Case 16-10163-KG Doc 730-1 Filed 04/19/16 Page 1 of 8

SCRAP METAL PURCHASE AGREEMENT

A

THIS AGREEMENT IS MADE AS OF THE 29th DAY OF JANUARY 2015.

BETWEEN: AMERICAN IRON & METAL LP, a limited partnership formed

under the laws of the Province of Québec, Canada, having its
principal place of business at 9100 Henri-Bourassa Blvd. East,
Montreal, Quebec, H1E 2S4
(hereinafter "AIM")

AND VERSO CORPORATION, a corporation formed under the laws

of the State of Delaware, having its principal place of business at
6775 Lenox Center Court, Suite 400, Memphis, Tennessee 38115
(hereinafter "Verso")

WHEREAS, AIM is a company specialised in the recovery and recycling of scrap metal;

WHEREAS, Verso and certain of its direct and indirect subsidiaries (collectively, the
“Vendors”) own and operate manufacturing facilities that generate scrap metal;

WHEREAS, the Vendors wish to sell to AIM, and AIM wishes to purchase from the Vendors,
all of the ferrous and non-ferrous scrap metal generated by the Vendors’ manufacturing facilities,
on the terms and conditions set forth in this Agreement;

NOW THEREFORE, the parties agree with each other as follows:

ARTICLE 1 - PURPOSE

1.1 AIM shall purchase all of the ferrous and non-ferrous residues generated during the Term
by the Vendors’ current and future manufacturing facilities (the “Vendors’ Scrap”), and
the Vendors shall sell Vendors’ Scrap exclusively to AIM during the Term.

ARTICLE 2- PRICING AND PAYMENT TERMS

2.1 The purchase price, denominated in U.S. dollars, for the Vendors’ Scrap delivered by the
Vendors to AIM hereunder (the “Purchase Price”) shall be established monthly as set
forth in Exhibit A – Pricing. AIM and Verso acknowledge and agree that (a) AIM is
deemed to have made a prepayment for the Vendors’ Scrap in an amount equal to
$7,000,000 (the “Prepayment”), (b) no Purchase Price shall be payable by AIM for the
first $7,000,000 of Vendors’ Scrap delivered to AIM hereunder, (c) the Prepayment shall
be reduced, dollar for dollar, by the invoiced amount of the Vendors’ Scrap delivered to
AIM hereunder or by operation of Section 2.3 until the Prepayment is reduced to zero,
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and (d) once the Prepayment has been reduced to zero, AIM shall pay the Purchase Price
for the Vendors’ Scrap as otherwise contemplated in Sections 2.1 and 2.2.

2.2 The payment terms shall be net 30 days from AIM’s receipt of the invoice.

2.3 Notwithstanding the foregoing, in the event of the sale by Verso of all or substantially all
of its assets or the sale by any other Vendor of all or substantially all of the assets
comprising such Vendor’s manufacturing facility, Verso shall pay, or shall cause such
Vendor to pay on Verso’s behalf, to AIM hereunder an amount equal to the then
remaining balance of the Prepayment within ten (10) business days after the completion
of such sale, such that thereby the Prepayment will be reduced to zero.

2.4 All duties, import and export fees, taxes (other than income taxes, if any, on income
received by Vendors) and other governmental charges due with respect to the purchase or
sale of Vendors’ Scrap will be paid by AIM.

ARTICLE 3 - TERM AND TERMINATION

3.1 This Agreement shall commence on January 29, 2015 (the “Effective Date”) and
continue for a fixed period of five (5) years (“Initial Term”). This Agreement shall
renew automatically from year to year (each, a “Subsequent Term”) after the Initial
Term unless either party provides the other party with written notice of non-renewal at
least ninety (90) days prior to the expiration of the Initial Term or any Subsequent Term;
provided, that Verso shall not exercise its right not to renew this Agreement for a
Subsequent Term until the amount of the Prepayment is reduced to zero.

3.2 Either party to this Agreement shall have the right to terminate this Agreement if the
other party has materially breached any of the terms and conditions of this Agreement
and has failed to cure said breach within fifteen (15) business days after receipt of written
notice of such breach from the other Party.

ARTICLE 4 – DELIVERY AND WEIGHTS

4.1 Upon notice from a Vendor to AIM that such Vendor’s Scrap is available to be picked up
at such Vendor’s manufacturing facility, AIM shall pick up, or cause its carrier to pick
up, such Vendor’s Scrap from such facility within twenty (20) days from receipt of such
notice.

4.2 The parties shall agree on a protocol regarding the weighting process and resolving of all
disputes regarding discrepancies in the weight measured upon shipment and receipt of the
Vendor’s Scrap at AIM’s facilities.

ARTICLE 5 – TITLE

5.1 The Vendors shall have good title, free and clear of all liens, to all Vendors’ Scrap
delivered to AIM pursuant to this Agreement.
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5.2 The ownership and legal title to, benefit of possession and control over, and risk of loss
to Vendors’ Scrap picked up by AIM pursuant to this Agreement shall transfer to AIM at
such time as the Vendors’ Scrap is delivered to AIM’s designated carrier for transport.

ARTICLE 6– CONDITION OF VENDORS’ SCRAP

6.1 The Vendors shall use commercially reasonable efforts to ensure that all Vendors’ Scrap
delivered to AIM does not include any Hazardous Materials. “Hazardous Materials”
means hazardous waste (as defined in the Resource Conservation and Recovery Act, 42
U.S.C. 6901 et. seq. and any equivalent state law), PCBs and radioactive materials.

ARTICLE 7– NOTICE

7.1 All notices or communications to be given pursuant to the terms herein must be in writing
and will be deemed to be given if sent by (a) a nationally recognized overnight delivery
service, (b) registered United States mail with a return receipt requested, (c) by fax if the
facsimile machine receives and prints a confirmation of receipt by the receiving facsimile
machine, (d) another means of electronic delivery if the sending party follows such
electronic delivery with another form of notice permitted in this Section 7.1, or
(e) delivered by hand. If a notice or other communication is sent by overnight delivery
service, the notice or other communication will be deemed received when delivery is
signed for at the recipient’s address for notice indicated below. If a notice or other
communication is sent by United States mail, and except during a general postal service
interruption due to a strike, lock-out or any other reason, the notice or other
communication will be deemed to have been received on the 4th business day after the
date of posting by the Post Office. If it is sent by fax or another means of electronic
communication or delivery, it will be deemed to have been received at the moment it is
delivered or communicated to the applicable address indicated below to the party
designated below or a person found at the address indicated below and having the
authority to accept such delivery in the name of the party designated. Notices pertaining
to changes in address are equally governed by the present section. In case of a general
postal service interruption due to a strike, lock-out or any other reason, notices and other
communications must be delivered by hand or sent by fax or other electronic means of
communication and shall be deemed to have been received in conformity with the present
section. Notices and other communications should be addressed as follows:

If to Verso, to Verso Corporation: 6775 Lenox Center Court, Suite 400

Memphis, TN 38115-4436
Attention: President
Facsimile No.: (901) 369-4228

With a copy to: Verso Corporation

6775 Lenox Center Court, Suite 400
Memphis, TN 38115-4436
Attention: General Counsel
Facsimile No.: (901) 369-4228
Email: peter.kesser@versoco.com
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If to AIM, to American Iron & 9100 Boulevard Henri-Bourassa East

Metal LP: Montreal, Québec
H1E 2S4
Canada
Attention: Herbert Black
Fax: (514) 494-3008
Email: hblack@scrapmetal.net

ARTICLE 8 – FORCE MAJEURE

8.1 No liability will result from any delay in performance caused by circumstances beyond
the reasonable control of the party affected, including acts of God, fire, flood, war,
terrorism, pandemic, cyber-attack, government action, accident, or unforeseeable
shortage; provided, however, that to the extent that the affected party is able to perform
partially, it must continue to perform in the same proportion as prior to the disabling
event and give immediate written notice of the disabling event, the date of the
commencement of any nonperformance, and an estimate of the extent and duration of the
nonperformance.

ARTICLE 9 – LIMITATION OF LIABILITY AND DAMAGES

9.1 DISCLAIMER. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT,

THE VENDORS’ SCRAP IS PROVIDED WITHOUT WARRANTY OF ANY KIND.
VENDORS DO NOT MAKE ANY REPRESENTATION OR WARRANTY (EITHER
EXPRESS OR IMPLIED, BY FACT OR LAW) OTHER THAN THOSE SET FORTH
IN THIS AGREEMENT, INCLUDING ANY WARRANTIES OF
MERCHANTABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR USE.

9.2 LIMITATION. IN NO EVENT WILL ANY PARTY TO THIS AGREEMENT OR

SUCH PARTY’S AFFILIATES, OR ANY OF ITS OR THEIR RESPECTIVE
OFFICERS, DIRECTORS, EMPLOYEES, OR AGENTS, BE LIABLE FOR (AND
EACH PARTY, AS APPLICABLE, EXPRESSLY WAIVES ANY RIGHT TO MAKE
A CLAIM FOR OR RECOVER) PUNITIVE DAMAGES OR INDIRECT DAMAGES
OR CONSEQUENTIAL DAMAGES, WHETHER BASED IN CONTRACT, TORT,
STRICT LIABILITY, OTHER LAW OR OTHERWISE, AND EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBLE EXISTENCE OF SUCH LIABILITY;
PROVIDED, HOWEVER, THAT VERSO ACKNOWLEDGES THAT THE
PRINCIPAL DAMAGES LIKELY TO BE SUFFERED BY AIM ARISING FROM A
BREACH OF THIS AGREEMENT BY VERSO ARE THE LOSS OF REVENUE AND
PROFITS FROM THE RESALE OF VENDOR’S SCRAP AND AGREES THAT THIS
SECTION 9.2 SHALL NOT PROHIBIT RECOVERY OF SUCH DAMAGES BY AIM
IN THE EVENT OF A BREACH OF THIS AGREEMENT BY VERSO.
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ARTICLE 10 – GENERAL

10.1 Vendors: Verso represents and warrants to AIM that Verso is authorized to enter into
this Agreement on behalf of the Vendors and that it has the authority and ability to cause
the other Vendors to perform their obligations hereunder.

10.2 Governing Law: This Agreement shall be governed by, and interpreted and enforced in
accordance with, the laws in force in the State of New York. Each party irrevocably and
unconditionally submits to the exclusive jurisdiction of and laying of venue in any
Federal court located in the Southern District of New York or any state court located in
New York sitting in the Borough of Manhattan and any appellate court from any thereof,
with respect to any matter arising hereunder or related hereto. EACH PARTY WAIVES
THE RIGHT TO A TRIAL BY JURY.

10.3 Nature of Agreement: Notwithstanding anything to the contrary contained herein, the
parties hereby confirm their intent that this Agreement not be considered or interpreted as
a contract of enterprise or for services.

10.4 Entire Agreement: This Agreement, together with its exhibit and any agreements and
other documents to be delivered pursuant hereto, constitutes the entire Agreement
between the parties pertaining to the subject matter hereof and supersedes all prior
proposals, agreements, negotiations, discussions and understandings, written or oral,
between the parties.

10.5 Written Amendments: This Agreement can only be modified in writing by an

amendment signed by the parties hereto.

10.6 No Assignment: No party hereto may assign this Agreement without the prior written
consent of the other party. Subject to the foregoing, this Agreement shall inure to the
benefit of and be binding upon the parties hereto, their respective heirs and executors,
administrators, successors and assigns.

10.7 Counterparts: This Agreement may be executed in counterparts, each of which so

executed shall be deemed to be an original and such counterparts together shall constitute
one and the same Agreement notwithstanding their date of execution shall be deemed to
be executed on the date first written above. The delivery of an executed counterpart copy
of this Agreement by facsimile or e-mail transmission shall be deemed to be the
equivalent of the delivery of an original executed copy thereof.

[Signature Page Follows]

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IN \ryITNESS WHEREOF the parties have executed the Agreement as of the date set out
above.

AMERICA¡I IRON & METAL LP

By its General Partner American Iron & Metal
Company Inc.

By:
Name
Title: President

VERSO CORPORATION

By:
Name: Peter H. Kesser
Title: Senior Vice President

[Scrap Metal Purchase Agreement]

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EXHIBIT A

Pricing

AIM will pay Verso for the Vendors’ Scrap based on the scrap load’s gross weight, as
established by Verso and AIM’s carrier weighing the load at Verso’s manufacturing facility. The
price for each commodity that makes up the load will be a percentage of the AMM index price
for the commodity, with the percentage determined on the basis of the location of the scrap yard
accepting the scrap, all as identified in the table. AIM will determine at its processing yard the
percentage of each type of commodity comprising the scrap load, without deduction for
contaminants. The parties acknowledge that a discount for contaminants is built into the pricing
discount in the table.

Western
Locations Upper MI Middle WI KY Luke MD Maine
Commodity AMM Index Chicago Chicago Chicago Pittsburgh Pittsburgh
Mixed Metals C.B.P No.1 Heavy
Melt (Chicago)
No. 1 Heavy Melt
Export Yard (Boston)
Stainless Steel 304 solids, clips
( High Side Chicago)
(High Side Pittsburgh)
Aluminum Old Aluminum, Sheet
& Cast
(High Side Chicago)
(High Side Pittsburgh)
#2 Copper & No. 2 Heavy Copper
& Wire (High Side
Wire Bare & Chicago)
Clean (High Side Pittsburgh)
Insulated Wire No. 2 Heavy Copper
& Wire (High Side
& Cable Chicago)
(High Side Pittsburgh)
Brass Yellow Brass Solids
(High Side Chicago)
(High Side Pittsburgh)
Lead/Battery Undrained Whole Old
Batteries
Plates (High Side Buffalo)
(High Side Pittsburgh)

Electric No. 2 Heavy Copper

& Wire
Motors (High Side Chicago)
(High Side Pittsburgh)