky, L.P., an Acquired Company, owns valid fee simple title in and to the real property and the improvements located thereon commonly known as the Wickliffe Mill, located in Wickliffe, Kentucky (the “ Wickliffe Mill ”); MeadWestvaco Oxford Corporation, an Acquired Company, owns valid fee simple title in and to the real property and the improvements located thereon commonly known as the Rumford Mill, located in Rumford, Maine (the “ Rumford Mill ”); MeadWestvaco Maryland, Inc., an Acquired Company, owns valid fee simple title in and to the real property and the improvements located thereon commonly known as the Luke Mill, located in Luke, Maryland (the “ Luke Mill ”); Escanaba Paper Company, an Acquired Company, owns valid fee simple title in and to the real property and the improvements located thereon commonly known as the Escanaba Mill, located in Escanaba, Michigan (the “ Escanaba Mill ”); and MW Custom Papers LLC, owns valid fee simple title in and to the real property and the improvements located

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thereon commonly known as the Chillicothe Mill, located in Chillicothe, Ohio (the “ Chillicothe Mill ”), the Chilpaco Mill, located in Chillicothe, Ohio (the “ Chilpaco Mill ”) and the Fremont Mill, located in Fremont, Ohio (the “ Fremont Mill ”, and, together with the Wickliffe Mill, the Rumford Mill, the Luke Mill, the Escanaba Mill, the Chillicothe Mill and the Chilpaco Mill, the “ Mills ”), in each case subject only to Permitted Exceptions. Except as set forth in clause (ii) of this Section 4.10(a), each Mill is an Owned Real Property and is accurately identified as such on Schedule 1.2(a)(i) or on Schedule 4.9(a)(i) .

(ii) The portions of the Mills identified as such on Schedule 4.10(a) are Leased Real Properties leased to the Seller or the applicable Subsidiary of Seller (including CP or an Acquired Company) identified on such Schedule 4.10(a) , such Leased Real Properties are accurately identified in all material respects on such Schedule and are the subject of the valid and subsisting Real Property Leases identified on such Schedule, which permit the use of such portions of such Mills for their current uses (each, together with all amendments and side agreements relating thereto, a “ Mill Lease ”). True, complete and correct copies of each material Mill Lease have been made available by Seller to Purchaser.

(iii) All right, title and interest of Seller or a Subsidiary of Seller in and to all real property, fixtures, easements, licenses, access rights and appurtenances used in connection with the Business currently conducted at each Mill is included as part of the Acquired Company Owned Real Property, Acquired Company Leased Real Property or is otherwise being transferred (directly or indirectly) by Seller or a Subsidiary of Seller to Purchaser pursuant to the terms of this Agreement, including, without limitation, all of Seller’s (or a Subsidiary of Seller’s) right, title and interest in and to any easements, licenses and other rights necessary (w) to obtain power, water and other utilities for the benefit of the Mills, (x) to obtain supplies and other materials for the benefit of the Mills, (y) to dispose of waste at the Mills in accordance with applicable law, and (z) to carry out the operation of the Business currently conducted at each Mill.

(iv) Notwithstanding anything to the contrary in this Section 4.10 or elsewhere in this Agreement, it shall not be deemed to be a misrepresentation or breach of this Agreement by Seller if (x) certain real property listed in Schedules 1.2(a)(i), 1.2(a)(ii), 1.2(b)(i), 1.2(b)(ii), 4.9(a)(i) and 4.9(c) attached hereto is Related to the Business but is not owned or leased by the particular entity indicated on such Schedule (but is nevertheless owned or leased by Seller, an Acquired Company or another Subsidiary of Seller), (y) certain real property listed on such Schedules is in fact not Related to the Business, or (z) certain real property Related to the Business is in fact not listed on such Schedules; provided that Seller shall at its sole cost and expense (other than sharing of transfer taxes as provided herein, which shall not apply to clause (B) below), (A) in the case of the real property described in clause (x) above, at the Closing, convey such real property (or cause such real property to be conveyed) to the correct Acquired Company (if related to (or a portion of) a Mill owned by such Acquired Company) or directly to Purchaser (or its designee) as provided herein (provided that any such conveyances shall be made pursuant to deeds and/or other instruments of assignment contemplated hereby and otherwise in compliance with the terms hereof, and any representations, warranties and covenants of Seller hereunder with respect to Owned Real Property or Leased Real Property shall be applicable to any such real property, and, if transferred directly to Purchaser, with applicable transfer taxes being shared as provided herein), (B) in the case of the real property

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described in clause (y) above, prior to Closing, cause any Acquired Company owning or leasing such real property to convey such real property to Seller or a Subsidiary of Seller (other than an Acquired Company), and if such real property is owned or leased by Seller or a Subsidiary of Seller, then such real property shall not be conveyed to Purchaser pursuant to this Agreement, and (C) in the case of the real property described in clause (z) above, cause such real property to be conveyed to Purchaser at Closing in accordance with this Agreement (and such real property shall be deemed to be Owned Real Property or Leased Real Property hereunder), subject to Section 7.11 (and, if such Undisclosed Business Property is part of the Mills, Chillicothe Distribution Center or the Timberlands, Section 6.10) of this Agreement.

(b) Distribution Centers . (i) A Subsidiary of Seller owns, directly or indirectly, good and valid fee simple title in and to the real property commonly referred to as the Chillicothe Distribution Center, located in Chillicothe, Ohio (the “ Chillicothe Distribution Center ”), subject only to Permitted Exceptions, which is an Owned Real Property accurately identified on Schedule 1.2(a)(i) , and good and valid leasehold interests in and to the real property commonly referred to as the Bedford Distribution Center, located in Bedford, Pennsylvania (the “ Bedford Distribution Center ”), and the Keyser Distribution Center, located in Keyser, West Virginia (the “ Keyser Distribution Center ”, and, together with the Chillicothe Distribution Center, the Bedford Distribution Center, and the Keyser Distribution Center, the “ Distribution Centers ”).

(ii) Each Distribution Center other than the Chillicothe Distribution Center is a Leased Real Property accurately identified on Schedule 1.2(b)(ii) which is the subject of a valid Real Property Lease providing for the use for warehousing and distribution center purposes of the related Distribution Center by the lessee thereunder. Copies of the Real Property Leases for the Bedford and Keyser Distribution Centers have been provided by Seller to Purchaser, and such copies are true, correct and complete in all material respects.

(iii) All right, title and interest of Seller or a Subsidiary of Seller in and to all real property, fixtures, easements, licenses, access rights and appurtenances used in connection with the Business currently conducted at each Distribution Center is included as part of the Acquired Company Owned Real Property, Acquired Company Leased Real Property or is otherwise being transferred (directly or indirectly) by Seller or a Subsidiary of Seller to Purchaser pursuant to the terms of this Agreement, including, without limitation, all right, title and interest of Seller or any Subsidiary of Seller in and to any easements, licenses and other rights relating to (x) power, water and other utilities for the benefit of the Distribution Centers, (y) parking, access and egress (including railroad spur access and egress) as currently utilized at the Distribution Centers, and (z) the distribution of products by Seller or its Subsidiaries, in each case, as necessary for the operation of the Business currently conducted at each Distribution Center.

Section 4.11. Timberlands .

(a) The term “ Timberlands ” shall mean the real property (including any and all interests and rights of Seller (or Seller’s Subsidiary, as applicable) that are appurtenant to such real property and related to the operation of the Business thereon) identified on Schedule 4.11(a) , which real property is forest land used or intended for use for the purpose of growing and harvesting timber for use in the Business and uses directly related thereto (provided that the

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term “ Timberlands ” shall exclude (i) any timberlands sold by Seller or its Subsidiaries as permitted pursuant to Section 6.2(c) hereof, and (ii) any Deleted Parcels (as defined in Section 6.12(f)(ii) hereof). Except as set forth on Schedule 4.11(a) , Seller or a Subsidiary of Seller owns valid fee simple title to the Timberlands, subject only to the Permitted Exceptions. The Timberlands constitute all the real property owned by Seller or its Subsidiaries and used by (or intended to be used by) Seller or any of its Subsidiaries for the purpose of growing and harvesting timber for the use in the Business, except for the timberlands (the “ Covington Timberlands ”) that provide timber for both the Luke Mill and Seller’s bleached board mill in Covington, Virginia. Schedule 4.11(a) lists the states and approximate acreage of the Timberlands. Except as set forth on Schedule 4.11(a) and except for the Covington Timberlands, the Seller does not, directly or through one of more of its Subsidiaries, own, lease, license or occupy any real property that is used in the growing and harvest of timber for the Business, other than the Timberlands.

(b) [Reserved].

(c) To the Knowledge of Seller, (i) there are no outstanding violations of Laws (or violation of Laws claimed by any Governmental Body) on the part of Seller or a Subsidiary of Seller in connection with its operation and management of the Timberlands that have had a material adverse effect on Seller’s (or such Subsidiary’s) use of the Timberlands as commercial timberland or tree farms or on Seller’s commercial harvesting of timber therefrom, (ii) there is no outstanding material failure by Seller or any of its Subsidiaries to comply with any Order imposed upon Seller or any such Subsidiary by any Governmental Body pertaining to any of the Timberlands or the use, occupancy, logging or condition thereof, and (iii) there is no pending change in the application of any forestry, zoning, land classification, environmental, or land use Laws to the Timberlands that would have a material adverse effect on the ability to log or conduct commercial timber or tree farming operations on such property after Closing.

(d) Except as set forth in the Geographic Information System (the “ GIS ”) maintained by Seller with respect to the Timberlands and a copy or copies of which have been delivered to Purchaser on or prior to the date hereof (on three CD-ROMs, one per forest, labeled with the date December 31, 2004), to the Knowledge of Seller, (i) there are no areas of the Timberlands with respect to which Seller or its Subsidiaries have a legal obligation under the Federal Endangered Species Act or comparable state, local or municipal Laws to protect endangered species (“ Protected Species ”) which inhabit such areas; and (ii) there are no pending or threatened Legal Proceedings against Seller, any of its Subsidiaries or the Timberlands based upon the presence of any Protected Species on the Timberlands.

(e) To the Knowledge of Seller, and except as set forth on Schedule 4.11(e) , there has been no material loss of timber from the Timberlands due to any casualty, insect infestation or other causes beyond the control of Seller since January 1, 2002.

(f) Except as set forth on Schedule 4.11(f) , there are no Contracts or Liens affecting or pertaining to the Timberlands or any portion thereof other than (i) Permitted Exceptions, (ii) Contracts entered into in the Ordinary Course, and (iii) such other Contracts and Liens that do not materially and adversely affect the commercial harvesting of timber on the Timberlands (or any portion thereof).

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(g) Except as set forth on Schedule 4.11(g) , to the Knowledge of Seller, there are no unresolved boundary disputes, and no unresolved disputes with respect to encroachments, between Seller (or any Subsidiary of Seller) and any third party affecting any of the Timberlands or any portion thereof, nor is any Person adversely possessing any of the Timberlands or any portion thereof, except for such matters that do not have a material adverse effect on the commercial harvesting of timber on the Timberlands (or any portion thereof).

(h) There are no management or brokerage agreements affecting the Timberlands to which Seller, or any Subsidiary of Seller, is a party that will or are reasonably likely to create a liability for Purchaser or any of its Designated Affiliates, or a Lien upon the Timberlands (other than obligations to pay brokerage fees pursuant to land sales contracts set forth in Schedule 4.11(h) hereto), and there are no agreements to which Seller or its Subsidiaries are a party for operation or maintenance services to be provided to the Timberlands, other than those that are terminable on not more than 90 days’ notice to the service provider or are otherwise referenced on Schedule 4.11(h) .

(i) Except as set forth on Schedule 4.11(i) , to Seller’s Knowledge, there are no unresolved disputes between Seller (or any Subsidiary of Seller) and any third party with respect to access to the Timberlands that would have a material adverse effect on the continued commercial timberland use, tree farming, and commercial logging, in the manner currently conducted by Seller or its Subsidiaries on any parcel included in the Timberlands.

(j) Seller and its Subsidiaries have during the past two years operated the Timberlands in the Ordinary Course, including (i) conducting their ongoing timber harvest operations on the Timberlands (x) in a manner sufficient to obtain certification from the Sustainable Forestry Initiative Program (“ SFI Certification ”) with respect to the Timberlands during such period, and (y) in accordance in all material respects with any applicable state forestry Best Management Practices, and (ii) performing necessary and prudent maintenance of roads, drainage systems, fire protection and prevention as well as appropriate stand establishment activities. Seller has obtained SFI Certification for the Timberlands and such certification is in full force and effect.

(k) Except as set forth on Schedule 4.11(k) , to the Seller’s Knowledge, there has been no mining activity on the Timberlands during the three (3) years immediately preceding the date hereof that has materially and adversely affected, or that would reasonably be expected to materially and adversely affect, the commercial harvesting of timber on the Timberlands or any portion thereof.

(l) Except as set forth on Schedule 4.11(l), during the three (3) years immediately preceding the date hereof, none of Seller or any of its Subsidiaries has taken any action or failed to take any action that would reasonably be expected to cause a change in the classification of the Timberlands for tax purposes (including real estate tax purposes), or any portion thereof (other than with respect to amounts of acreage that are immaterial), as “ forest land ” or “ timberland ”.

(m) To the Knowledge of Seller, and subject to (i) land sales described on Schedule 6.2(c) hereto, (ii) normal and customary harvesting of timber performed by or on

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behalf of Seller or any Subsidiary of Seller in the Ordinary Course and not inconsistent with the Harvesting Plan, and (iii) the natural growth and mortality of timber, the (A) aggregate amount of merchantable timber tonnage across all of the Timberlands set forth on Schedule 4.11(m)-1 , and (B) breakdown of merchantable hardwood and softwood timber tonnage by forest set forth on Schedule 4.11(m)-2 are true and correct in all material respects. For purposes of the representations set forth in this Section 4.11(m), the parties agree that (i) “in all material respects” as to merchantable timber tonnage will be defined as within a 10% variance, and (ii) the truth or falsity thereof may be determined prior to, on or after Closing pursuant to timber cruises of statistically relevant parcels (given the nature of Seller’s representations being made in this Section 4.11(m)) of the Timberlands and analysis thereof, which timber cruises shall be completed within six (6) months after the Closing Date, all in accordance with usual custom and practice of purchasers and sellers in the timber industry. The breakdown of merchantable pulpwood and saw timber tonnage by forest as set forth on Schedule 4.11(m)-3 has been prepared by Seller in good faith in the Ordinary Course and for utilization by Seller in the operation of the Business.

(n) Except as set forth in Schedule 4.11(n) , no Persons other than Seller or a Subsidiary of Seller (or contractors harvesting on their behalf) have the right to harvest timber on the Timberlands, except pursuant to Contracts entered into by Seller or its Subsidiaries in the Ordinary Course and in a manner not inconsistent with the Harvesting Plan.

(o) To the Knowledge of Seller, there are no currently existing facts or conditions with respect to the Timberlands that would prevent an owner of the entire Timberlands from growing and making available for harvest such volumes of timber on the Timberlands as are indicated in the Harvesting Plan, provided that such owner operates and manages the Timberlands (including making capital expenditures) in the same manner as Seller and its Subsidiaries, and excluding the adverse effect of weather conditions, casualty, insect infestations, and other causes beyond the control of an owner of Timberlands.

(p) As used in this Section 4.11, the term “to the Knowledge of Seller” or “to Seller’s Knowledge” shall refer to the actual knowledge of James H. Hill (Vice President, Land Acquisition and Sales), Bradley Homeier (Region Director, Escanaba Forest), Steve Mathey (Harvesting Director and former Forest Manager, Chillicothe Forest), Greg Dale (Forest Manager, Wickliffe Forest), Sam Houston (VP Finance and Strategy of Forestry), Gene Parker (President, Forestry Division) and Mark Watkins (Senior Vice President of Seller). Seller represents and warrants to Purchaser that (i) Mr. Hill is knowledgeable with respect to the matters described in this Section 4.11, based partly on his own knowledge and based partly on the knowledge of others (including the individuals listed in the following clause (ii)), (ii) Messrs. Homeier, Mathey and Dale are knowledgeable with respect to the matters described in this Section 4.11 (as applicable to the Escanaba, Chillicothe and Wickliffe forests, respectively), (iii) Messrs. Hill, Homeier, Mathey and Dale have made due inquiry with respect to such matters, and (iv) Messrs. Houston, Parker and Watkins are supervisory personnel in Seller’s forestry division.

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Section 4.12. Tangible Personal Property .

(a) Each lease of personal property (i) included in the Purchased Assets requiring lease payments equal to or exceeding U.S.$500,000 per annum, or (ii) the loss of which would reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect (collectively, the “ Personal Property Leases ”), is in full force and effect and is valid and enforceable in accordance with its terms, and there is no material default under any Personal Property Lease either by Seller or its Subsidiaries or, to the Knowledge of Seller, by any other party thereto, and no event has occurred that, with the lapse of time or the giving of notice or both, would constitute a material default by Seller or its Subsidiaries thereunder; and

(b) Seller or one of its Subsidiaries has good and valid title to each material item of owned Purchased Equipment, free and clear of any and all Liens other than Tangible Personal Property Permitted Liens.

Section 4.13. Intellectual Property . (a) Schedule 4.13(a) sets forth a true and complete list and description of (i) all Registered Acquired Intellectual Property and (ii) all Intellectual Property used in the operation of the Business that constitutes Excluded IP Assets.

(b) As of the date hereof, there are no Legal Proceedings decided, settled, pending or, to the Knowledge of Seller, threatened, by or against Seller or any of its Subsidiaries that concern any Acquired Intellectual Property or Business Data, including any such Legal Proceedings involving claims of infringement or other violation, validity, enforceability, ownership or the right to use any of the foregoing.

(c) To Seller’s Knowledge, the operation of the Business and the use of the Acquired Intellectual Property are not, and during the immediately preceding two years were not, infringing or otherwise in violation, in any material respect, of any Intellectual Property of any other Person.

(d) To Seller’s Knowledge, no Person is infringing or otherwise in violation, in any material respect, of any of the Acquired Intellectual Property in connection with the operation of the Business.

(e) Schedule 4.13(e) sets forth a true and complete list of all material IP Licenses. There are no Legal Proceedings decided, settled, pending, or to the Knowledge of Seller, threatened, by or against Seller or any of its Subsidiaries, concerning any material IP License, including any Legal Proceeding concerning a claim or position that Seller or any of its Subsidiaries or another party thereto has breached any material IP License or that any material IP License is invalid or unenforceable. Seller and its Subsidiaries are in compliance with, and have conducted their business so as to comply with, all material terms of all material IP Licenses. There exists no event, condition or occurrence which, with the giving of notice or lapse of time, or both, would constitute a material breach or default by Seller or any of its Subsidiaries or another party under any material IP License. No party to any material IP License has given Seller or any of its Subsidiaries notice of its intention to cancel, terminate or fail to renew any material IP License.

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(f) To the Knowledge of Seller, (i) the Acquired Intellectual Property is valid, subsisting and enforceable and (ii) Seller and each Acquired Company has timely made in all material respects all filings, payments and ownership recordations with the appropriate foreign and domestic agencies required to maintain in subsistence, in the name of Seller or one of its Subsidiaries, all Acquired Intellectual Property.

(g) All Intellectual Property of Seller and its Subsidiaries, except the Excluded IP Assets, used in the operation of the Business will be transferred to Purchaser (or one of its Subsidiaries) at Closing and such Intellectual Property will be available to Purchaser (or one of its Subsidiaries) immediately after Closing on the same terms and conditions under which it was available to Seller and its Subsidiaries prior to the Closing (except to the extent that any consent is required by any licensor of licensed Intellectual Property in connection with the transactions contemplated by this Agreement). The Seller Name and the other Trademarks, designs or logos used in the operation of the Business that do not constitute part of the Acquired Intellectual Property will remain available for use by Purchaser, without restriction and without infringing on the rights of any other Person, in the operation of the Business after Closing in the manner and to the extent provided in Section 7.7 hereof.

(h) Seller and each of its Subsidiaries have taken reasonable measures to protect the secrecy, confidentiality and value of all the Trade Secrets Related to the Business, and to Seller’s Knowledge, no unauthorized disclosure of any such Trade Secrets has occurred.

(i) The Computer Hardware Related to the Business as of the Closing Date is in good working condition (normal wear and tear excepted). Other than those errors and defects inherent in Computer Hardware that are generally known within the information technology industry, there has not been any material and recurring malfunction with respect to such Computer Hardware since January 1, 2002 that has not been remedied or replaced in all material respects.

(j) Schedule 4.13(j) sets forth a true and complete list of all Computer Software that is (i) Purchased Seller Software; (ii) owned by Seller or any of its Subsidiaries (other than the Acquired Companies) and used in the Business but not contained within the definition of the term “Related to the Business” (“ Included Seller Software ”); (iii) Purchased Third Party Software; or (iv) licensed by Seller or any of its Subsidiaries (other than the Acquired Companies) and used in the Business but not contained within the definition of the term “Related to the Business” (“ Included Third Party Software ”).

(k) All Business Software is transferred or made available to Purchaser and/or one or more of its Designated Affiliates hereunder on an “AS IS” basis as currently used in the Business. Without limiting the foregoing, to the Knowledge of Seller, the Business Software: (i) is in machine readable form and is in good working condition (normal wear and tear excepted); (ii) contains no Disabling Devices, and (iii) other than those errors and defects inherent in Computer Software that are generally known within the information technology industry, has not suffered from any material and recurring malfunctions since January 1, 2002 that have not been remedied in all material respects.

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(l) To the Knowledge of Seller, the use of the Business Data by Seller or its Subsidiaries prior to the Closing Date does not infringe or violate the rights of any Person, or otherwise violate any United States Law.

Section 4.14. Contracts . Schedule 4.14 sets forth a true, complete and correct list, as of the date hereof (or if not in writing, a description thereof), of each of the following Contracts related to the Business to which Seller or any of its Subsidiaries is a party or by which it is bound:

(a) Contracts for, or setting forth any of the terms or conditions relating to, the employment or termination of employment of any officer, consultant or employee whose basic annual compensation (including bonus and/or commission) is in excess of $150,000, other than any Contract that is terminable within 90 days without the Business incurring any penalty or fee;

(b) (i) Contracts for the purchase, or the sale, supply or provision, of merchandise, steam, materials, energy, supplies or services, including operating, land management and resource management and repair and timber hauling or cutting; (ii) Contracts for the purchase or lease of equipment, or (iii) Contracts relating to franchise, distributorship or sale agency arrangement, in each case ((i), (ii) or (iii)) not capable of being fully performed or not terminable by Seller or its Subsidiaries without penalty or premium within a period of 90 calendar days and involving annual payments in excess of (A) $5,000,000, in the case of Contracts with customers and merchant distributors of the Business; (B) $2,500,000, in the case of Contracts with suppliers to the Business, including pulp and timber Contracts and Contracts regarding the purchase or sale of energy, steam, and power, and (C) $2,000,000 in the case of all other Business contracts;

(c) Contracts for the purchase or sale of any of its assets in excess of $2,500,000, other than in the Ordinary Course, or any shares of its subsidiaries or interests in its businesses or joint ventures;

(d) Contracts relating to any partnership or joint venture involving payments by the Business in excess of $1,000,000 in the aggregate;

(e) Contracts that contain a non-compete or customer non-solicitation covenant or similar obligation (excluding any such Contracts which do not restrict the Business in any material respect and which would not apply to the shareholder(s) of Purchaser or any other entities or businesses owned by such shareholder(s) as a result of Purchaser’s acquisition of the Business);

(f) Contracts that contain any material indemnification obligation by or for the benefit of the Seller or any of its Subsidiaries, other than agreements entered into in the Ordinary Course;

(g) Collective Bargaining Agreements;

(h) Real Property Leases;

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(i) Intercompany Contracts; and

(j) Contracts relating to Indebtedness (including any Guarantees and any Hedging Agreements) ((a) through (j) being referred to collectively, the “ Material Business Contracts ”).

True and correct copies of all Material Business Contracts have been provided to Purchaser prior to the date hereof, together with any amendments, supplements, exhibits, schedules or addendums thereto. Seller and its Subsidiaries have performed, in all material respects, all of the obligations required to be performed by them to date, and are not in material default under, any of the Material Business Contracts, and, to the Knowledge of Seller, no other party to one of the Material Business Contracts is in material default thereunder. Each Material Business Contract is in full force and effect and constitutes the valid and legally binding obligation of the Seller or its applicable Subsidiary and, to the Knowledge of Seller, each other party thereto, enforceable in accordance with its terms, extent as may be limited by applicable bankruptcy, insolvency, moratorium or other laws affecting the enforcement of creditors’ rights generally or by general principles of equity.

Section 4.15. Employee Benefits . (a) Schedule 4.15(a)(i) sets forth a true and correct list, as of the date hereof, of each Employee Benefit Plan providing benefits to Acquired Company Employees and Business Employees at an annual cost to Seller and its Affiliates in excess of $200,000. For purposes of this Agreement, “ Employee Benefit Plan ” means each written employee benefit plan, and any other written incentive compensation or employee benefit plan, arrangement or agreement (including pension benefit, welfare benefit, retention, change in control, severance, disability, fringe benefit, deferred compensation, bonus or other incentive compensation and stock option, purchase or other equity based plans, agreements and arrangements, but excluding payroll practices and plans, agreements and arrangements that are mandated by Law) (“ Plans ”) that are sponsored or maintained by Seller or any of its Subsidiaries, to which Seller or any of its Subsidiaries contributes or is obligated to contribute, in any such case, for the benefit of Acquired Company Employees and Business Employees, including those Plans listed on Schedule 4.15(a)(i)(B) that are applicable to Acquired Company Employees and Business Employees who are employed outside the United States. Schedule 4.15(a)(ii) identifies each Plan that is sponsored, maintained or contributed to or required to be contributed to solely by one or more of the Acquired Companies, or to which solely the Acquired Companies are required to contribute (collectively, the “ Acquired Company Plans ”) and each employment, change-in-control or severance agreement between Seller or any of its Subsidiaries, on the one hand, and any Business Employee or Acquired Company Employee, on the other hand (the “ Individual Agreements ”).

(b) Except as would not reasonably be expected to have a Material Adverse Effect, each Employee Benefit Plan has been established and administered in accordance with its terms, and in compliance with the applicable provisions of ERISA, the Code and other applicable laws, rules and regulations.

(c) True and correct copies of the Employee Benefit Plans and the most recent plan summaries, if any, and all amendments or supplements thereto, with respect to each of the Employee Benefit Plans (as applicable) have been made available by Seller to Purchaser. Except

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as would not reasonably be expected to result in material liability to the Business, there are no pending or, to the Knowledge of Seller, threatened Legal Proceedings, audits or investigations against or involving any Acquired Company Plan, the assets of any such plan or the plan administrator or fiduciary of any Acquired Company Plan (other than routine benefit claims).

(d) Schedule 4.15(d) sets forth a true and correct list, as of the date of this Agreement, of each Employee Benefit Plan that is a defined contribution pension plan in which Acquired Company Employees or Business Employees participate (the “ Seller Savings Plans ”) or a defined benefit pension plan in which Acquired Company Employees or Business Employees participate (the “ Seller Pension Plans ”). The Internal Revenue Service has issued a favorable determination letter with respect to each Seller Savings Plan and each Seller Pension Plan and the related trust that has not been revoked, and, to the Knowledge of Seller, there are no existing circumstances and no events have occurred that could be reasonably expected to adversely affect the qualified status of any Seller Savings Plan or any Seller Pension Plan or the related trust. No “reportable event” as defined in Section 4043(c) of ERISA has occurred with respect to any Seller Pension Plan (other than an event for which the 30-day notice-period has been waived).

(e) Schedule 4.15(e) sets forth a true and correct list, as of the date of this Agreement, of each Plan sponsored by Seller or any of its Subsidiaries under which Former Acquired Company Employees or Former Business Employees and their respective beneficiaries and dependents receive post-retirement medical, health and life insurance benefits (other than Cobra Coverage) (the “ Retiree Medical Plans ”). Seller has used its reasonable best efforts to provide to Purchaser each written communication to Acquired Company Employees, Former Acquired Company Employees, Business Employees and Former Business Employees that, to the Knowledge of Seller, describe the terms and conditions for receipt of Retiree Medical Benefits under the Retiree Medical Plans by Acquired Company Employees. The obligation to provide benefits for Non-Represented Employees under the Retiree Medical Plans may be amended or terminated at any time for any reason.

(f) Schedule 4.15(f) sets forth a true and correct list, as of the date of this Agreement, of each Employee Benefit Plan providing medical, dental, life insurance, disability and other welfare benefits to Acquired Company Employees or Business Employees (the “ Seller Welfare Plans ”).

(g) Except for severance benefits provided under the terms of any Collective Bargaining Agreement, Schedule 4.15(g) sets forth a true and correct list, as of the date of this Agreement, of each Employee Benefit Plan under which Acquired Company Employees or Business Employees are eligible for severance benefits (the “ Severance Plans ”).

(h) With respect to each of the Employee Benefit Plans referred to in Sections 4.15(d) – (g) (the “ Specified Seller Plans ”), Seller has made available to Purchaser a true, correct and complete copy of: (i) each writing constituting a part of such Specified Seller Plan, including without limitation all plan documents, employee communications that to the Knowledge of Seller describe the terms and conditions for receipt of benefits, benefit schedules, trust agreements, and insurance contracts and other funding vehicles; (ii) the most recent Annual Report (Form 5500 Series) and accompanying schedule, if any; (iii) the current summary plan

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description and any material modifications thereto, if any; and (iv) the most recent annual financial report, if any. Seller has delivered or made available to Purchaser a true, correct and complete copy of each Individual Agreement. Except as specifically provided in the foregoing documents made available to Purchaser, there are no amendments to any Specified Seller Plan or Individual Agreement that have been adopted or approved nor has Seller or any of its Subsidiaries undertaken to make any such amendments or to adopt or approve any new Specified Seller Plan or Individual Agreement.

(i) Except as set forth on Schedule 4.15(i) , and except as required by Law or relating to the vesting of benefits under the MeadWestvaco Corporation Retirement Plan for Salaried and Non-Bargained Hourly Employees, neither the execution of this Agreement nor the consummation of the transactions contemplated hereby will (whether alone or together with any other event or events) (i) entitle any Acquired Company Employee or Business Employee to any increase in any compensation or benefits (including any cash or equity award or benefit), (ii) accelerate the time at which any compensation, benefits or award may become payable, vested or required to be funded in respect of any Acquired Company Employee or Business Employee, (iii) entitle any Acquired Company Employee or Business Employee to any additional compensation, benefits or award, or (iv) constitute a “change of control” as defined in any Employee Benefit Plan or Individual Agreement.

(j) No Acquired Company Plan is maintained outside the jurisdiction of the United States, or covers any employee residing or working outside the United States

(k) Except as set forth on Schedule 4.15(k) , neither the Seller nor any ERISA Affiliate is required to contribute to any “multiemployer plan” (as defined in Section 4001(a)(3) of ERISA) or, during the six years prior to the date hereof, has withdrawn from any multiemployer plan where such withdrawal has resulted in or would result in any “withdrawal liability” (within the meaning of Section 4201 of ERISA).

Section 4.16. Labor . (a) Set forth on Schedule 4.16(a) is a true and correct list, as of the date hereof, of each labor or collective bargaining agreement to which Seller or its Subsidiaries are a party that apply to Acquired Company Employees or Business Employees (each, a “ Collective Bargaining Agreement ”).

(b) No labor organization representing any Acquired Company Employees or Business Employees or group of Acquired Company Employees or Business Employees has made a written demand against Seller or any of its Subsidiaries for recognition; and there are no representation proceedings or written petitions seeking a representation proceeding presently pending against Seller or any of its Subsidiaries involving any Acquired Company Employees or Business Employees or, to the Knowledge of Seller, threatened in writing to be brought or filed against Seller or any of its Subsidiaries Related to the Business with the United States National Labor Relations Board or other labor relations tribunal. To the Knowledge of Seller, there is no ongoing organizing activity involving Acquired Company Employees or Business Employees pending or, to the Knowledge of Seller, threatened by any labor organization or group of Acquired Company Employees or Business Employees.

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(c) Except as set forth on Schedule 4.16(c) , as of the date hereof there are no (i) strikes, work stoppages, slowdowns or lockouts, (ii) grievances or other labor disputes or proceedings pending or threatened in writing against or involving any Acquired Company Employees or Business Employees (except as would not reasonably be expected to have a Material Adverse Effect), or (iii) unfair labor practice charges, grievances or complaints pending or, to the Knowledge of Seller, threatened by or on behalf of any Acquired Company Employees or Business Employees (except as would not reasonably be expected to have a Material Adverse Effect).

(d) To the Knowledge of Seller, except as would not reasonably be expected to result in material liability to the Business, the Acquired Companies are in substantial compliance with all Laws and Orders affecting the Business relating to the employment of their respective employees, including all such Laws and Orders relating to wages, hours, collective bargaining, employment discrimination, immigration, disability, civil rights, occupational safety and health, workers’ compensation, pay equity and the collection and payment of withholding and/or social contribution taxes and similar Taxes.

(e) Except as set forth on Schedule 4.16(e) , from January 1, 2003 through the date hereof there has been no event that has caused or required Seller to issue a notice under the Worker Adjustment and Retraining Notification Act or any similar Law with respect to any Acquired Company Employees, Business Employees, Former Acquired Company Employees or Former Business Employees. Seller has provided Purchaser with a list of (x) the Former Acquired Company Employees and/or Former Business Employees who have suffered an “employment loss” (as defined under WARN) within a ninety (90) day period prior to the date hereof and (y) the Acquired Company Employees and Business Employees who have been notified that they will incur an “employment loss,” within a ninety (90) day period prior to the date hereof.

Section 4.17. Litigation . As of the date hereof, there is no Legal Proceeding pending or, to the Knowledge of Seller, threatened in writing against Seller or any of its Subsidiaries that challenges, or questions the validity of, this Agreement, any Seller Document or any action taken or to be taken by Seller and its Subsidiaries in connection with, or which seeks to enjoin or obtain monetary damages in respect of, the consummation of the transactions contemplated hereby or thereby. Schedule 4.17 sets forth a true and correct list, as of the date hereof, of all material pending or, to the Knowledge of Seller, threatened Legal Proceedings Related to the Business, the Assets or the Assumed Liabilities, the Acquired Company Employees or the Business Employees in which Seller or any of its Subsidiaries or any officer or director thereof (in such capacity) is a party. There is no Legal Proceeding pending or, to Seller’s Knowledge, threatened against Seller or any of Seller’s Subsidiaries or any of their respective assets or properties that would, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. None of Seller nor any of its Subsidiaries (with respect to the Business) nor the Assets is subject to any Order except for regulatory decrees and orders of general applicability to both the Business and others conducting similar businesses in the affected jurisdiction which do not and could not reasonably be expected to materially impair the operation of the Business or materially detract from the value of the Business.

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Section 4.18. Compliance with Other Laws/Permits . With respect to the Business conducted by it and its Subsidiaries (including the Business conducted by Seller and its Subsidiaries at the Mill Sites and Distribution Centers), Seller and each Subsidiary of Seller is and has been since January 1, 2002 in compliance with all applicable Laws and all Orders and Permits of or from Governmental Bodies, except for instances of noncompliance or possible noncompliance that (i) are within the scope of Section 4.13 (Intellectual Property), 4.14 (Contracts), 4.15 (Employee Benefits), 4.16 (Labor) or 4.19 (Environmental Matters), or (ii) would not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect. Seller, CP and the Acquired Companies have all Permits that are material to the operation of the Business (other than environmental Permits, which are covered by Section 4.19), a true and complete list of which is contained in Schedule 4.18 , required for the ongoing conduct of the Business where and as it is currently being conducted, including at the Mill Sites and Distribution Centers. To Seller’s Knowledge, there is no pending or threatened Legal Proceeding before any Governmental Body to suspend, revoke, materially modify (other than modifications made in connection with a normal renewal of an expiring Permit) or cancel any such material Permit, or any claims by or before any Governmental Body alleging or investigating any violation of Law with respect to any such material Permit.

Section 4.19. Environmental Matters . Except as set forth on Schedule 4.19 or as would not reasonably be expected to have a Material Adverse Effect: (a) to the Knowledge of Seller, the Business as currently operated is being conducted by Seller and its Subsidiaries in compliance with all applicable Environmental Laws (it being understood that Seller makes no representation or warranty pursuant to this Section 4.19 as to conditions or activities that do not originate from or otherwise relate to the Business), (b) to the Knowledge of Seller, the Business as currently operated is in possession of and in compliance with all necessary Environmental Permits, (c) to the Knowledge of Seller, there have been no Releases of Hazardous Materials in violation of applicable Environmental Laws at, on or under the Business Facilities, (d) to the Knowledge of Seller, as of the date hereof, there are no Environmental Claims have been asserted or threatened in writing against Seller or any of its Subsidiaries in connection with the Business, (e) to the Knowledge of the Seller, no Environmental Claims have been asserted in writing against facilities that received Hazardous Materials Handled by the Business which are reasonably likely to result in Environmental Liabilities, and (f) 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.

Section 4.20. Ownership of Necessary Assets and Rights . (a) Except for the (a) Excluded Assets referred to in Sections 1.3(a), (c), (d), (f), (g), (j) and (k), and (b) those assets and services to be provided pursuant to the terms of the Transition Agreements, the Assets to be transferred to Purchaser on the Closing Date are in all material respects sufficient for the conduct of the Business immediately following the Closing in substantially the same manner as conducted on the date hereof.

(b) Seller, CP and/or one or more of the Acquired Companies have, and will at Closing convey to the Purchaser, good and valid title to (or valid leasehold interest in) the Assets (other than Real Property and Timberlands, which are addressed in Sections 4.9. 4.10 and 4.11), free and clear of all Liens (other than Tangible Personal Property Permitted Liens).

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Section 4.21. Distributors, Customers, Licensees and Suppliers . Schedule 4.21 contains a list of each of the top ten customers, distributors and suppliers of the Business, on the basis of revenues generated or expenditures made, as applicable, during the twelve months ended on the Balance Sheet Date. From the Balance Sheet Date to the date hereof, none of the customers, distributors or suppliers listed on Schedule 4.21 has canceled, terminated or materially and adversely modified or, to the Knowledge of Seller, threatened to cancel, terminate or materially and adversely modify, its relationship with the Business and the relationship with each such customer, distributor or supplier has not changed in any materially adverse respect.

Section 4.22. Absence of Certain Business Practices . During the two years immediately preceding the date hereof, none of the Seller nor any of its Subsidiaries, nor any officer, director, employee, consultant or agent thereof acting on their respective behalf has directly or indirectly (as it relates to the Business), (a) made any contribution or gift which contribution or gift is in material violation of any applicable Law, (b) in material violation of applicable Law, made any bribe, rebate, payoff, influence payment, kickback or other payment to any Governmental Body (or representative or official thereof) or made any bribe, rebate, payoff, influence payment, kickback or other payment to any Person other than a Governmental Body, in each case, regardless of form, whether in money, property or services (i) to obtain favorable treatment in securing business (ii) to pay for favorable treatment for business secured, or (iii) to obtain special concessions or for special concessions already obtained for or in respect of the Business, or (c) established or maintained, directly or indirectly, any fund or asset for the purpose of making any payment described in the foregoing clauses (a) and (b). In addition to, and not in limitation of, the foregoing, none of Seller nor any of its Subsidiaries, nor any officer, director, employee, consultant or agent thereof acting on their respective behalf has made (as it relates to the Business), directly or indirectly, any payment or promise to pay, or gift or promise to give or authorized such a promise or gift, of any money or anything of value, directly or indirectly, to: (x) any foreign official (as such term is defined in the Foreign Corrupt Practices Act of 1977, as amended (the “ FCPA ”)) for the purpose of influencing any official act or decision of such official or inducing him or her to use his or her influence to affect any act or decision of a foreign government, or any agency or subdivision thereof; or (y) any foreign political party or official thereof or candidate for foreign political office for the purpose of influencing any official act or decision of such party, official or candidate or inducing such party, official or candidate to use his, her or its influence to affect any act or decision of a foreign government or agency or subdivision thereof, in the case of both (x) and (y) above in order to assist the Business to obtain or retain business for or direct business to Seller or any of its Subsidiaries and under circumstances which would subject the Business to liability under the FCPA or any corresponding foreign Laws.

Section 4.23. Potential Conflicts of Interest . Except as set forth on Schedule 4.23 , none of Seller nor any of its Subsidiaries (other than the Acquired Companies) nor, to the Knowledge of Seller, any executive officer of Seller or of the Business:

(a) owns, directly or indirectly, any interest in (excepting not more than five percent stock holdings held solely for investment purposes in securities of any Person which is listed on any national securities exchange or regularly traded in the over-the-counter market) or is an owner, sole proprietor, stockholder, partner, director, officer, employee, consultant or agent of any Person which is a lessor, lessee, customer,

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licensee, or supplier of the Business (other than pursuant to arrangements on terms that would be obtained on an arms’ length basis and other than Contracts entered into by the Seller for the benefit of the Business and the Seller’s other businesses); or

(b) owns, directly or indirectly, in whole or in part, any tangible property, patent, trademark, service mark, trade name, copyright, franchise, invention, permit or license which is used and necessary for the operation of the Business.

Section 4.24. Power/Natural Gas . (a) The power generating stations used in the Business, including but not limited to the operations conducted by Rumford Cogeneration, Inc. and Rumford Falls Power Company (the “ Generating Stations ”), have been maintained in good repair and working order consistent with customary practice in the industry. Seller, CP and the Acquired Companies have made all necessary repairs, renewals, replacements, betterments and improvements of the Generating Stations, all as may be necessary so that the operations carried on in connection therewith may be conducted at all times in accordance with applicable Law. To Seller’s Knowledge, there are no conditions existing in respect of the Generating Stations which would require Seller, CP or any Acquired Company to incur any capital expenditures relating thereto which are materially in excess of the amounts budgeted by Seller in the Capital Budgets for maintenance, repair or renewal of the Generating Stations. For the avoidance of doubt, (i) nothing in this Section 4.24(a) shall be read to be a representation as to environmental matters which shall be exclusively governed by Section 4.19, and (ii) notwithstanding anything to the contrary, indemnification for any Environmental Condition related to the Generating Stations shall be governed exclusively by Sections 11.4 and 11.5.

(b) With respect to any pipelines owned or operated by the Seller, CP and/or an Acquired Company and Related to the Business, all fee, leasehold, easement or other rights as may be necessary for the operation of any such pipeline in the location and manner in which it is currently operated and in material compliance with all applicable Laws have been obtained by Seller, CP or such Acquired Company, as applicable, from the owner(s) of each of the tracts or parcels of land and the bodies of water, or portions thereof, necessary for the use of such pipeline (either voluntarily or through condemnation).

Section 4.25. Brokers . Except for Goldman, Sachs & Co. and UBS Investment Bank and Greenhill & Co., LLC, no Person has acted directly or indirectly as a broker, finder or financial advisor for Seller in connection with the negotiations relating to or the transactions contemplated hereby and no Person is entitled to any fee or commission or like payment in respect thereof from Purchaser based in any way on any agreement, arrangement or understanding made by or on behalf of Seller. Seller is solely responsible for the fees and expenses of Goldman, Sachs & Co. and UBS Investment Bank and Greenhill & Co., LLC, payable under engagements by Seller (which do not include the provision of the Acquisition Financing) in connection with the transactions contemplated hereby.

Section 4.26. Disclaimers of Seller . (a) EXCEPT AS EXPRESSLY SET FORTH HEREIN OR IN ANY TRANSITION AGREEMENT OR IN ANY OTHER AGREEMENT OR INSTRUMENT ENTERED INTO IN CONNECTION HEREWITH, (A) SELLER EXCLUDES AND DISCLAIMS ALL WARRANTIES, INCLUDING IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR

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PURPOSE, WITH RESPECT TO THE BUSINESS OR THE PURCHASED ASSETS, (B) SELLER MAKES NO REPRESENTATION OR WARRANTY WITH RESPECT TO THE MEMORANDA, PRESENTATIONS, REPORTS, OR ANY FINANCIAL FORECASTS OR PROJECTIONS OR OTHER INFORMATION FURNISHED BY SELLER OR ITS OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES, (C) SELLER UNDERTAKES NO LIABILITY FOR ANY DAMAGE, LOSS, EXPENSE OR CLAIM OR OTHER MATTER RELATING TO ANY CAUSE WHATSOEVER ARISING UNDER OR PURSUANT HERETO (WHETHER SUCH CAUSE BE BASED IN CONTRACT, NEGLIGENCE, STRICT LIABILITY, OTHER TORT OR OTHERWISE) AND IN NO EVENT SHALL SELLER BE LIABLE FOR SPECIAL, INCIDENTAL OR CONSEQUENTIAL DAMAGES THAT ARE NOT REASONABLY FORESEEABLE BY SELLER NOR FOR ANY EXEMPLARY OR PUNITIVE DAMAGES RESULTING FROM ANY SUCH CAUSE, (D) SELLER SHALL NOT BE LIABLE FOR, AND PURCHASER ASSUMES LIABILITY FOR, ALL PERSONAL INJURY AND PROPERTY DAMAGE CONNECTED WITH THE HANDLING, TRANSPORTATION, POSSESSION, PROCESSING, FURTHER MANUFACTURE OR OTHER USE OR RESALE OF ANY OF THE PURCHASED ASSETS AFTER THE CLOSING DATE, WHETHER SUCH PURCHASED ASSETS ARE USED OR RESOLD ALONE OR IN COMBINATION WITH OTHER ASSETS OR MATERIALS, AND (E) PURCHASER ACKNOWLEDGES THAT THE PURCHASED ASSETS ARE BEING SOLD IN THEIR PRESENT STATE AND CONDITION, “AS IS, WHERE IS,” WITH ALL FAULTS, AND PURCHASER IS PURCHASING AND ACQUIRING SUCH PURCHASED ASSETS ON THAT BASIS PURSUANT TO PURCHASER’S OWN INVESTIGATION AND EXAMINATION AFTER HAVING BEEN PROVIDED WITH AN ADEQUATE OPPORTUNITY AND ACCESS TO SUCH PURCHASED ASSETS TO COMPLETE SUCH INVESTIGATION OR EXAMINATION.

(b) EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT OR IN ANY TRANSITION AGREEMENT OR IN ANY OTHER AGREEMENT OR INSTRUMENT ENTERED INTO IN CONNECTION HEREWITH, WITH RESPECT TO THE TIMBERLANDS, PURCHASER ACKNOWLEDGES AND AGREES THAT (A) SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, GUARANTIES, COMMITMENTS, PROMISES OR AGREEMENTS OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THE TIMBERLANDS, INCLUDING, WITHOUT LIMITATION, GOVERNMENTAL REGULATIONS, REQUIREMENTS OR CONSTRAINTS, SITE OR PHYSICAL CONDITIONS, CONDITION OF THE TIMBERLANDS, ACCESS TO AND FROM THE TIMBERLANDS, MATTERS AFFECTING USE OR OCCUPANCY, PROFITABILITY, VOLUMES, AGE CLASSES, SPECIES, MERCHANTABILITY, YIELDS, ACREAGE, ACCESS, AVAILABILITY, QUANTITY OR QUALITY OF WATER, ENVIRONMENTAL COMPLIANCE, ENVIRONMENTAL CONDITION, PROSPECTS FOR FUTURE IMPROVEMENTS OR FUTURE DEVELOPMENT, ECONOMIC FEASIBILITY, MARKETABILITY OR ANY OTHER MATTER RELATING TO THE TIMBERLANDS; AND (B) PURCHASER IS ACQUIRING THE TIMBERLANDS PURSUANT TO PURCHASER’S OWN INDEPENDENT INVESTIGATIONS AND EXAMINATIONS RELATING TO THE TIMBERLANDS.

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Section 4.27. No Other Representations or Warranties . Except for the representations and warranties contained in this Article IV or in any Transition Agreement or in any other agreement or instrument entered into in connection herewith, none of Seller, any Affiliate of Seller or any other Person makes any representations or warranties, and Seller hereby disclaims any other representations or warranties, whether made by Seller or any Affiliate of Seller, or any of their respective officers, directors, employees, agents or representatives, with respect to the execution and delivery of this Agreement or any Seller Document, the transactions contemplated hereby or the Business, notwithstanding the delivery or disclosure to Purchaser or its representatives of any documentation or other information with respect to any one or more of the foregoing.

ARTICLE V

REPRESENTATIONS AND WARRANTIES OF PURCHASER

As an inducement to Seller to enter into this Agreement and to consummate the transactions contemplated hereby, Purchaser hereby represents and warrants to Seller that, except as set forth in the applicable Schedules to this Agreement delivered by Purchaser to Seller and dated as of the date hereof:

Section 5.1. Organization and Good Standing . Purchaser is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware.

Section 5.2. Authorization of Agreement . Purchaser has all requisite corporate power and authority to execute and deliver this Agreement and each other agreement, document, instrument or certificate contemplated hereby or to be executed by Purchaser in connection with the consummation of the transactions contemplated hereby and thereby (all of such agreements, documents, instruments and certificates required to be executed by Purchaser and any of its Subsidiaries being hereinafter referred to, collectively, as the “ Purchaser Documents ”), and to perform fully its obligations hereunder and thereunder. The execution, delivery and performance by Purchaser of this Agreement and by Purchaser of each Purchaser Document has been duly authorized by all necessary corporate action on the part of Purchaser. This Agreement has been, and each of Purchaser Documents will be, on or prior to the Closing Date, duly executed and delivered by Purchaser and (assuming the due authorization, execution and delivery by the other parties hereto) this Agreement constitutes, and each of Purchaser Documents when so executed and delivered will constitute, the valid and legally binding obligations of Purchaser, enforceable against Purchaser in accordance with its 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 5.3. No Conflicts; Consents of Third Parties . None of the execution and delivery by Purchaser of this Agreement and Purchaser Documents, the consummation of the transactions contemplated hereby or thereby or the compliance by Purchaser with any of the provisions hereof or thereof will (a) result in the breach of, any provision of the certificate or articles of incorporation, by-laws or similar organizational documents of Purchaser or (b) violate, result in the breach of, or constitute a default under any Order by which Purchaser or any of their

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properties or assets is bound or subject. No consent, waiver, approval, Order, Permit or authorization of, or declaration or filing with, or notification to, any Person or Governmental Body is required on the part of Purchaser in connection with the execution and delivery of this Agreement or Purchaser Documents, the consummation of the transactions contemplated hereby and thereby or the compliance by Purchaser with any of the provisions hereof or thereof, except for compliance with the applicable requirements of the HSR Act and other applicable merger control or similar Laws and the receipt of appropriate Permits by Purchaser to conduct the business and operate the Assets.

Section 5.4. Litigation . As of the date hereof, there is no Legal Proceeding pending or, to the knowledge, after due investigation, of Purchaser, threatened in writing against Purchaser that challenges, or questions the validity of, this Agreement, the Purchaser Documents or any action taken or to be taken by Purchaser in connection with, or that seeks to enjoin or obtain monetary damages in respect of, the consummation of the transactions contemplated hereby or thereby.

Section 5.5. Financing . Schedule 5.5 sets forth true, accurate and complete copies of debt and equity commitment letters and related term sheets (collectively, excluding any engagement and fee letters associated therewith, the “ Financing Commitments ”) to be used in connection with the transaction contemplated hereby (the “ Acquisition Financing ”). As of the date hereof, the Financing Commitments are in full force and effect, have not been withdrawn or terminated or otherwise amended or modified in any respect, and, as of the date hereof, Purchaser has no reason to believe that the Financing Commitments will not lead to the Acquisition Financing contemplated thereby. The proceeds from such Acquisition Financing constitute all of the financing required to be provided by Purchaser for the consummation of the transactions contemplated hereby. The Financing Commitments (other than the engagement and fee letters entered into in connection therewith) constitute, as of the date hereof, the entire and complete agreement between the parties thereto with respect to the financing contemplated thereby, and, to the Purchaser’s knowledge, there are no conditions precedent or other contingencies related to the funding of the Acquisition Financing other than as set forth in the Financing Commitments.

Section 5.6. Brokers . No Person has acted directly or indirectly as a broker, finder or financial advisor for Purchaser in connection with the negotiations relating to or the transactions contemplated hereby and no Person is entitled to any fee or commission or like payment in respect thereof from Seller based in any way on agreements, arrangements or understandings made by or on behalf of Purchaser.

Section 5.7. Electric Power . Neither Purchaser nor any of its Affiliates is engaged in the generation or sale of electric power, or has any ownership or operating interest, directly or indirectly, in any electric facilities other than qualifying facilities (as defined in the Public Utility Regulatory Policies Act of 1978 and the Federal Energy Regulatory Commission’s regulations promulgated thereunder), power marketers, facilities of foreign utility companies under section 33 of the Public Utility Holding Company Act of 1935, as amended, and eligible facilities of exempt wholesale generators (as defined in section 32 of the Public Utility Holding Company Act of 1935, as amended).

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Section 5.8. No Inducement or Reliance; Independent Assessment . (a) With respect to the Purchased Assets, the Business or any other rights or obligations to be transferred hereunder or under the Transition Agreements or pursuant hereto or thereto, Purchaser has not been induced by and has not relied upon any representations, warranties or statements, whether express or implied, made by Seller, any Affiliate of Seller, or any agent, employee, attorney or other representative of Seller representing or purporting to represent Seller that are not expressly set forth herein, any other Seller Documents or in the Transition Agreements (including the Schedules and Exhibits hereto and thereto and any other Seller Documents), whether or not any such representations, warranties or statements were made in writing or orally, and none of Seller, any Affiliate of Seller, or any agent, employee, attorney, other representative of Seller or other Person shall have or be subject to any liability to Purchaser or any other Person resulting from the distribution to Purchaser, or Purchaser’s use of, any such information, including management presentations and investment banker books relating to the Business and any information, documents or material made available in any “data rooms” or management presentations or in any other form in expectation of the transactions contemplated hereby.

(b) Purchaser acknowledges that it has made its own assessment of the present condition and the future prospects of the Business and is sufficiently experienced to make an informed judgment with respect thereto. Purchaser acknowledges that, except as explicitly set forth herein and in the other Seller Documents, neither Seller nor any of its Affiliates has made any warranty, express or implied, as to the prospects of the Business or its profitability for Purchaser, or with respect to any forecasts, projections or business plans prepared by or on behalf of Seller and delivered to Purchaser in connection with Purchaser’s review of the Business and the negotiation and the execution of this Agreement.

ARTICLE VI

COVENANTS OF SELLER

From and after the date hereof and until the Closing (except with respect to Sections 6.1(c), 6.3(b), 6.6, 6.8, 6.9, 6.13 and 6.14 which shall survive the Closing in accordance with their terms), Seller hereby covenants and agrees that:

Section 6.1. Access to Documents; Access to Assets; Opportunity to Ask Questions .

(a) Prior to the Closing, Sellers shall, and shall cause its Subsidiaries to, permit Purchaser and its financing sources and representatives to have reasonable access, during regular business hours and upon reasonable advance notice, and without undue interruption to Seller’s business, to the Assets, the Business, the Acquired Company Employees and Business Employees and Seller’s outside accountants and other advisors and to the Business’ customers, suppliers and others with whom it has material commercial dealings (provided that Seller shall have the right to participate in any meetings or discussion with any customers, suppliers, employees or others with whom it has material commercial dealings), and shall furnish, or caused to be furnished, to Purchaser and its financing sources and representatives any financial and operating data and other information that is available with respect to the Business, the Assets, the Assumed Liabilities, the Acquired Company Employees and Business Employees as

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Purchaser shall from time to time reasonably request (excluding confidential portions of personnel and medical records) and subject to any limitations that are reasonably required to preserve any applicable attorney-client privilege or third-party confidentiality obligation); provided , that in each case, such access shall be given at reasonable times and upon reasonable notice and without undue interruption to Seller’s business or personnel. Such access to the Assets shall include, without limitation, access to the Timberlands for cruises as provided in Section 4.11(m), environmental testing as provided in Section 11.5(h) and lender appraisals as contemplated in Section 6.1(b). All requests for access (including with respect to any meetings or discussion with any Business customers, suppliers, employees or others with whom it has material commercial dealings) shall be made to such representatives of Seller as Seller shall designate, who shall be solely responsible for coordinating all such requests and access thereunder.

(b) In addition to and not by way of limitation of the foregoing, Seller shall cooperate with Purchaser in connection with the financing contemplated by the Financing Commitment, including using (and causing its Subsidiaries to use) commercially reasonable efforts to satisfy all conditions precedent to be satisfied by Seller and its Subsidiaries in the Financing Commitments (or conditions within the control of Seller and its Subsidiaries), providing information to and permitting the financing sources and their representatives access to, the Assets, the Business, the Acquired Company Employees and Business Employees and Seller’s outside accountants and other advisors, as provided in Section 6.1(a) hereof, participating in meetings with prospective investors and participating (and permitting members of its senior management of the Business to participate) in “road shows” in connection with the financing, participating in meetings with rating agencies, participating in drafting sessions related to the offering materials for the debt financing of Purchaser and its Subsidiaries contemplated by the Financing Commitments, causing the present and former independent accountants for Seller to participate in drafting sessions related to the offering materials for the debt financing contemplated by the Financing Commitments and making work papers available to Purchaser, the underwriters or placement agents for the debt financing and their respective representatives; provided that Purchaser shall endeavor to minimize the interference with the ability of such senior management of the Business to carry out their normal responsibilities for ongoing management of the Business resulting from such participation in drafting sessions and the road show.

(c) Seller shall, and shall cause its Subsidiaries to, afford to Purchaser’s representatives, upon reasonable notice and without undue interruption to Seller’s business, access during normal business hours to the books and records of Seller pertaining to the operations of the Business prior to the Closing Date for a period of eight years following the Closing Date in connection with financial statements and U.S. Securities and Exchange Commission reporting obligations, Assumed Liabilities, Purchased Assets, assets and liabilities of Acquired Companies, and other reasonable business purposes provided that nothing herein shall limit Purchaser’s rights of discovery. Seller agrees to hold all of the books and records of the Business existing on the Closing Date or included in the Purchased Assets in accordance with Seller’s standard record retention policies.

Section 6.2. Conduct of Business . Until the Closing Date, Seller shall, and shall cause its Subsidiaries to, solely with respect to the operation of the Business (unless

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Purchaser shall otherwise consent in writing (which consent shall not be unreasonably withheld, conditioned or delayed) or except as otherwise contemplated hereby or by any Transition Agreement or as disclosed on Schedule 6.2 ), to the extent permitted by applicable Law:

(a) use it reasonable best efforts to: (i) operate the Business in the Ordinary Course, (ii) preserve its present material business operations, organization and goodwill, (iii) keep available the services of its present officers and key employees, (iv) preserve its present relationships with Persons having business dealings with it, (v) maintain all Permits necessary for the operation of the Business and (vi) except for changes resulting from transactions in the Ordinary Course or from the seasonality of the Business, keep the level of its inventories, supplies, accounts receivable and accounts payables reasonably consistent in all material respects with past practice;

(b) not incur, guarantee or assume any Indebtedness in connection with the Business, other than Indebtedness in an amount in excess of U.S.$20 million in the aggregate, in each case only to the extent such Indebtedness may be prepaid without penalty or premium at any time and does not result in any Lien on the Assets that will not be eliminated at Closing (unless otherwise agreed to by Purchaser);

(c) not dispose of or otherwise transfer, or incur, create or assume any Lien (other than Permitted Exceptions) on any asset of the Business, other than (i) sales of inventory and standing timber, (ii) dispositions of worn out or obsolete assets in an amount not in excess of $1,000,000 in the aggregate, in the case of each of (i) and (ii) in the Ordinary Course and not inconsistent with the Harvesting Plan, or (iii) sales of Timberlands pursuant to the Timberlands sales set forth on Schedule 6.2(c) ;

(d) not enter into, amend, terminate, renew or supplement any contract that constitutes (or, in the case of contracts not in existence on the date hereof, would constitute) a Material Business Contracts, except in the Ordinary Course;

(e) not engage in any transactions with, or enter into any Business Contracts with, any Affiliate of Seller in connection with the Business, except for any such transactions or Business Contracts in the Ordinary Course on terms no less favorable than would be obtained in an arms’ length third-party transaction and that are terminable at will by Seller, CP or the Acquired Company party thereto at any time without penalty or premium upon not greater than 30 days’ notice;

(f) not enter into, adopt, amend, renegotiate or terminate any (A) Employee Benefit Plan or plan that would be an Employee Benefit Plan if in effect on the date hereof or (B) Business Contract relating to the compensation, benefits or severance entitlement of any Acquired Company Employee or Business Employee, except (i) to the extent required by Law or any existing Business Contracts or Employee Benefit Plans, (ii) for any such actions taken in the Ordinary Course and which would not result in an increased annual cost to the Business in excess of $1,000,000 and (iii) for increases applicable to Corporate Business Employees that would not result in increased annual liability to the Business in excess of $150,000 in the aggregate;

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(g) except to the extent required by Law, including any bargaining obligations imposed by the National Labor Relations Act, or the terms of the applicable Collective Bargaining Agreements, (i) not enter into any new collective bargaining agreements, or amend or modify any existing Collective Bargaining Agreements, that would materially affect the Purchaser’s interests following the Closing Date, provided, that following consultation with the Purchaser, Seller may commence negotiations on the Collective Bargaining Agreements relating to the Chillicothe site if the Closing has not occurred by May 31, 2005, and thereafter enter into new collective bargaining agreements relating to the Chillicothe site and (ii) during any and all negotiations of new collective bargaining agreements or existing Collective Bargaining Agreements, advise the Purchaser of the status and details of the negotiations on a reasonable basis, as dictated by such negotiations (or at such times that Purchaser in writing reasonably requests of Seller the status and details of such negotiations), and in advance of execution of any agreement, and allow a designated representative of Purchaser to consult on such negotiations;

(h) not enter into any Contract pursuant to which it agrees to indemnify any Person in any material respect (except in the Ordinary Course) or to refrain from competing with any Person or from engaging in any business or carrying on any business in any geographic area or during any period of time;

(i) not revalue any portion of its assets, properties or businesses including, without limitation, any write-down of the value of inventory or other assets or any write-off of notes or accounts receivable, except as required by GAAP or in connection with the preparation and delivery of the Regulation S-X Financial Statements;

(j) not change, in any material respect, any of their accounting principles, practices, methodologies or policies (including any reserving and depreciation methodologies, practices and policies) used in connection with the Business, the Assets and Assumed Liabilities;

(k) except as otherwise required by GAAP, not release any material non-cash reserves;

(l) not issue or sell, or authorize for issuance or sale, or grant any rights with respect to, the securities of any Acquired Company, or alter any term of any of the outstanding securities of any Acquired Company;

(m) not institute or settle any Legal Proceeding that would have a material adverse impact on the operation of the Business or impose any material non-monetary obligation on the Business after Closing;

(n) not institute any material change in the methods of purchase, sale, lease or other accounting or engage in any activity which would accelerate the collection of accounts receivable, accelerate or delay the payment of the accounts payable, or increase, reduce or otherwise affect the amount of inventory (including raw material, packaging, work-in-process, or finished goods) on hand, other than as a result of the seasonality of the Business;

(o) continue to establish reserves with respect to workers’ compensation, litigation, environmental matters and other contingent Liabilities in accordance with GAAP;

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(p) maintain levels of insurance covering the operations of the Business and the Assets in full force and effect, with at least such policy limits, deductible amounts and overall scopes of coverage as are in effect on the date hereof, consistent with past practice;

(q) (i) use its commercially reasonable efforts to maintain the Assets in accordance with its normal and customary maintenance practices and (ii) make capital expenditures substantially in the amounts and at the times set forth in the 2004 and 2005 capital budgets of the Business attached to Schedule 6.2(q) (the “ Capital Budgets ”), other than capital expenditures relating to information technology at Business locations;

(r) not enter into commitments for new capital expenditures in excess of $5 million in the aggregate to the extent not otherwise contemplated substantially in the amounts and at the times set forth in the Capital Budgets;

(s) not acquire (by merger, exchange, consolidation, acquisition of stock or assets or otherwise) any Person or division or material assets thereof, whether or not engaged in a business similar to the Business;

(t) not sell, transfer, or grant licenses of Intellectual Property to any Person outside the Ordinary Course or allow any material registered Intellectual Property to lapse, expire, or become abandoned;

(u) not amend the organizational documents of any Acquired Company;

(v) with respect to state and local Taxes of any Acquired Company for a Straddle or Post-Closing Tax Period, not (i) make or change any Tax election, (ii) change an annual Tax accounting period, (iii) adopt or change any Tax accounting method except as required by applicable Law, (iv) file any amended Tax Return, (v) enter into any Tax closing agreement, (vi) settle any material tax claim or assessment, (vii) surrender any right to claim a Tax refund, or (viii) consent to the extension or waiver of any limitation period applicable to any material Tax claim or assessment;

(w) operate the Timberlands in the Ordinary Course, including (i) conducting their ongoing timber harvest operations on the Timberlands substantially in accordance with the Harvesting Plan, and (ii) performing maintenance of roads, drainage systems, fire protection and prevention as well as stand establishment activities consistent with past practice; and

(x) not agree to take any action or actions prohibited by any of the foregoing clauses (a) through (v).

Section 6.3. Consents and Conditions . (a) Seller shall use its reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with Purchaser in doing, all things necessary, proper or advisable to consummate and make effective the transactions contemplated hereby, including, but not limited to: (i) obtaining all necessary consents, approvals or waivers from, and giving any necessary notifications to, third parties; provided , however , that such efforts shall not require Seller or any of its Subsidiaries to make any payment to obtain any such consent, approval or waiver or to give such notice, except as specifical