Marathon Pulp Inc.

INVITATION TO OFFER April 2009

Invitation to Offer

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TITLE AND DISCLAIMER

The purpose of this Invitation to Offer (the “Invitation”) is to provide a description of certain assets owned by Marathon Pulp Inc. (“Marathon” or the “Company”) and offer these assets for sale “en bloc” to prospective acquirers. On March 17, 2009, Marathon was deemed to have filed an assignment and PricewaterhouseCoopers Inc. (“PwC”) was appointed Trustee of the estate of the bankruptcy. On April 3 2009, PwC was appointed as interim receiver and receiver (the “Receiver”) of all of the assets, undertakings and properties of Marathon and it is in this capacity that the Receiver seeks expressions of interest from prospective acquirers. The information contained herein is based on information provided by the Company and is intended solely for use by prospective acquirers of the assets described herein. This Invitation is not all-inclusive and does not necessarily contain all of the information that a prospective acquirer of the Company may require. While the information contained herein is believed to be accurate and reliable, the Receiver does not make any representations or warranties, expressed or implied, as to the accuracy or completeness of such information or any other written or oral communication by the Company, PwC, or any of the Company’s other advisors or agents. Prospective acquirers should, in accordance with the procedures set forth under the “Sale Process” in Appendix C of this Invitation, conduct their own investigation and analysis and form their own judgment of the data and assets described. All dollar figures in this document are unaudited and expressed in Canadian dollars, unless otherwise noted. The proposed sale of the assets described herein will take place in accordance with the Sale Process. The Receiver, at its sole discretion, reserves the right at any time to withdraw any or all of the assets from the solicitation, terminate this solicitation or alter, add, or waive the terms and conditions as it deems appropriate.

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Invitation to Offer

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No securities commission or regulatory authority in Canada or the United States of America or in any other country has in any way passed judgment on the merits of this document or the accuracy or adequacy of the Invitation. This Invitation does not constitute an offer of solicitation in any jurisdiction to any person to whom it is unlawful to make such an offer or solicitation. This Invitation is not, and under no circumstances, is to be construed as a prospectus, a public offering, or an offering memorandum as defined under applicable securities legislation. All inquiries should be directed to: PricewaterhouseCoopers Inc. 1250 René-Levesque West, Suite 2800 Montréal, Quebec, Canada, H3B 2G4 Frederic Bouchard, CA CF CFA Telephone: (514) 205 5079 Fax: (514) 205 5363 E-mail: frederic.bouchard@ca.pwc.com

Invitation to Offer

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DISCLAIMER We have compiled the accompanying information in our capacity as Receiver from information supplied to us in this capacity. This information has been prepared solely for the convenience of prospective acquirers and is not warranted to be complete or accurate. No audit has been conducted to verify the data compiled herein. With or without notice or reasons, PwC expressly reserves the right at any time to amend or terminate the process, to allow any party to submit a final offer (without notice to other prospective acquirers), to terminate discussion with any or all prospective acquirers, to reject any or all offers, or to negotiate with any party without any liability to PwC. PwC reserves the right to amend any information, which has been made available to prospective acquirers either by way of addition, deletion, or amendment.

Invitation to Offer

TABLE OF CONTENTS

1. EXECUTIVE SUMMARY 1

2. MARATHON PULP INC. 2

2.1 HISTORY 2

3. MANUFACTURING OPERATIONS 3

3.1 FIBRE SUPPLY 3 3.2 PULPING OPERATIONS 4 3.3 CAPITAL IMPROVEMENTS 7 3.4 ELECTRICAL ENERGY 9 3.5 ENVIRONMENT 9 3.6 RESEARCH AND DEVELOPMENT 10

4. SALES 11

5. MANAGEMENT AND HUMAN RESOURCES 12

5.1 SENIOR MANAGEMENT 12 5.2 HUMAN RESOURCES 12 5.3 LABOUR UNIONS 13

6. INFORMATION TECHNOLOGY SYSTEMS 14

APPENDIX A 15

APPENDIX A – SALE PROCESS APPENDIX B – TERMS AND CONDITIONS OF SALE APPENDIX C – FORM OF OFFER

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Invitation to Offer

1. EXECUTIVE SUMMARY

Marathon Pulp Inc. (referred to as “Marathon” or the “Company”), is a Northern Bleached Softwood Kraft producer, co-owned on equal basis by Tembec Industries Inc. and Kruger Inc.

Marathon Pulp Inc. is a 200,000 metric-tonne-per-year manufacturer of high-quality Northern Bleached Softwood Kraft (“NBSK”) pulp located in Marathon, Ontario, on the northern shore of Lake Superior. The Company sold its pulp to select customers in North America.

The Company’s shares were jointly acquired in December 1999 by Tembec Industries Inc. (“Tembec”) and Kruger Inc. (“Kruger”) on a 50/50 basis from Fort James Corporation. Under the terms of their Shareholders’ Agreement, Tembec was responsible for the operations, sales and marketing.

Marathon’s advantage, from a risk perspective, is its secure, long-term fibre source. The Company has a 1.4 million acre Sustainable Forest Licence (“SFL”), expiring in 2016, issued by the Government of Ontario which provided it with up to half of its fibre requirements. An additional 30% was supplied through local chipping contractors, including First Nations. The remaining 20% was composed of residual chips from sawmills.

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Invitation to Offer

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2. MARATHON PULP INC.

2.1 HISTORY The Marathon pulp mill was built in 1945 by Marathon Paper Mills of Canada Limited, the Canadian subsidiary of U.S.-based Marathon Corporation. Initial mill output was 275 metric tonnes per day. American Can acquired the mill in 1957.

In 1983, the facility was then sold to James River Corporation (Fort James Corporation’s predecessor) and Buchanan, a wood supply partner. Between 1983 and 1999 Fort James invested over $280 million in capital improvements, effectively doubling capacity to 550 MTPD. Fort James gained 100% control after buying out Buchanan’s share in 1998.

In December 1999, Tembec and Kruger, two major North American forest industry players, purchased all of the Marathon shares from Fort James Corporation on a 50/50 basis. (Fort James was subsequently acquired by Georgia-Pacific Corp in mid-2000.) The new Shareholders elected that, as a major world pulp producer, Tembec was best suited to operating the Marathon Mill and marketing its products.

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3. MANUFACTURING OPERATIONS

3.1 FIBRE SUPPLY Marathon produced its NBSK pulp from softwood chips. Based on the mill’s average annual production of 190,000 tonnes per year, the mill required approximately 1,000,000 m3 per year of softwood (coniferous) fibre.

Marathon possessed a Sustainable Forest Licence (“SFL”) from the Government of Ontario, called “Big Pic”, a 6,357 square kilometre territory whose forest fibre resources have been allocated exclusively to Marathon until March 31, 2016. Big Pic is comprised of approximately 72% softwood and 28% hardwood with a maximum allowable annual depletion of 450,000 m3 for softwood and 310,000 m3 for hardwood. The Province of Ontario undertakes independent audits of SFL forest management performance every five years. The last audit of the Big Pic SFL was conducted in 2004, and there are no outstanding issues relating to Marathon and the timber rights granted by the Province of Ontario.

Marathon’s “Big Pic” Sustainable Forestry License

The Big Pic SFL was managed under a long-term Fibre Supply and Land Management Agreement by Buchanan Forest Products, providing the pulp mill with 50% of its fibre requirements.

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An additional 30% was supplied through local chipping contractors, including First Nations. The remaining 20% was composed of residual chips from sawmills.

Chip inventory

3.2 PULPING OPERATIONS Marathon Pulp Inc. produced bleached kraft pulp from wood. Wood species used, were of the softwood variety, namely jackpine, black spruce and white spruce. In addition, a blended hardwood / softwood grade was produced using approximately 20% hardwood composed of aspen and birch fibres. In the kraft pulping process, wood chips were cooked with cooking liquor to separate the fibre used in papermaking from the organic glue that binds the fibres together. The isolated fibre was then bleached to remove any remaining impurities and was sold as pulp while the spent cooking liquor was recycled to the Mill’s recovery boiler to recover valuable cooking chemicals.

The following summarizes the various basic stages of Marathon’s pulping process:

Wood Yard Wood yard operations consisted of two systems (chip unloading and chip reclaim). The wood chips were delivered by both truck and rail. Upon unloading, they were stored in piles to provide an adequate buffer between the production requirements of the pulp mill and the production and delivery schedules of the various chip suppliers. Each system operated independently for optimal chip inventory management. Two chip piles were maintained to provide uninterrupted pulp mill supply.

As required, the wood chips, were pneumatically transferred from the storage area to the digesters in the mill.

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Digesters The batch digester cooking system consisted of three main operations (digester filling, digester cooking and digester blowing). Typical digester turnover rate was 2 hours, 20 minutes.

An overhead chip conveyor transferred to one of eight identical size 3,500 cubic foot batch digesters. Each digester batch contained between 25 and 35 tons of chips and 1650 to 1700 cubic feet of cooking liquor. The cooking process freed the fibre by dissolving the lignin in the cooking liquor.

The digester cooking process was based on time and temperature. High temperatures and pressures are required to effectively cook the chips. Steam was added directly into the digester to reach the proper cooking conditions. Gases generated during the cooking process contain turpentine which was separated from other gases and stored for sale. Remaining gases were sent to the evaporator plant stripper unit.

Once the chips were cooked, the digester contents (pulp and spent cooking liquor) discharged into a blow tank where water from the pulp and spent cooking liquor flashed into hot vapours which were sent through the blow heat recovery system to recover the heat energy.

Brownstock Pulp Washing & Screening Pulp washing consists of three phases: large debris screening, liquor displacement washing and screening for small debris removal. After screening, the pulp was then thickened to a higher consistency for storage prior to bleaching.

Bleaching The washed and cleaned raw pulp, called brownstock, was sent to the bleach plant where any residual lignin and impurities were removed. By this stage almost 95% of the lignin had been removed and recovered. Therefore, bleaching chemicals more selective to lignin than cellulose were used in the bleach plant to produce the final product of the strength, brightness and cleanliness required.

A five-stage DEoDEpD bleaching sequence was used with a retention tower and conventional washer for each stage. This is also known as an “ECF” (Elemental Chlorine Free) Bleaching Sequence.

Pulp Cleaning Following bleaching, the pulp went through a series of cleaning stages to remove any contaminants such as grit, bark, plastic, etc. The pulp consistency was then increased prior to storage in the screened bleach chest.

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Pulp Drying The pulp from the bleach chests was pumped to one of two near-identical pulp drying lines. The cleaned, bleached pulp was formed into a continuous sheet of pulp, pressed to remove excess water and then dried in steam-heated dryers. The dry pulp was then cut into sheets, formed into bales and then packaged and stored for sale.

Finished bales of pulp in inventory

Other Major Process Components

Recovery Furnace The recovered black liquor from the cooking process was pumped to the recovery boiler to recover the cooking chemicals. The concentrated black liquor had a solid content that would sustain combustion and was used as fuel for the boiler.

The recovery boiler produced 80-100% of the steam used by the mill and the remaining amount was produced in two oil-fired boilers. Most of the steam produced in the boilers was processed through two turbogenerators which generated 60% of the Mill’s power requirements. (Remaining electrical energy requirements were purchased from the grid).

Once through the turbogenerators, the steam was then further utilized in the Mill’s various processes. Flue gas from the recovery boiler was treated in an electrostatic precipitator to remove particulate matter prior to discharging to the stack.

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Mill Effluent The mill effluent, consisting mainly of the digester contaminated condensates, the evaporator contaminated condensates and the bleach cleaner rejects, was clarified and combined with the bleach plant effluent to form the process effluent. The solids removed in the primary clarifier were dewatered and disposed of in the company landfill. Individual effluent streams were monitored to help control the discharge of process effluent below the Ontario Ministry of the Environment and Environment Canada regulated limits. The process effluent was also monitored at various intervals (continuously, daily, weekly, monthly, and quarterly). Results of tests on the process effluent were reported regularly to the Ministry and Environment Canada.

The process effluent was monitored for pH, total suspended solids (i.e., fibre), the amount of organic material discharged as measured by biochemical oxygen demand (BOD), the amount of chlorinated organic material as measured by adsorbable organically bound halides (AOX), and for its acute toxicity to fish. Other parameters monitored included specific organic compounds as well as total phosphorous.

3.3 CAPITAL IMPROVEMENTS Since 2000, the Company has reinvested approximately $18 million in capital expenditures. This amount includes regular, ongoing maintenance capital as well as mill modernization and improvement. This amount also includes more than $3 million invested in environmental improvements.

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The following table summarizes the mill’s major equipment along with year installed and year upgraded as applicable:

Woodyard Outstocking Systems Reclaim Systems Batch Digesters

2 – Rader Star Feeders, 2 – Holmes blowers 2 – Rader drag chain conveyors, 2 – Rader Star Feeders, 2 – Holmes blowers 8 – 10’ X 48’

1983/1985/1979/1982/1996/1997

Pulp Processing Knotters Screens Cleaners

2 Hi-Q, 1 Jonsson vibrating screen 4 primary, 1 secondary 1 tertiary and 1 quaternary 1 radiscreen, 2 primary, 1 secondary, 1 tertiary, 1 quaternary and 1 quinternary radiclone

1983/1992/1983/2004/983/1992

Washers Brown Stock 3 Coru-Dek Vacuums 1 Dorr-Oliver Decker: 11.5’ X 24’ 1989/1994/1974

Bleach Plant Sequence Chlorine Dioxide System xDEopDED 1 – R8, 18 TPD 1985/1989/1989 Bleach Washers

4 Impco 13.5’ X 20’ E2 Dorr 11.5’ X 16’ Bleach Decker – Impco 13.5’ X 26’ 19851991/1986/1992

Pulp Drying Wet Machines Dryers Cutter-Layboys

2 - 136” Kamyr vacuum moulds, 6 presses 2 SF Flakt 13-pass 2 Hamblet cutters with Lamb-Grays Harbor layboys 1946/1997/1946/1997/1946/1997

Chemical Recovery Plant Evaporators Concentrators Recovery Boiler Electrostatic Precipitator Lime Kiln Lime Mud Pre Coat Filter Recausticizing System

1 - 6 Body Effect Ahlstrom Evaporator System with Condensate Stripping 2 - Gosslin 1 B & W low-odour: 2.2 mm# solids 1 Wheelabrator with ABB retrofit 1 – 10’ X 288’ Ahlstrom 1 Eimco 4 Eimco causticizers, 3 Goslin pressure filters 1997/1976/1979/1992/1979/1992/1986/1986/1986

Steam/Power Power Boilers Turbogenerators #1 #2 #3

2 Package Fuel: Oil, Steam: 300,000 lbs. hr. 9.0 megawatts – Back pressure 4.0 megawatts – Extraction / condensing (not in service) 4.0 megawatts – Back pressure 1991/1991//2001/1990/1992

Water Treatment Daily Usage Reverse Osmosis Feedwater Plant

12,500 M.G.P.D. Source: Lake Superior Glegg 3 units 400 USGPM each

1946/1999

Effluent Treatment Primary Treatment Secondary Treatment

Clarifier with 12’ Eimco belt filter ASB with 10 days retention time 1971/1995

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3.4 ELECTRICAL ENERGY The Mill’s total power requirement were 19 megawatts (“MW”), of which between 9 MW (summer) and 11 MW (winter) were provided by turbogenerators driven by residual process steam from the pulp mill. Turbogenerators No. 1 and No. 3 have capacities of 9 MW and 4 MW respectively; No. 2, with a 4 MW capacity, were not used due to a lack of excess steam.

As a registered wholesale market participant, Marathon Pulp purchased power from the Independent Electricity System Operator (IESO) controlled grid. In addition the Company had a bilateral Transition Rate Contract with Ontario Power Generation through to May 1, 2007. Purchases varied from 9 MW in the summer to 7 MW in the winter.

3.5 ENVIRONMENT The Company’s environmental management system focused on air emissions, wastewater discharge, and solid waste, and followed best practice guidelines and procedures to adhere to government regulations. Since acquisition the Company has invested approximately $3 million in environmental remediation and upgrades.

The Company was substantially in compliance with all laws and regulations governing wastewater effluent and waste management, and was dealing with the following environmental issues:

dust from chip handling historic mercury contaminated sediment in Peninsula Harbour –

scientists, Environment Canada and the MOE have been monitoring mercury and PCS’s in the sediment of the harbour for the past thirty years. A decision has recently been made by Environment Canada and the MOE that the preferred remediation method will be thin-layer capping. Federal and Provincial funding has been identified to fund this work and the mill is not expected to be asked to contribute. What may be requested is an in-kind contribution potentially consisting of labour and/or access to the mill dock to carry out the work.

the mill had modified its operating procedures so as to minimize dust from chip handling.

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3.6 RESEARCH AND DEVELOPMENT Research and Development activities at Marathon Pulp consisted mostly of trials run within the pulping and/or auxiliary processes. Typical activities include the use of new or different chemical additives, the use of different process setpoints and conditions, new processes, etc. The aim of such trials were cost reduction, product improvement, energy reduction, or any of a number of other possibilities.

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4. SALES

Marathon’s sales were almost exclusively to North America (99%) where the Company was the most competitive due to the qualities of its pulp. Marathon NBSK pulp’s strength, brightness and freeness was particularly well suited to the manufacture of high-quality tissue products which were predominantly found in North American consumer markets. Historically, the Company also made sales in Europe.

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5. MANAGEMENT AND HUMAN RESOURCES

5.1 SENIOR MANAGEMENT The following organizational chart represents Marathon’s previous senior management structure:

Manager Purchading

Gerry Ferguson

Manager Human Resources Bobbi Jo Schwantz

Manager Recovery & Energy

Mike Kae Voet

Manager Logistics & Customer Service

Roger St. Jules

Manager Maintenance & services

Jim Power

Manager Production

Yves Grenier

Manager Technical

Tony Koch

Mill Engineer

Ron Koiru

Controller

Chuck Verbo

Vice President & Chief Operating Officer

Sue Nakanishi

5.2 HUMAN RESOURCES The company employed 232 individuals as summarized in the following table:

AREA UNION UNION NON UNION TOTALHOURLY SALARIED

Mill Management 2 2Safety 1 1

Shipping 8 1 2 11Miantenance 52 1 12 65Operations 63 7 70

Poer & Recovery 31 1 7 39Technical 14 5 19Finance 4 2 6

Engineering 2 2Human Resources 1 4 5

Purchasing 5 2 7ITS 1 4 5

TOTAL 168 14 50 232

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5.3 LABOUR UNIONS There were two unions in place at the mill:

U.S.W. Local 7-0548 represented the maintenance and operating personnel

C.O.P.E. Local 219 represented the office clerical employees.

An amendment to the collective agreement with the maintenance and operating personnel, in the form of a Letter of Understanding, would have expired on December 1, 2010. The collective agreement with the office union would have expired on May 1, 2009. A copy of agreements can be found on PwC’s website at www.pwc.com/car-marathon.

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6. INFORMATION TECHNOLOGY SYSTEMS

The IT organization consisted of five full time employees and supported about 200 users. The scope of the IT group included supporting the local infrastructure, local site applications, site IT security, and ensuring WAN connectivity to the rest of Tembec. Some applications have been built in house, however, as standard corporate systems such as PI, Ekho, Elixir, Adagio and Maximo were implemented the group needed to rely on Tembec IT, vendors or service providers for advanced support. The following summarizes the Company’s systems:

Technology Overview Most are running on Office 2007.

The site uses Microsoft servers running Windows 2003 and there are two servers running Novell. Novell phase-out is expected.

There are 14 Windows 2003 Servers on site running various applications and 6 data collectors. Backup tapes are kept in ITS and the security shack The computer room is UPS protected This is an Ethernet LAN with router-based connectivity to the Tembec WAN. Primary Local Applications/Systems Financials (GL/AP/AR)

Adagio accounting package is currently being used for finance and was implemented in November 2008.

Payroll/Human Resources Using CGI Paie PC and Nethris (on-line) for union employees. Salaried employees are paid through Tembec utilizing CGI HR Expert System. Kronos running under Novell is used to track time and attendance (due to be replaced). A new

system (ITR) was installed and being parallel tested but had not been put into use. Maintenance/Purchasing/Stores Maximo version 5.2 which tracks the availability of inventory parts and the costs (both material &

labour) to complete a work order This system is interfaced to Adagio for Accounts Payables and General Ledger Chip Purchasing In-house system using Foxpro supported by the site’s IT team Application manages all wood receipts, lab results and vendor payments Pulp Sales EKHO (ver 1.9.1) bale and quality tracking system supported by site IT and vendor (Inexcon

Technology). Inteterfaced with Elixir system for inventory and pulp sales.

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APPENDIX A

SALE PROCESS PwC intends to make the Invitation available to all interested parties. Prospective acquirers are invited to submit an offer for the purchase of the assets as described within this Invitation at the earliest possible time. The Receiver recognizes that all the required information to make an offer is not contained herein, and prospective acquirers are invited to make enquiries on the business operations directly to the Receiver or visit our website at www.pwc.com/car-marathon. The Sale Process will be managed in accordance with the following procedures established by PwC. PwC retains the right at any time to terminate or alter the Sale Process without compensation to any party. REVIEW OF THE OFFERS Following receipt of the Invitation, prospective acquirers are asked to submit a binding expression of interest to the Montréal’s office of PwC at the address noted on the Form of Offer, no later than Monday April 20, 2009, 5:00 PM Eastern Time. This binding offer to purchase should include the following details:

The purchase price and Form of Offer, based on the attached Terms & Conditions (See Appendix B);

A certified cheque or bank draft for 5% of the purchase price; The names of the financial and legal advisors and other key consultants retained

by the prospective purchaser in connection with the proposed transaction; Details on how the purchase would be financed, including evidence of proposed

commitments if any; Timing and other approvals required for the purchase; and Proposed time of closing.

PwC will review the expressions of interest and select the final acquirer. PwC intends to select the offer considered to be the most favourable in terms of meeting the Receiver’s objectives. The Receiver will deal with offers as they are received. This is not a tender sale. If an offer is received before Monday April 20, 2009, 5:00 PM Eastern Time, and it is acceptable, the Receiver will exercise its right to terminate the sale process and accept the offer.

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APPENDIX B

PRICEWATERHOUSECOOPERS INC., RECEIVER

ASSETS OF MARATHON PULP INC.

TERMS AND CONDITIONS OF SALE 1. The Vendor is PricewaterhouseCoopers Inc. (“Vendor”) in its capacity as

Receiver. 2. The Assets being offered for Sale, pursuant to these Terms and Conditions of

Sale, consist of the Vendor's interest in the assets as described in the Invitation to Offer to Purchase Assets, property description and equipment list.

3. Offers marked “Offer – Marathon Pulp Inc.” addressed to

PricewaterhouseCoopers Inc., Suite 2800, 1250 René-Lévesque Boulevard West attention Frederic Bouchard, CA, CF, CFA.

4. Offers will be reviewed and considered as received. 5. Each offer must be accompanied by a certified cheque, bank draft or money

order payable to "PricewaterhouseCoopers Inc. - In Trust", for an amount equal to 5% of the purchase price. If an offer is accepted and approved, the cheque, bank draft or money order shall be deemed a cash deposit and the balance of the purchase price shall be paid to the Vendor, at the times and on the terms and conditions herein set out.

6. All offers shall be submitted on the required Form of Offer, which is attached to

these Terms and Conditions of Sale. The Receiver may reject offers that are not on the required Form of Offer.

7. In consideration of the Vendor making available these Terms and Conditions of

Sale, other information and the opportunity of inspection and/or in consideration of the Vendor receiving offers, each prospective Acquirer agrees that its offer is irrevocable and cannot be retracted, withdrawn, varied or countermanded prior to acceptance or rejection thereof.

8. The highest or any offer shall not necessarily be accepted. Preference may be

given to “en bloc” offers.

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APPENDIX B

9. If the Vendor accepts any offer, then such acceptance shall be communicated to the successful prospective Acquirer within ten (10) business days of the date fixed for the closing of receipt of offers. Such notice may be by telephone, email, facsimile or other means of recorded telecommunications or by registered mail or delivery. Notice of acceptance shall be deemed effectively given when so delivered, telephoned or sent by facsimile or other means of recorded telecommunication or on date of deposit in a post office if mailed by registered mail, as the case may be. Upon such acceptance, there shall be an Agreement of Purchase and Sale between the Vendor and the Acquirer on the terms contained herein and the offer, these Terms and Conditions of Sale, and the acceptance shall be sufficient evidence of such Agreement.

10. Certified cheques, bank drafts or money orders accompanying offers that are not

accepted by the Vendor will be returned, without interest, to the address given in the offer within ten (10) business days of the date fixed for the closing of receipt of offers.

11. The balance of the purchase price shall be paid to the Receiver by wire transfer

or bank draft upon closing, which closing shall occur within thirty days after acceptance of offers by the Receiver provided that where Court approval has not been obtained within 10 days of the date of acceptance, the closing date shall be extended until 30 days after Court approval, or on such other date as may be mutually agreed between the Receiver and Acquirer.

12. Real Property Taxes will be adjusted pro rata to the Closing Date in favour of the

Acquirer. Acquirer’s counsel will undertake to pay or otherwise satisfy all Real Property Taxes for 2009 and prior such that clear title is passed to the Acquirer.

13. In addition to the Purchase Price for the Assets being purchased, the Acquirer

shall pay to the Vendor on the Closing Date all applicable federal, provincial and other taxes unless all necessary Certificates to exempt the Acquirer therefrom are provided to the Vendor on or before the Closing Date. The Acquirer shall arrange its own insurance, and there shall be no adjustment of insurance. The Acquirer shall be responsible for all costs with respect to the obtaining of all Federal, Provincial, civic and other licenses necessary to carry on a business.

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APPENDIX B

14. The obligation of the Vendor to sell, and the Acquirer to purchase, the Assets

shall, at the option of the Vendor, terminate in the event that, prior to the Closing Date of the sale the Assets are substantially destroyed by fire, flood, the elements, Government action, or civil commotion or any other external cause beyond the control of the Vendor. Such option to terminate by the Vendor shall be exercised by giving notice in writing to the Acquirer that it intends to take the proceeds, if any, payable under any existing insurance policies and terminate the Agreement of Purchase and Sale. In such an event, the Agreement of Purchase and Sale shall automatically terminate and be deemed null and void and the deposit money shall be returned to the Acquirer without interest, cost, and compensation or deduction and no party shall be liable to another for any costs or damages whatsoever. If the Vendor does not exercise such option, the Acquirer, at his option may perform the Agreement of Purchase and Sale, such option to be exercised in writing, within seven (7) business days after notice to the Acquirer that the Vendor does not intend to exercise its option to terminate. In such event, the Acquirer shall be entitled only to an assignment of any proceeds payable under the existing insurance policies and transfer of any remaining Assets in full settlement of the Vendor's obligations to repair or replace the damaged assets and in full satisfaction of this Agreement of Purchase and Sale. If the Acquirer does not exercise its option, the Agreement of Purchase and Sale shall be automatically terminated and deemed null and void and the deposit money shall be refunded to the Acquirer without interest, costs, compensation or deduction and neither party shall be liable to the other for any costs or damages whatsoever.

15. The Vendor shall remain in possession of the Assets until the Closing Date and

completion of the Agreement of Purchase and Sale. Title to the Assets shall not pass to the Acquirer, nor shall the Acquirer be entitled to possession of same, until the purchase price and all other payments to be made by the Acquirer pursuant to the Agreement of Purchase and Sale have been paid in full.

16. The Vendor may pay and discharge out of the monies to be paid by the Acquirer

any liens or encumbrances not being assumed by the Acquirer.

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APPENDIX B

17. If, on or before closing, it is found that there are property claims, encumbrances or charges against any of the Assets being offered for sale which the Acquirer has not agreed to assume in addition to, or as part of its offer, and which the Vendor is not willing to discharge, then, subject to the Vendor’s consent, the offer may be reduced by the Acquirer by the amount of the value of the claimed or encumbered assets (calculated by prorating the value of the encumbered assets based on the actual offered price) or the Vendor at its own option may rescind the agreement to sell the assets in question and the Acquirer shall be entitled solely to the return of the cash deposit without interest and without any other compensation of any kind or nature whatsoever for any loss, damages or other costs.

18. If the Acquirer fails to comply with these Terms and Conditions of Sale, the

deposit shall be forfeited to the Vendor on account of liquidated damages and the Assets may be resold by the Vendor in such manner and on such terms as the Vendor in its sole discretion determines and the Acquirer shall pay to the Vendor (i) an amount equal to the amount, if any, by which the Purchase Price under the Agreement of Purchase and Sale exceeds the net purchase price received by the Vendor pursuant to such resale, and (ii) an amount equal to all costs and expenses incurred by the Vendor in respect of or occasioned by the Acquirer’s failure to comply with the Agreement of Purchase and Sale.

19. By submitting an offer, the Acquirer acknowledges that it has inspected the

Assets and that the Assets are sold on an "as is, where is" basis at the time of closing and that no representation, warranty or condition is expressed or implied as to title, description, environmental conditions, fitness for purpose, merchantability, quantity, condition, cost, or quality thereof or in respect of any other matter or thing whatsoever. Without limitation, the Assets are specifically offered as they exist on closing and with no adjustments to be allowed the Acquirer for changes in conditions, qualities or quantities of the Assets from the date hereof to the Closing Date except as specifically provided for in the Terms and Conditions of Sale. Each Acquirer acknowledges that the Vendor is not required to inspect or count, or provide any inspection or counting, of the Assets.

20. PricewaterhouseCoopers Inc. acts in its capacity as Receiver as aforesaid and shall have no personal or corporate liability hereunder or from any Agreement of Purchase and Sale of contemplated hereby or as a result of any sale contemplated hereby.

21. In the event that some of the offers submitted are substantially in the same terms

and\or amounts, the Vendor may in its sole discretion call upon those prospective Acquirers to submit further offers.

22. The Terms and Conditions contained herein shall not merge on closing, but shall

survive such closing and remain in full force and effect and be binding on the Acquirer thereafter.

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APPENDIX B

23. In the event that disruption occurs with respect to the Canadian or other postal

service, all notices contemplated by these Terms and Conditions of Sale may be forwarded by telegram, facsimile or electronic transmission (email).

24. The validity and interpretation of these Terms and Conditions of Sale, and of

each provision and part thereof, and of any Agreement of Purchase and Sale defined herein, shall be governed by the laws of Ontario, and the Courts of the Province of Ontario shall have exclusive jurisdiction with respect to any disputes arising out of these Terms and Conditions of Sale or any Agreement of Purchase and Sale entered into pursuant to these Terms and Conditions of Sale.

25. The Vendor at its own discretion may waive any or all of the Terms and

Conditions of Sale herein. 26. If there is any conflict between these conditions and the advertised Invitation to

Offer, the terms contained in these Terms and Conditions of Sale shall prevail. 27. The Agreement of Purchase and Sale entered into pursuant to these Terms and

Conditions of Sale shall endure to the benefit of and be binding upon the parties thereto, and their respective successors and assigns.

28. All stipulations as to time are strictly of the essence. PricewaterhouseCoopers Inc. 1250 René-Lévesque Boulevard West Suite 2800 Montréal, Quebec, Canada H3B 2G4

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APPENDIX C

FORM OF OFFER

INVITATION TO OFFER

THE ASSETS OF MARATHON PULP INC. To: PricewaterhouseCoopers Inc. 1250 René-Lévesque Boulevard West Suite 2800 Montréal, Quebec, Canada H3B 2G4

Attention: Frederic Bouchard

(Name of Prospective Purchaser)

(Address {include postal code})

(Telephone)

(Facsimile) I I, we, hereby submit this offer for the bulk purchase of the following parcels:

Parcel 1 – Lands and Buildings $

Parcel 2 – Equipment $ Total offer $

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APPENDIX C

II Enclosed is the cash deposit by way of certified cheque, bank draft or money order in the amount of 5% of the purchase price representing ___________$.

III It is acknowledged that this offer is subject to the Terms and Conditions of Sale

issued by the Vendor. DATED AT , this day of , 2009. (city or town) (date) (month)

(PRINTED NAME OF PROSPECTIVE PURCHASER)

Attach by addendum any other terms and conditions that the purchaser may wish the Receiver and the Company to consider.

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