Common use of Initial Merger Consideration Clause in Contracts

Initial Merger Consideration. (a) The initial aggregate consideration (the “Initial Common Equity Consideration”) to be paid in connection with the Merger to the holders of the common stock, par value $0.01 per share, of the Company (the “Company Common Stock”), and the RSUs shall be an amount equal to the following (which amount shall be adjusted as provided herein): (1) $338,000,000 (the “Total Consideration”); plus (2) the amount of Estimated Closing Cash; plus (3) the amount, if any, by which the Estimated Closing Net Working Capital is greater than $47,083,355 (the “Net Working Capital Target”); minus (4) the amount, if any, by which the Estimated Closing Net Working Capital is less than the Net Working Capital Target; minus (5) the amount of unpaid Estimated Company Transaction Expenses; minus (6) the amount of Estimated Closing Indebtedness, including the Indebtedness of the Company and the Company Subsidiaries under or in respect of: (i) the credit agreement, dated as of December 17, 2003, as thereafter amended, by and among Blue Ridge Paper Products Inc., a Delaware corporation (“BRPPI”), as borrower, the lenders from time to time party thereto and General Electric Capital Corporation, as administrative agent, agent and lender; (ii) the 9.50% senior secured notes due 2008 (the “2008 Notes”) of BRPPI, provided that notwithstanding anything else to the contrary, for purposes of this Agreement the Indebtedness under or in respect of the 2008 Notes shall equal the sum of (I) 104.75% of the principal amount thereof plus (II) all accrued and unpaid interest thereon through the Closing Date (the “Note Prepayment Amount”); provided, however, that in the event Parent notifies the Company that it intends to satisfy the 2008 Notes by a defeasance or satisfaction and discharge mechanism, the amount in respect of the 2008 Notes shall instead equal the sum of (x) the amount required to be deposited with the trustee thereunder to effectuate such defeasance or satisfaction and discharge (provided that for purposes of this clause the amount deposited in respect of accrued interest shall not be deemed to include any interest accruing from and after the Closing Date) plus (y) if the amount described in clause (x) does not include a prepayment penalty, 4.75% of the principal amount of the 2008 Notes; provided that in no event shall the amount determined under this proviso exceed the Note Prepayment Amount; (iii) the Pay-In-Kind Senior Subordinated Note, dated May 14, 1999, by the Company in favor of International Paper Company (successor in interest to Champion International Corporation); and (iv) the promissory note, dated July 9, 2003, in the original principal amount of $818,550; minus (7) the Aggregate Preferred Stock Amount; minus (8) the amount of the MSA Termination Payment; and minus (9) an amount equal to $1,500,000, increased by any additional amount (not to exceed $1,000,000) determined under the last sentence of Section 2.6(a) (as increased, the “PPA Escrow Amount”). (b) At the Closing, Parent or Newco shall pay by wire transfer of immediately available funds the following: (1) to the Paying Agent, an amount equal to the product of (x) the Initial Common Equity Consideration multiplied by (y) the Appraisal Rights Fraction, if any; (2) to the Paying Agent, an amount equal to the Initial Preferred Stock Amount; (3) to the Escrow Agent, (i) for deposit in an escrow account (the “Indemnity Escrow Account”), the Indemnity Escrow Amount and (ii) for deposit in an escrow account (the “PPA Escrow Account”), the PPA Escrow Amount, in each case, such amounts to be held in a separate escrow account and distributed by the Escrow Agent and in accordance with the Escrow Agreements and the applicable provisions of this Agreement; and (4) to the Stockholder Representative for deposit into a separate account, the Administrative Expense Amount to be held in such separate account and distributed by the Stockholder Representative in accordance with the applicable provisions of this Agreement. (c) Subject to Section 2.4, the Initial Common Equity Consideration shall be distributed to holders of Company Common Stock and RSUs by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement. (d) The Initial Preferred Stock Amount shall be distributed to holders of the Company Preferred Stock by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement. (e) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay the Estimated Company Transaction Expenses in the amounts and to the Persons specified therein. (f) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay the MSA Termination Payment in accordance with the terms of the MSA Termination Agreement. (g) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay all Indebtedness set forth under Section 2.1(a)(6)(i), (iii) and (iv) to the lenders of such Indebtedness. (h) Subject to Section 2.4, any amount (other than any portion of the Initial Common Equity Consideration) which any of the holders of Company Common Stock or RSUs become entitled hereunder after the Closing under Section 2.7 (including any amounts payable for their account under the PPA Escrow Agreement) (collectively, as agreed to by the Stockholder Representative or as otherwise determined hereunder, the “Additional Common Equity Consideration”), which amounts shall be paid to the Paying Agent for distribution to the holders of Company Common Stock and RSUs, and thereafter distributed to them as provided in Section 2.3, Section 2.5, Section 2.7 and, to the extent applicable, in accordance with the Paying Agent Agreement. (i) Subject to Section 2.4, any amounts (other than any portion of the Initial Preferred Stock Amount) which any of the holders of Company Preferred Stock become entitled hereunder after the Closing (including any amounts payable for their account under the Indemnity Escrow Agreement)(collectively, as agreed to by the Stockholder Representative or as otherwise determined hereunder, the “Additional Preferred Stock Consideration”), which amounts shall be paid directly to the holders of Company Preferred Stock as provided herein.

Initial Merger Consideration. (a) The initial aggregate consideration (the “Initial Common Equity ConsiderationCompany Securities Amount”) to be paid in connection with the Merger to the holders of the class A common stock, par value $0.01 0.0001 per share, of the Company (the “Class A Common Stock”), the holders of the class B common stock, par value $0.0001 per share, of the Company (the “Class B Common Stock”, and together with the Class A Common Stock, the “Company Common Stock”), other than shares of Company Common Stock to be cancelled pursuant to Section 2.3(a), the Optionholders (as defined herein) and the RSUs Warrantholders (as defined herein), shall be an amount equal to the following (which amount shall be adjusted as provided herein): (1) $338,000,000 840,000,000 (the “Total Consideration”); plus (2) the amount of Estimated cash and Cash Equivalents of the Company and the subsidiaries of the Company (collectively, the “Company Subsidiaries”) on the Closing CashDate; plus (3) the amount, if any, by which the Estimated Closing Net Working Capital is greater than $47,083,355 52,000,000 (the “Net Working Capital Target”); minus (4) the amount, if any, by which the Estimated Closing Net Working Capital is less than the Net Working Capital Target; minus (5) the amount of unpaid Estimated Company Transaction Expenses; minus (6) the amount of Estimated Closing Indebtedness, including the all outstanding Indebtedness of the Company and the Company Subsidiaries under or in respect of:on the Closing Date (before taking into account any repayment of Indebtedness on the Closing Date pursuant to the terms hereof), including the following (the “Closing Indebtedness”): (i) all outstanding principal and accrued and unpaid interest (but not the outstanding letters of credit issued thereunder (the “Letters of Credit”)) under the credit agreement, dated as of December 17November 5, 2003, as thereafter amended2004, by and among Blue Ridge Paper Products Inc., a Delaware corporation (“BRPPI”)Dxxxx Pet Care Company, as borrower, the Company, as guarantor, the lenders from time to time party thereto and General Electric Capital CorporationCredit Suisse First Boston, acting through its Cayman Islands Branch, as administrative agent, agent and lender;collateral agent (the “Existing Credit Agreement”) and any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions); plus (ii) all outstanding principal and accrued and unpaid interest under the 9.509.750% senior secured subordinated notes due 2008 2007 (the “2008 2007 Notes”) of BRPPIDPC and any fees, provided that notwithstanding anything else to the contrarypre-payment premiums, pre-payment penalties and charges associated therewith (including, for purposes the avoidance of this Agreement doubt, any additional amounts payable as a result of the Indebtedness Transactions); plus (iii) all outstanding principal and accrued and unpaid interest under or the 10.750% senior notes due 2010 of DPC (the “2010 Notes” and, together with the 2007 Notes, the “Notes”); plus (iv) all outstanding principal and accrued and unpaid interest under the 7.250% Ottawa County Finance Authority Industrial Revenue Bonds of DPC (the “Miami Bonds”) and, if the Company fails to obtain the Consent in respect of the 2008 Notes shall equal Miami Bonds contemplated by Section 5.16 prior to the sum Closing Date, any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of (I) 104.75% doubt, any additional amounts payable as a result of the Transactions); plus (v) all outstanding principal amount thereof plus and accrued and unpaid interest under the 6.25% Oklahoma Development Finance Authority Industrial Development Revenue Bonds of DPC (IIthe “Cxxxxxx Xxxxx” and, together with the Miami Bonds, the “Bonds”) and, if the Company fails to obtain the Consent in respect of the Cxxxxxx Xxxxx contemplated by Section 5.16 prior to the Closing Date, any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions); plus (vi) the liquidation preference and all accrued and unpaid interest thereon through or dividends with respect to the Closing Date 14.25% senior preferred stock (the “Note Prepayment DPC Preferred Stock”) of DPC and any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (including, for the avoidance of doubt, any additional amounts payable as a result of the Transactions), to be calculated pursuant to Section 5(c) of the Certificate of Designations and other terms thereof (the “DPC Preferred Stock Redemption Amount”); providedplus (vii) all outstanding principal and accrued and unpaid interest under the loan agreement dated June 14, however2004 between A/S Arovit Petfood and FIH Erhvervsbank A/S (the “FIH Loan Agreement”) and, that in the event Parent notifies if the Company that it intends fails to satisfy obtain the 2008 Notes by a defeasance or satisfaction and discharge mechanism, the amount Consent in respect of the 2008 Notes shall instead equal the sum of (x) the amount required FIH Loan Agreement contemplated by Section 5.16 prior to be deposited with the trustee thereunder to effectuate such defeasance or satisfaction and discharge (provided that for purposes of this clause the amount deposited in respect of accrued interest shall not be deemed to include any interest accruing from and after the Closing Date) plus , any fees, pre-payment premiums, pre-payment penalties and charges associated therewith (y) if including, for the amount described in clause (x) does not include avoidance of doubt, any additional amounts payable as a prepayment penalty, 4.75% result of the principal amount of the 2008 Notes; provided that in no event shall the amount determined under this proviso exceed the Note Prepayment Amount; (iii) the Pay-In-Kind Senior Subordinated Note, dated May 14, 1999, by the Company in favor of International Paper Company (successor in interest to Champion International CorporationTransactions); and (iv) the promissory note, dated July 9, 2003, in the original principal amount of $818,550; minus (7) the Aggregate Preferred Stock Escrow Amount; minus (8) the amount of the MSA Termination PaymentReserve Amount; and minus (9) an amount equal to the Rollover Amount; minus (10) $1,500,000, increased by any additional amount (not to exceed $1,000,000) determined under the last sentence of Section 2.6(a) (as increased, the “PPA Escrow Amount”)250,000. (b) At the Closing, Parent Newco shall, or Newco shall cause the Surviving Corporation to, pay by wire transfer of immediately available funds the following: (1) to the Paying Agent, an amount for distribution in accordance with Sections 2.3(b), (c) and (d) and Section 2.5 equal to the product of (x) the Initial Common Equity Consideration multiplied by (y) the Appraisal Rights Fraction, if anyCompany Securities Amount; (2) to the Paying Agent, an amount for distribution in accordance with Section 5.14 equal to the Initial DPC Preferred Stock Redemption Amount (together with the Initial Company Securities Amount, the “Initial Merger Consideration”); (3) to Sun Trust Bank (the “Escrow Agent”), an amount equal to the sum of (i) for deposit in an escrow account amount equal to $5,000,000 minus the Rollover Working Capital Adjustment Amount (the “Working Capital Adjustment Escrow Amount”) and (ii) an amount equal to $15,000,000 minus the Rollover Indemnity Escrow Amount (the “Indemnity Escrow Amount” and, together with the Working Capital Adjustment Escrow Amount, the “Escrow Amount”), in each case to be held for the period provided in, and to be distributed by the Escrow Agent as provided in, Section 8.3 and the terms of an escrow agreement, in form and substance reasonably satisfactory to Newco and the Stockholder Representative, to be entered into at Closing by the Surviving Corporation, the Escrow Agent and the Stockholder Representative (the “Escrow Agreement”); (4) to a reserve account established and maintained by the Stockholder Representative in connection with the Transactions (the “Reserve Account”), an amount equal to $2,000,000 minus the Rollover Reserve Amount (the “Reserve Amount”), which shall be held by the Stockholder Representative and used and distributed as specified in Section 2.8(b) and any other documentation or agreements executed and delivered by the holders of Company Securities in connection with the Transactions; and (5) to an account established and maintained by the Surviving Corporation on behalf of the holders of Rollover Shares and Rollover Options in connection with the Transactions (the “Rollover Account”), the Rollover Working Capital Adjustment Amount, the Rollover Indemnity Escrow Amount and (ii) for deposit the Rollover Reserve Amount, which shall be held by the Surviving Corporation and used and distributed as specified in an escrow account (the “PPA Escrow Account”Section 2.1(f), the PPA Escrow AmountSection 2.7(c), in each case, such amounts to Section 2.8(b) and any other documentation or agreements that may be held in a separate escrow account executed and distributed delivered by the Escrow Agent holders of Rollover Shares, Rollover Options and in accordance with Newco or the Escrow Agreements and the applicable provisions of this Agreement; and (4) to the Stockholder Representative for deposit into a separate account, the Administrative Expense Amount to be held in such separate account and distributed by the Stockholder Representative in accordance with the applicable provisions of this AgreementSurviving Corporation. (c) Subject to Section 2.4, the The Initial Common Equity Consideration Company Securities Amount shall be distributed to holders of Company Common Stock Stock, Company Options and RSUs Company Warrants (collectively, the “Company Securities”) by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement; provided, that the Paying Agent shall not deliver to such holder of Company Securities any cash for such holder’s outstanding Company Securities until such holder has delivered to the Paying Agent the appropriate Surrender Forms with respect to such Company Securities; and provided, further, that if a holder has not delivered to the Paying Agent the appropriate Surrender Forms at Closing, the Paying Agent shall hold such amount and not pay such amount to such holder until such Surrender Forms are delivered. (d) The Initial DPC Preferred Stock Redemption Amount shall be distributed to holders of the Company DPC Preferred Stock by the Paying Agent as provided in Section 2.3 and Section 2.5 5.14 and in accordance with the Paying Agent AgreementAgreement and the certificate of designations for the DPC Preferred Stock (the “Certificate of Designations”); provided, however, that the Paying Agent shall not deliver to such holder of DPC Preferred Stock any cash for such holder’s outstanding shares of DPC Preferred Stock until such holder has delivered to the Paying Agent the appropriate return notice (as provided in the Certificate of Designations) with respect to such shares of DPC Preferred Stock. (e) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay the Estimated Company Transaction Expenses in the amounts and to the Persons persons specified thereinin the Company Transaction Expense Schedule. (f) At Any amounts payable to the Closingholders of Company Securities (other than holders of Rollover Shares and Rollover Options) after the Closing (including any Escrow Amount, Parent any Reserve Amount, or any other amounts due and payable to the Surviving Corporation or a holders of Company SubsidiarySecurities in connection with the Transactions) (collectively, the “Additional Company Securities Amount”) shall pay be paid to the MSA Termination Payment Stockholder Representative on behalf of the holders of Company Securities, and thereafter distributed by the Stockholder Representative to the holders of Company Securities in accordance with the terms of this Agreement, the MSA Termination Agreement. (g) At the Closing, Parent other Transaction Agreements and any other documentation or the Surviving Corporation or a Company Subsidiary, shall pay all Indebtedness set forth under Section 2.1(a)(6)(i), (iii) agreements executed and (iv) to the lenders of such Indebtedness. (h) Subject to Section 2.4, any amount (other than any portion of the Initial Common Equity Consideration) which any of delivered by the holders of Company Common Stock Securities in connection with the Transactions. Notwithstanding the foregoing, no holder of Rollover Shares or RSUs become entitled hereunder after the Closing under Section 2.7 (including any amounts payable for their account under the PPA Escrow Agreement) (collectively, as agreed to by the Stockholder Representative or as otherwise determined hereunder, the “Additional Common Equity Consideration”), which amounts Rollover Options shall be paid entitled to the Paying Agent for distribution to the holders of Company Common Stock and RSUs, and thereafter distributed to them as provided in Section 2.3, Section 2.5, Section 2.7 and, to the extent applicable, in accordance with the Paying Agent Agreement. (i) Subject to Section 2.4, any amounts (other than any portion of the Initial Preferred Stock any Additional Company Securities Amount) which any of the . Any amounts payable to holders of Company Preferred Stock become entitled hereunder Rollover Shares or Rollover Options after the Closing (including any amounts payable for their account under the Rollover Working Capital Adjustment Amount, any Rollover Indemnity Escrow Agreement)(collectivelyAmount, as agreed any Rollover Reserve Amount, or any other amounts due and payable to by the Stockholder Representative or as otherwise determined hereunderholders of Rollover Shares and Rollover Options in connection with the Transactions) (collectively, the “Additional Preferred Stock ConsiderationRollover Securities Amount”), which amounts ) shall be paid directly by the Surviving Corporation to the holders of Company Preferred Stock as provided hereinRollover Shares and Rollover Options in accordance with the terms of this Agreement, the other Transaction Agreements and any other documentation or agreements that may be executed and delivered by the holders of Rollover Shares and Rollover Options and Newco or the Surviving Corporation in connection with the Transactions.

Initial Merger Consideration. (a) The initial aggregate consideration (At or at any time following the “Initial Common Equity Consideration”) Effective Time, TLC shall deliver, or cause to be paid delivered, and a Shareholder shall be entitled to receive, upon surrender to TLC of one or more certificates representing Shares and a duly executed election form and transmittal letter in connection with the Merger form attached hereto as Exhibit A (an "Election Form"), subject to Section 2.01(c) and Section 2.01(d) hereof and to the holders terms of the common stockIndemnification Agreement and Escrow Agreement, par value $0.01 per share, cash consideration equal to such Shareholder's Percentage Interest multiplied by the Initial Merger Consideration. (b) A Shareholder may elect to receive up to twenty percent (20%) of the Company (the “Company Common Stock”), and the RSUs shall be an amount equal Initial Merger Consideration to the following (which amount shall be adjusted as provided herein): (1) $338,000,000 (the “Total Consideration”); plus (2) the amount of Estimated Closing Cash; plus (3) the amount, if any, by which the Estimated Closing Net Working Capital Shareholder is greater than $47,083,355 (the “Net Working Capital Target”); minus (4) the amountentitled in TLC Shares, if any, by which the Estimated Closing Net Working Capital is less than the Net Working Capital Target; minus (5) the amount in lieu of unpaid Estimated Company Transaction Expenses; minus (6) the amount of Estimated Closing Indebtedness, including the Indebtedness of the Company and the Company Subsidiaries under or in respect of: (i) the credit agreement, dated as of December 17, 2003, as thereafter amended, by and among Blue Ridge Paper Products Inc., a Delaware corporation (“BRPPI”), as borrower, the lenders from time to time party thereto and General Electric Capital Corporation, as administrative agent, agent and lender; (ii) the 9.50% senior secured notes due 2008 (the “2008 Notes”) of BRPPIcash, provided that notwithstanding anything else such Shareholder has submitted a duly completed Election Form to TLC no later than the contrary, for purposes of this Agreement the Indebtedness under or in respect of the 2008 Notes shall equal the sum of (I) 104.75% of the principal amount thereof plus (II) all accrued and unpaid interest thereon through the Closing Date (the “Note Prepayment Amount”)Effective Time; provided, however, that no Shareholder who is not an "accredited investor" as defined in Rule 501(a) of Regulation D under the event Parent notifies U.S. Securities Act (a "Non-Accredited Investor") may elect to receive TLC Shares. Unless a Shareholder has 84 submitted a duly completed Election Form prior to the Company that it intends to satisfy the 2008 Notes by a defeasance or satisfaction and discharge mechanismEffective Time, the amount in respect of the 2008 Notes such Shareholder shall instead equal the sum of (x) the amount required to be deposited with the trustee thereunder to effectuate such defeasance or satisfaction and discharge (provided that for purposes of this clause the amount deposited in respect of accrued interest shall not be deemed to include any interest accruing from and after the Closing Datehave elected to receive one hundred percent (100%) plus (y) if the amount described in clause (x) does not include a prepayment penalty, 4.75% of the principal amount Initial Merger Consideration to which he is entitled in cash. (c) For purposes of determining the number of TLC Shares to be delivered to an Electing Shareholder as part of the 2008 Notes; provided that in no event Initial Merger Consideration, the value of the TLC Shares shall be $6.13 per share, being the amount determined under this proviso exceed average closing price of TLC Shares on NASDAQ for the Note Prepayment Amount;five (5) trading days prior to the date hereof. (iiid) At the Pay-In-Kind Senior Subordinated NoteClosing, dated May 14pursuant to the Escrow Agreement, 1999TLC shall deposit with the Escrow Agent (as defined in the Escrow Agreement) a portion of the Initial Merger Consideration equal to: (i) a cash amount equal to twenty five percent (25%) of the total Initial Merger Consideration (together with all earnings thereon, by collectively, the Company in favor of International Paper Company (successor in interest to Champion International Corporation"Indemnity Escrow Deposit"); and (ivii) the promissory note, dated July 9, 2003, in the original principal amount of $818,550; minus (7) the Aggregate Preferred Stock Amount; minus (8) the amount of the MSA Termination Payment; and minus (9) an a cash amount equal to $1,500,000twenty-five percent (25%) of the Required Net Assets (the "Closing Adjustment Escrow Amount" and, increased by any additional amount (not to exceed $1,000,000) determined under the last sentence of Section 2.6(a) (as increasedtogether with all earnings thereon, collectively, the “PPA "Closing Adjustment Escrow Amount”Deposit"). (b) At the Closing, Parent or Newco shall pay by wire transfer of immediately available funds the following: (1) to the Paying Agent, an amount equal to the product of (x) the Initial Common Equity Consideration multiplied by (y) the Appraisal Rights Fraction, if any; (2) to the Paying Agent, an amount equal to the Initial Preferred Stock Amount; (3) to the Escrow Agent, (i) for deposit in an escrow account (the “Indemnity Escrow Account”), the Indemnity Escrow Amount and (ii) for deposit in an escrow account (the “PPA Escrow Account”), the PPA Escrow Amount, in each case, such amounts to be held in a separate escrow account and distributed by the Escrow Agent and in accordance with the Escrow Agreements and the applicable provisions of this Agreement; and (4) to the Stockholder Representative for deposit into a separate account, the Administrative Expense Amount to be held in such separate account and distributed by the Stockholder Representative in accordance with the applicable provisions of this Agreement. (c) Subject to Section 2.4, the Initial Common Equity Consideration shall be distributed to holders of Company Common Stock and RSUs by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement. (d) The Initial Preferred Stock Amount shall be distributed to holders of the Company Preferred Stock by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement. (e) At the ClosingThe Indemnity Escrow Deposit shall be held, Parent or the Surviving Corporation or a Company Subsidiary, shall pay the Estimated Company Transaction Expenses invested and disbursed as provided in the amounts Indemnification Agreement and to the Persons specified therein. (f) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay the MSA Termination Payment in accordance with the terms of the MSA Termination Agreement. (g) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay all Indebtedness set forth under Section 2.1(a)(6)(i), (iii) and (iv) to the lenders of such Indebtedness. (h) Subject to Section 2.4, any amount (other than any portion of the Initial Common Equity Consideration) which any of the holders of Company Common Stock or RSUs become entitled hereunder after the Closing under Section 2.7 (including any amounts payable for their account under the PPA Escrow Agreement) (collectively, as agreed to by the Stockholder Representative or as otherwise determined hereunder, the “Additional Common Equity Consideration”), which amounts . The Closing Adjustment Escrow Deposit shall be paid to the Paying Agent for distribution to the holders of Company Common Stock held, invested and RSUs, and thereafter distributed to them disbursed as provided in Section 2.3, Section 2.5, Section 2.7 and, to 2.09(c) and the extent applicable, in accordance with the Paying Agent Escrow Agreement. (i) Subject to Section 2.4, any amounts (other than any portion of the Initial Preferred Stock Amount) which any of the holders of Company Preferred Stock become entitled hereunder after the Closing (including any amounts payable for their account under the Indemnity Escrow Agreement)(collectively, as agreed to by the Stockholder Representative or as otherwise determined hereunder, the “Additional Preferred Stock Consideration”), which amounts shall be paid directly to the holders of Company Preferred Stock as provided herein.

Initial Merger Consideration. Subject to Section 1.11 (Dissenting Shares) and Section 8.6 (Right of Set-Off), Parent shall pay for all of the Company Common Stock, Company Preferred Stock, Company Stock Options and Company Warrants issued and outstanding immediately prior to the Effective Time the consideration set forth in this Section 1.8 as follows: (a) The initial aggregate consideration Parent shall advance Three Hundred Thousand Dollars ($300,000) as a third loan to fund the “Initial Common Equity Consideration”) to be paid in connection with the Merger to the holders of the common stock, par value $0.01 per share, ongoing operation of the Company (the “Company Common StockThird Loan” and, together with the First Loan and the Second Loan, the “Loans”) upon execution of this Agreement, unless Parent has previously advanced the Third Loan to the Company. (b) At Closing, Parent shall pay Ten Million Dollars ($10,000,000) (the “Initial Payment”), plus or minus, as the case may be, the Purchase Price Adjustment, if any (as defined in section 1.8(c)) (as so adjusted, the “Initial Merger Consideration”), which shall be paid by Parent to the Persons and in the amounts as follows: (x) One Million Dollars ($1,000,000) (the “Escrow Funds”) to the Escrow Agent to be held in escrow to secure any indemnification obligation of the Stockholders under Section 8.2; (y) Two Hundred Eighty Thousand Five Hundred Dollars ($280,500), in the aggregate, to the persons and in the amounts as set forth in Section 2.5 of the Disclosure Schedule, in partial repayment of the Bridge Loans; and (z) the balance of the Initial Merger Consideration, less any withholding described in 4.11(g), in accordance with the terms of the Payment Agreement (such balance payable to the Stockholders at Closing is sometimes referred to herein as the “Net Initial Merger Consideration”). The Escrow Funds shall not be distributed to the Stockholders until twelve (12) months after the Effective Time and shall only be distributed in accordance with the terms and conditions of the Escrow Agreement. In the event that Parent shall have perfected, prior to the expiration of such twelve- (12-) month period, a claim for indemnification pursuant to Section 8.4, the Stockholders’ Representative and the RSUs Parent shall be an endeavor in good faith to determine a reasonable estimate of the maximum amount equal of such claim and shall instruct the Escrow Agent to deliver any excess amount of Escrow Funds to the following Payment Agent for distribution to the Stockholders in accordance with the Escrow Agreement. (which amount c) The Initial Payment shall be adjusted as provided herein): (1) $338,000,000 (the “Total ConsiderationPurchase Price Adjustment”); plus ) as follows: (2A) decreased by (i) the amount of Estimated Closing Cashthe Loans; plus (3ii) the amount of consideration that would have been payable to Dissenting Stockholders (as defined below) if they had not perfected their rights as Dissenting Stockholders; (iii) the amount, if any, by which Transaction Expenses exceed $150,000; (iv) any amounts paid prior to Closing in settlement of the Estimated Closing Net Working Capital is greater than $47,083,355 Musket Litigation; (the “Net Working Capital Target”); minus (4v) the amountSupplemental Advance, if any; and (vi) the aggregate amount of the employee bonuses payable at Closing, as set forth in Section 2.8(j) of the Disclosure Schedule; and (B) increased by (i) the Closing Capital and (ii) that portion of the Supplemental Advance, if any, by which the Estimated Closing Net Working Capital is less than the Net Working Capital Target; minus (5) the amount of unpaid Estimated Company Transaction Expenses; minus (6) the amount of Estimated Closing Indebtedness, including the Indebtedness of that the Company spends on operations in the ordinary course of business, consistent in nature and amount with past practice, after having spent all other cash resources available to the Company Subsidiaries under or in respect of: (i) the credit agreement, dated as of December 17, 2003, as thereafter amended, by and among Blue Ridge Paper Products Inc., a Delaware corporation (“BRPPI”), as borrower, the lenders from time to time party thereto and General Electric Capital Corporation, as administrative agent, agent and lender; (ii) the 9.50% senior secured notes due 2008 (the “2008 Notes”) of BRPPI, provided that notwithstanding anything else to the contrary, for purposes of this Agreement the Indebtedness under or in respect of the 2008 Notes shall equal the sum of (I) 104.75% of the principal amount thereof plus (II) all accrued and unpaid interest thereon through the Closing Date (the “Note Prepayment Amount”); provided, however, that in the event Parent notifies the Company that it intends to satisfy the 2008 Notes by a defeasance or satisfaction and discharge mechanism, the amount in respect of the 2008 Notes shall instead equal the sum of (x) the amount required to be deposited with the trustee thereunder to effectuate such defeasance or satisfaction and discharge (provided that for purposes of this clause the amount deposited in respect of accrued interest shall not be deemed to include any interest accruing from and after the Closing Date) plus (y) if the amount described in clause (x) does not include a prepayment penalty, 4.75% of the principal amount of the 2008 Notes; provided that in no event shall the amount determined under this proviso exceed the Note Prepayment Amount; (iii) the Pay-In-Kind Senior Subordinated Note, dated May 14, 1999, by the Company in favor of International Paper Company (successor in interest to Champion International Corporation); and (iv) the promissory note, dated July 9, 2003, in the original principal amount of $818,550; minus (7) the Aggregate Preferred Stock Amount; minus (8) the amount of the MSA Termination Payment; and minus (9) an amount equal to $1,500,000, increased by any additional amount (not to exceed $1,000,000) determined under the last sentence of Section 2.6(a) (as increased, the “PPA Escrow Amount”). (b) At the Closing, Parent or Newco shall pay by wire transfer of immediately available funds the following: (1) to the Paying Agent, an amount equal to the product of (x) the Initial Common Equity Consideration multiplied by (y) the Appraisal Rights Fraction, if any; (2) to the Paying Agent, an amount equal to the Initial Preferred Stock Amount; (3) to the Escrow Agent, (i) for deposit in an escrow account (the “Indemnity Escrow Account”), the Indemnity Escrow Amount and (ii) for deposit in an escrow account (the “PPA Escrow Account”), the PPA Escrow Amount, in each case, such amounts to be held in a separate escrow account and distributed by the Escrow Agent and in accordance with the Escrow Agreements and the applicable provisions of this Agreement; and (4) to the Stockholder Representative for deposit into a separate account, the Administrative Expense Amount to be held in such separate account and distributed by the Stockholder Representative in accordance with the applicable provisions of this Agreement. (c) Subject to Section 2.4, the Initial Common Equity Consideration shall be distributed to holders of Company Common Stock and RSUs by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement. (d) The Initial Preferred Stock Amount shall be distributed to holders of the Company Preferred Stock by the Paying Agent as provided in Section 2.3 and Section 2.5 and in accordance with the Paying Agent Agreement. (e) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay the Estimated Company Transaction Expenses in the amounts and to the Persons specified therein. (f) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay the MSA Termination Payment in accordance with the terms of the MSA Termination Agreement. (g) At the Closing, Parent or the Surviving Corporation or a Company Subsidiary, shall pay all Indebtedness set forth under Section 2.1(a)(6)(i), (iii) and (iv) to the lenders of such Indebtedness. (h) Subject to Section 2.4, any amount (other than any portion of the Initial Common Equity Consideration) which any of the holders of Company Common Stock or RSUs become entitled hereunder after the Closing under Section 2.7 (including any amounts payable for their account under the PPA Escrow Agreement) (collectively, as agreed to by the Stockholder Representative or as otherwise determined hereunder, the “Additional Common Equity Consideration”), which amounts shall be paid to the Paying Agent for distribution to the holders of Company Common Stock and RSUs, and thereafter distributed to them as provided in Section 2.3, Section 2.5, Section 2.7 and, to the extent applicable, in accordance with the Paying Agent Agreement. (i) Subject to Section 2.4, any amounts (other than any portion of the Initial Preferred Stock Amount) which any of the holders of Company Preferred Stock become entitled hereunder after the Closing (including any amounts payable for their account under the Indemnity Escrow Agreement)(collectively, as agreed to by the Stockholder Representative or as otherwise determined hereunder, the “Additional Preferred Stock Consideration”), which amounts shall be paid directly to the holders of Company Preferred Stock as provided herein.