Common use of Limitations on Dividends and Distributions Clause in Contracts

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX[Intentionally Omitted]; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing[Intentionally Omitted]; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased; (g) the U.S. Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the U.S. Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; (h) [Intentionally Omitted]; (i) subject to Section 12.1(o)(ix); so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, the Borrower may make cash distributions or dividends to the Parent which shall be invested in a U.S. Credit Party; and (j) subject to Section 10.10 and Section 12.1(o)(vii)(E), the U.S. Borrower and its Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 12.1(o)(viii); provided that on each date any distribution or dividend is paid and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing; and (ii) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX and Section 12.1(o)(ix).

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX[Intentionally Omitted]; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing[Intentionally Omitted]; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased; (g) the Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; (h) [Intentionally Omitted]; (i) subject to Section 11.1(o)(ix); so long as (i) no Default or Event of Default shall have occurred and be continuing or would be caused thereby and (ii) the Borrower shall have complied with the requirements set forth in Sections 8.10(e)(i), (ii)(A) and (ii)(B) of this Agreement and Section 8.10(e)(i) of the Canadian Credit Agreement, the Borrower may make cash distributions or dividends to the Parent which shall be invested in a Credit Party; and (j) subject to Sections 10.10 and 11.1(o)(viii)(E), the Borrower and its Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 11.1(o)(viii); provided that on each date any distribution or dividend is paid and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing; and (ii) the Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX and Section 11.1(o)(ix).

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX[Intentionally Omitted]; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing[Intentionally Omitted]; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased; (g) the U.S. Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the U.S. Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; (h) [Intentionally Omitted]; (i) subject to Section 12.1(o)(ix); so long as (i) no Default or Event of Default shall have occurred and be continuing or would be caused thereby and (ii) the U.S. Borrower shall have complied with the requirements set forth in Section 8.10(e)(i) of this Agreement and Section 8.10(e)(i), (ii)(A) and (ii)(B) of the U.S. Credit Agreement, the U.S. Borrower may make cash distributions or dividends to the Parent which shall be invested in a U.S. Credit Party; and (j) subject to Section 10.10 and Section 12.1(o)(viii)(E), the U.S. Borrower and its Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 12.1(o)(viii); provided that on each date any distribution or dividend is paid and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing; and (ii) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX and Section 12.1(o)(ix).

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX[Intentionally Omitted]; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing[Intentionally Omitted]; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased; (g) the U.S. Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the U.S. Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; (h) [Intentionally Omitted]; (i) subject to Section 12.1(o)(ix); so long as (i) no Default or Event of Default shall have occurred and be continuing or would be caused thereby and (ii) the U.S. Borrower shall have complied with the requirements set forth in Section 8.10(e)(i) of this Agreement and Section 8.10(e)(i), (ii)(A) and (ii)(B) of the U.S. Credit Agreement, the U.S. Borrower may make cash distributions or dividends to the Parent which shall be invested in a U.S. Credit Party; and (j) subject to Sections 10.10 and 12.1(o)(viii)(E), the U.S. Borrower and its Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 12.1(o)(viii); provided that on each date any distribution or dividend is paid and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing; and (ii) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX and Section 12.1(o)(ix).

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX[Intentionally Omitted]; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing[Intentionally Omitted]; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased; (g) the Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; (h) [Intentionally Omitted]; (i) subject to Section 11.1(o)(ix), so long as no Default or Event of Default shall have occurred and be continuing or would be caused thereby, the Borrower may make cash distributions or dividends to the Parent which shall be invested in a Credit Party; and (j) subject to Sections 10.10 and 11.1(o)(viii)(E), the Borrower and its Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 11.1(o)(viii); provided that on each date any distribution or dividend is paid and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing; and (ii) the Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX and Section 11.1(o)(ix).

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) (i) the U.S. Original Borrower may pay cash dividends to the Parent to allow the Parent to pay cash dividends to holders of its the Parent's Capital Stock and (ii) Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that in each case (iA) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (iiB) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iiiC) on each date that a dividend is declared and after giving effect thereto: (A1) no Default or Event of Default shall have occurred and be continuing; and (B2) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may pay dividends to the Parent to allow the Parent to repurchase shares of its the Parent's Capital Stock Stock, in an aggregate amount for all such repurchases by the Borrower or dividends paid by the Borrower of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased or such dividend is paid and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and; (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased; (g) the Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; (h) the Original Borrower may pay a one-time dividend to the Parent of all or (if the remaining portion is transferred to the Parent pursuant to Section 10.5(i)) any portion of the issued and outstanding shares of the Capital Stock of Newco held by the Original Borrower in connection with the Newco Transactions; (i) subject to Section 11.1(o)(ix); so long as (i) no Default or Event of Default shall have occurred and be continuing or would be caused thereby and (ii) the Borrower shall have complied with the requirements set forth in Sections 8.10(e)(i) and (ii)(A) of this Agreement and Section 8.10(e)(i) of the Canadian Credit Agreement, the Borrower may make cash distributions or dividends to the Parent (including, without limitation, with all or a portion of the proceeds of Indebtedness incurred pursuant to Section 10.1(m)) which, unless otherwise permitted pursuant to Section 8.12(c) or (d), shall be invested in a Credit Party; and (j) subject to Sections 10.10 and 11.1(o)(viii)(E), the Borrower and its Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 11.1(o)(viii); provided that on each date any distribution or dividend is paid and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing; and (ii) the Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX and Section 11.1(o)(ix).

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that, except as to clause (d), so long as no Default or Event of Default has occurred and is continuing or would result from the following: (a) the U.S. Canadian Borrower or any Restricted Subsidiary may pay dividends in shares of its own Capital Stock; (b) any Restricted Subsidiary may pay dividends to, or redeem shares of its Capital Stock owned by, (i) any Full Credit Party or (ii) any Restricted Subsidiary that is not a Full Credit Party (provided that such Restricted Subsidiary must distribute such amount to a Full Credit Party to the U.S. extent provided for in Section 11.13); (c) any Subsidiary which is not a Wholly-Owned Subsidiary (including the Mexican Borrower) may pay cash dividends to, or redeem shares of its Capital Stock owned by, in each case on a ratable basis, (i) any Full Credit Party, (ii) any Restricted Subsidiary that is not a Full Credit Party (provided that such Restricted Subsidiary must distribute such amount to a Full Credit Party to the extent provided for in Section 11.13) and (iii) its other owners; (d) any Borrower or any Restricted Subsidiary thereof may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. a Borrower or of the applicable Restricted Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (e) any Borrower or Restricted Subsidiary may make dividends or distributions, or purchase, redeem, retire or otherwise acquire its Capital Stock pursuant to (i) a disposition permitted by Section 11.5 or (ii) any Permitted Acquisition; (f) the U.S. Canadian Borrower may declare and pay dividends to its shareholders in an aggregate amount in any fiscal quarter not to exceed the following: (i) if the Total Leverage Ratio as of the last day of the preceding fiscal quarter is greater than or equal to 2.00 to 1.00, an amount equal to twenty-five percent (25%) of Net Income for the immediately preceding fiscal quarter; or (ii) if the Total Leverage Ratio as of the last day of the preceding fiscal quarter is less than 2.00 to 1.00, an amount equal to fifty percent (50%) of Net Income for the immediately preceding fiscal quarter; and (g) the Canadian Borrower or any of its Restricted Subsidiaries may repurchase shares of its Capital Stock in an aggregate amount of up not to exceed $100,000,000 50,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. US Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the U.S. US Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, declare and pay quarterly dividends in each case to a manner consistent with the extent such distributions constitute compensation to executives or employees past practice of the U.S. US Borrower or in amounts reasonably determined by the board of directors of the applicable SubsidiaryUS Borrower; provided that the aggregate amount of dividends declared and paid during each Fiscal Year shall not exceed fifty percent (50%) of Net Income for the Fiscal Year preceding the Fiscal Year in which such dividend is to be declared and paid (as set forth in the audited financial statements of the US Borrower and its Subsidiaries for such preceding Fiscal Year); (c) any Subsidiary may declare and pay dividends of any type (cash or non-cash) to the holders of its Capital Stock (US Borrower or any other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only provided that if such the Subsidiary paying the dividend is paid on a ratable basis to Subsidiary Guarantor or Subsidiary Borrower then the holders recipient of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary;the dividend must be either the US Borrower or another Subsidiary Guarantor; and (d) the U.S. US Borrower may pay cash dividends to holders repurchase shares of its Capital Stock and Bowater CanadaStock, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect theretoso long as: (Ai) no Default or Event of Default shall have has occurred and be continuingis continuing at the time of such repurchase or would result therefrom; and (Bii) the U.S. US Borrower and its Subsidiaries shall be in have demonstrated to the Administrative Agent that the Average Total Leverage Ratio (as of the date of the proposed share repurchase, based on the most recent financial statements delivered to the Administrative Agent pursuant to Section 8.1, and, on a pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and basis, after giving effect thereto: (Ato such share repurchase and any Indebtedness incurred in connection therewith) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 is less than 2.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have (collectively, a Material Adverse Effect"RESTRICTED PAYMENT"); provided PROVIDED that: (a) the U.S. Borrower Holdings or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make pay cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case dividends to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or another Subsidiary that is a Credit Party and, so long as no Default or Event of the applicable Subsidiary;Default has occurred or is continuing, to other equity holders of such Subsidiary on a pro rata basis. (c) any Subsidiary so long as no Event of Default exists, the Borrower may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that make payments in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to amounts and at the holders of such Capital Stock rates specified in accordance with their respective ownership percentages in such Subsidiarythe Management Agreement; (d) the U.S. Borrower may make payments to Holdings, and Holdings may make payments to any direct or indirect parent of Holdings, to pay cash dividends franchise taxes, directors fees and reasonable accounting, legal and administrative expenses of Holdings and such parents when due, in an aggregate amount not to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX1,000,000 per annum; (e) for so long as the U.S. Borrower is a member of a group filing a consolidated or combined tax return with Holdings or any direct or indirect parent of Holdings, the Borrower may repurchase shares make payments to Holdings and Holdings may make payments to such Person in respect of an allocable portion of the tax liabilities of such group that is attributable to Holdings, the Borrower or their Subsidiaries (limited, in the case of Holdings, to taxes attributable to its Capital Stock in an aggregate ownership of the Borrower) ("TAX PAYMENTS"). The Tax Payments shall not exceed the lesser of (i) the amount of up the relevant tax (including any penalties and interest) that the Borrower would owe if the Borrower were filing a separate tax return (or a separate consolidated or combined return with its Subsidiaries that are members of the consolidated or combined group), taking into account any carryovers and carrybacks of tax attributes (such as net operating losses) of the Borrower and such Subsidiaries from other taxable years and (ii) the net amount of the relevant tax that Holdings or such Person actually owes to $100,000,000 during the term appropriate taxing authority. Any Tax Payments received from the Borrower shall be paid over to the appropriate taxing authority within 30 days of this Agreement; provided that on each date that Capital Stock is repurchased and Holdings' or any direct or indirect parent of Holdings' receipt of such Tax Payments or refunded to the Borrower; (f) if no Event of Default shall exist or would occur after giving effect thereto: (A) no Default or Event , any Credit Party may make any Restricted Payments not otherwise permitted by this Section, not to exceed $2,000,000 in any fiscal year of Default shall have occurred Holdings and $10,000,000 in the aggregate after the Effective Date; PROVIDED, that any amount not utilized in a previous fiscal year may be continuingutilized in the immediately succeeding fiscal year; (Bg) the U.S. Borrower shall be in pro forma compliance with each may repurchase, redeem, or otherwise acquire for value any Capital Stock of the covenants set forth Borrower, and the Borrower may make distributions, loans and advances to Holdings and Holdings may make distributions, loans and advances to any direct or indirect parent to enable the repurchase, redemption or other acquisition or retirement for value of any Capital Stock of Holdings, or any direct or indirect parent of Holdings, in Article IX; each case, held by any current or former officer, director, consultant or employee of Holdings or any of its Subsidiaries (C) or Heirs or other permitted transferees thereof); PROVIDED that the Aggregate Credit Exposure shall aggregate price paid for all such repurchased, redeemed, acquired or retired Capital Stock may not exceed $100,000,0001.5 million in any calendar year; andPROVIDED, FURTHER that the Borrower may carry over and make in subsequent calendar years, in addition to the amounts permitted for such calendar year, the amount of such purchases, redemptions or other acquisitions or retirements for value permitted to have been made but not made in any preceding calendar year up to a maximum of $3.0 million in any calendar year; PROVIDED FURTHER that such amount in any calendar year may be increased by an amount not to exceed (1) the net cash proceeds from the sale of Capital Stock of the Borrower (or Holdings or any direct or indirect parent of Holdings to the extent such net cash proceeds are contributed to the common equity of Holdings) to employees, officers, directors or consultants of Holdings and its Subsidiaries that occurs after the Effective Date (to the extent the cash proceeds from the sale of such Capital Stock have not otherwise been applied to the payment of Restricted Payments) plus (2) the cash proceeds of key man life insurance policies received by Holdings and its Subsidiaries after the Effective Date less any amounts previously applied to the payment of Restricted Payments pursuant to this clause (g); PROVIDED FURTHER that cancellation of Indebtedness owing to Holdings or any of its Subsidiaries from employees, officers, directors and consultants of Holdings or any of its Subsidiaries in connection with the repurchase of Capital Stock of the Borrower, Holdings or any direct or indirect parent from such Persons will not be deemed to constitute a Restricted Payment for purposes of this Section. (Dh) there shall be permitted hereunder (i) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 repurchase of Capital Stock deemed to 1.00; and (f) Bowater Canadaoccur upon the exercise of options, Inc. warrants or Bowater Canadian Holdings Incorporated may repurchase all or other convertible securities to the extent such Capital Stock represent a portion of the Exchangeable Shares solely through an exchange exercise price of common stock those options, warrants or other convertible securities and (ii) cash payments in lieu of the U.S. issuance of fractional shares in connection with the exercise of options, warrants, or other convertible securities; (i) Holdings and the Borrower for may make payments in connection with or as a result of the Exchangeable Shares being repurchasedAcquisition (including, without limitation, payments in respect of Earnouts) to the extent contemplated by the Acquisition Documents; (j) Holdings and the Borrower may make Restricted Payments in exchange for, or out of the net proceeds of the substantially concurrent sale (other than to a Subsidiary) of, other Capital Stock. (k) On the Effective Date, in connection with the redemption of equity interests in Target from certain existing shareholders, Holdings and the Borrower may cancel up to $1.0 million of indebtedness of such shareholders owed to the Credit Parties.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. US Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the U.S. US Borrower or may declare and pay quarterly dividends in a manner consistent with the past practice of the US Borrower in amounts reasonably determined by the board of directors of the US Borrower; provided that the aggregate amount of dividends declared and paid during each Fiscal Year shall not exceed fifty percent (50%) of Net Income for the Fiscal Year preceding the Fiscal Year in which such dividend is to be declared and paid (as set forth in the audited financial statements of the US Borrower and its Subsidiaries for such preceding Fiscal Year) (the “Annual Dividend Limit”); provided further that the US Borrower may declare and pay such quarterly dividends notwithstanding that the aggregate amount of dividends paid during such Fiscal Year would be in excess of the then applicable Annual Dividend Limit so long as (i) the amount per share of such dividends does not exceed the amount per share paid during the most recent Fiscal Year in which the US Borrower was in compliance with the Annual Dividend Limit (without giving effect to this proviso) and (ii) the US Borrower and its Subsidiaries shall have demonstrated to the Administrative Agent that, immediately before and after giving pro forma effect to such dividends and any Subsidiary may make cash distributions or equity repurchases Indebtedness incurred in connection therewith, the Average Total Leverage Ratio (based on the most recent financial statements delivered to the Administrative Agent pursuant to employee benefit plans or incentive compensation plans, in each case Section 8.1) is less than 3.00 to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary1.00; (c) any Subsidiary may declare and pay dividends of any type (cash or non-cash) to the holders of its Capital Stock (US Borrower or any other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only provided that if such the Subsidiary paying the dividend is paid on a ratable basis to Subsidiary Guarantor or Subsidiary Borrower then the holders recipient of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary;the dividend must be either the US Borrower or another Subsidiary Guarantor; and (d) the U.S. US Borrower may pay cash dividends to holders repurchase shares of its Capital Stock and Bowater CanadaStock, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect theretoso long as: (Ai) no Default or Event of Default shall have has occurred and be continuingis continuing at the time of such repurchase or would result therefrom; and (Bii) the U.S. US Borrower and its Subsidiaries shall be in have demonstrated to the Administrative Agent that the Average Total Leverage Ratio (as of the date of the proposed share repurchase, based on the most recent financial statements delivered to the Administrative Agent pursuant to Section 8.1, and, on a pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and basis, after giving effect thereto: (Ato such share repurchase and any Indebtedness incurred in connection therewith) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 is less than 2.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower Company or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make pay cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case dividends to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable SubsidiaryBorrowers; (c) so long as no Default or Event of Default has occurred and is continuing, or would result therefrom, any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower Company may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay the Company to permit the Company to make cash dividends and distributions with respect to holders shares of the Exchangeable Sharescommon stock of the Company; provided that (i) prior to making any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after or distribution, the date Company shall deliver an Officer’s Compliance Certificate demonstrating, to the reasonable satisfaction of declaration of such dividendthe Administrative Agent, (ii) such dividends do not exceed $75,000,000 in that the aggregate during each Fiscal Year Company and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall its Subsidiaries will be in pro forma compliance with each of the financial covenants set forth in Article IXIX after giving pro forma effect to such proposed dividend or distribution, and (ii) the aggregate amount of such dividends and distributions pursuant to this Section 10.6(c) shall not exceed $15,000,000 during any Fiscal Year of the Company; (d) any Subsidiary of the Company may pay dividends to the Company to permit the Company to purchase the Company’s common stock or common stock options from present or former officers or employees of the Company or any Subsidiary upon the death, disability or termination of employment of such officer or employee; provided, that the aggregate amount of payments under this clause (c) (net of any proceeds received by the Company and contributed to a Subsidiary of the Company in connection with substantially contemporaneous resales of any common stock or common stock options so purchased) shall not exceed $2,000,000; and (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each any Subsidiary of the covenants set forth Company may pay dividends to the Company to (i) pay general and administrative expenses incurred in Article IX; (C) the Aggregate Credit Exposure shall ordinary course of business not to exceed $100,000,000; and 5,000,000 in any fiscal year and (Dii) pay any taxes which are due and payable by the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or Company and the Borrower as part of a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchasedconsolidated group.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) a. the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid b. so long as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default has occurred and is continuing or would result therefrom, the Borrower may declare and pay quarterly dividends in a manner consistent with the past practice of the Borrower in amounts reasonably determined by the board of directors of the Borrower; provided that the Borrower may declare and pay such quarterly dividends so long as (i) the amount per share of such dividends is not greater than the most recently publicly announced amount of dividends per share and (ii) the Borrower and its Subsidiaries shall have occurred demonstrated to the Lender that, immediately before and after giving effect to such dividends and any Indebtedness incurred in connection therewith on a Pro Forma Basis, the Average Total Leverage Ratio (based on the most recent financial statements delivered to the Lender pursuant to Section 6.01) is less than 3.25 to 1.00; c. any Subsidiary may declare and pay dividends of any type (cash or non-cash) to the Borrower or any other Wholly-Owned Subsidiary, provided that if the Subsidiary paying the dividend is a Guarantor or a Revolving Subsidiary Borrower then the recipient of the dividend must be continuingeither the Borrower or another Guarantor; and (B) d. the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect theretoStock, so long as: (A) i. no Default or Event of Default shall have has occurred and be continuing; (B) is continuing at the U.S. Borrower shall be in pro forma compliance with each time of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000such repurchase or would result therefrom; and (D) ii. the pro forma Consolidated Borrower and its Subsidiaries shall have demonstrated to the Lender that the Average Total Leverage Ratio shall not exceed 4.50 (as of the date of the proposed share repurchase, based on the most recent financial statements delivered to the Lender pursuant to Section 6.01, and, on a Pro Forma Basis, after giving effect to such share repurchase and any Indebtedness incurred in connection therewith) is less than 3.25 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare No Credit Party will, and no Credit Party will permit any of its Subsidiaries to, declare or pay any dividends upon any of its Capital Stock; Equity Interests, purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital StockEquity Interests, or make any distribution of cash, property or assets among the holders of shares of its Capital StockEquity Interests, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effectstructure; provided that: (a) the U.S. Borrower any Credit Party or any Subsidiary may pay dividends in shares units of its own Capital StockEquity Interests; (b) the U.S. Borrower or any Subsidiary of a Credit Party may make pay cash distributions or equity repurchases pursuant dividends to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable SubsidiaryCredit Party; (c) any Subsidiary the Parent may pay purchase Equity Interests of the Parent with an aggregate value of $10,000,000 during the term of this Agreement, so long as no Default or Event of Default shall have occurred and is continuing or will result therefrom; and (d) the Parent may make other dividends and distributions to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that Equity Interests so long as (i) any the Parent shall have delivered notice of its intention to make each such dividend is paid as promptly as possible but in no event later than seventy-five or distribution to the Administrative Agent at least fourteen (7514) days after prior to the intended date of declaration of such dividendthereof, (ii) the Parent shall have delivered to the Administrative Agent an Officer’s Compliance Certificate (A) demonstrating, in form and substance satisfactory to the Administrative Agent, that the Borrowers shall have maintained Excess Availability of $30,000,000 or more on at least fifty-six (56) of the sixty (60) consecutive days immediately preceding each such dividends do not exceed dividend or distribution, (B) demonstrating, in form and substance satisfactory to the Administrative Agent, that the Borrowers shall have maintained Excess Availability of $75,000,000 30,000,000 or more on each day during the period of fifty (50) consecutive days immediately preceding each such dividend or distribution (and including the date on which such dividend or distribution is made) and (C) certifying, in form and substance satisfactory to the aggregate Administrative Agent, that the Borrowers expect to maintain Excess Availability of $30,000,000 or more on each day during the period of five (5) consecutive days immediately succeeding each Fiscal Year such dividend or distribution, such certification in this Section 12.6(d)(i)(C) representing the good faith estimate in all material respects (utilizing reasonable assumptions) of the financial condition and operations of the Borrowers and their Subsidiaries, (iii) the Borrowers maintain Excess Availability of $30,000,000 or more on each day during the period of five (5) consecutive days immediately succeeding each such dividend or distribution and (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and after giving effect thereto: (A) no Default continuing or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchasedwill result therefrom.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. US Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the U.S. US Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, declare and pay dividends in each case to a manner consistent with the extent such distributions constitute compensation to executives or employees past practice of the U.S. US Borrower or in an amount reasonably determined by the board of directors of the applicable SubsidiaryUS Borrower; provided that such amount shall not exceed fifty percent (50%) of Net Income for the preceding Fiscal Year; (c) any Subsidiary may declare and pay dividends of any type (cash or non-cash) to the holders of its Capital Stock (US Borrower or any other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only provided that if such the Subsidiary paying the dividend is paid on a ratable basis to Subsidiary Guarantor then the holders recipient of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary;the dividend must be either the US Borrower or another Subsidiary Guarantor; and (d) the U.S. US Borrower may pay cash dividends to holders repurchase shares of its Capital Stock and Bowater CanadaStock, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect theretoso long as: (Ai) no Default or Event of Default shall have has occurred and be continuingis continuing at the time of such repurchase or would result therefrom; and (Bii) the U.S. US Borrower and its Subsidiaries shall be in have demonstrated to the Administrative Agent that the Average Total Leverage Ratio (as of the date of the proposed share repurchase, based on the most recent financial statements delivered to the Administrative Agent pursuant to Section 8.1, and, on a pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and basis, after giving effect thereto: (Ato such share repurchase and any Indebtedness incurred in connection therewith) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 is less than 3.00 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) (i) the Original U.S. Borrower may pay cash dividends to the Parent to allow the Parent to pay cash dividends to holders of its the Parent’s Capital Stock and (ii) Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that in each case (iA) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (iiB) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iiiC) on each date that a dividend is declared and after giving effect thereto: (A1) no Default or Event of Default shall have occurred and be continuing; and (B2) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (ei) the U.S. Borrower may pay dividends to the Parent to allow the Parent to repurchase shares of its the Parent’s Capital Stock Stock, in an aggregate amount for all such repurchases by the U.S. Borrower or dividends paid by the U.S. Borrower of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased or such dividend is paid and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and; (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased.; (g) the U.S. Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the U.S. Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year;

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital StockStock or other equity interests; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, Stock or other equity interests; return capital of the Borrowers to the Parent; or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, Stock or make other payments or distributions to any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower Affiliate of any Credit Party or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plansSubsidiaries, in each case with respect to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment or in its capacity as holder of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable SharesStock; provided that (ia) any such dividend is paid as promptly as possible but each Credit Party may make dividends payable solely in no event later than seventy-five (75) days after the date same class of declaration Capital Stock of such dividendPerson, (iib) such each Credit Party may make dividends do not exceed $75,000,000 in or other distributions payable to the aggregate during each Fiscal Year Borrowers and (iiic) on each date that a dividend is declared and after giving effect thereto: (A) if no Default or Event of Default shall have has occurred and be continuing; and is continuing nor would occur as a result thereof (i) the Borrowers may make payments to the Parent to pay (A) corporate overhead or administrative costs in an aggregate amount not to exceed $150,000 during any fiscal year and (B) amounts necessary to pay liquidated damages payable by the U.S. Borrower shall be Parent as a result of a Registration Default (as defined in pro forma compliance with each the Warrant Registration Rights Agreement dated as of the covenants set forth Closing Date among the Parent and the initial purchasers named therein and the Note Registration Rights Agreement dated as of the Closing Date among the Parent, the subsidiary guarantors named therein and the initial purchasers named therein) such amounts not to exceed $1,000,000 in Article IX; the aggregate, (eii) the U.S. Borrower a Credit Party may repurchase shares of its Capital Stock pursuant to the exercise of rights of first refusal granted in connection with a proposed sale of such Capital Stock by an option-holder who has exercised stock options pursuant to an option plan approved by the board of directors of such Credit Party in an aggregate amount not to exceed $3,000,000 during any fiscal year, (iii) a Credit Party may make payments as required pursuant to the contracts set forth on Schedule 9.9 as in effect on the Closing Date and in the amounts stated on such Schedule, (iv) the Borrowers may make distributions to the Parent to make regularly scheduled payments of up interest on Permitted Parent Debt, (v) the Company may dividend or distribute shares of Horizon Telcom, Inc. that it owns to $100,000,000 during the term Parent and the Parent may dividend or distribute such shares of this Agreement; provided that on each date that Horizon Telcom, Inc. to its shareholders and (vi) at any time prior to April 30, 2001, the Parent may redeem its Series A-1 Convertible Preferred Capital Stock is repurchased and after giving effect thereto: (Ain an aggregate amount not to exceed $86,000,000 pursuant to Article 4, Subpart C, Subsection F(2)(i) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion Parent's Amended and Restated Articles of Incorporation with proceeds of an initial public offering of the Exchangeable Shares solely through Parent's Capital Stock in an exchange aggregate amount yielding proceeds of common stock of not less than $86,000,000 in the U.S. Borrower for the Exchangeable Shares being repurchasedaggregate.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) so long as no Default or Event of Default has occurred and is continuing or would result therefrom, the U.S. Borrower or may declare and pay quarterly dividends in a manner consistent with the past practice of the Borrower in amounts reasonably determined by the board of directors of the Borrower; provided that the aggregate amount of dividends declared and paid during each Fiscal Year shall not exceed fifty percent (50%) of Net Income for the Fiscal Year preceding the Fiscal Year in which such dividend is to be declared and paid (as set forth in the audited financial statements of the Borrower and its Subsidiaries for such preceding Fiscal Year) (the “Annual Dividend Limit”); provided further that the Borrower may declare and pay such quarterly dividends notwithstanding that the aggregate amount of dividends paid during such Fiscal Year would be in excess of the then applicable Annual Dividend Limit so long as (i) the amount per share of such dividends does not exceed the amount per share paid during the most recent Fiscal Year in which the Borrower was in compliance with the Annual Dividend Limit (without giving effect to this proviso) and (ii) the Borrower and its Subsidiaries shall have demonstrated to the Lender that, immediately before and after giving pro forma effect to such dividends and any Subsidiary may make cash distributions or equity repurchases Indebtedness incurred in connection therewith, the Average Total Leverage Ratio (based on the most recent financial statements delivered to the Lender pursuant to employee benefit plans or incentive compensation plans, in each case Section 6.01) is less than 3.00 to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary1.00; (c) any Subsidiary may declare and pay dividends of any type (cash or non-cash) to the holders of its Capital Stock (Borrower or any other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only provided that if such the Subsidiary paying the dividend is paid on a ratable basis to Guarantor or a Revolving Subsidiary Borrower then the holders recipient of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary;the dividend must be either the Borrower or another Guarantor; and (d) the U.S. Borrower may pay cash dividends to holders repurchase shares of its Capital Stock and Bowater CanadaStock, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iii) on each date that a dividend is declared and after giving effect theretoso long as: (Ai) no Default or Event of Default shall have has occurred and be continuingis continuing at the time of such repurchase or would result therefrom; and (Bii) the U.S. Borrower and its Subsidiaries shall be in have demonstrated to the Lender that the Average Total Leverage Ratio (as of the date of the proposed share repurchase, based on the most recent financial statements delivered to the Lender pursuant to Section 6.01, and, on a pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may repurchase shares of its Capital Stock in an aggregate amount of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased and basis, after giving effect thereto: (Ato such share repurchase and any Indebtedness incurred in connection therewith) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 is less than 2.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower for the Exchangeable Shares being repurchased.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) (i) the Original U.S. Borrower may pay cash dividends to the Parent to allow the Parent to pay cash dividends to holders of its the Parent's Capital Stock and (ii) Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that in each case (iA) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (iiB) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iiiC) on each date that a dividend is declared and after giving effect thereto: (A1) no Default or Event of Default shall have occurred and be continuing; and (B2) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (ei) the U.S. Borrower may pay dividends to the Parent to allow the Parent to repurchase shares of its the Parent's Capital Stock Stock, in an aggregate amount for all such repurchases by the U.S. Borrower or dividends paid by the U.S. Borrower of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased or such dividend is paid and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and; (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased.; (g) the U.S. Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the U.S. Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year;

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital StockStock or other equity interests; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, Stock or other equity interests; return capital of the Borrowers to the Parent; or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, Stock or make other payments or distributions to any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower Affiliate of any Credit Party or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plansSubsidiaries, in each case with respect to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment or in its capacity as holder of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) the U.S. Borrower may pay cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable SharesStock; provided that (ia) any such dividend is paid as promptly as possible but each Credit Party may make dividends payable solely in no event later than seventy-five (75) days after the date same class of declaration Capital Stock of such dividendPerson, (iib) such each Credit Party may make dividends do not exceed $75,000,000 in or other distributions payable to the aggregate during each Fiscal Year Borrowers and (iiic) on each date that a dividend is declared and after giving effect thereto: (A) if no Default or Event of Default shall have has occurred and be continuing; and is continuing nor would occur as a result thereof (i) the Borrowers may make payments to the Parent to pay (A) corporate overhead or administrative costs in an aggregate amount not to exceed $150,000 during any fiscal year and (B) amounts necessary to pay liquidated damages payable by the U.S. Borrower shall be Parent as a result of a Registration Default (as defined in pro forma compliance with each the Warrant Registration Rights Agreement dated as of the covenants set forth Closing Date among the Parent and the initial purchasers named therein and the Note Registration Rights Agreement dated as of the Closing Date among the Parent, the subsidiary guarantors named therein and the initial purchasers named therein) such amounts not to exceed $1,000,000 in Article IX; the aggregate, (eii) the U.S. Borrower a Credit Party may repurchase shares of its Capital Stock pursuant to the exercise of rights of first refusal granted in connection with a proposed sale of such Capital Stock by an option-holder who has exercised stock options pursuant to an option plan approved by the board of directors of such Credit Party in an aggregate amount not to exceed $3,000,000 during any fiscal year, (iii) a Credit Party may make payments as required pursuant to the contracts set forth on Schedule 9.9 as in effect on the Closing Date and in the amounts stated on such Schedule, (iv) the Borrowers may make distributions to the Parent to make regularly scheduled payments of up interest on Permitted Parent Debt; provided, however, that no such distributions shall be permitted hereunder with respect to $100,000,000 during interest obligations relating to the term Indebtedness referred to in clause (ii) of this Agreement; provided the definition of Permitted Parent Debt Documents until the depletion in full of all amounts deposited in the Interest Escrow Account in respect of such Indebtedness, (v) the Company may dividend or distribute shares of Horizon Telcom, Inc. that on each date that it owns to the Parent and the Parent may dividend or distribute such shares of Horizon Telcom, Inc. to its shareholders and (vi) at any time prior to April 30, 2001, the Parent may redeem its Series A-1 Convertible Preferred Capital Stock is repurchased and after giving effect thereto: (Ain an aggregate amount not to exceed $86,000,000 pursuant to Article 4, Subpart C, Subsection F(2)(i) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion Parent's Amended and Restated Articles of Incorporation with proceeds of an initial public offering of the Exchangeable Shares solely through Parent's Capital Stock in an exchange aggregate amount yielding proceeds of common stock of not less than $86,000,000 in the U.S. Borrower for the Exchangeable Shares being repurchasedaggregate.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stockcapital stock or other ownership interests; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stockcapital stock or other ownership interests, or make any distribution of cash, property or assets among the holders of shares of its Capital Stockcapital stock or other ownership interests, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Restricted Subsidiary may pay dividends in shares of its own Capital Stockcapital stock or other ownership interests; (b) the U.S. Borrower or any Restricted Subsidiary may make cash dividends or distributions to any Subsidiary Guarantor or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable SubsidiaryBorrower; (c) the Borrower or any Restricted Subsidiary may pay dividends to the holders of its Capital Stock make any distribution (other than payment of dividends to holders of the Exchangeable Shares); provided that whether direct or indirect and whether in the case form of any dividend paid cash, property, securities or otherwise) to shareholders, employees or other permitted distributees under Borrower’s 1996 Omnibus Plan and other benefit or retirement plans maintained and created by a Subsidiary that is not a Wholly-Owned Subsidiarythe Borrower, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiaryits Restricted Subsidiaries and its Affiliates; (d) the U.S. Borrower and its Subsidiaries may pay the cash dividends to holders of its Capital Stock and Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that (i) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (ii) such dividends do not exceed $75,000,000 consideration payable in the aggregate during each Fiscal Year and ESSI Merger (iii) on each date that a dividend is declared and after giving effect thereto: (A) no Default or Event including any payments in respect of Default shall have occurred and be continuing; and (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IXappraisal rights); (e) the U.S. Borrower may repurchase shares of declare and pay cash dividends to its Capital Stock shareholders in an aggregate amount in any Fiscal Year not to exceed $25,000,000; (f) the Borrower may make cash redemption of up Permitted Senior Unsecured Convertible Debt to $100,000,000 during the term extent permitted pursuant to Section 11.10(e)(iv); (g) the Borrower or any Restricted Subsidiary may purchase its capital stock or other ownership interests or options in respect of this Agreementits capital stock or other ownership interests to the extent that such purchase is made with the Net Cash Proceeds of any offering of equity securities of the Borrower; (h) the Borrower or any Restricted Subsidiary may purchase, redeem, retire or otherwise acquire for value any capital stock or other ownership interests of the Borrower or any Restricted Subsidiary held by any current or former officer, director, employee or consultant of the Borrower or any Restricted Subsidiary (or any permitted transferees of such persons) pursuant to any equity subscription agreement, stock option agreement, shareholders’ agreement or similar agreement; provided that on each date the aggregate price paid for all such repurchased, redeemed, acquired or retired capital stock or other ownership interests may not exceed $5,000,000 in any twelve-month period, provided, that Capital Stock is repurchased the Borrower may carry forward and after giving effect thereto: (A) no Default make in a subsequent twelve-month period, in addition to the amounts permitted for such twelve-month period, the amount of such repurchase, redemptions or Event other acquisitions or retirements for value permitted to have been made but not made in any preceding twelve-month period up to a maximum of Default shall have occurred and be continuing$10,000,000 in any twelve-month period; (Bi) the U.S. Borrower shall be or any Restricted Subsidiary may make cash payments in pro forma compliance with each lieu of the covenants set forth issuance of fractional shares in Article IX; (C) the Aggregate Credit Exposure shall an amount not to exceed $100,000,00010,000,000 in any twelve-month period; and (Dj) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 repurchase of capital stock or other ownership interests deemed to 1.00; and (f) Bowater Canada, Inc. occur upon the exercise of stock options to the extent such capital stock or Bowater Canadian Holdings Incorporated may repurchase all or other ownership interest represents a portion of the Exchangeable Shares solely through an exchange exercise price of common those stock of the U.S. Borrower for the Exchangeable Shares being repurchasedoptions.

Limitations on Dividends and Distributions. Declare or pay any dividends upon any of its Capital Stock; purchase, redeem, retire or otherwise acquire, directly or indirectly, any shares of its Capital Stock, or make any distribution of cash, property or assets among the holders of shares of its Capital Stock, or make any change in its capital structure which such change in its capital structure could reasonably be expected to have a Material Adverse Effect; provided that: (a) the U.S. Borrower or any Subsidiary may pay dividends in shares of its own Capital Stock; (b) the U.S. Borrower or any Subsidiary may make cash distributions or equity repurchases pursuant to employee benefit plans or incentive compensation plans, in each case to the extent such distributions constitute compensation to executives or employees of the U.S. Borrower or of the applicable Subsidiary; (c) any Subsidiary may pay dividends to the holders of its Capital Stock (other than payment of dividends to holders of the Exchangeable Shares); provided that in the case of any dividend paid by a Subsidiary that is not a Wholly-Owned Subsidiary, such dividend may be paid only if such dividend is paid on a ratable basis to the holders of such Capital Stock in accordance with their respective ownership percentages in such Subsidiary; (d) (i) the U.S. Original Borrower may pay cash dividends to the Parent to allow the Parent to pay cash dividends to holders of its the Parent’s Capital Stock and (ii) Bowater Canada, Inc. may pay cash dividends to holders of the Exchangeable Shares; provided that in each case (iA) any such dividend is paid as promptly as possible but in no event later than seventy-five (75) days after the date of declaration of such dividend, (iiB) such dividends do not exceed $75,000,000 in the aggregate during each Fiscal Year and (iiiC) on each date that a dividend is declared and after giving effect thereto: (A1) no Default or Event of Default shall have occurred and be continuing; and (B2) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (e) the U.S. Borrower may pay dividends to the Parent to allow the Parent to repurchase shares of its the Parent’s Capital Stock Stock, in an aggregate amount for all such repurchases by the Borrower or dividends paid by the Borrower of up to $100,000,000 during the term of this Agreement; provided that on each date that Capital Stock is repurchased or such dividend is paid and after giving effect thereto: (A) no Default or Event of Default shall have occurred and be continuing; (B) the U.S. Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX; (C) the Aggregate Credit Exposure shall not exceed $100,000,000; and (D) the pro forma Consolidated Total Leverage Ratio shall not exceed 4.50 to 1.00; and; (f) Bowater Canada, Inc. or Bowater Canadian Holdings Incorporated may repurchase all or a portion of the Exchangeable Shares solely through an exchange of common stock of the U.S. Borrower Parent for the Exchangeable Shares being repurchased; (g) the Borrower may make dividends and distributions to the Parent to pay: (i) taxes attributable to the consolidated operations of the Borrower and its Subsidiaries; (ii) the Parent Overhead Expenses in an aggregate amount per Fiscal Year not to exceed fifty percent (50%) of the aggregate amount of Parent Overhead Expenses during such Fiscal Year; and (iii) so long as no Default or Event of Default has occurred and is continuing or would result after giving effect to such dividends or distributions, an additional amount of Parent Overhead Expenses in an aggregate amount not to exceed $10,000,000 per Fiscal Year; (h) the Original Borrower may pay a one-time dividend to the Parent of all or (if the remaining portion is transferred to the Parent pursuant to Section 10.5(i)) any portion of the issued and outstanding shares of the Capital Stock of Newco held by the Original Borrower in connection with the Newco Transactions; (i) subject to Section 11.1(o)(ix); so long as (i) no Default or Event of Default shall have occurred and be continuing or would be caused thereby and (ii) the Borrower shall have complied with the requirements set forth in Sections 8.10(e)(i) and (ii)(A) of this Agreement and Section 8.10(e)(i) of the Canadian Credit Agreement, the Borrower may make cash distributions or dividends to the Parent (including, without limitation, with all or a portion of the proceeds of Indebtedness incurred pursuant to Section 10.1(m)) which, unless otherwise permitted pursuant to Section 8.12(c) or (d), shall be invested in a Credit Party; and (j) subject to Sections 10.10 and 11.1(o)(viii)(E), the Borrower and its Subsidiaries may make cash distributions or dividends to the Parent to allow the Parent to make required payments on Indebtedness incurred by the Parent as permitted pursuant to Section 11.1(o)(viii); provided that on each date any distribution or dividend is paid and after giving effect thereto: (i) no Default or Event of Default shall have occurred and be continuing; and (ii) the Borrower shall be in pro forma compliance with each of the covenants set forth in Article IX and Section 11.1(o)(ix).