Common use of Lessee's Options Upon Expiration Clause in Contracts

Lessee's Options Upon Expiration. (a) In addition to its rights under paragraphs l2 and 14 hereof, Lessee shall, by notice given not less than nine (9) months prior to the Expiration Date, elect either to (i) deliver an Offer to Purchase the Property and purchase the Property on the Expiration Date upon payment of an amount equal to the Offer Purchase Price, in which case the transfer of the Property shall be governed by the terms of paragraphs 14 and 15 (and in which case, this Lease (with the exception of paragraph 24(e) or any other provision hereof under which the Lessee indemnifies the Lessor or others from liability in connection with this Lease) shall terminate on the Closing Date); or (ii) subject to the satisfaction of the conditions set forth in paragraph 27(b) hereof, terminate this Lease, abandon the Property as of the Expiration Date and pay to the Trustee, on behalf of the Lessor on the Expiration Date, in addition to any Fixed Rent, Additional Rent and any other amounts then due and payable to the Lessor hereunder, the Residual Guaranty; or (iii) subject to the conditions set forth in paragraph 27(d) hereof, extend the Lease for an Extended Term. (b) Upon the election of the Lessee to terminate this Lease pursuant to paragraph 27(a)(ii) hereof, Lessee shall provide, or cause to be provided or accomplished, at the sole cost and expense of the Lessee, to or for the benefit of the Lessor and the holders of the Instruments, at least thirty (30) days but not more than sixty (60) days prior to the Expiration Date each of the items set forth in Section 7.05 of the Participation Agreement. (c) Upon the Lessee's election to terminate this Lease pursuant to and in compliance with paragraph 27(a)(ii) hereof, the Trustee (on behalf of the Lessor) shall have the sole and exclusive right to sell or dispose of the Property and, as of the Expiration Date, the Lessee shall have no further claim thereto. The proceeds of any sale or disposition of the Property pursuant to this paragraph 27 (herein called a "Qualified Sale") shall be applied by the Trustee on the Lessor's behalf as follows: first, to pay all Closing Costs in connection with the Qualified Sale; and second, as provided in the Declaration. 38 42 (d) By written notice given to the Agent at least 10 months prior to the Expiration Date (or the expiration of any Extended Term ending on a date less than 5 years after the Expiration Date, as the case may be) the Lessee may request, in its sole discretion and if there exists no Default, Event of Default, Environmental Trigger or Unwind Event, an extension of this Lease for a maximum of 5 successive one-year terms (each an "Extended Term"). The Lessor and the Lessee shall determine the Applicable Rate for each Extended Term, consistent with the terms outlined below in this paragraph 27(d), and the Lessee shall undertake to enter into all amendments and supplements to the Operative Documents and such other agreements as the Lessor in its sole discretion determines to be necessary and appropriate in connection therewith. If the Lease is extended for an Extended Term, the Lessee shall pay the Agent a remarketing fee the amount of which shall be determined prior to the commencement of each Extended Term. Fixed Rent during each Extended Term shall be paid monthly in advance, and include an annual amount to be applied in a manner acceptable to each Purchaser, to the outstanding principal amount of the Notes, such annual amount to be equal to 20% (or such lower percentage as the Purchasers in their sole discretion may agree to) of the outstanding principal amount of the Notes at the Expiration Date. Within ten (10) days of receipt of Lessee's request to extend this Lease pursuant to this paragraph 27, the Agent shall, after consultation with the Purchasers, notify the Lessee of the Applicable Rate agreed upon by the Purchasers for such Extended Term. Within 5 days of such notice, the Lessee shall notify the Agent of whether the Lessee wishes to extend the Lease on the proposed terms. If a Purchaser fails to agree to extend this Lease on terms acceptable to the Lessee, the Agent shall use all reasonable efforts to locate a replacement lender or investor, as the case may be, provided, however, that if the Agent fails to locate a replacement lender or investor within fifteen (15) days of the aforesaid notice, the Lessee shall either (i) give notice of its election pursuant to paragraph 27(a) (i) hereof or (ii) agree to extend the Lease at the highest Applicable Rate enforceable at law.

Lessee's Options Upon Expiration. (a) In addition to its rights under paragraphs l2 12 and 14 hereof, Lessee shall, by notice given not less than nine twelve (912) months prior to the Expiration Date, elect either to (i) deliver an Offer to Purchase the Property in its entirety and purchase the Property on the Expiration Date upon payment of an amount equal to the Offer Purchase Price, in which case the transfer of the Property shall be governed by the terms of paragraphs 14 and 15 (and in which case, this Lease (with the exception of paragraph 24(e) or any other provision hereof under which the Lessee indemnifies the Lessor or others from liability in connection with this Lease) shall terminate on the Closing Date); or (ii) subject to the satisfaction of the conditions set forth in paragraph 27(b) hereof, terminate this Lease, abandon the Property as of the Expiration Date and pay to the Trustee, on behalf of the Lessor on the Expiration Date, in addition to any Fixed Rent, Additional Rent and any other amounts then due and payable to the Lessor hereunder, the Residual Guaranty; or (iii) subject to the conditions set forth in paragraph 27(d) hereof, extend the Lease for an Extended Term.. 37 (b) Upon the election of the Lessee to terminate this Lease pursuant to paragraph 27(a)(ii) hereof, Lessee shall provide, or cause to be provided or accomplished, at the sole cost and expense of the Lessee, to or for the benefit of the Lessor and the holders of the Instruments, at least thirty (30) days but not more than sixty (60) days prior to the Expiration Date each of the items set forth in Section 7.05 of the Participation Agreement. (c) Upon the Lessee's election to terminate this Lease pursuant to and in compliance with paragraph 27(a)(ii) hereof, the Trustee (on behalf of the Lessor) Lessor shall have the sole and exclusive right to sell or dispose of the Property and, as of the Expiration Date, the Lessee shall have no further claim thereto. The proceeds of any sale or disposition of the Property pursuant to this paragraph 27 (herein called a "Qualified SaleQUALIFIED SALE") shall be applied by the Trustee on the Lessor's behalf as follows: firstFIRST, to pay all Closing Costs in connection with the Qualified Sale; and secondSECOND, as provided in the Declaration. 38 42 . (d) By written notice given If Lessee is unable to satisfy one or more of the Agent at least 10 months prior conditions set forth in paragraph 27(b) hereof, or fails to the Expiration Date elect either (i) or the expiration of any Extended Term ending on a date less than 5 years after the Expiration Date, as the case may be(ii) the Lessee may request, in its sole discretion and if there exists no Default, Event of Default, Environmental Trigger or Unwind Event, an extension of this Lease for a maximum of 5 successive one-year terms (each an "Extended Term"). The Lessor and the Lessee shall determine the Applicable Rate for each Extended Term, consistent with the terms outlined below in this under paragraph 27(d), and the Lessee shall undertake to enter into all amendments and supplements to the Operative Documents and such other agreements as the Lessor in its sole discretion determines to be necessary and appropriate in connection therewith. If the Lease is extended for an Extended Term27(a) hereof, the Lessee shall pay be deemed to have elected to proceed under paragraph 27(a)(i) hereof, in which case Lessee shall purchase the Agent a remarketing fee the amount of which shall be determined prior to the commencement of each Extended Term. Fixed Rent during each Extended Term shall be paid monthly in advance, and include an annual amount to be applied in a manner acceptable to each Purchaser, to the outstanding principal amount of the Notes, such annual amount to be equal to 20% (or such lower percentage as the Purchasers in their sole discretion may agree to) of the outstanding principal amount of the Notes at the Expiration Date. Within ten (10) days of receipt of Lessee's request to extend this Lease Property pursuant to this and in accordance with said paragraph 27, the Agent shall, after consultation with the Purchasers, notify the Lessee of the Applicable Rate agreed upon by the Purchasers for such Extended Term. Within 5 days of such notice, the Lessee shall notify the Agent of whether the Lessee wishes to extend the Lease on the proposed terms. If a Purchaser fails to agree to extend this Lease on terms acceptable to the Lessee, the Agent shall use all reasonable efforts to locate a replacement lender or investor, as the case may be, provided, however, that if the Agent fails to locate a replacement lender or investor within fifteen (15) days of the aforesaid notice, the Lessee shall either (i) give notice of its election pursuant to paragraph 27(a) (i) hereof or (ii) agree to extend the Lease at the highest Applicable Rate enforceable at law27(a)(i).

Lessee's Options Upon Expiration. (a) In addition to its rights under paragraphs l2 and 14 hereofIf this Lease has not been extended as set forth in Section 3.02, Lessee shall, by notice given not less than nine at least twelve (912) months prior to the Expiration Date, Date the Lessee shall elect either by written notice given to the Lessor and the Agent to either: (i) deliver an Offer to Purchase the Property Properties and purchase the Property Properties on the Expiration Date upon payment of an amount equal to the Offer Purchase PriceLEASE Proprietary & Confidential Termination Value for the Properties, in which case the transfer provisions of the Property Section 5.04 shall be governed by the terms of paragraphs 14 and 15 (and in which case, this Lease (with the exception of paragraph 24(e) or any other provision hereof under which the Lessee indemnifies the Lessor or others from liability in connection with this Lease) shall terminate on the Closing Date)apply; or or (ii) so long as no Default, Event of Default, Non-Performance Event or Environmental Trigger has occurred and is continuing, and subject to the satisfaction of the conditions set forth in paragraph 27(bSection 3.03(b) hereofand Article X, terminate this Lease, abandon the Property Properties and release all of its interest in the Properties as of the Expiration Date and pay to the TrusteeAgent, on behalf of the Lessor Lessor, on the Expiration Date, in addition to any Fixed Rent, Additional Rent and any other amounts then due and payable to the Lessor hereunder, an amount equal to the Residual Guaranty; Value Amount for the Properties. If the Lessee is unable to satisfy one or (iii) subject to more of the conditions set forth in paragraph 27(d) hereofabove, extend or fails to timely make an election as provided above, the Lease for an Extended TermLessee shall be deemed to have elected to proceed under Section 3.03(a)(i). (b) Upon the election of the Lessee to terminate this Lease pursuant to paragraph 27(a)(ii) hereof, Lessee shall provide, or cause to be provided or accomplished, at the sole cost and expense of the Lessee, to or for the benefit of the Lessor and the holders of the Instruments, at least thirty (30) days but not more than sixty (60) days prior to the Expiration Date each of the items set forth in Section 7.05 of the Participation Agreement. (c) Upon the Lessee's election to terminate this Lease pursuant to and in compliance with paragraph 27(a)(ii) hereof, the Trustee (on behalf of the Lessor) shall have the sole and exclusive right to sell or dispose of the Property and, as of the Expiration DateSection 3.03(a)(ii), the Lessee shall have no further claim thereto. The proceeds of any sale or disposition of use reasonable efforts during the Property pursuant to this paragraph 27 (herein called a "Qualified Sale") shall be applied by the Trustee on the Lessor's behalf as follows: first, to pay all Closing Costs in connection with the Qualified Sale; and second, as provided in the Declaration. 38 42 (d) By written notice given to the Agent at least 10 months twelve-month period prior to the Expiration Date ("Remarketing Period") to obtain bids from unrelated third parties for the Properties. All bids received by the Lessee will immediately be copied to the Lessor and the Agent in writing, setting forth the amount of such bid and the name and address of the Person submitting such bid. The Lessor, the Agent, the Certificate Holders and the B-Note Holders will have the right, but not the obligation, to seek bids for the Properties during the Remarketing Period or the expiration of at any Extended Term ending on a date less than 5 years after time thereafter. On the Expiration DateDate or at any time thereafter, as the case may be) Properties will be sold pursuant to the Lessee may requestprovisions of the Participation Agreement (any such sale, in its sole discretion and if there exists no Default, Event of Default, Environmental Trigger or Unwind Event, an extension of this Lease for a maximum of 5 successive one-year terms (each an "Extended TermQualified Sale"). The Lessor and the Lessee shall determine the Applicable Rate for each Extended TermSales Proceeds from a Qualified Sale, consistent if any, will be distributed in accordance with the terms outlined below in this paragraph 27(d), and the Lessee shall undertake to enter into all amendments and supplements to the Operative Documents and such other agreements as the Lessor in its sole discretion determines to be necessary and appropriate in connection therewith. If the Lease is extended for an Extended Term, the Lessee shall pay the Agent a remarketing fee the amount of which shall be determined prior to the commencement of each Extended Term. Fixed Rent during each Extended Term shall be paid monthly in advance, and include an annual amount to be applied in a manner acceptable to each Purchaser, to the outstanding principal amount Article VII of the Notes, such annual amount to be equal to 20% (or such lower percentage as the Purchasers in their sole discretion may agree to) of the outstanding principal amount of the Notes at the Expiration Date. Within ten (10) days of receipt of Lessee's request to extend this Lease pursuant to this paragraph 27, the Agent shall, after consultation with the Purchasers, notify the Lessee of the Applicable Rate agreed upon by the Purchasers for such Extended Term. Within 5 days of such notice, the Lessee shall notify the Agent of whether the Lessee wishes to extend the Lease on the proposed terms. If a Purchaser fails to agree to extend this Lease on terms acceptable to the Lessee, the Agent shall use all reasonable efforts to locate a replacement lender or investor, as the case may be, provided, however, that if the Agent fails to locate a replacement lender or investor within fifteen (15) days of the aforesaid notice, the Lessee shall either (i) give notice of its election pursuant to paragraph 27(a) (i) hereof or (ii) agree to extend the Lease at the highest Applicable Rate enforceable at lawParticipation Agreement.

Lessee's Options Upon Expiration. (a) In addition to its rights -------------------------------- under paragraphs l2 and 14 hereof, Lessee shall, shall elect either to (i) by written notice given not less than nine at least three (93) months prior to the Expiration Date, elect either to Date (ior later if permitted or required under paragraph 27(d)) deliver an Offer to Purchase the Mill II Property in its entirety and purchase the Mill II Property on the Expiration Date upon payment of an amount equal to the Offer Purchase Price, in which case the transfer of the Mill II Property shall be governed by the terms of paragraphs 14 and 15 (and in which case, this Lease (with the exception of paragraph 24(e) or any other provision hereof or under the other Operative Documents under which the Lessee indemnifies the Lessor or others from liability in connection with this Lease, or otherwise specifies that such provision survives termination hereof or under the other Operative Documents) shall terminate on the Closing Date); or (ii) so long as no Default, Event of Default or Major Environmental Event has occurred and is continuing by written notice given at least twelve (12) months prior to the Expiration Date, and subject to the satisfaction of the conditions set forth in paragraph paragraphs 27(b) and 27(c) hereof, terminate this Lease, abandon the Mill II Property as of the Expiration Date and pay to the TrusteeAgent, on behalf of the Lessor on the Expiration Date, in addition to any Fixed Rent, Additional Rent and any other amounts then due and payable to the Lessor hereunder, an amount equal to the Series A Portion of the Adjusted Capitalized Cost of the Mill II Property (the "Residual Guaranty"); or (iii) by written notice given at ----------------- least three (3) months prior to the Expiration Date, and subject to the conditions set forth in paragraph 27(d) hereof), extend the this Lease for an the Extended Term. (b) Upon the election of the Lessee to terminate this Lease pursuant to paragraph 27(a)(ii) hereof, the Lessee shall provide, or cause to be provided or accomplished, at the sole cost and expense of the Lessee, to or for the benefit of the Lessor and the holders of the Instruments, at least thirty (30) days but not more than sixty (60) days prior to the Expiration Date or date of such other termination of this Lease each of the items set forth in Section 7.05 following (other than the documentation contemplated under clause (b)(ii)(F) which must be delivered five days prior to the Expiration Date) (collectively, the "Return Conditions"): ----------------- (i) an environmental audit of the Participation AgreementMill II Property, performed by environmental consultants selected by the Lessor, satisfactory in scope and content to the Agent, the Lessor, the Collateral Agent, each Equity Investor and each Note Holder, each in its sole discretion. (ii) a report of the Appraiser and/or the Independent Engineer, satisfactory in scope and content to the Lessor, the Collateral Agent, the Agent, the Equity Investors and the Note Holders, each in their sole discretion, to the effect that (A) the Mill II Improvements, if any, have been completed; (B) the Mill II Property has been constructed or maintained in accordance with the terms and conditions of the Lease and the other Operative Documents and the requirements of all Legal Requirements, Applicable Permits and prudent industry standards for pulp and paper xxxxx in Wisconsin; (C) the Lessee shall not be rebuilding or restoring or required to rebuild or restore the Mill II Property or any part thereof pursuant to paragraph 12(c) of this Lease; (D) the Mill II Property meets or exceeds the performance tests specified on Exhibit A hereto (the "Performance Tests") taking into account any modifications to the ----------------- Performance Tests necessitated by the Mill II Improvements (as determined by the Independent Engineer) which will insure that, at a minimum, the Mill II Property (including the Mill II Improvements, if any,) can operate at the required capacity, efficiency, utility and reliability required to meet the terms of any existing contracts involving the Mill II Property (including the Mill II Improvements) on the Expiration Date (or date of such other termination of the Lease); (E) all mechanical, electrical, security, plumbing, fire safety, telecommunications, structural and other building systems in the Mill II Property are operating properly in accordance with standards and specifications for such systems not less than those in effect on the date hereof, subject to the provisions of paragraph 23 hereof (and such other standards and specifications as may be required by applicable Legal Requirements); and (F) no Condemnation or Casualty has occurred which has not been remedied in accordance with the terms of the Operative Documents; (iii) delivery of a services agreement to the Lessor (in form and substance satisfactory to the Agent, the Lessor, the Equity Investors and the Note Holders each in their sole and absolute discretion), containing among other things, evidence that the Lessee has made arrangements satisfactory to the Agent in its sole and absolute discretion for the provision of all services necessary to maintain, own, operate or sell the Mill II Property (including obtaining all necessary intellectual property, surveys, permits, rights of way, manuals and contracts specifically associated with the Mill II Property and required for the operation of the Mill II Property as then being operated); (iv) an endorsement to the previously delivered ALTA extended coverage owner's title insurance policy issued by the Title Company, marked "premium paid" and increasing the coverage of such policy to an aggregate amount equal to the lesser of (i) the maximum insurable amount or (ii) the Adjusted Capitalized Cost of the Mill II Property, subject only to Permitted Encumbrances and otherwise in form and substance satisfactory to the Note Holders, the Equity Investors, the Lessor and Special Counsel, to be delivered to the Note Holders, the Equity Investors, the Lessor and Special Counsel, together with copies of all documents relating to the Permitted Encumbrances referred to therein, showing record title of the Lessor in the (leasehold estate in and to the) Mill II Property, and in and to Mill II, the Mill II Improvements and the Mill II Alterations; (v) all Fixed Rent and Additional Rent shall have been paid in full through such expiration or termination of the Term (or the Extended Term, as applicable); (vi) the Lessee shall remove, or cause the removal of, at the Lessee's sole expense, any inventory, fixtures, machinery, equipment or other property belonging to the Lessee or third parties in compliance with paragraph 10(b) and 23(d) of this Lease; and (vii) if directed to do so by the Lessor, the Lessee (at its expense) shall execute and deliver any and all further instruments, agreements and documents as may, in the reasonable opinion of the Lessor, be necessary to confirm the termination and expiration of this Lease and to acknowledge that the Lessee, from the date of termination and expiration, ceases to have any interest in the Mill II Property under this Lease and to confirm the Lessor's ownership of the Mill II Property. (c) Upon the Lessee's election to terminate this Lease pursuant to and in compliance with paragraph 27(a)(ii) hereof, the Trustee (on behalf of the Lessor) shall have the sole and exclusive right to sell or dispose of the Property and, as of the Expiration Date, the Lessee shall have no further claim thereto. The proceeds of any sale or disposition of use reasonable efforts during the Property pursuant to this paragraph 27 (herein called a "Qualified Sale") shall be applied by the Trustee on the Lessor's behalf as follows: first, to pay all Closing Costs in connection with the Qualified Sale; and second, as provided in the Declaration. 38 42 (d) By written notice given to the Agent at least 10 months twelve-month period prior to the Expiration Date (or "Remarketing ----------- Period") to obtain bids from unrelated third parties for the expiration of any Extended Term ending on a date less than 5 years after the Expiration Date, as the case may be) Mill II Property. ------ All bids received by the Lessee may request, in its sole discretion and if there exists no Default, Event of Default, Environmental Trigger or Unwind Event, an extension of this Lease for a maximum of 5 successive one-year terms (each an "Extended Term"). The shall immediately be copied to the Lessor and the Lessee shall determine the Applicable Rate for each Extended TermAgent in writing, consistent with the terms outlined below in this paragraph 27(d), and the Lessee shall undertake to enter into all amendments and supplements to the Operative Documents and such other agreements as the Lessor in its sole discretion determines to be necessary and appropriate in connection therewith. If the Lease is extended for an Extended Term, the Lessee shall pay the Agent a remarketing fee setting forth the amount of which such bid and the name and address of the person submitting such bid. The Lessor, the Agent, the Equity Investors and each Note Holder shall be determined prior have the right, but not the obligation, to seek bids for the Mill II Property during the Remarketing Period or at any time thereafter. On the Expiration Date or at any time thereafter, provided that all conditions of this paragraph 27 have been met, the Collateral Agent may (but is not obligated to) sell the Mill II Property for cash to the commencement of each Extended Term. Fixed Rent bidder, if any, who shall have submitted the highest bid during each Extended Term shall be paid monthly in advancethe Remarketing Period or any time thereafter on an as-is basis and without recourse or warranty, and include an annual amount to be applied in a manner acceptable to each Purchaser, subject to the outstanding principal amount provisions of the Notes, such annual amount to be equal to 20% (or such lower percentage as the Purchasers in their sole discretion may agree to) of the outstanding principal amount of the Notes at the Expiration Date. Within ten (10) days of receipt of Lessee's request to extend this Lease pursuant to this paragraph 27, the Agent shall, after consultation with the Purchasers, notify the Lessee of the Applicable Rate agreed upon by the Purchasers for such Extended Term. Within 5 days of such notice, the Lessee shall notify the Agent of whether the Lessee wishes to extend the Lease on the proposed terms. If a Purchaser fails to agree to extend this Lease on terms acceptable to the Lessee, the Agent shall use all reasonable efforts to locate a replacement lender or investor, as the case may be, provided, however, that if the Agent fails to locate a replacement lender or investor within fifteen (15) days of the aforesaid notice, the Lessee shall either (i) give notice of its election pursuant to paragraph 27(a) (i) hereof or (ii) agree to extend the Lease at the highest Applicable Rate enforceable at law.Section 3.01

Lessee's Options Upon Expiration. (a) In addition to its rights -------------------------------- under paragraphs l2 and 14 hereof, Lessee shall, shall elect either to (i) by written notice given not less than nine at least three (93) months prior to the Expiration Date, elect either to Date (ior later if permitted or required under paragraph 27(d)) deliver an Offer to Purchase the Mill I Property in its entirety and purchase the Mill I Property on the Expiration Date upon payment of an amount equal to the Offer Purchase Price, in which case the transfer of the Mill I Property shall be governed by the terms of paragraphs 14 and 15 (and in which case, this Lease (with the exception of paragraph 24(e) or any other provision hereof or under the other Operative Documents under which the Lessee indemnifies the Lessor or others from liability in connection with this Lease, or otherwise specifies that such provision survives termination hereof or under the other Operative Documents) shall terminate on the Closing Date); or (ii) so long as no Default, Event of Default or Major Environmental Event has occurred and is continuing by written notice given at least twelve (12) months prior to the Expiration Date, and subject to the satisfaction of the conditions set forth in paragraph paragraphs 27(b) and 27(c) hereof, terminate this Lease, abandon the Mill I Property as of the Expiration Date and pay to the TrusteeAgent, on behalf of the Lessor on the Expiration Date, in addition to any Fixed Rent, Additional Rent and any other amounts then due and payable to the Lessor hereunder, an amount equal to the Series A Portion of the Adjusted Capitalized Cost of the Mill I Property (the "Residual Guaranty"); or (iii) by ----------------- written notice given at least three (3) months prior to the Expiration Date, and subject to the conditions set forth in paragraph 27(d) hereof), extend the this Lease for an the Extended Term. (b) Upon the election of the Lessee to terminate this Lease pursuant to paragraph 27(a)(ii) hereof, the Lessee shall provide, or cause to be provided or accomplished, at the sole cost and expense of the Lessee, to or for the benefit of the Lessor and the holders of the Instruments, at least thirty (30) days but not more than sixty (60) days prior to the Expiration Date or date of such other termination of this Lease each of the items set forth in Section 7.05 following (other than the documentation contemplated under clause (b)(ii)(F) which must be delivered five days prior to the Expiration Date) (collectively, the "Return Conditions"): ----------------- (i) an environmental audit of the Participation AgreementMill I Property, performed by environmental consultants selected by the Lessor, satisfactory in scope and content to the Agent, the Lessor, the Collateral Agent, each Equity Investor and each Note Holder, each in its sole discretion. (ii) a report of the Appraiser and/or the Independent Engineer, satisfactory in scope and content to the Lessor, the Collateral Agent, the Agent, the Equity Investors and the Note Holders, each in their sole discretion, to the effect that (A) the Mill I Improvements, if any, have been completed; (B) the Mill I Property has been constructed or maintained in accordance with the terms and conditions of the Lease and the other Operative Documents and the requirements of all Legal Requirements, Applicable Permits and prudent industry standards for pulp and paper xxxxx in Wisconsin; (C) the Lessee shall not be rebuilding or restoring or required to rebuild or restore the Mill I Property or any part thereof pursuant to paragraph 12(c) of this Lease; (D) the Mill I Property meets or exceeds the performance tests specified on Exhibit A hereto (the "Performance Tests") taking into account any modifications to the ------------------ Performance Tests necessitated by the Mill I Improvements (as determined by the Independent Engineer) which will insure that, at a minimum, the Mill I Property (including the Mill I Improvements, if any,) can operate at the required capacity, efficiency, utility and reliability required to meet the terms of any existing contracts involving the Mill I Property (including the Mill I Improvements) on the Expiration Date (or date of such other termination of the Lease); (E) all mechanical, electrical, security, plumbing, fire safety, telecommunications, structural and other building systems in the Mill I Property are operating properly in accordance with standards and specifications for such systems not less than those in effect on the date hereof, subject to the provisions of paragraph 23 hereof (and such other standards and specifications as may be required by applicable Legal Requirements); and (F) no Condemnation or Casualty has occurred which has not been remedied in accordance with the terms of the Operative Documents; (iii) delivery of a services agreement to the Lessor (in form and substance satisfactory to the Agent, the Lessor, the Equity Investors and the Note Holders each in their sole and absolute discretion), containing among other things, evidence that the Lessee has made arrangements satisfactory to the Agent in its sole and absolute discretion for the provision of all services necessary to maintain, own, operate or sell the Mill I Property (including obtaining all necessary intellectual property, surveys, permits, rights of way, manuals and contracts specifically associated with the Mill I Property and required for the operation of the Mill I Property as then being operated); (iv) an endorsement to the previously delivered ALTA extended coverage owner's title insurance policy issued by the Title Company, marked "premium paid" and increasing the coverage of such policy to an aggregate amount equal to the lesser of (i) the maximum insurable amount or (ii) the Adjusted Capitalized Cost of the Mill I Property, subject only to Permitted Encumbrances and otherwise in form and substance satisfactory to the Note Holders, the Equity Investors, the Lessor and Special Counsel, to be delivered to the Note Holders, the Equity Investors, the Lessor and Special Counsel, together with copies of all documents relating to the Permitted Encumbrances referred to therein, showing record title of the Lessor in the (leasehold estate in and to the) Mill I Property, and in and to Mill I, the Mill I Improvements and the Mill I Alterations; (v) all Fixed Rent and Additional Rent shall have been paid in full through such expiration or termination of the Term (or the Extended Term, as applicable); (vi) the Lessee shall remove, or cause the removal of, at the Lessee's sole expense, any inventory, fixtures, machinery, equipment or other property belonging to the Lessee or third parties in compliance with paragraph 10(b) and 23(d) of this Lease; and (vii) if directed to do so by the Lessor, the Lessee (at its expense) shall execute and deliver any and all further instruments, agreements and documents as may, in the reasonable opinion of the Lessor, be necessary to confirm the termination and expiration of this Lease and to acknowledge that the Lessee, from the date of termination and expiration, ceases to have any interest in the Mill I Property under this Lease and to confirm the Lessor's ownership of the Mill I Property. (c) Upon the Lessee's election to terminate this Lease pursuant to and in compliance with paragraph 27(a)(ii) hereof, the Trustee (on behalf of the Lessor) shall have the sole and exclusive right to sell or dispose of the Property and, as of the Expiration Date, the Lessee shall have no further claim thereto. The proceeds of any sale or disposition of use reasonable efforts during the Property pursuant to this paragraph 27 (herein called a "Qualified Sale") shall be applied by the Trustee on the Lessor's behalf as follows: first, to pay all Closing Costs in connection with the Qualified Sale; and second, as provided in the Declaration. 38 42 (d) By written notice given to the Agent at least 10 months twelve-month period prior to the Expiration Date (or "Remarketing Period") to obtain bids from unrelated third parties for the expiration of any Extended Term ending on a date less than 5 years after the Expiration Date, as the case may be) Mill ------------------ I Property. All bids received by the Lessee may request, in its sole discretion and if there exists no Default, Event of Default, Environmental Trigger or Unwind Event, an extension of this Lease for a maximum of 5 successive one-year terms (each an "Extended Term"). The shall immediately be copied to the Lessor and the Lessee shall determine the Applicable Rate for each Extended TermAgent in writing, consistent with the terms outlined below in this paragraph 27(d), and the Lessee shall undertake to enter into all amendments and supplements to the Operative Documents and such other agreements as the Lessor in its sole discretion determines to be necessary and appropriate in connection therewith. If the Lease is extended for an Extended Term, the Lessee shall pay the Agent a remarketing fee setting forth the amount of which such bid and the name and address of the person submitting such bid. The Lessor, the Agent, the Equity Investors and each Note Holder shall be determined prior have the right, but not the obligation, to seek bids for the Mill I Property during the Remarketing Period or at any time thereafter. On the Expiration Date or at any time thereafter, provided that all conditions of this paragraph 27 have been met, the Collateral Agent may (but is not obligated to) sell the Mill I Property for cash to the commencement of each Extended Term. Fixed Rent bidder, if any, who shall have submitted the highest bid during each Extended Term shall be paid monthly in advancethe Remarketing Period or any time thereafter on an as-is basis and without recourse or warranty, and include an annual amount to be applied in a manner acceptable to each Purchaser, subject to the outstanding principal amount provisions of the Notes, such annual amount to be equal to 20% (or such lower percentage as the Purchasers in their sole discretion may agree to) of the outstanding principal amount of the Notes at the Expiration Date. Within ten (10) days of receipt of Lessee's request to extend this Lease pursuant to this paragraph 27, the Agent shall, after consultation with the Purchasers, notify the Lessee of the Applicable Rate agreed upon by the Purchasers for such Extended Term. Within 5 days of such notice, the Lessee shall notify the Agent of whether the Lessee wishes to extend the Lease on the proposed terms. If a Purchaser fails to agree to extend this Lease on terms acceptable to the Lessee, the Agent shall use all reasonable efforts to locate a replacement lender or investor, as the case may be, provided, however, that if the Agent fails to locate a replacement lender or investor within fifteen (15) days of the aforesaid notice, the Lessee shall either (i) give notice of its election pursuant to paragraph 27(a) (i) hereof or (ii) agree to extend the Lease at the highest Applicable Rate enforceable at law.Section 3.01

Lessee's Options Upon Expiration. (a) In addition to its rights under paragraphs l2 12 and 14 hereof, Lessee shall, by notice given not less than nine twelve (912) months prior to the Expiration Date, elect either to (i) deliver an Offer to Purchase the Property in its entirety and purchase the Property on the Expiration Date upon payment of an amount equal to the Offer Purchase Price, in which case the transfer of the Property shall be governed by the terms of paragraphs 14 and 15 (and in which case, this Lease (with the exception of paragraph 24(e) or any other provision hereof under which the Lessee indemnifies the Lessor or others from liability in connection with this Lease) shall terminate on the Closing Date); or (ii) subject to the satisfaction of the conditions set forth in paragraph 27(b) hereof, terminate this Lease, abandon the Property as of the Expiration Date and pay to the Trustee, on behalf of the Lessor on the Expiration Date, in addition to any Fixed Rent, Additional Rent and any other amounts then due and payable to the Lessor hereunder, the Residual Guaranty; or (iii) subject to the conditions set forth in paragraph 27(d) hereof, extend the Lease for an Extended Term. (b) Upon the election of the Lessee to terminate this Lease pursuant to paragraph 27(a)(ii) hereof, Lessee shall provide, or cause to be provided or accomplished, at the sole cost and expense of the Lessee, to or for the benefit of the Lessor and the holders of the Instruments, at least thirty (30) days but not more than sixty (60) days prior to the Expiration Date each of the items set forth in Section 7.05 of the Participation Agreement. (c) Upon the Lessee's election to terminate this Lease pursuant to and in compliance with paragraph 27(a)(ii) hereof, the Trustee (on behalf of the Lessor) Lessor shall have the sole and exclusive right to sell or dispose of the Property and, as of the Expiration Date, the Lessee shall have no further claim thereto. The proceeds of any sale or disposition of the Property pursuant to this paragraph 27 (herein called a "Qualified SaleQUALIFIED SALE") shall be applied by the Trustee on the Lessor's behalf as follows: firstFIRST, to pay all Closing Costs in connection with the Qualified Sale; and secondSECOND, as provided in the Declaration. 38 42 . (d) By written notice given If Lessee is unable to satisfy one or more of the Agent at least 10 months prior conditions set forth in paragraph 27(b) hereof, or fails to the Expiration Date elect either (i) or the expiration of any Extended Term ending on a date less than 5 years after the Expiration Date, as the case may be(ii) the Lessee may request, in its sole discretion and if there exists no Default, Event of Default, Environmental Trigger or Unwind Event, an extension of this Lease for a maximum of 5 successive one-year terms (each an "Extended Term"). The Lessor and the Lessee shall determine the Applicable Rate for each Extended Term, consistent with the terms outlined below in this under paragraph 27(d), and the Lessee shall undertake to enter into all amendments and supplements to the Operative Documents and such other agreements as the Lessor in its sole discretion determines to be necessary and appropriate in connection therewith. If the Lease is extended for an Extended Term27(a) hereof, the Lessee shall pay be deemed to have elected to proceed under paragraph 27(a)(i) hereof, in which case Lessee shall purchase the Agent a remarketing fee the amount of which shall be determined prior to the commencement of each Extended Term. Fixed Rent during each Extended Term shall be paid monthly in advance, and include an annual amount to be applied in a manner acceptable to each Purchaser, to the outstanding principal amount of the Notes, such annual amount to be equal to 20% (or such lower percentage as the Purchasers in their sole discretion may agree to) of the outstanding principal amount of the Notes at the Expiration Date. Within ten (10) days of receipt of Lessee's request to extend this Lease Property pursuant to this and in accordance with said paragraph 27, the Agent shall, after consultation with the Purchasers, notify the Lessee of the Applicable Rate agreed upon by the Purchasers for such Extended Term. Within 5 days of such notice, the Lessee shall notify the Agent of whether the Lessee wishes to extend the Lease on the proposed terms. If a Purchaser fails to agree to extend this Lease on terms acceptable to the Lessee, the Agent shall use all reasonable efforts to locate a replacement lender or investor, as the case may be, provided, however, that if the Agent fails to locate a replacement lender or investor within fifteen (15) days of the aforesaid notice, the Lessee shall either (i) give notice of its election pursuant to paragraph 27(a) (i) hereof or (ii) agree to extend the Lease at the highest Applicable Rate enforceable at law27(a)(i).